<Page>
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 811-08955
---------------------------------------------
Columbia Institutional Floating
Rate Income Fund
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Vincent Pietropaolo, Esq.
Columbia Management Group, Inc.
One Financial Center
Boston, MA 02111
- -------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-617-772-3698
----------------------------
Date of fiscal year end: August 31, 2004
--------------------------
Date of reporting period: February 29, 2004
-------------------------
Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its
regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street,
NW, Washington, DC 20549-0609. The OMB has reviewed this collection of
information under the clearance requirements of 44 U.S.C. Section 3507.
<Page>
ITEM 1. REPORTS TO STOCKHOLDERS.
<Page>
[GRAPHIC]
COLUMBIA INSTITUTIONAL
FLOATING RATE INCOME FUND
SEMIANNUAL REPORT
FEBRUARY 29, 2004
[COLUMBIAFUNDS(R) LOGO]
A MEMBER OF COLUMBIA MANAGEMENT GROUP
<Page>
TABLE OF CONTENTS
<Table>
FUND PROFILE 1
PERFORMANCE INFORMATION 2
ECONOMIC UPDATE 3
PORTFOLIO MANAGERS' REPORT 4
FINANCIAL STATEMENTS 6
INVESTMENT PORTFOLIO 7
STATEMENT OF ASSETS AND LIABILITIES 20
STATEMENT OF OPERATIONS 21
STATEMENT OF CHANGES IN NET ASSETS 22
STATEMENT OF CASH FLOWS 23
STATEMENT OF ASSETS AND LIABILITIES 24
STATEMENT OF OPERATIONS 25
STATEMENT OF CHANGES IN NET ASSETS 26
NOTES TO FINANCIAL STATEMENTS 27
FINANCIAL HIGHLIGHTS 32
IMPORTANT INFORMATION ABOUT THIS REPORT 34
COLUMBIA FUNDS 35
</Table>
Economic and market conditions change frequently. There is no assurance that the
trends described in this report will continue or commence.
NOT FDIC MAY LOSE VALUE
INSURED NO BANK GUARANTEE
TO OUR FELLOW SHAREHOLDERS
COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND
DEAR SHAREHOLDER:
We are pleased to let you know that FleetBoston Financial Corporation and Bank
of America Corporation have merged, effective April 1, 2004. As as a result of
the merger, Columbia Management Group became part of the Bank of America family
of companies. Looking ahead, we believe this merger will be a real benefit to
our shareholders. Preserving and leveraging our strengths, the combined
organization will deliver additional research, management, and product
capabilities to you.
We also want to take this opportunity to advise a change in your fund's
investment advisor. On April 15, Highland Capital Management, L.P. became the
investment advisor to Columbia Institutional Floating Rate Income Fund. Our
board transferred management of the fund to Highland because regulations
prohibited Columbia Management from purchasing bank loans underwritten by Bank
of America. The change of investment advisor will not impact the fund's
investment strategy and will give your fund access to the full bank loan
marketplace. For more information, please read the sidebar on page 5 of this
report. If you have additional questions about this transfer or about your
account, please contact Shareholder Services at 800-345-6611.
As you might know, on March 15, 2004, FleetBoston Financial announced an
agreement in principle with the staff of the Securities and Exchange Commission
("SEC") and the New York Attorney General to settle charges involving market
timing in Columbia Management mutual funds. (Bank of America came to a similar
settlement in principle at the same time.) The agreement will require the final
approval of the SEC. This action reflects our full cooperation with the
investigation and our strong wish to put this regrettable situation behind us.
Columbia Management has taken and will continue to take steps to strengthen
policies, procedures and oversight to curb frequent trading of Columbia fund
shares.
We also want you to know that your fund's Board of Trustees has been energetic
over the past year in strengthening its capacity to oversee the Columbia funds.
Recently, the Board of Trustees:
- ELECTED AN INDEPENDENT TRUSTEE TO CHAIR THE TWELVE-PERSON BOARD. IN
ADDITION, EACH COMMITTEE OF THE BOARD IS COMPRISED OF TRUSTEES WHO ARE
COMPLETELY INDEPENDENT OF THE ADVISOR AND ITS AFFILIATES.
- APPOINTED A CHIEF COMPLIANCE OFFICER OF THE COLUMBIA FUNDS, WHO REPORTS
DIRECTLY TO EACH FUND'S AUDIT COMMITTEE. TRUSTEES WERE ALSO ASSIGNED TO
FOUR SEPARATE INVESTMENT OVERSIGHT COMMITTEES, EACH BETTER ABLE TO
MONITOR PERFORMANCE OF INDIVIDUAL FUNDS.
- VOTED TO DOUBLE THE REQUIRED INVESTMENT BY EACH TRUSTEE IN THE COLUMBIA
FUNDS -- TO FURTHER ALIGN THE INTERESTS OF THE TRUSTEES WITH THOSE OF
OUR FUND SHAREHOLDERS. AT THE SAME TIME, NEW POLICIES WERE INSTITUTED
REQUIRING ALL INVESTMENT PERSONNEL AND TRUSTEES TO HOLD THEIR COLUMBIA
FUND SHARES FOR A MINIMUM OF ONE YEAR (UNLESS EXTRAORDINARY
CIRCUMSTANCES WARRANT AN EXCEPTION TO BE GRANTED BY A BOARD DESIGNATED
COMMITTEE).
Both your fund's trustees and Columbia Management are committed to serving the
interests of our shareholders, and we will continue to work hard to help you
achieve your financial goals.
In the pages that follow, you'll find valuable information about the economic
environment and the performance of your Columbia fund. The "Economic Update"
provides an overview of the investing environment during the past six months. In
the "Portfolio Managers' Report," your fund's management team discusses
investment performance and the impact of decisions made during the period. This
discussion is followed by financial statements for your fund. We hope that you
will take time to read this report and discuss it with your financial advisor if
you have any questions.
As always, thank you for choosing Columbia funds. It is a privilege to play a
role in your financial future.
Sincerely,
/s/ Thomas C. Theobald /s/ J. Kevin Connaughton
Thomas C. Theobald J. Kevin Connaughton
Chairman, Board of Trustees President, Columbia Funds
J. Kevin Connaughton was named president of Columbia Funds on February 27, 2004.
<Page>
FUND PROFILE
COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND
The information below gives you a snapshot of your fund at the end of the
reporting period. Your fund is actively managed and the composition of its
portfolio will change over time.
QUALITY BREAKDOWN AS OF 02/29/04 (%)
<Table>
Baa2 1.3
Baa3 0.4
Ba1 2.8
Ba2 8.2
Ba3 17.6
B1 18.3
B2 11.7
B3 7.5
Caa1 3.6
Caa2 2.5
Ca 2.2
NR 9.6
Other 14.3
Total 100%
</Table>
TOP 5 SECTORS AS OF 02/29/04 (%)
<Table>
Telecommunications - wireless 7.9
Cable 7.4
Food manufacturer 5.6
Electric utilities 4.8
Health care services 4.0
</Table>
TOP 10 ISSUERS AS OF 02/29/04 (%)
<Table>
Nextel Finance 2.3
Cricket Communications 2.2
Mission Energy Holdings 1.8
Century Cable Holdings 1.7
Charter Communications 1.6
UPC Financing Partnership 1.5
Huntsman 1.4
Albertson's 1.3
Ispat Inland 1.3
Washington Group International 1.3
</Table>
Quality is calculated as a percentage of total investments. Sectors and
issuers are calculated as a percentage of net assets.
(C)2004 Morningstar, Inc. All Rights Reserved. The information contained herein:
(1) is proprietary to Morningstar and/or its content providers; (2) may not
be copied or distributed; and (3) is not warranted to be accurate, complete
or timely. Neither Morningstar nor its content providers are responsible for
any damages or losses arising from any use of this information. Past
performance is no guarantee of future results.
The Morningstar Style Box(TM) reveals a fund's investment strategy. For
equity funds the vertical axis shows the market capitalization of the stocks
owned and the horizontal axis shows investment style (value, blend or
growth). For fixed-income funds the vertical axis shows the average credit
quality of the bonds owned, and the horizontal axis shows interest rate
sensitivity as measured by a bond's duration (short, intermediate or long).
All of these numbers are drawn from the data most recently provided by the
fund and entered into Morningstar's database as of month-end. Although the
data are gathered from reliable sources, Morningstar cannot guarantee
completeness and accuracy. As of 02/29/2004.
[SIDENOTE]
SUMMARY
- - FOR THE SIX-MONTH PERIOD THAT ENDED FEBRUARY 29, 2004, THE FUND RETURNED
7.92%.
- - THE FUND'S RETURN EXCEEDED THAT OF THE CSFB LEVERAGED LOAN PLUS INDEX AND
THE LIPPER LOAN PARTICIPATION FUNDS CATEGORY AVERAGE.
- - THE FUND'S EMPHASIS ON RECOVERING INDUSTRIES, SUCH AS WIRELESS AND CABLE
TELEVISION, AIDED ITS RETURN.
<Table>
<Caption>
COLUMBIA
INSTITUTIONAL CSFB
FLOATING RATE LEVERAGED
INCOME FUND LOAN PLUS INDEX
7.92% 4.68%
</Table>
OBJECTIVE
To provide a high level of current
income consistent with
preservation of capital
TOTAL NET ASSETS
$89.7 million
[CHART]
MORNINGSTAR STYLE BOX
1
<Page>
PERFORMANCE INFORMATION
COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND
[CHART]
VALUE OF A $10,000 INVESTMENT 12/17/98 - 02/29/04
<Table>
<Caption>
COLUMBIA INSTITUTIONAL FLOATING CSFB LEVERAGED
RATE INCOME FUND LOAN PLUS INDEX
$ 10,000 $ 10,000
12/17/1998 - 12/31/1998 $ 10,012 $ 10,099
01/01/1999 - 01/31/1999 $ 10,079 $ 10,125
02/01/1999 - 02/28/1999 $ 10,168 $ 10,082
03/01/1999 - 03/31/1999 $ 10,253 $ 10,143
04/01/1999 - 04/30/1999 $ 10,330 $ 10,217
05/01/1999 - 05/31/1999 $ 10,408 $ 10,348
06/01/1999 - 06/30/1999 $ 10,484 $ 10,441
07/01/1999 - 07/31/1999 $ 10,555 $ 10,510
08/01/1999 - 08/31/1999 $ 10,596 $ 10,472
09/01/1999 - 09/30/1999 $ 10,667 $ 10,447
10/01/1999 - 10/31/1999 $ 10,721 $ 10,432
11/01/1999 - 11/30/1999 $ 10,775 $ 10,500
12/01/1999 - 12/31/1999 $ 10,855 $ 10,572
01/01/2000 - 01/31/2000 $ 10,937 $ 10,674
02/01/2000 - 02/29/2000 $ 11,026 $ 10,709
03/01/2000 - 03/31/2000 $ 11,064 $ 10,625
04/01/2000 - 04/30/2000 $ 11,134 $ 10,663
05/01/2000 - 05/31/2000 $ 11,231 $ 10,753
06/01/2000 - 06/30/2000 $ 11,315 $ 10,818
07/01/2000 - 07/31/2000 $ 11,417 $ 10,896
08/01/2000 - 08/31/2000 $ 11,499 $ 10,952
09/01/2000 - 09/30/2000 $ 11,566 $ 10,987
10/01/2000 - 10/31/2000 $ 11,624 $ 10,992
11/01/2000 - 11/30/2000 $ 11,657 $ 11,016
12/01/2000 - 12/31/2000 $ 11,706 $ 11,094
01/01/2001 - 01/31/2001 $ 11,800 $ 11,160
02/01/2001 - 02/28/2001 $ 11,834 $ 11,256
03/01/2001 - 03/31/2001 $ 11,792 $ 11,270
04/01/2001 - 04/30/2001 $ 11,681 $ 11,222
05/01/2001 - 05/31/2001 $ 11,799 $ 11,356
06/01/2001 - 06/30/2001 $ 11,822 $ 11,369
07/01/2001 - 07/31/2001 $ 11,950 $ 11,398
08/01/2001 - 08/31/2001 $ 12,065 $ 11,489
09/01/2001 - 09/30/2001 $ 11,945 $ 11,270
10/01/2001 - 10/31/2001 $ 11,749 $ 11,094
11/01/2001 - 11/30/2001 $ 11,849 $ 11,268
12/01/2001 - 12/31/2001 $ 11,961 $ 11,385
01/01/2002 - 01/31/2002 $ 12,125 $ 11,448
02/01/2002 - 02/28/2002 $ 12,023 $ 11,404
03/01/2002 - 03/31/2002 $ 12,174 $ 11,537
04/01/2002 - 04/30/2002 $ 12,319 $ 11,660
05/01/2002 - 05/31/2002 $ 12,368 $ 11,652
06/01/2002 - 06/30/2002 $ 12,204 $ 11,476
07/01/2002 - 07/31/2002 $ 11,896 $ 11,301
08/01/2002 - 08/31/2002 $ 11,776 $ 11,269
09/01/2002 - 09/30/2002 $ 11,662 $ 11,294
10/01/2002 - 10/31/2002 $ 11,606 $ 11,142
11/01/2002 - 11/30/2002 $ 11,749 $ 11,334
12/01/2002 - 12/31/2002 $ 11,931 $ 11,512
01/01/2003 - 01/31/2003 $ 12,062 $ 11,667
02/01/2003 - 02/28/2003 $ 12,086 $ 11,728
03/01/2003 - 03/31/2003 $ 12,217 $ 11,767
04/01/2003 - 04/30/2003 $ 12,499 $ 11,932
05/01/2003 - 05/31/2003 $ 12,793 $ 12,092
06/01/2003 - 06/30/2003 $ 13,002 $ 12,263
07/01/2003 - 07/31/2003 $ 13,075 $ 12,346
08/01/2003 - 08/31/2003 $ 13,130 $ 12,373
09/01/2003 - 09/30/2003 $ 13,322 $ 12,497
10/01/2003 - 10/31/2003 $ 13,502 $ 12,610
11/01/2003 - 11/30/2003 $ 13,710 $ 12,702
12/01/2003 - 12/31/2003 $ 13,863 $ 12,780
01/01/2004 - 01/31/2004 $ 14,121 $ 12,913
02/01/2004 - 02/29/2004 $ 14,168 $ 12,826
</Table>
The graph and table do not reflect a deduction of the taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The CSFB
Leveraged Loan Plus Index is an unmanaged index that tracks the performance of
senior floating rate bank loans. Unlike the fund, indices are not investments,
do not incur fees or expenses, and are not professionally managed. It is not
possible to invest directly in an index. Securities in the fund may not match
those in an index. Index performance is from December 31, 1998.
