UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number 811-2111
RIVERSOURCE LARGE CAP SERIES, INC.
(Exact name of registrant as specified in charter)
50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474
(Address of principal executive offices) (Zip code)
Scott R. Plummer - 5228 Ameriprise Financial Center, Minneapolis, MN 55474
(Name and address of agent for service)
Registrant's telephone number, including area code: (612) 671-1947
Date of fiscal year end: 7/31
Date of reporting period: 7/31
Annual Report
and Prospectus
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE(R)
DISCIPLINED EQUITY FUND
ANNUAL REPORT FOR
THE PERIOD ENDED
JULY 31, 2007
(Prospectus also enclosed)
RIVERSOURCE DISCIPLINED EQUITY
FUND SEEKS TO PROVIDE SHAREHOLDERS
WITH LONG-TERM CAPITAL GROWTH.
This annual report includes a prospectus that
describes in detail the Fund's objective,
investment strategy, risks, sales charges, fees
and other matters of interest. Please read the
prospectus carefully before you invest or send
money.
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 3
Performance Summary................. 5
Questions & Answers
with Portfolio Management........ 8
The Fund's Long-term Performance ... 12
Fund Expenses Example............... 14
Investments in Securities........... 17
Financial Statements................ 23
Notes to Financial Statements....... 29
Report of Independent Registered
Public Accounting Firm........... 52
Federal Income Tax Information...... 54
Board Members and Officers.......... 57
Approval of Investment Management
Services Agreement............... 61
Proxy Voting........................ 63
Change in Independent Registered
Public Accounting Firm........... 63
</Table>
(DALBAR LOGO)
The RiverSource mutual fund
shareholder reports have been
awarded the Communications Seal
from Dalbar Inc., an independent
financial services research firm.
The Seal recognizes communications
demonstrating a level of
excellence in the industry.
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2 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
FUND SNAPSHOT AT JULY 31, 2007
FUND OBJECTIVE
RiverSource Disciplined Equity Fund seeks to provide shareholders with long-term
capital growth.
SECTOR BREAKDOWN*
Percentage of portfolio assets
(PIE CHART)
<Table>
Financials 16.7%
Consumer Discretionary 15.9%
Energy 15.2%
Information Technology 13.5%
Health Care 11.6%
Industrials 7.6%
Other(1) 19.5%
</Table>
* Sectors can be comprised of several industries. Please refer to the section
entitled "Investments in Securities" for a complete listing. No single
industry exceeds 25% of portfolio assets.
(1) Includes Consumer Staples 6.7%, Telecommunication Services 5.7%, Materials
3.4%, Utilities 3.4% and Cash & Cash Equivalents(2) 0.3%.
(2) Of the 0.3%, 0.2% is due to security lending activity and 0.1% is the
Fund's cash equivalent position.
TOP TEN HOLDINGS
Percentage of portfolio assets
<Table>
Exxon Mobil 5.0%
Chevron 4.8%
AT&T 4.4%
Pfizer 3.4%
Apple 3.1%
Microsoft 2.6%
Johnson & Johnson 2.5%
Fannie Mae 2.1%
ConocoPhillips 1.9%
Intl Business Machines 1.9%
</Table>
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
The Global Industry Classification Standard (GICS) was developed by and is the
exclusive property of Morgan Stanley Capital International Inc. and Standard &
Poor's, a division of The McGraw-Hill Companies, Inc.
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 3
FUND SNAPSHOT AT JULY 31, 2007
STYLE MATRIX
STYLE MATRIX GRAPHIC
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
</Table>
Shading within the style matrix indicates areas in which the Fund generally
invests.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and serves as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
PORTFOLIO MANAGERS
<Table>
<Caption>
YEARS IN INDUSTRY
Dimitris Bertsimas, Ph.D. 14
Gina Mourtzinou, Ph.D. 11
</Table>
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A AQEAX 04/24/03
Class B AQEBX 04/24/03
Class C RDCEX 04/24/03
Class I ALEIX 07/15/04
Class R2 -- 12/11/06
Class R3 RSDEX 12/11/06
Class R4(1) RQEYX 04/24/03
Class R5 RSIPX 12/11/06
Class W RDEWX 12/01/06
(1) Effective Dec. 11, 2006, Class Y was renamed Class
R4.
Total net assets $2.819 billion
Number of holdings 251
</Table>
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4 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the year ended July 31, 2007
(BAR CHART)
<Table>
RiverSource Disciplined Equity Fund Class A
(excluding sales charge) +15.92
Standard & Poor's 500 Index (unmanaged) +16.13
Lipper Large-Cap Core Funds Index +16.16
</Table>
(see "The Fund's Long-term Performance" for Index descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the bar chart. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes.
It is not possible to invest directly in an index.
ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
<Table>
<Caption>
TOTAL NET EXPENSES(A)
Class A 1.05% 1.05%
Class B 1.82% 1.82%
Class C 1.81% 1.81%
Class I 0.70% 0.70%
Class R2(b) 1.49% 1.49%
Class R3(b) 1.25% 1.25%
Class R4(c) 1.00% 0.91%
Class R5(b) 0.75% 0.75%
Class W(d) 1.18% 1.18%
</Table>
(a) The investment manager and its affiliates have contractually agreed to
waive certain fees and to absorb certain expenses until July 31, 2008,
unless sooner terminated at the discretion of the Fund's Board. Any amounts
waived will not be reimbursed by the Fund. Under this agreement, net fund
expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment (that increased the
management fee by 0.03%), will not exceed 1.09% for Class A, 1.85% for
Class B, 1.85% for Class C, 0.78% for Class I, 1.58% for Class R2, 1.33%
for Class R3, 0.88% for Class R4, 0.83% for Class R5 and 1.23% for Class W.
(b) Inception date for Class R2, Class R3 and Class R5 was Dec. 11, 2006.
(c) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(d) Inception date for Class W was Dec. 1, 2006.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 5
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT JULY 31, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS INCEPTION
Class A (inception 4/24/03) +15.92% +12.61% +13.86%
Class B (inception 4/24/03) +15.18% +11.78% +12.97%
Class C (inception 4/24/03) +15.14% +11.80% +12.98%
Class I (inception 7/15/04) +16.29% +13.01% +12.63%
Class R2 (inception 12/11/06) N/A N/A +3.31%*
Class R3 (inception 12/11/06) N/A N/A +3.46%*
Class R4** (inception 4/24/03) +16.15% +12.87% +14.06%
Class R5 (inception 12/11/06) N/A N/A +3.76%*
Class W (inception 12/1/06) N/A N/A +5.01%*
WITH SALES CHARGE
Class A (inception 4/24/03) +9.26% +10.41% +12.29%
Class B (inception 4/24/03) +10.18% +10.70% +12.65%
Class C (inception 4/24/03) +14.14% +11.80% +12.98%
</Table>
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6 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
<Table>
<Caption>
AT JUNE 30, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS INCEPTION
Class A (inception 4/24/03) +21.13% +12.25% +15.20%
Class B (inception 4/24/03) +20.25% +11.43% +14.30%
Class C (inception 4/24/03) +20.40% +11.39% +14.32%
Class I (inception 7/15/04) +21.49% +0.00% +14.47%
Class R2 (inception 12/11/06) N/A N/A +7.33%*
Class R3 (inception 12/11/06) N/A N/A +7.48%*
Class R4** (inception 4/24/03) +21.35% +12.50% +15.40%
Class R5 (inception 12/11/06) N/A N/A +7.77%*
Class W (inception 12/1/06) N/A N/A +9.08%*
WITH SALES CHARGE
Class A (inception 4/24/03) +14.16% +10.06% +13.58%
Class B (inception 4/24/03) +15.25% +10.34% +13.98%
Class C (inception 4/24/03) +19.40% +11.39% +14.32%
</Table>
Class A share performance reflects the maximum sales charge of 5.75%. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 3%; fifth year
2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to
a 1% CDSC if shares are sold within one year after purchase. Sales charges do
not apply to Class I, Class R2, Class R3, Class R4, Class R5 and Class W shares.
Class I, Class R2, Class R3, Class R4 and Class R5 are available to
institutional investors only. Class W shares are offered through qualifying
discretionary accounts.
* Not annualized.
** Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 7
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, Portfolio Managers Dimitris Bertsimas and Gina Mourtzinou discuss
RiverSource Disciplined Equity Fund's positioning and results for the 12 months
ended July 31, 2007.
Q: How did RiverSource Disciplined Equity Fund perform for the annual period?
A: RiverSource Disciplined Equity Fund's Class A shares (excluding sales charge)
returned 15.92% for the 12 months ended July 31, 2007. The Fund
underperformed the unmanaged Standard & Poor's 500 Index (S&P 500 Index),
which gained 16.13%, as well as the Lipper Large-Cap Core Funds Index,
representing the Fund's peer group, which returned 16.16%, for the same
period.
ALL THREE MODELS OUTPERFORMED THE S&P 500 INDEX FOR THE 12-MONTH PERIOD,
WITH THE QUALITY MODEL THE STRONGEST PERFORMER, FOLLOWED BY MOMENTUM AND
THEN VALUE.
Q: What factors most significantly affected the Fund's performance?
A: The Fund's performance benefited from the three quantitative investment
models -- momentum, value and quality -- we employ in selecting stocks for
the Fund's portfolio, the quality model the strongest performer, followed by
momentum and then value for the 12-month period. This was the first annual
period since the Fund's inception during which the quality model took the
lead. The quality model was intended to serve as a defensive measure during
equity market corrections when investor risk aversion increases, and it
indeed did so by tracking the performance of the S&P 500 Index during the
significant market slump in July. In comparison, the value and momentum
models lagged the S&P 500 Index during the last month of the period. We
believe the style diversification provided by the three quantitative models
continued to be a notable investment advantage during the annual period
overall.
The Fund's significant positions in energy and telecommunication services and
its more modest exposure to financials contributed to performance.
Conversely, the Fund's sizable allocation to consumer discretionary and its
moderate positions in the strongly performing information technology and
industrials sectors detracted.
Stock selection was effective in nearly all of the sectors in which the Fund
invests, and was particularly strong in the industrials, financials and
- --------------------------------------------------------------------------------
8 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS
telecommunications sectors. The only sector in which stock selection was weak
during the period was consumer discretionary.
Among individual holdings, energy company Chevron, selected by the quality
and value models, contributed most to the Fund's return. Other strong,
positive contributors included drug manufacturer Merck & Co., which was
favored by all three models; telecommunications leaders AT&T, selected by the
momentum and value models; Verizon Communications, a value model pick; and
mortgage loan company Fannie Mae, favored by both the value and quality
models.
Stocks that detracted from the Fund's return included pharmaceutical giant
Pfizer, which was a quality model pick; consumer staples leader Archer-
Daniels-Midland, a momentum model selection; and media behemoth Time Warner,
also a momentum model pick. The Fund had significant positions in each of
these stocks, and each posted losses for the annual period.
At the end of July, the Fund's largest individual stock holdings were energy
companies Exxon Mobil and Chevron, telecommunications leader AT&T,
pharmaceutical company Pfizer, and information technology company Apple.
The Fund's small exposure to international markets through iShares MSCI EAFE
Index Fund through February 2007 also helped performance. iShares MSCI EAFE
Index Fund is an exchange-traded fund based on the MSCI EAFE Index of stocks
from developed international markets. The Fund's position in iShares MSCI
EAFE Index Fund was established -- and eliminated -- based on a separate
asset allocation model.
Q: What changes did you make to the Fund's portfolio during the period?
A: The Fund's position in iShares MSCI EAFE Index Fund was eliminated in
February 2007 in an effort to reduce overall portfolio risk. We had increased
the Fund's exposure to iShares MSCI EAFE Index Fund in September 2006, and
subsequently began to reduce the allocation in December 2006.
As a result of quantitative models-driven stock selection during the period,
the Fund's sector allocations changed somewhat. For example, the Fund's
exposure to consumer discretionary and utilities relative to the S&P 500
Index increased. The Fund's positions in health care and materials decreased.
Our risk models limit the size of individual holdings, as well as sector and
industry allocations, relative to the S&P 500 Index. For example, the
portfolio's weightings by sector and industry can never be more than 6%
overweighted or
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 9
QUESTIONS & ANSWERS
underweighted relative to the S&P 500 Index. We also apply additional risk
measures that impose constraints on market capitalization, price, quality,
turnover, transaction costs and other variables.
WE INTEND TO CONTINUE SEEKING OPTIMAL RETURNS FOR THE FUND THROUGH THE
STYLE DIVERSIFICATION OFFERED BY OUR THREE QUANTITATIVE INVESTMENT MODELS.
Q: How do you intend to manage the Fund in the coming months?
A: We intend to continue seeking optimal returns for the Fund through the style
diversification offered by our three quantitative investment models. We are
convinced of the merit of our multifaceted, disciplined approach to managing
risk in the portfolio, and believe this combination of style diversification
and rigorous risk management will allow us to maintain the high quality of
the Fund's portfolio in whatever market conditions lay ahead.
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of RiverSource Investments, LLC (RiverSource) or
any subadviser to the Fund or any other person in the RiverSource or subadviser
organizations. Any such views are subject to change at any time based upon
market or other conditions and RiverSource disclaims any responsibility to
update such views. These views may not be relied on as investment advice and,
because investment decisions for a RiverSource Fund are based on numerous
factors, may not be relied on as an indication of trading intent on behalf of
any RiverSource Fund.
- --------------------------------------------------------------------------------
10 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
THIS PAGE LEFT BLANK INTENTIONALLY
THE FUND'S LONG-TERM PERFORMANCE
The chart on the facing page illustrates the total value of an assumed $10,000
investment in RiverSource Disciplined Equity Fund Class A shares (from 5/1/03 to
7/31/07)* as compared to the performance of two widely cited performance
indices, the S&P 500 Index and the Lipper Large-Cap Core Funds Index. In
comparing the Fund's Class A shares to these indices, you should take into
account the fact that the Fund's performance reflects the maximum sales charge
of 5.75%, while such charges are not reflected in the performance of the
indices. Returns for the Fund include the reinvestment of any distribution paid
during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial institution or visiting riversource.com/funds. Also
see "Past Performance" in the Fund's current prospectus.
* Fund data is from April 24, 2003. S&P 500 Index and Lipper peer group data is
from May 1, 2003.
COMPARATIVE RESULTS
<Table>
<Caption>
SINCE
Results at July 31, 2007 1 YEAR 3 YEARS INCEPTION(3)
RIVERSOURCE DISCIPLINED EQUITY FUND (INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,926 $13,459 $16,399
Average annual total return +9.26% +10.41% +12.29%
S&P 500 INDEX(1)
Cumulative value of $10,000 $11,613 $13,959 $17,136
Average annual total return +16.13% +11.76% +13.51%
LIPPER LARGE-CAP CORE FUNDS INDEX(2)
Cumulative value of $10,000 $11,616 $13,728 $16,244
Average annual total return +16.16% +11.14% +12.09%
</Table>
Results for other share classes can be found on pages 6 and 7.
- --------------------------------------------------------------------------------
12 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN RIVERSOURCE DISCIPLINED FUND LINE
GRAPH)
<Table>
<Caption>
RIVERSOURCE DISCIPLINED
EQUITY FUND CLASS A
(INCLUDES SALES CHARGE) LIPPER LARGE-CAP CORE
($16,399) S&P 500 INDEX(1) ($17,136) FUNDS INDEX(2) ($16,244)
----------------------- -------------------------- ------------------------
5/1/03 9,425 10,000 10,000
7/03 10,254 10,849 10,755
7/04 11,483 12,278 11,832
7/05 13,315 14,003 13,318
7/06 14,147 14,756 13,984
7/07 16,399 17,136 16,244
</Table>
(1) The Standard & Poor's 500 Index (S&P 500 Index), an unmanaged index of
common stocks, is frequently used as a general measure of market
performance. The index reflects reinvestment of all distributions and
changes in market prices.
(2) The Lipper Large-Cap Core Funds Index includes the 30 largest large-cap
core funds tracked by Lipper Inc. The index's returns include net
reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive
adjustment.
(3) Fund data is from April 24, 2003. S&P 500 Index and Lipper peer group data
is from May 1, 2003.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 13
FUND EXPENSES EXAMPLE
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments; and (2) ongoing
costs, which may include management fees; distribution and service (12b-1) fees;
and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the expenses of the funds in which it invests (also
referred to as "acquired funds"), including affiliated and non-affiliated pooled
investment vehicles (including mutual funds and exchange traded funds). The
Fund's indirect expense from investing in the acquired funds is based on the
Fund's pro rata portion of the cumulative expenses charged by the acquired funds
using the acquired funds expense ratio as of the most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended July 31, 2007.
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.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
14 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
FEB. 1, 2007 JULY 31, 2007 THE PERIOD(A) EXPENSE RATIO
Class A
Actual(b) $1,000 $1,015.50 $5.10(c) 1.02%
Hypothetical
(5% return before
expenses) $1,000 $1,019.74 $5.11(c) 1.02%
Class B
Actual(b) $1,000 $1,012.80 $8.88(c) 1.78%
Hypothetical
(5% return before
expenses) $1,000 $1,015.97 $8.90(c) 1.78%
Class C
Actual(b) $1,000 $1,012.80 $8.88(c) 1.78%
Hypothetical
(5% return before
expenses) $1,000 $1,015.97 $8.90(c) 1.78%
Class I
Actual(b) $1,000 $1,016.80 $3.35(c) .67%
Hypothetical
(5% return before
expenses) $1,000 $1,021.47 $3.36(c) .67%
Class R2
Actual(b) $1,000 $1,014.10 $7.39(c) 1.48%
Hypothetical
(5% return before
expenses) $1,000 $1,017.46 $7.40(c) 1.48%
Class R3
Actual(b) $1,000 $1,015.50 $6.10(c) 1.22%
Hypothetical
(5% return before
expenses) $1,000 $1,018.74 $6.11(c) 1.22%
Class R4*
Actual(b) $1,000 $1,016.80 $4.40(c) .88%
Hypothetical
(5% return before
expenses) $1,000 $1,020.43 $4.41(c) .88%
Class R5
Actual(b) $1,000 $1,016.90 $3.70(c) .74%
Hypothetical
(5% return before
expenses) $1,000 $1,021.12 $3.71(c) .74%
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 15
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
FEB. 1, 2007 JULY 31, 2007 THE PERIOD(A) EXPENSE RATIO
Class W
Actual(b) $1,000 $1,015.50 $5.65(c) 1.13%
Hypothetical
(5% return before
expenses) $1,000 $1,019.19 $5.66(c) 1.13%
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(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 181/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended July 31, 2007: +1.55%
for Class A, +1.28% for Class B, +1.28% for Class C, +1.68% for Class I,
+1.41% for Class R2, +1.55% for Class R3, +1.68% for Class R4, +1.69% for
Class R5 and +1.55% for Class W.
(c) The investment manager and its affiliates have contractually agreed to
waive certain fees and to absorb certain expenses until July 31, 2008,
unless sooner terminated at the discretion of the Fund's Board, such that
net expenses, (excluding fees and expenses of acquired funds) before giving
effect to any performance incentive adjustment, will not exceed 1.09% for
Class A, 1.85% for Class B, 1.85% for Class C, 0.78% for Class I, 1.58% for
Class R2, 1.33% for Class R3, 0.88% for Class R4, 0.83% for Class R5 and
1.23% for Class W. Any amounts waived will not be reimbursed by the Fund.
This change was effective Aug. 1, 2007. If this change had been in place
for the entire six month period ended July 31, 2007, the actual expenses
paid would have been $5.22 for Class A, $8.99 for Class B, $8.99 for Class
C, $3.50 for Class I, $7.41 for Class R2, $6.16 for Class R3, $4.58 for
Class R4, $3.72 for Class R5 and $5.89 for Class W; the hypothetical
expenses paid would have been $5.23 for Class A, $9.01 for Class B, $9.00
for Class C, $3.51 for Class I, $7.42 for Class R2, $6.17 for Class R3,
$4.58 for Class R4, $3.73 for Class R5 and $5.90 for Class W.
- --------------------------------------------------------------------------------
16 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
INVESTMENTS IN SECURITIES
JULY 31, 2007
(Percentages represent value of investments compared to net assets)
<Table>
<Caption>
COMMON STOCKS (98.7%)
ISSUER SHARES VALUE(A)
AEROSPACE & DEFENSE (2.4%)
General Dynamics 98,044 $7,702,337
Goodrich 38,815 2,441,852
Honeywell Intl 236,834 13,620,323
Lockheed Martin 109,106 10,744,759
Precision Castparts 127,995 17,542,994
Rockwell Collins 39,213 2,693,933
United Technologies 170,133 12,414,605
---------------
Total 67,160,803
- -----------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS (0.2%)
United Parcel Service Cl B 69,400 5,254,968
- -----------------------------------------------------------------------------------
AUTO COMPONENTS (0.5%)
Cooper Tire & Rubber 13,328 306,411
Goodyear Tire & Rubber 194,143(b) 5,575,787
Johnson Controls 65,282 7,386,658
---------------
Total 13,268,856
- -----------------------------------------------------------------------------------
AUTOMOBILES (1.0%)
Ford Motor 949,756 8,082,424
General Motors 375,737 12,173,878
Harley-Davidson 144,208 8,266,003
---------------
Total 28,522,305
- -----------------------------------------------------------------------------------
BEVERAGES (1.9%)
Coca-Cola 473,330 24,665,226
Molson Coors Brewing Cl B 10,957 974,516
PepsiCo 442,003 29,004,237
---------------
Total 54,643,979
- -----------------------------------------------------------------------------------
BUILDING PRODUCTS (0.3%)
American Standard Companies 63,234 3,417,798
Masco 136,787 3,721,974
---------------
Total 7,139,772
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CAPITAL MARKETS (3.5%)
Bear Stearns Companies 32,004 $3,879,525
Franklin Resources 155,884 19,854,945
Janus Capital Group 57,498 1,728,390
Legg Mason 26,523(f) 2,387,070
Lehman Brothers Holdings 328,565 20,371,030
Merrill Lynch & Co 426,443 31,642,070
Morgan Stanley 290,085 18,527,729
T Rowe Price Group 3,814 198,824
---------------
Total 98,589,583
- -----------------------------------------------------------------------------------
CHEMICALS (1.4%)
Ashland 8,000 488,480
Dow Chemical 115,065 5,003,026
Ecolab 67,323 2,834,972
EI du Pont de Nemours & Co 279,188 13,046,455
Intl Flavors & Fragrances 45,228 2,266,375
Monsanto 165,680 10,678,076
PPG Inds 27,638 2,107,950
Sigma-Aldrich 59,672 2,704,335
---------------
Total 39,129,669
- -----------------------------------------------------------------------------------
COMMERCIAL BANKS (1.3%)
BB&T 129,347 4,840,165
Comerica 123,145 6,484,816
Fifth Third Bancorp 10,200 376,278
First Horizon Natl 130,956 4,153,924
Huntington Bancshares 41,800 802,560
KeyCorp 80,436 2,790,325
Natl City 393,484 11,564,495
Synovus Financial 54,813 1,532,571
US Bancorp 128,076 3,835,876
---------------
Total 36,381,010
- -----------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (0.1%)
Monster Worldwide 58,736(b) 2,284,243
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND - 2007 ANNUAL REPORT 17
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
COMMUNICATIONS EQUIPMENT (0.9%)
Avaya 72,746(b) $1,203,219
Corning 242,756(b) 5,787,303
Juniper Networks 175,616(b) 5,261,455
QUALCOMM 261,676 10,898,805
Tellabs 315,628(b) 3,582,378
---------------
Total 26,733,160
- -----------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (6.1%)
Apple 665,941(b) 87,744,385
EMC 1,286,621(b) 23,815,355
Intl Business Machines 480,561 53,174,075
Lexmark Intl Cl A 113,857(b) 4,501,906
NCR 83,977(b) 4,385,279
---------------
Total 173,621,000
- -----------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (0.1%)
Fluor 13,844 1,599,120
- -----------------------------------------------------------------------------------
CONSTRUCTION MATERIALS (0.2%)
Vulcan Materials 44,481 4,257,721
- -----------------------------------------------------------------------------------
CONTAINERS & PACKAGING (0.3%)
Ball 31,661 1,623,259
Pactiv 98,053(b) 3,099,455
Sealed Air 50,522 1,376,725
Temple-Inland 16,613 965,714
---------------
Total 7,065,153
- -----------------------------------------------------------------------------------
DISTRIBUTORS (0.2%)
Genuine Parts 101,046 4,807,769
- -----------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (0.1%)
H&R Block 71,860 1,433,607
- -----------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (2.5%)
Bank of America 420,777 19,953,245
CIT Group 120,412 4,958,566
Citigroup 977,792 45,535,774
---------------
Total 70,447,585
- -----------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (5.5%)
AT&T 3,145,269 123,168,734
Embarq 78,688 4,862,132
Verizon Communications 706,965 30,130,848
---------------
Total 158,161,714
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
ELECTRIC UTILITIES (1.8%)
American Electric Power 346,619 $15,074,460
Edison Intl 49,383 2,611,867
Entergy 125,035 12,498,499
FPL Group 318,654 18,395,896
Pinnacle West Capital 47,828 1,792,593
Progress Energy 21,334 931,442
---------------
Total 51,304,757
- -----------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (0.1%)
Emerson Electric 48,625 2,288,779
- -----------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (0.5%)
BJ Services 67,770 1,772,186
Nabors Inds 75,642(b,c) 2,211,772
Natl Oilwell Varco 27,414(b) 3,292,696
Noble 21,064 2,158,217
Transocean 44,475(b) 4,778,838
---------------
Total 14,213,709
- -----------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (2.0%)
Kroger 100,259 2,602,724
Safeway 318,606 10,153,973
SUPERVALU 208,803 8,700,821
SYSCO 74,978 2,390,299
Wal-Mart Stores 717,641 32,975,603
---------------
Total 56,823,420
- -----------------------------------------------------------------------------------
FOOD PRODUCTS (0.4%)
Sara Lee 375,839 5,957,048
Tyson Foods Cl A 223,365 4,757,675
WM Wrigley Jr 8,183 471,995
---------------
Total 11,186,718
- -----------------------------------------------------------------------------------
GAS UTILITIES (--%)
Nicor 32,448 1,278,776
- -----------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (1.3%)
Baxter Intl 96,193 5,059,752
Becton Dickinson & Co 44,419 3,391,835
Stryker 229,919 14,353,843
Zimmer Holdings 182,299(b) 14,175,570
---------------
Total 36,981,000
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
18 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HEALTH CARE PROVIDERS & SERVICES (1.5%)
Cardinal Health 85,343 $5,609,595
CIGNA 430,592 22,235,772
Express Scripts 124,816(b) 6,257,026
Health Management Associates Cl A 67,300 542,438
Medco Health Solutions 41,361(b) 3,361,408
Quest Diagnostics 38,786(d) 2,151,459
Tenet Healthcare 261,345(b) 1,353,767
---------------
Total 41,511,465
- -----------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (2.7%)
Harrah's Entertainment 116,274 9,847,245
Hilton Hotels 243,528 10,766,373
Marriott Intl Cl A 168,444 6,998,848
McDonald's 1,025,655 49,098,105
---------------
Total 76,710,571
- -----------------------------------------------------------------------------------
HOUSEHOLD DURABLES (0.8%)
Centex 82,847 3,091,022
DR Horton 466,472 7,612,822
KB HOME 94,169 2,995,516
Lennar Cl A 201,361 6,173,728
Pulte Homes 188,605 3,647,621
---------------
Total 23,520,709
- -----------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS (0.5%)
Kimberly-Clark 207,731 13,974,064
- -----------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.7%)
Constellation Energy Group 140,900 11,807,420
Dynegy Cl A 437,931(b) 3,901,965
TXU 55,953 3,650,933
---------------
Total 19,360,318
- -----------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (1.3%)
3M 393,613 35,000,068
Tyco Intl 22,489(c) 1,063,505
---------------
Total 36,063,573
- -----------------------------------------------------------------------------------
INSURANCE (4.6%)
ACE 116,429(c) 6,720,282
Allstate 451,018 23,971,608
Ambac Financial Group 60,196 4,042,161
Chubb 184,140 9,282,497
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
INSURANCE (CONT.)
Cincinnati Financial 28,900 $1,132,880
Genworth Financial Cl A 348,663 10,641,195
Lincoln Natl 86,117 5,194,577
Marsh & McLennan Companies 194,762 5,365,693
MBIA 75,996 4,263,376
MetLife 113,489 6,834,308
Progressive 452,728 9,498,233
Prudential Financial 137,775 12,210,998
Safeco 59,339 3,469,551
Torchmark 66,596 4,098,318
Travelers Companies 353,002 17,925,442
UnumProvident 313,431 7,616,373
---------------
Total 132,267,492
- -----------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL (0.7%)
Amazon.com 181,591(b) 14,262,157
IAC/InterActiveCorp 158,366(b) 4,551,439
---------------
Total 18,813,596
- -----------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (0.8%)
eBay 635,338(b) 20,584,951
VeriSign 38,282(b) 1,136,593
---------------
Total 21,721,544
- -----------------------------------------------------------------------------------
IT SERVICES (0.9%)
Affiliated Computer Services Cl A 19,858(b) 1,065,580
Automatic Data Processing 16,251 754,371
Cognizant Technology Solutions Cl A 104,056(b) 8,426,455
Fidelity Natl Information Services 51,382 2,550,089
First Data 181,735(f) 5,777,356
Paychex 98,702 4,084,289
Unisys 469,201(b) 3,795,836
---------------
Total 26,453,976
- -----------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (0.8%)
Eastman Kodak 205,970(d) 5,200,743
Hasbro 149,979 4,202,412
Mattel 530,174 12,146,285
---------------
Total 21,549,440
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND - 2007 ANNUAL REPORT 19
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
LIFE SCIENCES TOOLS & SERVICES (0.2%)
PerkinElmer 74,591 $2,075,868
Thermo Fisher Scientific 60,622(b) 3,165,074
---------------
Total 5,240,942
- -----------------------------------------------------------------------------------
MACHINERY (2.7%)
Caterpillar 98,844 7,788,907
Cummins 59,608 7,075,470
Deere & Co 69,770 8,401,702
Eaton 65,117 6,328,070
Illinois Tool Works 40,630 2,236,682
Ingersoll-Rand Cl A 119,334(c) 6,004,887
ITT 56,354 3,543,540
Navistar Intl 54,900(b) 3,465,563
PACCAR 268,025 21,929,805
Pall 57,228 2,376,107
Parker Hannifin 18,184 1,794,397
Terex 48,204(b) 4,157,595
---------------
Total 75,102,725
- -----------------------------------------------------------------------------------
MEDIA (3.2%)
CBS Cl B 458,797 14,553,041
Comcast Cl A 497,126(b) 13,059,500
DIRECTV Group 195,319(b) 4,377,099
Gannett 308,497 15,394,000
Interpublic Group of Companies 341,187(b) 3,579,052
McGraw-Hill Companies 9,792 592,416
Meredith 12,130 685,224
New York Times Cl A 70,995(d) 1,622,946
Time Warner 1,786,378 34,405,639
Tribune 83,709 2,340,504
---------------
Total 90,609,421
- -----------------------------------------------------------------------------------
METALS & MINING (1.1%)
Alcoa 264,112 10,089,078
Allegheny Technologies 62,632 6,571,976
Freeport-McMoRan Copper & Gold 128,319 12,059,420
United States Steel 36,690(f) 3,606,260
---------------
Total 32,326,734
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
MULTILINE RETAIL (0.5%)
Big Lots 83,306(b) $2,154,293
Family Dollar Stores 36,123 1,069,963
Kohl's 55,930(b) 3,400,544
Nordstrom 150,187 7,145,898
---------------
Total 13,770,698
- -----------------------------------------------------------------------------------
MULTI-UTILITIES (0.8%)
CenterPoint Energy 303,481 5,001,367
CMS Energy 57,088 922,542
NiSource 121,389 2,314,888
PG&E 68,873 2,948,453
Sempra Energy 162,520 8,568,055
TECO Energy 40,396 651,991
Xcel Energy 98,866 2,006,980
---------------
Total 22,414,276
- -----------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (14.5%)
Anadarko Petroleum 273,837 13,782,216
Apache 132,448 10,707,096
Chevron 1,561,283 133,114,989
ConocoPhillips 666,527 53,882,043
CONSOL Energy 28,588 1,190,690
Devon Energy 57,973 4,325,366
Exxon Mobil 1,648,955 140,375,540
Hess 62,794 3,842,993
Marathon Oil 375,756 20,741,731
Occidental Petroleum 401,348 22,764,459
Valero Energy 84,736 5,678,159
---------------
Total 410,405,282
- -----------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.4%)
MeadWestvaco 57,197 1,861,190
Weyerhaeuser 134,478 9,580,213
---------------
Total 11,441,403
- -----------------------------------------------------------------------------------
PERSONAL PRODUCTS (0.2%)
Alberto-Culver 41,634 979,232
Avon Products 136,094 4,900,745
---------------
Total 5,879,977
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
20 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
PHARMACEUTICALS (8.4%)
Abbott Laboratories 551,435 $27,952,240
Forest Laboratories 73,718(b) 2,963,464
Johnson & Johnson 1,173,043 70,969,102
King Pharmaceuticals 212,443(b) 3,613,655
Merck & Co 772,283 38,343,851
Pfizer 4,043,991 95,074,228
---------------
Total 238,916,540
- -----------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (0.4%)
General Growth Properties 112,440 5,394,871
Simon Property Group 63,007(f) 5,451,996
---------------
Total 10,846,867
- -----------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT (0.1%)
CB Richard Ellis Group Cl A 70,910(b) 2,476,177
- -----------------------------------------------------------------------------------
ROAD & RAIL (0.5%)
Avis Budget Group 13,026(b) 334,377
CSX 67,474 3,198,942
Union Pacific 81,844 9,750,895
---------------
Total 13,284,214
- -----------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (0.6%)
Intel 301,534 7,122,233
KLA-Tencor 49,695 2,822,179
LSI 238,134(b) 1,714,565
MEMC Electronic Materials 35,228(b) 2,160,181
Teradyne 58,834(b) 923,105
Xilinx 45,631 1,140,775
---------------
Total 15,883,038
- -----------------------------------------------------------------------------------
SOFTWARE (4.0%)
Adobe Systems 77,430(b) 3,119,655
Autodesk 51,339(b) 2,175,233
BMC Software 95,479(b) 2,742,157
CA 256,197 6,425,421
Compuware 234,183(b) 2,184,927
Microsoft 2,529,902 73,341,859
Oracle 1,128,747(b) 21,581,643
---------------
Total 111,570,895
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SPECIALTY RETAIL (3.7%)
Abercrombie & Fitch Cl A 47,279 $3,304,802
AutoNation 126,049(b) 2,455,435
AutoZone 41,363(b) 5,245,242
Bed Bath & Beyond 106,045(b) 3,673,399
Best Buy 76,085 3,392,630
Gap 252,105 4,336,206
Home Depot 1,238,236 46,025,232
Lowe's Companies 831,569 23,292,248
RadioShack 133,706 3,360,032
Sherwin-Williams 53,160 3,704,720
Tiffany & Co 106,856 5,155,802
---------------
Total 103,945,748
- -----------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS (1.7%)
Coach 425,592(b) 19,347,413
Jones Apparel Group 82,114 2,049,565
Liz Claiborne 79,065 2,778,344
Nike Cl B 222,731 12,573,165
Polo Ralph Lauren 57,168 5,107,961
VF 69,819 5,989,772
---------------
Total 47,846,220
- -----------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (4.1%)
Countrywide Financial 276,087 7,777,371
Fannie Mae 976,195 58,415,508
Freddie Mac 452,106 25,892,111
MGIC Investment 99,793(d) 3,857,997
Washington Mutual 524,984 19,702,650
---------------
Total 115,645,637
- -----------------------------------------------------------------------------------
TOBACCO (1.6%)
Altria Group 650,584 43,244,319
UST 53,877 2,885,113
---------------
Total 46,129,432
- -----------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (0.1%)
WW Grainger 26,000 2,271,360
- -----------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $2,630,769,004) $2,782,533,510
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND - 2007 ANNUAL REPORT 21
<Table>
<Caption>
MONEY MARKET FUND (0.3%)(e)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 8,325,387(g) $8,325,387
- -----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $8,325,387) $8,325,387
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $2,639,094,391)(h) $2,790,858,897
===================================================================================
</Table>
NOTES TO INVESTMENTS IN SECURITIES
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At July 31, 2007, the
value of foreign securities represented 0.6% of net assets.
(d) At July 31, 2007, security was partially or fully on loan. See Note 5 to
the financial statements.
(e) Cash collateral received from security lending activity is invested in an
affiliated money market fund and represents 0.2% of net assets. See Note 5
to the financial statements. 0.1% of net assets is the Fund's cash
equivalent position.
(f) Partially pledged as initial margin deposit on the following open stock
index futures contracts (see Note 6 to the financial statements):
<Table>
<Caption>
TYPE OF SECURITY CONTRACTS
- ------------------------------------------------------------------------------
PURCHASE CONTRACTS
S&P 500 Index, Sept. 2007 67
</Table>
(g) Affiliated Money Market Fund - See Note 7 to the financial statements.
(h) At July 31, 2007, the cost of securities for federal income tax purposes
was $2,644,641,892 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $257,486,790
Unrealized depreciation (111,269,785)
- ------------------------------------------------------------------------------
Net unrealized appreciation $146,217,005
- ------------------------------------------------------------------------------
</Table>
The Global Industry Classification Standard (GICS) was developed by and is the
exclusive property of Morgan Stanley Capital International Inc. and Standard &
Poor's, a division of The McGraw-Hill Companies, Inc.
HOW TO FIND INFORMATION ABOUT THE FUND'S 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 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
can be found at riversource.com/funds.
- --------------------------------------------------------------------------------
22 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2007
<Table>
ASSETS
Investments in securities, at value (Note 1)
Unaffiliated issuers* (identified cost $2,630,769,004) $2,782,533,510
Affiliated money market fund (identified cost $8,325,387)
(Note 7) 8,325,387
- ------------------------------------------------------------------------------
Total investments in securities (identified cost
$2,639,094,391) 2,790,858,897
Capital shares receivable 33,013,338
Dividends and accrued interest receivable 3,496,204
- ------------------------------------------------------------------------------
Total assets 2,827,368,439
- ------------------------------------------------------------------------------
LIABILITIES
Disbursements in excess of cash on demand deposit 266,725
Capital shares payable 1,458,642
Payable for investment securities purchased 56,232
Payable upon return of securities loaned (Note 5) 5,989,000
Variation margin payable 10,575
Accrued investment management services fee 44,996
Accrued distribution fee 16,723
Accrued transfer agency fee 6,321
Accrued administrative services fee 4,109
Accrued plan administration services fee 1,096
Other accrued expenses 134,609
- ------------------------------------------------------------------------------
Total liabilities 7,989,028
- ------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $2,819,379,411
==============================================================================
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 23
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
JULY 31, 2007
<Table>
REPRESENTED BY
Capital stock -- $.01 par value (Note 1) $ 3,901,041
Additional paid-in capital 2,510,493,651
Undistributed net investment income 15,309,316
Accumulated net realized gain (loss) 138,346,267
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (Note 6) 151,329,136
- ------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $2,819,379,411
==============================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $1,410,073,147
Class B $ 62,090,519
Class C $ 3,322,979
Class I $ 441,406,784
Class R2 $ 4,763
Class R3 $ 4,770
Class R4 $ 157,584,051
Class R5 $ 4,783
Class W $ 744,887,615
Net asset value per share of
outstanding capital stock: Class A shares(1) 195,317,511 $ 7.22
Class B shares 8,724,783 $ 7.12
Class C shares 467,585 $ 7.11
Class I shares 60,689,061 $ 7.27
Class R2 shares 661 $ 7.21
Class R3 shares 661 $ 7.22
Class R4 shares 21,739,173 $ 7.25
Class R5 shares 661 $ 7.24
Class W shares 103,164,030 $ 7.22
- --------------------------------------------------------------------------------------------
* Including securities on loan, at
value (Note 5) $ 5,528,300
- --------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $7.66. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
24 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 2007
<Table>
INVESTMENT INCOME
Income:
Dividends $ 46,250,747
Interest 556,791
Income distributions from affiliated money market fund (Note
7) 1,766,357
Fee income from securities lending (Note 5) 102,236
- ----------------------------------------------------------------------------
Total income 48,676,131
- ----------------------------------------------------------------------------
Expenses (Note 2):
Investment management services fee 14,110,274
Distribution fee
Class A 3,592,175
Class B 774,204
Class C 30,535
Class R2 15
Class R3 7
Class W 360,341
Transfer agency fee
Class A 1,500,245
Class B 94,020
Class C 3,500
Class R2 2
Class R3 2
Class R4 149,207
Class R5 2
Class W 288,273
Service fee -- Class R4 93,450
Administrative services fees and expenses 1,224,572
Plan administration services fee
Class R2 7
Class R3 7
Class R4 329,854
Compensation of board members 41,234
Custodian fees 197,205
Printing and postage 169,900
Registration fees 193,695
Professional fees 82,684
Other 80,945
- ----------------------------------------------------------------------------
Total expenses 23,316,355
Expenses waived/reimbursed by the Investment Manager and
its affiliates (Note 2) (791,059)
- ----------------------------------------------------------------------------
22,525,296
Earnings and bank fee credits on cash balances (Note 2) (177,524)
- ----------------------------------------------------------------------------
Total net expenses 22,347,772
- ----------------------------------------------------------------------------
Investment income (loss) -- net 26,328,359
- ----------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 25
STATEMENT OF OPERATIONS (CONTINUED)
YEAR ENDED JULY 31, 2007
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (Note 3) $164,997,246
Futures contracts 10,332,154
- ----------------------------------------------------------------------------
Net realized gain (loss) on investments 175,329,400
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities
in foreign currencies 99,972,248
- ----------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 275,301,648
- ----------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $301,630,007
============================================================================
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
26 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 26,328,359 $ 8,709,265
Net realized gain (loss) on investments 175,329,400 122,200,444
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies 99,972,248 (121,608,827)
- ---------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 301,630,007 9,300,882
- ---------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (11,770,748) (354,341)
Class B (119,376) (19,051)
Class C (7,167) (767)
Class I (4,503,510) (1,329,352)
Class R2 (53) N/A
Class R3 (53) N/A
Class R4 (2,093,617) (391)
Class R5 (54) N/A
Class W (4,357) N/A
Net realized gain
Class A (98,698,411) (1,913,998)
Class B (5,457,193) (540,285)
Class C (199,900) (14,293)
Class I (28,282,528) (5,176,835)
Class R2 (338) N/A
Class R3 (338) N/A
Class R4 (15,612,336) (1,940)
Class R5 (338) N/A
Class W (27,397) N/A
- ---------------------------------------------------------------------------------------
Total distributions (166,777,714) (9,351,253)
- ---------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 27
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Proceeds from sales
Class A shares (Note 2) $ 88,546,740 $ 57,119,187
Class B shares 11,644,836 8,354,913
Class C shares 962,793 459,648
Class I shares 268,920,269 127,309,091
Class R2 shares 5,000 N/A
Class R3 shares 5,000 N/A
Class R4 shares 96,913,115 1,874,060
Class R5 shares 5,000 N/A
Class W shares 847,280,579 N/A
Fund merger (Note 9)
Class A shares N/A 1,396,617,869
Class B shares N/A 85,982,462
Class C shares N/A 2,432,014
Class I shares N/A 37,756,460
Class R4 shares N/A 274,057,962
Reinvestment of distributions at net asset value
Class A shares 101,787,281 2,250,671
Class B shares 5,504,829 553,930
Class C shares 204,516 13,921
Class I shares 32,784,089 6,505,529
Class R4 shares 17,705,953 1,577
Class W shares 31,356 N/A
Payments for redemptions
Class A shares (248,119,981) (116,576,502)
Class B shares (Note 2) (34,806,536) (29,916,465)
Class C shares (Note 2) (749,148) (373,393)
Class I shares (138,117,054) (1,598,499)
Class R4 shares (203,796,200) (51,682,981)
Class W shares (82,651,517) N/A
- ---------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions 764,060,920 1,801,141,454
- ---------------------------------------------------------------------------------------
Total increase (decrease) in net assets 898,913,213 1,801,091,083
Net assets at beginning of year 1,920,466,198 119,375,115
- ---------------------------------------------------------------------------------------
Net assets at end of year $2,819,379,411 $1,920,466,198
=======================================================================================
Undistributed net investment income $ 15,309,316 $ 7,730,352
- ---------------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
28 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a series of RiverSource Large Cap Series, Inc. and is registered
under the Investment Company Act of 1940 (as amended) as a diversified, open-end
management investment company. RiverSource Large Cap Series, Inc. has 10 billion
authorized shares of capital stock that can be allocated among the separate
series as designated by the Board. The Fund invests primarily in equity
securities of companies listed on U.S. exchanges with market capitalizations
greater than $5 billion at the time of purchase.