AVERAGE ANNUAL TOTAL RETURN AS OF 02/29/04 (%)
<Table>
<Caption>
INCEPTION 12/17/98
- -------------------- --------
SALES CHARGE WITHOUT
- -------------------- --------
6-MONTH (CUMULATIVE) 7.92
1-YEAR 17.23
5-YEAR 6.86
LIFE 6.93
</Table>
AVERAGE ANNUAL TOTAL RETURN AS OF 12/31/03 (%)
<Table>
<Caption>
SALES CHARGE WITHOUT
- -------------------- -------
6-MONTH (CUMULATIVE) 6.62
1-YEAR 16.19
5-YEAR 6.72
LIFE 6.70
</Table>
All results shown assume reinvestment of distributions. Performance results
reflect any voluntary waivers or reimbursements of fund expenses by the advisor.
Absent these waivers and reimbursement arrangements, performance results would
have been lower. Life returns are calculated from December 17, 1998.
[SIDENOTE]
PERFORMANCE OF A $10,000 INVESTMENT 12/17/98 - 02/29/04
<Table>
The fund $ 14,168
</Table>
Performance data quoted represents past performance and current performance may
be lower or higher. Past performance is no guarantee of future results. The
investment return and principal value will fluctuate so that shares may be worth
more or less than the original cost. Please visit www.columbiafunds.com for
daily and most recent month-end performance updates.
2
<Page>
ECONOMIC UPDATE
COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND
The US economy moved strongly early in the six-month reporting period that began
September 1, 2003 and ended February 29, 2004. However, the pace of growth
slowed as the period wore on, and downbeat news from consumers and the jobs
front put a damper on expectations for 2004.
A combination of factors accounted for the economy's stronger growth in the
first half of this reporting period. A sizeable tax package, which was
implemented in 2003, gave disposable income a boost. Income taxes fell across
all tax brackets. And, many taxpayers received tax rebate checks late last
summer, which helped prop up consumer spending throughout this reporting period.
But early in 2004, consumer confidence slipped. Unemployment claims rose and the
number of new jobs added to the labor market was substantially lower than
economists had expected--given the overall growth of the economy. Even the
housing market, which has been hot for years, showed signs of weakness.
Home-buying activity slowed, and sales fell late in the period.
The business sector contributed to the economy's growth as industrial production
rose over the past six months. Business spending--especially on
technology-related items--showed strength as corporate profits rose sharply.
However, orders for durable goods declined in January, interrupting five
consecutive months of gains. Computer and electronic equipment orders rose, but
transportation equipment orders fell sharply.
BONDS DELIVER RESPECTABLE GAINS
A growing economy continued to boost investor enthusiasm for high-yield bonds,
which continued to lead the fixed-income markets. The Merrill Lynch US High
Yield, Cash Pay Index returned 10.32%. And as interest rates moved lower, other
segments of the bond market delivered respectable gains. The yield on the
benchmark 10-year US Treasury bond edged downward from 4.46% to 3.97% during the
period. The Lehman Brothers Aggregate Bond Index, a broad measure of
investment-grade bond performance, returned 4.92%. However, money market fund
yields remained below 1%, as the Fed kept short-term interest rates at their
historical lows.
US STOCKS HEADED HIGHER
The US stock market gained ground, but its rate of return slowed in the final
month of the period as disappointing economic data gave investors pause. The S&P
500 Index returned 14.59% for this six-month period as all sectors of the market
benefited from rising corporate profits. Defensive sectors, such as energy,
materials, industrials and consumer staples were the strongest performers, as
investors started to hedge their bets on the economy. Technology, which led the
stock market rally in its early stage last year, pulled back during the period.
INTERNATIONAL STOCK MARKETS REPORTED STRONG RETURNS
A rebound in economic growth and a declining dollar helped international stock
markets to returns that were generally stronger than in the United States. The
MSCI EAFE Index, a broad measure of performance of 21 developed equity markets
in Europe, Australasia (which includes Australia and New Zealand) and the Far
East, returned 25.22%. European stock markets responded to improving economic
data and relatively low interest rates. A strong euro gave returns to American
investors an additional boost. Japan's economy continued to report steady but
modest growth. Yet its stock market cooled after a run-up in the six months
prior to this reporting period. Many emerging stock markets did even better.
Although the Chinese economy cooled somewhat in 2003, its stock market soared.
The MSCI China Index returned 43.07%.
[SIDENOTE]
SUMMARY
FOR THE SIX-MONTH PERIOD ENDED
FEBRUARY 29, 2004
- - PERFORMANCE IN THE FIXED-INCOME UNIVERSE WAS LED BY HIGH-YIELD BONDS. AS
MEASURED BY THE MERRILL LYNCH US HIGH YIELD, CASH PAY INDEX, THIS SECTOR
POSTED A RETURN MORE THAN FIVE PERCENTAGE POINTS HIGHER THAN THE RETURN FOR
INVESTMENT-GRADE BONDS, AS MEASURED BY THE LEHMAN BROTHERS AGGREGATE BOND
INDEX.
<Table>
<Caption>
MERRILL LYNCH
INDEX LEHMAN INDEX
10.32% 4.92%
</Table>
- - THE US STOCK MARKET ROSE AS THE ECONOMY STRENGTHENED AND CORPORATE PROFITS
INCREASED. BOTH THE RUSSELL 3000 INDEX, WHICH TRACKS APPROXIMATELY 98% OF
THE US STOCK MARKET, AND THE S&P 500 INDEX POSTED DOUBLE-DIGIT RETURNS THIS
PERIOD.
<Table>
<Caption>
RUSSELL 3000 S&P 500
INDEX INDEX
15.06% 14.59%
</Table>
The Merrill Lynch US High Yield Cash Pay Index is an unmanaged index that tracks
the performance of non-investment-grade corporate bonds.
The Lehman Brothers Aggregate Bond Index is a market value-weighted index that
tracks fixed-rate, publicly placed, dollar-denominated, and non-convertible
investment grade debt issues.
The Russell 3000 Index is an unmanaged index that tracks the performance of the
3,000 largest US companies based on total market capitalizations.
The S&P 500 Index is an unmanaged index that tracks the performance of 500
widely held, large capitalization US stocks.
3
<Page>
PORTFOLIO MANAGERS' REPORT
COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND
For the six-month period ended February 29, 2004, Columbia Institutional
Floating Rate Income Fund returned 7.92%. It outperformed its benchmark, the
CSFB Leveraged Loan Plus Index, which returned 4.68%, and also its peer group,
the Lipper Loan Participation Funds Category average, which was up 6.18% for the
same period.(1) The fund's emphasis on recovering industries, such as wireless
and cable television, aided its strong return. A recovering economy and lower
default rates also played a role in the fund's strong showing for the period.
ECONOMIC RECOVERY HELPED BANK LOAN MARKET MOVE HIGHER
Although we did not witness tremendous movement in interest rates, a
strengthening economy and a rising stock market helped all credit sensitive debt
markets, including the bank loan market. Lower quality credits performed
especially well, continuing a trend that has been in place since late 2002.
In particular, the fund was aided by its overweight position in the wireless and
cable television industries, both of which outperformed the market. As new money
came into the fund, we added to our positions in Charter Communications, Century
Cable Holdings, and Nextel Finance. Our additions to Nextel made it the fund's
single largest holding. Other standout performers for the fund included Cricket
Communications, Mission Energy Holdings, and steel company Ispat Inland.
SIGNS OF A HEALTHY MARKETPLACE
The overall credit quality of the fund improved as several of the fund's
holdings were upgraded during the six-month period. In fact, the fund did not
experience any major defaults despite our focus on the riskiest sectors of the
markets. Many lower rated companies have improved their financial condition via
their newfound access to the high yield markets.
Floating-rate obligations also benefited from the technical dynamics of the bank
loan market. Even though the yield advantage of new issues (versus the London
Interbank Rate, or LIBOR) has come down dramatically, net new issuance has been
quite low. Meanwhile, the demand for bank loans from mutual funds and other
financial institutions has been extremely strong. Lower supply and higher demand
resulted in price appreciation for bank loans on the secondary market.
(1) Lipper, Inc., a widely respected data provider in the industry, calculates
an average total return for mutual funds with similar investment objectives
as the fund.
[SIDENOTE]
NET ASSET VALUE PER SHARE AS OF 02/29/04 ($)
<Table>
The fund 9.78
</Table>
DISTRIBUTIONS DECLARED PER SHARE 09/01/03-02/29/04 ($)
<Table>
The fund 0.22
</Table>
SEC YIELD AS OF 02/29/04 (%)
<Table>
The fund 4.37
</Table>
The 30-day SEC yield reflect the portfolio's earning power net of expenses,
expressed as an annualized percentage of the public offering price at the end of
the period. If the advisor or its affiliates had not waived certain fund
expenses, the SEC yields would have been lower.
HOLDINGS DISCUSSED IN THIS REPORT AS OF 02/29/04 (%)
<Table>
Charter Communications 1.6
Century Cable Holdings 1.7
Nextel Finance 2.3
Cricket Communications 2.2
Mission Energy Holdings 1.8
Ispat Inland 1.3
</Table>
Your fund is actively managed and the composition of its portfolio changes over
time. Information provided is calculated as a percentage of net assets.
4
<Page>
A STABLE RATE ENVIRONMENT
We anticipate that short-term interest rates will remain stable over the next
six months. Ordinarily, continued economic strength would translate into higher
short-term interest rates, precisely the scenario for which floating rate
securities provide protection. However, we do not expect the Federal Reserve to
raise short-term interest rates in the absence of strong employment creation.
Yet, we are optimistic that we have the potential to achieve competitive returns
even in a stable rate environment.
[PHOTO OF BRIAN GOOD]
Brian Good has co-managed Columbia Institutional Floating Rate Income Fund since
its inception in December 1998 and has been with the advisor and its
predecessors since April 1998.
/s/ Brian Good
[PHOTO OF JIM FELLOWS]
Jim Fellows has co-managed the fund since its inception in December 1998 and has
been with the advisor and its predecessors since April 1998.
/s/ Jim Fellows
Just like any other investment, floating rate loan investments present financial
risks. Defaults on the loans in the portfolio could reduce the fund's net asset
value and its distributions, as could non-payment of scheduled interest and
principal. Prepayment of principal by a borrower could mean that the fund
managers have to replace the loan with a lower-yielding security, which could
affect the valuation of the portfolio's holdings.
The fund is a continuously offered, closed-end management investment company and
provides limited liquidity through a quarterly tender offer for between 5% and
25% of outstanding shares. Each quarter, the fund's trustees must approve the
actual tender amount. Please read the prospectus carefully for more details.
The fund may invest a high percentage of assets in a limited number of loans, so
the default of any individual holding can have a greater impact on the fund's
NAV than could a default in a more diversified portfolio.
Unlike floating rate loans, some fixed-income investments may be covered by FDIC
insurance or other guarantees relating to timely payment of principal and
interest. Some may also provide tax benefits.
[SIDENOTE]
IMPORTANT INFORMATION
Effective 11:59 p.m. on April 15, 2004, Highland Capital Management, L.P.
("Highland") replaced Columbia Management Advisors, Inc. as investment advisor
to Columbia Institutional Floating Rate Income Fund. Highland did so pursuant to
an interim investment advisory agreement (the "Interim Agreement"), which has
been approved by the Board of Trustees of the fund, pending shareholder approval
of a longer-term agreement with Highland.
Also effective 11:59 p.m. on April 15, 2004, pursuant to the Interim Agreement,
Mark Okada and Joe Dougherty assumed primary responsibility for the day-to-day
management of Columbia Institutional Floating Rate Income Fund. Mr. Okada and
Mr. Dougherty are supported by a team of industry-focused investment
professionals in analyzing and executing investment ideas. Mr. Okada has been
affiliated with Highland since it was founded in 1993 and Mr. Dougherty has been
affiliated with Highland since 1998.
5
<Page>
FINANCIAL STATEMENTS
FEBRUARY 29, 2004 COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND
A GUIDE TO UNDERSTANDING YOUR FUND'S FINANCIAL STATEMENTS
INVESTMENT PORTFOLIO
The investment portfolio details all of the fund's holdings and their market
value as of the last day of the reporting period. Portfolio holdings are
organized by type of asset, industry, country or geographic region (if
applicable) to demonstrate areas of concentration and diversification.
STATEMENT OF ASSETS AND LIABILITIES
This statement details the fund's assets, liabilities, net assets and share
price for each share class. Net assets are calculated by subtracting all the
fund's liabilities (including any unpaid expenses) from the total of the fund's
investment and non-investment assets. The share price for each class is
calculated by dividing net assets for that class by the number of shares
outstanding in that class as of the last day of the reporting period.
STATEMENT OF OPERATIONS
This statement details income earned by the fund and the expenses charged to the
fund. The Statement of Operations also shows any net gain or loss the fund
realized on the sales of its holdings during the period, as well as any
unrealized gains or losses recognized over the period. The total of these
results represents the fund's net increase or decrease in net assets from
operations.
STATEMENT OF CHANGES IN NET ASSETS
This statement demonstrates how the fund's net assets were affected by its
operating results, distributions to shareholders and shareholder transactions
(e.g., subscriptions, redemptions and dividend reinvestments). The Statement of
Changes in Net Assets also reconciles changes in the number of shares
outstanding.
STATEMENT OF CASH FLOWS
The statement of cash flows reports net cash provided or used by operating,
investing and financing activities and the net effect of those flows on cash and
cash equivalents during the period.
FINANCIAL HIGHLIGHTS
The financial highlights demonstrate how the fund's net asset value per share
was affected by the fund's operating results. The financial highlights table
also discloses certain key fund ratios (e.g., fund expenses and net investment
income as a percentage of average net assets).
NOTES TO FINANCIAL STATEMENTS
These notes disclose the organizational background of the fund, its significant
accounting policies (including those surrounding security valuation, income
recognition and distributions to shareholders), federal tax information, fees
and compensation paid to affiliates and significant risks and contingencies.
6
<Page>
INVESTMENT PORTFOLIO
FEBRUARY 29, 2004 (UNAUDITED)
COLUMBIA FLOATING RATE LIMITED LIABILITY COMPANY
<Table>
<Caption>
PAR ($) VALUE ($)
- ----------------------------------------------------- --------------------------------------------------------------------------
VARIABLE RATE SENIOR LOAN INTERESTS (a) - 85.6%
AEROSPACE/DEFENSE - 1.6%
Communications & Power Industries Holding Corp. Term Loan 07/23/10 500,000 508,751
--------------------------------------------------------------------------
Decrane Aircraft Holdings, Inc. Floating Rate Loan 06/30/08 5,000,000 5,062,500
--------------------------------------------------------------------------
Titan Corp. Term Loan B 06/30/09 1,970,000 1,974,809
--------------------------------------------------------------------------
Vought Aircraft Industries, Inc. Term Loan B 06/30/07 1,290,459 1,294,707
Term Loan C 06/30/08 2,138,265 2,145,377
Term Loan X 12/31/06 847,637 855,048
--------------------------------------------------------------------------
AEROSPACE/DEFENSE TOTAL 11,841,192
AUTO PARTS - 3.0%
142466 Ontario Ltd. Term Loan B 08/10/07 6,755,477 6,810,535
--------------------------------------------------------------------------
Federal-Mogul Corp. Term Loan B 02/24/05 5,000,000 4,535,381
Term Loan C 02/06/05 485,000 488,028
--------------------------------------------------------------------------
Key Plastics LLC (b) Jr. Sec. Sub Notes 04/30/07 48,970 48,970
Sr. Sec. Sub Notes 04/30/07 101,433 101,433
--------------------------------------------------------------------------
Keystone Automotive Industries Co. Term Loan 10/30/09 1,000,000 1,015,001
--------------------------------------------------------------------------
Meridian Automotive Systems, Inc. Term Loan B 03/31/07 3,494,054 3,442,347
--------------------------------------------------------------------------
Shiloh Industries, Inc. Term Loan B 01/14/09 3,500,000 3,549,839
--------------------------------------------------------------------------
TRW Automotive Acquisitions Corp. Term Loan D1 02/28/11 2,504,348 2,551,249
--------------------------------------------------------------------------
AUTO PARTS TOTAL 22,542,783
BROADCASTING - 1.7%
Comcorp Broadcasting, Inc. Term Loan A2 03/31/04 930,188 925,537
--------------------------------------------------------------------------
Emmis Communications Corp. Term Loan A 02/28/09 1,968,439 1,977,270
--------------------------------------------------------------------------
Gray Television, Inc. Incremental Term Loan 12/31/10 2,085,000 2,108,764
--------------------------------------------------------------------------
PanAmSat Corp. Tranche B1 09/30/10 2,692,308 2,736,040
--------------------------------------------------------------------------
Spanish Broadcasting Systems, Inc. Term Loan 10/30/09 4,375,000 4,432,392
--------------------------------------------------------------------------
White Knight Broadcasting, Inc. Term Loan A2 03/31/04 1,026,745 1,021,612
--------------------------------------------------------------------------
BROADCASTING TOTAL 13,201,615
BUILDING PRODUCTS - 0.7%
Georgia-Pacific Corp. Term Loan 11/03/05 3,000,000 3,006,565
--------------------------------------------------------------------------
Tapco International Corp. Term Loan B 06/23/07 1,518,017 1,525,673
Term Loan C 06/23/08 1,041,999 1,047,255
--------------------------------------------------------------------------
BUILDING PRODUCTS TOTAL 5,579,493
</Table>
See notes to investment portfolio.
7
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- ----------------------------------------------------- --------------------------------------------------------------------------
(VARIABLE RATE SENIOR LOAN INTERESTS (a) - (CONTINUED)
BUSINESS SERVICES - 1.6%
NATG Holdings LLC (b) Credit Linked Certificate of Deposit 01/23/05 1,039,746 1,039,224
Term Loan A 01/23/09 1,011,450 809,235
Term Loan B1 01/23/10 684,740 547,843
Term Loan B2 01/23/10 175,360 175,373
--------------------------------------------------------------------------
Pacer International, Inc. Term Loan 06/10/10 827,451 836,554
--------------------------------------------------------------------------
Per-Se Technologies, Inc. Term Loan B 09/11/08 2,193,750 2,240,806
--------------------------------------------------------------------------
Relizon Co. Term Loan B 02/20/11 2,000,000 2,012,500
--------------------------------------------------------------------------
Spectraguard Acquisition LLC (c) Delayed Draw Term Loan 12/31/09 2,666,667 2,682,275
--------------------------------------------------------------------------
Transaction Network Services, Inc. Term Loan B 04/03/07 1,890,589 1,890,637
--------------------------------------------------------------------------
BUSINESS SERVICES TOTAL 12,234,447
CABLE - 7.4%
Century Cable Holdings LLC Discretionary Term 12/31/09 3,500,000 3,323,908
Term Loan 06/30/09 10,000,000 9,589,580
--------------------------------------------------------------------------
Charter Communications Operating LLC Incremental Term Loan 09/18/08 1,977,437 1,926,079
Term Loan A 09/18/07 8,916,667 8,637,470
Term Loan B 03/18/08 1,946,438 1,898,048
--------------------------------------------------------------------------
CSC Holdings, Inc. (c) Revolver 06/30/06 1,304,167 1,278,097
--------------------------------------------------------------------------
Insight Midwest Holdings, Inc. Term Loan 12/31/09 2,000,000 2,016,293
Term Loan A 06/30/09 2,000,000 1,991,414
Term Loan B 12/31/09 3,000,000 3,020,466
--------------------------------------------------------------------------
MCC Iowa LLC Term Loan A 03/31/10 4,000,000 3,978,803
--------------------------------------------------------------------------
Olympus Cable Holdings LLC Term Loan A 06/30/10 5,000,000 4,734,375
Term Loan B 09/30/10 2,500,000 2,382,033
--------------------------------------------------------------------------
UPC Financing Partnership Term Loan C2 03/31/09 11,500,000 11,460,857
--------------------------------------------------------------------------
CABLE TOTAL 56,237,423
CASINOS/GAMBLING - 2.7%
Aladdin Gaming LLC (d) Term Loan A 02/25/05 6,000,000 5,430,000
Term Loan B 08/26/06 1,250,000 1,131,250
--------------------------------------------------------------------------
Alliance Gaming Corp. Term Loan 09/04/09 4,980,000 5,037,671
--------------------------------------------------------------------------
Ameristar Casinos, Inc. Term Loan B 12/20/06 869,782 875,136
--------------------------------------------------------------------------
Green Valley Ranch Gaming LLC Term Loan B 12/22/10 4,000,000 4,060,156
--------------------------------------------------------------------------
Marina District Finance Co., Inc. Term Loan A 12/13/07 3,636,545 3,675,473
--------------------------------------------------------------------------
CASINOS/GAMBLING TOTAL 20,209,686
</Table>
See notes to investment portfolio.
8
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- ----------------------------------------------------- -------------------------------------------------------------------------
(VARIABLE RATE SENIOR LOAN INTERESTS (a) - (CONTINUED)
CHEMICALS - 3.2%
Huntsman Co. LLC Term Loan A 03/31/07 6,245,821 6,086,116
Term Loan B 03/31/07 4,728,766 4,603,942
-------------------------------------------------------------------------
Huntsman International LLC Term Loan B 06/30/07 3,869,085 3,907,233
Term Loan C 06/30/08 4,489,270 4,537,046
-------------------------------------------------------------------------
Messer Griesheim Industries, Inc. Term Loan B 04/27/09 877,032 884,926
Term Loan C 04/27/10 1,262,308 1,273,669
-------------------------------------------------------------------------
Nalco Co. Term Loan B 11/04/10 2,400,000 2,427,001
-------------------------------------------------------------------------
Noveon, Inc. (c) Term Loan B 12/31/09 338,213 342,026
-------------------------------------------------------------------------
CHEMICALS TOTAL 24,061,959
CONSUMER SERVICES - 1.4%
Alderwoods Group, Inc. Note 7 Year 01/02/09 880,100 985,712
Term Loan B 09/29/08 1,762,993 1,788,911
-------------------------------------------------------------------------
DIMAC Holdings (d) Term Loan A 12/31/05 246,193 923
Term Loan B 01/01/05 65,209 1,956
-------------------------------------------------------------------------
DIMAC Marketing Partners, Inc. (d) Revolver 07/01/03 27,443 -(e)
Term Loan B 01/01/05 159,881 4,796
-------------------------------------------------------------------------
FHC Health Systems, Inc. (c) Delayed Draw Term Loan 10/31/06 2,785,714 2,877,902
-------------------------------------------------------------------------
Knowledge Learning Corp. Term Loan B 05/15/10 5,000,000 5,040,114
-------------------------------------------------------------------------
CONSUMER SERVICES TOTAL 10,700,314
CONSUMER SPECIALTIES - 1.3%
Fisher Scientific International, Inc. Tranche C 03/31/10 2,028,809 2,042,850
-------------------------------------------------------------------------
Jarden Corp. Term Loan B 04/24/08 1,246,875 1,259,142
-------------------------------------------------------------------------
Johnson Diversey, Inc. Term Loan B 11/03/09 2,148,080 2,174,511
-------------------------------------------------------------------------
Reddy Ice Group, Inc. Term Loan 08/15/09 748,125 756,383
-------------------------------------------------------------------------
Sola International, Inc. Term Loan 12/11/09 1,250,000 1,268,750
-------------------------------------------------------------------------
United Industries Corp. Term Loan B 01/20/06 2,701,066 2,721,305
-------------------------------------------------------------------------
CONSUMER SPECIALTIES TOTAL 10,222,941
CONTAINER/PACKAGING - 1.4%
Baker Tanks, Inc. Term Loan 01/30/11 1,500,000 1,511,927
-------------------------------------------------------------------------
Berry Plastics Corp. Term Loan 07/22/10 2,000,000 2,005,040
-------------------------------------------------------------------------
Graphic Packaging International, Inc. Term Loan B 08/09/10 2,985,000 3,033,012
-------------------------------------------------------------------------
Kerr Group, Inc. Term Loan 08/13/10 1,469,477 1,481,722
</Table>
See notes to investment portfolio.