The Fund offers Class A, Class B, Class C, Class I and Class R4 shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I and Class R4 shares have no sales charge and are offered only to
qualifying institutional investors.
Effective Dec. 11, 2006, the Board approved renaming Class Y as Class R4,
terminating the shareholder servicing agreement, revising the fee structure
under the transfer agent agreement from account-based to asset-based, and
adopting a plan administration services agreement.
At July 31, 2007, Ameriprise Financial, Inc. (Ameriprise Financial), the parent
company of RiverSource Investments, LLC (the Investment Manager) and the
affiliated funds-of-funds owned 100% of Class I shares.
Effective Dec.11, 2006, the Fund offers additional classes of shares, Class R2,
Class R3 and Class R5, to certain institutional investors. These shares are sold
without a front-end sales charge or CDSC. At July 31, 2007, Ameriprise Financial
owned 100% of Class R2, Class R3 and Class R5 shares.
Effective Dec. 1, 2006, the Fund offers an additional class of shares, Class W,
through qualifying discretionary accounts. Class W shares are sold without a
front-end sales charge or CDSC.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration fees) differ among classes. Income, expenses (other
than class specific expenses) and realized and unrealized gains or losses on
investments are allocated to each class of shares based upon its relative net
assets.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 29
The Fund's significant accounting policies are summarized below:
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of each business day. Securities traded
on national securities exchanges or included in national market systems are
valued at the last quoted sales price. Debt securities are generally traded in
the over-the-counter market and are valued at a price that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
Foreign securities are valued based on quotations from the principal market in
which such securities are normally traded. The procedures adopted by the Board
of Directors of the funds generally contemplate the use of fair valuation in the
event that price quotations or valuations are not readily available, price
quotations or valuations from other sources are not reflective of market value
and thus deemed unreliable, or a significant event has occurred in relation to a
security or class of securities (such as foreign equities) that is not reflected
in price quotations or valuations from other sources. A fair value price is a
good faith estimate of the value of a security at a given point in time. Many
securities markets and exchanges outside the U.S. close prior to the close of
the New York Stock Exchange and therefore the closing prices for securities in
such markets or on such exchanges may not fully reflect events that occur after
such close but before the close of the New York Stock Exchange, including
significant movements in the U.S. market after foreign exchanges have closed.
Accordingly, in those situations, Ameriprise Financial will fair value foreign
equity securities pursuant to procedures adopted by the Board of Directors of
the funds, including utilizing a third party pricing service to determine these
fair values. These procedures take into account multiple factors, including
movements in the U.S. securities markets, to determine a good faith estimate
that reasonably reflects the current market conditions as of the close of the
New York Stock Exchange. Swap transactions are valued through an authorized
pricing service, broker, or an internal model. Short-term securities maturing in
more than 60 days from the valuation date are valued at the market price or
approximate market value based on current interest rates; those maturing in 60
days or less are valued at amortized cost.
OPTION TRANSACTIONS
To produce incremental earnings, protect gains, and facilitate buying and
selling of securities for investments, the Fund may buy and write options traded
on any U.S. or foreign exchange or in the over-the-counter market where
completing the obligation depends upon the credit standing of the other party.
Cash collateral may be collected by the Fund to secure certain over-the-counter
options trades. Cash collateral held by the Fund for such option trades must be
returned to the
- --------------------------------------------------------------------------------
30 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
counterparty upon closure, exercise or expiration of the contract. The Fund also
may buy and sell put and call options and write covered call options on
portfolio securities as well as write cash-secured put options. The risk in
writing a call option is that the Fund gives up the opportunity for profit if
the market price of the security increases. The risk in writing a put option is
that the Fund may incur a loss if the market price of the security decreases and
the option is exercised. The risk in buying an option is that the Fund pays a
premium whether or not the option is exercised. The Fund also has the additional
risk of being unable to enter into a closing transaction if a liquid secondary
market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The Fund will
realize a gain or loss when the option transaction expires or closes. When an
option is exercised, the proceeds on sales for a written call option, the
purchase cost for a written put option or the cost of a security for a purchased
put or call option is adjusted by the amount of premium received or paid. At
July 31, 2007, the Fund had no outstanding option contracts.
FUTURES TRANSACTIONS
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund also may buy and write put and call options on these futures contracts.
Risks of entering into futures contracts and related options include the
possibility of an illiquid market and that a change in the value of the contract
or option may not correlate with changes in the value of the underlying
securities.
Futures are valued daily based upon the last sale price at the close of market
on the principal exchange on which they are traded. Upon entering into a futures
contract, the Fund is required to deposit either cash or securities in an amount
(initial margin) equal to a certain percentage of the contract value. Subsequent
payments (variation margin) are made or received by the Fund each day. The
variation margin payments are equal to the daily changes in the contract value
and are recorded as unrealized gains and losses. The Fund recognizes a realized
gain or loss when the contract is closed or expires.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the statement of operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 31
settlement date on securities transactions, and other translation gains or
losses on dividends, interest income and foreign withholding taxes.
The Fund may enter into forward foreign currency exchange contracts for
operational purposes and to protect against adverse exchange rate fluctuation.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates from an
independent pricing service. The Fund is subject to the credit risk that the
other party will not complete its contract obligations. At July 31, 2007, the
Fund had no outstanding forward foreign currency contracts.
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 to shareholders. No provision for income or excise
taxes is thus required.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred losses on
certain futures contracts, the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes, and losses deferred due to
"wash sale" transactions. 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 (losses) were recorded by
the Fund.
On the statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been decreased by $250,460
and accumulated net realized gain been increased by $250,460.
- --------------------------------------------------------------------------------
32 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
The tax character of distributions paid for the years indicated is as follows:
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
- ----------------------------------------------------------------------------
CLASS A
Distributions paid from:
Ordinary income.......................... $55,821,524 $1,705,386
Long-term capital gain................... 54,647,635 562,953
CLASS B
Distributions paid from:
Ordinary income.......................... 2,555,014 400,261
Long-term capital gain................... 3,021,555 159,075
CLASS C
Distributions paid from:
Ordinary income.......................... 96,386 10,856
Long-term capital gain................... 110,681 4,204
CLASS I
Distributions paid from:
Ordinary income.......................... 17,126,482 4,989,806
Long-term capital gain................... 15,659,556 1,516,381
CLASS R2(A)
Distributions paid from:
Ordinary income.......................... 204 N/A
Long-term capital gain................... 187 N/A
CLASS R3(A)
Distributions paid from:
Ordinary income.......................... 204 N/A
Long-term capital gain................... 187 N/A
CLASS R4(B)
Distributions paid from:
Ordinary income.......................... 9,061,667 1,765
Long-term capital gain................... 8,644,286 566
CLASS R5(A)
Distributions paid from:
Ordinary income.......................... 205 N/A
Long-term capital gain................... 187 N/A
CLASS W(C)
Distributions paid from:
Ordinary income.......................... 16,585 N/A
Long-term capital gain................... 15,169 N/A
</Table>
(a) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) For the period from Dec. 1, 2006 (inception date) to July 31, 2007.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 33
At July 31, 2007, the components of distributable earnings on a tax basis are as
follows:
<Table>
Undistributed ordinary income............................. $ 59,944,450
Undistributed accumulated long-term gain.................. $ 98,799,366
Unrealized appreciation (depreciation).................... $146,240,903
</Table>
RECENT ACCOUNTING PRONOUNCEMENTS
On Sept. 20, 2006, the Financial Accounting Standards Board (FASB) released
Statement of Financial Accounting Standards No. 157 "Fair Value Measurements"
(SFAS 157). SFAS 157 establishes an authoritative definition of fair value, sets
out a framework for measuring fair value, and requires additional disclosures
about fair-value measurements. The application of SFAS 157 is required for
fiscal years beginning after Nov. 15, 2007 and interim periods within those
fiscal years. The impact of SFAS 157 on the Fund's financial statements is being
evaluated.
In June 2006, the FASB issued FASB Interpretation 48 (FIN 48), "Accounting for
Uncertainty in Income Taxes." FIN 48 clarifies the accounting for uncertainty in
income taxes recognized in accordance with FASB Statement 109, "Accounting for
Income Taxes." FIN 48 prescribes a two-step process to recognize and measure a
tax position taken or expected to be taken in a tax return. The first step is to
determine whether a tax position has met the more-likely-than-not recognition
threshold and the second step is to measure a tax position that meets the
threshold to determine the amount of benefit to recognize. FIN 48 also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition. FIN 48 is effective for fiscal
years beginning after Dec. 15, 2006. Tax positions of the Fund are being
evaluated to determine the impact, if any, to the Fund. The adoption of FIN 48
is not anticipated to have a material impact on the Fund.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend. On March 7, 2006, an additional
dividend was paid before the merger (see Note 9) to ensure that current
shareholders of RiverSource Disciplined Equity Fund would not experience a
dilution in their share of the Fund's income or capital gains.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date and interest income,
including amortization of premium, market discount and original issue discount
using the effective interest method, is accrued daily.
- --------------------------------------------------------------------------------
34 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
2. EXPENSES AND SALES CHARGES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets that declines from 0.60%
to 0.375% annually as the Fund's assets increase. The fee may be adjusted upward
or downward by a performance incentive adjustment based on a comparison of the
performance of Class A shares of the Fund to the Lipper Large-Cap Core Funds
Index. In certain circumstances, the Board may approve a change in the index.
The maximum adjustment is 0.12% per year. If the performance difference is less
than 0.50%, the adjustment will be zero. The adjustment increased the fee by
$716,428 for the year ended July 31, 2007. The management fee for the year ended
July 31, 2007, was 0.61% of the Fund's average daily net assets, including an
adjustment under the terms of the performance incentive adjustment.
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines from 0.06% to 0.03% annually as the
Fund's assets increase.
Other expenses in the amount of $26,786 are for, among other things, certain
expenses of the Fund or the Board including: Fund boardroom and office expense,
employee compensation, employee health and retirement benefits, and certain
other expenses. Payment of these Fund and Board expenses is facilitated by a
company providing limited administrative services to the Fund and the Board.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a former Board Chair's
compensation, including health benefits and payment of certain other expenses,
are included under other expenses.
Under a Deferred Compensation Plan (the Plan), non-interested board members may
defer receipt of their compensation. Deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of the Fund or other
RiverSource funds. The Fund's liability for these amounts is adjusted for market
value changes and remains in the Fund until distributed in accordance with the
Plan.
Professional fees include fees paid by the Fund for legal services and
independent registered public accounting firm services.
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual fee per shareholder account for this service as follows:
- - Class A $19.50
- - Class B $20.50
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 35
- - Class C $20.00
Effective Dec. 11, 2006, as part of the Board's approval to rename Class Y as
Class R4, the fee structure under the Transfer Agency Agreement was revised from
an account-based fee for Class Y to an asset-based fee for Class R4. The Fund
pays the Transfer Agent an annual asset-based fee at a rate of 0.05% of the
Fund's average daily net assets attributable to Class R4 shares. Prior to Dec.
11, 2006, the Fund paid the Transfer Agent an annual account-based fee of $17.50
per shareholder account.
In addition, the Fund pays the Transfer Agent an annual asset-based fee at a
rate of 0.05% of the Fund's average daily net assets attributable to Class R2,
Class R3 and Class R5 shares and an annual asset-based fee at a rate of 0.20% of
the Fund's average daily net assets attributable to Class W shares.
Prior to Dec. 11, 2006, Class I paid a transfer agency fee at an annual rate per
shareholder account of $1. Effective Dec. 11, 2006, this fee was eliminated.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 12 months from the date the account becomes inactive. These
fees are included in the transfer agency fees on the statement of operations.
The Fund has agreements with Ameriprise Financial Services, Inc. and RiverSource
Distributors, Inc. (collectively, the Distributor) for distribution and
shareholder services. Under a Plan and Agreement of Distribution pursuant to
Rule 12b-1, the Fund pays a fee at an annual rate of up to 0.25% of the Fund's
average daily net assets attributable to Class A, Class R3 and Class W shares, a
fee at annual rate of up to 0.50% of the Fund's average daily net assets
attributable to Class R2 shares and a fee at an annual rate of up to 1.00% of
the Fund's average daily net assets attributable to Class B and Class C shares.
Effective Dec. 11, 2006, a Plan Administration Services Agreement was adopted
for the restructured Class R4 and the introduction of Class R2 and Class R3. The
fee is calculated at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares.
Prior to Dec. 11, 2006, under a Shareholder Service Agreement, the Fund paid the
Distributor a fee for service provided to shareholders by the Distributor and
other servicing agents with respect to Class Y shares. The fee was calculated at
a rate of 0.10% of the Fund's average daily net assets attributable to Class Y
shares. Effective Dec. 11, 2006, this agreement was terminated.
Sales charges received by the Distributor for distributing Fund shares were
$616,732 for Class A, $44,715 for Class B and $304 for Class C for the year
ended July 31, 2007.
In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in which
it
- --------------------------------------------------------------------------------
36 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). Because the acquired funds have varied expense and fee levels and
the Fund may own different proportions of acquired funds at different times, the
amount of fees and expenses incurred indirectly by the Fund will vary.
For the year ended July 31, 2007, the Investment Manager and its affiliates
waived certain fees and expenses such that net expenses (excluding fees and
expenses of acquired funds), before giving effect to any performance incentive
adjustment, were 1.03% for Class A, 1.79% for Class B, 1.79% for Class C, 0.67%
for Class I, 1.48% for Class R2, 1.22% for Class R3, 0.87% for Class R4, 0.74%
for Class R5 and 1.13% for Class W. Of these waived fees and expenses, the
transfer agency fees waived for Class R4 were $121,727 and the management fees
waived at the Fund level were $669,332. Under an agreement, which was effective
until July 31, 2007, the Investment Manager and its affiliates contractually
agreed to waive certain fees and expenses such that net expenses (excluding fee
and expenses of acquired funds), before giving effect to any performance
incentive adjustment, would not exceed 1.00% for Class A, 1.78% for Class B,
1.77% for Class C, 0.64% for Class I, 1.46% for Class R2, 1.21% for Class R3,
0.84% for Class R4, 0.71% for Class R5 and 1.11% for Class W of the Fund's
average daily net assets. Effective Aug. 1, 2007, the Investment Manager and its
affiliates have contractually agreed to waive certain fees and expenses such
that net expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment, will not exceed 1.09% for Class
A, 1.85% for Class B, 1.85% for Class C, 0.78% for Class I, 1.58% for Class R2,
1.33% for Class R3, 0.88% for Class R4, 0.83% for Class R5 and 1.23% for Class W
of the Fund's average daily net assets, until July 31, 2008, unless sooner
terminated at the discretion of the Board.
During the year ended July 31, 2007, the Fund's custodian and transfer agency
fees were reduced by $177,524 as a result of earnings and bank fee credits from
overnight cash balances. The Fund also pays custodian fees to Ameriprise Trust
Company, an affiliate of Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $1,996,518,039 and $1,391,070,515, respectively, for the
year ended July 31, 2007. Realized gains and losses are determined on an
identified cost basis.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 37
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the years indicated are as follows:
<Table>
<Caption>
YEAR ENDED JULY 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- -----------------------------------------------------------------------------------------------
Class A 12,174,430 14,582,705 (34,507,399) (7,750,264)
Class B 1,639,136 796,647 (4,750,576) (2,314,793)
Class C 135,752 29,640 (105,911) 59,481
Class I 37,783,228 4,670,098 (18,989,372) 23,463,954
Class R2(a) 661 -- -- 661
Class R3(a) 661 -- -- 661
Class R4(b) 13,970,887 2,529,422 (27,927,795) (11,427,486)
Class R5(a) 661 -- -- 661
Class W(c) 114,252,036 4,492 (11,092,498) 103,164,030
- -----------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED JULY 31, 2006
ISSUED FOR
REINVESTED NET
SOLD FUND MERGER DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ---------------------------------------------------------------------------------------------------------
Class A 8,536,165 207,275,407 337,195 (17,270,329) 198,878,438
Class B 1,250,216 12,879,602 83,745 (4,576,044) 9,637,519
Class C 68,880 364,574 2,104 (55,973) 379,585
Class I 18,763,732 5,576,952 969,971 (237,632) 25,073,023
Class R4(b) 276,369 40,564,166 235 (7,679,229) 33,161,541
- ---------------------------------------------------------------------------------------------------------
</Table>
(a) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) For the period from Dec. 1, 2006 (inception date) to July 31, 2007.
5. LENDING OF PORTFOLIO SECURITIES
In order to generate additional income, the Fund may lend securities
representing up to one-third of the value of its total assets (which includes
collateral for securities on loan) to broker-dealers, banks, or other
institutional borrowers of securities. The Fund receives collateral in the form
of cash and U.S. government securities, equal to at least 100% of the value of
securities loaned, which is marked to the market value of the loaned securities
daily until the securities are returned, e.g., if the value of the securities on
loan increases, additional cash collateral is provided by the borrower. The
Investment Manager serves as securities lending agent for the Fund under the
investment management services agreement pursuant to which the Fund has agreed
to reimburse the Investment Manager for expenses incurred by it in connection
with the lending program, and pursuant to guidelines adopted by and under the
oversight of the Board. At July 31, 2007, securities valued at $5,528,300 were
on loan to brokers. For collateral, the Fund received $5,989,000 in cash. Cash
collateral received is invested in an affiliated money
- --------------------------------------------------------------------------------
38 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
market fund and short-term securities, including U.S. government securities or
other high-grade debt obligations, which are included in the "Investments in
securities." Income from securities lending amounted to $102,236 for the year
ended July 31, 2007. Expenses paid to the Investment Manager were $4,189 for the
year ended July 31, 2007, which are included in other expenses on the statement
of operations. The risks to the Fund of securities lending are that the borrower
may not provide additional collateral when required or return the securities
when due.
6. STOCK INDEX FUTURES CONTRACTS
At July 31, 2007, investments in securities included securities valued at
$2,083,960 that were pledged as collateral to cover initial margin deposits on
67 open purchase contracts. The notional market value of the open purchase
contracts at July 31, 2007 was $24,486,825 with a net unrealized loss of
$459,268. See "Summary of significant accounting policies" and "Notes to
investments in securities."
7. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of RiverSource Investments. Cost of purchases
and proceeds from sales of securities aggregated $878,276,983 and $869,951,596,
respectively, for the year ended July 31, 2007.
8. BANK BORROWINGS
The Fund has a revolving credit agreement with a syndicate of banks headed by
JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund may borrow for the temporary
funding of shareholder redemptions or for other temporary or emergency purposes.
The agreement went into effect Sept. 19, 2006. The Fund must maintain asset
coverage for borrowings of at least 300%. The agreement, which enables the Fund
to participate with other RiverSource funds, permits borrowings up to $500
million, collectively. Interest is charged to each Fund based on its borrowings
at a rate equal to either the higher of the Federal Funds Effective Rate plus
0.40% or the JPMCB Prime Commercial Lending Rate. Borrowings are payable within
60 days after such loan is executed. The Fund also pays a commitment fee equal
to its pro rata share of the amount of the credit facility at a rate of 0.06%
per annum. Prior to this agreement, the Fund paid a commitment fee equal to its
pro rata share of the amount of the credit facility at a rate of 0.07% per
annum. The Fund had no borrowings under the facility outstanding during the year
ended July 31, 2007.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 39
9. FUND MERGER
At the close of business on March 10, 2006, RiverSource Disciplined Equity Fund
acquired the assets and assumed the identified liabilities of RiverSource Stock
Fund. The reorganization was completed after shareholders approved the plan on
Feb. 15, 2006.
The aggregate net assets of RiverSource Disciplined Equity Fund immediately
before the acquisition were $207,410,855 and the combined net assets immediately
after the acquisition were $2,004,257,622.
The merger was accomplished by a tax-free exchange of 87,585,087 shares of
RiverSource Stock Fund valued at $1,796,846,767.
In exchange for the RiverSource Stock Fund shares and net assets, RiverSource
Disciplined Equity Fund issued the following number of shares:
<Table>
<Caption>
SHARES
- -------------------------------------------------------------------------
Class A 207,275,407
Class B 12,879,602
Class C 364,574
Class I 5,576,952
Class Y 40,564,166
- -------------------------------------------------------------------------
</Table>
RiverSource Stock Fund's net assets after adjustments for any permanent book-to-
tax differences at the merger date were as follows, which include the following
amounts of capital stock, unrealized appreciation, accumulated net realized loss
and undistributed net income.
<Table>
<Caption>
ACCUMULATED
TOTAL UNREALIZED NET REALIZED UNDISTRIBUTED
NET ASSETS CAPITAL STOCK APPRECIATION LOSS NET INCOME
- ---------------------------------------------------------------------------------------------------------
RiverSource
Stock Fund $1,796,846,767 $1,638,521,442 $166,822,042 $(8,526,929) $30,212
</Table>
10. 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 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
- --------------------------------------------------------------------------------
40 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
Minnesota. In response to defendants' motion to dismiss the complaint, the 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 may file a
notice of appeal with the Eighth Circuit Court of Appeals within 30 days from
the date of judgment.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), the parent company of RiverSource Investments, LLC
(RiverSource Investments), entered into settlement agreements with the
Securities and Exchange Commission (SEC) and Minnesota Department of Commerce
(MDOC) related to market timing activities. In connection with these matters,
the SEC and MDOC issued orders (the Orders) alleging that AEFC violated certain
provisions of the federal and Minnesota securities laws by failing to adequately
disclose market timing activities by allowing certain identified market timers
to continue to market time contrary to disclosures in mutual fund and variable
annuity product prospectuses. The Orders also alleged that AEFC failed to
implement procedures to detect and prevent market timing in 401(k) plans for
employees of AEFC and related companies and failed to adequately disclose that
there were no such procedures. Pursuant to the MDOC Order, the MDOC also alleged
that AEFC allowed inappropriate market timing to occur by failing to have
written policies and procedures and failing to properly supervise its employees.
As a result of the Orders, 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. Pursuant to the terms of the Orders, AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to make presentations at least annually to its board of directors and the
relevant mutual funds' board that include an overview of policies and procedures
to prevent market timing, material changes to these policies and procedures and
whether disclosures related to market timing are consistent with the SEC order
and federal securities laws. AEFC also agreed to retain an independent
distribution consultant to assist in developing a plan for distribution of all
disgorgement and civil penalties ordered by the SEC in accordance with various
undertakings detailed at http://www.sec.gov/litigation/admin/ia-2451.pdf. In
addition, AEFC agreed to complete and submit to the MDOC a compliance review of
its procedures regarding market timing within one year of the MDOC Order,
including a summary of actions taken to ensure compliance with applicable laws
and regulations and certification by a senior officer regarding compliance and
supervisory procedures.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 41
Ameriprise Financial and its affiliates have cooperated with the SEC and the
MDOC in these legal proceedings, and have made regular reports to the
RiverSource 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.
- --------------------------------------------------------------------------------
42 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
11. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003(B)
Net asset value, beginning of period $6.74 $6.70 $5.95 $5.44 $5.00
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .08(c) .06 .04 .02 .01
Net gains (losses) (both realized and
unrealized) .97 .35 .90 .63 .43
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.05 .41 .94 .65 .44
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.06) (.06) (.03) (.02) --
Distributions from realized gains (.51) (.31) (.16) (.12) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.57) (.37) (.19) (.14) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.22 $6.74 $6.70 $5.95 $5.44
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------
Net assets, end of period (in
millions) $1,410 $1,368 $28 $13 $8
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e),(f) 1.03% 1.02% 1.25% 1.13% 1.22%(g)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 1.13% .95% .84% .65% .81%(g)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 62% 137% 64% 64% 17%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 15.92% 6.25% 15.95% 11.99% 8.80%(i)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from April 24, 2003 (when shares became publicly available)
to July 31, 2003.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears directly, the Fund indirectly bears a pro rata share
of the fees and expenses of the acquired funds in which it invests. Such
indirect expenses are not included in the above reported expense ratios.
(f) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses for
Class A would have been 1.05%, 1.05%, 1.35%, 1.91% and 7.39% for the
periods ended July 31, 2007, 2006, 2005, 2004 and 2003, respectively.
(g) Adjusted to an annual basis.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 43
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003(B)
Net asset value, beginning of period $6.65 $6.62 $5.90 $5.43 $5.00
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03(c) .01 .02 (.02) --
Net gains (losses) (both realized and
unrealized) .96 .34 .86 .61 .43
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .99 .35 .88 .59 .43
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.01) (.01) -- -- --
Distributions from realized gains (.51) (.31) (.16) (.12) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.52) (.32) (.16) (.12) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.12 $6.65 $6.62 $5.90 $5.43
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $62 $73 $9 $3 $1
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e),(f) 1.79% 1.82% 2.04% 1.95% 2.01%(g)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .37% .20% .06% (.16%) (.08%)(g)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 62% 137% 64% 64% 17%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 15.18% 5.42% 15.03% 10.95% 8.60%(i)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from April 24, 2003 (when shares became publicly available)
to July 31, 2003.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses for
Class B would have been 1.82%, 1.85%, 2.13%, 2.73% and 8.18% for the
periods ended July 31, 2007, 2006, 2005, 2004 and 2003, respectively.
(g) Adjusted to an annual basis.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
44 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003(B)
Net asset value, beginning of period $6.65 $6.62 $5.90 $5.43 $5.00
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03(c) .01 .01 (.02) --
Net gains (losses) (both realized and
unrealized) .96 .35 .87 .61 .43
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .99 .36 .88 .59 .43
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.02) (.02) -- -- --
Distributions from realized gains (.51) (.31) (.16) (.12) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.53) (.33) (.16) (.12) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.11 $6.65 $6.62 $5.90 $5.43
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $3 $3 $-- $-- $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e),(f) 1.79% 1.81% 2.06% 1.95% 2.01%(g)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .36% .20% .02% (.17%) (.05%)(g)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 62% 137% 64% 64% 17%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 15.14% 5.51% 15.03% 10.96% 8.60%(i)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from April 24, 2003 (when shares became publicly available)
to July 31, 2003.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses for
Class C would have been 1.81%, 1.84%, 2.13%, 2.73% and 8.20% for the
periods ended July 31, 2007, 2006, 2005, 2004 and 2003, respectively.
(g) Adjusted to an annual basis.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 45
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004(B)
Net asset value, beginning of period $6.78 $6.73 $5.96 $5.99
- ----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .11(c) .08 .04 .02
Net gains (losses) (both realized and
unrealized) .97 .36 .92 (.05)
- ----------------------------------------------------------------------------------------------------
Total from investment operations 1.08 .44 .96 (.03)
- ----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08) (.08) (.03) --
Distributions from realized gains (.51) (.31) (.16) --
- ----------------------------------------------------------------------------------------------------
Total distributions (.59) (.39) (.19) --
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $7.27 $6.78 $6.73 $5.96
- ----------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $441 $252 $82 $9
- ----------------------------------------------------------------------------------------------------
Ratio of expenses to average daily net
assets(d),(e) .67%(f) .70%(f) .91% .93%(f),(g)
- ----------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to
average daily net assets 1.47% 1.41% 1.19% 5.35%(g)
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 62% 137% 64% 64%
- ----------------------------------------------------------------------------------------------------
Total return(h) 16.29% 6.73% 16.29% (.50%)(i)
- ----------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from July 15, 2004 (inception date) to July 31, 2004.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses for
Class I would have been 0.70%, 0.72% and 1.27% for the periods ended July
31, 2007, 2006 and 2004, respectively.
(g) Adjusted to an annual basis.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
46 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $7.57
- ----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03(c)
Net gains (losses) (both realized and unrealized) .20
- ----------------------------------------------------------------------
Total from investment operations .23
- ----------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08)
Distributions from realized gains (.51)
- ----------------------------------------------------------------------
Total distributions (.59)
- ----------------------------------------------------------------------
Net asset value, end of period $7.21
- ----------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $--
- ----------------------------------------------------------------------
Ratio of expenses to average daily net assets(d),(e),(f) 1.48%(g)
- ----------------------------------------------------------------------
Ratio of net investment income (loss) to average daily net
assets .55%(g)
- ----------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 62%
- ----------------------------------------------------------------------
Total return(h) 3.31%(i)
- ----------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratio of expenses for
Class R2 would have been 1.49% for the period ended July 31, 2007.
(g) Adjusted to an annual basis.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 47
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $7.57
- ----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04(c)
Net gains (losses) (both realized and unrealized) .20
- ----------------------------------------------------------------------
Total from investment operations .24
- ----------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08)
Distributions from realized gains (.51)
- ----------------------------------------------------------------------
Total distributions (.59)
- ----------------------------------------------------------------------
Net asset value, end of period $7.22
- ----------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $--
- ----------------------------------------------------------------------
Ratio of expenses to average daily net assets(d),(e),(f) 1.22%(g)
- ----------------------------------------------------------------------
Ratio of net investment income (loss) to average daily net
assets .81%(g)
- ----------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 62%
- ----------------------------------------------------------------------
Total return(h) 3.46%(i)
- ----------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratio of expenses for
Class R3 would have been 1.24% for the period ended July 31, 2007.
(g) Adjusted to an annual basis.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
48 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
CLASS R4*
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003(B)
Net asset value, beginning of period $6.76 $6.71 $5.95 $5.45 $5.00
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .09(c) .07 .05 .03 .01
Net gains (losses) (both realized and
unrealized) .98 .36 .91 .61 .44
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.07 .43 .96 .64 .45
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.07) (.07) (.04) (.02) --
Distributions from realized gains (.51) (.31) (.16) (.12) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.58) (.38) (.20) (.14) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.25 $6.76 $6.71 $5.95 $5.45
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $158 $224 $-- $-- $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e),(f) .87% .84% 1.06% .98% 1.01%(g)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 1.29% 1.10% 1.03% .78% .90%(g)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 62% 137% 64% 64% 17%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 16.15% 6.48% 16.25% 11.87% 9.00%(i)
- -----------------------------------------------------------------------------------------------------------
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from April 24, 2003 (when shares became publicly available)
to July 31, 2003.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses for
Class R4 would have been 0.95%, 0.87%, 1.18%, 1.76% and 7.20% for the
periods ended July 31, 2007, 2006, 2005, 2004 and 2003, respectively.
(g) Adjusted to an annual basis.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 49
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $7.57
- ----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .06(c)
Net gains (losses) (both realized and unrealized) .20
- ----------------------------------------------------------------------
Total from investment operations .26
- ----------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08)
Distributions from realized gains (.51)
- ----------------------------------------------------------------------
Total distributions (.59)
- ----------------------------------------------------------------------
Net asset value, end of period $7.24
- ----------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $--
- ----------------------------------------------------------------------
Ratio of expenses to average daily net assets(d),(e),(f) .74%(g)
- ----------------------------------------------------------------------
Ratio of net investment income (loss) to average daily net
assets 1.28%(g)
- ----------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 62%
- ----------------------------------------------------------------------
Total return(h) 3.76%(i)
- ----------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratio of expenses for
Class R5 would have been 0.75% for the period ended July 31, 2007.
(g) Adjusted to an annual basis.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
50 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $7.46
- ----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03(c)
Net gains (losses) (both realized and unrealized) .32
- ----------------------------------------------------------------------
Total from investment operations .35
- ----------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08)
Distributions from realized gains (.51)
- ----------------------------------------------------------------------
Total distributions (.59)
- ----------------------------------------------------------------------
Net asset value, end of period $7.22
- ----------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $745
- ----------------------------------------------------------------------
Ratio of expenses to average daily net assets(d),(e),(f) 1.13%(g)
- ----------------------------------------------------------------------
Ratio of net investment income (loss) to average daily net
assets .59%(g)
- ----------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 62%
- ----------------------------------------------------------------------
Total return(h) 5.01%(i)
- ----------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 1, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratio of expenses for
Class W would have been 1.18% for the period ended July 31, 2007.
(g) Adjusted to an annual basis.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 51
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
RIVERSOURCE DISCIPLINED EQUITY FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of RiverSource Disciplined Equity
Fund (the Fund), one of the portfolios constituting the RiverSource Large Cap
Series, Inc., as of July 31, 2007, and the related statements of operations,
changes in net assets, and financial highlights for the year then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The financial
statements and financial highlights of the Fund for the periods presented
through July 31, 2006, were audited by other auditors whose report dated
September 20, 2006, expressed an unqualified opinion on those financial
statements and financial highlights.
We conducted our audit 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 audit 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, 2007, by correspondence with the custodian and
brokers or by other appropriate auditing procedures where replies from brokers
were not received. We believe that our audit provides a reasonable basis for our
opinion.
- --------------------------------------------------------------------------------
52 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
In our opinion, the 2007 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
RiverSource Disciplined Equity Fund of the RiverSource Large Cap Series, Inc. at
July 31, 2007, the results of its operations, changes in its net assets and the
financial highlights for the year then ended, in conformity with U.S. generally
accepted accounting principles.
Ernst & Young LLP
Minneapolis, Minnesota
September 20, 2007
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 53
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, 2007
CLASS A
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 26.15%
Dividends Received Deduction for corporations......... 25.90%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.28963
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.28353
Total distributions......................................... $0.57316
</Table>
CLASS B
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 26.15%
Dividends Received Deduction for corporations......... 25.90%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.23975
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.28353
Total distributions......................................... $0.52328
</Table>
CLASS C
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 26.15%
Dividends Received Deduction for corporations......... 25.90%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.24691
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... 0.28353
Total distributions......................................... $0.53044
</Table>
- --------------------------------------------------------------------------------
54 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
CLASS I
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 26.15%
Dividends Received Deduction for corporations......... 25.90%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.31009
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.28353
Total distributions......................................... $0.59362
</Table>
CLASS R2
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 26.15%
Dividends Received Deduction for corporations......... 25.90%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.30875
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.28353
Total distributions......................................... $0.59228
</Table>
CLASS R3
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 26.15%
Dividends Received Deduction for corporations......... 25.90%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.30922
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.28353
Total distributions......................................... $0.59275
</Table>
CLASS R4*
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 26.15%
Dividends Received Deduction for corporations......... 25.90%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.29722
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.28353
Total distributions......................................... $0.58075
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 55
CLASS R5
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 26.15%
Dividends Received Deduction for corporations......... 25.90%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.30998
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.28353
Total distributions......................................... $0.59351
</Table>
CLASS W
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 26.15%
Dividends Received Deduction for corporations......... 25.90%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.30998
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.28353
Total distributions......................................... $0.59351
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
56 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
BOARD MEMBERS AND OFFICERS
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board.
The following is a list of the Fund's Board members. Each member oversees 102
RiverSource funds. Board members serve until the next regular shareholders'
meeting or until he or she reaches the mandatory retirement age established by
the Board. Under the current Board policy, members may serve until the end of
the meeting following their 75th birthday, or the fifteenth anniversary of the
first Board meeting they attended as members of the Board, whichever occurs
first. This policy does not apply to Ms. Jones who may retire after her 75th
birthday.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Kathleen Blatz Board member Chief Justice, Minnesota Supreme
901 S. Marquette Ave. since 2006 Court, 1998-2005
Minneapolis, MN 55402
Age 53
- -----------------------------------------------------------------------------------------------------
Arne H. Carlson Board member Chair, RiverSource Funds,
901 S. Marquette Ave. since 1999 1999-2006; former Governor of
Minneapolis, MN 55402 Minnesota
Age 73
- -----------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member President, Springboard -- Partners
901 S. Marquette Ave. since 2007 in Cross Cultural Leadership
Minneapolis, MN 55402 (consulting company)
Age 52
- -----------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member Trustee Professor of Economics and
901 S. Marquette Ave. since 2004 Management, Bentley College; former
Minneapolis, MN 55402 Dean, McCallum Graduate School of
Age 56 Business, Bentley College
- -----------------------------------------------------------------------------------------------------
Anne P. Jones Board member Attorney and Consultant
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member Former Managing Director, Shikiar American Progressive
901 S. Marquette Ave. since 2005 Asset Management Insurance
Minneapolis, MN 55402
Age 71
- -----------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Board member President Emeritus and Professor of Valmont Industries,
901 S. Marquette Ave. since 2002 and Economics, Carleton College Inc. (manufactures
Minneapolis, MN 55402 Chair of the irrigation systems)
Age 68 Board since 2007
- -----------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 57
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Catherine James Paglia Board member Director, Enterprise Asset Strategic
901 S. Marquette Ave. since 2004 Management, Inc. (private real Distribution, Inc.
Minneapolis, MN 55402 estate and asset management (transportation,
Age 55 company) distribution and
logistics
consultants)
- -----------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member Chief Executive Officer, RiboNovix, Hybridon, Inc.
901 S. Marquette Ave. since 2002 Inc. since 2003 (biotechnology); (biotechnology);
Minneapolis, MN 55402 former President, Forester Biotech American Healthways,
Age 63 Inc. (health
management programs)
- -----------------------------------------------------------------------------------------------------
</Table>
BOARD MEMBER AFFILIATED WITH RIVERSOURCE INVESTMENTS*
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
William F. Truscott Board member President -- U.S. Asset Management
53600 Ameriprise since 2001, and Chief Investment Officer,
Financial Center Vice President Ameriprise Financial, Inc. and
Minneapolis, MN 55474 since 2002 President, Chairman of the Board
Age 47 and Chief Investment Officer,
RiverSource Investments, LLC since
2005; President, Ameriprise
Certificate Company since 2006;
Senior Vice President -- Chief
Investment Officer, Ameriprise
Financial, Inc. and Chairman of the
Board and Chief Investment Officer,
RiverSource Investments, LLC,
2001-2005
- -----------------------------------------------------------------------------------------------------
</Table>
* Interested person by reason of being an officer, director, security holder
and/or employee of RiverSource Investments.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling RiverSource Funds at (888)
791-3380; contacting your financial institution; or visiting
riversource.com/funds.
- --------------------------------------------------------------------------------
58 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 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 FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Patrick T. Bannigan President since Senior Vice President -- Asset Management,
172 Ameriprise 2006 RiverSource Investments, LLC since 2006;
Financial Center Managing Director and Global Head of Product,
Minneapolis, MN 55474 Morgan Stanley Investment Management,
Age 41 2004-2006; President, Touchstone Investments,
2002-2004; Director of Strategic Planning,
Evergreen Investments, 1995-2002
- ------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President Executive Vice President -- Equity and Fixed
172 Ameriprise since 2004 Income, Ameriprise Financial, Inc. and
Financial Center RiverSource Investments, LLC since 2006; Vice
Minneapolis, MN 55474 President -- Investments, Ameriprise
Age 43 Certificate Company since 2003; Senior Vice
President -- Fixed Income, Ameriprise
Financial, Inc., 2002-2006 and RiverSource
Investments, LLC, 2004-2006; Managing
Director, Zurich Global Assets, 2001-2002
- ------------------------------------------------------------------------------------------
Amy K. Johnson Vice President Vice President -- Asset Management and Trust
5228 Ameriprise since 2006 Company Services, RiverSource Investments, LLC
Financial Center since 2006; Vice President -- Operations and
Minneapolis, MN 55474 Compliance, RiverSource Investments, LLC,
Age 41 2004-2006; Director of Product
Development -- Mutual Funds, Ameriprise
Financial, Inc., 2001-2004
- ------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Vice President -- Investment Accounting,
105 Ameriprise 2002 Ameriprise Financial, Inc. since 2002; Vice
Financial Center President -- Finance, American Express
Minneapolis, MN 55474 Company, 2000-2002
Age 52
- ------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Vice President and Chief Counsel -- Asset
5228 Ameriprise General Counsel Management, Ameriprise Financial, Inc. since
Financial Center and Secretary 2005; Vice President, General Counsel and
Minneapolis, MN 55474 since 2006 Secretary, Ameriprise Certificate Company
Age 47 since 2005; Vice President -- Asset Management
Compliance, Ameriprise Financial, Inc.,
2004-2005; Senior Vice President and Chief
Compliance Officer, U.S. Bancorp Asset
Management, 2002-2004; Second Vice President
and Assistant General Counsel, Hartford Life,
2001-2002
- ------------------------------------------------------------------------------------------
Jennifer D. Lammers Chief Compliance U.S. Asset Management Chief Compliance
172 Ameriprise Officer since Officer, RiverSource Investments, LLC since
Financial Center 2006 2006; Director -- Mutual Funds, Voyageur Asset
Minneapolis, MN 55474 Management, 2003-2006; Director of Finance,
Age 46 Voyageur Asset Management, 2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 59
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Compliance Director and Anti-Money Laundering
2934 Ameriprise Prevention Officer, Ameriprise Financial, Inc. since
Financial Center Officer since 2004; Manager Anti-Money Laundering,
Minneapolis, MN 55474 2004 Ameriprise Financial, Inc., 2003-2004;
Age 43 Compliance Director and Bank Secrecy Act
Officer, American Express Centurion Bank,
2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
60 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
APPROVAL OF INVESTMENT MANAGEMENT SERVICES AGREEMENT
RiverSource Investments, LLC ("RiverSource"), 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") RiverSource provides investment advice and other services to the
Fund and all RiverSource funds (collectively, the "Funds"). The Fund's Board of
Directors (the "Board") and the Board's Investment Review and Contracts
Committees monitor these services throughout the year.
On an annual basis, the Board, including the independent Board members (the
"Independent Directors"), considers renewal of the IMS Agreement. RiverSource
prepares detailed reports for the Board and its Contracts Committee in March and
April, including reports based on data provided by independent organizations to
assist the Board in making this determination. In addition, throughout the year,
the Board (or its committees) reviews information prepared by RiverSource
addressing the services RiverSource provides and Fund performance. The Board
accords particular weight to the work, deliberations and conclusions of the
Contracts and Investment Review Committees in determining whether to continue
the IMS Agreement. At the April 11-12, 2007 in-person Board meeting, independent
legal counsel to the Independent Directors reviewed with the Independent
Directors 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 RiverSource: The Board
analyzed various reports and presentations it had received detailing the
services performed by RiverSource, as well as its expertise, resources and
capabilities. The Board specifically considered many developments during the
past year concerning the services provided by RiverSource, including, in
particular, the growing strength and capabilities of many RiverSource offices
and the increased investment and resources dedicated to the Fund's operations,
particularly in the areas of trading systems, legal and compliance. Further, in
connection with the Board's evaluation of the overall package of services
provided by RiverSource, the Board considered the quality of the administrative,
custody and transfer agency services provided by RiverSource affiliates to the
Fund. The Board also reviewed the financial condition of RiverSource and the
entity's ability to carry out its responsibilities under the IMS Agreement. 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
RiverSource). The Board concluded that the services being performed under the
IMS Agreement were of a reasonably high quality.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 61
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 determined that RiverSource was 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: (i) detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of the Fund, the
performance of a benchmark index, the percentage ranking of the Fund among its
comparison group and the net assets of the Fund; and (ii) a report detailing the
Fund's performance over various periods (including since inception), recent Fund
inflows (and outflows) and a comparison of the Fund's net assets from December
2006 to December 2005. The Board observed that the Fund's investment performance
met expectations.
Comparative Fees, Costs of Services Provided and the Profits Realized By
RiverSource and its Affiliates from their Relationships with the Fund: The
Board reviewed comparative fees and the costs of services to be provided under
the IMS Agreement. The Board members considered detailed comparative information
set forth in an annual report on fees and expenses, including, among other
things, data (prepared by an independent organization) showing a comparison of
the Fund's expenses with median expenses paid by funds in its peer group, as
well as data showing the Fund's contribution to RiverSource's profitability. 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 Funds' family, while assuring that the overall fees for each fund
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 took into
account that the Fund's total expense ratio (after considering proposed expense
caps/waivers) was below the peer group's median expense ratio shown in the
reports. Based on its review, the Board concluded that the Fund's management fee
was fair and reasonable in light of the extent and quality of services that the
Fund receives.
The Board also considered the expected profitability of RiverSource and its
affiliates in connection with RiverSource providing investment management
services to the Fund. In this regard, the Board referred to a detailed
profitability report, discussing the profitability to RiverSource and Ameriprise
Financial from managing and operating the Fund, including data showing
comparative profitability. The Board also considered the services acquired by
the investment manager through the use of commission dollars paid by the Funds
on portfolio transactions. The Board noted that the fees paid by the Fund should
permit the investment manager to offer competitive compensation to its
personnel, make necessary investments in its business and earn an appropriate
profit. The Board concluded that profitability levels were reasonable.