9
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- ----------------------------------------------------- --------------------------------------------------------------------------
(VARIABLE RATE SENIOR LOAN INTERESTS (a) - (CONTINUED)
CONTAINER/PACKAGING - (CONTINUED)
Port Townsend Paper Corp. Term Loan B 03/16/07 1,945,000 1,886,793
--------------------------------------------------------------------------
Silgan Holdings, Inc. Term Loan B 11/30/08 989,975 1,006,588
--------------------------------------------------------------------------
CONTAINER/PACKAGING TOTAL 10,925,082
DIVERSIFIED COMMERCIAL SERVICES - 0.9%
Transcore Holdings, Inc. Term Loan B 01/05/08 2,652,955 2,688,399
Term Loan C 01/05/08 3,990,000 4,039,875
--------------------------------------------------------------------------
DIVERSIFIED COMMERCIAL SERVICES TOTAL 6,728,274
DIVERSIFIED MANUFACTURING - 3.2%
Amsted Industries, Inc. Term Loan 10/15/10 3,731,250 3,770,247
--------------------------------------------------------------------------
Enersys, Inc. Term Loan B 11/09/08 5,872,230 5,930,898
--------------------------------------------------------------------------
Flowserve Corp. Term Loan C 06/30/09 664,961 672,104
--------------------------------------------------------------------------
Gentek, Inc. Sr. Secured Note 11/10/08 106,884 107,689
--------------------------------------------------------------------------
Jason, Inc. Term Loan B 06/30/07 2,087,013 2,066,219
--------------------------------------------------------------------------
Polymer Group, Inc. Term Loan 12/31/06 6,462,362 6,555,259
--------------------------------------------------------------------------
Polypore, Inc. Term Loan B 12/31/06 1,846,503 1,860,092
--------------------------------------------------------------------------
Tyco International Group SA (c) Revolver 3 Year 12/22/06 3,666,667 3,654,552
--------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING TOTAL 24,617,060
ELECTRIC UTILITIES - 4.8%
Calpine Corp. Second Lien 07/16/07 6,666,500 6,362,341
--------------------------------------------------------------------------
CenterPoint Energy, Inc. Term Loan 10/07/06 4,986,486 5,113,286
--------------------------------------------------------------------------
Infrasource, Inc. Term Loan 09/30/10 2,992,500 3,005,553
--------------------------------------------------------------------------
Mission Energy Holding Co. Term Loan 12/11/06 1,750,000 1,777,718
Term Loan A 07/02/06 3,246,754 3,149,461
Term Loan B 07/02/06 9,253,246 8,975,964
--------------------------------------------------------------------------
Northwestern Corp. Term Loan 12/01/06 2,475,000 2,489,806
--------------------------------------------------------------------------
NRG Energy, Inc. Credit Linked Deposit 06/23/10 833,333 860,407
Term Loan 06/23/10 1,488,333 1,541,017
--------------------------------------------------------------------------
TNP Enterprises, Inc. Term Loan 12/31/06 2,985,000 3,028,164
--------------------------------------------------------------------------
ELECTRIC UTILITIES TOTAL 36,303,717
</Table>
See notes to investment portfolio.
10
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- ----------------------------------------------------- --------------------------------------------------------------------------
(VARIABLE RATE SENIOR LOAN INTERESTS (a) - (CONTINUED)
ELECTRONIC COMPONENTS - 0.8%
Viasystems, Inc. Term Loan B 09/30/08 5,711,567 5,770,899
--------------------------------------------------------------------------
ELECTRONIC COMPONENTS TOTAL 5,770,899
ENGINEERING & CONSTRUCTION - 1.5%
URS Corp. Term Loan B 08/22/08 1,384,809 1,393,330
--------------------------------------------------------------------------
Washington Group International Credit Linked Certificate of Deposit 10/03/07 9,600,000 9,786,000
--------------------------------------------------------------------------
ENGINEERING & CONSTRUCTION TOTAL 11,179,330
ENVIRONMENTAL SERVICES - 1.4%
Allied Waste North America, Inc. Tranche A 01/15/10 571,429 580,765
Tranche C 01/15/10 4,185,714 4,259,966
--------------------------------------------------------------------------
Environmental Systems Products Holdings, Inc. Second Lien 12/12/10 4,500,000 4,556,677
--------------------------------------------------------------------------
Synagro Technologies, Inc. Term Loan 05/07/07 1,245,280 1,250,627
--------------------------------------------------------------------------
ENVIRONMENTAL SERVICES TOTAL 10,648,035
FARMING/AGRICULTURE - 0.7%
AGCO Corp. Term Loan 01/31/06 5,000,000 5,062,502
--------------------------------------------------------------------------
Quality Stores, Inc. (b)(d) Term Loan B 04/30/06 1,484,798 17,075
--------------------------------------------------------------------------
Seminis, Inc. Term Loan B 09/29/09 588,980 594,166
--------------------------------------------------------------------------
FARMING/AGRICULTURE TOTAL 5,673,743
FINANCE COMPANIES - 0.2%
Finova Group, Inc. Note 05/15/09 2,250,000 1,215,000
--------------------------------------------------------------------------
FINANCE COMPANIES TOTAL 1,215,000
FOOD CHAINS - 2.3%
Albertson's, Inc. Term Loan 07/03/04 10,000,000 10,024,364
--------------------------------------------------------------------------
Buffets, Inc. Synth LC 06/28/09 466,600 469,522
Term Loan 06/28/09 3,400,000 3,413,577
--------------------------------------------------------------------------
Carrols Corp. Term Loan B 12/31/07 1,405,556 1,416,127
--------------------------------------------------------------------------
Domino's, Inc. Term Loan 06/25/10 2,176,647 2,212,071
--------------------------------------------------------------------------
FOOD CHAINS TOTAL 17,535,661
FOOD MANUFACTURER - 5.6%
American Seafoods Group LLC Term Loan B 03/31/09 3,099,703 3,115,148
--------------------------------------------------------------------------
Atkins Nutritionals, Inc. First Lien 10/29/09 2,000,000 2,007,565
Second Lien 10/29/09 1,000,000 1,015,091
--------------------------------------------------------------------------
Burns Philp, Inc. Term Loan 02/26/09 1,985,000 2,009,890
</Table>
See notes to investment portfolio.
11
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- ----------------------------------------------------- --------------------------------------------------------------------------
(VARIABLE RATE SENIOR LOAN INTERESTS (a) - (CONTINUED)
FOOD MANUFACTURER - (CONTINUED)
Commonwealth Brands, Inc. Term Loan 08/28/07 1,224,240 1,239,653
--------------------------------------------------------------------------
Constellation Brands, Inc Term Loan B 11/30/08 1,416,667 1,437,158
--------------------------------------------------------------------------
Dr. Pepper Bottling Company of Texas Term Loan B 12/19/10 5,917,808 6,010,274
--------------------------------------------------------------------------
DS Waters Enterprises LP Term Loan 11/07/09 1,000,000 1,015,841
--------------------------------------------------------------------------
Interstate Brands Corp. Term Loan C 07/19/07 1,989,899 1,990,839
Tranche A 07/19/06 2,718,750 2,718,759
--------------------------------------------------------------------------
Merisant Corp. Term Loan B 01/11/10 1,117,200 1,129,114
--------------------------------------------------------------------------
Michael Foods, Inc. Floater Term Loan 11/21/11 3,000,000 3,077,929
Term Loan 11/21/10 4,987,500 5,075,475
--------------------------------------------------------------------------
Nellson Nutraceutical, Inc. Second Lien 04/02/10 3,000,000 3,026,229
--------------------------------------------------------------------------
Otis Spunkmeyer, Inc. Term Loan B 02/20/09 2,827,124 2,848,315
--------------------------------------------------------------------------
Pinnacle Foods Holding Corp. (c) Delayed Draw Term Loan 11/25/10 1,585,321 1,589,605
--------------------------------------------------------------------------
Southern Wine & Spirits of America, Inc. Term Loan B 07/02/08 2,955,094 2,989,625
--------------------------------------------------------------------------
FOOD MANUFACTURER TOTAL 42,296,510
HEALTHCARE SERVICES - 3.7%
Alliance Imaging, Inc. Term Loan A 11/02/06 1,951,336 1,919,463
--------------------------------------------------------------------------
Ameripath, Inc. Term Loan 03/27/10 2,500,000 2,507,804
--------------------------------------------------------------------------
Colgate Medical Ltd. Term Loan B 12/30/08 1,750,000 1,764,283
--------------------------------------------------------------------------
Concentra Operating Corp. Term Loan 06/30/09 3,250,665 3,287,754
--------------------------------------------------------------------------
Davita, Inc. Term Loan B 03/31/09 1,989,226 2,015,564
--------------------------------------------------------------------------
dj Orthopedics LLC Term Loan 05/15/09 750,000 758,925
--------------------------------------------------------------------------
Empi, Inc. Term Loan 11/24/09 1,000,000 1,012,677
--------------------------------------------------------------------------
Fresenius Medical Care, Inc. Term Loan B 02/21/10 1,293,500 1,310,932
--------------------------------------------------------------------------
Insight Health Services Corp. Term Loan B 10/17/08 4,375,428 4,402,774
--------------------------------------------------------------------------
Kinetic Concepts, Inc. Term Loan B 08/11/10 1,243,750 1,262,463
--------------------------------------------------------------------------
Medco Health Solutions, Inc. Term Loan 06/30/10 3,421,425 3,475,524
--------------------------------------------------------------------------
Pacificare Health Systems, Inc. Term Loan 06/03/08 1,243,750 1,258,489
--------------------------------------------------------------------------
Quintiles Transnational Corp. Term Loan 09/25/09 1,246,875 1,273,428
</Table>
See notes to investment portfolio.
12
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- ----------------------------------------------------- --------------------------------------------------------------------------
(VARIABLE RATE SENIOR LOAN INTERESTS (a) - (CONTINUED)
HEALTHCARE SERVICES - (CONTINUED)
VCA Antech, Inc. Term Loan D 06/30/09 2,166,602 2,195,093
--------------------------------------------------------------------------
HEALTHCARE SERVICES TOTAL 28,445,173
HOSPITAL MANAGEMENT - 1.1%
Community Health Systems, Inc. Incremental Term Loan 01/16/11 1,995,000 2,015,574
Tranche B Term Loan 07/16/10 1,975,000 2,010,550
--------------------------------------------------------------------------
Iasis Healthcare Corp. Term Loan B 02/09/09 2,300,000 2,330,071
--------------------------------------------------------------------------
Vanguard Health Systems, Inc. Incremental Term Loan 01/03/10 2,376,000 2,405,080
--------------------------------------------------------------------------
HOSPITAL MANAGEMENT TOTAL 8,761,275
HOTELS/RESORTS - 0.7%
Wyndham International, Inc. Term Loan I 06/30/06 5,324,247 5,196,891
--------------------------------------------------------------------------
HOTELS/RESORTS TOTAL 5,196,891
INDUSTRIAL MACHINERY/COMPONENTS - 0.6%
Dresser, Inc. Term Loan B 04/10/09 1,924,359 1,946,411
--------------------------------------------------------------------------
Terex Corp. Term Loan 07/03/09 2,406,937 2,412,454
--------------------------------------------------------------------------
INDUSTRIAL MACHINERY/COMPONENTS TOTAL 4,358,865
INSURANCE BROKER/SERVICES - 0.7%
Conseco, Inc. Term Loan A1 09/10/09 3,846,154 3,871,320
Term Loan B1 09/10/10 1,153,846 1,161,492
--------------------------------------------------------------------------
INSURANCE BROKER/SERVICES TOTAL 5,032,812
MEDIA CONGLOMERATES - 0.0%
Bridge Information Systems (d) Multidraw Term Loan 07/07/04 525,154 210,062
--------------------------------------------------------------------------
MEDIA CONGLOMERATES TOTAL 210,062
MEDICAL SPECIALTIES - 0.2%
Dade Behring, Inc. Term Loan B 10/03/08 1,269,468 1,288,589
--------------------------------------------------------------------------
MEDICAL SPECIALTIES TOTAL 1,288,589
METAL FABRICATIONS - 0.1%
Copperweld Corp. (b) Term Loan 12/16/11 1,222,222 1,038,884
--------------------------------------------------------------------------
METAL FABRICATIONS TOTAL 1,038,884
METALS/MINING - 0.5%
Stillwater Mining Co. Term Loan B 12/31/07 3,805,976 3,854,144
--------------------------------------------------------------------------
METALS/MINING TOTAL 3,854,144
MOVIES/ENTERTAINMENT - 2.3%
Carmike Cinemas, Inc. Sr. Secured 2nd Priority Term Loan 02/02/09 4,666,667 4,758,385
</Table>
See notes to investment portfolio.
13
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- ----------------------------------------------------- --------------------------------------------------------------------------
(VARIABLE RATE SENIOR LOAN INTERESTS (a) - (CONTINUED)
MOVIES/ENTERTAINMENT - (CONTINUED)
GT Brands LLC Term Loan 09/30/07 3,002,841 2,925,399
--------------------------------------------------------------------------
Loews Cineplex Entertainment Corp. Term Loan 02/29/08 4,204,445 4,217,657
--------------------------------------------------------------------------
Regal Cinemas, Inc. Term Loan D 06/30/09 1,948,387 1,975,501
--------------------------------------------------------------------------
Six Flags Theme Parks, Inc. Term Loan B 06/30/09 1,750,000 1,772,976
--------------------------------------------------------------------------
Vivendi Universal Entertainment LLP Term Loan B 06/30/08 2,000,000 2,015,925
--------------------------------------------------------------------------
MOVIES/ENTERTAINMENT TOTAL 17,665,843
OFFICE SUPPLIES - 0.7%
Xerox Corp. Term Loan 09/30/08 5,000,000 5,058,044
--------------------------------------------------------------------------
OFFICE SUPPLIES TOTAL 5,058,044
OIL REFINING/MARKETING - 1.7%
ALON USA Term Loan 12/12/08 3,500,000 3,584,297
--------------------------------------------------------------------------
Magellan Midstream Holdings LP Tranche A 06/17/08 1,348,554 1,367,097
--------------------------------------------------------------------------
Tesoro Petroleum Corp. Fixed Asset Term Loan 04/15/08 3,176,000 3,280,110
--------------------------------------------------------------------------
Western Refining Co. LP Term Loan B 08/28/08 2,940,000 3,007,023
--------------------------------------------------------------------------
W-H Energy Services, Inc. Term Loan C 04/16/07 1,860,650 1,879,342
--------------------------------------------------------------------------
OIL REFINING/MARKETING TOTAL 13,117,869
PAPER - 1.3%
Appleton Papers, Inc. Tranche D Term Loan 11/08/06 3,934,241 3,966,215
--------------------------------------------------------------------------
RLC Industries Co. Term Loan B 02/26/10 3,500,000 3,539,356
--------------------------------------------------------------------------
SP Newsprint Co. Term Loan 01/08/10 711,111 720,842
Term Loan B 01/08/10 1,288,889 1,306,612
--------------------------------------------------------------------------
PAPER TOTAL 9,533,025
PHARMACEUTICALS - 0.6%
aaiPharma, Inc. Term Loan 12/01/09 1,442,156 1,460,170
--------------------------------------------------------------------------
Medpointe, Inc. Term Loan B 09/30/08 3,139,047 3,158,725
--------------------------------------------------------------------------
PHARMACEUTICALS TOTAL 4,618,895
PRINTING/PUBLISHING - 3.2%
Dex Media East LLC Term Loan A 11/08/08 7,478,963 7,565,017
--------------------------------------------------------------------------
Dex Media West LLC Term Loan A 09/09/09 1,779,712 1,802,193
--------------------------------------------------------------------------
MediaNews Group, Inc. Term Loan B 12/30/10 4,000,000 4,050,004
</Table>
See notes to investment portfolio.
14
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- ----------------------------------------------------- --------------------------------------------------------------------------
(VARIABLE RATE SENIOR LOAN INTERESTS (a) - (CONTINUED)
PRINTING/PUBLISHING - (CONTINUED)
Reader's Digest Association, Inc. Term Loan B 05/20/08 2,258,565 2,277,064
--------------------------------------------------------------------------
Sun Media Corp. Term Loan B 02/07/09 1,432,826 1,441,334
--------------------------------------------------------------------------
TV Guide, Inc. (c) Term Loan A 02/28/05 1,522,932 1,477,235
--------------------------------------------------------------------------
Weekly Reader Corp. Term Loan B 11/17/06 5,753,679 5,762,672
--------------------------------------------------------------------------
PRINTING/PUBLISHING TOTAL 24,375,519
RAIL/SHIPPING - 1.4%
American Commercial Lines Term Loan A 06/30/05 673,286 604,300
Term Loan B 06/30/06 1,026,863 919,128
Term Loan C 06/30/07 1,816,231 1,625,678
--------------------------------------------------------------------------
Helm Holding Corp. Term Loan B 10/18/06 5,221,142 5,188,527
--------------------------------------------------------------------------
Kansas City Southern Railway Co. Term Loan B 06/12/08 784,700 789,188
--------------------------------------------------------------------------
RailAmerica Transportation Corp. Term Loan 05/22/09 1,696,821 1,715,294
--------------------------------------------------------------------------
RAIL/SHIPPING TOTAL 10,842,115
REAL ESTATE INVESTMENT TRUSTS - 0.5%
AIMCO Properties LP Term Loan 05/30/08 1,850,000 1,869,662
--------------------------------------------------------------------------
Macerich Partnership LP Term Loan 07/26/05 1,968,000 1,977,840
--------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS TOTAL 3,847,502
RENTAL/LEASING COMPANIES - 0.9%
Rent-A-Center, Inc. Term Loan 05/28/09 2,388,000 2,419,045
--------------------------------------------------------------------------
United Rentals, Inc. (c) Term Loan 02/17/11 4,277,778 4,274,006
--------------------------------------------------------------------------
RENTAL/LEASING COMPANIES TOTAL 6,693,051
RETAIL STORES - 1.3%
CH Operating LLC Term Loan 06/21/07 1,344,828 1,344,890
--------------------------------------------------------------------------
FTD, Inc. Term Loan 02/28/11 500,000 504,997
--------------------------------------------------------------------------
Nebraska Book Co. LLC Term Loan 06/30/07 1,000,000 1,008,921
--------------------------------------------------------------------------
Rite Aid Corp. Term Loan 04/30/08 7,000,000 7,153,118
--------------------------------------------------------------------------
RETAIL STORES TOTAL 10,011,926
SEMICONDUCTORS - 0.2%
Semiconductor Components Industries LLC Term Loan E 08/04/07 1,709,739 1,717,324
--------------------------------------------------------------------------
SEMICONDUCTORS TOTAL 1,717,324
</Table>
See notes to investment portfolio.
15
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- ----------------------------------------------------- --------------------------------------------------------------------------
(VARIABLE RATE SENIOR LOAN INTERESTS (a) - (CONTINUED)
STEEL/IRON ORE - 1.9%
International Steel Group Term Loan B 05/01/07 667,145 670,060
--------------------------------------------------------------------------
Ispat Inland LP. Term Loan B 07/16/05 5,111,926 4,894,868
Term Loan C 07/16/06 5,111,926 4,894,868
--------------------------------------------------------------------------
Steel Dynamics, Inc. Term Loan B1 03/26/08 1,229,943 1,247,027
--------------------------------------------------------------------------
The Techs Industries, Inc. Term Loan 01/14/10 3,000,000 3,014,589
--------------------------------------------------------------------------
STEEL/IRON ORE TOTAL 14,721,412
TELECOMMUNICATIONS-INFRASTRUCTURE/
EQUIPMENT - 0.9%
Crown Castle Operating Co. Term Loan B 09/30/10 3,042,375 3,102,488
--------------------------------------------------------------------------
SBA Senior Finance, Inc. (c) Term Loan 10/31/08 2,115,385 2,140,254
--------------------------------------------------------------------------
Spectrasite Communications, Inc. Term Loan B 12/31/07 1,679,828 1,701,927
--------------------------------------------------------------------------
TELECOMMUNICATIONS-INFRASTRUCTURE/EQUIPMENT TOTAL 6,944,669
TELECOMMUNICATIONS-WIRELESS - 7.9%
Centennial Cellular Operating Co., LLC (c) Tranche B R/C 02/09/11 4,170,000 4,193,094
--------------------------------------------------------------------------
Cricket Communications, Inc., (d) Vendor Term Loan 06/30/07 20,500,000 16,810,000
--------------------------------------------------------------------------
Nextel Finance Co. Term Loan A 12/31/07 5,374,121 5,343,414
Term Loan E 12/15/10 11,667,268 11,794,476
--------------------------------------------------------------------------
Nextel Partners, Inc. Term Loan B 11/30/10 6,000,000 6,093,047
--------------------------------------------------------------------------
Rural Cellular Corp. Term Loan A 04/03/08 5,154,943 5,149,271
Term Loan B 10/03/08 2,031,710 2,046,999
Term Loan C 04/03/09 2,031,710 2,046,999
--------------------------------------------------------------------------
Western Wireless Corp. Term Loan A 03/31/08 3,300,000 3,294,218
Term Loan B 09/30/08 3,073,520 3,090,961
--------------------------------------------------------------------------
TELECOMMUNICATIONS-WIRELESS TOTAL 59,862,479
TELECOMMUNICATIONS SERVICES - 1.6%
Alaska Communications Systems Holdings, Inc. Term Loan 02/14/09 1,750,000 1,763,169
--------------------------------------------------------------------------
Dobson Cellular Systems, Inc. (c) Revolver 03/31/10 5,865,300 5,921,930
--------------------------------------------------------------------------
Valor Telecommunications Enterprises LLC Term Loan B 06/30/08 4,685,612 4,720,821
--------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES TOTAL 12,405,920
TEXTILES - 0.7%
Levi Strauss & Co. Term Loan A 09/29/09 1,246,875 1,296,834
--------------------------------------------------------------------------
Springs Industries, Inc. Term Loan B 09/05/08 2,306,613 2,323,643
</Table>
See notes to investment portfolio.
16
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- ----------------------------------------------------- --------------------------------------------------------------------------
(VARIABLE RATE SENIOR LOAN INTERESTS (a) - (CONTINUED)
TEXTILES - (CONTINUED)
St. John Knits International, Inc. Term Loan B 07/31/07 1,471,080 1,476,636
--------------------------------------------------------------------------
TEXTILES TOTAL 5,097,113
TRANSPORTATION - 3.5%
Comcar Industries, Inc. Term Loan B 01/15/10 5,000,000 5,022,533
--------------------------------------------------------------------------
Laidlaw Investments Ltd. Term Loan B 06/19/09 4,462,000 4,605,168
--------------------------------------------------------------------------
Motor Coach Industries, Inc. Term Loan 06/16/05 5,702,364 4,894,527
--------------------------------------------------------------------------
TTI, Inc. Term Loan B 03/31/07 6,196,014 6,219,406
--------------------------------------------------------------------------
United Airlines, Inc. Term Loan B 07/01/04 2,973,557 2,994,533
--------------------------------------------------------------------------
Yellow Roadway Corp. Credit Linked Certificate of Deposit 06/11/08 1,456,364 1,468,198
Term Loan 06/11/08 1,213,636 1,223,497
--------------------------------------------------------------------------
TRANSPORTATION TOTAL 26,427,862
TOTAL VARIABLE RATE SENIOR LOAN INTERESTS
(COST OF $636,251,128) 650,852,427
SENIOR NOTES - 0.1%
DIVERSIFIED MANUFACTURING - 0.1%
Superior Telecom, Inc. Sr. Secured Note 11/10/08 417,064 418,032
--------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING TOTAL 418,032
TOTAL SENIOR NOTES
(COST OF $417,064)
<Caption>
SHARES
- ----------------------------------------------------- --------------------------------------------------------------------------
COMMON STOCKS (f) - 0.6%
BUSINESS SERVICES - 0.1%
NATG Holdings LLC (b) 322,876 571,491
--------------------------------------------------------------------------
BUSINESS SERVICES TOTAL 571,491
DIVERSIFIED MANUFACTURING - 0.1%
Gentek, Inc. 4,015 151,660
--------------------------------------------------------------------------
Superior Telecom, Inc. 47,459 735,614
--------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING TOTAL 887,274
ENVIRONMENTAL SERVICES - 0.0%
Environmental Systems (b) 3,445 -
--------------------------------------------------------------------------
ENVIRONMENTAL SERVICES TOTAL -
</Table>
See notes to investment portfolio.