- --------------------------------------------------------------------------------
62 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT
Economies of Scale to be Realized: The Board also considered the economies of
scale that might be realized by RiverSource as the Fund grows and took note of
the extent to which Fund shareholders might also benefit from such growth. The
Board considered that the IMS Agreement provides for lower fees as assets
increase at pre-established breakpoints and concluded that the IMS Agreement
satisfactorily provided for sharing these economies of scale.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the investment management service fees were fair and reasonable
in light of the extent and quality of services provided. In reaching this
conclusion, no single factor was determinative. On April 12, 2007, the Board,
including all of the Independent Directors, approved the renewal of the IMS
Agreement.
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 RiverSource Funds at (888) 791-3380; contacting your financial
institution; visiting riversource.com/funds; 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 riversource.com/funds; or
searching the website of the SEC at www.sec.gov.
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On April 12, 2007, Ernst & Young LLP was selected as the Fund's independent
registered public accounting firm for the 2007 fiscal year. A majority of the
Fund's Board of Directors, including a majority of the Independent Directors,
approved the appointment of Ernst & Young LLP. The predecessor independent
registered public accounting firm's reports on the Fund's financial statements
for the year ended July 31, 2006 and the year ended July 31, 2005 contained no
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles. During such fiscal periods
and through April 12, 2007 there were no disagreements between the Fund and the
predecessor independent registered public accounting firm on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which such disagreements, if not resolved to the
satisfaction of the predecessor independent registered public accounting firm,
would have caused them to make reference to the subject matter of the
disagreement in connection with their reports on the financial statements for
such fiscal periods.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2007 ANNUAL REPORT 63
RIVERSOURCE(R) DISCIPLINED EQUITY FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus.
RiverSource(R) mutual funds are distributed by RiverSource
Distributors, Inc.
and Ameriprise Financial Services, Inc., Members FINRA, and
managed by
(RIVERSOURCE INVESTMENTS RiverSource Investments, LLC. These companies are part of
LOGO) Ameriprise Financial, Inc. S-6263 G (9/07)
</Table>
Annual Report
and Prospectus
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE(R)
GROWTH FUND
ANNUAL REPORT FOR
THE PERIOD ENDED
JULY 31, 2007
(Prospectus also enclosed)
RIVERSOURCE GROWTH FUND SEEKS TO
PROVIDE SHAREHOLDERS WITH
LONG-TERM CAPITAL GROWTH.
This annual report includes a prospectus that
describes in detail the Fund's objective,
investment strategy, risks, sales charges, fees
and other matters of interest. Please read the
prospectus carefully before you invest or send
money.
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 3
Performance Summary................. 5
Questions & Answers
with Portfolio Management........ 8
The Fund's Long-term Performance ... 12
Fund Expenses Example............... 14
Investments in Securities........... 16
Financial Statements................ 20
Notes to Financial Statements....... 26
Report of Independent Registered
Public Accounting Firm........... 49
Federal Income Tax Information...... 50
Board Members and Officers.......... 52
Approval of Investment Management
Services Agreement............... 56
Proxy Voting........................ 58
Change in Independent Registered
Public Accounting Firm........... 58
</Table>
(DALBAR LOGO)
The RiverSource mutual fund
shareholder reports have been
awarded the Communications Seal
from Dalbar Inc., an independent
financial services research firm.
The Seal recognizes communications
demonstrating a level of
excellence in the industry.
- --------------------------------------------------------------------------------
2 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
FUND SNAPSHOT AT JULY 31, 2007
FUND OBJECTIVE
RiverSource Growth Fund seeks to provide shareholders with long-term capital
growth.
SECTOR BREAKDOWN*
Percentage of portfolio assets
(PIE CHART)
<Table>
Information Technology 21.0%
Health Care 20.0%
Consumer Discretionary 15.8%
Telecommunication Services 14.5%
Consumer Staples 8.6%
Industrials 5.6%
Other(1) 14.5%
</Table>
* Sectors can be comprised of several industries. Please refer to the section
entitled "Investments in Securities" for a complete listing. No single
industry exceeds 25% of portfolio assets.
(1) Includes Financials 5.4%, Materials 3.4%, Energy 3.0%, Options Purchased
0.4% and Cash & Cash Equivalents(2) 2.3%.
(2) Of the 2.3%, 1.2% is due to security lending activity, 0.2% is due to open
options contracts and 0.9% is the Fund's cash equivalent position.
TOP TEN HOLDINGS
Percentage of portfolio assets
<Table>
Virgin Media 8.3%
Harman Intl Inds 4.2%
Vodafone Group 4.0%
QUALCOMM 4.0%
Cisco Systems 2.9%
Merck & Co 2.4%
Boston Scientific 2.3%
Genentech 2.3%
Microsoft 1.9%
Altria Group 1.9%
</Table>
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
The Global Industry Classification Standard (GICS) was developed by and is the
exclusive property of Morgan Stanley Capital International Inc. and Standard &
Poor's, a division of The McGraw-Hill Companies, Inc.
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 3
FUND SNAPSHOT AT JULY 31, 2007
STYLE MATRIX
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
</Table>
Shading within the style matrix indicates areas in which the Fund generally
invests.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and serves as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
PORTFOLIO MANAGER
<Table>
<Caption>
YEARS IN INDUSTRY
Nick Thakore 14
</Table>
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A INIDX 03/01/72
Class B IGRBX 03/20/95
Class C AXGCX 06/26/00
Class I AGWIX 03/04/04
Class R2 -- 12/11/06
Class R3 RSCGX 12/11/06
Class R4(1) IGRYX 03/20/95
Class R5 RSWHX 12/11/06
Class W -- 12/01/06
(1) Effective Dec. 11, 2006, Class Y was renamed Class
R4.
Total net assets $3.227 billion
Number of holdings 114
</Table>
- --------------------------------------------------------------------------------
4 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the year ended July 31, 2007
(BAR CHART)
<Table>
RiverSource Growth Fund Class A (excluding sales
charge) +15.20
Russell 1000(R) Growth Index (unmanaged) +19.47
Lipper Large-Cap Growth Funds Index +17.67
</Table>
(see "The Fund's Long-term Performance" for Index descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the bar chart. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes.
It is not possible to invest directly in an index.
ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
<Table>
<Caption>
TOTAL
Class A 1.19%
Class B 1.96%
Class C 1.95%
Class I 0.74%
Class R2(a) 1.50%
Class R3(a) 1.27%
Class R4(b) 1.04%(c)
Class R5(a) 0.76%
Class W(d) 1.17%
</Table>
(a) Inception date for Class R2, Class R3 and Class R5 was Dec. 11, 2006.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) The investment manager and its affiliates have contractually agreed to
waive certain fees and to absorb certain expenses until July 31, 2008,
unless sooner terminated at the discretion of the Fund's Board. Any amounts
waived will not be reimbursed by the Fund. Under this agreement, net fund
expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment (that increased the
management fee by 0.09), will not exceed 0.97% for Class R4.
(d) Inception date for Class W was Dec. 1, 2006.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 5
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT JULY 31, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
Class A (inception 3/1/72) +15.20% +11.58% +9.55% +0.77% +11.81%
Class B (inception 3/20/95) +14.31% +10.72% +8.70% -0.01% +6.19%
Class C (inception 6/26/00) +14.31% +10.73% +8.71% N/A -6.90%
Class I (inception 3/4/04) +15.70% +12.11% N/A N/A +8.63%
Class R2 (inception 12/11/06) N/A N/A N/A N/A +3.93%*
Class R3 (inception 12/11/06) N/A N/A N/A N/A +4.09%*
Class R4** (inception 3/20/95) +15.39% +11.79% +9.74% +0.92% +7.17%
Class R5 (inception 12/11/06) N/A N/A N/A N/A +4.41%*
Class W (inception 12/1/06) N/A N/A N/A N/A +5.29%*
WITH SALES CHARGE
Class A (inception 3/1/72) +8.58% +9.40% +8.26% +0.17% +11.63%
Class B (inception 3/20/95) +9.31% +9.62% +8.41% -0.01% +6.19%
Class C (inception 6/26/00) +13.31% +10.73% +8.71% N/A -6.90%
</Table>
- --------------------------------------------------------------------------------
6 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
<Table>
<Caption>
AT JUNE 30, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
Class A (inception 3/1/72) +18.55% +10.76% +8.49% +2.20% +11.92%
Class B (inception 3/20/95) +17.63% +9.90% +7.65% +1.42% +6.45%
Class C (inception 6/26/00) +17.64% +9.91% +7.65% N/A -6.65%
Class I (inception 3/4/04) +19.06% +11.26% N/A N/A +9.65%
Class R2 (inception 12/11/06) N/A N/A N/A N/A +6.56%*
Class R3 (inception 12/11/06) N/A N/A N/A N/A +6.69%*
Class R4** (inception 3/20/95) +18.72% +10.94% +8.68% +2.36% +7.43%
Class R5 (inception 12/11/06) N/A N/A N/A N/A +6.99%*
Class W (inception 12/1/06) N/A N/A N/A N/A +7.92%*
WITH SALES CHARGE
Class A (inception 3/1/72) +11.73% +8.60% +7.21% +1.60% +11.73%
Class B (inception 3/20/95) +12.63% +8.79% +7.35% +1.42% +6.45%
Class C (inception 6/26/00) +16.64% +9.91% +7.65% N/A -6.65%
</Table>
Class A share performance reflects the maximum sales charge of 5.75%. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 3%; fifth year
2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to
a 1% CDSC if shares are sold within one year after purchase. Sales charges do
not apply to Class I, Class R2, Class R3, Class R4, Class R5 and Class W shares.
Class I, Class R2, Class R3, Class R4 and Class R5 are available to
institutional investors only. Class W shares are offered through qualifying
discretionary accounts.
* Not annualized.
** Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 7
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, Portfolio Manager Nick Thakore discusses the Fund's positioning and
results for the fiscal year ended July 31, 2007.
Q: How did RiverSource Growth Fund perform for the 12 months ended July 31,
2007?
A: RiverSource Growth Fund's Class A shares rose 15.20%, excluding sales
charge, for the 12 months ended July 31, 2007. The Fund underperformed its
benchmark, the Russell 1000(R) Growth Index (Russell Index), which advanced
19.47%, and its peer group as represented by the Lipper Large-Cap Growth
Funds Index, which advanced 17.67% for the same period.
Q: What factors influenced performance during the period?
A: The stock market advanced strongly during the fiscal year, with a notable
shift in market leadership. After lagging for a prolonged period, large-cap
growth stocks outperformed large-cap value stocks, small-cap stocks and
mid-cap stocks.
Though the Fund benefited from the favorable environment, it did not fully
keep pace with the sharp advance of the Russell Index. Positioning in the
health care and materials sectors were key factors in the Fund's
underperformance.
AFTER LAGGING FOR A PROLONGED PERIOD, LARGE-CAP GROWTH STOCKS OUTPERFORMED
LARGE-CAP VALUE STOCKS, SMALL-CAP STOCKS AND MID-CAP STOCKS.
The Fund's health care holdings underperformed, largely due to company-
specific issues. Medical device maker Boston Scientific saw some improvement
in sales of implantable cardioverter defibrillators, but faced continued
pressure in other areas, including sales of drug-coated coronary stents.
Pharmaceutical company Pfizer struggled in the first half of the period due
to disappointing study results for an add-on compound to its widely used
cholesterol drug Lipitor. We reduced holdings of Boston Scientific and Pfizer
during the period. Another pharmaceutical company, AstraZeneca, released
disappointing clinical trial results for some new drugs and bought Medimmune,
an acquisition that was poorly received due to its dilutive effect on
earnings.
The materials sector was incredibly strong during the period, and a number of
small industries and individual stocks performed well. Within the sector, we
- --------------------------------------------------------------------------------
8 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS
emphasized precious metals stocks, including gold and silver, which were not
as strong as other groups. We remain optimistic about the prospects for
precious metals, based on limited near-term supply growth and some demand
growth. Given the recent underperformance of gold stocks and the use of gold
as a hedge against inflation and the dollar's decline, we consider the
outlook for these stocks to be quite promising.
On the positive side, positioning in information technology and
telecommunication services were the leading contributors to performance.
Stock selection in the information technology sector was advantageous, driven
by strong results from QUALCOMM, Nokia and Cisco Systems. QUALCOMM, a
semiconductor company that makes chips for handheld wireless devices, is
entering a major product cycle in which we believe they have a virtual
monopoly. Going forward, as many as 90% of all cell phones may have
QUALCOMM's third generation (3G) technology. Cell phone manufacturer Nokia
benefited from a favorable market for wireless handsets. Cisco Systems
benefited from strong results and increasing dominance in the enterprise and
telecommunications networking areas.
In the telecommunication services sector, the Fund emphasized the wireless
segment, which has continued to experience growth. Vodafone Group, a European
wireless telecommunications company, was the Fund's leading contributor to
performance. Vodafone Group began the period at a relatively inexpensive
valuation, and a combination of improving fundamentals and expectations that
were initially quite low led to strong performance. Conversely, the Fund's
holdings of Sprint Nextel detracted, largely due to results early in the
period when the company struggled to execute its growth plans and experienced
deteriorating fundamentals. During the first half of the fiscal year, we used
a rally in the stock to significantly reduce the position due to our concerns
about near-term fundamentals.
Q: What changes did you make to the Fund's portfolio during the fiscal year?
A: We decreased the energy weighting following the sector's strong performance
due to our concern over near-term fundamentals. In our view, commodity prices
seemed too high given the supply/demand scenario.
We still have confidence in the growth potential of telecommunication
services and maintain an emphasis on the sector. However, we adjusted
individual
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 9
QUESTIONS & ANSWERS
telecommunications positions, adding to several European telecommunications
stocks, such as Deutsche Telekom due to attractive valuations, while reducing
exposure to U.S. telecommunications stocks, including Sprint Nextel. Exposure
to wireless companies in emerging markets declined, primarily because Fund
holdings were acquired or performed well, leading us to take profits.
The Fund's health care position increased slightly. Within the sector, we
increased the Fund's holdings of pharmaceutical stock Merck & Co. Though the
market was skeptical that Merck & Co could meet its own earnings growth
forecast, we had confidence in its product development and cost management
efforts.
We reduced the industrials position despite the sector's continued strength,
because we are concerned about the sustainability of growth and the fact that
many industrial companies are already operating at record profit margins.
Q: How are you positioning the Fund going forward?
A: A major theme within the portfolio is our interest in "mega-cap" companies,
that is, the very largest companies within our universe. We believe that
these stocks are more attractively valued than ever before compared to the
rest of the stock market. In addition, they may have faster growth rates and
better earnings revision trends than the overall market.
A MAJOR THEME WITHIN THE PORTFOLIO IS OUR INTEREST IN "MEGA-CAP"
COMPANIES, THAT IS, THE VERY LARGEST COMPANIES WITHIN OUR UNIVERSE.
We have been focusing more on stocks generating high free cash flow. In a
decelerating economy, aggregate free cash flow is likely to decline, making
companies that can maintain it even more attractive. This characteristic can
also make companies more appealing for acquisitions and private equity
buyouts, which have been drivers behind recent market performance.
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of RiverSource Investments, LLC (RiverSource) or
any subadviser to the Fund or any other person in the RiverSource or subadviser
organizations. Any such views are subject to change at any time based upon
market or other conditions and RiverSource disclaims any responsibility to
update such views. These views may not be relied on as investment advice and,
because investment decisions for a RiverSource Fund are based on numerous
factors, may not be relied on as an indication of trading intent on behalf of
any RiverSource Fund.
- --------------------------------------------------------------------------------
10 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
THE FUND'S LONG-TERM PERFORMANCE
The chart on the facing page illustrates the total value of an assumed $10,000
investment in RiverSource Growth Fund Class A shares (from 8/1/97 to 7/31/07) as
compared to the performance of two widely cited performance indices, Russell
1000 Growth Index and the Lipper Large-Cap Growth Funds Index. In comparing the
Fund's Class A shares to these indices, you should take into account the fact
that the Fund's performance reflects the maximum sales charge of 5.75%, while
such charges are not reflected in the performance of the indices. Returns for
the Fund include the reinvestment of any distribution paid during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial institution or visiting riversource.com/funds. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
<Table>
<Caption>
SINCE
Results at July 31, 2007 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION(3)
RIVERSOURCE GROWTH FUND (INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,858 $13,093 $14,871 $9,220 $492,300
Average annual total return +8.58% +9.40% +8.26% +0.17% +11.63%
RUSSELL 1000 GROWTH INDEX(1)
Cumulative value of $10,000 $11,947 $13,405 $16,237 $12,526 N/A
Average annual total return +19.47% +10.26% +10.18% +3.35% N/A
LIPPER LARGE-CAP GROWTH FUNDS INDEX(2)
Cumulative value of $10,000 $11,767 $13,383 $15,478 $12,563 N/A
Average annual total return +17.67% +10.20% +9.13% +2.80% N/A
</Table>
Results for other share classes can be found on page 6.
- --------------------------------------------------------------------------------
12 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN RIVERSOURCE GROWTH FUND LINE
GRAPH)
<Table>
<Caption>
RIVERSOURCE GROWTH FUND
CLASS A (INCLUDES SALES RUSSELL 1000(R) GROWTH LIPPER LARGE-CAP GROWTH
CHARGE) ($9,220) INDEX(1) ($12,526) FUNDS INDEX(2) ($12,563)
----------------------- ---------------------- ------------------------
'97 9,425 10,000 10,000
'98 10,021 11,992 12,016
'99 12,074 14,875 14,771
'00 15,818 18,502 18,029
'01 9,152 12,015 11,827
'02 6,450 8,561 8,518
'03 7,033 9,558 9,282
'04 7,323 10,371 9,852
'05 8,746 11,723 11,417
'06 8,832 11,634 11,205
'07 9,220 12,526 12,563
</Table>
(1) The Russell 1000 Growth Index, an unmanaged index, measures the performance
of those stocks in the Russell 1000 Index with higher price-to-book ratios
and higher forecasted growth values. The index reflects reinvestment of all
distributions and changes in market prices.
(2) The Lipper Large-Cap Growth Funds Index includes the 30 largest large-cap
growth funds tracked by Lipper Inc. The index's returns include net
reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive
adjustment.
(3) Fund data is from March 1, 1972. The Fund began operating before the
inception of the Russell 1000 Growth Index and Lipper peer group.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 13
FUND EXPENSES EXAMPLE
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments; and (2) ongoing
costs, which may include management fees; distribution and service (12b-1) fees;
and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the expenses of the funds in which it invests (also
referred to as "acquired funds"), including affiliated and non-affiliated pooled
investment vehicles (including mutual funds and exchange traded funds). The
Fund's indirect expense from investing in the acquired funds is based on the
Fund's pro rata portion of the cumulative expenses charged by the acquired funds
using the acquired funds expense ratio as of the most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended July 31, 2007.
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.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
14 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
FEB. 1, 2007 JULY 31, 2007 THE PERIOD(A) EXPENSE RATIO
Class A
Actual(b) $1,000 $1,004.00 $5.76 1.16%
Hypothetical
(5% return before
expenses) $1,000 $1,019.04 $5.81 1.16%
Class B
Actual(b) $1,000 $1,000.00 $9.52 1.92%
Hypothetical
(5% return before
expenses) $1,000 $1,015.27 $9.59 1.92%
Class C
Actual(b) $1,000 $1,000.00 $9.52 1.92%
Hypothetical
(5% return before
expenses) $1,000 $1,015.27 $9.59 1.92%
Class I
Actual(b) $1,000 $1,006.00 $3.58 .72%
Hypothetical
(5% return before
expenses) $1,000 $1,021.22 $3.61 .72%
Class R2
Actual(b) $1,000 $1,002.10 $7.45 1.50%
Hypothetical
(5% return before
expenses) $1,000 $1,017.36 $7.50 1.50%
Class R3
Actual(b) $1,000 $1,003.30 $6.31 1.27%
Hypothetical
(5% return before
expenses) $1,000 $1,018.50 $6.36 1.27%
Class R4*
Actual(b) $1,000 $1,004.80 $5.07 1.02%
Hypothetical
(5% return before
expenses) $1,000 $1,019.74 $5.11 1.02%
Class R5
Actual(b) $1,000 $1,005.80 $3.78 .76%
Hypothetical
(5% return before
expenses) $1,000 $1,021.03 $3.81 .76%
Class W
Actual(b) $1,000 $1,003.90 $5.76 1.16%
Hypothetical
(5% return before
expenses) $1,000 $1,019.04 $5.81 1.16%
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(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 181/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended July 31, 2007: +0.40%
for Class A, +0.00% for Class B, +0.00% for Class C, +0.60% for Class I,
+0.21% for Class R2, +0.33% for Class R3, +0.48% for Class R4, +0.58%. for
Class R5 and +0.39% for Class W.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 15
INVESTMENTS IN SECURITIES
JULY 31, 2007
(Percentages represent value of investments compared to net assets)
<Table>
<Caption>
COMMON STOCKS (97.4%)
ISSUER SHARES VALUE(A)
AEROSPACE & DEFENSE (2.4%)
Boeing 517,321 $53,506,511
Honeywell Intl 269,205 15,481,980
Lockheed Martin 89,507 8,814,649
---------------
Total 77,803,140
- -----------------------------------------------------------------------------------
BEVERAGES (2.4%)
Coca-Cola 347,444 18,105,307
PepsiCo 927,982 60,894,179
---------------
Total 78,999,486
- -----------------------------------------------------------------------------------
BIOTECHNOLOGY (4.6%)
Amgen 718,446(b) 38,609,288
Biogen Idec 495,140(b) 27,995,216
Celgene 155,011(b) 9,387,466
Genentech 985,691(b) 73,315,696
---------------
Total 149,307,666
- -----------------------------------------------------------------------------------
CAPITAL MARKETS (2.3%)
Blackstone Group LP 23,715(b) 569,397
Fortress Investment Group LLC Cl A 236,765(e) 4,491,432
Goldman Sachs Group 66,393 12,504,458
KKR Private Equity Investors LP Unit 2,440,935(g) 49,306,887
Oaktree Capital Group LLC Cl A Unit 230,000(b,d,g) 7,590,000
---------------
Total 74,462,174
- -----------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (10.3%)
Alcatel-Lucent ADR 387,268(c) 4,492,309
Avaya 1,284,610(b) 21,247,449
Cisco Systems 3,296,939(b) 95,314,506
JDS Uniphase 1,359,682(b,e) 19,484,243
Nokia ADR 837,408(c) 23,983,365
QUALCOMM 3,139,483 130,759,468
Telefonaktiebolaget LM Ericsson ADR 745,871(c) 27,903,034
Tellabs 553,512(b) 6,282,361
---------------
Total 329,466,735
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
COMPUTERS & PERIPHERALS (2.5%)
Apple 362,850(b) $47,809,116
Brocade Communications Systems 127,906(b) 900,458
Dell 294,049(b) 8,224,551
Hewlett-Packard 535,073 24,629,410
---------------
Total 81,563,535
- -----------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (0.2%)
KBR 187,152(b) 6,005,708
- -----------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (5.5%)
AT&T 789,842 30,930,213
Chunghwa Telecom ADR 80,014(c) 1,326,632
COLT Telecom Group 816,308(b,c) 2,540,890
Deutsche Telekom 2,698,810(c) 46,379,814
Deutsche Telekom ADR 1,298,073(c) 22,300,894
Indosat 8,701,500(c) 6,842,286
Qwest Communications Intl 2,056,667(b) 17,543,370
Telefonica 931,652(c) 21,805,040
Telefonica ADR 147,367(c) 10,349,584
Telenor ADR 295,000(c) 16,301,346
---------------
Total 176,320,069
- -----------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (0.2%)
Transocean 70,925(b) 7,620,891
- -----------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (0.1%)
CVS Caremark 92,812 3,266,054
- -----------------------------------------------------------------------------------
FOOD PRODUCTS (1.3%)
Dean Foods 219,304 6,309,376
Kraft Foods Cl A 1,135,834 37,198,564
---------------
Total 43,507,940
- -----------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (2.9%)
Boston Scientific 5,750,917(b) 75,624,559
Medtronic 330,666 16,754,846
---------------
Total 92,379,405
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
16 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HEALTH CARE PROVIDERS & SERVICES (3.5%)
Cardinal Health 747,493 $49,132,715
McKesson 554,004 31,999,271
UnitedHealth Group 650,718 31,514,273
---------------
Total 112,646,259
- -----------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (--%)
Pinnacle Entertainment 11,527(b) 305,581
- -----------------------------------------------------------------------------------
HOUSEHOLD DURABLES (4.2%)
Harman Intl Inds 1,163,171 134,927,836
Tele Atlas 75,879(b,c) 2,180,219
---------------
Total 137,108,055
- -----------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS (2.7%)
Colgate-Palmolive 601,212 39,679,992
Procter & Gamble 783,578 48,472,135
---------------
Total 88,152,127
- -----------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (1.8%)
General Electric 1,526,011 59,148,186
- -----------------------------------------------------------------------------------
INSURANCE (2.9%)
ACE 245,058(c) 14,144,748
AFLAC 206,615 10,768,774
American Intl Group 696,550 44,704,578
Hartford Financial Services Group 40,168 3,690,234
Prudential Financial 212,839 18,863,921
---------------
Total 92,172,255
- -----------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (3.2%)
eBay 948,762(b) 30,739,889
Google Cl A 98,197(b) 50,080,469
VeriSign 407,075(b) 12,086,057
Yahoo! 480,135(b) 11,163,139
---------------
Total 104,069,554
- -----------------------------------------------------------------------------------
IT SERVICES (0.1%)
HCL Technologies 240,310(c) 1,862,640
- -----------------------------------------------------------------------------------
MACHINERY (0.3%)
Flowserve 113,498 8,202,500
- -----------------------------------------------------------------------------------
MEDIA (11.3%)
Charter Communications Cl A 2,717,734(b) 11,034,000
Comcast Cl A 726,932(b) 19,096,504
Idearc 18,849 654,249
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
MEDIA (CONT.)
News Corp Cl A 754,236 $15,929,464
Time Warner Cable Cl A 93,358(b) 3,568,143
Virgin Media 10,774,573(h) 267,640,393
Vivendi 93,060(c) 3,953,080
WorldSpace Cl A 419,274(b,e) 2,046,057
XM Satellite Radio Holdings Cl A 3,376,167(b,h) 38,657,112
---------------
Total 362,579,002
- -----------------------------------------------------------------------------------
METALS & MINING (3.4%)
Barrick Gold 109,574(c) 3,604,985
Coeur d'Alene Mines 5,707,601(b,e) 22,316,720
Lihir Gold 21,587,339(b,c) 56,268,218
Newmont Mining 606,738 25,331,312
Stillwater Mining 256,952(b) 2,338,263
---------------
Total 109,859,498
- -----------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (2.8%)
Chevron 108,490 9,249,857
Exxon Mobil 689,505 58,697,562
Kinder Morgan Management LLC --(b) 19
Total 281,264(c) 22,151,245
---------------
Total 90,098,683
- -----------------------------------------------------------------------------------
PHARMACEUTICALS (9.0%)
AstraZeneca 1,158,953(c) 59,897,687
Bristol-Myers Squibb 621,282 17,650,622
Eli Lilly & Co 355,995 19,255,770
Johnson & Johnson 347,470 21,021,935
Merck & Co 1,550,309 76,972,841
Pfizer 2,152,041 50,594,484
Schering-Plough 799,724 22,824,123
Wyeth 449,988 21,833,418
---------------
Total 290,050,880
- -----------------------------------------------------------------------------------
ROAD & RAIL (0.9%)
Hertz Global Holdings 1,344,437(b) 30,101,944
- -----------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (3.1%)
Atmel 3,750,256(b) 20,213,880
Intel 1,881,906 44,450,619
LSI 1,301,808(b) 9,373,018
Spansion Cl A 2,441,983(b) 25,909,440
United Microelectronics ADR 232,402(c) 750,658
---------------
Total 100,697,615
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 17
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SOFTWARE (1.9%)
Microsoft 2,155,236 $62,480,292
- -----------------------------------------------------------------------------------
SPECIALTY RETAIL (0.3%)
Office Depot 46,627(b) 1,163,810
TJX Companies 327,663 9,092,648
---------------
Total 10,256,458
- -----------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (0.2%)
Countrywide Financial 229,462 6,463,945
- -----------------------------------------------------------------------------------
TOBACCO (1.9%)
Altria Group 939,104 62,422,243
- -----------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (9.1%)
ALLTEL 358,358 23,633,710
America Movil ADR Series L 126,236(c) 7,559,012
Hutchison Telecommunications Intl 18,581,402(c) 23,268,898
Millicom Intl Cellular 170,734(b,c) 13,709,940
Orascom Telecom Holding GDR 125,593(c,e) 8,439,850
Sprint Nextel 2,670,852 54,832,592
Vivo Participacoes ADR 1,389,500(c) 6,238,855
Vodafone Group 43,513,834(c) 130,809,030
Vodafone Group ADR 823,585(c) 24,995,805
---------------
Total 293,487,692
- -----------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $2,963,166,182) $3,142,868,212
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
OPTIONS PURCHASED (0.4%)
EXERCISE EXPIRATION
ISSUER CONTRACTS PRICE DATE VALUE(A)
CALLS
QUALCOMM 1,163 $50.00 Jan. 2008 $174,450
Virgin Media 11,090 30.00 Jan. 2008 831,750
Virgin Media 11,090 27.50 Jan. 2008 1,608,050
- --------------------------------------------------------------------------------------------------------------------------
PUTS
XM Satellite Radio Holdings Cl A 25,224 15.00 Jan. 2008 10,089,600
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OPTIONS PURCHASED
(Cost: $11,652,813) $12,703,850
- --------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (2.4%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 75,870,781(i) $75,870,781
- -----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $75,870,781) $75,870,781
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $3,050,689,776)(j) $3,231,442,843
===================================================================================
</Table>
NOTES TO INVESTMENTS IN SECURITIES
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At July 31, 2007, the
value of foreign securities represented 17.5% of net assets.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the Fund's
Board of Directors. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At July 31,
2007, the value of these securities amounted to $7,590,000 or 0.2% of net
assets.
(e) At July 31, 2007, security was partially or fully on loan. See Note 6 to
the financial statements.
(f) Cash collateral received from security lending activity is invested in an
affiliated money market fund and represents 1.2% of net assets. See Note 6
to the financial statements. Cash collateral received for open options
contracts is invested in an affiliated money market fund and represents
0.2% of net assets. See Note 1 to the financial statements. 1.0% of net
assets is the Fund's cash equivalent position.
- --------------------------------------------------------------------------------
18 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
NOTES TO INVESTMENTS IN SECURITIES (CONTINUED)
(g) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). These securities may be valued at fair
value according to procedures approved, in good faith, by the Fund's Board
of Directors. Information concerning such security holdings at July 31,
2007, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
- ----------------------------------------------------------------------------------
KKR Private Equity Investors LP Unit 05-01-06 thru 07-24-07 $53,952,761
Oaktree Capital Group LLC Cl A Unit* 05-21-07 thru 07-20-07 9,765,100
</Table>
* Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended.
(h) At July 31, 2007, securities valued at $85,310,520 were held to cover open
call options written as follows (see Note 7 to the financial statements):
<Table>
<Caption>
EXERCISE EXPIRATION
ISSUER CONTRACTS PRICE DATE VALUE(A)
- ----------------------------------------------------------------------------------------
Virgin Media 11,090 $30.00 Jan. 2008 $831,750
XM Satellite Radio
Holdings Cl A 25,224 20.00 Jan. 2008 504,480
- ----------------------------------------------------------------------------------------
Total value $1,336,230
- ----------------------------------------------------------------------------------------
</Table>
At July 31, 2007, cash or short-term securities were designated to cover
open put options written as follows (see Note 7 to the financial
statements):
<Table>
<Caption>
EXERCISE EXPIRATION
ISSUER CONTRACTS PRICE DATE VALUE(A)
- ----------------------------------------------------------------------------------------
XM Satellite Radio
Holdings Cl A 25,224 $12.50 Jan. 2008 $5,549,280
</Table>
(i) Affiliated Money Market Fund -- See Note 8 to the financial statements.
(j) At July 31, 2007, the cost of securities for federal income tax purposes
was $3,081,131,055 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $251,190,208
Unrealized depreciation (100,878,420)
- ------------------------------------------------------------------------------
Net unrealized appreciation $150,311,788
- ------------------------------------------------------------------------------
</Table>
The Global Industry Classification Standard (GICS) was developed by and is the
exclusive property of Morgan Stanley Capital International Inc. and Standard &
Poor's, a division of The McGraw-Hill Companies, Inc.
HOW TO FIND INFORMATION ABOUT THE FUND'S 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 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
can be found at riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 19
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2007
<Table>
ASSETS
Investments in securities, at value (Note 1)
Unaffiliated issuers* (identified cost $2,974,818,995) $3,155,572,062
Affiliated money market fund (identified cost
$75,870,781) (Note 8) 75,870,781
- ------------------------------------------------------------------------------
Total investments in securities (identified cost
$3,050,689,776) 3,231,442,843
Cash in bank on demand deposit 100,297
Foreign currency holdings (identified cost $279,190) (Note
1) 276,065
Capital shares receivable 1,451,776
Dividends and accrued interest receivable 5,952,417
Receivable for investment securities sold 65,440,809
Unrealized appreciation on forward foreign currency
contracts held, at value (Note 5) 1,626,082
- ------------------------------------------------------------------------------
Total assets 3,306,290,289
- ------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 2,444,581
Payable for investment securities purchased 26,710,978
Payable upon return of securities loaned (Note 6) 37,808,900
Payable for cash collateral held on open options contracts
(Note 1) 5,317,020
Accrued investment management services fee 51,157
Accrued distribution fee 27,444
Accrued transfer agency fee 1,509
Accrued administrative services fee 4,612
Accrued plan administration services fee 1,011
Other accrued expenses 286,378
Options contracts written, at value (premiums received
$8,319,762) (Note 7) 6,885,510
- ------------------------------------------------------------------------------
Total liabilities 79,539,100
- ------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $3,226,751,189
==============================================================================
</Table>
- --------------------------------------------------------------------------------
20 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
JULY 31, 2007
<Table>
REPRESENTED BY
Capital stock -- $.01 par value (Note 1) $ 994,514
Additional paid-in capital 3,334,999,400
Undistributed net investment income 21,380,472
Accumulated net realized gain (loss) (Note 10) (314,505,270)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (Note 5) 183,882,073
- ------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $3,226,751,189
==============================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $2,392,774,288
Class B $ 369,487,313
Class C $ 20,332,352
Class I $ 298,304,650
Class R2 $ 5,135
Class R3 $ 5,143
Class R4 $ 145,831,935
Class R5 $ 5,159
Class W $ 5,214
Net asset value per share of outstanding
capital stock: Class A shares(1) 73,100,079 $ 32.73
Class B shares 12,401,019 $ 29.79
Class C shares 682,923 $ 29.77
Class I shares 8,893,003 $ 33.54
Class R2 shares 155 $ 33.13
Class R3 shares 155 $ 33.18
Class R4 shares 4,373,779 $ 33.34
Class R5 shares 155 $ 33.28
Class W shares 157 $ 33.21
- -------------------------------------------------------------------------------------------
* Including securities on loan, at value
(Note 6) $ 33,616,930
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $34.73. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 21
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 2007
<Table>
INVESTMENT INCOME
Income:
Dividends $ 59,682,896
Interest 1,270,908
Income distributions from affiliated money market fund (Note
8) 5,549,293
Fee income from securities lending (Note 6) 524,804
Less foreign taxes withheld (1,474,003)
- --------------------------------------------------------------------------
Total income 65,553,898
- --------------------------------------------------------------------------
Expenses (Note 2):
Investment management services fee 22,705,786
Distribution fee
Class A 6,060,271
Class B 4,642,489
Class C 201,604
Class R2 16
Class R3 8
Class W 9
Transfer agency fee
Class A 4,761,442
Class B 999,373
Class C 41,758
Class R2 2
Class R3 2
Class R4 221,474
Class R5 2
Class W 7
Service fee -- Class R4 93,050
Administrative services fees and expenses 1,763,087
Plan administration services fee
Class R2 8
Class R3 8
Class R4 311,647
Compensation of board members 62,840
Custodian fees 303,550
Printing and postage 482,500
Registration fees 133,300
Professional fees 95,538
Other 147,342
- --------------------------------------------------------------------------
Total expenses 43,027,113
Earnings and bank fee credits on cash balances (Note 2) (270,712)
- --------------------------------------------------------------------------
Total net expenses 42,756,401
- --------------------------------------------------------------------------
Investment income (loss) -- net 22,797,497
- --------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
22 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
STATEMENT OF OPERATIONS (CONTINUED)
YEAR ENDED JULY 31, 2007
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (Note 3) $247,504,400
Foreign currency transactions 31,204
Options contracts written (Note 7) (2,403,085)
- --------------------------------------------------------------------------
Net realized gain (loss) on investments 245,132,519
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies 227,422,901
- --------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 472,555,420
- --------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $495,352,917
==========================================================================
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 23
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 22,797,497 $ 21,536,361
Net realized gain (loss) on investments 245,132,519 378,492,867
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies 227,422,901 (369,575,760)
- ---------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 495,352,917 30,453,468
- ---------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (17,087,134) (766,414)
Class C (21,069) --
Class I (3,983,286) (240,149)
Class R2 (55) N/A
Class R3 (55) N/A
Class R4 (1,999,289) (164,443)
Class R5 (56) N/A
Class W (55) N/A
- ---------------------------------------------------------------------------------------
Total distributions (23,090,999) (1,171,006)
- ---------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Proceeds from sales
Class A shares (Note 2) 279,305,597 723,627,727
Class B shares 40,223,465 155,729,842
Class C shares 3,730,834 8,410,448
Class I shares 102,896,983 109,795,697
Class R2 shares 5,000 N/A
Class R3 shares 5,000 N/A
Class R4 shares 28,815,906 54,128,249
Class R5 shares 5,000 N/A
Class W shares 5,000 N/A
Reinvestment of distributions at net asset value
Class A shares 16,669,054 748,320
Class C shares 20,543 --
Class I shares 3,983,218 240,142
Class R4 shares 1,999,289 164,443
</Table>
- --------------------------------------------------------------------------------
24 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
Payments for redemptions
Class A shares (574,909,608) (500,308,297)
Class B shares (Note 2) (201,026,288) (269,341,808)
Class C shares (Note 2) (4,753,464) (4,706,122)
Class I shares (110,663,694) (3,449,675)
Class R2 shares -- N/A
Class R3 shares -- N/A
Class R4 shares (184,854,678) (96,349,570)
Class R5 shares -- N/A
Class W shares -- N/A
- ---------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (598,542,843) 178,689,396
- ---------------------------------------------------------------------------------------
Total increase (decrease) in net assets (126,280,925) 207,971,858
Net assets at beginning of year 3,353,032,114 3,145,060,256
- ---------------------------------------------------------------------------------------
Net assets at end of year $3,226,751,189 $3,353,032,114
=======================================================================================
Undistributed net investment income $ 21,380,472 $ 21,642,770
- ---------------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 25
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a series of RiverSource Large Cap Series, Inc. and is registered
under the Investment Company Act of 1940 (as amended) as a diversified, open-end
management investment company. RiverSource Large Cap Series, Inc. has 10 billion
authorized shares of capital stock that can be allocated among the separate
series as designated by the Board. The Fund invests primarily in common stocks
of U.S. and foreign companies that appear to offer growth opportunities.
The Fund offers Class A, Class B, Class C, Class I and Class R4 shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I and Class R4 shares have no sales charge and are offered only to
qualifying institutional investors.
Effective Dec. 11, 2006, the Board approved renaming Class Y as Class R4,
terminating the shareholder servicing agreement, revising the fee structure
under the transfer agent agreement from account-based to asset-based, and
adopting a plan administration services agreement.
At July 31, 2007, Ameriprise Financial, Inc. (Ameriprise Financial), the parent
company of RiverSource Investments, LLC (the Investment Manager) and the
affiliated funds-of-funds owned 100% of Class I shares.
Effective Dec. 11, 2006, the Fund offers additional classes of shares, Class R2,
Class R3 and Class R5, to certain institutional investors. These shares are sold
without a front-end sales charge or CDSC. At July 31, 2007, Ameriprise Financial
owned 100% of Class R2, Class R3 and Class R5 shares.
Effective Dec. 1, 2006, the Fund offers an additional class of shares, Class W,
through qualifying discretionary accounts. Class W shares are sold without a
front-end sales charge or CDSC. At July 31, 2007, Ameriprise Financial owned
100% of Class W shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration fees) differ among classes. Income, expenses (other
than class specific expenses) and realized and unrealized gains or losses on
investments are allocated to each class of shares based upon its relative net
assets.
- --------------------------------------------------------------------------------
26 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
The Fund's significant accounting policies are summarized below:
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of each business day. Securities traded
on national securities exchanges or included in national market systems are
valued at the last quoted sales price. Debt securities are generally traded in
the over-the-counter market and are valued at a price that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
Foreign securities are valued based on quotations from the principal market in
which such securities are normally traded. The procedures adopted by the Board
of Directors of the funds generally contemplate the use of fair valuation in the
event that price quotations or valuations are not readily available, price
quotations or valuations from other sources are not reflective of market value
and thus deemed unreliable, or a significant event has occurred in relation to a
security or class of securities (such as foreign equities) that is not reflected
in price quotations or valuations from other sources. A fair value price is a
good faith estimate of the value of a security at a given point in time. Many
securities markets and exchanges outside the U.S. close prior to the close of
the New York Stock Exchange and therefore the closing prices for securities in
such markets or on such exchanges may not fully reflect events that occur after
such close but before the close of the New York Stock Exchange, including
significant movements in the U.S. market after foreign exchanges have closed.
Accordingly, in those situations, Ameriprise Financial will fair value foreign
equity securities pursuant to procedures adopted by the Board of Directors of
the funds, including utilizing a third party pricing service to determine these
fair values. These procedures take into account multiple factors, including
movements in the U.S. securities markets, to determine a good faith estimate
that reasonably reflects the current market conditions as of the close of the
New York Stock Exchange. Swap transactions are valued through an authorized
pricing service, broker, or an internal model. Short-term securities maturing in
more than 60 days from the valuation date are valued at the market price or
approximate market value based on current interest rates; those maturing in 60
days or less are valued at amortized cost.
ILLIQUID SECURITIES
At July 31, 2007, investments in securities included issues that are illiquid
which, the Fund currently limits to 15% of net assets, at market value, at the
time of purchase. Prior to July 12, 2007, the Fund limited the percent held in
securities and other instruments that were illiquid to 10% of the Fund's net
assets. The aggregate value of such securities as of July 31, 2007 was
$56,896,887 representing 1.8% of net assets. These securities may be valued at
fair value
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 27
according to procedures approved, in good faith, by the Board. According to
board guidelines, certain unregistered securities are determined to be liquid
and are not included within the 15% limitation specified above. Assets are
liquid if they can be sold or disposed of in the ordinary course of business
within seven days at approximately the value which the asset is valued by the
Fund.
OPTION TRANSACTIONS
To produce incremental earnings, protect gains and facilitate buying and selling
of securities for investments, the Fund may buy and write options traded on any
U.S. or foreign exchange or in the over-the-counter market where completing the
obligation depends upon the credit standing of the other party. Cash collateral
may be collected by the Fund to secure certain over-the-counter options trades.
Cash collateral held by the Fund for such option trades must be returned to the
counterparty upon closure, exercise or expiration of the contract. The Fund also
may buy and sell put and call options and write covered call options on
portfolio securities as well as write cash-secured put options. The risk in
writing a call option is that the Fund gives up the opportunity for profit if
the market price of the security increases. The risk in writing a put option is
that the Fund may incur a loss if the market price of the security decreases and
the option is exercised. The risk in buying an option is that the Fund pays a
premium whether or not the option is exercised. The Fund also has the additional
risk of being unable to enter into a closing transaction if a liquid secondary
market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The Fund will
realize a gain or loss when the option transaction expires or closes. When an
option is exercised, the proceeds on sales for a written call option, the
purchase cost for a written put option or the cost of a security for a purchased
put or call option is adjusted by the amount of premium received or paid.
FUTURES TRANSACTIONS
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund also may buy and write put and call options on these futures contracts.
Risks of entering into futures contracts and related options include the
possibility of an illiquid market and that a change in the value of the contract
or option may not correlate with changes in the value of the underlying
securities.
Futures are valued daily based upon the last sale price at the close of market
on the principal exchange on which they are traded. Upon entering into a futures
contract, the Fund is required to deposit either cash or securities in an amount
(initial margin) equal to a certain percentage of the contract value. Subsequent
payments (variation margin) are made or received by the Fund each day. The
variation margin payments are equal to the daily changes in the contract value
and are recorded as unrealized gains and losses. The Fund recognizes a realized
gain or
- --------------------------------------------------------------------------------
28 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
loss when the contract is closed or expires. At July 31, 2007, the Fund had no
outstanding futures contracts.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the statement of operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes. At July 31, 2007, foreign currency holdings consisted of
multiple denominations, primarily Malaysian Ringgits and Indonesian Rupiahs.
The Fund may enter into forward foreign currency exchange contracts for
operational purposes and to protect against adverse exchange rate fluctuation.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates from an
independent pricing service. The Fund is subject to the credit risk that the
other party will not complete its contract obligations.
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 to the shareholders. No provision for income or excise
taxes is thus required.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred losses on
certain futures contracts and losses deferred due to "wash sale" transactions.
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
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 29
which amounts are distributed may differ from the year that the income or
realized gains (losses) were recorded by the Fund.
On the statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by $31,204
and accumulated net realized loss has been increased by $31,204.
The tax character of distributions paid for the years indicated is as follows:
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
- ----------------------------------------------------------------------------
CLASS A
Distributions paid from:
Ordinary income............................ $17,087,134 $766,414
Long-term capital gain..................... -- --
CLASS B
Distributions paid from:
Ordinary income............................ -- --
Long-term capital gain..................... -- --
CLASS C
Distributions paid from:
Ordinary income............................ 21,069 --
Long-term capital gain..................... -- --
CLASS I
Distributions paid from:
Ordinary income............................ 3,983,286 240,149
Long-term capital gain..................... -- --
CLASS R2(A)
Distributions paid from:
Ordinary income............................ 55 N/A
Long-term capital gain..................... -- N/A
CLASS R3(A)
Distributions paid from:
Ordinary income............................ 55 N/A
Long-term capital gain..................... -- N/A
CLASS R4(B)
Distributions paid from:
Ordinary income............................ 1,999,289 164,443
Long-term capital gain..................... -- --
CLASS R5(A)
Distributions paid from:
Ordinary income............................ 56 N/A
Long-term capital gain..................... -- N/A
</Table>
- --------------------------------------------------------------------------------
30 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
- ----------------------------------------------------------------------------
CLASS W(C)
Distributions paid from:
Ordinary income............................ $ 55 N/A
Long-term capital gain..................... -- N/A
</Table>
(a) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) For the period from Dec. 1, 2006 (inception date) to July 31, 2007.
At July 31, 2007, the components of distributable earnings on a tax basis are as
follows:
<Table>
Undistributed ordinary income............................ $ 23,220,406
Undistributed accumulated long-term gain................. $ --
Accumulated realized loss................................ $(284,278,656)
Unrealized appreciation (depreciation)................... $ 151,815,525
</Table>
RECENT ACCOUNTING PRONOUNCEMENTS
On Sept. 20, 2006, the Financial Accounting Standards Board (FASB) released
Statement of Financial Accounting Standards No. 157 "Fair Value Measurements"
(SFAS 157). SFAS 157 establishes an authoritative definition of fair value, sets
out a framework for measuring fair value, and requires additional disclosures
about fair-value measurements. The application of SFAS 157 is required for
fiscal years beginning after Nov. 15, 2007 and interim periods within those
fiscal years. The impact of SFAS 157 on the Fund's financial statements is being
evaluated.
In June 2006, the FASB issued FASB Interpretation 48 (FIN 48), "Accounting for
Uncertainty in Income Taxes." FIN 48 clarifies the accounting for uncertainty in
income taxes recognized in accordance with FASB Statement 109, "Accounting for
Income Taxes." FIN 48 prescribes a two-step process to recognize and measure a
tax position taken or expected to be taken in a tax return. The first step is to
determine whether a tax position has met the more-likely-than-not recognition
threshold and the second step is to measure a tax position that meets the
threshold to determine the amount of benefit to recognize. FIN 48 also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition. FIN 48 is effective for fiscal
years beginning after Dec. 15, 2006. Tax positions of the Fund are being
evaluated to determine the impact, if any, to the Fund. The adoption of FIN 48
is not anticipated to have a material impact on the Fund.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 31
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Interest income, including amortization of premium, market discount and
original issue discount using the effective interest method, is accrued daily.
2. EXPENSES AND SALES CHARGES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets that declines from 0.60%
to 0.375% annually as the Fund's assets increase. The fee may be adjusted upward
or downward by a performance incentive adjustment based on a comparison of the
performance of Class A shares of the Fund to the Lipper Large-Cap Growth Funds
Index. In certain circumstances, the Board may approve a change in the index.
The maximum adjustment is 0.12% per year. If the performance difference is less
than 0.50%, the adjustment will be zero. The adjustment increased the fee by
$2,987,141 for the year ended July 31, 2007. The management fee for the year
ended July 31, 2007, was 0.66% of the Fund's average daily net assets, including
an adjustment under the terms of the performance incentive agreement.
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines from 0.06% to 0.03% annually as the
Fund's assets increase.
Other expenses in the amount of $32,815 are for, among other things, certain
expenses of the Fund or the Board including: Fund boardroom and office expense,
employee compensation, employee health and retirement benefits, and certain
other expenses. Payment of these Fund and Board expenses is facilitated by a
company providing limited administrative services to the Fund and the Board.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a Board Chair's
compensation, including health benefits and payment of certain other expenses,
are included under other expenses.
Under a Deferred Compensation Plan (the Plan), non-interested board members may
defer receipt of their compensation. Deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of the Fund or other
RiverSource funds. The Fund's liability for these amounts is adjusted for market
value changes and remains in the Fund until distributed in accordance with the
Plan.
Professional fees include fees paid by the Fund for legal services and
independent registered public accounting firm services.
- --------------------------------------------------------------------------------
32 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual fee per shareholder account for this service as follows:
- - Class A $19.50
- - Class B $20.50
- - Class C $20.00
Effective Dec. 11, 2006, as part of the Board's approval to rename Class Y as
Class R4, the fee structure under the Transfer Agency Agreement was revised from
an account-based fee for Class Y to an asset-based fee for Class R4. The Fund
pays the Transfer Agent an annual asset-based fee at a rate of 0.05% of the
Fund's average daily net asset attributable to Class R4 shares. Prior to Dec.
11, 2006, the Fund paid the Transfer Agent an annual account-based fee of $17.50
per shareholder account.
In addition, the Fund pays the Transfer Agent an annual asset-based fee at a
rate of 0.05% of the Fund's average daily net assets attributable to Class R2,
Class R3 and Class R5 shares and an annual asset-based fee at a rate of 0.20% of
the Fund's average daily net assets attributable to Class W shares.
Prior to Dec. 11, 2006, Class I paid a transfer agency fee at an annual rate per
shareholder account of $1. Effective Dec. 11, 2006, this fee was eliminated.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 12 months from the date the account becomes inactive. These
fees are included in the transfer agency fees on the statement of operations.
The Fund has agreements with Ameriprise Financial Services, Inc. and RiverSource
Distributors, Inc. (collectively, the Distributor) for distribution and
shareholder services. Under a Plan and Agreement of Distribution pursuant to
Rule 12b-1, the Fund pays a fee at an annual rate of up to 0.25% of the Fund's
average daily net assets attributable to Class A, Class R3 and Class W shares, a
fee at an annual rate of up to 0.50% of the Fund's average daily net assets
attributable to Class R2 shares and a fee at an annual rate of up to 1.00% of
the Fund's average daily net assets attributable to Class B and Class C shares.
Effective Dec. 11, 2006, a Plan Administration Services Agreement was adopted
for the restructured Class R4 and the introduction of Class R2 and Class R3. The
fee is calculated at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares.
Prior to Dec. 11, 2006, under a Shareholder Service Agreement, the Fund paid the
Distributor a fee for service provided to shareholders by the Distributor and
other servicing agents with respect to Class Y shares. The fee was calculated at
a rate of 0.10% of the Fund's average daily net assets attributable to Class Y
shares. Effective Dec. 11, 2006, this agreement was terminated.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 33
Sales charges received by the Distributor for distributing Fund shares were
$2,629,101 for Class A, $396,657 for Class B and $2,421 for Class C for the year
ended July 31, 2007.
In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in which
it invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). Because the acquired funds have varied expense and fee levels and
the Fund may own different proportions of acquired funds at different times, the
amount of fees and expenses incurred indirectly by the Fund will vary.
Effective Dec. 11, 2006, with the renaming of Class Y as Class R4, the
Investment Manager and its affiliates have contractually agreed to waive certain
fees and expenses until July 31, 2008, unless sooner terminated at the
discretion of the Board, such that net expenses (excluding fees and expenses of
acquired funds), before giving effect to any performance incentive adjustment,
will not exceed 0.97% for Class R4.
During the year ended July 31, 2007, the Fund's custodian and transfer agency
fees were reduced by $270,712 as a result of earnings and bank fee credits from
overnight cash balances. The Fund also pays custodian fees to Ameriprise Trust
Company, an affiliate of Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $3,263,138,796 and $3,915,171,059, respectively, for the
year ended July 31, 2007. Realized gains and losses are determined on an
identified cost basis.
- --------------------------------------------------------------------------------
34 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the years indicated are as follows:
<Table>
<Caption>
YEAR ENDED JULY 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- --------------------------------------------------------------------------------------------
Class A 8,592,129 525,999 (18,184,913) (9,066,785)
Class B 1,395,545 -- (6,731,640) (5,336,095)
Class C 129,341 709 (165,607) (35,557)
Class I 3,255,973 123,015 (3,216,500) 162,488
Class R2(a) 155 -- -- 155
Class R3(a) 155 -- -- 155
Class R4(b) 887,179 62,013 (5,678,782) (4,729,590)
Class R5(a) 155 -- -- 155
Class W(c) 157 -- -- 157
- --------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED JULY 31, 2006
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- --------------------------------------------------------------------------------------------
Class A 25,321,178 25,727 (17,311,509) 8,035,396
Class B 5,918,299 -- (10,403,829) (4,485,530)
Class C 320,095 -- (178,061) 142,034
Class I 3,763,917 8,083 (113,992) 3,658,008
Class R4(b) 1,827,502 5,559 (3,287,393) (1,454,332)
- --------------------------------------------------------------------------------------------
</Table>
(a) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) For the period from Dec. 1, 2006 (inception date) to July 31, 2007.
5. FORWARD FOREIGN CURRENCY CONTRACTS
At July 31, 2007, the Fund had forward foreign currency exchange contracts that
obligate it to deliver currencies at specified future dates. The unrealized
appreciation on these contracts is included in the accompanying financial
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 35
statements. See "Summary of significant accounting policies." The terms of the
open contracts are as follows:
<Table>
<Caption>
CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED
EXCHANGE DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION
- -------------------------------------------------------------------------------------------------
Aug. 2, 2007 6,981,334 9,552,887 $ 813 $--
European Monetary Unit U.S. Dollar
Aug. 17, 2007 50,696,127 103,626,432 677,588 --
British Pound U.S. Dollar
Aug. 17, 2007 57,500,000 117,557,025 791,526 --
British Pound U.S. Dollar
Aug. 30, 2007 35,500,000 48,698,084 72,556 --
European Monetary Unit U.S. Dollar
Aug. 30, 2007 36,083,023 49,507,712 83,599 --
European Monetary Unit U.S. Dollar
- -------------------------------------------------------------------------------------------------
Total $1,626,082 $--
- -------------------------------------------------------------------------------------------------
</Table>
6. LENDING OF PORTFOLIO SECURITIES
In order to generate additional income, the Fund may lend securities
representing up to one-third of the value of its total assets (which includes
collateral for securities on loan) to broker-dealers, banks, or other
institutional borrowers of securities. The Fund receives collateral in the form
of cash and U.S. government securities, equal to at least 100% of the value of
securities loaned, which is marked to the market value of the loaned securities
daily until the securities are returned, e.g., if the value of the securities on
loan increases, additional cash collateral is provided by the borrower. The
Investment Manager serves as securities lending agent for the Fund under the
investment management services agreement pursuant to which the Fund has agreed
to reimburse the Investment Manager for expenses incurred by it in connection
with the lending program, and pursuant to guidelines adopted by and under the
oversight of the Board. At July 31, 2007, securities valued at $33,616,930 were
on loan to brokers. For collateral, the Fund received $37,808,900 in cash. Cash
collateral received is invested in an affiliated money market fund and
short-term securities, including U.S. government securities or other high-grade
debt obligations, which are included in the "Investments in securities." Income
from securities lending amounted to $524,804 for the year ended July 31, 2007.
Expenses paid to the Investment Manager were $7,621 for the year ended July 31,
2007, which are included in other expenses on the statement of operations. The
risks to the Fund of securities lending are that the borrower may not provide
additional collateral when required or return the securities when due.
- --------------------------------------------------------------------------------
36 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
7. OPTIONS CONTRACTS WRITTEN
Contracts and premiums associated with options contracts written are as follows:
<Table>
<Caption>
CALLS PUTS
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- ----------------------------------------------------------------------------------
Balance July 31, 2006 2,515 $ 5,531,700 -- $ --
Opened 91,990 10,349,937 42,040 5,339,080
Closed (24,901) (8,220,882) (16,816) (2,135,632)
Expired (33,290) (2,544,441) -- --
- ----------------------------------------------------------------------------------
Balance July 31, 2007 36,314 $ 5,116,314 25,224 $ 3,203,448
- ----------------------------------------------------------------------------------
</Table>
See "Summary of significant accounting policies."
8. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of RiverSource Investments. Cost of purchases
and proceeds from sales aggregated $1,512,404,501 and $1,436,533,720,
respectively, for the year ended July 31, 2007.
9. BANK BORROWINGS
The Fund has a revolving credit agreement with a syndicate of banks headed by
JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund may borrow for the temporary
funding of shareholder redemptions or for other temporary or emergency purposes.
The agreement went into effect Sept. 19, 2006. The Fund must maintain asset
coverage for borrowings of at least 300%. The agreement, which enables the Fund
to participate with other RiverSource funds, permits borrowings up to $500
million, collectively. Interest is charged to each Fund based on its borrowings
at a rate equal to either the higher of the Federal Funds Effective Rate plus
0.40% or the JPMCB Prime Commercial Lending Rate. Borrowings are payable within
60 days after such loan is executed. The Fund also pays a commitment fee equal
to its pro rata share of the amount of the credit facility at a rate of 0.06%
per annum. Prior to this agreement, the Fund paid a commitment fee equal to its
pro rata share of the amount of the credit facility at a rate of 0.07% per
annum. The Fund had no borrowings under the facility outstanding during the year
ended July 31, 2007.
10. CAPITAL LOSS CARRY-OVER
For federal income tax purposes, the Fund had a capital loss carry-over of
$284,278,656 at July 31, 2007, that if not offset by capital gains will expire
in 2011. 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.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 37
11. 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 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. In response to defendants' motion to dismiss the
complaint, the 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 may file a notice of appeal with the Eight Circuit Court of Appeals
within 30 days from the date of judgment.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), the parent company of RiverSource Investments, LLC
(RiverSource Investments), entered into settlement agreements with the
Securities and Exchange Commission (SEC) and Minnesota Department of Commerce
(MDOC) related to market timing activities. In connection with these matters,
the SEC and MDOC issued orders (the Orders) alleging that AEFC violated certain
provisions of the federal and Minnesota securities laws by failing to adequately
disclose market timing activities by allowing certain identified market timers
to continue to market time contrary to disclosures in mutual fund and variable
annuity product prospectuses. The Orders also alleged that AEFC failed to
implement procedures to detect and prevent market timing in 401(k) plans for
employees of AEFC and related companies and failed to adequately disclose that
there were no such procedures. Pursuant to the MDOC Order, the MDOC also alleged
that AEFC allowed inappropriate market timing to occur by failing to have
written policies and procedures and failing to properly supervise its employees.
As a result of the Orders, 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. Pursuant to the terms of the Orders, AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to make presentations at least annually to its board of directors and the
relevant mutual funds' board that include an overview of policies and procedures
to prevent market timing, material changes to these policies and procedures and
- --------------------------------------------------------------------------------
38 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
whether disclosures related to market timing are consistent with the SEC order
and federal securities laws. AEFC also agreed to retain an independent
distribution consultant to assist in developing a plan for distribution of all
disgorgement and civil penalties ordered by the SEC in accordance with various
undertakings detailed at http://www.sec.gov/litigation/admin/ia-2451.pdf. In
addition, AEFC agreed to complete and submit to the MDOC a compliance review of
its procedures regarding market timing within one year of the MDOC Order,
including a summary of actions taken to ensure compliance with applicable laws
and regulations and certification by a senior officer regarding compliance and
supervisory procedures.
Ameriprise Financial and its affiliates have cooperated with the SEC and the
MDOC in these legal proceedings, and have made regular reports to the
RiverSource 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.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 39
12. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $28.61 $28.34 $23.73 $22.80 $20.88
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .23(b) .18 .04 .02 --
Net gains (losses) (both realized and
unrealized) 4.11 .10 4.57 .91 1.92
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 4.34 .28 4.61 .93 1.92
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.22) (.01) -- -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $32.73 $28.61 $28.34 $23.73 $22.80
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $2,393 $2,351 $2,101 $2,117 $2,263
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 1.19% 1.14% 1.19% 1.03% 1.21%
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .71% .72% .16% .07% --%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98% 134% 136% 171% 205%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 15.20% .98% 19.43% 4.08% 9.20%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
40 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $26.06 $26.01 $21.95 $21.25 $19.61
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.02)(b) (.05) (.16) (.16) (.17)
Net gains (losses) (both realized and
unrealized) 3.75 .10 4.22 .86 1.81
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 3.73 .05 4.06 .70 1.64
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $29.79 $26.06 $26.01 $21.95 $21.25
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $369 $462 $578 $598 $775
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 1.96% 1.91% 1.97% 1.81% 1.99%
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets (.06%) (.06%) (.62%) (.71%) (.77%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98% 134% 136% 171% 205%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 14.31% .19% 18.50% 3.29% 8.36%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 41
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $26.07 $26.01 $21.95 $21.25 $19.62
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)(b) (.04) (.16) (.16) (.17)
Net gains (losses) (both realized and
unrealized) 3.74 .10 4.22 .86 1.80
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 3.73 .06 4.06 .70 1.63
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.03) -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $29.77 $26.07 $26.01 $21.95 $21.25
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $20 $19 $15 $13 $12
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 1.95% 1.91% 1.97% 1.81% 2.01%
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets (.03%) (.03%) (.62%) (.71%) (.81%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98% 134% 136% 171% 205%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 14.31% .23% 18.50% 3.29% 8.31%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
42 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004(B)
Net asset value, beginning of period $29.31 $28.93 $24.10 $25.61
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .40(c) .32 .12 .09
Net gains (losses) (both realized and
unrealized) 4.19 .10 4.71 (1.60)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 4.59 .42 4.83 (1.51)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.36) (.04) -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.54 $29.31 $28.93 $24.10
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $298 $256 $147 $18
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) .74% .68% .75% .57%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 1.21% 1.22% .55% .43%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98% 134% 136% 171%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 15.70% 1.44% 20.04% (5.90%)(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from March 4, 2004 (inception date) to July 31, 2004.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 43
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $32.23
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .13(c)
Net gains (losses) (both realized and
unrealized) 1.12
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.25
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.35)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.13
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) 1.50%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .63%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 3.93%(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
44 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $32.23
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .18(c)
Net gains (losses) (both realized and
unrealized) 1.13
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.31
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.36)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.18
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) 1.27%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .87%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 4.09%(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 45
CLASS R4*
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $29.13 $28.81 $24.07 $23.09 $21.11
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .25(b) .24 .09 .07 .04
Net gains (losses) (both realized and
unrealized) 4.22 .10 4.65 .91 1.94
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 4.47 .34 4.74 .98 1.98
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.26) (.02) -- -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.34 $29.13 $28.81 $24.07 $23.09
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $146 $265 $304 $350 $398
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 1.03% .95% 1.02% .86% 1.03%
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .79% .89% .34% .25% .18%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98% 134% 136% 171% 205%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 15.39% 1.17% 19.69% 4.24% 9.38%
- -----------------------------------------------------------------------------------------------------------
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
46 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $32.23
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .29(c)
Net gains (losses) (both realized and
unrealized) 1.12
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.41
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.36)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.28
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) .76%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 1.38%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 4.41%(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 47
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $31.89
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .24(c)
Net gains (losses) (both realized and
unrealized) 1.43
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.67
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.35)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.21
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) 1.17%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 1.09%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 5.29%(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 1, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
48 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF RIVERSOURCE GROWTH FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of RiverSource Growth Fund (the
Fund), one of the portfolios constituting the RiverSource Large Cap Series, Inc.
as of July 31, 2007, and the related statement of operations, statement of
changes in net assets and financial highlights for the year then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The financial
statements and financial highlights of the Fund for the periods presented
through July 31, 2006, were audited by other auditors whose report dated
September 20, 2006, expressed an unqualified opinion on those financial
statements and financial highlights.
We conducted our audit 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 audit 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, 2007, by correspondence with the custodian and
brokers, or by other appropriate auditing procedures where replies from brokers
were not received. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
RiverSource Growth Fund of the RiverSource Large Cap Series, Inc. at July 31,
2007, the results of its operations, changes in its net assets and the financial
highlights for the year then ended, in conformity with U.S. generally accepted
accounting principles.
Ernst & Young LLP
Minneapolis, Minnesota
September 20, 2007
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 49
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, 2007
CLASS A
<Table>
<Caption>
INCOME DISTRIBUTION - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.22210
</Table>
CLASS C
<Table>
<Caption>
INCOME DISTRIBUTION - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.03029
</Table>
CLASS I
<Table>
<Caption>
INCOME DISTRIBUTION - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.35985
</Table>
CLASS R2
<Table>
<Caption>
INCOME DISTRIBUTION - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.35429
</Table>
CLASS R3
<Table>
<Caption>
INCOME DISTRIBUTION -- taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.35625
</Table>
- --------------------------------------------------------------------------------
50 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
CLASS R4*
<Table>
<Caption>
INCOME DISTRIBUTION -- taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.26381
</Table>
CLASS R5
<Table>
<Caption>
INCOME DISTRIBUTION -- taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.35941
</Table>
CLASS W
<Table>
<Caption>
INCOME DISTRIBUTION -- taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.35385
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 51
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 member oversees 102
RiverSource funds. Board members serve until the next regular shareholders'
meeting or until he or she reaches the mandatory retirement age established by
the Board. Under the current Board policy, members may serve until the end of
the meeting following their 75th birthday, or the fifteenth anniversary of the
first Board meeting they attended as members of the Board, whichever occurs
first. This policy does not apply to Ms. Jones who may retire after her 75th
birthday.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Kathleen Blatz Board member Chief Justice, Minnesota Supreme
901 S. Marquette Ave. since 2006 Court, 1998-2005
Minneapolis, MN 55402
Age 53
- -----------------------------------------------------------------------------------------------------
Arne H. Carlson Board member Chair, RiverSource Funds,
901 S. Marquette Ave. since 1999 1999-2006; former Governor of
Minneapolis, MN 55402 Minnesota
Age 73
- -----------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member President, Springboard -- Partners
901 S. Marquette Ave. since 2007 in Cross Cultural Leadership
Minneapolis, MN 55402 (consulting company)
Age 52
- -----------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member Trustee Professor of Economics and
901 S. Marquette Ave. since 2004 Management, Bentley College; former
Minneapolis, MN 55402 Dean, McCallum Graduate School of
Age 56 Business, Bentley College
- -----------------------------------------------------------------------------------------------------
Anne P. Jones Board member Attorney and Consultant
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member Former Managing Director, Shikiar American Progressive
901 S. Marquette Ave. since 2005 Asset Management Insurance
Minneapolis, MN 55402
Age 71
- -----------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Board member President Emeritus and Professor of Valmont Industries,
901 S. Marquette Ave. since 2002 and Economics, Carleton College Inc. (manufactures
Minneapolis, MN 55402 Chair of the irrigation systems)
Age 68 Board since 2007
- -----------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
52 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Catherine James Paglia Board member Director, Enterprise Asset Strategic
901 S. Marquette Ave. since 2004 Management, Inc. (private real Distribution, Inc.
Minneapolis, MN 55402 estate and asset management (transportation,
Age 55 company) distribution and
logistics
consultants)
- -----------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member Chief Executive Officer, RiboNovix, Hybridon, Inc.
901 S. Marquette Ave. since 2002 Inc. since 2003 (biotechnology); (biotechnology);
Minneapolis, MN 55402 former President, Forester Biotech American Healthways,
Age 63 Inc. (health
management programs)
- -----------------------------------------------------------------------------------------------------
</Table>
BOARD MEMBER AFFILIATED WITH RIVERSOURCE INVESTMENTS*
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
William F. Truscott Board member President -- U.S. Asset Management
53600 Ameriprise since 2001, and Chief Investment Officer,
Financial Center Vice President Ameriprise Financial, Inc. and
Minneapolis, MN 55474 since 2002 President, Chairman of the Board
Age 47 and Chief Investment Officer,
RiverSource Investments, LLC since
2005; President, Ameriprise
Certificate Company since 2006;
Senior Vice President -- Chief
Investment Officer, Ameriprise
Financial, Inc. and Chairman of the
Board and Chief Investment Officer,
RiverSource Investments, LLC,
2001-2005
- -----------------------------------------------------------------------------------------------------
</Table>
* Interested person by reason of being an officer, director, security holder
and/or employee of RiverSource Investments.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling RiverSource Funds at (888)
791-3380; contacting your financial institution; or visiting
riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 53
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 FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Patrick T. Bannigan President since Senior Vice President -- Asset Management,
172 Ameriprise 2006 RiverSource Investments, LLC since 2006;
Financial Center Managing Director and Global Head of Product,
Minneapolis, MN 55474 Morgan Stanley Investment Management,
Age 41 2004-2006; President, Touchstone Investments,
2002-2004; Director of Strategic Planning,
Evergreen Investments, 1995-2002
- ------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President Executive Vice President -- Equity and Fixed
172 Ameriprise since 2004 Income, Ameriprise Financial, Inc. and
Financial Center RiverSource Investments, LLC since 2006; Vice
Minneapolis, MN 55474 President -- Investments, Ameriprise
Age 43 Certificate Company since 2003; Senior Vice
President -- Fixed Income, Ameriprise
Financial, Inc., 2002-2006 and RiverSource
Investments, LLC, 2004-2006; Managing
Director, Zurich Global Assets, 2001-2002
- ------------------------------------------------------------------------------------------
Amy K. Johnson Vice President Vice President -- Asset Management and Trust
5228 Ameriprise since 2006 Company Services, RiverSource Investments, LLC
Financial Center since 2006; Vice President -- Operations and
Minneapolis, MN 55474 Compliance, RiverSource Investments, LLC,
Age 41 2004-2006; Director of Product
Development -- Mutual Funds, Ameriprise
Financial, Inc., 2001-2004
- ------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Vice President -- Investment Accounting,
105 Ameriprise 2002 Ameriprise Financial, Inc. since 2002; Vice
Financial Center President -- Finance, American Express
Minneapolis, MN 55474 Company, 2000-2002
Age 52
- ------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Vice President and Chief Counsel -- Asset
5228 Ameriprise General Counsel Management, Ameriprise Financial, Inc. since
Financial Center and Secretary 2005; Vice President, General Counsel and
Minneapolis, MN 55474 since 2006 Secretary, Ameriprise Certificate Company
Age 47 since 2005; Vice President -- Asset Management
Compliance, Ameriprise Financial, Inc.,
2004-2005; Senior Vice President and Chief
Compliance Officer, U.S. Bancorp Asset
Management, 2002-2004; Second Vice President
and Assistant General Counsel, Hartford Life,
2001-2002
- ------------------------------------------------------------------------------------------
Jennifer D. Lammers Chief Compliance U.S. Asset Management Chief Compliance
172 Ameriprise Officer since Officer, RiverSource Investments, LLC since
Financial Center 2006 2006; Director -- Mutual Funds, Voyageur Asset
Minneapolis, MN 55474 Management, 2003-2006; Director of Finance,
Age 46 Voyageur Asset Management, 2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
54 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Compliance Director and Anti-Money Laundering
2934 Ameriprise Prevention Officer, Ameriprise Financial, Inc. since
Financial Center Officer since 2004; Manager Anti-Money Laundering,
Minneapolis, MN 55474 2004 Ameriprise Financial, Inc., 2003-2004;
Age 43 Compliance Director and Bank Secrecy Act
Officer, American Express Centurion Bank,
2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 55
APPROVAL OF INVESTMENT MANAGEMENT SERVICES AGREEMENT
RiverSource Investments, LLC ("RiverSource"), 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") RiverSource provides investment advice and other services to the
Fund and all RiverSource funds (collectively, the "Funds"). The Fund's Board of
Directors (the "Board") and the Board's Investment Review and Contracts
Committees monitor these services throughout the year.
On an annual basis, the Board, including the independent Board members (the
"Independent Directors"), considers renewal of the IMS Agreement. RiverSource
prepares detailed reports for the Board and its Contracts Committee in March and
April, including reports based on data provided by independent organizations to
assist the Board in making this determination. In addition, throughout the year,
the Board (or its committees) reviews information prepared by RiverSource
addressing the services RiverSource provides and Fund performance. The Board
accords particular weight to the work, deliberations and conclusions of the
Contracts and Investment Review Committees in determining whether to continue
the IMS Agreement. At the April 11-12, 2007 in-person Board meeting, independent
legal counsel to the Independent Directors reviewed with the Independent
Directors 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 RiverSource: The Board
analyzed various reports and presentations it had received detailing the
services performed by RiverSource, as well as its expertise, resources and
capabilities. The Board specifically considered many developments during the
past year concerning the services provided by RiverSource, including, in
particular, the growing strength and capabilities of many RiverSource offices
and the increased investment and resources dedicated to the Fund's operations,
particularly in the areas of trading systems, legal and compliance. Further, in
connection with the Board's evaluation of the overall package of services
provided by RiverSource, the Board considered the quality of the administrative,
custody and transfer agency services provided by RiverSource affiliates to the
Fund. The Board also reviewed the financial condition of RiverSource and the
entity's ability to carry out its responsibilities under the IMS Agreement. 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
RiverSource). The Board concluded that the services being performed under the
IMS Agreement were of a reasonably high quality.
- --------------------------------------------------------------------------------
56 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
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 determined that RiverSource was 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: (i) detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of the Fund, the
performance of a benchmark index, the percentage ranking of the Fund among its
comparison group and the net assets of the Fund; and (ii) a report detailing the
Fund's performance over various periods (including since inception), recent Fund
inflows (and outflows) and a comparison of the Fund's net assets from December
2006 to December 2005. The Board observed that the Fund's investment performance
met expectations.
Comparative Fees, Costs of Services Provided and the Profits Realized By
RiverSource and its Affiliates from their Relationships with the Fund: The
Board reviewed comparative fees and the costs of services to be provided under
the IMS Agreement. The Board members considered detailed comparative information
set forth in an annual report on fees and expenses, including, among other
things, data (prepared by an independent organization) showing a comparison of
the Fund's expenses with median expenses paid by funds in its peer group, as
well as data showing the Fund's contribution to RiverSource's profitability. 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 Funds' family, while assuring that the overall fees for each fund
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 took into
account that the Fund's total expense ratio (after considering proposed expense
caps/waivers) approximated the peer group's median expense ratio. Based on its
review, the Board concluded that the Fund's management fee was fair and
reasonable in light of the extent and quality of services that the Fund
receives.
The Board also considered the expected profitability of RiverSource and its
affiliates in connection with RiverSource providing investment management
services to the Fund. In this regard, the Board referred to a detailed
profitability report, discussing the profitability to RiverSource and Ameriprise
Financial from managing and operating the Fund, including data showing
comparative profitability. The Board also considered the services acquired by
the investment manager through the use of commission dollars paid by the Funds
on portfolio transactions. The Board noted that the fees paid by the Fund should
permit the investment manager to offer competitive compensation to its
personnel, make
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 57
necessary investments in its business and earn an appropriate profit. The Board
concluded that profitability levels were reasonable.
Economies of Scale to be Realized: The Board also considered the economies of
scale that might be realized by RiverSource as the Fund grows and took note of
the extent to which Fund shareholders might also benefit from such growth. The
Board considered that the IMS Agreement provides for lower fees as assets
increase at pre-established breakpoints and concluded that the IMS Agreement
satisfactorily provided for sharing these economies of scale.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the investment management service fees were fair and reasonable
in light of the extent and quality of services provided. In reaching this
conclusion, no single factor was determinative. On April 12, 2007, the Board,
including all of the Independent Directors, approved the renewal of the IMS
Agreement.
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 RiverSource Funds at (888) 791-3380; contacting your financial
institution; visiting riversource.com/funds; 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 riversource.com/funds; or
searching the website of the SEC at www.sec.gov.
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On April 12, 2007, Ernst & Young LLP was selected as the Fund's independent
registered public accounting firm for the 2007 fiscal year. A majority of the
Fund's Board of Directors, including a majority of the Independent Directors,
approved the appointment of Ernst & Young LLP. The predecessor independent
registered public accounting firm's reports on the Fund's financial statements
for the year ended July 31, 2006 and the year ended July 31, 2005 contained no
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles. During such fiscal periods
and through April 12, 2007 there were no disagreements between the Fund and the
predecessor independent registered public accounting firm on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope
- --------------------------------------------------------------------------------
58 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
or procedures, which such disagreements, if not resolved to the satisfaction of
the predecessor independent registered public accounting firm, would have caused
them to make reference to the subject matter of the disagreement in connection
with their reports on the financial statements for such fiscal periods.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 59
RIVERSOURCE(R) GROWTH FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by
the Fund's current prospectus. RiverSource(R)
mutual funds are distributed by RiverSource
Distributors, Inc. and Ameriprise Financial
Services, Inc., Members FINRA, and managed by
RiverSource Investments, LLC. These companies
(RIVERSOURCE INVESTMENTS LOGO) are part of Ameriprise Financial, Inc. S-6455 AC (9/07)
</Table>
Annual Report
and Prospectus
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE(R)
LARGE CAP EQUITY FUND
ANNUAL REPORT FOR
THE PERIOD ENDED
JULY 31, 2007
(Prospectus also enclosed)
RIVERSOURCE LARGE CAP EQUITY FUND
SEEKS TO PROVIDE SHAREHOLDERS WITH
LONG-TERM GROWTH OF CAPITAL.
This annual report includes a prospectus that
describes in detail the Fund's objective,
investment strategy, risks, sales charges, fees
and other matters of interest. Please read the
prospectus carefully before you invest or send
money.
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 3
Performance Summary................. 5
Questions & Answers
with Portfolio Management........ 8
The Fund's Long-term Performance ... 12
Fund Expenses Example............... 14
Investments in Securities........... 17
Financial Statements................ 28
Notes to Financial Statements....... 34
Report of Independent Registered
Public Accounting Firm........... 59
Federal Income Tax Information...... 61
Board Members and Officers.......... 64
Approval of Investment Management
Services Agreement............... 68
Proxy Voting........................ 70
Change in Independent Registered
Public Accounting Firm........... 71
</Table>
(DALBAR LOGO)
The RiverSource mutual fund
shareholder reports have been
awarded the Communications Seal
from Dalbar Inc., an independent
financial services research firm.
The Seal recognizes communications
demonstrating a level of
excellence in the industry.
- --------------------------------------------------------------------------------
2 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
FUND SNAPSHOT AT JULY 31, 2007
FUND OBJECTIVE
RiverSource Large Cap Equity Fund seeks to provide shareholders with long-term
growth of capital.
SECTOR BREAKDOWN*
Percentage of portfolio assets
(PIE CHART)
<Table>
Financials 17.3%
Consumer Discretionary 11.9%
Energy 8.5%
Information Technology 15.6%
Health Care 13.0%
Industrials 9.0%
Other(1) 24.7%
</Table>
* Sectors can be comprised of several industries. Please refer to the section
entitled "Investments in Securities" for a complete listing. No single
industry exceeds 25% of portfolio assets.
(1) Includes Telecommunication Services 7.7%, Consumer Staples 7.5%, Materials
3.1%, Utilities 2.5%, Options Purchased 0.2%, and Cash & Cash
Equivalents(2) 3.7%.
(2) Of the 3.7%, 0.6% is due to security lending activity, 0.1% is due to open
options contracts and 3.0% is the Fund's cash equivalent position.
TOP TEN HOLDINGS
Percentage of portfolio assets
<Table>
Exxon Mobil 3.6%
Virgin Media 3.2%
General Electric 2.1%
Pfizer 1.9%
Cisco Systems 1.7%
QUALCOMM 1.7%
Bank of America 1.7%
Citigroup 1.7%
American Intl Group 1.5%
Merck & Co 1.5%
</Table>
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
The Global Industry Classification Standard (GICS) was developed by and is the
exclusive property of Morgan Stanley Capital International Inc. and Standard &
Poor's, a division of The McGraw-Hill Companies, Inc.
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 3
FUND SNAPSHOT AT JULY 31, 2007
STYLE MATRIX
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
</Table>
Shading within the style matrix indicates areas in which the Fund generally
invests.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and serves as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
PORTFOLIO MANAGERS
<Table>
<Caption>
YEARS IN INDUSTRY
Robert Ewing, CFA 19
Nick Thakore 14
</Table>
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A ALEAX 03/28/02
Class B ALEBX 03/28/02
Class C ARQCX 03/28/02
Class I ALRIX 03/04/04
Class R2 -- 12/11/06
Class R3 -- 12/11/06
Class R4(1) ALEYX 03/28/02
Class R5 -- 12/11/06
</Table>
(1) Effective Dec. 11, 2006, Class Y was renamed
Class R4.
<Table>
Total net assets $6.327 billion
Number of holdings 461
</Table>
- --------------------------------------------------------------------------------
4 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the year ended July 31, 2007
(BAR CHART)
<Table>
RiverSource Large Cap Equity Fund Class A
(excluding sales charge) +15.79
Russell 1000(R) Index (unmanaged) +16.45
Standard & Poor's 500 Index (unmanaged) +16.13
Lipper Large-Cap Core Funds Index +16.16
</Table>
(see "The Fund's Long-term Performance" for Index descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the bar chart. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes.
It is not possible to invest directly in an index.
ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
<Table>
<Caption>
TOTAL NET EXPENSES(A)
Class A 1.09% 1.06%
Class B 1.86% 1.82%
Class C 1.86% 1.82%
Class I 0.63% 0.63%
Class R2(b) 1.44% 1.44%
Class R3(b) 1.19% 1.19%
Class R4(c) 0.92% 0.91%
Class R5(b) 0.70% 0.70%
</Table>
(a) The investment manager and its affiliates have contractually agreed to
waive certain fees and to absorb certain expenses until July 31, 2008,
unless sooner terminated at the discretion of the Fund's Board. Any amounts
waived will not be reimbursed by the Fund. Under this agreement, net fund
expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment (that increased the
management fee by 0.01), will not exceed 1.05% for Class A, 1.81% for Class
B, 1.81% for Class C, 0.67% for Class I, 1.47% for Class R2, 1.22% for
Class R3, 0.90% for Class R4 and 0.72% for Class R5.
(b) Inception date for Class R2, Class R3 and Class R5 was Dec. 11, 2006.
(c) Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 5
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT JULY 31, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS INCEPTION
Class A (inception 3/28/02) +15.79% +10.90% +9.98% +5.42%
Class B (inception 3/28/02) +14.71% +10.04% +9.17% +4.60%
Class C (inception 3/28/02) +14.80% +10.06% +9.17% +4.64%
Class I (inception 3/4/04) +16.13% +11.48% N/A +8.18%
Class R2 (inception 12/11/06) N/A N/A N/A +3.71%*
Class R3 (inception 12/11/06) N/A N/A N/A +3.88%*
Class R4** (inception 3/28/02) +15.80% +11.18% +10.24% +5.66%
Class R5 (inception 12/11/06) N/A N/A N/A +4.24%*
WITH SALES CHARGE
Class A (inception 3/28/02) +9.15% +8.73% +8.69% +4.26%
Class B (inception 3/28/02) +9.71% +8.93% +8.88% +4.44%
Class C (inception 3/28/02) +13.80% +10.06% +9.17% +4.64%
</Table>
- --------------------------------------------------------------------------------
6 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
<Table>
<Caption>
AT JUNE 30, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS INCEPTION
Class A (inception 3/28/02) +20.32% +10.32% +9.35% +6.17%
Class B (inception 3/28/02) +19.30% +9.40% +8.52% +5.30%
Class C (inception 3/28/02) +19.38% +9.42% +8.52% +5.35%
Class I (inception 3/4/04) +20.87% +10.84% N/A +9.40%
Class R2 (inception 12/11/06) N/A N/A N/A +7.12%*
Class R3 (inception 12/11/06) N/A N/A N/A +7.12%*
Class R4** (inception 3/28/02) +20.71% +10.52% +9.57% +6.37%
Class R5 (inception 12/11/06) N/A N/A N/A +7.48%*
WITH SALES CHARGE
Class A (inception 3/28/02) +13.40% +8.16% +8.07% +4.98%
Class B (inception 3/28/02) +14.30% +8.27% +8.23% +5.15%
Class C (inception 3/28/02) +18.38% +9.42% +8.52% +5.35%
</Table>
Class A share performance reflects the maximum sales charge of 5.75%. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 3%; fifth year
2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to
a 1% CDSC if shares are sold within one year after purchase. Sales charges do
not apply to Class I, Class R2, Class R3, Class R4 and Class R5 shares. Class I,
Class R2, Class R3, Class R4 and Class R5 are available to institutional
investors only.
* Not annualized.
** Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 7
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, Bob Ewing and Nick Thakore, RiverSource Large Cap Equity Fund's portfolio
managers, discuss the Fund's results and positioning for the annual period ended
July 31, 2007.
Q: How did RiverSource Large Cap Equity Fund perform for the 12-month period
ended July 31, 2007?
A: RiverSource Large Cap Equity Fund's Class A shares advanced 15.79%,
excluding sales charge, for the fiscal year ended July 31, 2007. The Fund
underperformed its benchmarks, the Russell 1000(R) Index (Russell Index) and
the Standard & Poor's 500 Index (S&P 500 Index), which increased 16.45% and
16.13%, respectively. The Fund's peer group, the Lipper Large-Cap Core Funds
Index, gained 16.16% during the same time frame.
Q: What factors most significantly affected performance for the period?
A: U.S. stocks advanced sharply during the past year, as economic growth
continued and the Federal Reserve Board held the Fed Funds rate, a benchmark
for short-term interest rates, steady. Stock market volatility increased in
the latter half of the year, amid concerns that weakness in the subprime
lending market would affect other areas of the economy. This past year
brought a shift in market leadership as large-cap growth stocks outperformed
large-cap value as well as small- and mid-cap stocks.
The Fund lagged the Russell Index, primarily due to sector allocations. Stock
selection had a positive effect on return. Stock selection in the information
technology sector had a favorable impact, as did selection in industrials and
consumer staples. Selection in the health care, materials and financials
sectors detracted from performance.
A larger technology position than the Russell Index was advantageous as the
technology sector advanced almost twice as much as the overall Russell Index.
Having a smaller financials position than the Russell Index was also
beneficial, as financial companies faced a challenging interest rate
environment and deteriorating lending market. Smaller positions in
industrials and energy compared to the Russell Index hampered results.
- --------------------------------------------------------------------------------
8 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS
Individual contributors to performance included Vodafone Group, Nokia,
QUALCOMM, Honeywell Intl and Freescale. The Fund's holdings in each of these
stocks were larger than the respective Russell Index weightings. Vodafone
Group, a European wireless telecommunications company, began the period at a
relatively inexpensive valuation. A combination of improving fundamentals and
expectations that were initially quite low led to strong performance. Cell
phone manufacturer Nokia benefited from a favorable market for wireless
handsets, particularly lower cost products in the emerging markets, an area
where Nokia has a strong presence. QUALCOMM, a semiconductor company that
makes chips for handheld wireless devices, is beginning a major product cycle
in which the company has a virtual monopoly on technology for the next
generation of cell phone handsets. In addition to its broad industrial
exposure, Honeywell Intl operates in aerospace and defense, areas that have
been particularly strong. Semiconductor company Freescale was acquired during
the year and is an example of how portfolio results have benefited from the
very active private equity marketplace.