17
<Page>
<Table>
<Caption>
SHARES VALUE ($)
- ----------------------------------------------------- --------------------------------------------------------------------------
COMMON STOCKS (f) - 0.6% - (CONTINUED)
HEALTH CARE SERVICES - 0.3%
Sun Healthcare Group Sun Healthcare Group 186,353 2,226,918
--------------------------------------------------------------------------
HEALTHCARE SERVICES TOTAL 2,226,918
METAL FABRICATIONS - 0.0%
Copperweld Corp. (b) 56 -
--------------------------------------------------------------------------
Copperweld Corp., Class B (b) 400 -
--------------------------------------------------------------------------
METAL FABRICATIONS TOTAL -
MOVIES/ENTERTAINMENT - 0.1%
AMF Bowling Worldwide, Inc. 19,918 497,950
--------------------------------------------------------------------------
MOVIES/ENTERTAINMENT TOTAL 497,950
TOTAL COMMON STOCKS
(COST OF $5,971,630) 4,183,633
PREFERRED STOCKS (b)(f) - 0.0%
AUTO PARTS - 0.0%
Key Plastics LLC, Series A 13 -
--------------------------------------------------------------------------
AUTO PARTS TOTAL -
CONSUMER SERVICES - 0.0%
DIMAC Holdings, Series C 483 -
--------------------------------------------------------------------------
CONSUMER SERVICES TOTAL -
DIVERSIFIED MANUFACTURING - 0.0%
Superior Telecom, Inc., Series A 14,382 14,382
--------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING TOTAL 14,382
TOTAL PREFERRED STOCKS
(COST OF $148,890) 14,382
<Caption>
UNITS
- ----------------------------------------------------- --------------------------------------------------------------------------
WARRANTS (b)(f) - 0.0%
AUTO PARTS - 0.0%
Key Plastics LLC, Class A, expires 04/26/11 8 -
--------------------------------------------------------------------------
Key Plastics LLC, Class B, expires 04/26/11 7 -
--------------------------------------------------------------------------
AUTO PARTS TOTAL -
</Table>
See notes to investment portfolio.
18
<Page>
<Table>
<Caption>
UNITS VALUE ($)
- ----------------------------------------------------- --------------------------------------------------------------------------
WARRANTS (b)(f) - 0.0% - (CONTINUED)
CONSUMER SERVICES - 0.0%
DIMAC Holdings, expires 04/04/25 483 -
--------------------------------------------------------------------------
CONSUMER SERVICES TOTAL -
DIVERSIFIED MANUFACTURING - 0.0%
Gentek, Inc., expires 10/31/10 8 -
--------------------------------------------------------------------------
Gentek, Inc., Class A, expires 10/31/06 4 -
--------------------------------------------------------------------------
Gentek, Inc., Class B, expires 10/31/08 2 -
--------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING TOTAL -
TOTAL WARRANTS
(COST OF $0) -
<Caption>
PAR ($)
- ----------------------------------------------------- --------------------------------------------------------------------------
SHORT-TERM OBLIGATION - 13.4%
Repurchase agreement with State Street Bank &
Trust Co., dated 02/27/04, due 03/01/04 at
0.930%, collateralized by U.S. Treasury
Bonds/Notes with various maturities to
02/15/29 market value of $104,361,681
(repurchase proceeds $102,313,929)
(Cost of $102,306,000) 102,306,000 102,306,000
TOTAL INVESTMENTS - 99.7%
(COST OF $745,094,712) (g) 757,774,474
OTHER ASSETS & LIABILITIES, NET - 0.3% 2,347,978
NET ASSETS - 100.0% $ 760,122,452
</Table>
NOTES TO INVESTMENT PORTFOLIO:
(a) Senior Loans in which the Portfolio invests generally pay interest at rates
which are periodically predetermined by reference to a base lending rate
plus a premium. These base lending rates are generally (i) the prime rate
offered by one or more major United States banks, (ii) the lending rate
offered by one or more European banks such as the London Inter-Bank Offered
Rate ("LIBOR") and (iii) the certificate of deposit rate. Senior loans are
generally considered to be restricted in that the Portfolio ordinarily is
contractually obligated to receive approval from the Agent Bank and/or
borrower prior to the disposition of a Senior Loan.
(b) Represents fair value as determined in good faith under direction of the
Board of Trustees.
(c) Unfunded commitments, See Note 8.
(d) These issuers are in default of certain debt covenants. Income is not being
accrued.
(e) Amount rounds to less than $1.
(f) Non-income producing.
(g) Cost for federal income tax purposes is $745,203,252.
See notes to financial statements.
19
<Page>
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 2004 (UNAUDITED)
COLUMBIA FLOATING RATE LIMITED LIABILITY COMPANY
<Table>
<Caption>
($)
- ----------------------------------- ----------------------------------------------------------------------
ASSETS Investments, at cost 642,788,712
Investments, at value 655,468,474
Repurchase agreement 102,306,000
Cash 29
Receivable for:
Interest and fees 3,295,721
Deferred Trustees' compensation plan 324
Other assets 44,375
-----------
Total Assets 761,114,923
----------------------------------------------------------------------
LIABILITIES Deferred facility fees 586,886
Payable for:
Investment advisory fee 251,448
Transfer agent fee 483
Pricing and bookkeeping fees 63,646
Trustees' fees 200
Custody fee 650
Legal fee 45,895
Deferred Trustees' fees 324
Other liabilities 42,939
-----------
Total Liabilities 992,471
NET ASSETS 760,122,452
</Table>
See notes to financial statements.
20
<Page>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 29, 2004 (UNAUDITED)
COLUMBIA FLOATING RATE LIMITED LIABILITY COMPANY
<Table>
<Caption>
($)
- ------------------------------------------ ---------------------------------------------------------------
INVESTMENT INCOME Interest 15,809,597
Facility and other fees 674,153
----------
Total Investment Income 16,483,750
---------------------------------------------------------------
EXPENSES Investment advisory fee 1,398,785
Transfer agent fee 2,983
Pricing and bookkeeping fees 113,995
Trustees' fees 3,608
Custody fee 12,492
Other expenses 96,980
----------
Total Operating Expenses 1,628,843
Custody earnings credit (461)
----------
Net Operating Expenses 1,628,382
Interest expense 8,524
----------
Net Expenses 1,636,906
----------
Net Investment Income 14,846,844
---------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON Net realized loss on investments (102,330)
PORTFOLIO POSITIONS ----------
Net change in unrealized appreciation/depreciation
on investments 32,038,076
----------
Net Gain 31,935,746
----------
Net Increase in Net Assets from Operations 46,782,590
</Table>
See notes to financial statements.
21
<Page>
STATEMENT OF CHANGES IN NET ASSETS
COLUMBIA FLOATING RATE LIMITED LIABILITY COMPANY
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED
FEBRUARY 29, AUGUST 31,
INCREASE (DECREASE) IN NET ASSETS: 2004 ($) 2003 ($)
- ---------------------------------------------- ---------------------------------------------------------------------------------
OPERATIONS Net investment income 14,846,844 27,411,344
Net realized loss on investments (102,330) (11,578,981)
Net realized loss on the disposal of investments in
violation of restrictions and subsequently
reimbursed by affiliate -- --
Net change in unrealized appreciation/depreciation
on investments 32,038,076 33,906,354
---------------------------
Net Increase from Operations 46,782,590 49,738,717
---------------------------------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST Contributions 240,131,300 93,827,932
Withdrawals (37,452,869) (169,392,880)
---------------------------
Net Increase (Decrease) from Transactions in
Investors' Beneficial Interest 202,678,431 (75,564,948)
---------------------------
Total Increase (Decrease) in Net Assets 249,461,021 (25,826,231)
---------------------------------------------------------------------------------
NET ASSETS Beginning of period 510,661,431 536,487,662
End of period 760,122,452 510,661,431
---------------------------------------------------------------------------------
</Table>
See notes to financial statements.
22
<Page>
STATEMENT OF CASH FLOWS
COLUMBIA FLOATING RATE LIMITED LIABILITY COMPANY
<Table>
<Caption>
(UNAUDITED)
FOR THE
SIX MONTHS ENDED
INCREASE (DECREASE) IN CASH FEBRUARY 29, 2004 ($)
- --------------------------------------------------- --------------------------------------------------------------------------
CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES: Net investment Income 14,846,844
--------------------------------------------------------------------------
ADJUSTMENTS TO RECONCILE NET INVESTMENT INCOME Purchase of investment securities (446,342,209)
TO NET CASH USED FOR BY OPERATING ACTIVITIES: Proceeds from disposition of investment securities 269,813,551
Purchase of short-term portfolio investments, net (40,527,000)
Increase in interest and fees receivable (564,017)
Decrease in receivable for investments sold 1,277,823
Increase in other assets (38,857)
Increase in deferred facility fees 376,342
Increase in payable for accrued expenses 37,550
Net amortization of premium (discount) (1,415,931)
Decrease in payable for investments purchased (18,333)
Decrease in other liabilities (123,309)
---------------------
Net cash used for operating activities (202,677,546)
--------------------------------------------------------------------------
CASH FLOWS USED FROM FINANCING ACTIVITIES: Proceeds from capital contributions 240,131,300
Payment of capital withdrawals (37,452,869)
---------------------
Net cash flows used for financing activities 202,678,431
---------------------
Net increase in cash 885
--------------------------------------------------------------------------
CASH: Cash at beginning of the period (856)
---------------------
Cash at end of the period 29
</Table>
See notes to financial statements.
23
<Page>
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 2004 (UNAUDITED)
COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND
<Table>
<Caption>
($)
- ------------------------- --------------------------------------------------------------------------------
ASSETS Investments in Portfolio, at cost 88,230,541
Investment in Portfolio, at value 89,741,567
Receivable for:
Expense reimbursement due from Investment Advisor 11,271
Deferred Trustees' compensation plan 2,407
----------
Total Assets 89,755,245
--------------------------------------------------------------------------------
LIABILITIES Payable for:
Distributions 29,682
Administration fee 14,044
Transfer agent fee 10,066
Pricing and bookkeeping fees 5,398
Trustees' fees 200
Custody fee 400
Reports to shareholders 14,313
Deferred Trustees' fees 2,407
Other liabilities 16,717
----------
Total Liabilities 93,227
NET ASSETS 89,662,018
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS Paid-in capital 97,175,708
Overdistributed net investment income (21,286)
Accumulated net realized loss allocated from Portfolio (9,003,430)
Net unrealized appreciation on investments allocated from Portfolio 1,511,026
----------
NET ASSETS 89,662,018
--------------------------------------------------------------------------------
Shares outstanding (unlimited number authorized) 9,172,049
Net asset value per share 9.78
</Table>
See notes to financial statements.
24
<Page>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 29, 2004 (UNAUDITED)
COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND
<Table>
<Caption>
($)
- ----------------------------------------------- -------------------------------------------------------------------------------
INVESTMENT INCOME Interest and fees allocated from Portfolio 2,282,940
-------------------------------------------------------------------------------
EXPENSES Net operating expenses allocated from Portfolio 225,632
Administration fee 86,013
Transfer agent fee 19,534
Pricing and bookkeeping fees 16,087
Trustees' fees 4,917
Custody fee 1,452
Other expenses 38,462
----------
Total Operating Expenses 392,097
Fees and expenses waived or reimbursed by Investment Advisor (70,987)
----------
Net Operating Expenses 321,110
Interest expense allocated from Portfolio 1,179
----------
Net Expenses 322,289
----------
Net Investment Income 1,960,651
-------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON Net realized loss on investments allocated from Portfolio (765,803)
INVESTMENTS ALLOCATED FROM PORTFOLIO ----------
Net change in unrealized appreciation/depreciation
on investments allocated from Portfolio 5,287,862
----------
Net Gain 4,522,059
----------
Net Increase in Net Assets from Operations 6,482,710
</Table>
See notes to financial statements.