A LARGER TECHNOLOGY POSITION THAN THE RUSSELL INDEX WAS ADVANTAGEOUS AS
THE TECHNOLOGY SECTOR ADVANCED ALMOST TWICE AS MUCH AS THE OVERALL RUSSELL
INDEX.
The largest detractors to performance during the period were Boston
Scientific, Sprint Nextel, Countrywide Financial and Genentech. Each of these
positions is larger than the respective Russell Index weighting. Medical
device company Boston Scientific has seen some improvement in sales of
implantable cardioverter defibrillators, but faced continued pressure in
other areas, including sales of drug-coated coronary stents.
Telecommunications firm Sprint Nextel showed improved performance toward the
end of the period, but earlier in the year, the company struggled with
customer turnover and an inability to capitalize on consolidation savings
expected from the merger of the two companies. Though we thought the
valuation of mortgage lender Countrywide Financial adequately discounted the
challenging lending environment, mortgage volume decelerated more than
anticipated, and the company indicated that credit problems in the subprime
mortgage segment may spread to other areas, such as home equity loans.
Biotechnology firm Genentech suffered
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 9
QUESTIONS & ANSWERS
from concerns about decelerating growth, competition from new entrants into
its markets and a trend toward lower doses on a leading product, which would
reduce revenue. Despite some deceleration, the stock has remained a great
growth opportunity, and recent earnings exceeded expectations. Having a
smaller-than-Russell Index position in oil services company Schlumberger also
detracted from performance. As high commodity prices have motivated oil and
gas producers to search for more oil and gas reserves, demand for
Schlumberger's services has grown, driving the stock price higher.
Q: What changes did you make to the portfolio and how is it currently
positioned?
A: The most significant change to the portfolio during the last year was
increased exposure to industrials. Powerful earnings growth and lower
price-to-earnings multiples made selected industrials stocks more appealing
from a valuation perspective. Within the industrials sector, machinery stocks
were an attractive segment. We decreased telecommunications services
exposure. Several telecommunications holdings in the Fund, such as Verizon
Communications and AT&T, performed quite well, and as valuations crept up, we
took some profits. As other stocks in the telecommunications sector
struggled, we reduced exposure to selected holdings. We also decreased the
consumer staples position based on our valuation assessment. These stocks,
particularly some food and household products companies, have become more
expensive as the market has become concerned about overall earnings in the
equity universe.
IN THE CURRENT ENVIRONMENT, WE CONTINUED TO FOCUS ON COMPANIES THAT
EXHIBIT MORE GROWTH CHARACTERISTICS AND ARE LESS DEPENDENT ON THE EXTERNAL
ECONOMIC CYCLE.
- --------------------------------------------------------------------------------
10 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS
Q: How do you plan to manage the Fund in coming months?
A: With an economy that has been resilient, but is in the late stages of its
cycle, the door is open to either a strong or weak equity market. In the
current environment, we continue to focus on companies that exhibit more
growth characteristics and are less dependent on the external economic cycle.
These are stocks that, in our view, control their own destiny when it comes
to earnings growth. Another major portfolio theme is a preference for larger
companies within our universe. Larger companies are delivering attractive
growth rates and still appear inexpensive relative to mid- and small-cap
stocks based on the historical relationships between these groups. Finally,
by most valuation measures, the portfolio compares favorably with the Russell
Index, demonstrating that we are finding more attractive opportunities on a
valuation basis.
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of RiverSource Investments, LLC (RiverSource) or
any subadviser to the Fund or any other person in the RiverSource or subadviser
organizations. Any such views are subject to change at any time based upon
market or other conditions and RiverSource disclaims any responsibility to
update such views. These views may not be relied on as investment advice and,
because investment decisions for a RiverSource Fund are based on numerous
factors, may not be relied on as an indication of trading intent on behalf of
any RiverSource Fund.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 11
THE FUND'S LONG-TERM PERFORMANCE
The chart on the facing page illustrates the total value of an assumed $10,000
investment in RiverSource Large Cap Equity Fund Class A shares (from 4/1/02 to
7/31/07)* as compared to the performance of three widely cited performance
indices, the Russell 1000 Index, the Standard & Poor's 500 Index (S&P 500 Index)
and the Lipper Large-Cap Core Funds Index. In comparing the Fund's Class A
shares to these indices, you should take into account the fact that the Fund's
performance reflects the maximum sales charge of 5.75%, while such charges are
not reflected in the performance of the indices. Returns for the Fund include
the reinvestment of any distribution paid during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial institution or visiting riversource.com/funds. Also
see "Past Performance" in the Fund's current prospectus.
* Fund data is from March 28, 2002. Russell 1000 Index, S&P 500 Index and Lipper
peer group data is from April 1, 2002.
COMPARATIVE RESULTS
<Table>
<Caption>
Results at July 31, 2007 SINCE
1 YEAR 3 YEARS INCEPTION(4)
RIVERSOURCE LARGE CAP EQUITY FUND (INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,896 $12,840 $12,493
Average annual total return +9.15% +8.69% +4.26%
RUSSELL 1000 INDEX(1)
Cumulative value of $10,000 $11,645 $14,238 $14,342
Average annual total return +16.45% +12.50% +7.00%
S&P 500 INDEX(2)
Cumulative value of $10,000 $11,613 $13,959 $13,957
Average annual total return +16.13% +11.76% +6.45%
LIPPER LARGE-CAP CORE FUNDS INDEX(3)
Cumulative value of $10,000 $11,616 $13,728 $13,303
Average annual total return +16.16% +11.14% +5.49%
</Table>
Results for other share classes can be found on page 6.
- --------------------------------------------------------------------------------
12 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN RIVERSOURCE DIVERSIFIED BOND FUND
LINE GRAPH)
<Table>
<Caption>
RIVERSOURCE LARGE
CAP EQUITY FUND LIPPER LARGE-CAP
CLASS A (INCLUDES SALES RUSSELL 1000(R) S&P 500 INDEX(2) CORE FUNDS INDEX(3)
CHARGE) ($12,493) INDEX(1) ($14,342) ($13,957) ($13,303)
----------------------- ------------------ ---------------- -------------------
4/1/02 9,425 10,000 10,000 10,000
7/02 7,766 8,014 7,985 8,108
7/03 8,546 8,911 8,835 8,808
7/04 9,160 10,072 9,999 9,690
7/05 10,441 11,704 11,404 10,907
7/06 10,807 12,316 12,018 11,452
7/07 12,493 14,342 13,957 13,303
</Table>
(1) The Russell 1000 Index, an unmanaged index, measures the performance of the
1,000 largest companies in the Russell 3000(R) Index, which represents
approximately 90% of the total market capitalization of the Russell 3000
Index. The index reflects reinvestment of all distributions and changes in
market prices.
(2) The Standard & Poor's 500 Index (S&P 500 Index), an unmanaged index of
common stocks, is frequently used as a general measure of market
performance. The index reflects reinvestment of all distributions and
changes in market prices.
(3) The Lipper Large-Cap Core Funds Index includes the 30 largest large-cap
core funds tracked by Lipper Inc. The index's returns include net
reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive
adjustment.
(4) Fund data is from March 28, 2002. Russell 1000 Index, S&P 500 Index and
Lipper peer group data is from April 1, 2002.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 13
FUND EXPENSES EXAMPLE
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments; and (2) ongoing
costs, which may include management fees; distribution and service (12b-1) fees;
and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the expenses of the funds in which it invests (also
referred to as "acquired funds"), including affiliated and non-affiliated pooled
investment vehicles (including mutual funds and exchange traded funds). The
Fund's indirect expense from investing in the acquired funds is based on the
Fund's pro rata portion of the cumulative expenses charged by the acquired funds
using the acquired funds expense ratio as of the most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended July 31, 2007.
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.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
14 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
FEB. 1, 2007 JULY 31, 2007 THE PERIOD(A) EXPENSE RATIO
Class A
Actual(b) $1,000 $1,010.00 $5.48(c) 1.10%
Hypothetical
(5% return before
expenses) $1,000 $1,019.34 $5.51(c) 1.10%
Class B
Actual(b) $1,000 $1,005.10 $9.25(c) 1.86%
Hypothetical
(5% return before
expenses) $1,000 $1,015.57 $9.30(c) 1.86%
Class C
Actual(b) $1,000 $1,006.80 $9.21(c) 1.85%
Hypothetical
(5% return before
expenses) $1,000 $1,015.62 $9.25(c) 1.85%
Class I
Actual(b) $1,000 $1,013.30 $3.24(c) .65%
Hypothetical
(5% return before
expenses) $1,000 $1,021.57 $3.26(c) .65%
Class R2
Actual(b) $1,000 $1,008.30 $7.17(c) 1.44%
Hypothetical
(5% return before
expenses) $1,000 $1,017.65 $7.20(c) 1.44%
Class R3
Actual(b) $1,000 $1,008.30 $5.93(c) 1.19%
Hypothetical
(5% return before
expenses) $1,000 $1,018.89 $5.96(c) 1.19%
Class R4*
Actual(b) $1,000 $1,011.60 $4.64(c) .93%
Hypothetical
(5% return before
expenses) $1,000 $1,020.18 $4.66(c) .93%
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 15
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
FEB. 1, 2007 JULY 31, 2007 THE PERIOD(A) EXPENSE RATIO
Class R5
Actual(b) $1,000 $1,011.60 $3.49(c) .70%
Hypothetical
(5% return before
expenses) $1,000 $1,021.32 $3.51(c) .70%
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(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 181/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended July 31, 2007: +1.00%
for Class A, +0.51% for Class B, +0.68% for Class C, +1.33% for Class I,
+0.83% for Class R2, +0.83% for Class R3, +1.16% for Class R4 and +1.16%.
for Class R5.
(c) The investment manager and its affiliates have contractually agreed to
waive certain fees and to absorb certain expenses until July 31, 2008,
unless sooner terminated at the discretion of the Fund's Board, such that
net expenses, (excluding fees and expenses of acquired funds) before giving
effect to any performance incentive adjustment, will not exceed 1.05% for
Class A, 1.81% for Class B, 1.81% for Class C, 0.67% for Class I, 1.47% for
Class R2, 1.22% for Class R3, 0.90% for Class R4 and 0.72% for Class R5.
Any amounts waived will not be reimbursed by the Fund. This change was
effective Aug. 1, 2007. If this change had been in place for the entire six
month period ended July 31, 2007, the actual expenses paid would have been
$5.34 for Class A, $9.11 for Class B and $9.12 for Class C; the
hypothetical expenses paid would have been $5.37 for Class A, $9.16 for
Class B and $9.16 for Class C; the actual and hypothetical expenses for
Class I, Class R2, Class R3, Class R4 and Class R5 would have been the same
as those expenses presented in the table above.
- --------------------------------------------------------------------------------
16 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
INVESTMENTS IN SECURITIES
JULY 31, 2007
(Percentages represent value of investments compared to net assets)
<Table>
<Caption>
COMMON STOCKS (96.7%)
ISSUER SHARES VALUE(A)
AEROSPACE & DEFENSE (3.8%)
Boeing 828,474 $85,689,067
DRS Technologies 58,740 3,075,626
General Dynamics 54,831 4,307,523
Goodrich 336,373 21,161,225
Honeywell Intl 987,939 56,816,372
L-3 Communications Holdings 153,663 14,991,362
Lockheed Martin 239,432 23,579,263
Northrop Grumman 99,490 7,571,189
United Technologies 348,577 25,435,664
---------------
Total 242,627,291
- -----------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS (0.1%)
United Parcel Service Cl B 44,884 3,398,616
- -----------------------------------------------------------------------------------
AIRLINES (0.1%)
UAL 113,258(b) 4,999,208
- -----------------------------------------------------------------------------------
AUTO COMPONENTS (0.1%)
Goodyear Tire & Rubber 33,598(b) 964,935
Johnson Controls 31,795 3,597,604
---------------
Total 4,562,539
- -----------------------------------------------------------------------------------
AUTOMOBILES (0.1%)
Ford Motor 306,233 2,606,043
General Motors 91,522 2,965,312
Harley-Davidson 41,771 2,394,314
---------------
Total 7,965,669
- -----------------------------------------------------------------------------------
BEVERAGES (1.8%)
Anheuser-Busch Companies 123,843 6,039,823
Brown-Forman Cl B 12,762 847,907
Coca-Cola 738,428 38,479,483
Coca-Cola Enterprises 45,074 1,021,377
Constellation Brands Cl A 131,608(b) 2,886,163
Molson Coors Brewing Cl B 7,601 676,033
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
BEVERAGES (CONT.)
Pepsi Bottling Group 21,292 $712,430
PepsiCo 1,005,768 65,998,497
---------------
Total 116,661,713
- -----------------------------------------------------------------------------------
BIOTECHNOLOGY (2.0%)
Amgen 710,354(b) 38,174,424
Biogen Idec 424,515(b) 24,002,078
Celgene 154,340(b) 9,346,830
Genentech 671,936(b) 49,978,600
Gilead Sciences 161,682(b) 6,019,421
---------------
Total 127,521,353
- -----------------------------------------------------------------------------------
BUILDING PRODUCTS (0.1%)
Masco 214,382(f) 5,833,334
- -----------------------------------------------------------------------------------
CAPITAL MARKETS (3.3%)
Bank of New York Mellon 255,657 10,878,205
Bear Stearns Companies 19,227 2,330,697
Blackstone Group LP 81,592(b,f) 1,959,024
Charles Schwab 123,838 2,492,859
Fortress Investment Group LLC Cl A 170,277(f) 3,230,155
Franklin Resources 66,551 8,476,601
Goldman Sachs Group 140,145 26,394,909
KKR Private Equity Investors LP Unit 1,729,320(h) 34,932,264
Lehman Brothers Holdings 416,768 25,839,616
Merrill Lynch & Co 399,217 29,621,901
Morgan Stanley 473,657 30,252,473
Oaktree Capital Group LLC Cl A Unit 247,000(b,d,h) 8,151,000
State Street 143,173 9,596,886
T Rowe Price Group 294,629 15,359,010
---------------
Total 209,515,600
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to
investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 17
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CHEMICALS (1.0%)
Air Products & Chemicals 35,023 $3,024,937
Ashland 41,898 2,558,292
Dow Chemical 505,790 21,991,749
Eastman Chemical 76,363 5,255,302
Ecolab 28,539 1,201,777
EI du Pont de Nemours & Co 315,694 14,752,381
Hercules 20,171(b) 418,750
Intl Flavors & Fragrances 12,526 627,678
Monsanto 87,945 5,668,055
PPG Inds 26,535 2,023,824
Praxair 51,839 3,971,904
Rohm & Haas 23,908 1,351,280
Sigma-Aldrich 21,370 968,488
---------------
Total 63,814,417
- -----------------------------------------------------------------------------------
COMMERCIAL BANKS (2.1%)
BB&T 87,853 3,287,459
Comerica 25,555 1,345,726
Commerce Bancorp 30,398 1,016,813
Compass Bancshares 20,925 1,449,684
Fifth Third Bancorp 144,175(f) 5,318,616
First Horizon Natl 20,314 644,360
Huntington Bancshares 59,191 1,136,467
M&T Bank 12,453 1,323,629
Natl City 96,037 2,822,527
PNC Financial Services Group 158,450 10,560,693
Regions Financial 118,610 3,566,603
SunTrust Banks 57,586 4,508,984
Synovus Financial 52,437 1,466,139
US Bancorp 615,065 18,421,197
Wachovia 739,868 34,929,168
Wells Fargo & Co 1,148,223 38,775,490
Zions Bancorporation 18,001 1,341,975
---------------
Total 131,915,530
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
COMMERCIAL SERVICES & SUPPLIES (0.2%)
Allied Waste Inds 45,104(b) $580,488
Avery Dennison 31,967 1,960,856
Cintas 21,965 803,040
Equifax 40,534 1,640,006
Monster Worldwide 20,791(b) 808,562
Robert Half Intl 27,179 923,814
Waste Management 86,256 3,280,316
---------------
Total 9,997,082
- -----------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (5.4%)
Alcatel-Lucent 43,541(c) 518,295
Alcatel-Lucent ADR 252,867(c) 2,933,257
Avaya 1,352,083(b) 22,363,453
Cisco Systems 3,736,825(b) 108,031,610
Corning 73,231(b) 1,745,827
JDS Uniphase 1,094,103(b) 15,678,496
Motorola 722,411 12,273,763
Nokia ADR 1,150,518(c) 32,950,836
QUALCOMM 2,592,395 107,973,252
Telefonaktiebolaget LM Ericsson ADR 777,090(c) 29,070,937
Tellabs 606,563(b) 6,884,490
---------------
Total 340,424,216
- -----------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (3.1%)
Apple 410,222(b) 54,050,850
Brocade Communications Systems 81,763(b) 575,612
Dell 787,539(b) 22,027,466
EMC 148,504(b) 2,748,809
Hewlett-Packard 1,354,987 62,370,051
Intl Business Machines 452,632 50,083,731
SanDisk 129,817(b) 6,962,086
---------------
Total 198,818,605
- -----------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (0.3%)
Fluor 31,489 3,637,294
KBR 417,199(b) 13,387,916
---------------
Total 17,025,210
- -----------------------------------------------------------------------------------
CONSTRUCTION MATERIALS (--%)
Vulcan Materials 15,374 1,471,599
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
18 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CONSUMER FINANCE (0.8%)
American Express 357,634 $20,935,894
Capital One Financial 370,999 26,251,890
Discover Financial Services 236,615(b) 5,453,964
SLM 48 2,360
---------------
Total 52,644,108
- -----------------------------------------------------------------------------------
CONTAINERS & PACKAGING (0.1%)
Ball 16,680 855,184
Bemis 18,623 548,820
Pactiv 21,503(b) 679,710
Sealed Air 26,109 711,470
Temple-Inland 83,873 4,875,537
---------------
Total 7,670,721
- -----------------------------------------------------------------------------------
DISTRIBUTORS (--%)
Genuine Parts 27,343 1,300,980
- -----------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (--%)
Apollo Group Cl A 22,644(b) 1,338,487
- -----------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (4.6%)
Bank of America 2,249,449 106,668,871
CIT Group 27,250 1,122,155
Citigroup 2,288,403 106,570,927
CME Group 9,067 5,009,518
Financial Select Sector SPDR Fund 116,106(f) 3,822,210
iShares Dow Jones US Healthcare Sector Index
Fund 1 67
JPMorgan Chase & Co 1,453,691 63,976,941
Materials Select Sector SPDR Trust 48,279 1,902,193
Moody's 11,954 643,125
Utilities Select Sector SPDR Fund 63,980 2,412,046
---------------
Total 292,128,053
- -----------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (3.7%)
AT&T 1,936,058 75,816,032
Chunghwa Telecom ADR 51,679(c) 856,839
Citizens Communications 187,230 2,701,729
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
DIVERSIFIED TELECOMMUNICATION SERVICES (CONT.)
COLT Telecom Group 523,770(b,c) $1,630,318
Deutsche Telekom 2,183,211(c) 37,519,099
Deutsche Telekom ADR 844,053(c) 14,500,831
Embarq 34,013 2,101,663
Indosat 6,582,958(c) 5,176,404
Qwest Communications Intl 1,345,696(b) 11,478,787
Telecom Italia 235,047(c) 629,243
Telefonica 872,212(c) 20,413,864
Telefonica ADR 96,187(c) 6,755,213
Telenor ADR 192,349(c) 10,628,975
Verizon Communications 1,040,002 44,324,885
Windstream 184,667 2,541,018
---------------
Total 237,074,900
- -----------------------------------------------------------------------------------
ELECTRIC UTILITIES (1.6%)
Allegheny Energy 26,617(b) 1,390,206
American Electric Power 64,208 2,792,406
Duke Energy 203,483 3,465,315
Edison Intl 52,738 2,789,313
Entergy 157,579 15,751,597
Exelon 346,848 24,331,387
FirstEnergy 52,040 3,161,430
FPL Group 133,055 7,681,265
Hawaiian Electric Inds 123,479 2,816,556
Pinnacle West Capital 59,622 2,234,633
PPL 211,509 9,970,534
Progress Energy 83,351 3,639,105
Southern 567,071 19,076,268
---------------
Total 99,100,015
- -----------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (0.5%)
Cooper Inds Cl A 27,957 1,479,484
Emerson Electric 538,480 25,346,254
Rockwell Automation 25,516 1,785,865
---------------
Total 28,611,603
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to
investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 19
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.1%)
Agilent Technologies 4,658(b) $177,703
Tyco Electronics 163,662(b) 5,862,373
---------------
Total 6,040,076
- -----------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (0.7%)
Halliburton 121,972 4,393,431
Natl Oilwell Varco 68,445(b) 8,220,929
Pride Intl 320,145(b) 11,221,082
Transocean 143,164(b) 15,382,972
Weatherford Intl 75,884(b) 4,198,662
---------------
Total 43,417,076
- -----------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (0.9%)
CVS Caremark 652,181 22,950,249
Kroger 115,259 2,992,124
Safeway 102,218 3,257,688
SUPERVALU 33,464 1,394,445
SYSCO 99,917 3,185,354
Wal-Mart Stores 416,813 19,152,557
Whole Foods Market 24,087 892,182
---------------
Total 53,824,599
- -----------------------------------------------------------------------------------
FOOD PRODUCTS (1.3%)
Archer-Daniels-Midland 106,597 3,581,659
Campbell Soup 151,064 5,563,687
ConAgra Foods 81,807 2,073,807
Dean Foods 163,648 4,708,153
General Mills 134,988 7,508,033
Groupe Danone 20,540(c) 1,493,215
HJ Heinz 52,609 2,302,170
Kellogg 219,371 11,365,612
Kraft Foods Cl A 1,231,571 40,333,950
McCormick & Co 21,081 720,127
Sara Lee 118,782 1,882,695
Tyson Foods Cl A 42,307 901,139
WM Wrigley Jr 35,328 2,037,719
---------------
Total 84,471,966
- -----------------------------------------------------------------------------------
GAS UTILITIES (0.1%)
Nicor 8,082 318,512
ONEOK 123,021 6,243,315
Questar 27,822 1,432,555
---------------
Total 7,994,382
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HEALTH CARE EQUIPMENT & SUPPLIES (1.9%)
Bausch & Lomb 85,589 $5,471,705
Boston Scientific 5,636,336(b) 74,117,818
China Medical Technologies ADR 60,149(c,f) 1,968,075
Covidien 146,069(b,c) 5,981,526
CR Bard 24,622 1,932,088
Medtronic 413,189 20,936,287
St. Jude Medical 35,756(b) 1,542,514
Stryker 120,598 7,528,933
---------------
Total 119,478,946
- -----------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (2.1%)
Aetna 256,025 12,307,122
Cardinal Health 640,182 42,079,163
CIGNA 161,369 8,333,095
Coventry Health Care 25,158(b) 1,404,068
Express Scripts 44,451(b) 2,228,329
Humana 27,444(b) 1,758,886
Laboratory Corp of America Holdings 19,798(b) 1,462,082
Manor Care 11,676 739,675
McKesson 454,112 26,229,509
Patterson Companies 21,937(b) 786,880
Quest Diagnostics 25,252 1,400,728
Tenet Healthcare 74,404(b) 385,413
UnitedHealth Group 718,677 34,805,527
---------------
Total 133,920,477
- -----------------------------------------------------------------------------------
HEALTH CARE TECHNOLOGY (--%)
IMS Health 31,298 880,413
- -----------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (1.0%)
Chipotle Mexican Grill Cl A 3,193(b) 282,070
Chipotle Mexican Grill Cl B 1(b) 81
Darden Restaurants 24,632 1,048,584
Intl Game Technology 278,586 9,839,658
Marriott Intl Cl A 454,170 18,870,764
McDonald's 495,221 23,706,229
Pinnacle Entertainment 129,730(b) 3,439,142
Starwood Hotels & Resorts Worldwide 18,112 1,140,332
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
20 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HOTELS, RESTAURANTS & LEISURE (CONT.)
Wyndham Worldwide 15,333(b) $515,955
Yum! Brands 43,401 1,390,568
---------------
Total 60,233,383
- -----------------------------------------------------------------------------------
HOUSEHOLD DURABLES (1.8%)
Black & Decker 11,112 961,966
DR Horton 412,218 6,727,397
Fortune Brands 24,670 2,005,671
Harman Intl Inds 764,932 88,732,111
Hovnanian Enterprises Cl A 215,952(b,f) 2,859,204
Leggett & Platt 28,702 594,992
Lennar Cl A 129,480 3,969,857
Meritage Homes 52,169(b,f) 1,017,296
Newell Rubbermaid 44,630 1,180,464
Snap-On 10,370 542,662
Standard-Pacific 226,507 3,354,569
Stanley Works 13,690 757,468
Tele Atlas 73,436(b,c) 2,110,025
Whirlpool 12,734 1,300,269
---------------
Total 116,113,951
- -----------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS (1.9%)
Clorox 24,496 1,481,028
Colgate-Palmolive 607,431 40,090,446
Kimberly-Clark 73,918 4,972,464
Procter & Gamble 1,185,442 73,331,443
Spectrum Brands 354,637(b,f) 1,556,856
---------------
Total 121,432,237
- -----------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.2%)
AES 107,510(b) 2,112,572
Constellation Energy Group 29,246 2,450,815
Dynegy Cl A 68,036(b) 606,201
TXU 74,337 4,850,488
---------------
Total 10,020,076
- -----------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (2.2%)
3M 38,249 3,401,101
General Electric 3,402,238 131,870,745
Tyco Intl 125,960(c) 5,956,648
---------------
Total 141,228,494
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
INSURANCE (4.7%)
ACE 606,443(c) $35,003,890
AFLAC 594,788 31,000,351
Allstate 14,192 754,305
American Intl Group 1,530,882 98,252,007
Aon 77,113 3,087,605
Arch Capital Group 46,830(b,c) 3,262,178
Assurant 21,677 1,099,457
Chubb 169,267 8,532,749
Endurance Specialty Holdings 63,275(c) 2,366,485
Genworth Financial Cl A 27,589 842,016
Hartford Financial Services Group 457,553 42,035,394
Lincoln Natl 8,254 497,881
MetLife 167,959 10,114,491
Principal Financial Group 23,834 1,343,999
Prudential Financial 565,678 50,136,041
Validus Holdings 28,915(b,c) 650,588
XL Capital Cl A 68,852(c) 5,360,817
---------------
Total 294,340,254
- -----------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL (0.1%)
IAC/InterActiveCorp 36,085(b) 1,037,083
Liberty Media -- Interactive Cl A 142,596(b,e) 2,987,386
---------------
Total 4,024,469
- -----------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (1.7%)
eBay 928,269(b) 30,075,916
Google Cl A 100,088(b) 51,044,879
VeriSign 399,144(b) 11,850,585
Yahoo! 531,978(b) 12,368,489
---------------
Total 105,339,869
- -----------------------------------------------------------------------------------
IT SERVICES (0.8%)
Accenture Cl A 54,564(c) 2,298,781
Affiliated Computer Services Cl A 150,895(b) 8,097,026
Automatic Data Processing 229,538 10,655,153
Broadridge Financial Solutions 1 18
Cognizant Technology Solutions Cl A 49,114(b) 3,977,252
Computer Sciences 4,516(b) 251,451
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 21
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
IT SERVICES (CONT.)
Convergys 15,667(b) $298,456
Electronic Data Systems 158,583 4,280,155
Fidelity Natl Information Services 21,617 1,072,852
First Data 281,342 8,943,862
HCL Technologies 531,725(c) 4,121,395
Ness Technologies 55,072(b,c) 647,647
Paychex 54,908 2,272,093
Satyam Computer Services ADR 46,906(c) 1,250,514
Unisys 53,629(b) 433,859
Western Union 70,212 1,400,729
---------------
Total 50,001,243
- -----------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (0.1%)
Brunswick 14,714 411,403
Eastman Kodak 46,229 1,167,282
Hasbro 26,088 730,986
Mattel 63,768 1,460,925
---------------
Total 3,770,596
- -----------------------------------------------------------------------------------
MACHINERY (1.5%)
Caterpillar 395,878 31,195,186
Deere & Co 125,388 15,099,223
Flowserve 308,191 22,272,964
Illinois Tool Works 52,005 2,862,875
Ingersoll-Rand Cl A 60,081(c) 3,023,276
ITT 62,663 3,940,249
Navistar Intl 9,998(b) 631,124
Parker Hannifin 137,422 13,560,803
---------------
Total 92,585,700
- -----------------------------------------------------------------------------------
MEDIA (6.7%)
Charter Communications Cl A 1,762,625(b) 7,156,258
Comcast Cl A 1,157,980(b) 30,420,135
Comcast Special Cl A 288,867(b) 7,559,649
EchoStar Communications Cl A 81,393(b) 3,442,110
Idearc 12,741 442,240
McGraw-Hill Companies 11,472 694,056
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
MEDIA (CONT.)
News Corp Cl A 2,658,620 $56,150,054
Time Warner 1,673,001 32,221,999
Time Warner Cable Cl A 60,128(b,i) 2,298,092
Viacom Cl B 274,006(b) 10,494,430
Virgin Media 8,100,992(j) 201,228,642
Vivendi 731,373(c) 31,067,866
Walt Disney 332,380 10,968,540
WorldSpace Cl A 276,554(b,f) 1,349,584
XM Satellite Radio Holdings Cl A 2,560,293(b,j) 29,315,355
---------------
Total 424,809,010
- -----------------------------------------------------------------------------------
METALS & MINING (1.6%)
Alcan 36,315(c) 3,537,081
Alcoa 329,277 12,578,381
Allegheny Technologies 16,357 1,716,340
Barrick Gold 71,747(c) 2,360,476
Coeur d'Alene Mines 3,701,745(b,f) 14,473,823
Freeport-McMoRan Copper & Gold 60,114 5,649,514
Lihir Gold 14,134,965(b,c) 36,843,324
Newmont Mining 466,080 19,458,840
Nucor 48,726 2,446,045
Stillwater Mining 166,411(b) 1,514,340
---------------
Total 100,578,164
- -----------------------------------------------------------------------------------
MULTILINE RETAIL (0.8%)
Dillard's Cl A 20,634 616,750
JC Penney 248,839 16,931,005
Kohl's 151,541(b) 9,213,693
Macy's 167,012 6,024,123
Nordstrom 136,298 6,485,059
Target 209,438 12,685,660
---------------
Total 51,956,290
- -----------------------------------------------------------------------------------
MULTI-UTILITIES (0.7%)
Ameren 33,443 1,604,595
CenterPoint Energy 51,807 853,779
CMS Energy 36,137 583,974
Consolidated Edison 41,704 1,821,631
Dominion Resources 229,630 19,339,438
DTE Energy 28,672 1,329,807
Integrys Energy Group 12,897 638,273
KeySpan 28,422 1,180,934
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
22 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
MULTI-UTILITIES (CONT.)
NiSource 44,329 $845,354
PG&E 56,785 2,430,966
Public Service Enterprise Group 40,915 3,524,827
TECO Energy 37,193 600,295
Xcel Energy 330,462 6,708,379
---------------
Total 41,462,252
- -----------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (7.8%)
Anadarko Petroleum 40,583 2,042,542
Apache 14,337 1,159,003
BP ADR 284,884(c) 19,770,950
Canadian Natural Resources 13,103(c) 896,376
Chesapeake Energy 60,200 2,049,208
Chevron 1,086,777 92,658,607
ConocoPhillips 553,551 44,749,063
CONSOL Energy 29,870 1,244,086
Devon Energy 98,358 7,338,490
El Paso 105,003 1,748,300
Exxon Mobil 2,719,946 231,549,004
Occidental Petroleum 202,345 11,477,008
Peabody Energy 41,749 1,764,313
Petroleo Brasileiro ADR 14,313(c) 928,914
Range Resources 2,634 97,827
Royal Dutch Shell ADR 51,442(c) 3,991,385
Ship Finance Intl 128,536(c) 3,592,581
Spectra Energy 96,471 2,457,116
Sunoco 11,864 791,566
Total 712,083(c) 56,080,853
Valero Energy 48,764 3,267,676
Williams Companies 92,197 2,973,353
XTO Energy 51,271 2,795,808
---------------
Total 495,424,029
- -----------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.4%)
Bowater 203,128(f) 3,985,371
Intl Paper 262,856 9,744,072
MeadWestvaco 29,525 960,744
Weyerhaeuser 152,609 10,871,865
---------------
Total 25,562,052
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
PERSONAL PRODUCTS (0.1%)
Avon Products 100,554 $3,620,950
Estee Lauder Companies Cl A 19,422 874,378
Herbalife 28,413(c) 1,164,365
---------------
Total 5,659,693
- -----------------------------------------------------------------------------------
PHARMACEUTICALS (7.0%)
AstraZeneca 826,407(c) 42,710,851
Bristol-Myers Squibb 1,557,210 44,240,336
Eli Lilly & Co 505,725 27,354,665
Johnson & Johnson 526,541 31,855,731
Merck & Co 1,977,928 98,204,125
Novartis ADR 73,673(c) 3,974,658
Pfizer 5,085,050 119,549,526
Schering-Plough 1,198,822(i) 34,214,380
Teva Pharmaceutical Inds ADR 104,431(c) 4,388,191
Wyeth 794,585 38,553,264
---------------
Total 445,045,727
- -----------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (0.5%)
Annaly Capital Management 351,343 5,076,906
Apartment Investment & Management Cl A 95,422 4,031,580
Archstone-Smith Trust 35,341 2,028,927
AvalonBay Communities 12,839(i) 1,386,227
Boston Properties 19,247 1,818,649
Developers Diversified Realty 21,405 1,027,440
Equity Residential 47,575 1,893,961
General Growth Properties 40,028 1,920,543
Host Hotels & Resorts 84,269 1,779,761
Kimco Realty 36,575 1,365,345
Plum Creek Timber 29,811 1,158,455
ProLogis 41,461 2,359,131
Public Storage 19,851 1,391,357
Simon Property Group 6,985 604,412
Vornado Realty Trust 21,096 2,257,905
---------------
Total 30,100,599
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 23
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
REAL ESTATE MANAGEMENT & DEVELOPMENT (--%)
CB Richard Ellis Group Cl A 30,224(b) $1,055,422
- -----------------------------------------------------------------------------------
ROAD & RAIL (0.4%)
CSX 82,975 3,933,845
Hertz Global Holdings 869,066(b) 19,458,387
Norfolk Southern 61,960 3,332,209
---------------
Total 26,724,441
- -----------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (2.6%)
Advanced Micro Devices 86,276(b) 1,168,177
Applied Materials 91,807 2,023,426
Atmel 4,353,879(b) 23,467,408
Broadcom Cl A 118,120(b) 3,875,517
Cypress Semiconductor 213,798(b) 5,357,778
Intel 2,889,056 68,239,502
KLA-Tencor 32,363 1,837,895
LSI 1,694,066(b) 12,197,275
Maxim Integrated Products 96,901 3,071,762
Natl Semiconductor 44,492 1,156,347
NVIDIA 24,426(b) 1,117,734
Spansion Cl A 2,722,041(b) 28,880,855
Texas Instruments 271,277 9,546,238
United Microelectronics ADR 434,477(c) 1,403,361
Xilinx 50,086 1,252,150
---------------
Total 164,595,425
- -----------------------------------------------------------------------------------
SOFTWARE (2.0%)
ACI Worldwide 67,663(b) 2,065,751
Adobe Systems 185,308(b) 7,466,059
BEA Systems 186,904(b) 2,313,872
Citrix Systems 46,184(b) 1,670,475
Electronic Arts 22,525(b) 1,095,616
Microsoft 3,216,951 93,259,410
Oracle 737,642(b) 14,103,715
Quest Software 69,259(b) 1,025,033
Red Hat 164,084(b) 3,416,229
Salesforce.com 16,703(b) 649,079
---------------
Total 127,065,239
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SPECIALTY RETAIL (1.2%)
Abercrombie & Fitch Cl A 14,240 $995,376
AutoNation 26,569(b) 517,564
AutoZone 8,038(b) 1,019,299
Gap 247,189 4,251,651
Home Depot 583,806 21,700,069
Limited Brands 103,148 2,491,024
Lowe's Companies 625,290(f) 17,514,373
Office Depot 73,355(b) 1,830,941
OfficeMax 12,026 395,415
Penske Automotive Group 192,109 3,742,283
RadioShack 21,844 548,940
Sherwin-Williams 17,897 1,247,242
Staples 116,020 2,670,780
TJX Companies 666,160 18,485,940
---------------
Total 77,410,897
- -----------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS (0.1%)
Jones Apparel Group 17,555 438,173
Liz Claiborne 18,203 639,653
Nike Cl B 61,163 3,452,651
Polo Ralph Lauren 1,722 153,861
VF 14,572 1,250,132
---------------
Total 5,934,470
- -----------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (1.4%)
Countrywide Financial 1,435,058 40,425,584
Fannie Mae 430,519 25,762,257
Freddie Mac 380,168 21,772,221
---------------
Total 87,960,062
- -----------------------------------------------------------------------------------
TOBACCO (1.5%)
Altria Group 1,354,687 90,046,045
Reynolds American 27,768 1,698,569
UST 26,011 1,392,889
---------------
Total 93,137,503
- -----------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (4.0%)
ALLTEL 470,188 31,008,899
America Movil ADR Series L 82,100(c) 4,916,148
Hutchison Telecommunications Intl 12,406,800(c) 15,536,640
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
24 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
WIRELESS TELECOMMUNICATION SERVICES (CONT.)
Millicom Intl Cellular 110,859(b,c) $8,901,978
Orascom Telecom Holding GDR 81,233(c,f) 5,458,858
Sprint Nextel 3,314,085 68,038,165
Vivo Participacoes ADR 1,143,032(c) 5,132,214
Vodafone Group 30,804,233(c) 92,602,087
Vodafone Group ADR 799,620(c) 24,268,467
---------------
Total 255,863,456
- -----------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $5,592,182,260) $6,115,883,787
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
OPTIONS PURCHASED (0.2%)
EXERCISE EXPIRATION
ISSUER CONTRACTS PRICE DATE VALUE(A)
CALLS
QUALCOMM 683 $50.00 Jan. 2008 $102,450
Virgin Media 7,244 30.00 Jan. 2008 543,300
Virgin Media 7,244 27.50 Jan. 2008 1,050,380
</Table>
<Table>
<Caption>
OPTIONS PURCHASED (CONTINUED)
EXERCISE EXPIRATION
ISSUER CONTRACTS PRICE DATE VALUE(A)
PUTS
Oil Service Sector Index 404 $215.00 Sept. 2007 $37,370
XM Satellite Radio Holdings
Cl A 20,639 15.00 Jan. 2008 8,255,600
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OPTIONS PURCHASED
(Cost: $9,226,291) $9,989,100
- --------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (3.7%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 233,390,132(k) $233,390,132
- -----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $233,390,132) $233,390,132
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $5,834,798,683)(l) $6,359,263,019
===================================================================================
</Table>
NOTES TO INVESTMENTS IN SECURITIES
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At July 31, 2007, the
value of foreign securities represented 9.6% of net assets.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the Fund's
Board of Directors. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At July 31,
2007, the value of these securities amounted to $8,151,000 or 0.1% of net
assets.
(e) Shareholders of tracking stocks have a financial interest only in a unit or
division of the company. Unlike the common stock of the company itself, a
tracking stock usually has limited or no voting rights. In the event of a
company's liquidation, tracking stock shareholders typically do not have a
legal claim on the company's assets.
(f) At July 31, 2007, security was partially or fully on loan. See Note 7 to
the financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 25
NOTES TO INVESTMENTS IN SECURITIES (CONTINUED)
(g) Cash collateral received from security lending activity is invested in an
affiliated money market fund and represents 0.6% of net assets. See Note 7
to the financial statements. Cash collateral received for open options
contracts is invested in an affiliated money market fund and represents
0.1% of net assets. See Note 1 to the financial statements. 3.0% of net
assets is the Fund's cash equivalent position.
(h) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). These securities may be valued at fair
value according to procedures approved, in good faith, by the Fund's Board
of Directors. Information concerning such security holdings at July 31,
2007, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
- ----------------------------------------------------------------------------------
KKR Private Equity Investors LP Unit 05-01-06 thru 07-24-07 $38,592,087
Oaktree Capital Group LLC Cl A Unit* 05-21-07 thru 07-20-07 10,584,080
</Table>
* Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended.
(i) Partially pledged as initial margin deposit on the following open stock
index futures contracts (see Note 6 to the financial statements):
<Table>
<Caption>
TYPE OF SECURITY CONTRACTS
- ------------------------------------------------------------------------------
PURCHASE CONTRACTS
S&P 500 Index, Sept. 2007 50
</Table>
(j) At July 31, 2007, securities valued at $41,625,751 were held to cover open
call options written as follows (see Note 8 to the financial statements):
<Table>
<Caption>
EXERCISE EXPIRATION
ISSUER CONTRACTS PRICE DATE VALUE(A)
- ---------------------------------------------------------------------------------------
Virgin Media 7,244 $30.00 Jan. 2008 $543,300
XM Satellite Radio Holdings
Cl A 20,639 20.00 Jan. 2008 412,780
- ---------------------------------------------------------------------------------------
Total value $956,080
- ---------------------------------------------------------------------------------------
</Table>
At July 31, 2007, cash or short-term securities were designated to cover
open put options written as follows (see Note 8 to the financial
statements):
<Table>
<Caption>
EXERCISE EXPIRATION
ISSUER CONTRACTS PRICE DATE VALUE(A)
- ----------------------------------------------------------------------------------------
XM Satellite Radio
Holdings Cl A 20,639 $12.50 Jan. 2008 $4,540,580
</Table>
(k) Affiliated Money Market Fund -- See Note 10 to the financial statements.
(l) At July 31, 2007, the cost of securities for federal income tax purposes
was $5,945,740,806 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $567,613,960
Unrealized depreciation (154,091,747)
- ------------------------------------------------------------------------------
Net unrealized appreciation $413,522,213
- ------------------------------------------------------------------------------
</Table>
The Global Industry Classification Standard (GICS) was developed by and is the
exclusive property of Morgan Stanley Capital International Inc. and Standard &
Poor's, a division of The McGraw-Hill Companies, Inc.
- --------------------------------------------------------------------------------
26 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
HOW TO FIND INFORMATION ABOUT THE FUND'S 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 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
can be found at riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 27
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2007
<Table>
ASSETS
Investments in securities, at value (Note 1)
Unaffiliated issuers* (identified cost $5,601,408,551) $6,125,872,887
Affiliated money market fund (identified cost
$233,390,132) (Note 10) 233,390,132
- ------------------------------------------------------------------------------
Total investments in securities (identified cost
$5,834,798,683) 6,359,263,019
Foreign currency holdings (identified cost $3,841,017) (Note
1) 3,811,693
Capital shares receivable 770,326
Dividends and accrued interest receivable 7,948,987
Receivable for investment securities sold 66,853,312
Unrealized appreciation on forward foreign currency
contracts held, at value (Note 5) 1,048,437
- ------------------------------------------------------------------------------
Total assets 6,439,695,774
- ------------------------------------------------------------------------------
LIABILITIES
Bank overdraft 4,708,888
Capital shares payable 5,864,010
Payable for investment securities purchased 51,664,905
Payable upon return of securities loaned (Note 7) 38,203,000
Payable for cash collateral held on open options contracts
(Note 1) 4,222,922
Variation margin payable 324,300
Unrealized depreciation on swap transactions, at value (Note
9) 1,510,345
Accrued investment management services fee 96,111
Accrued distribution fee 59,030
Accrued transfer agency fee 27,110
Accrued administrative services fee 8,059
Accrued plan administration services fee 2,290
Other accrued expenses 257,362
Options contracts written, at value (premiums received
$6,575,045) (Note 8) 5,496,660
- ------------------------------------------------------------------------------
Total liabilities 112,444,992
- ------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $6,327,250,782
==============================================================================
</Table>
- --------------------------------------------------------------------------------
28 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
JULY 31, 2007
<Table>
REPRESENTED BY
Capital stock -- $.01 par value (Note 1) $ 10,489,543
Additional paid-in capital 5,525,281,893
Undistributed net investment income 40,157,282
Accumulated net realized gain (loss) (Note 13) 227,325,033
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (Notes 5, 6 and 9) 523,997,031
- ------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $6,327,250,782
==============================================================================
</Table>
<Table>
Net assets applicable to outstanding Class A $5,038,950,020
shares:
Class B $ 833,234,754
Class C $ 31,622,901
Class I $ 67,937,053
Class R2 $ 5,001
Class R3 $ 5,009
Class R4 $ 330,120,266
Class R5 $ 25,375,778
Net asset value per share of outstanding Class A 833,522,641 $ 6.05
capital stock: shares(1)
Class B shares 140,889,101 $ 5.91
Class C shares 5,341,167 $ 5.92
Class I shares 11,159,673 $ 6.09
Class R2 shares 822 $ 6.08
Class R3 shares 822 $ 6.09
Class R4 shares 53,887,010 $ 6.13
Class R5 shares 4,153,053 $ 6.11
- -------------------------------------------------------------------------------------------
* Including securities on loan, at value $ 35,122,521
(Note 7)
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $6.42. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 29
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 2007
<Table>
INVESTMENT INCOME
Income:
Dividends $ 134,925,432
Interest 2,709,661
Income distributions from affiliated money market fund (Note
10) 11,473,863
Fee income from securities lending (Note 7) 782,450
Less foreign taxes withheld (1,506,828)
- ------------------------------------------------------------------------------
Total income 148,384,578
- ------------------------------------------------------------------------------
Expenses (Note 2):
Investment management services fee 39,667,264
Distribution fee
Class A 13,273,226
Class B 11,344,113
Class C 344,990
Class R2 16
Class R3 8
Transfer agency fee
Class A 11,382,925
Class B 2,650,360
Class C 79,009
Class R2 2
Class R3 2
Class R4 670,055
Class R5 8,271
Service fee -- Class R4 314,706
Administrative services fees and expenses 3,245,953
Plan administration services fee
Class R2 8
Class R3 8
Class R4 670,949
Compensation of board members 137,876
Custodian fees 829,088
Printing and postage 726,238
Registration fees 84,687
Professional fees 142,870
Other 205,056
- ------------------------------------------------------------------------------
Total expenses 85,777,680
Expenses waived/reimbursed by the Investment Manager and
its affiliates (Note 2) (48,166)
- ------------------------------------------------------------------------------
85,729,514
Earnings and bank fee credits on cash balances (Note 2) (909,145)
- ------------------------------------------------------------------------------
Total net expenses 84,820,369
- ------------------------------------------------------------------------------
Investment income (loss) -- net 63,564,209
- ------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
30 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
STATEMENT OF OPERATIONS (CONTINUED)
YEAR ENDED JULY 31, 2007
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (Note 3) $ 689,178,998
Foreign currency transactions 168,743
Futures contracts 13,216,258
Options contracts written (Note 8) (2,309,225)
Swap transactions 3,095,064
- ------------------------------------------------------------------------------
Net realized gain (loss) on investments 703,349,838
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies 323,820,329
- ------------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 1,027,170,167
- ------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $1,090,734,376
==============================================================================
See accompanying notes to financial statements.
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 31
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 63,564,209 $ 40,904,787
Net realized gain (loss) on investments 703,349,838 275,180,804
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies 323,820,329 (370,550,095)
- ----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 1,090,734,376 (54,464,504)
- ----------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (51,279,745) (8,339,131)
Class B (2,969,618) --
Class C (121,537) --
Class I (1,522,653) (656,302)
Class R2 (65) N/A
Class R3 (66) N/A
Class R4 (5,679,767) (1,124)
Class R5 (322,641) N/A
Net realized gain
Class A (125,265,857) --
Class B (27,693,216) --
Class C (831,229) --
Class I (2,640,713) --
Class R2 (115) N/A
Class R3 (115) N/A
Class R4 (13,607,896) --
Class R5 (560,037) N/A
- ----------------------------------------------------------------------------------------
Total distributions (232,495,270) (8,996,557)
- ----------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
32 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Proceeds from sales
Class A shares (Note 2) $ 370,676,879 $ 429,909,019
Class B shares 57,068,487 50,136,037
Class C shares 2,755,399 2,589,055
Class I shares 15,570,677 27,683,397
Class R2 shares 5,000 N/A
Class R3 shares 5,000 N/A
Class R4 shares 28,329,694 19,415,795
Class R5 shares 26,931,801 N/A
Fund Merger (Note 12)
Class A shares N/A 5,066,390,993
Class B shares N/A 1,262,273,829
Class C shares N/A 31,569,946
Class I shares N/A 97,113,086
Class R4 shares N/A 1,287,966,195
Reinvestment of distributions at net asset value
Class A shares 171,429,375 8,175,459
Class B shares 30,416,192 --
Class C shares 939,571 --
Class I shares 4,163,008 656,222
Class R4 shares 19,287,529 1,072
Class R5 shares 882,497 N/A
Payments for redemptions
Class A shares (1,564,111,579) (1,045,511,081)
Class B shares (Note 2) (569,109,428) (597,123,506)
Class C shares (Note 2) (10,923,150) (8,250,000)
Class I shares (69,035,113) (62,694,425)
Class R4 shares (882,819,499) (221,738,132)
Class R5 shares (2,629,011) N/A
- ----------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (2,370,166,671) 6,348,562,961
- ----------------------------------------------------------------------------------------
Total increase (decrease) in net assets (1,511,927,565) 6,285,101,900
Net assets at beginning of year 7,839,178,347 1,554,076,447
- ----------------------------------------------------------------------------------------
Net assets at end of year $ 6,327,250,782 $ 7,839,178,347
========================================================================================
Undistributed net investment income $ 40,157,282 $ 35,811,841
- ----------------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 33
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a series of RiverSource Large Cap Series, Inc. and is registered
under the Investment Company Act of 1940 (as amended) as a diversified, open-end
management investment company. RiverSource Large Cap Series, Inc. has 10 billion
authorized shares of capital stock that can be allocated among the separate
series as designated by the Board. The Fund invests primarily in equity
securities of companies with a market capitalization greater than $5 billion at
the time of purchase.
The Fund offers Class A, Class B, Class C, Class I and Class R4 shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I and Class R4 shares have no sales charge and are offered only to
qualifying institutional investors.
Effective Dec. 11, 2006, the Board approved renaming Class Y as Class R4,
terminating the shareholder servicing agreement, revising the fee structure
under the transfer agent agreement from account-based to asset-based, and
adopting a plan administration services agreement.
At July 31, 2007, Ameriprise Financial, Inc. (Ameriprise Financial), the parent
company of RiverSource Investments, LLC (the Investment Manager) and the
affiliated funds-of-funds owned 100% of Class I shares.
Effective Dec. 11, 2006, the Fund offers additional classes of shares, Class R2,
Class R3 and Class R5, to certain institutional investors. These shares are sold
without a front-end sales charge or CDSC. At July 31, 2007, Ameriprise Financial
owned 100% of Class R2 and Class R3 shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration fees) differ among classes. Income, expenses (other
than class specific expenses) and realized and unrealized gains or losses on
investments are allocated to each class of shares based upon its relative net
assets.
- --------------------------------------------------------------------------------
34 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
The Fund's significant accounting policies are summarized below:
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of each business day. Securities traded
on national securities exchanges or included in national market systems are
valued at the last quoted sales price. Debt securities are generally traded in
the over-the-counter market and are valued at a price that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
Foreign securities are valued based on quotations from the principal market in
which such securities are normally traded. The procedures adopted by the Board
of Directors of the funds generally contemplate the use of fair valuation in the
event that price quotations or valuations are not readily available, price
quotations or valuations from other sources are not reflective of market value
and thus deemed unreliable, or a significant event has occurred in relation to a
security or class of securities (such as foreign equities) that is not reflected
in price quotations or valuations from other sources. A fair value price is a
good faith estimate of the value of a security at a given point in time. Many
securities markets and exchanges outside the U.S. close prior to the close of
the New York Stock Exchange and therefore the closing prices for securities in
such markets or on such exchanges may not fully reflect events that occur after
such close but before the close of the New York Stock Exchange, including
significant movements in the U.S. market after foreign exchanges have closed.
Accordingly, in those situations, Ameriprise Financial will fair value foreign
equity securities pursuant to procedures adopted by the Board of Directors of
the funds, including utilizing a third party pricing service to determine these
fair values. These procedures take into account multiple factors, including
movements in the U.S. securities markets, to determine a good faith estimate
that reasonably reflects the current market conditions as of the close of the
New York Stock Exchange. Swap transactions are valued through an authorized
pricing service, broker, or an internal model. Short-term securities maturing in
more than 60 days from the valuation date are valued at the market price or
approximate market value based on current interest rates; those maturing in 60
days or less are valued at amortized cost.
ILLIQUID SECURITIES
At July 31, 2007, investments in securities included issues that are illiquid
which the Fund currently limits to 15% of net assets, at market value, at the
time of purchase. Prior to July 12, 2007, the Fund limited the percent held in
securities and other instruments that were illiquid to 10% of the Fund's net
assets. The aggregate value of such securities at July 31, 2007 was $43,083,264
representing 0.68% of net assets. These securities may be valued at fair value
according to
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 35
procedures approved, in good faith, by the Board. According to board guidelines,
certain unregistered securities are determined to be liquid and are not included
within the 15% limitation specified above. Assets are liquid if they can be sold
or disposed of in the ordinary course of business within seven days at
approximately the value at which the asset is valued by the Fund.
OPTION TRANSACTIONS
To produce incremental earnings, protect gains, and facilitate buying and
selling of securities for investments, the Fund may buy and write options traded
on any U.S. or foreign exchange or in the over-the-counter market where
completing the obligation depends upon the credit standing of the other party.
Cash collateral may be collected by the Fund to secure certain over-the-counter
options trades. Cash collateral held by the Fund for such option trades must be
returned to the counterparty upon closure, exercise or expiration of the
contract. The Fund also may buy and sell put and call options and write covered
call options on portfolio securities as well as write cash-secured put options.
The risk in writing a call option is that the Fund gives up the opportunity for
profit if the market price of the security increases. The risk in writing a put
option is that the Fund may incur a loss if the market price of the security
decreases and the option is exercised. The risk in buying an option is that the
Fund pays a premium whether or not the option is exercised. The Fund also has
the additional risk of being unable to enter into a closing transaction if a
liquid secondary market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The Fund will
realize a gain or loss when the option transaction expires or closes. When an
option is exercised, the proceeds on sales for a written call option, the
purchase cost for a written put option or the cost of a security for a purchased
put or call option is adjusted by the amount of premium received or paid.
FUTURES TRANSACTIONS
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund also may buy and write put and call options on these futures contracts.
Risks of entering into futures contracts and related options include the
possibility of an illiquid market and that a change in the value of the contract
or option may not correlate with changes in the value of the underlying
securities.
Futures are valued daily based upon the last sale price at the close of market
on the principal exchange on which they are traded. Upon entering into a futures
contract, the Fund is required to deposit either cash or securities in an amount
(initial margin) equal to a certain percentage of the contract value. Subsequent
payments (variation margin) are made or received by the Fund each day. The
variation margin payments are equal to the daily changes in the contract value
and are
- --------------------------------------------------------------------------------
36 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
recorded as unrealized gains and losses. The Fund recognizes a realized gain or
loss when the contract is closed or expires.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the statement of operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes. At July 31, 2007, foreign currency holdings consisted of
multiple denominations, primarily European monetary units.
The Fund may enter into forward foreign currency exchange contracts for
operational purposes. The net U.S. dollar value of foreign currency underlying
all contractual commitments held by the Fund and the resulting unrealized
appreciation or depreciation are determined using foreign currency exchange
rates from an independent pricing service. The Fund is subject to the credit
risk that the other party will not complete its contract obligations.
TOTAL RETURN EQUITY SWAP TRANSACTIONS
The Fund may enter into swap agreements to earn the total return on a specified
security, basket of securities or security indexes during the specified period,
in return for periodic payments based on a fixed or variable interest rate of
the total return from other underlying assets. Total return swap agreements may
be used to obtain exposure to a security or market without owning or taking
physical custody of such security or market. Under the terms of a total return
equity swap agreement, payments made by the Fund or the counterparty are based
on the total return of a particular reference asset or assets (such as an equity
security, a combination of such securities, or an index). That is, one party
agrees to pay another party the return on a stock, basket of stocks, or stock
index in return for a specified interest rate.
The notional amounts of swap contracts are not recorded in the financial
statements. Swap contracts are valued daily, and the change in value is recorded
as unrealized appreciation (depreciation) until the termination of the swap, at
which time realized gain (loss) is recorded. Payments received or made are
recorded as realized gains (losses).
Swap agreements may be subject to liquidity risk, which exists when a particular
swap is difficult to purchase or sell. It may not be possible for the Fund to
initiate a transaction or liquidate a position at an advantageous time or price,
which may
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 37
result in significant losses. Total return swaps are subject to the risk
associated with the investment in the underlying securities and also the risk of
the counterparty not fulfilling its obligations under the agreement.
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 to shareholders. No provision for income or excise
taxes is thus required.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred losses on
certain futures contracts, the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes and losses deferred due to
"wash sale" transactions. 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 (losses) were recorded by
the Fund.
On the statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by
$2,677,324 and accumulated net realized gain has been increased by $11,327,457
resulting in a net reclassification adjustment to decrease paid-in capital by
$14,004,781.
- --------------------------------------------------------------------------------
38 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
The tax character of distributions paid for the years indicated is as follows:
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
- ----------------------------------------------------------------------------
CLASS A
Distributions paid from:
Ordinary income............................ $114,060,835 $8,339,131
Long-term capital gain..................... 62,484,767 --
CLASS B
Distributions paid from:
Ordinary income............................ 16,848,997 --
Long-term capital gain..................... 13,813,837 --
CLASS C
Distributions paid from:
Ordinary income............................ 538,139 --
Long-term capital gain..................... 414,627 --
CLASS I
Distributions paid from:
Ordinary income............................ 2,846,125 656,302
Long-term capital gain..................... 1,317,241 --
CLASS R2*
Distributions paid from:
Ordinary income............................ 123 N/A
Long-term capital gain..................... 57 N/A
CLASS R3*
Distributions paid from:
Ordinary income............................ 124 N/A
Long-term capital gain..................... 57 N/A
CLASS R4**
Distributions paid from:
Ordinary income............................ 12,499,767 1,124
Long-term capital gain..................... 6,787,896 --
CLASS R5*
Distributions paid from:
Ordinary income............................ 603,320 N/A
Long-term capital gain..................... 279,358 N/A
</Table>
* For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
** Effective Dec. 11, 2006, Class Y was renamed R4.
At July 31, 2007, the components of distributable earnings on a tax basis are as
follows:
<Table>
Undistributed ordinary income............................ $ 231,790,951
Undistributed accumulated long-term gain................. $ 303,447,508
Accumulated realized loss................................ $(158,388,854)
Unrealized appreciation (depreciation)................... $ 414,629,741
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 39
RECENT ACCOUNTING PRONOUNCEMENTS
On Sept. 20, 2006, the Financial Accounting Standards Board (FASB) released
Statement of Financial Accounting Standards No. 157 "Fair Value Measurements"
(SFAS 157). SFAS 157 establishes an authoritative definition of fair value, sets
out a framework for measuring fair value, and requires additional disclosures
about fair-value measurements. The application of SFAS 157 is required for
fiscal years beginning after Nov. 15, 2007 and interim periods within those
fiscal years. The impact of SFAS 157 on the Fund's financial statements is being
evaluated.
In June 2006, the FASB issued FASB Interpretation 48 (FIN 48), "Accounting for
Uncertainty in Income Taxes." FIN 48 clarifies the accounting for uncertainty in
income taxes recognized in accordance with FASB Statement 109, "Accounting for
Income Taxes." FIN 48 prescribes a two-step process to recognize and measure a
tax position taken or expected to be taken in a tax return. The first step is to
determine whether a tax position has met the more-likely-than-not recognition
threshold and the second step is to measure a tax position that meets the
threshold to determine the amount of benefit to recognize. FIN 48 also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition. FIN 48 is effective for fiscal
years beginning after Dec. 15, 2006. Tax positions of the Fund are being
evaluated to determine the impact, if any, to the Fund. The adoption of FIN 48
is not anticipated to have a material impact on the Fund.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend. On March 7, 2006, an additional
dividend was paid before the merger (see Note 12) to ensure that current
shareholders of RiverSource Large Cap Equity Fund would not experience a
dilution in their share of the Fund's income or capital gains.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date and interest income,
including amortization of premium, market discount and original issue discount
using the effective interest method, is accrued daily.
2. EXPENSES AND SALES CHARGES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets that declines from 0.60%
to 0.375% annually as the Fund's assets increase. The fee may be adjusted upward
or downward by a performance incentive adjustment based on a comparison of the
performance of Class A shares of the Fund to the Lipper Large-Cap Core Funds
- --------------------------------------------------------------------------------
40 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
Index. In certain circumstances, the Board may approve a change in the index.
The maximum adjustment is 0.12% per year. If the performance difference is less
than 0.50%, the adjustment will be zero. The adjustment increased the fee by
$788,515 for the year ended July 31, 2007. The management fee for the year ended
July 31, 2007, was 0.55% of the Fund's average daily net assets, including an
adjustment under the terms of the performance incentive arrangement.
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines from 0.06% to 0.03% annually as the
Fund's assets increase.
Other expenses in the amount of $54,037 are for, among other things, certain
expenses of the Fund or the Board including: Fund boardroom and office expense,
employee compensation, employee health and retirement benefits, and certain
other expenses. Payment of these Fund and Board expenses is facilitated by a
company providing limited administrative services to the Fund and the Board.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a former Board Chair's
compensation, including health benefits and payment of certain other expenses,
are included under other expenses.
Under a Deferred Compensation Plan (the Plan), non-interested board members may
defer receipt of their compensation. Deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of the Fund or other
RiverSource funds. The Fund's liability for these amounts is adjusted for market
value changes and remains in the Fund until distributed in accordance with the
Plan.
Professional fees include fees paid by the Fund for legal services and
independent registered public accounting firm services.
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual fee per shareholder account for this service as follows:
- - Class A $19.50
- - Class B $20.50
- - Class C $20.00
Effective Dec. 11, 2006, as part of the Board's approval to rename Class Y as
R4, the fee structure under the Transfer Agency Agreement was revised from an
account-based fee for Class Y to an asset-based fee for Class R4. The Fund pays
the Transfer Agent an annual asset-based fee at a rate of 0.05% of the Fund's
average daily net assets attributable to Class R4 shares. Prior to Dec. 11,
2006, the
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 41
Fund paid the Transfer Agent an annual account-based fee of $17.50 per
shareholder account.
In addition, the Fund pays the Transfer Agent an annual asset-based fee at a
rate of 0.05% of the Fund's average daily net assets attributable to Class R2,
Class R3 and Class R5 shares.
Prior to Dec. 11, 2006, Class I paid a transfer agency fee at an annual rate per
shareholder account of $1. Effective Dec. 11, 2006, this fee was eliminated.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 12 months from the date the account becomes inactive. These
fees are included in the transfer agency fees on the statement of operations.
The Fund has agreements with Ameriprise Financial Services, Inc. and RiverSource
Distributors, Inc. (collectively, the Distributor) for distribution and
shareholder services. Under a Plan and Agreement of Distribution pursuant to
Rule 12b-1, the Fund pays a fee at an annual rate of up to 0.25% of the Fund's
average daily net assets attributable to Class A and Class R3 shares, a fee at
an annual rate of up to 0.50% of the Fund's average daily net assets
attributable to Class R2 shares and a fee at an annual rate of up to 1.00% of
the Fund's average daily net assets attributable to Class B and Class C shares.
Effective Dec. 11, 2006, a Plan Administration Services Agreement was adopted
for the restructured Class R4 and the introduction of Class R2 and Class R3. The
fee is calculated at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares.
Prior to Dec. 11, 2006, under a Shareholder Service Agreement, the Fund paid the
Distributor a fee for service provided to shareholders by the Distributor and
other servicing agents with respect to Class Y shares. The fee was calculated at
a rate of 0.10% of the Fund's average daily net assets attributable to Class Y
shares. Effective Dec. 11, 2006, this agreement was terminated.
Sales charges received by the Distributor for distributing Fund shares were
$3,512,380 for Class A, $1,079,819 for Class B and $4,228 for Class C for the
year ended July 31, 2007.
In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in which
it invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). Because the acquired funds have varied expense and fee levels and
the Fund may own different proportions of acquired funds at different times, the
amount of fees and expenses incurred indirectly by the Fund will vary.
For the year ended July 31, 2007, the Investment Manager and its affiliates
waived certain fees and expenses such that net expenses (excluding fees and
expenses of
- --------------------------------------------------------------------------------
42 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
acquired funds), before giving effect to any performance incentive adjustment,
were 0.89% for Class R4. Of these waived fees and expenses, the transfer agency
fees waived for Class R4 were $48,166. Effective Dec. 11, 2006, with the
renaming of Class Y as Class R4, the Investment Manager and its affiliates
contractually agreed to waive certain fees and expenses until July 31, 2007,
unless sooner terminated at the discretion of the Board, such that net expenses
(excluding fees and expenses of acquired funds), before giving effect to any
performance incentive adjustment, will not exceed 0.90% for Class R4. Effective
Aug. 1, 2007, the Investment Manager and its affiliates have contractually
agreed to waive certain fees and expenses such that net expenses (excluding fees
and expenses of acquired funds), before giving effect to any performance
incentive adjustment, will not exceed 1.05% for Class A, 1.81% for Class B,
1.81% for Class C, 0.67% for Class I, 1.47% for Class R2, 1.22% for Class R3,
0.90% for Class R4 and 0.72% for Class R5 of the Fund's average daily net
assets, until July 31, 2008, unless sooner terminated at the discretion of the
Board.
During the year ended July 31, 2007, the Fund's custodian and transfer agency
fees were reduced by $909,145 as a result of earnings and bank fee credits from
overnight cash balances. The Fund also pays custodian fees to Ameriprise Trust
Company, an affiliate of Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $4,555,072,901 and $7,162,685,066, respectively, for the
year ended July 31, 2007. Realized gains and losses are determined on an
identified cost basis.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 43
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the years indicated are as follows:
<Table>
<Caption>
YEAR ENDED JULY 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 59,268,105 29,154,657 (265,432,267) (177,009,505)
Class B 9,841,913 5,262,317 (95,077,518) (79,973,288)
Class C 475,544 162,555 (1,886,761) (1,248,662)
Class I 2,660,792 705,595 (11,591,197) (8,224,810)
Class R2* 822 -- -- 822
Class R3* 822 -- -- 822
Class R4** 4,699,528 3,241,602 (149,629,106) (141,687,976)
Class R5* 4,421,287 149,070 (417,304) 4,153,053
- ----------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED JULY 31, 2006
ISSUED FOR
REINVESTED NET
SOLD FUND MERGER DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------------------
Class A 81,619,158 924,673,877 1,513,462 (193,098,401) 814,708,096
Class B 9,503,444 234,448,180 -- (114,705,720) 129,245,904
Class C 489,203 5,852,776 -- (1,551,449) 4,790,530
Class I 5,125,399 17,647,385 120,911 (11,535,888) 11,357,807
Class R4** 3,501,543 232,656,314 196 (40,622,509) 195,535,544
- ----------------------------------------------------------------------------------------------------------
</Table>
* For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
** Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
44 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
5. FORWARD FOREIGN CURRENCY CONTRACTS
At July 31, 2007, the Fund had forward foreign currency exchange contracts that
obligate it to deliver currencies at specified future dates. The unrealized
appreciation and/or depreciation on these contracts is included in the
accompanying financial statements. See "Summary of significant accounting
policies." The terms of the open contracts are as follows:
<Table>
<Caption>
CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED
EXCHANGE DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION
- ----------------------------------------------------------------------------------------------------
Aug. 17, 2007 32,215,655 65,851,054 $ 430,584 $--
British Pound U.S. Dollar
Aug. 17, 2007 37,500,000 76,667,625 516,213 --
British Pound U.S. Dollar
Aug. 2, 2007 4,568,557 6,251,371 532 --
European Monetary Unit U.S. Dollar
Aug. 30, 2007 23,000,000 31,550,871 47,008 --
European Monetary Unit U.S. Dollar
Aug. 30, 2007 23,198,018 31,828,841 53,746 --
European Monetary Unit U.S. Dollar
Aug. 30, 2007 244,271 178,790 354 --
U.S. Dollar European Monetary Unit
- ----------------------------------------------------------------------------------------------------
Total $1,048,437 $--
- ----------------------------------------------------------------------------------------------------
</Table>
6. STOCK INDEX FUTURES CONTRACTS
At July 31, 2007, investments in securities included securities valued at
$4,681,241 that were pledged as collateral to cover initial margin deposits on
50 open purchase contracts. The notional market value of the open purchase
contracts at July 31, 2007 was $18,273,750 with a net unrealized loss of
$1,112,039. See "Summary of significant accounting policies" and "Notes to
investments in securities."
7. LENDING OF PORTFOLIO SECURITIES
In order to generate additional income, the Fund may lend securities
representing up to one-third of the value of its total assets (which includes
collateral for securities on loan) to broker-dealers, banks, or other
institutional borrowers of securities. The Fund receives collateral in the form
of cash and U.S. government securities, equal to at least 100% of the value of
securities loaned, which is marked to the market value of the loaned securities
daily until the securities are returned, e.g., if the value of the securities on
loan increases, additional cash collateral is provided by the borrower. The
Investment Manager serves as securities lending agent for the Fund under the
investment management services agreement pursuant to which the Fund has agreed
to reimburse the Investment Manager for expenses incurred by it in connection
with the lending program, and pursuant to guidelines
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 45
adopted by and under the oversight of the Board. At July 31, 2007, securities
valued at $35,122,521 were on loan to brokers. For collateral, the Fund received
$38,203,000 in cash. Cash collateral received is invested in an affiliated money
market fund and short-term securities, including U.S. government securities or
other high-grade debt obligations, which are included in the "Investments in
securities." Income from securities lending amounted to $782,450 for the year
ended July 31, 2007. Expenses paid to the Investment Manager were $18,712 for
the year ended July 31, 2007, which are included in other expenses on the
statement of operations. The risks to the Fund of securities lending are that
the borrower may not provide additional collateral when required or return the
securities when due.
8. OPTIONS CONTRACTS WRITTEN
Contracts and premiums associated with options contracts written are as follows:
<Table>
<Caption>
YEAR ENDED JULY 31, 2007
CALLS
CONTRACTS PREMIUMS
- -----------------------------------------------------------------------------
Balance July 31, 2006 1,954 $4,297,846
Opened 68,074 7,829,903
Closed (20,401) (6,508,617)
Expired (21,744) (1,665,240)
- -----------------------------------------------------------------------------
Balance July 31, 2007 27,883 $3,953,892
- -----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED JULY 31, 2007
PUTS
CONTRACTS PREMIUMS
- -----------------------------------------------------------------------------
Balance July 31, 2006 -- $ --
Opened 33,750 4,286,250
Closed (13,111) (1,665,097)
- -----------------------------------------------------------------------------
Balance July 31, 2007 20,639 $2,621,153
- -----------------------------------------------------------------------------
</Table>
See "Summary of significant accounting policies."
- --------------------------------------------------------------------------------
46 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
9. SWAP CONTRACTS
At July 31, 2007, the Fund had the following open total return equity swap
contracts:
<Table>
<Caption>
UNREALIZED
TERMINATION NOTIONAL APPRECIATION
DATE AMOUNT (DEPRECIATION)
- ----------------------------------------------------------------------------------
Receive total return on a basket
of large cap industrial
securities and pay a floating
rate based on 1-month LIBOR plus
0.20%. Counterparty: Citigroup May 7, 2008 $11,720,000 $ (741,804)
Receive total return on a basket
of large cap health care
securities and pay a floating
rate based on 1-month LIBOR plus
0.20%. Counterparty: Merrill
Lynch Oct. 12, 2007 13,210,000 (768,541)
- ----------------------------------------------------------------------------------
Total $(1,510,345)
- ----------------------------------------------------------------------------------
</Table>
10. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of RiverSource Investments. Cost of purchases
and proceeds from sales aggregated $4,414,608,149 and $4,181,218,017,
respectively, for the year ended July 31, 2007.
11. BANK BORROWINGS
The Fund has a revolving credit agreement with a syndicate of banks headed by
JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund may borrow for the temporary
funding of shareholder redemptions or for other temporary or emergency purposes.
The agreement went into effect Sept. 19, 2006. The Fund must maintain asset
coverage for borrowings of at least 300%. The agreement, which enables the Fund
to participate with other RiverSource funds, permits borrowings up to $500
million, collectively. Interest is charged to each Fund based on its borrowings
at a rate equal to either the higher of the Federal Funds Effective Rate plus
0.40% or the JPMCB Prime Commercial Lending Rate. Borrowings are payable within
60 days after such loan is executed. The Fund also pays a commitment fee equal
to its pro rata share of the amount of the credit facility at a rate of 0.06%
per annum. Prior to this agreement, the Fund paid a commitment fee equal to its
pro rata share of the amount of the credit facility at a rate of 0.07% per
annum. The Fund had no borrowings under the facility outstanding during the year
ended July 31, 2007.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 47
12. FUND MERGER
At the close of business on March 10, 2006, RiverSource Large Cap Equity Fund
acquired the assets and assumed the identified liabilities of RiverSource New
Dimensions Fund. The reorganization was completed after shareholders approved
the plan on Feb. 15, 2006.
The aggregate net assets of RiverSource Large Cap Equity Fund immediately before
the acquisition were $1,392,594,683 and the combined net assets immediately
after the acquisition were $9,137,908,732.
The merger was accomplished by a tax-free exchange of 400,881,844 shares of
RiverSource New Dimensions Fund valued at $7,745,314,049.
In exchange for the RiverSource New Dimensions Fund shares and net assets,
RiverSource Large Cap Equity Fund issued the following number of shares:
<Table>
<Caption>
SHARES
- --------------------------------------------------------------------------
Class A 924,673,877
Class B 234,448,180
Class C 5,852,776
Class I 17,647,385
Class Y 232,656,314
- --------------------------------------------------------------------------
</Table>
RiverSource New Dimensions Fund's net assets after adjustments for any permanent
book-to-tax differences at the merger date were as follows, which include the
following amounts of capital stock, unrealized appreciation, accumulated net
realized loss and undistributed net income.
<Table>
<Caption>
ACCUMULATED
TOTAL NET CAPITAL UNREALIZED NET REALIZED UNDISTRIBUTED
ASSETS STOCK APPRECIATION LOSS NET INCOME
- ----------------------------------------------------------------------------------------------------------------
RiverSource New
Dimensions Fund $7,745,314,049 $7,385,408,991 $472,802,551 $(112,899,579) $2,086
- ----------------------------------------------------------------------------------------------------------------
</Table>
13. CAPITAL LOSS CARRY-OVER
For federal income tax purposes, the Fund had a capital loss carry-over of
$158,388,854 at July 31, 2007, that if not offset by capital gains will expire
as follows:
<Table>
<Caption>
2008 2009 2010 2011
$51,243,861 $70,190,395 $24,231,893 $12,722,705
</Table>
RiverSource Large Cap Equity Fund acquired $33,183,702 of capital loss carry-
overs in connection with the RiverSource New Dimensions Fund merger (Note 12) as
well as capital loss carry-overs acquired as a result of prior mergers. In
addition to the acquired capital loss carry-overs, the Fund also acquired
unrealized capital gains as a result of the mergers. The yearly utilization of
the acquired capital
- --------------------------------------------------------------------------------
48 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
losses as well as the utilization of the acquired unrealized gains is limited by
the Internal Revenue Code. 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.
14. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc., was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company 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. In response to defendants' motion to dismiss the
complaint, the 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 may file a notice of appeal with the Eighth Circuit Court of Appeals
within 30 days from the date of judgment.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), the parent company of RiverSource Investments, LLC
(RiverSource Investments), entered into settlement agreements with the
Securities and Exchange Commission (SEC) and Minnesota Department of Commerce
(MDOC) related to market timing activities. In connection with these matters,
the SEC and MDOC issued orders (the Orders) alleging that AEFC violated certain
provisions of the federal and Minnesota securities laws by failing to adequately
disclose market timing activities by allowing certain identified market timers
to continue to market time contrary to disclosures in mutual fund and variable
annuity product prospectuses. The Orders also alleged that AEFC failed to
implement procedures to detect and prevent market timing in 401(k) plans for
employees of AEFC and related companies and failed to adequately disclose that
there were no such procedures. Pursuant to the MDOC Order, the MDOC also alleged
that AEFC allowed inappropriate market timing to occur by failing to have
written policies and procedures and failing to properly supervise its employees.
As a result of the Orders, 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
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 49
Minnesota laws. Pursuant to the terms of the Orders, AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to make presentations at least annually to its board of directors and the
relevant mutual funds' board that include an overview of policies and procedures
to prevent market timing, material changes to these policies and procedures and
whether disclosures related to market timing are consistent with the SEC order
and federal securities laws. AEFC also agreed to retain an independent
distribution consultant to assist in developing a plan for distribution of all
disgorgement and civil penalties ordered by the SEC in accordance with various
undertakings detailed at http://www.sec.gov/litigation/admin/ia-2451.pdf. In
addition, AEFC agreed to complete and submit to the MDOC a compliance review of
its procedures regarding market timing within one year of the MDOC Order,
including a summary of actions taken to ensure compliance with applicable laws
and regulations and certification by a senior officer regarding compliance and
supervisory procedures.
Ameriprise Financial and its affiliates have cooperated with the SEC and the
MDOC in these legal proceedings, and have made regular reports to the
RiverSource 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.
- --------------------------------------------------------------------------------
50 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
15. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $5.40 $5.26 $4.64 $4.53 $4.11
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .06(b) .06 .04 .01 .01
Net gains (losses) (both realized and
unrealized) .79 .12 .61 .32 .41
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .85 .18 .65 .33 .42
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.06) (.04) (.02) -- --
Distributions from realized gains (.14) -- (.01) (.22) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.20) (.04) (.03) (.22) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.05 $5.40 $5.26 $4.64 $4.53
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $5,039 $5,461 $1,030 $1,248 $83
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 1.09% 1.06% 1.11%(e) 1.20%(e) 1.25%(e)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .99% 1.08% .79% .36% .24%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 66% 116% 128% 99% 135%
- -----------------------------------------------------------------------------------------------------------
Total return(f) 15.79% 3.51% 13.99% 7.19% 10.22%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expenses ratios.
(e) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses for
Class A would have been 1.16%, 1.23% and 1.84% for the years ended July 31,
2005, 2004 and 2003, respectively.
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 51
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $5.29 $5.15 $4.56 $4.48 $4.10
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(b) .02 -- (.01) (.01)
Net gains (losses) (both realized and
unrealized) .76 .12 .60 .31 .39
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .77 .14 .60 .30 .38
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.01) -- -- -- --
Distributions from realized gains (.14) -- (.01) (.22) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.15) (.01) (.22) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.91 $5.29 $5.15 $4.56 $4.48
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $833 $1,169 $472 $572 $36
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 1.86% 1.84% 1.88%(e) 1.95%(e) 2.01%(e)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .23% .28% .02% (.46%) (.52%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 66% 116% 128% 99% 135%
- -----------------------------------------------------------------------------------------------------------
Total return(f) 14.71% 2.72% 13.09% 6.48% 9.27%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expenses ratios.
(e) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses for
Class B would have been 1.93%, 1.98% and 2.60% for the years ended July 31,
2005, 2004 and 2003, respectively.
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
52 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $5.30 $5.16 $4.57 $4.49 $4.10
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(b) .02 -- (.01) (.01)
Net gains (losses) (both realized and
unrealized) .77 .12 .60 .31 .40
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .78 .14 .60 .30 .39
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.02) -- -- -- --
Distributions from realized gains (.14) -- (.01) (.22) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.16) -- (.01) (.22) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.92 $5.30 $5.16 $4.57 $4.49
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $32 $35 $9 $11 $2
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 1.86% 1.84% 1.88%(e) 1.98%(e) 2.01%(e)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .23% .28% .02% (.43%) (.53%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 66% 116% 128% 99% 135%
- -----------------------------------------------------------------------------------------------------------
Total return(f) 14.80% 2.71% 13.06% 6.46% 9.51%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expenses ratios.
(e) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses for
Class C would have been 1.93%, 2.01% and 2.60% for the years ended July 31,
2005, 2004 and 2003, respectively.
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 53
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004(B)
Net asset value, beginning of period $5.44 $5.31 $4.67 $5.08
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .09(c) .10 .05 --
Net gains (losses) (both realized and
unrealized) .78 .12 .63 (.28)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .87 .22 .68 (.28)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08) (.09) (.03) --
Distributions from realized gains (.14) -- (.01) (.13)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.22) (.09) (.04) (.13)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.09 $5.44 $5.31 $4.67
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $68 $105 $43 $14
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) .63% .59% .65%(f) .71%(f),(g)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 1.44% 1.53% 1.24% .74%(g)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 66% 116% 128% 99%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 16.13% 4.06% 14.64% (5.65%)(i)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from March 4, 2004 (inception date) to July 31, 2004.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expenses ratios.
(f) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses for
Class I would have been 0.70% and 0.72% for the periods ended July 31, 2005
and 2004, respectively.
(g) Adjusted to an annual basis.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
54 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $6.08
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03(c)
Net gains (losses) (both realized and
unrealized) .19
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .22
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08)
Distributions from realized gains (.14)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.22)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.08
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) 1.44%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .67%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 66%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 3.71%(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expenses ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 55
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $6.08
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04(c)
Net gains (losses) (both realized and
unrealized) .19
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .23
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08)
Distributions from realized gains (.14)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.22)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.09
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) 1.19%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .92%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 66%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 3.88%(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expenses ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
56 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
CLASS R4*
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $5.47 $5.28 $4.66 $4.54 $4.11
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .07(b) .09 .04 .01 .01
Net gains (losses) (both realized and
unrealized) .79 .12 .61 .34 .42
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .86 .21 .65 .35 .43
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.06) (.02) (.02) (.01) --
Distributions from realized gains (.14) -- (.01) (.22) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.20) (.02) (.03) (.23) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.13 $5.47 $5.28 $4.66 $4.54
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $330 $1,069 $-- $8 $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) .89%(e) .81% .90%(e) 1.00%(e) 1.07%(e)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 1.14% 1.41% 1.08% .50% .45%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 66% 116% 128% 99% 135%
- -----------------------------------------------------------------------------------------------------------
Total return(f) 15.80% 4.03% 14.06% 7.44% 10.46%
- -----------------------------------------------------------------------------------------------------------
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expenses ratios.
(e) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses for
Class R4 would have been 0.90%, 0.95%, 1.03% and 1.66% for the years ended
July 31, 2007, 2005, 2004 and 2003, respectively.
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 57
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $6.08
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .06(c)
Net gains (losses) (both realized and
unrealized) .19
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .25
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08)
Distributions from realized gains (.14)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.22)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.11
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $25
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) .70%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 1.44%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 66%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 4.24%(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expenses ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
58 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
OF RIVERSOURCE LARGE CAP EQUITY FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of RiverSource Large Cap Equity Fund
(the Fund), one of the portfolios constituting the RiverSource Large Cap Series,
Inc. as of July 31, 2007, and the related statement of operations, statement of
changes in net assets and financial highlights for the year then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The financial
statements and financial highlights of the Fund for the periods presented
through July 31, 2006, were audited by other auditors whose report dated
September 20, 2006, expressed an unqualified opinion on those financial
statements and financial highlights.
We conducted our audit 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 audit 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, 2007, by correspondence with the custodian and
brokers or by other appropriate auditing procedures where replies from brokers
were not received. We believe that our audit provides a reasonable basis for our
opinion.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 59
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
RiverSource Large Cap Equity Fund of the RiverSource Large Cap Series, Inc. at
July 31, 2007, the results of its operations, changes in its net assets, and the
financial highlights for the year then ended, in conformity with U.S. generally
accepted accounting principles.
Ernst & Young LLP
Minneapolis, Minnesota
September 20, 2007
- --------------------------------------------------------------------------------
60 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 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, 2007
CLASS A
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 51.53%
Dividends Received Deduction for corporations......... 48.37%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.12736
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.06977
Total distributions......................................... $0.19713
</Table>
CLASS B
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 51.53%
Dividends Received Deduction for corporations......... 48.37%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.08510
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.06977
Total distributions......................................... $0.15487
</Table>
CLASS C
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 51.53%
Dividends Received Deduction for corporations......... 48.37%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.09056
Total distributions.........................................
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.06977
Total distributions......................................... $0.16033
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 61
CLASS I
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 51.53%
Dividends Received Deduction for corporations......... 48.37%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.15075
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.06977
Total distributions......................................... $0.22052
</Table>
CLASS R2
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 51.53%
Dividends Received Deduction for corporations......... 48.37%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.14968
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.06977
Total distributions......................................... $0.21945
</Table>
CLASS R3
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 51.53%
Dividends Received Deduction for corporations......... 48.37%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.15005
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.06977
Total distributions......................................... $0.21982
</Table>
CLASS R4*
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 51.53%
Dividends Received Deduction for corporations......... 48.37%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.12848
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.06977
Total distributions......................................... $0.19825
</Table>
- --------------------------------------------------------------------------------
62 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
CLASS R5
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 51.53%
Dividends Received Deduction for corporations......... 48.37%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.15068
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.06977
Total distributions......................................... $0.22045
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 63
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 member oversees 102
RiverSource funds. Board members serve until the next regular shareholders'
meeting or until he or she reaches the mandatory retirement age established by
the Board. Under the current Board policy, members may serve until the end of
the meeting following their 75th birthday, or the fifteenth anniversary of the
first Board meeting they attended as members of the Board, whichever occurs
first. This policy does not apply to Ms. Jones who may retire after her 75th
birthday.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Kathleen Blatz Board member Chief Justice, Minnesota Supreme
901 S. Marquette Ave. since 2006 Court, 1998-2005
Minneapolis, MN 55402
Age 53
- -----------------------------------------------------------------------------------------------------
Arne H. Carlson Board member Chair, RiverSource Funds,
901 S. Marquette Ave. since 1999 1999-2006; former Governor of
Minneapolis, MN 55402 Minnesota
Age 73
- -----------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member President, Springboard -- Partners
901 S. Marquette Ave. since 2007 in Cross Cultural Leadership
Minneapolis, MN 55402 (consulting company)
Age 52
- -----------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member Trustee Professor of Economics and
901 S. Marquette Ave. since 2004 Management, Bentley College; former
Minneapolis, MN 55402 Dean, McCallum Graduate School of
Age 56 Business, Bentley College
- -----------------------------------------------------------------------------------------------------
Anne P. Jones Board member Attorney and Consultant
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member Former Managing Director, Shikiar American Progressive
901 S. Marquette Ave. since 2005 Asset Management Insurance
Minneapolis, MN 55402
Age 71
- -----------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Board member President Emeritus and Professor of Valmont Industries,
901 S. Marquette Ave. since 2002 and Economics, Carleton College Inc. (manufactures
Minneapolis, MN 55402 Chair of the irrigation systems)
Age 68 Board since 2007
- -----------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
64 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Catherine James Paglia Board member Director, Enterprise Asset Strategic
901 S. Marquette Ave. since 2004 Management, Inc. (private real Distribution, Inc.
Minneapolis, MN 55402 estate and asset management (transportation,
Age 55 company) distribution and
logistics
consultants)
- -----------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member Chief Executive Officer, RiboNovix, Hybridon, Inc.