25
<Page>
STATEMENT OF CHANGES IN NET ASSETS
COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, AUGUST 31,
INCREASE (DECREASE) IN NET ASSETS: 2004 2003
- ------------------------------------------ -------------------------------------------------------------------------------------
OPERATIONS Net investment income 1,960,651 5,385,567
Net realized loss on investments allocated
from Portfolio (765,803) (2,409,848)
Net realized loss on the disposal of investments
in violation of restrictions and subsequently
reimbursed by affiliate allocated from Portfolio -- --
Net change in unrealized appreciation/depreciation
on investments allocated from Portfolio 5,287,862 6,893,031
-------------------------------
Net Increase from Operations 6,482,710 9,868,750
-------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (1,953,271) (5,397,399)
-------------------------------------------------------------------------------------
SHARE TRANSACTIONS Subscriptions 1,299,993 --
Distributions reinvested 1,796,882 5,469,970
Redemptions (7,670,007) (21,147,179)
-------------------------------
Net Decrease from Share Transactions (4,573,132) (15,677,209)
-------------------------------
Total Decrease in Net Assets (43,693) (11,205,858)
-------------------------------------------------------------------------------------
NET ASSETS Beginning of period 89,705,711 100,911,569
End of period (including overdistributed net
investment income of $(21,286) and $(28,666),
respectively) 89,662,018 89,705,711
-------------------------------------------------------------------------------------
CHANGES IN SHARES Subscriptions 134,995 --
Issued for distributions reinvested 187,301 616,460
Redemptions (822,080) (2,392,797)
-------------------------------
Net Decrease (499,784) (1,776,337)
</Table>
See notes to financial statements.
26
<Page>
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 2004 (UNAUDITED)
COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND
NOTE 1. ORGANIZATION
Columbia Institutional Floating Rate Income Fund (the "Fund") is a Massachusetts
business trust registered under the Investment Company Act of 1940, as amended,
as a non-diversified, closed-end management investment company.
INVESTMENT GOAL
The Fund invests all of its investable assets in Columbia Floating Rate Limited
Liability Company (the "Portfolio"). The Portfolio seeks a high level of current
income consistent with preservation of capital.
THE PORTFOLIO
The Portfolio is a non-diversified, closed-end management investment company
organized as a Delaware limited liability company. The Portfolio allocates
income, expenses, realized and unrealized gains and losses to each investor on a
daily basis, based on methods in compliance with the Internal Revenue Code. At
February 29, 2004, the Fund and the Columbia Floating Rate Fund owned 11.8% and
88.2%, respectively, of the Portfolio.
FUND SHARES
The Fund may issue an unlimited number of shares, which are offered continuously
at net asset value.
Effective October 13, 2003, the Fund changed its name from Stein Roe
Institutional Floating Rate Income Fund to Columbia Institutional Floating Rate
Income Fund. Also on that date, the Portfolio changed its name from Stein Roe
Floating Rate Limited Liability Company to Columbia Floating Rate Limited
Liability Company.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements.
SECURITY VALUATION
The value of the Portfolio is determined in accordance with guidelines
established and periodically reviewed by the Board of Trustees. Senior loans are
generally valued using market prices or quotations provided by banks, dealers or
pricing services with respect to secondary market transactions. The prices
provided by these principal market makers may differ from the value that would
be realized if the loans were sold and the difference could be material to the
financial statements. In the absence of actual market values, the senior loans
will be valued at fair value, which is intended to approximate market value,
pursuant to procedures approved by the Board of Trustees. In determining fair
value, the following factors, among others, will be considered on an on-going
basis: (i) the creditworthiness of the Borrower; (ii) the current interest rate,
the interest rate redetermination period and maturity of such senior loan
interests; and (iii) recent prices in the market for instruments of similar
quality, rate and interest rate redeterminiation period and maturity. Because of
uncertainty inherent in the valuation process, the estimated value of a senior
loan may differ significantly from the value that would have been used had there
been market activity for that senior loan interest.
Equity securities are valued at the last sale price at the close of the
principal exchange on which they trade. Unlisted securities or listed securities
for which there were no sales during the day are valued at the closing bid price
on such exchanges or over-the-counter markets.
Short-term debt obligations maturing within 60 days are valued at amortized
cost, which approximates market value.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined
and gains (losses) are based upon the specific identification method for both
financial statement and federal income tax purposes.
27
<Page>
REPURCHASE AGREEMENTS
The Portfolio may engage in repurchase agreement transactions with institutions
that the Portfolio's investment advisor has determined are creditworthy. The
Portfolio, through its custodian, receives delivery of underlying securities
collateralizing a repurchase agreement. Collateral is at least equal, at all
times, to the value of the repurchase obligation including interest. A
repurchase agreement transaction involves certain risks in the event of default
or insolvency of the counterparty. These risks include possible delays or
restrictions upon the Portfolio's ability to dispose of the underlying
securities and a possible decline in the value of the underlying securities
during the period while the Portfolio seeks to assert its rights.
INCOME RECOGNITION
Interest income is recorded on the accrual basis and includes accretion of
discounts, amortization of premiums and paydown gains and losses. Facility fees
received are treated as market discounts. Unamortized facility fees are
reflected as deferred fees on the Statement of Assets and Liabilities.
FEDERAL INCOME TAX STATUS
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable income, if any, for its tax year, and as such
will not be subject to federal income taxes. In addition, the Portfolio is
treated as a partnership for federal income tax purposes and all of its income
is allocated to its owners based on methods in compliance with the Internal
Revenue Service. Therefore, no federal income tax provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared daily and paid monthly. Net
realized capital gains, if any, are distributed at least annually.
STATEMENT OF CASH FLOWS
The Portfolio is required to disclose a Statement of Cash Flows due to its
average debt outstanding during the year. Information on financial transactions
which have been settled through the receipt or disbursement of cash is presented
in the Statement of Cash Flows. The cash amount shown in the Statement of Cash
Flows is the amount included within the Fund's Statement of Assets and
Liabilities and includes cash on hand at its custodian bank and does not include
any short-term investments.
NOTE 3. FEDERAL TAX INFORMATION
The tax character of distributions paid during the year ended August 31, 2003
and was as follows:
<Table>
<Caption>
YEAR ENDED
AUGUST 31,
2003
- -------------------------------------------------
Ordinary Income $ 5,397,399
</Table>
Unrealized appreciation and depreciation at February 29, 2004, based on cost of
investments for federal income tax purposes was:
<Table>
Unrealized appreciation $ 19,901,641
- -------------------------------------------------
Unrealized depreciation (7,330,419)
------------
Net unrealized appreciation $ 12,571,222
</Table>
The following capital loss carryforwards, determined as of August 31, 2003, may
be available to reduce taxable income arising from future net realized gains on
investments, if any, to the extent permitted by the Internal Revenue Code:
<Table>
<Caption>
YEAR OF EXPIRATION CAPITAL LOSS CARRYFORWARD
- -------------------------------------------------
2009 $ 16,991
- -------------------------------------------------
2010 2,799,382
- -------------------------------------------------
2011 1,685,798
- -------------------------------------------------
$ 4,502,171
</Table>
Under current tax rules, certain currency and capital losses realized after
October 31 may be deferred and treated as occurring on the first day of the
following fiscal year. As determined on August 31, 2003, post-October capital
losses of $3,705,606 attributed to security transactions were deferred to
September 1, 2003.
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
INVESTMENT ADVISORY FEE
Effective April 15, 2004, Highland Capital Management, L.P. ("Highland") is the
investment advisor to the Fund. Prior to April 15, 2004, Columbia Management
Advisors, Inc. ("Columbia") was the investment advisor to the Fund. Columbia was
an
28
<Page>
indirect, wholly owned subsidiary of FleetBoston Financial Corporation
("FleetBoston"), however effective April 1, 2004, FleetBoston was acquired by
Bank of America Corporation ("BOA"), see Note 11.
For the period ended February 29, 2004, Columbia received a monthly investment
advisory fee based on the Portfolio's average daily net assets at the following
annual rates:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS FEE RATE
- -----------------------------------------
First $1 billion 0.45%
- -----------------------------------------
Next $1 billion 0.40%
- -----------------------------------------
Over $2 billion 0.35%
</Table>
Prior to November 1, 2003, Columbia was entitled to receive a monthly investment
advisory fee at the annual rate of 0.45% of the Portfolio's average daily net
assets.
For the six months ended February 29, 2004, the Portfolio's annualized effective
investment advisory fee rate was 0.45%.
ADMINISTRATION FEES
Columbia provides accounting and other services to the Fund for a monthly
administration fee at the annual rate of 0.20% of the Fund's average daily net
assets.
PRICING AND BOOKKEEPING FEES
Columbia is responsible for providing pricing and bookkeeping services to the
Portfolio and the Fund under a pricing and bookkeeping agreement. Under a
separate agreement (the "Outsourcing Agreement"), Columbia has delegated those
functions to State Street Corporation ("State Street"). Columbia pays the total
fees collected to State Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Portfolio and the Fund,
Columbia receives from the Portfolio and the Fund an annual flat fee of $10,000
and $5,000, respectively, paid monthly, and in any month that the Fund's average
daily net assets exceed $50 million, an additional monthly fee. The additional
fee rate is calculated by taking into account the fees payable to State Street
under the Outsourcing Agreement. This rate is applied to the average daily net
assets of the Fund for that month. For the six months ended February 29, 2004,
the Fund's annualized effective pricing and bookkeeping fee rate was 0.038%. The
Portfolio also pays additional fees for pricing services.
TRANSFER AGENT FEE
Columbia Funds Services, Inc. (the "Transfer Agent"), formerly Liberty Funds
Services, Inc., an indirect, wholly owned subsidiary of BOA, provides
shareholder services to the Fund. For such services, the Transfer Agent receives
a fee, paid monthly, at the annual rate of $34.00 per open account. The Transfer
Agent also receives reimbursement for certain out-of-pocket expenses.
The Portfolio pays the Transfer Agent a monthly fee equal to $6,000 annually.
Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly
transfer agent fee, in addition to reimbursement for certain out-of-pocket
expenses, at the annual rate of 0.06% of the Fund's average daily net assets
plus flat-rate charges based on the number of shareholder accounts and
transactions. For the six months ended February 29, 2004, the Fund's annualized
effective transfer agent fee rate, exclusive of out-of-pocket fees, was 0.02%.
EXPENSE LIMITS AND FEE REIMBURSEMENTS
Columbia has voluntarily agreed to waive fees and reimburse certain expenses to
the extent that total expenses (inclusive of allocated Portfolio expenses but
exclusive of brokerage commissions, interest, commitment fees, taxes and
extraordinary expenses, if any) exceed 0.75% annually of the Fund's average
daily net assets. This arrangement may be revised or discontinued by Columbia at
any time.
CUSTODY CREDITS
The Portfolio has an agreement with its custodian bank under which custody fees
may be reduced by balance credits. The Portfolio could have invested a portion
of the assets utilized in connection with the expense offset arrangement in an
income-producing asset if it had not entered into such an agreement.
FEES PAID TO OFFICERS AND TRUSTEES
The Fund pays no compensation to its officers, all of whom are employees of
Columbia or its affiliates.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any
29
<Page>
time. Obligations of the plan will be paid solely out of the Portfolio's assets.
NOTE 5. PORTFOLIO INFORMATION
For the six months ended February 29, 2004, the cost of purchases and proceeds
from sales of securities, excluding short-term obligations, were $446,332,209
and $269,813,551, respectively.
NOTE 6. TENDER OF SHARES
The Board of Trustees has adopted a policy of making tender offers on a
quarterly basis. The Board has designated the 15th day of March, June, September
and December of each year, or the next business day if the 15th is not a
business day, as the Repurchase Request Deadline. Tender offers are made for a
portion of the Fund's outstanding shares at the net asset value of the shares as
of the Repurchase Pricing Date. The tender amount, which is determined by the
Board of Trustees, will be at least 5% and no more than 25% of the total number
of shares outstanding on the Repurchase Request Deadline. The Fund may
repurchase an additional amount of shares up to 2% of the shares outstanding on
the Repurchase Request Deadline if the shareholders' offer for repurchase
exceeds the Repurchase Offer Amount. For the six months ended February 29, 2004,
there were two tender offers in September and December. For each tender, the
Fund offered to repurchase 10% and 10%, respectively, of its shares, and 8.50%
and 0.00%, respectively, of shares outstanding were tendered.
NOTE 7. SENIOR LOAN PARTICIPATION COMMITMENTS
The Portfolio invests primarily in participations and assignments, or acts as a
party to the primary lending syndicate of a Variable Rate Senior Loan interest
to United States corporations, partnerships, and other entities. If the lead
lender in a typical lending syndicate becomes insolvent, enters FDIC
receivership or, if not FDIC insured enters into bankruptcy, the Portfolio may
incur certain costs and delays in receiving payment or may suffer a loss of
principal and/or interest. When the Portfolio purchases a participation of a
senior loan interest, the Portfolio typically enters into a contractual
agreement with the lender or other third party selling the participation, not
with the borrower directly. As such, the Portfolio assumes the credit risk of
the Borrower, Selling Participant or other persons interpositioned between the
Portfolio and the Borrower. The ability of Borrowers to meet their obligations
may be affected by economic developments in a specific industry.