901 S. Marquette Ave. since 2002 Inc. since 2003 (biotechnology); (biotechnology);
Minneapolis, MN 55402 former President, Forester Biotech American Healthways,
Age 63 Inc. (health
management programs)
- -----------------------------------------------------------------------------------------------------
</Table>
BOARD MEMBER AFFILIATED WITH RIVERSOURCE INVESTMENTS*
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
William F. Truscott Board member President -- U.S. Asset Management
53600 Ameriprise since 2001, and Chief Investment Officer,
Financial Center Vice President Ameriprise Financial, Inc. and
Minneapolis, MN 55474 since 2002 President, Chairman of the Board
Age 47 and Chief Investment Officer,
RiverSource Investments, LLC since
2005; President, Ameriprise
Certificate Company since 2006;
Senior Vice President -- Chief
Investment Officer, Ameriprise
Financial, Inc. and Chairman of the
Board and Chief Investment Officer,
RiverSource Investments, LLC,
2001-2005
- -----------------------------------------------------------------------------------------------------
</Table>
* Interested person by reason of being an officer, director, security holder
and/or employee of RiverSource Investments.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling RiverSource Funds at (888)
791-3380; contacting your financial institution; or visiting
riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 65
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 FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Patrick T. Bannigan President since Senior Vice President -- Asset Management,
172 Ameriprise 2006 RiverSource Investments, LLC since 2006;
Financial Center Managing Director and Global Head of Product,
Minneapolis, MN 55474 Morgan Stanley Investment Management,
Age 41 2004-2006; President, Touchstone Investments,
2002-2004; Director of Strategic Planning,
Evergreen Investments, 1995-2002
- ------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President Executive Vice President -- Equity and Fixed
172 Ameriprise since 2004 Income, Ameriprise Financial, Inc. and
Financial Center RiverSource Investments, LLC since 2006; Vice
Minneapolis, MN 55474 President -- Investments, Ameriprise
Age 43 Certificate Company since 2003; Senior Vice
President -- Fixed Income, Ameriprise
Financial, Inc., 2002-2006 and RiverSource
Investments, LLC, 2004-2006; Managing
Director, Zurich Global Assets, 2001-2002
- ------------------------------------------------------------------------------------------
Amy K. Johnson Vice President Vice President -- Asset Management and Trust
5228 Ameriprise since 2006 Company Services, RiverSource Investments, LLC
Financial Center since 2006; Vice President -- Operations and
Minneapolis, MN 55474 Compliance, RiverSource Investments, LLC,
Age 41 2004-2006; Director of Product
Development -- Mutual Funds, Ameriprise
Financial, Inc., 2001-2004
- ------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Vice President -- Investment Accounting,
105 Ameriprise 2002 Ameriprise Financial, Inc. since 2002; Vice
Financial Center President -- Finance, American Express
Minneapolis, MN 55474 Company, 2000-2002
Age 52
- ------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Vice President and Chief Counsel -- Asset
5228 Ameriprise General Counsel Management, Ameriprise Financial, Inc. since
Financial Center and Secretary 2005; Vice President, General Counsel and
Minneapolis, MN 55474 since 2006 Secretary, Ameriprise Certificate Company
Age 47 since 2005; Vice President -- Asset Management
Compliance, Ameriprise Financial, Inc.,
2004-2005; Senior Vice President and Chief
Compliance Officer, U.S. Bancorp Asset
Management, 2002-2004; Second Vice President
and Assistant General Counsel, Hartford Life,
2001-2002
- ------------------------------------------------------------------------------------------
Jennifer D. Lammers Chief Compliance U.S. Asset Management Chief Compliance
172 Ameriprise Officer since Officer, RiverSource Investments, LLC since
Financial Center 2006 2006; Director -- Mutual Funds, Voyageur Asset
Minneapolis, MN 55474 Management, 2003-2006; Director of Finance,
Age 46 Voyageur Asset Management, 2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
66 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Compliance Director and Anti-Money Laundering
2934 Ameriprise Prevention Officer, Ameriprise Financial, Inc. since
Financial Center Officer since 2004; Manager Anti-Money Laundering,
Minneapolis, MN 55474 2004 Ameriprise Financial, Inc., 2003-2004;
Age 43 Compliance Director and Bank Secrecy Act
Officer, American Express Centurion Bank,
2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 67
APPROVAL OF INVESTMENT MANAGEMENT SERVICES AGREEMENT
RiverSource Investments, LLC ("RiverSource"), 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") RiverSource provides investment advice and other services to the
Fund and all RiverSource funds (collectively, the "Funds"). The Fund's Board of
Directors (the "Board") and the Board's Investment Review and Contracts
Committees monitor these services throughout the year.
On an annual basis, the Board, including the independent Board members (the
"Independent Directors"), considers renewal of the IMS Agreement. RiverSource
prepares detailed reports for the Board and its Contracts Committee in March and
April, including reports based on data provided by independent organizations to
assist the Board in making this determination. In addition, throughout the year,
the Board (or its committees) reviews information prepared by RiverSource
addressing the services RiverSource provides and Fund performance. The Board
accords particular weight to the work, deliberations and conclusions of the
Contracts and Investment Review Committees in determining whether to continue
the IMS Agreement. At the April 11-12, 2007 in-person Board meeting, independent
legal counsel to the Independent Directors reviewed with the Independent
Directors 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 RiverSource: The Board
analyzed various reports and presentations it had received detailing the
services performed by RiverSource, as well as its expertise, resources and
capabilities. The Board specifically considered many developments during the
past year concerning the services provided by RiverSource, including, in
particular, the growing strength and capabilities of many RiverSource offices
and the increased investment and resources dedicated to the Fund's operations,
particularly in the areas of trading systems, legal and compliance. Further, in
connection with the Board's evaluation of the overall package of services
provided by RiverSource, the Board considered the quality of the administrative,
custody and transfer agency services provided by RiverSource affiliates to the
Fund. The Board also reviewed the financial condition of RiverSource and the
entity's ability to carry out its responsibilities under the IMS Agreement. 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
RiverSource). The Board concluded that the services being performed under the
IMS Agreement were of a reasonably high quality.
- --------------------------------------------------------------------------------
68 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
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 determined that RiverSource was 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: (i) detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of the Fund, the
performance of a benchmark index, the percentage ranking of the Fund among its
comparison group and the net assets of the Fund; and (ii) a report detailing the
Fund's performance over various periods (including since inception), recent Fund
inflows (and outflows) and a comparison of the Fund's net assets from December
2006 to December 2005. The Board observed that the Fund's investment performance
met expectations.
Comparative Fees, Costs of Services Provided and the Profits Realized By
RiverSource and its Affiliates from their Relationships with the Fund: The
Board reviewed comparative fees and the costs of services to be provided under
the IMS Agreement. The Board members considered detailed comparative information
set forth in an annual report on fees and expenses, including, among other
things, data (prepared by an independent organization) showing a comparison of
the Fund's expenses with median expenses paid by funds in its peer group, as
well as data showing the Fund's contribution to RiverSource's profitability. 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 Funds' family, while assuring that the overall fees for each fund
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). Although the Fund's
expense ratio was higher than the median ratio, the Board was satisfied with the
consistent and rational fee schedule applicable to all Funds, including the
Fund. Based on its review, the Board concluded that the Fund's management fee
was fair and reasonable in light of the extent and quality of services that the
Fund receives.
The Board also considered the expected profitability of RiverSource and its
affiliates in connection with RiverSource providing investment management
services to the Fund. In this regard, the Board referred to a detailed
profitability report, discussing the profitability to RiverSource and Ameriprise
Financial from managing and operating the Fund, including data showing
comparative profitability. The Board also considered the services acquired by
the investment manager through the use of commission dollars paid by the Funds
on portfolio transactions. The Board noted that the fees paid by the Fund should
permit the investment manager to offer competitive compensation to its
personnel, make
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 69
necessary investments in its business and earn an appropriate profit. The Board
concluded that profitability levels were reasonable.
Economies of Scale to be Realized: The Board also considered the economies of
scale that might be realized by RiverSource as the Fund grows and took note of
the extent to which Fund shareholders might also benefit from such growth. The
Board considered that the IMS Agreement provides for lower fees as assets
increase at pre-established breakpoints and concluded that the IMS Agreement
satisfactorily provided for sharing these economies of scale.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the investment management service fees were fair and reasonable
in light of the extent and quality of services provided. In reaching this
conclusion, no single factor was determinative. On April 12, 2007, the Board,
including all of the Independent Directors, approved the renewal of the IMS
Agreement.
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 RiverSource Funds at (888) 791-3380; contacting your financial
institution; visiting riversource.com/funds; 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 riversource.com/funds; or
searching the website of the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
70 RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On April 12, 2007, Ernst & Young LLP was selected as the Fund's independent
registered public accounting firm for the 2007 fiscal year. A majority of the
Fund's Board of Directors, including a majority of the Independent Directors,
approved the appointment of Ernst & Young LLP. The predecessor independent
registered public accounting firm's reports on the Fund's financial statements
for the year ended July 31, 2006 and the year ended July 31, 2005 contained no
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles. During such fiscal periods
and through April 12, 2007 there were no disagreements between the Fund and the
predecessor independent registered public accounting firm on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which such disagreements, if not resolved to the
satisfaction of the predecessor independent registered public accounting firm,
would have caused them to make reference to the subject matter of the
disagreement in connection with their reports on the financial statements for
such fiscal periods.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2007 ANNUAL REPORT 71
RIVERSOURCE(R) LARGE CAP EQUITY FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus.
RiverSource(R) mutual funds are distributed by RiverSource
Distributors, Inc.
and Ameriprise Financial Services, Inc., Members FINRA, and
managed by
(RIVERSOURCE INVESTMENTS RiverSource Investments, LLC. These companies are part of
LOGO) Ameriprise Financial, Inc. S-6244 H (9/07)
</Table>
Annual Report
and Prospectus
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE(R)
LARGE CAP VALUE FUND
ANNUAL REPORT FOR
THE PERIOD ENDED
JULY 31, 2007
(Prospectus also enclosed)
RIVERSOURCE LARGE CAP VALUE FUND
SEEKS TO PROVIDE SHAREHOLDERS WITH
LONG-TERM GROWTH OF CAPITAL.
This annual report includes a prospectus that
describes in detail the Fund's objective,
investment strategy, risks, sales charges, fees
and other matters of interest. Please read the
prospectus carefully before you invest or send
money.
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 3
Performance Summary................. 5
Questions & Answers
with Portfolio Management........ 7
The Fund's Long-term Performance ... 10
Fund Expenses Example............... 12
Investments in Securities........... 15
Financial Statements................ 21
Notes to Financial Statements....... 27
Report of Independent Registered
Public Accounting Firm........... 47
Federal Income Tax Information...... 49
Board Members and Officers.......... 52
Approval of Investment Management
Services Agreement............... 56
Proxy Voting........................ 58
Change in Independent Registered
Public Accounting Firm........... 58
</Table>
(DALBAR LOGO)
The RiverSource mutual fund
shareholder reports have been
awarded the Communications Seal
from Dalbar Inc., an independent
financial services research firm.
The Seal recognizes communications
demonstrating a level of
excellence in the industry.
- --------------------------------------------------------------------------------
2 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
FUND SNAPSHOT AT JULY 31, 2007
FUND OBJECTIVE
RiverSource Large Cap Value Fund seeks to provide shareholders with long-term
growth of capital.
SECTOR BREAKDOWN*
Percentage of portfolio assets
(PIE CHART)
<Table>
Financials 27.8%
Energy 12.5%
Industrials 10.5%
Consumer Discretionary 9.1%
Health Care 8.6%
Information Technology 8.3%
Other(1) 23.2%
</Table>
* Sectors can be comprised of several industries. Please refer to the section
entitled "Investments in Securities" for a complete listing. No single
industry exceeds 25% of portfolio assets.
(1) Includes Telecommunication Services 6.5%, Consumer Staples 5.7%, Utilities
4.4%, Materials 3.1% and Cash & Cash Equivalents 3.5%.
TOP TEN HOLDINGS
Percentage of portfolio assets
<Table>
Exxon Mobil 4.8%
Bank of America 3.5%
Citigroup 3.4%
Chevron 2.5%
Pfizer 2.4%
AT&T 2.3%
General Electric 2.2%
Verizon Communications 2.0%
JPMorgan Chase & Co 1.9%
ConocoPhillips 1.9%
</Table>
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
The Global Industry Classification Standard (GICS) was developed by and is the
exclusive property of Morgan Stanley Capital International Inc. and Standard &
Poor's, a division of The McGraw-Hill Companies, Inc.
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 3
FUND SNAPSHOT AT JULY 31, 2007
STYLE MATRIX
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
</Table>
Shading within the style matrix indicates areas in which the Fund generally
invests.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and serves as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
PORTFOLIO MANAGER
<Table>
<Caption>
YEARS IN INDUSTRY
Robert Ewing, CFA 19
</Table>
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A ALVAX 06/27/02
Class B ALVBX 06/27/02
Class C RLVCX 06/27/02
Class I ALCIX 03/04/04
Class R2 -- 12/11/06
Class R3 -- 12/11/06
Class R4(1) RSLVX 06/27/02
Class R5 -- 12/11/06
(1) Effective Dec. 11, 2006, Class Y was renamed Class
R4.
Total net assets $95.5 million
Number of holdings 200
</Table>
- --------------------------------------------------------------------------------
4 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the year ended July 31, 2007
(BAR CHART)
<Table>
RiverSource Large Cap Value Fund Class A
(excluding sales charge) +14.47
Russell 1000(R) Value Index (unmanaged) +13.47
Lipper Large-Cap Value Funds Index +14.83
</Table>
(see "The Fund's Long-term Performance" for Index descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the bar chart. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes.
It is not possible to invest directly in an index.
ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
<Table>
<Caption>
TOTAL NET EXPENSES
Class A 1.28% 1.28%
Class B 2.05% 2.05%
Class C 2.04% 2.04%
Class I 0.85% 0.85%
Class R2(a) 1.63% 1.63%
Class R3(a) 1.38% 1.38%
Class R4(b) 1.15% 1.13%(c)
Class R5(a) 0.83% 0.83%
</Table>
(a) Inception date for Class R2, Class R3 and Class R5 was Dec. 11, 2006.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) The investment manager and its affiliates have contractually agreed to
waive certain fees and to absorb certain expenses until July 31, 2008,
unless sooner terminated at the discretion of the Fund's Board. Any amounts
waived will not be reimbursed by the Fund. Under this agreement, net fund
expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment (that decreased the
management fee by 0.003), will not exceed 1.13% for Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 5
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT JULY 31, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS INCEPTION
Class A (inception 6/27/02) +14.47% +12.07% +11.92% +9.93%
Class B (inception 6/27/02) +13.75% +11.25% +11.08% +9.12%
Class C (inception 6/27/02) +13.50% +11.18% +11.04% +9.09%
Class I (inception 3/4/04) +15.10% +12.59% N/A +9.76%
Class R2 (inception 12/11/06) N/A N/A N/A +2.84%*
Class R3 (inception 12/11/06) N/A N/A N/A +3.03%*
Class R4** (inception 6/27/02) +14.67% +12.25% +12.13% +10.13%
Class R5 (inception 12/11/06) N/A N/A N/A +3.40%*
WITH SALES CHARGE
Class A (inception 6/27/02) +7.88% +9.88% +10.60% +8.66%
Class B (inception 6/27/02) +8.89% +10.17% +10.82% +8.99%
Class C (inception 6/27/02) +12.53% +11.18% +11.04% +9.09%
</Table>
<Table>
<Caption>
AT JUNE 30, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS INCEPTION
Class A (inception 6/27/02) +21.14% +12.65% +10.91% +10.98%
Class B (inception 6/27/02) +20.23% +11.83% +10.09% +10.16%
Class C (inception 6/27/02) +20.20% +11.83% +10.05% +10.12%
Class I (inception 3/4/04) +21.56% +13.17% N/A +11.27%
Class R2 (inception 12/11/06) N/A N/A N/A +7.00%*
Class R3 (inception 12/11/06) N/A N/A N/A +7.18%*
Class R4** (inception 6/27/02) +21.32% +12.89% +11.11% +11.18%
Class R5 (inception 12/11/06) N/A N/A N/A +7.38%*
WITH SALES CHARGE
Class A (inception 6/27/02) +14.17% +10.45% +9.60% +9.67%
Class B (inception 6/27/02) +15.23% +10.76% +9.81% +10.02%
Class C (inception 6/27/02) +19.20% +11.83% +10.05% +10.12%
</Table>
Class A share performance reflects the maximum sales charge of 5.75%. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 3%; fifth year
2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to
a 1% CDSC if shares are sold within one year after purchase. Sales charges do
not apply to Class I, Class R2, Class R3, Class R4 and Class R5 shares. Class I,
Class R2, Class R3, Class R4 and Class R5 are available to institutional
investors only.
* Not annualized.
** Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
6 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, Portfolio Manager Bob Ewing discusses the Fund's results and positioning
for the fiscal year ended July 31, 2007.
Q: How did RiverSource Large Cap Value Fund perform for the 12-month period
ended July 31, 2007?
A: RiverSource Large Cap Value Fund's Class A shares advanced 14.47%,
excluding sales charge, for the fiscal year ended July 31, 2007. The Fund's
benchmark, the Russell 1000(R) Value Index (Russell Index), rose 13.47%
during the period. The Fund's peer group, the Lipper Large-Cap Value Funds
Index, gained 14.83% during the same time frame.
Q: What factors most significantly affected performance for the period?
A: The past fiscal year has seen double-digit gains in the U.S. stock market,
fueled by continued economic growth, solid corporate earnings and the Federal
Reserve's decision to keep short-term interest rates steady. Results for the
year were marked by a reversal of leadership, as large-cap growth stocks
outperformed their large-cap value peers as well as small- and mid-cap
stocks. Volatility increased during the second half of the year amid concerns
about the potential broader impact of weakness in the subprime lending
market.
Both stock selection and sector allocations had a positive impact on
performance relative to the Russell Index, with stock selection having a
greater effect. Stock selection in financials, information technology and
health care added to performance. Within financials, our de-emphasis of
mid-size banks was advantageous. Stock selection in the consumer
discretionary sector detracted from return, largely due to the Fund's
holdings of homebuilders, a group that has suffered in the weak housing
market.
Having a smaller financials position than the Russell Index was a positive
factor, as financial stocks were flat during the period. The Fund held a
larger position in information technology and a modest overweight in
industrials compared to the Russell Index, which added to performance. Though
the Fund's materials position was only slightly smaller than that of the
Russell Index, the underweight was disadvantageous, as the materials sector
gained more than 30% during the period.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 7
QUESTIONS & ANSWERS
BOTH STOCK SELECTION AND SECTOR ALLOCATIONS HAD A POSITIVE IMPACT ON
PERFORMANCE RELATIVE TO THE RUSSELL INDEX, WITH STOCK SELECTION HAVING A
GREATER EFFECT.
Contributors to performance included Honeywell Intl, IBM, Goodrich and Cisco
Systems. In addition to its broad industrial exposure, Honeywell Intl
operates in aerospace and defense, areas that have been particularly strong.
Technology company IBM had an attractive valuation and delivered fundamental
performance that was similar to or slightly better than the market's
expectations. Like Honeywell, Goodrich benefited from its exposure to
commercial aerospace, as well as some defense exposure. The Fund had a
relatively small position in Cisco Systems, but this stock is not in the
Russell Index and performed well due to its strong earnings growth.
The largest detractors to performance during the period were Countrywide
Financial and Hovnanian Enterprises. Positions in both stocks were larger
than those of the Russell Index. Though we believed the valuation of mortgage
lender Countrywide Financial adequately discounted the challenging lending
environment, mortgage volume decelerated more than anticipated, and the
company indicated that credit problems in the subprime mortgage segment may
spread to other areas, such as home equity loans. The Fund held several
homebuilders, including Hovnanian Enterprises, which was purchased at what
appeared to be the valuation low point for the cycle. However, the housing
slowdown has been surprisingly severe and homebuilder stocks have remained
weak.
Q: What changes did you make to the Fund during this period?
A: We decreased the Fund's financials exposure because we expect more
challenges for these stocks given the deteriorating credit environment and a
flat yield curve with little difference between short-term and long-term
interest rates. Based on our belief that valuations in the financials sector
seemed a bit high in light of these negative issues, we sold some positions.
Within the financials sector, we also decreased insurance holdings because
the current insurance pricing cycle seems to be in its later stages and
declining prices on insurance products could be problematic.
- --------------------------------------------------------------------------------
8 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS
We increased the Fund's position in the industrials sector as powerful
earnings growth and lower price-to-earnings multiples made selected
industrials stocks more appealing from a valuation perspective. We decreased
the Fund's consumer staples position based on our valuation assessment. These
stocks, particularly some food and household products companies, became more
expensive as the market became concerned about overall earnings in the equity
universe. We believe there are companies with better valuations and better
secular growth characteristics in other areas.
WE INCREASED THE FUND'S POSITION IN THE INDUSTRIALS SECTOR AS POWERFUL
EARNINGS GROWTH AND LOWER PRICE-TO-EARNINGS MULTIPLES MADE SELECTED
INDUSTRIALS STOCKS MORE APPEALING FROM A VALUATION PERSPECTIVE.
Q: How do you plan to manage the Fund in the coming months?
A: At this point, we expect economic growth to be stable at relatively modest
growth rates. We are in the late stages of this economic cycle and, in our
view, valuations on economically-sensitive companies are high by historical
standards. This scenario supports continued implementation of our current
themes: a preference for larger companies over smaller companies,
capitalizing on opportunities to invest in companies with traditional growth
characteristics that are trading at attractive valuations and focusing on
higher quality companies. Currently there is very little difference in
valuations among stocks. We believe that this creates an opportunity to buy
higher quality companies that usually trade at a premium over lower quality
companies.
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of RiverSource Investments, LLC (RiverSource) or
any subadviser to the Fund or any other person in the RiverSource or subadviser
organizations. Any such views are subject to change at any time based upon
market or other conditions and RiverSource disclaims any responsibility to
update such views. These views may not be relied on as investment advice and,
because investment decisions for a RiverSource Fund are based on numerous
factors, may not be relied on as an indication of trading intent on behalf of
any RiverSource Fund.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 9
THE FUND'S LONG-TERM PERFORMANCE
The chart on the facing page illustrates the total value of an assumed $10,000
investment in RiverSource Large Cap Value Fund Class A shares (from 7/1/02 to
7/31/07)* as compared to the performance of two widely cited performance
indices, The Russell 1000 Value Index and the Lipper Large-Cap Value Funds
Index. In comparing the Fund's Class A shares to these indices, you should take
into account the fact that the Fund's performance reflects the maximum sales
charge of 5.75%, while such charges are not reflected in the performance of the
indices. Returns for the Fund include the reinvestment of any distribution paid
during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial institution or visiting riversource.com/funds. Also
see "Past Performance" in the Fund's current prospectus.
* Fund data is from June 27, 2002. Russell 1000 Value Index and Lipper peer
group data is from July 1, 2002.
COMPARATIVE RESULTS
<Table>
<Caption>
SINCE
Results at July 31, 2007 1 YEAR 3 YEARS 5 YEARS INCEPTION(3)
RIVERSOURCE LARGE CAP VALUE FUND (INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,788 $13,266 $16,549 $15,268
Average annual total return +7.88% +9.88% +10.60% +8.66%
RUSSELL 1000 VALUE INDEX(1)
Cumulative value of $10,000 $11,347 $15,074 $19,646 $17,818
Average annual total return +13.47% +14.66% +14.46% +12.03%
LIPPER LARGE-CAP VALUE FUNDS INDEX(2)
Cumulative value of $10,000 $11,483 $14,349 $17,940 $16,393
Average annual total return +14.83% +12.79% +12.40% +10.21%
</Table>
Results for other share classes can be found on page 6.
- --------------------------------------------------------------------------------
10 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN RIVERSOURCE LARGE CAP VALUE FUND
CLASS A LINE GRAPH)
<Table>
<Caption>
RIVERSOURCE LARGE CAP
VALUE FUND CLASS A
(INCLUDES SALES CHARGE) RUSSELL 1000 VALUE INDEX(1) LIPPER LARGE-CAP VALUE
($15,268) ($17,818) FUNDS INDEX(2) ($16,393)
----------------------- --------------------------- ------------------------
7/1/02 9,425 10,000 10,000
7/02 8,695 9,070 9,136
7/03 9,610 10,045 9,923
7/04 10,845 11,821 11,424
7/05 12,420 14,072 13,144
7/06 13,338 15,703 14,276
7/07 15,268 17,818 16,393
</Table>
(1) The Russell 1000 Value Index, an unmanaged index, measures the performance
of those stocks in the Russell 1000 Index with lower price-to-book ratios
and lower forecasted growth values. The index reflects reinvestment of all
distributions and changes in market prices.
(2) The Lipper Large-Cap Value Funds Index includes the 30 largest large-cap
value funds tracked by Lipper Inc. The index's returns include net
reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive
adjustment.
(3) Fund data is from June 27, 2002. Russell 1000 Value Index and Lipper peer
group data is from July 1, 2002.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 11
FUND EXPENSES EXAMPLE
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments; and (2) ongoing
costs, which may include management fees; distribution and service (12b-1) fees;
and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the expenses of the funds in which it invests (also
referred to as "acquired funds"), including affiliated and non-affiliated pooled
investment vehicles (including mutual funds and exchange traded funds). The
Fund's indirect expense from investing in the acquired funds is based on the
Fund's pro rata portion of the cumulative expenses charged by the acquired funds
using the acquired funds expense ratio as of the most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended July 31, 2007.
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.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
12 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
FEB. 1, 2007 JULY 31, 2007 THE PERIOD(A) EXPENSE RATIO
Class A
Actual(b) $1,000 $1,003.50 $ 6.36 1.28%
Hypothetical
(5% return before
expenses) $1,000 $1,018.45 $ 6.41 1.28%
Class B
Actual(b) $1,000 $1,001.80 $10.17 2.05%
Hypothetical
(5% return before
expenses) $1,000 $1,014.63 $10.24 2.05%
Class C
Actual(b) $1,000 $1,000.00 $10.12 2.04%
Hypothetical
(5% return before
expenses) $1,000 $1,014.68 $10.19 2.04%
Class I
Actual(b) $1,000 $1,007.00 $ 3.98 .80%
Hypothetical
(5% return before
expenses) $1,000 $1,020.83 $ 4.01 .80%
Class R2
Actual(b) $1,000 $1,001.80 $ 7.99 1.61%
Hypothetical
(5% return before
expenses) $1,000 $1,016.81 $ 8.05 1.61%
Class R3
Actual(b) $1,000 $1,003.50 $ 6.76 1.36%
Hypothetical
(5% return before
expenses) $1,000 $1,018.05 $ 6.80 1.36%
Class R4*
Actual(b) $1,000 $1,005.30 $ 5.57(c) 1.12%
Hypothetical
(5% return before
expenses) $1,000 $1,019.24 $ 5.61(c) 1.12%
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 13
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
FEB. 1, 2007 JULY 31, 2007 THE PERIOD(A) EXPENSE RATIO
Class R5
Actual(b) $1,000 $1,007.00 $ 4.08 .82%
Hypothetical
(5% return before
expenses) $1,000 $1,020.73 $ 4.11 .82%
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(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 181/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended July 31, 2007: +0.35%
for Class A, +0.18% for Class B, +0.00% for Class C, +0.70% for Class I,
+0.18% for Class R2, +0.35% for Class R3, +0.53% for Class R4 and +0.70%
for Class R5.
(c) The investment manager and its affiliates have contractually agreed to
waive certain fees and to absorb certain expenses until July 31, 2008,
unless sooner terminated at the discretion of the Fund's Board, such that
net expenses, (excluding fees and expenses of acquired funds) before giving
effect to any performance incentive adjustment, will not exceed 1.13% for
Class R4. Any amounts waived will not be reimbursed by the Fund. This
change was effective Aug. 1, 2007. If this change had been in place for the
entire six month period ended July 31, 2007, the actual expenses paid would
have been $5.62 for Class R4; the hypothetical expenses paid would have
been $5.66 for Class R4.
- --------------------------------------------------------------------------------
14 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
INVESTMENTS IN SECURITIES
JULY 31, 2007
(Percentages represent value of investments compared to net assets)
<Table>
<Caption>
COMMON STOCKS (96.2%)
ISSUER SHARES VALUE(A)
AEROSPACE & DEFENSE (4.5%)
Boeing 6,447 $666,813
DRS Technologies 2,789 146,032
General Dynamics 2,582 202,842
Goodrich 9,589 603,244
Honeywell Intl 17,597 1,012,004
L-3 Communications Holdings 3,064 298,924
Lockheed Martin 5,964 587,335
Northrop Grumman 4,684 356,452
United Technologies 5,568 406,297
---------------
Total 4,279,943
- -----------------------------------------------------------------------------------
BEVERAGES (1.0%)
Coca-Cola 8,595 447,885
Constellation Brands Cl A 4,720(b) 103,510
PepsiCo 6,385 418,984
---------------
Total 970,379
- -----------------------------------------------------------------------------------
BIOTECHNOLOGY (0.2%)
Amgen 1,838(b) 98,775
Biogen Idec 1,547(b) 87,467
---------------
Total 186,242
- -----------------------------------------------------------------------------------
BUILDING PRODUCTS (0.3%)
Masco 10,324 280,916
- -----------------------------------------------------------------------------------
CAPITAL MARKETS (4.5%)
Bank of New York Mellon 11,455 487,410
Blackstone Group LP 3,109(b) 74,647
Franklin Resources 769 97,948
Goldman Sachs Group 1,473 277,425
KKR Private Equity Investors LP Unit 6,910(f) 139,582
Lehman Brothers Holdings 15,639 969,617
Merrill Lynch & Co 12,083 896,559
Morgan Stanley 14,248 910,020
Oaktree Capital Group LLC Cl A Unit 5,000(b,d,f) 165,000
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CAPITAL MARKETS (CONT.)
State Street 2,245 $150,482
T Rowe Price Group 3,050 158,997
---------------
Total 4,327,687
- -----------------------------------------------------------------------------------
CHEMICALS (1.4%)
Ashland 1,544 94,277
Dow Chemical 16,564 720,202
Eastman Chemical 2,941 202,400
EI du Pont de Nemours & Co 7,718 360,662
---------------
Total 1,377,541
- -----------------------------------------------------------------------------------
COMMERCIAL BANKS (2.9%)
Fifth Third Bancorp 2,535 93,516
PNC Financial Services Group 4,848 323,119
US Bancorp 15,502 464,285
Wachovia 20,008 944,578
Wells Fargo & Co 28,487 962,006
---------------
Total 2,787,504
- -----------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (0.1%)
Avery Dennison 1,476 90,538
- -----------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (1.8%)
Alcatel-Lucent 1,757(c) 20,915
Avaya 7,369(b) 121,883
Cisco Systems 16,245(b) 469,642
Motorola 16,946 287,913
Nokia ADR 10,661(c) 305,331
QUALCOMM 3,666 152,689
Telefonaktiebolaget LM Ericsson ADR 8,533(c) 319,220
---------------
Total 1,677,593
- -----------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (2.4%)
Dell 4,296(b) 120,159
Hewlett-Packard 20,636 949,875
Intl Business Machines 9,297 1,028,713
SanDisk 3,587(b) 192,371
---------------
Total 2,291,118
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 15
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CONSTRUCTION & ENGINEERING (0.3%)
Fluor 1,043 $120,477
KBR 4,350(b) 139,591
---------------
Total 260,068
- -----------------------------------------------------------------------------------
CONSUMER FINANCE (1.7%)
American Express 7,325 428,806
Capital One Financial 14,068 995,451
Discover Financial Services 7,124(b) 164,208
---------------
Total 1,588,465
- -----------------------------------------------------------------------------------
CONTAINERS & PACKAGING (0.2%)
Temple-Inland 3,231 187,818
- -----------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (8.8%)
Bank of America 69,616 3,301,190
Citigroup 69,372 3,230,654
JPMorgan Chase & Co 42,155 1,855,242
---------------
Total 8,387,086
- -----------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (4.8%)
AT&T 56,056 2,195,152
Citizens Communications 8,884 128,196
Deutsche Telekom 11,032(c) 189,588
Embarq 1,607 99,297
Verizon Communications 43,990 1,874,854
Windstream 8,592 118,226
---------------
Total 4,605,313
- -----------------------------------------------------------------------------------
ELECTRIC UTILITIES (3.1%)
Entergy 5,925 592,263
Exelon 11,283 791,503
FPL Group 3,269 188,719
Hawaiian Electric Inds 5,919 135,012
Pinnacle West Capital 2,105 78,895
PPL 7,033 331,536
Progress Energy 2,032 88,717
Southern 21,027 707,349
---------------
Total 2,913,994
- -----------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (0.4%)
Emerson Electric 7,384 347,565
- -----------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.1%)
Tyco Electronics 3,890(b) 139,331
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
ENERGY EQUIPMENT & SERVICES (1.0%)
GlobalSantaFe 1,358 $97,382
Halliburton 5,850 210,717
Natl Oilwell Varco 1,659(b) 199,262
Pride Intl 3,717(b) 130,281
Transocean 1,455(b) 156,340
Weatherford Intl 3,548(b) 196,311
---------------
Total 990,293
- -----------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (1.0%)
CVS Caremark 10,659 375,090
Safeway 1,461 46,562
Wal-Mart Stores 12,621 579,935
---------------
Total 1,001,587
- -----------------------------------------------------------------------------------
FOOD PRODUCTS (1.3%)
Campbell Soup 5,584 205,659
General Mills 3,828 212,913
Kellogg 8,415 435,981
Kraft Foods Cl A 10,881 356,353
---------------
Total 1,210,906
- -----------------------------------------------------------------------------------
GAS UTILITIES (0.3%)
ONEOK 5,805 294,604
- -----------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (0.7%)
Bausch & Lomb 2,258 144,354
Boston Scientific 30,890(b) 406,204
Covidien 3,890(b,c) 159,285
---------------
Total 709,843
- -----------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (1.3%)
Aetna 8,045 386,722
Cardinal Health 3,560 233,999
CIGNA 5,451 281,490
McKesson 2,185 126,206
UnitedHealth Group 3,676 178,029
---------------
Total 1,206,446
- -----------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (1.1%)
Intl Game Technology 4,041 142,728
Marriott Intl Cl A 8,558 355,585
McDonald's 8,975 429,633
Pinnacle Entertainment 4,309(b) 114,232
---------------
Total 1,042,178
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
16 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HOUSEHOLD DURABLES (0.6%)
DR Horton 14,080 $229,786
Hovnanian Enterprises Cl A 10,209(b) 135,167
Lennar Cl A 3,184 97,621
Standard-Pacific 7,196 106,573
---------------
Total 569,147
- -----------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS (0.9%)
Colgate-Palmolive 6,350 419,100
Procter & Gamble 6,308 390,213
Spectrum Brands 16,774(b) 73,638
---------------
Total 882,951
- -----------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (2.6%)
3M 1,789 159,078
General Electric 53,969 2,091,838
Tyco Intl 5,165(c) 244,241
---------------
Total 2,495,157
- -----------------------------------------------------------------------------------
INSURANCE (6.8%)
ACE 13,215(c) 762,770
AFLAC 9,940 518,073
American Intl Group 27,837 1,786,578
Aon 2,672 106,987
Arch Capital Group 1,821(b,c) 126,851
Chubb 5,971 300,998
Endurance Specialty Holdings 2,929(c) 109,545
Hartford Financial Services Group 13,895 1,276,533
MetLife 4,829 290,802
Prudential Financial 10,549 934,958
XL Capital Cl A 3,316(c) 258,184
---------------
Total 6,472,279
- -----------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL (0.2%)
Liberty Media -- Interactive Cl A 6,882(b,e) 144,178
- -----------------------------------------------------------------------------------
IT SERVICES (1.1%)
Affiliated Computer Services Cl A 6,808(b) 365,318
Automatic Data Processing 5,213 241,987
Electronic Data Systems 5,402 145,800
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
IT SERVICES (CONT.)
First Data 7,941 $252,444
HCL Technologies 6,629(c) 51,381
---------------
Total 1,056,930
- -----------------------------------------------------------------------------------
MACHINERY (2.3%)
Caterpillar 7,500 590,999
Deere & Co 3,556 428,214
Flowserve 4,814 347,908
Illinois Tool Works 2,504 137,845
Ingersoll-Rand Cl A 2,893(c) 145,576
ITT 3,018 189,772
Parker Hannifin 3,790 373,997
---------------
Total 2,214,311
- -----------------------------------------------------------------------------------
MEDIA (5.2%)
Comcast Cl A 21,089(b) 554,008
Comcast Special Cl A 13,594(b) 355,755
EchoStar Communications Cl A 3,920(b) 165,777
News Corp Cl A 40,207 849,172
Time Warner 46,479 895,185
Viacom Cl B 7,452(b) 285,412
Virgin Media 32,436 805,710
Vivendi 13,364(c) 567,687
Walt Disney 15,642 516,186
---------------
Total 4,994,892
- -----------------------------------------------------------------------------------
METALS & MINING (0.5%)
Alcan 1,749(c) 170,353
Alcoa 8,938 341,431
---------------
Total 511,784
- -----------------------------------------------------------------------------------
MULTILINE RETAIL (0.8%)
JC Penney 5,545 377,282
Macy's 3,918 141,322
Target 3,739 226,471
---------------
Total 745,075
- -----------------------------------------------------------------------------------
MULTI-UTILITIES (1.0%)
Dominion Resources 8,191 689,846
Xcel Energy 12,779 259,414
---------------
Total 949,260
- -----------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (11.4%)
Anadarko Petroleum 1,933 97,288
BP ADR 7,277(c) 505,024
Chesapeake Energy 2,901 98,750
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 17
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
OIL, GAS & CONSUMABLE FUELS (CONT.)
Chevron 27,425 $2,338,256
ConocoPhillips 22,732 1,837,655
Devon Energy 4,635 345,817
Exxon Mobil 53,775 4,577,865
Royal Dutch Shell ADR 2,477(c) 192,190
Total 10,373(c) 816,937
Valero Energy 701 46,974
XTO Energy 1,700 92,701
---------------
Total 10,949,457
- -----------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (1.0%)
Bowater 9,811 192,492
Intl Paper 8,971 332,555
Weyerhaeuser 5,601 399,015
---------------
Total 924,062
- -----------------------------------------------------------------------------------
PERSONAL PRODUCTS (0.1%)
Avon Products 1,361 49,010
Herbalife 1,309(c) 53,642
---------------
Total 102,652
- -----------------------------------------------------------------------------------
PHARMACEUTICALS (6.4%)
Bristol-Myers Squibb 28,822 818,833
Eli Lilly & Co 6,171 333,789
Johnson & Johnson 6,415 388,108
Merck & Co 21,135 1,049,353
Novartis ADR 3,548(c) 191,415
Pfizer 98,713 2,320,742
Schering-Plough 17,472 498,651
Wyeth 9,998 485,103
---------------
Total 6,085,994
- -----------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (0.3%)
Annaly Capital Management 9,799 141,596
Apartment Investment & Management Cl A 3,842 162,324
---------------
Total 303,920
- -----------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (1.9%)
Atmel 45,684(b) 246,237
Cypress Semiconductor 10,042(b) 251,653
Intel 28,173 665,445
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (CONT.)
LSI 20,035(b) $144,252
Spansion Cl A 36,533(b) 387,615
Texas Instruments 1,766 62,146
United Microelectronics ADR 6,552(c) 21,163
---------------
Total 1,778,511
- -----------------------------------------------------------------------------------
SOFTWARE (1.0%)
ACI Worldwide 1,666(b) 50,863
BEA Systems 8,614(b) 106,641
Microsoft 19,380 561,827
Oracle 9,350(b) 178,772
Quest Software 3,295(b) 48,766
---------------
Total 946,869
- -----------------------------------------------------------------------------------
SPECIALTY RETAIL (1.3%)
Gap 5,438 93,534
Home Depot 9,475 352,186
Limited Brands 3,784 91,384
Lowe's Companies 13,136 367,938
Penske Automotive Group 2,387 46,499
TJX Companies 9,228 256,077
---------------
Total 1,207,618
- -----------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (2.7%)
Countrywide Financial 37,597 1,059,107
Fannie Mae 12,995 777,621
Freddie Mac 12,410 710,721
---------------
Total 2,547,449
- -----------------------------------------------------------------------------------
TOBACCO (1.3%)
Altria Group 18,802 1,249,769
- -----------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (1.6%)
ALLTEL 7,240 477,478
Sprint Nextel 34,909 716,681
Vodafone Group ADR 12,256(c) 371,970
---------------
Total 1,566,129
- -----------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $80,262,638) $91,853,352
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
18 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
MONEY MARKET FUND (3.5%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 3,317,297(g) $3,317,297
- -----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $3,317,297) $3,317,297
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $83,579,935)(h) $95,170,649
===================================================================================
</Table>
NOTES TO INVESTMENTS IN SECURITIES
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At July 31, 2007, the
value of foreign securities represented 5.8% of net assets.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the Fund's
Board of Directors. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At July 31,
2007, the value of these securities amounted to $165,000 or 0.2% of net
assets.
(e) Shareholders of tracking stocks have a financial interest only in a unit or
division of the company. Unlike the common stock of the company itself, a
tracking stock usually has limited or no voting rights. In the event of a
company's liquidation, tracking stock shareholders typically do not have a
legal claim on the company's assets.
(f) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). These securities may be valued at fair
value according to procedures approved, in good faith, by the Fund's Board
of Directors. Information concerning such security holdings at July 31,
2007, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
- ----------------------------------------------------------------------------------
KKR Private Equity Investors LP Unit 05-01-06 $171,437
Oaktree Capital Group LLC Cl A Unit* 05-21-07 thru 07-19-07 214,540
</Table>
* Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended.
(g) Affiliated Money Market Fund -- See Note 5 to the financial statements.
(h) At July 31, 2007, the cost of securities for federal income tax purposes
was $84,408,500 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $12,780,631
Unrealized depreciation (2,018,482)
- ------------------------------------------------------------------------------
Net unrealized appreciation $10,762,149
- ------------------------------------------------------------------------------
</Table>
The Global Industry Classification Standard (GICS) was developed by and is the
exclusive property of Morgan Stanley Capital International Inc. and Standard &
Poor's, a division of The McGraw-Hill Companies, Inc.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 19
HOW TO FIND INFORMATION ABOUT THE FUND'S 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 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
can be found at riversource.com/funds.
- --------------------------------------------------------------------------------
20 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2007
<Table>
ASSETS
Investments in securities, at value (Note 1)
Unaffiliated issuers (identified cost $80,262,638) $91,853,352
Affiliated money market fund (identified cost $3,317,297)
(Note 5) 3,317,297
- ---------------------------------------------------------------------------
Total investments in securities (identified cost
$83,579,935) 95,170,649
Capital shares receivable 26,347
Dividends and accrued interest receivable 104,859
Receivable for investment securities sold 617,082
- ---------------------------------------------------------------------------
Total assets 95,918,937
- ---------------------------------------------------------------------------
LIABILITIES
Capital shares payable 42,734
Payable for investment securities purchased 328,397
Accrued investment management services fee 1,589
Accrued distribution fee 882
Accrued transfer agency fee 400
Accrued administrative services fee 159
Other accrued expenses 49,277
- ---------------------------------------------------------------------------
Total liabilities 423,438
- ---------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $95,495,499
===========================================================================
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 21
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
JULY 31, 2007
<Table>
REPRESENTED BY
Capital stock -- $.01 par value (Note 1) $ 167,288
Additional paid-in capital 77,976,295
Undistributed net investment income 496,785
Accumulated net realized gain (loss) 5,264,417
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies 11,590,714
- ---------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $95,495,499
===========================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $62,421,177
Class B $15,116,287
Class C $ 1,041,705
Class I $16,865,439
Class R2 $ 4,345
Class R3 $ 4,352
Class R4 $ 37,830
Class R5 $ 4,364
Net asset value per share of outstanding Class A
capital stock: shares(1) 10,928,420 $ 5.71
Class B shares 2,672,256 $ 5.66
Class C shares 184,547 $ 5.64
Class I shares 2,934,662 $ 5.75
Class R2 shares 763 $ 5.69
Class R3 shares 763 $ 5.70
Class R4 shares 6,589 $ 5.74
Class R5 shares 763 $ 5.72
- ------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $6.06. The offering
price is calculated by dividing the net asset value by 1.0 minus the maximum
sales charge of 5.75%.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
22 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 2007
<Table>
INVESTMENT INCOME
Income:
Dividends $ 2,091,091
Interest 19,596
Income distributions from affiliated money market fund (Note
5) 183,566
Less foreign taxes withheld (10,021)
- ---------------------------------------------------------------------------
Total income 2,284,232
- ---------------------------------------------------------------------------
Expenses (Note 2):
Investment management services fee 602,406
Distribution fee
Class A 160,778
Class B 188,820
Class C 11,437
Class R2 14
Class R3 7
Transfer agency fee
Class A 118,243
Class B 37,163
Class C 2,230
Class R2 2
Class R3 2
Class R4 33
Class R5 306
Service fee -- Class R4 13
Administrative services fees and expenses 60,574
Plan administration services fee
Class R2 7
Class R3 7
Class R4 60
Compensation of board members 1,892
Custodian fees 31,970
Printing and postage 29,010
Registration fees 95,700
Professional fees 28,149
Other 6,319
- ---------------------------------------------------------------------------
Total expenses 1,375,142
Expenses waived/reimbursed by the Investment Manager and
its affiliates (Note 2) (5)
- ---------------------------------------------------------------------------
1,375,137
Earnings and bank fee credits on cash balances (Note 2) (8,325)
- ---------------------------------------------------------------------------
Total net expenses 1,366,812
- ---------------------------------------------------------------------------
Investment income (loss) -- net 917,420
- ---------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 23
STATEMENT OF OPERATIONS (CONTINUED)
YEAR ENDED JULY 31, 2007
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (Note 3) $ 7,967,043
Foreign currency transactions (1,176)
- -----------------------------------------------------------------------------------
Net realized gain (loss) on investments 7,965,867
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 4,751,162
- -----------------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 12,717,029
- -----------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $13,634,449
===================================================================================
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
24 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 917,420 $ 1,745,900
Net realized gain (loss) on investments 7,965,867 12,601,161
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and
liabilities in foreign currencies 4,751,162 (5,201,720)
- ---------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 13,634,449 9,145,341
- ---------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (754,607) (878,948)
Class B (58,266) (101,985)
Class C (4,777) (5,946)
Class I (250,586) (815,837)
Class R2 (78) N/A
Class R3 (78) N/A
Class R4 (453) (1,721)
Class R5 (79) N/A
Net realized gain
Class A (9,225,989) (3,373,386)
Class B (2,795,600) (1,215,159)
Class C (166,141) (63,394)
Class I (2,248,825) (2,287,588)
Class R2 (708) N/A
Class R3 (708) N/A
Class R4 (5,335) (5,789)
Class R5 (708) N/A
- ---------------------------------------------------------------------------------------
Total distributions (15,512,938) (8,749,753)
- ---------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 25
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Proceeds from sales
Class A shares (Note 2) $ 10,152,788 $ 11,203,132
Class B shares 1,711,166 1,923,861
Class C shares 211,888 172,850
Class I shares 2,650,378 13,890,983
Class R2 shares 5,000 N/A
Class R3 shares 5,000 N/A
Class R4 shares 1,000 1,022
Class R5 shares 2,488,893 N/A
Reinvestment of distributions at net asset value
Class A shares 9,755,373 4,161,490
Class B shares 2,826,941 1,301,183
Class C shares 162,715 67,763
Class I shares 2,498,502 3,103,080
Class R4 shares 3,775 6,764
Payments for redemptions
Class A shares (19,024,336) (27,249,234)
Class B shares (Note 2) (8,203,518) (12,824,832)
Class C shares (Note 2) (420,058) (534,833)
Class I shares (1,080,983) (41,255,992)
Class R4 shares -- (114,743)
Class R5 shares (2,561,087) N/A
- ---------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions 1,183,437 (46,147,506)
- ---------------------------------------------------------------------------------------
Total increase (decrease) in net assets (695,052) (45,751,918)
Net assets at beginning of year 96,190,551 141,942,469
- ---------------------------------------------------------------------------------------
Net assets at end of year $ 95,495,499 $ 96,190,551
=======================================================================================
Undistributed net investment income $ 496,785 $ 662,124
- ---------------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
26 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a series of RiverSource Large Cap Series, Inc. and is registered
under the Investment Company Act of 1940 (as amended) as a diversified, open-end
management investment company. RiverSource Large Cap Series, Inc. has 10 billion
authorized shares of capital stock that can be allocated among the separate
series as designated by the Board. The Fund invests primarily in equity
securities of companies with a market capitalization greater than $5 billion.
The Fund offers Class A, Class B, Class C, Class I and Class R4 shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I and Class R4 shares have no sales charge and are offered only to
qualifying institutional investors.
Effective Dec. 11, 2006, the Board approved renaming Class Y as Class R4,
terminating the shareholder servicing agreement, revising the fee structure
under the transfer agent agreement from account-based to asset-based, and
adopting a plan administration services agreement.
At July 31, 2007, Ameriprise Financial, Inc. (Ameriprise Financial), the parent
company of RiverSource Investments, LLC (the Investment Manager) and the
affiliated funds-of-funds owned 100% of Class I shares.
Effective Dec. 11, 2006, the Fund offers additional classes of shares, Class R2,
Class R3 and Class R5, to certain institutional investors. These shares are sold
without a front-end sales charge or CDSC. At July 31, 2007, Ameriprise Financial
owned 100% of Class R2, Class R3 and Class R5 shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration fees) differ among classes. Income, expenses (other
than class specific expenses) and realized and unrealized gains or losses on
investments are allocated to each class of shares based upon its relative net
assets.
The Fund's significant accounting policies are summarized below:
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.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 27
VALUATION OF SECURITIES
All securities are valued at the close of each business day. Securities traded
on national securities exchanges or included in national market systems are
valued at the last quoted sales price. Debt securities are generally traded in
the over-the-counter market and are valued at a price that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
Foreign securities are valued based on quotations from the principal market in
which such securities are normally traded. The procedures adopted by the Board
of Directors of the funds generally contemplate the use of fair valuation in the
event that price quotations or valuations are not readily available, price
quotations or valuations from other sources are not reflective of market value
and thus deemed unreliable, or a significant event has occurred in relation to a
security or class of securities (such as foreign equities) that is not reflected
in price quotations or valuations from other sources. A fair value price is a
good faith estimate of the value of a security at a given point in time. Many
securities markets and exchanges outside the U.S. close prior to the close of
the New York Stock Exchange and therefore the closing prices for securities in
such markets or on such exchanges may not fully reflect events that occur after
such close but before the close of the New York Stock Exchange, including
significant movements in the U.S. market after foreign exchanges have closed.
Accordingly, in those situations, Ameriprise Financial will fair value foreign
equity securities pursuant to procedures adopted by the Board of Directors of
the funds, including utilizing a third party pricing service to determine these
fair values. These procedures take into account multiple factors, including
movements in the U.S. securities markets, to determine a good faith estimate
that reasonably reflects the current market conditions as of the close of the
New York Stock Exchange. Swap transactions are valued through an authorized
pricing service, broker, or an internal model. Short-term securities maturing in
more than 60 days from the valuation date are valued at the market price or
approximate market value based on current interest rates; those maturing in 60
days or less are valued at amortized cost.
ILLIQUID SECURITIES
At July 31, 2007, investments in securities included issues that are illiquid
which the Fund currently limits to 15% of net assets, at market value, at the
time of purchase. Prior to July 12, 2007, the Fund limited the percent held in
securities and other instruments that were illiquid to 10% of the Fund's net
assets. The aggregate value of such securities at July 31, 2007 was $304,582
representing 0.32% of net assets. These securities may be valued at fair value
according to procedures approved, in good faith, by the Board. According to
board guidelines, certain unregistered securities are determined to be liquid
and are not included within the 15% limitation specified above. Assets are
liquid if they can be sold or disposed of in the ordinary course of business
within seven days at approximately the value at which the asset is valued by the
Fund.
- --------------------------------------------------------------------------------
28 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
OPTION TRANSACTIONS
To produce incremental earnings, protect gains, and facilitate buying and
selling of securities for investments, the Fund may buy and write options traded
on any U.S. or foreign exchange or in the over-the-counter market where
completing the obligation depends upon the credit standing of the other party.
Cash collateral may be collected by the Fund to secure certain over-the-counter
options trades. Cash collateral held by the Fund for such option trades must be
returned to the counterparty upon closure, exercise or expiration of the
contract. The Fund also may buy and sell put and call options and write covered
call options on portfolio securities as well as write cash-secured put options.
The risk in writing a call option is that the Fund gives up the opportunity for
profit if the market price of the security increases. The risk in writing a put
option is that the Fund may incur a loss if the market price of the security
decreases and the option is exercised. The risk in buying an option is that the
Fund pays a premium whether or not the option is exercised. The Fund also has
the additional risk of being unable to enter into a closing transaction if a
liquid secondary market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The Fund will
realize a gain or loss when the option transaction expires or closes. When an
option is exercised, the proceeds on sales for a written call option, the
purchase cost for a written put option or the cost of a security for a purchased
put or call option is adjusted by the amount of premium received or paid. At
July 31, 2007, the Fund had no outstanding option contracts.
FUTURES TRANSACTIONS
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund also may buy and write put and call options on these futures contracts.
Risks of entering into futures contracts and related options include the
possibility of an illiquid market and that a change in the value of the contract
or option may not correlate with changes in the value of the underlying
securities.
Futures are valued daily based upon the last sale price at the close of market
on the principal exchange on which they are traded. Upon entering into a futures
contract, the Fund is required to deposit either cash or securities in an amount
(initial margin) equal to a certain percentage of the contract value. Subsequent
payments (variation margin) are made or received by the Fund each day. The
variation margin payments are equal to the daily changes in the contract value
and are recorded as unrealized gains and losses. The Fund recognizes a realized
gain or loss when the contract is closed or expires. At July 31, 2007, the Fund
had no outstanding futures contracts.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 29
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the statement of operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes.
The Fund may enter into forward foreign currency exchange contracts for
operational purposes and to protect against adverse exchange rate fluctuation.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates from an
independent pricing service. The Fund is subject to the credit risk that the
other party will not complete its contract obligations. At July 31, 2007, the
Fund had no outstanding forward foreign currency contracts.
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 to shareholders. No provision for income or excise
taxes is thus required.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred losses on
certain futures contracts, the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes and losses deferred due to
"wash sale" transactions. 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
- --------------------------------------------------------------------------------
30 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
On the statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been decreased by $13,835
and accumulated net realized gain has been increased by $13,835.
The tax character of distributions paid for the years indicated is as follows:
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
- ----------------------------------------------------------------------------
CLASS A
Distributions paid from:
Ordinary income........................... $2,470,246 $1,836,908
Long-term capital gain.................... 7,510,350 2,415,525
CLASS B
Distributions paid from:
Ordinary income........................... 578,128 447,025
Long-term capital gain.................... 2,275,738 870,119
CLASS C
Distributions paid from:
Ordinary income........................... 35,672 23,946
Long-term capital gain.................... 135,246 45,394
CLASS I
Distributions paid from:
Ordinary income........................... 668,771 1,465,389
Long-term capital gain.................... 1,830,640 1,638,036
CLASS R2*
Distributions paid from:
Ordinary income........................... 210 N/A
Long-term capital gain.................... 576 N/A
CLASS R3*
Distributions paid from:
Ordinary income........................... 210 N/A
Long-term capital gain.................... 576 N/A
CLASS R4**
Distributions paid from:
Ordinary income........................... 1,445 3,365
Long-term capital gain.................... 4,343 4,145
CLASS R5*
Distributions paid from:
Ordinary income........................... 211 N/A
Long-term capital gain.................... 576 N/A
</Table>
* For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
** Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 31
At July 31, 2007, the components of distributable earnings on a tax basis are as
follows:
<Table>
Undistributed ordinary income.............................. $ 1,322,432
Undistributed accumulated long-term gain................... $ 5,268,531
Unrealized appreciation (depreciation)..................... $10,760,953
</Table>
RECENT ACCOUNTING PRONOUNCEMENTS
On Sept. 20, 2006, the Financial Accounting Standards Board (FASB) released
Statement of Financial Accounting Standards No. 157 "Fair Value Measurements"
(SFAS 157). SFAS 157 establishes an authoritative definition of fair value, sets
out a framework for measuring fair value, and requires additional disclosures
about fair-value measurements. The application of SFAS 157 is required for
fiscal years beginning after Nov. 15, 2007 and interim periods within those
fiscal years. The impact of SFAS 157 on the Fund's financial statements is being
evaluated.
In June 2006, the FASB issued FASB Interpretation 48 (FIN 48), "Accounting for
Uncertainty in Income Taxes." FIN 48 clarifies the accounting for uncertainty in
income taxes recognized in accordance with FASB Statement 109, "Accounting for
Income Taxes." FIN 48 prescribes a two-step process to recognize and measure a
tax position taken or expected to be taken in a tax return. The first step is to
determine whether a tax position has met the more-likely-than-not recognition
threshold and the second step is to measure a tax position that meets the
threshold to determine the amount of benefit to recognize. FIN 48 also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition. FIN 48 is effective for fiscal
years beginning after Dec. 15, 2006. Tax positions of the Fund are being
evaluated to determine the impact, if any, to the Fund. The adoption of FIN 48
is not anticipated to have a material impact on the Fund.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date and interest income,
including amortization of premium, market discount and original issue discount
using the effective interest method, is accrued daily.
2. EXPENSES AND SALES CHARGES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
- --------------------------------------------------------------------------------
32 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
is a percentage of the Fund's average daily net assets that declines from 0.60%
to 0.375% annually as the Fund's assets increase. The fee may be adjusted upward
or downward by a performance incentive adjustment based on a comparison of the
performance of Class A shares of the Fund to the Lipper Large-Cap Value Funds
Index. In certain circumstances, the Board may approve a change in the index.
The maximum adjustment is 0.12% per year. If the performance difference is less
than 0.50%, the adjustment will be zero. The adjustment decreased the fee by
$3,332 for the year ended July 31, 2007. The management fee for the year ended
July 31, 2007 was 0.60% of the Fund's average daily net assets, including an
adjustment under the terms of the performance incentive arrangement.
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines from 0.06% to 0.03% annually as the
Fund's assets increase.
Other expenses in the amount of $2,810 are for, among other things, certain
expenses of the Fund or the Board including: Fund boardroom and office expense,
employee compensation, employee health and retirement benefits, and certain
other expenses. Payment of these Fund and Board expenses is facilitated by a
company providing limited administrative services to the Fund and the Board.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a former Board Chair's
compensation, including health benefits and payment of certain other expenses,
are included under other expenses.
Under a Deferred Compensation Plan (the Plan), non-interested board members may
defer receipt of their compensation. Deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of the Fund or other
RiverSource funds. The Fund's liability for these amounts is adjusted for market
value changes and remains in the Fund until distributed in accordance with the
Plan.
Professional fees include fees paid by the Fund for legal services and
independent registered public accounting firm services.
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual fee per shareholder account for this service as follows:
- - Class A $19.50
- - Class B $20.50
- - Class C $20.00
Effective Dec. 11, 2006, as part of the Board's approval to rename Class Y as
Class R4, the fee structure under the Transfer Agency Agreement was revised from
an account-based fee for Class Y to an asset-based fee for Class R4. The Fund
pays the Transfer Agent an annual asset-based fee at a rate of 0.05% of the
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 33
Fund's average daily net assets, attributable to Class R4 shares. Prior to Dec.
11, 2006, the Fund paid the Transfer Agent an annual account-based fee of $17.50
per shareholder account.
In addition, the Fund pays the Transfer Agent an annual asset-based fee at a
rate of 0.05% of the Funds average daily net assets attributable to Class R2,
Class R3 and Class R5 shares.
Prior to Dec. 11, 2006, Class I paid a transfer agency fee at an annual rate per
shareholder account of $1. Effective Dec. 11, 2006, this fee was eliminated.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 12 months from the date the account becomes inactive. These
fees are included in the transfer agency fees on the statement of operations.
The Fund has agreements with Ameriprise Financial Services, Inc. and RiverSource
Distributor, Inc. (collectively, the Distributor) for distribution and
shareholder services. Under a Plan and Agreement of Distribution pursuant to
Rule 12b-1, the Fund pays a fee at an annual rate of up to 0.25% of the Fund's
average daily net assets attributable to Class A and Class R3 shares, a fee at
an annual rate of up to 0.50% of the Fund's average daily net assets
attributable to Class R2 shares and a fee at an annual rate of up to 1.00% of
the Fund's average daily net assets attributable to Class B and Class C shares.
Effective Dec. 11, 2006, a Plan Administration Services Agreement was adopted
for the restructured Class R4 and the introduction of Class R2 and Class R3. The
fee is calculated at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares.
Prior to Dec. 11, 2006, under a Shareholder Service Agreement, the Fund paid the
Distributor a fee for service provided to shareholders by the Distributor and
other servicing agents with respect to Class Y shares. The fee was calculated at
a rate of 0.10% of the Fund's average daily net assets attributable to Class Y
shares. Effective Dec. 11, 2006, this agreement was terminated.
Sales charges received by the Distributor for distributing Fund shares were
$82,042 for Class A, $20,398 for Class B and $32 for Class C for the year ended
July 31, 2007.
In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in which
it invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). Because the acquired funds have varied expense and fee levels and
the Fund may own different proportions of acquired funds at different times, the
amount of fees and expenses incurred indirectly by the Fund will vary.
- --------------------------------------------------------------------------------
34 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
For the year ended July 31, 2007, the Investment Manager and its affiliates
waived certain fees and expenses such that net expenses (excluding fees and
expenses of acquired funds), before giving effect to any performance incentive
adjustment, were 1.12% for Class R4. Of these waived fees and expenses, the
transfer agency fees waived for Class R4 were $5. Under an agreement, which was
effective until July 31, 2007, the Investment Manager and its affiliates
contractually agreed to waive certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds), before giving effect to any
performance incentive adjustment, would not exceed 1.29% for Class A, 2.05% for
Class B, 2.06% for Class C, 0.94% for Class I, 1.69% for Class R2, 1.44% for
Class R3, 1.12% for Class R4 and 0.94% for Class R5 of the Fund's average daily
net assets. Effective Aug. 1, 2007, the Investment Manager and its affiliates
have contractually agreed to waive certain fees and expenses such that net
expenses (excluding fees and expenses of acquired funds), before giving effect
to any performance incentive adjustment, will not exceed 1.13% for Class R4 of
the Fund's average daily net assets, until July 31, 2008, unless sooner
terminated at the discretion of the Board.
During the year ended July 31, 2007, the Fund's custodian and transfer agency
fees were reduced by $8,325 as a result of earnings and bank fee credits from
overnight cash balances. The Fund also pays custodian fees to Ameriprise Trust
Company, an affiliate of Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $33,960,989 and $50,345,720, respectively, for the year
ended July 31, 2007. Realized gains and losses are determined on an identified
cost basis.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 35
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the years indicated are as follows:
<Table>
<Caption>
YEAR ENDED JULY 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 1,700,418 1,738,926 (3,203,244) 236,100
Class B 290,285 506,620 (1,386,106) (589,201)
Class C 36,321 29,213 (71,502) (5,968)
Class I 440,786 443,784 (184,695) 699,875
Class R2* 763 -- -- 763
Class R3* 763 -- -- 763
Class R4** 165 671 -- 836
Class R5* 439,307 -- (438,544) 763
- ----------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED JULY 31, 2006
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 1,942,339 743,124 (4,706,798) (2,021,335)
Class B 336,668 233,606 (2,243,828) (1,673,554)
Class C 30,218 12,166 (93,245) (50,861)
Class I 2,383,522 552,149 (7,154,110) (4,218,439)
Class R4** 175 1,204 (19,573) (18,194)
- ----------------------------------------------------------------------------------------------
</Table>
* For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
** Effective Dec. 11, 2006, Class Y was renamed Class R4.
5. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of RiverSource Investments. Cost of purchases
and proceeds from sales aggregated $40,454,168 and $37,136,871, respectively,
for the year ended July 31, 2007.
6. BANK BORROWINGS
The Fund has a revolving credit agreement with a syndicate of banks headed by
JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund may borrow for the temporary
funding of shareholder redemptions or for other temporary or emergency purposes.
The agreement went into effect Sept. 19, 2006. The Fund must maintain asset
coverage for borrowings of at least 300%. The agreement, which enables the Fund
to participate with other RiverSource funds, permits borrowings up to $500
million, collectively. Interest is charged to each Fund based on its borrowings
at a rate equal to either the higher of the Federal Funds Effective
- --------------------------------------------------------------------------------
36 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
Rate plus 0.40% or the JPMCB Prime Commercial Lending Rate. Borrowings are
payable within 60 days after such loan is executed. The Fund also pays a
commitment fee equal to its pro rata share of the amount of the credit facility
at a rate of 0.06% per annum. Prior to this agreement, the Fund paid a
commitment fee equal to its pro rata share of the amount of the credit facility
at a rate of 0.07% per annum. The Fund had no borrowings under the facility
outstanding during the year ended July 31, 2007.
7. 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 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. In response to defendants' motion to dismiss the
complaint, the 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 may file a notice of appeal with the Eighth Circuit Court of Appeals
within 30 days from the date of judgment.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), the parent company of RiverSource Investments, LLC
(RiverSource Investments), entered into settlement agreements with the
Securities and Exchange Commission (SEC) and Minnesota Department of Commerce
(MDOC) related to market timing activities. In connection with these matters,
the SEC and MDOC issued orders (the Orders) alleging that AEFC violated certain
provisions of the federal and Minnesota securities laws by failing to adequately
disclose market timing activities by allowing certain identified market timers
to continue to market time contrary to disclosures in mutual fund and variable
annuity product prospectuses. The Orders also alleged that AEFC failed to
implement procedures to detect and prevent market timing in 401(k) plans for
employees of AEFC and related companies and failed to adequately disclose that
there were no such procedures. Pursuant to the MDOC Order, the MDOC also alleged
that AEFC allowed inappropriate market timing to occur by failing to have
written policies and procedures and failing to properly supervise its employees.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 37
As a result of the Orders, 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. Pursuant to the terms of the Orders, AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to make presentations at least annually to its board of directors and the
relevant mutual funds' board that include an overview of policies and procedures
to prevent market timing, material changes to these policies and procedures and
whether disclosures related to market timing are consistent with the SEC order
and federal securities laws. AEFC also agreed to retain an independent
distribution consultant to assist in developing a plan for distribution of all
disgorgement and civil penalties ordered by the SEC in accordance with various
undertakings detailed at http://www.sec.gov/litigation/admin/ia-2451.pdf. In
addition, AEFC agreed to complete and submit to the MDOC a compliance review of
its procedures regarding market timing within one year of the MDOC Order,
including a summary of actions taken to ensure compliance with applicable laws
and regulations and certification by a senior officer regarding compliance and
supervisory procedures.
Ameriprise Financial and its affiliates have cooperated with the SEC and the
MDOC in these legal proceedings, and have made regular reports to the
RiverSource 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
- --------------------------------------------------------------------------------
38 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
on the consolidated financial condition or results of operations of Ameriprise
Financial.
8. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $5.88 $5.83 $5.34 $4.98 $4.52
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .06(b) .09 .06 .04 .03
Net gains (losses) (both realized and
unrealized) .77 .32 .70 .59 .44
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .83 .41 .76 .63 .47
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.07) (.07) (.04) (.03) (.01)
Distributions from realized gains (.93) (.29) (.23) (.24) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (1.00) (.36) (.27) (.27) (.01)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.71 $5.88 $5.83 $5.34 $4.98
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $62 $63 $74 $67 $31
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 1.28% 1.21% 1.29% 1.24%(e) 1.25%(e)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .99% 1.35% 1.07% .95% 1.01%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 35% 46% 57% 59% 77%
- -----------------------------------------------------------------------------------------------------------
Total return(f) 14.47% 7.39% 14.52% 12.85% 10.52%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses for
Class A would have been 1.54% and 2.64% for the years ended July 31, 2004
and 2003, respectively.
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 39
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $5.82 $5.77 $5.29 $4.95 $4.52
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(b) .04 .01 -- .01
Net gains (losses) (both realized and
unrealized) .78 .32 .70 .59 .43
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .79 .36 .71 .59 .44
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.02) (.02) -- (.01) (.01)
Distributions from realized gains (.93) (.29) (.23) (.24) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.95) (.31) (.23) (.25) (.01)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.66 $5.82 $5.77 $5.29 $4.95
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $15 $19 $28 $25 $13
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 2.05% 1.97% 2.05% 2.00%(e) 2.00%(e)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .23% .59% .30% .16% .25%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 35% 46% 57% 59% 77%
- -----------------------------------------------------------------------------------------------------------
Total return(f) 13.75% 6.51% 13.66% 12.00% 9.66%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses for
Class B would have been 2.30% and 3.40% for the years ended July 31, 2004
and 2003, respectively.
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
40 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $5.82 $5.77 $5.29 $4.94 $4.52
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(b) .04 .01 -- .01
Net gains (losses) (both realized and
unrealized) .76 .32 .70 .60 .42
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .77 .36 .71 .60 .43
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.02) (.02) -- (.01) (.01)
Distributions from realized gains (.93) (.29) (.23) (.24) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.95) (.31) (.23) (.25) (.01)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.64 $5.82 $5.77 $5.29 $4.94
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $1 $1 $1 $1 $1
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 2.04% 1.98% 2.06% 2.00%(e) 2.00%(e)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .23% .58% .30% .19% .26%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 35% 46% 57% 59% 77%
- -----------------------------------------------------------------------------------------------------------
Total return(f) 13.50% 6.56% 13.62% 12.19% 9.50%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses for
Class C would have been 2.30% and 3.40% for the years ended July 31, 2004
and 2003, respectively.
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 41
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004(B)
Net asset value, beginning of
period $5.91 $5.86 $5.36 $5.57
- -------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) .08(c) .12 .07 .03
Net gains (losses) (both
realized and unrealized) .79 .32 .72 (.24)
- -------------------------------------------------------------------------------------------------------------------
Total from investment
operations .87 .44 .79 (.21)
- -------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.10) (.10) (.06) --
Distributions from realized
gains (.93) (.29) (.23) --
- -------------------------------------------------------------------------------------------------------------------
Total distributions (1.03) (.39) (.29) --
- -------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.75 $5.91 $5.86 $5.36
- -------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $17 $13 $38 $16
- -------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
daily net assets(d),(e) .85% .75% .86% .93%(f),(g)
- -------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average daily net
assets 1.41% 1.85% 1.50% 1.33%(f)
- -------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term
securities) 35% 46% 57% 59%
- -------------------------------------------------------------------------------------------------------------------
Total return(h) 15.10% 7.86% 14.97% (3.77%)(i)
- -------------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from March 4, 2004 (inception date) to July 31, 2004.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratio of expenses for
Class I would have been 1.02% for the period ended July 31, 2004.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
42 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $6.55
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .02(c)
Net gains (losses) (both realized and
unrealized) .15
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .17
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.10)
Distributions from realized gains (.93)
- -----------------------------------------------------------------------------------------------------------
Total distributions (1.03)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.69
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) 1.63%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .55%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 35%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 2.84%(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratio.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 43
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $6.55
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03(c)
Net gains (losses) (both realized and
unrealized) .15
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .18
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.10)
Distributions from realized gains (.93)
- -----------------------------------------------------------------------------------------------------------
Total distributions (1.03)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.70
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) 1.38%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .80%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 35%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 3.03%(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratio.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
44 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
CLASS R4*
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $5.90 $5.85 $5.36 $4.99 $4.52
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .07(b) .10 .07 .04 .03
Net gains (losses) (both realized and
unrealized) .78 .32 .70 .61 .45
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .85 .42 .77 .65 .48
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08) (.08) (.05) (.04) (.01)
Distributions from realized gains (.93) (.29) (.23) (.24) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (1.01) (.37) (.28) (.28) (.01)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.74 $5.90 $5.85 $5.36 $4.99
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $-- $-- $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 1.12%(e) 1.00% 1.11% 1.06%(e) .95%(e)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 1.14% 1.69% 1.25% 1.12% 1.30%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 35% 46% 57% 59% 77%
- -----------------------------------------------------------------------------------------------------------
Total return(f) 14.67% 7.55% 14.67% 13.14% 10.76%
- -----------------------------------------------------------------------------------------------------------
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) The Investment Manager and its affiliates waived/reimbursed the Fund for
certain expenses. Had they not done so, the annual ratios of expenses for
Class R4 would have been 1.13%, 1.36%, and 2.46% for the years ended July
31, 2007, 2004 and 2003, respectively.
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 45
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $6.55
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .05(c)
Net gains (losses) (both realized and
unrealized) .15
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .20
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.10)
Distributions from realized gains (.93)
- -----------------------------------------------------------------------------------------------------------
Total distributions (1.03)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.72
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) .83%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 1.45%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 35%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 3.40%(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratio.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
46 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
OF THE RIVERSOURCE LARGE CAP VALUE FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of RiverSource Large Cap Value Fund
(the Fund), one of the portfolios constituting the RiverSource Large Cap Series,
Inc., as of July 31, 2007, and the related statements of operations, changes in
net assets, and financial highlights for the year then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit. The financial statements
and financial highlights of the Fund for the periods presented through July 31,
2006, were audited by other auditors whose report dated September 20, 2006,
expressed an unqualified opinion on those financial statements and financial
highlights.
We conducted our audit 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 audit 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, 2007, by correspondence with the custodian and
brokers, or by other appropriate auditing procedures where replies from brokers
were not received. We believe that our audit provides a reasonable basis for our
opinion.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 47
In our opinion, the 2007 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
RiverSource Large Cap Value Fund of the RiverSource Large Cap Series, Inc. at
July 31, 2007, the results of its operations, changes in its net assets, and the
financial highlights for the year then ended, in conformity with U.S. generally
accepted accounting principles.
Ernst & Young LLP
Minneapolis, Minnesota
September 20, 2007
- --------------------------------------------------------------------------------
48 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 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, 2007
CLASS A
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 85.37%
Dividends Received Deduction for corporations......... 79.11%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.24819
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.75487
Total distributions......................................... $1.00306
</Table>
CLASS B
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 85.37%
Dividends Received Deduction for corporations......... 79.11%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.19176
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.75487
Total distributions......................................... $0.94663
</Table>
CLASS C
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 85.37%
Dividends Received Deduction for corporations......... 79.11%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.19910
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.75487
Total distributions......................................... $0.95397
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 49
CLASS I
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 85.37%
Dividends Received Deduction for corporations......... 79.11%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.27577
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.75487
Total distributions......................................... $1.03064
</Table>
CLASS R2
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 85.37%
Dividends Received Deduction for corporations......... 79.11%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.27462
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.75487
Total distributions......................................... $1.02949
</Table>
CLASS R3
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 85.37%
Dividends Received Deduction for corporations......... 79.11%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.27505
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.75487
Total distributions......................................... $1.02992
</Table>
CLASS R4*
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 85.37%
Dividends Received Deduction for corporations......... 79.11%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.25120
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.75487
Total distributions......................................... $1.00607
</Table>
- --------------------------------------------------------------------------------
50 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
CLASS R5
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 85.37%
Dividends Received Deduction for corporations......... 79.11%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.27570
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.75487
Total distributions......................................... $1.03057
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 51
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 member oversees 102
RiverSource funds. Board members serve until the next regular shareholders'
meeting or until he or she reaches the mandatory retirement age established by
the Board. Under the current Board policy, members may serve until the end of
the meeting following their 75th birthday, or the fifteenth anniversary of the
first Board meeting they attended as members of the Board, whichever occurs
first. This policy does not apply to Ms. Jones who may retire after her 75th
birthday.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Kathleen Blatz Board member Chief Justice, Minnesota Supreme
901 S. Marquette Ave. since 2006 Court, 1998-2005
Minneapolis, MN 55402
Age 53
- -----------------------------------------------------------------------------------------------------
Arne H. Carlson Board member Chair, RiverSource Funds,
901 S. Marquette Ave. since 1999 1999-2006; former Governor of
Minneapolis, MN 55402 Minnesota
Age 73
- -----------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member President, Springboard -- Partners
901 S. Marquette Ave. since 2007 in Cross Cultural Leadership
Minneapolis, MN 55402 (consulting company)
Age 52
- -----------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member Trustee Professor of Economics and
901 S. Marquette Ave. since 2004 Management, Bentley College; former
Minneapolis, MN 55402 Dean, McCallum Graduate School of
Age 56 Business, Bentley College
- -----------------------------------------------------------------------------------------------------
Anne P. Jones Board member Attorney and Consultant
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member Former Managing Director, Shikiar American Progressive
901 S. Marquette Ave. since 2005 Asset Management Insurance
Minneapolis, MN 55402
Age 71
- -----------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Board member President Emeritus and Professor of Valmont Industries,
901 S. Marquette Ave. since 2002 and Economics, Carleton College Inc. (manufactures
Minneapolis, MN 55402 Chair of the irrigation systems)
Age 68 Board since 2007
- -----------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
52 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Catherine James Paglia Board member Director, Enterprise Asset Strategic
901 S. Marquette Ave. since 2004 Management, Inc. (private real Distribution, Inc.
Minneapolis, MN 55402 estate and asset management (transportation,
Age 55 company) distribution and
logistics
consultants)
- -----------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member Chief Executive Officer, RiboNovix, Hybridon, Inc.
901 S. Marquette Ave. since 2002 Inc. since 2003 (biotechnology); (biotechnology);
Minneapolis, MN 55402 former President, Forester Biotech American Healthways,
Age 63 Inc. (health
management programs)
- -----------------------------------------------------------------------------------------------------
</Table>
BOARD MEMBER AFFILIATED WITH RIVERSOURCE INVESTMENTS*
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
William F. Truscott Board member President -- U.S. Asset Management
53600 Ameriprise since 2001, and Chief Investment Officer,
Financial Center Vice President Ameriprise Financial, Inc. and
Minneapolis, MN 55474 since 2002 President, Chairman of the Board
Age 47 and Chief Investment Officer,
RiverSource Investments, LLC since
2005; President, Ameriprise
Certificate Company since 2006;
Senior Vice President -- Chief
Investment Officer, Ameriprise
Financial, Inc. and Chairman of the
Board and Chief Investment Officer,
RiverSource Investments, LLC,
2001-2005
- -----------------------------------------------------------------------------------------------------
</Table>
* Interested person by reason of being an officer, director, security holder
and/or employee of RiverSource Investments.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling RiverSource Funds at (888)
791-3380; contacting your financial institution; or visiting
riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 53
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 FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Patrick T. Bannigan President since Senior Vice President -- Asset Management,
172 Ameriprise 2006 RiverSource Investments, LLC since 2006;
Financial Center Managing Director and Global Head of Product,
Minneapolis, MN 55474 Morgan Stanley Investment Management,
Age 41 2004-2006; President, Touchstone Investments,
2002-2004; Director of Strategic Planning,
Evergreen Investments, 1995-2002
- ------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President Executive Vice President -- Equity and Fixed
172 Ameriprise since 2004 Income, Ameriprise Financial, Inc. and
Financial Center RiverSource Investments, LLC since 2006; Vice
Minneapolis, MN 55474 President -- Investments, Ameriprise
Age 43 Certificate Company since 2003; Senior Vice
President -- Fixed Income, Ameriprise
Financial, Inc., 2002-2006 and RiverSource
Investments, LLC, 2004-2006; Managing
Director, Zurich Global Assets, 2001-2002
- ------------------------------------------------------------------------------------------
Amy K. Johnson Vice President Vice President -- Asset Management and Trust
5228 Ameriprise since 2006 Company Services, RiverSource Investments, LLC
Financial Center since 2006; Vice President -- Operations and
Minneapolis, MN 55474 Compliance, RiverSource Investments, LLC,
Age 41 2004-2006; Director of Product
Development -- Mutual Funds, Ameriprise
Financial, Inc., 2001-2004
- ------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Vice President -- Investment Accounting,
105 Ameriprise 2002 Ameriprise Financial, Inc. since 2002; Vice
Financial Center President -- Finance, American Express
Minneapolis, MN 55474 Company, 2000-2002
Age 52
- ------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Vice President and Chief Counsel -- Asset
5228 Ameriprise General Counsel Management, Ameriprise Financial, Inc. since
Financial Center and Secretary 2005; Vice President, General Counsel and
Minneapolis, MN 55474 since 2006 Secretary, Ameriprise Certificate Company
Age 47 since 2005; Vice President -- Asset Management
Compliance, Ameriprise Financial, Inc.,
2004-2005; Senior Vice President and Chief
Compliance Officer, U.S. Bancorp Asset
Management, 2002-2004; Second Vice President
and Assistant General Counsel, Hartford Life,
2001-2002
- ------------------------------------------------------------------------------------------
Jennifer D. Lammers Chief Compliance U.S. Asset Management Chief Compliance
172 Ameriprise Officer since Officer, RiverSource Investments, LLC since
Financial Center 2006 2006; Director -- Mutual Funds, Voyageur Asset
Minneapolis, MN 55474 Management, 2003-2006; Director of Finance,
Age 46 Voyageur Asset Management, 2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
54 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Compliance Director and Anti-Money Laundering
2934 Ameriprise Prevention Officer, Ameriprise Financial, Inc. since
Financial Center Officer since 2004; Manager Anti-Money Laundering,
Minneapolis, MN 55474 2004 Ameriprise Financial, Inc., 2003-2004;
Age 43 Compliance Director and Bank Secrecy Act
Officer, American Express Centurion Bank,
2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 55
APPROVAL OF INVESTMENT MANAGEMENT SERVICES AGREEMENT
RiverSource Investments, LLC ("RiverSource"), 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") RiverSource provides investment advice and other services to the
Fund and all RiverSource funds (collectively, the "Funds"). The Fund's Board of
Directors (the "Board") and the Board's Investment Review and Contracts
Committees monitor these services throughout the year.
On an annual basis, the Board, including the independent Board members (the
"Independent Directors"), considers renewal of the IMS Agreement. RiverSource
prepares detailed reports for the Board and its Contracts Committee in March and
April, including reports based on data provided by independent organizations to
assist the Board in making this determination. In addition, throughout the year,
the Board (or its committees) reviews information prepared by RiverSource
addressing the services RiverSource provides and Fund performance. The Board
accords particular weight to the work, deliberations and conclusions of the
Contracts and Investment Review Committees in determining whether to continue
the IMS Agreement. At the April 11-12, 2007 in-person Board meeting, independent
legal counsel to the Independent Directors reviewed with the Independent
Directors 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 RiverSource: The Board
analyzed various reports and presentations it had received detailing the
services performed by RiverSource, as well as its expertise, resources and
capabilities. The Board specifically considered many developments during the
past year concerning the services provided by RiverSource, including, in
particular, the growing strength and capabilities of many RiverSource offices
and the increased investment and resources dedicated to the Fund's operations,
particularly in the areas of trading systems, legal and compliance. Further, in
connection with the Board's evaluation of the overall package of services
provided by RiverSource, the Board considered the quality of the administrative,
custody and transfer agency services provided by RiverSource affiliates to the
Fund. The Board also reviewed the financial condition of RiverSource and the
entity's ability to carry out its responsibilities under the IMS Agreement. 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
RiverSource). The Board concluded
- --------------------------------------------------------------------------------
56 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
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 determined that RiverSource was 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: (i) detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of the Fund, the
performance of a benchmark index, the percentage ranking of the Fund among its
comparison group and the net assets of the Fund; and (ii) a report detailing the
Fund's performance over various periods (including since inception), recent Fund
inflows (and outflows) and a comparison of the Fund's net assets from December
2006 to December 2005. The Board observed that the Fund's investment performance
met expectations.
Comparative Fees, Costs of Services Provided and the Profits Realized By
RiverSource and its Affiliates from their Relationships with the Fund: The
Board reviewed comparative fees and the costs of services to be provided under
the IMS Agreement. The Board members considered detailed comparative information
set forth in an annual report on fees and expenses, including, among other
things, data (prepared by an independent organization) showing a comparison of
the Fund's expenses with median expenses paid by funds in its peer group, as
well as data showing the Fund's contribution to RiverSource's profitability. 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 Funds' family, while assuring that the overall fees for each fund
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 took into
account that the Fund's total expense ratio (after considering proposed expense
caps/waivers) was below the peer group's median expense ratio shown in the
reports. Based on its review, the Board concluded that the Fund's management fee
was fair and reasonable in light of the extent and quality of services that the
Fund receives.
The Board also considered the expected profitability of RiverSource and its
affiliates in connection with RiverSource providing investment management
services to the Fund. In this regard, the Board referred to a detailed
profitability report, discussing the profitability to RiverSource and Ameriprise
Financial from managing and operating the Fund, including data showing
comparative
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 57
profitability. The Board also considered the services acquired by the investment
manager through the use of commission dollars paid by the Funds on portfolio
transactions. The Board noted that the fees paid by the Fund should permit the
investment manager to offer competitive compensation to its personnel, make
necessary investments in its business and earn an appropriate profit. The Board
concluded that profitability levels were reasonable.
Economies of Scale to be Realized: The Board also considered the economies of
scale that might be realized by RiverSource as the Fund grows and took note of
the extent to which Fund shareholders might also benefit from such growth. The
Board considered that the IMS Agreement provides for lower fees as assets
increase at pre-established breakpoints and concluded that the IMS Agreement
satisfactorily provided for sharing these economies of scale.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the investment management service fees were fair and reasonable
in light of the extent and quality of services provided. In reaching this
conclusion, no single factor was determinative. On April 12, 2007, the Board,
including all of the Independent Directors, approved the renewal of the IMS
Agreement.
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 RiverSource Funds at (888) 791-3380; contacting your financial
institution; visiting riversource.com/funds; 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 riversource.com/funds; or
searching the website of the SEC at www.sec.gov.
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On April 12, 2007, Ernst & Young LLP was selected as the Fund's independent
registered public accounting firm for the 2007 fiscal year. A majority of the
Fund's Board of Directors, including a majority of the Independent Directors,
approved the appointment of Ernst & Young LLP. The predecessor independent
registered public accounting firm's reports on the Fund's financial statements
for the year ended July 31, 2006 and the year ended July 31, 2005 contained no
- --------------------------------------------------------------------------------
58 RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles. During such fiscal periods
and through April 12, 2007 there were no disagreements between the Fund and the
predecessor independent registered public accounting firm on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which such disagreements, if not resolved to the
satisfaction of the predecessor independent registered public accounting firm,
would have caused them to make reference to the subject matter of the
disagreement in connection with their reports on the financial statements for
such fiscal periods.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2007 ANNUAL REPORT 59
RIVERSOURCE(R) LARGE CAP VALUE FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by the
Fund's current prospectus. RiverSource(R) mutual funds
are distributed by RiverSource Distributors, Inc. and
Ameriprise Financial Services, Inc., Members FINRA, and
managed by RiverSource Investments, LLC. These
(RIVERSOURCE INVESTMENTS LOGO) companies are part of Ameriprise Financial, Inc. S-6246 H (9/07)
</Table>
Item 2. (a) The Registrant has adopted a code of ethics that applies to the
Registrant's principal executive officer and principal financial
officer. A copy of the code of ethics is filed as an exhibit to this
form N-CSR.
(b) During the period covered by this report, there were not any
amendments to the provisions of the code of ethics adopted in 2(a)
above.
(c) During the period covered by this report, there were not any
implicit or explicit waivers to the provisions of the code of ethics
adopted in 2(a).
Item 3. The Registrant's board of directors has determined that independent
directors Jeffrey Laikind and Anne P. Jones, each qualify as audit
committee financial experts.
Item 4. Principal Accountant Fees and Services
Fund - Related Fees
(a) Audit Fees. The fees for the year ended July 31, to Ernst & Young LLP for
professional services rendered for the audits of the annual financial
statements for RiverSource Large Cap Series, Inc. were as follows:
2007 - $74,600
(b) Audit - Related Fees. The fees for the year ended July 31, to Ernst & Young
LLP for additional professional services rendered in connection with the
registrant's security count pursuant to Rule 17f-2 and the semiannual
financial statement reviews for RiverSource Large Cap Series, Inc. were as
follows:
2007 - $3,180
(c) Tax Fees. The fees for the year ended July 31, to Ernst & Young LLP for tax
compliance related services for RiverSource Large Cap Series, Inc. were as
follows:
2007 - $11,400
(d) All Other Fees. The fees for the year ended July 31, to Ernst & Young LLP
for additional professional services rendered for RiverSource Large Cap
Series, Inc. were as follows:
2007 - $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
2007 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:
2007 - $246,660
(h) 100% of the services performed in item (g) above during 2007 were
pre-approved by the audit committee.
Item 5. Audit Committee of Listed Registrants. Not applicable.
Item 6. The complete schedule of investments is included in Item 1 of this
Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchase 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. Not applicable.
Item 11. Controls and Procedures.
(a) Based upon their evaluation of the registrant's disclosure controls
and procedures as conducted within 90 days of the filing date of this
Form N-CSR, the registrant's Principal Financial
Officer and Principal Executive Officer have concluded that those
disclosure controls and procedures provide reasonable assurance that
the material information required to be disclosed by the registrant on
this report is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission's
rules and forms.
(b) There were no changes in the registrant's internal controls over
financial reporting that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-year in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
Item 12. Exhibits.
(a)(1) Code of ethics as applies to the Registrant's principal
executive officer and principal financial officer, as required to be
disclosed under Item 2 of Form N-CSR, is attached as Ex. 99.CODE ETH.
(a)(2) Separate certification for the Registrant's principal executive
officer and principal financial officer, as required by Section 302 of
the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment
Company Act of 1940, are attached as EX.99.CERT.
(a)(3) Not applicable.
(b) A certification by the Registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and Rule 30a-2(b) under the Investment
Company Act of 1940, is attached as EX.99.906 CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant)
RiverSource Large Cap Series, Inc.
By /s/ Patrick T. Bannigan
-----------------------------------------
Patrick T. Bannigan
President and Principal Executive Officer
Date October 3, 2007
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/ Patrick T. Bannigan
-----------------------------------------
Patrick T. Bannigan
President and Principal Executive Officer
Date October 3, 2007
By /s/ Jeffrey P. Fox
-----------------------------------------
Jeffrey P. Fox
Treasurer and Principal Financial Officer
Date October 3, 2007