At February 29, 2004, the following sets forth the selling participants with
respect to interests in senior loans purchased by the Portfolio on a
participation basis.
<Table>
<Caption>
PRINCIPAL
SELLING PARTICIPANT AMOUNT VALUE
- -------------------------------------------------------------
Citibank:
- -------------------------------------------------------------
CSC Holdings, Inc., Revolver $ 1,304,167 $ 1,278,097
- -------------------------------------------------------------
Goldman Sachs Credit Partners:
- -------------------------------------------------------------
Bridge Information Systems,
- -------------------------------------------------------------
Multi-Draw Term Loan 525,154 210,062
</Table>
NOTE 8. UNFUNDED LOAN COMMITMENTS
As of February 29, 2004, the Portfolio had unfunded loan commitments of
$24,758,703, which could be extended at the option of the Borrower, pursuant to
the following loan agreements:
<Table>
<Caption>
UNFUNDED
BORROWER COMMITMENT
- ----------------------------------------------------------
Centennial Cellular $ 2,250,000
- ----------------------------------------------------------
CSC Holdings, Inc. 695,833
- ----------------------------------------------------------
Dobson Cellular Systems, Inc. 1,250,000
- ----------------------------------------------------------
FHC Health Systems, Inc. 3,214,286
- ----------------------------------------------------------
Noveon, Inc. 625,000
- ----------------------------------------------------------
Pinnacle Foods Holding Corp. 5,614,679
- ----------------------------------------------------------
SBA Senior Finance, Inc. 384,615
- ----------------------------------------------------------
Spectraguard Acquisition LLC 1,333,333
- ----------------------------------------------------------
TV Guide, Inc. 1,502,068
- ----------------------------------------------------------
Tyco International Group SA 6,333,333
- ----------------------------------------------------------
United Rentals, Inc. 1,555,556
-------------
$ 24,758,703
</Table>
NOTE 9. LINE OF CREDIT
The Portfolio and other affiliated funds participate in a $350,000,000 credit
facility, which is used for temporary or emergency purposes to facilitate
portfolio liquidity. Interest is charged to the Fund based on its borrowings. In
addition, the Fund has agreed to pay commitment fees on its pro-rata portion of
the unutilized line of credit. The commitment fee is included in "Other
expenses" on the Statement of Operations. For the six months ended February 29,
2004, the average daily loan balance outstanding on
30
<Page>
days where borrowings existed was $25,000,000 at a weighted average interest
rate of 1.54%.
NOTE 10 . DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES
INDUSTRY FOCUS
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
LEGAL PROCEEDINGS
Columbia, and Columbia Funds Distributor, Inc. ("CFDI"), and certain of their
affiliates (collectively, "the Columbia Group") have received information
requests and subpoenas from various regulatory and law enforcement authorities
in connection with their investigations of late trading and market timing in
mutual funds. The Columbia Group has not uncovered any instances where Columbia
or CFDI were knowingly involved in late trading of mutual fund shares.
On February 24, 2004, the Securities and Exchange Commission ("SEC") filed a
civil complaint in the United States District Court for the District of
Massachusetts against Columbia and CFDI, alleging that they had violated certain
provisions of the federal securities laws in connection with trading activity in
mutual fund shares. Also on February 24, 2004, the New York Attorney General
("NYAG") filed a civil complaint in New York Supreme Court, County of New York
against Columbia and CFDI alleging that Columbia and CFDI had violated certain
New York anti-fraud statutes. If either Columbia or CFDI is unsuccessful in its
defense of these proceedings, it could be barred from serving as an investment
advisor or distributor for any investment company registered under the
Investment Company Act of 1940, as amended (a "registered investment company").
Such results could prevent Columbia, CFDI or any company that is an affiliated
person of Columbia and CFDI from serving as an investment advisor or distributor
for any registered investment company, including your fund. Your fund has been
informed by Columbia and CFDI that, if these results occur, they will seek
exemptive relief from the SEC to permit them to continue to serve as your fund's
investment advisor and distributor. There is no assurance that such exemptive
relief will be granted. On March 15, 2004, Columbia and CFDI entered into
agreements in principle with the SEC Division of Enforcement and NYAG in
settlement of the charges. Under the agreements, Columbia and CFDI agreed, inter
alia, to the following conditions: payment of $70 million in disgorgement;
payment of $70 million in civil penalties; an order requiring Columbia and CFDI
to cease and desist from violations of the antifraud provisions and other
provisions of the federal securities laws; governance changes designed to
maintain the independence of the mutual fund boards of trustees and ensure
compliance with securities laws and their fiduciary duties; and retention of an
independent consultant to review Columbia's and CFDI's compliance policies and
procedures. The agreement requires the final approval of the SEC. In a separate
agreement with the NYAG, the Columbia Group has agreed to reduce mutual fund
fees by $80 million over a five-year period.
As a result of these matters or any adverse publicity or other developments
resulting from them, there may be increased redemptions or reduced sales of fund
shares, which could increase transaction costs or operating expenses, or have
other adverse consequences for the funds.
NOTE 11. SUBSEQUENT EVENT
On April 1, 2004, FleetBoston, including the Fund's investment advisor was
acquired by BOA.
Effective 11:59 p.m. on April 15, 2004, Highland replaced Columbia as investment
advisor to the Fund. Highland did so pursuant to an interim investment advisory
agreement, which has been approved by the Board of Trustees of the Fund, pending
shareholder approval of a longer-term agreement with Highland. The change in
investment advisor will not impact the Fund's investment strategy.
31
<Page>
FINANCIAL HIGHLIGHTS
COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS ENDED
FEBRUARY 29, YEAR ENDED AUGUST 31,
2004 2003 2002 2001
- -----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Total return 8.14%(b) 11.68%(c) (2.20)% 5.15%
Operating expenses 0.52%(d)(e) 0.57%(d) 0.55%(d) 0.53%(d)
Interest expense --(e)(f) --(f) 0.03% --
Net expenses 0.52%(d)(e) 0.57% 0.58% 0.53%
Net investment income 4.76%(d)(e) 5.96%(d) 6.42%(d)(g) 8.94%(d)
Portfolio turnover rate 49%(b) 75% 70% 63%
<Caption>
PERIOD
ENDED
AUGUST 31,
2000 1999(a)
- ----------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Total return 8.73% 5.85%(b)
Operating expenses 0.55% 0.96%(e)
Interest expense -- --
Net expenses 0.55% 0.96%
Net investment income 9.26% 7.59%(e)
Portfolio turnover rate 21% 17%(b)
</Table>
(a) From commencement of operations on December 17, 1998.
(b) Not annualized.
(c) Total return includes of a voluntary reimbursement by the Investment
Advisor for a realized investment loss on an investment not meeting the
Portfolio's investment restrictions. This reimbursement had an impact of
less that 0.01% on the Portfolio's return.
(d) The benefits derived from custody credits, and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%
(e) Annualized.
(f) Rounds to less than 0.01%.
(g) Effective September 1, 2001, the Portfolio has adopted the provisions of
the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing and accreting premium and discount on debt securities. The
effect of this change for the year ended August 31, 2002, was to increase
the ratio of net investment income to average net assets from 6.41% to
6.42%. Ratios and supplemental data for the periods prior to August 31,
2002 have not been reinstated to reflect this change in presentation.
32
<Page>
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS ENDED
FEBRUARY 29, YEAR ENDED AUGUST 31,
2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.27 $ 8.81 $ 9.61 $ 10.00
- -------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.22(b) 0.52(b) 0.60(b)(c) 0.87(b)
Net realized and unrealized
gain (loss) allocated from Portfolio 0.51 0.46 (0.82)(c) (0.40)
---------------- ---------- ---------- ----------
Total from Investment Operations 0.73 0.98 (0.22) 0.47
- -------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.22) (0.52) (0.58) (0.85)
In excess of net investment income -- -- -- --
From net realized gains -- -- -- (0.01)
---------------- ---------- ---------- ----------
Total Distributions Declared
to Shareholders (0.22) (0.52) (0.58) (0.86)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.78 $ 9.27 $ 8.81 $ 9.61
Total return (e) 7.92%(f) 11.50%(g) (2.39)% 4.93%
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net operating expenses 0.75%(h) 0.75% 0.75% 0.75%
Interest expense allocated
from Portfolio --(h)(i) --(i) 0.03% --
Net expenses 0.75%(h) 0.75% 0.78% 0.75%
Net investment income 4.56%(h) 5.81% 6.28%(c) 8.90%
Waiver/reimbursement 0.16%(h) 0.24% 0.21% 0.10%
Net assets, end of period (000's) $ 89,662 $ 89,706 $ 100,912 $ 135,964
<Caption>
PERIOD
ENDED
AUGUST 31,
2000 1999(a)
- -----------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.07 $ 10.00
- -----------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.88 0.51
Net realized and unrealized
gain (loss) allocated from Portfolio (0.07) 0.07
---------- ----------
Total from Investment Operations 0.81 0.58
- -----------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.88) (0.51)
In excess of net investment income -- --(d)
From net realized gains --(d) --
---------- ----------
Total Distributions Declared
to Shareholders (0.88) (0.51)
- -----------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.00 $ 10.07
Total return (e) 8.52% 5.94%(f)
- -----------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net operating expenses 0.75% 0.87%(h)
Interest expense allocated
from Portfolio -- --
Net expenses 0.75% 0.87%(h)
Net investment income 8.97% 7.68%(h)
Waiver/reimbursement 0.14% 0.85%(h)
Net assets, end of period (000's) $ 184,661 $ 127,195
</Table>
(a) From commencement of operations on December 17, 1998.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Effective September 1, 2001, the Fund has adopted the provisions of the
AICPA Audit and Accounting Guide for Investment Companies and began
amortizing and accreting premium and discount on all debt securities. The
effect of this change for the year ended August 31, 2002 was to increase
net investment income per share by $0.01, and increase net realized and
unrealized loss per share by $0.01. The impact to the ratio of net
investment income to average net assets increased from 6.27% to 6.28%. Per
share data and ratios for periods prior to August 31, 2002 have not been
restated to reflect this change in presentation.
(d) Rounds to less than $0.01 per share.
(e) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(f) Not annualized.
(g) Total return includes of a voluntary reimbursement by the Investment
Advisor for a realized investment loss on an investment not meeting the
Fund's investment restrictions. This reimbursement had an impact of less
than 0.01% on the Fund's return.
(h) Annualized.
(i) Rounds to less than 0.01%.
33
<Page>
IMPORTANT INFORMATION ABOUT THIS REPORT
COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND
TRANSFER AGENT
Columbia Funds Services, Inc.
P.O. Box 8081
Boston MA 02266-8081
800.345.6611
DISTRIBUTOR
Columbia Funds Distributor, Inc.
One Financial Center
Boston MA 02111
INVESTMENT ADVISOR
Columbia Management Advisors, Inc.
100 Federal Street
Boston MA 02111
The fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call shareholder services at 800-345-6611 and
additional reports will be sent to you.
This report has been prepared for shareholders of Columbia Institutional
Floating Rate Income Fund. This report may also be used as sales literature when
preceded or accompanied by the current prospectus which provides details of
sales charges, investment objectives and operating policies of the fund and with
the most recent copy of the Columbia Funds Performance Update.
A description of the policies and procedures that the fund uses to determine how
to vote proxies relating to its portfolio securities is available (i) without
charge, upon request, by calling 800-345-6611 and (ii) on the Securities and
Exchange Commission's website at http://www.sec.gov.
34
<Page>
COLUMBIA FUNDS
COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND
LARGE GROWTH
Columbia Common Stock
Columbia Growth
Columbia Growth Stock
Columbia Large Cap Growth
Columbia Tax-Managed Growth
Columbia Tax-Managed Growth II
Columbia Young Investor
LARGE VALUE
Columbia Disciplined Value
Columbia Growth & Income
Columbia Large Cap Core
Columbia Tax-Managed Value
MIDCAP GROWTH
Columbia Acorn Select
Columbia Mid Cap Growth
Columbia Tax-Managed Aggressive Growth
MIDCAP VALUE
Columbia Dividend Income
Columbia Mid Cap
Columbia Strategic Investor
SMALL GROWTH
Columbia Acorn
Columbia Acorn USA
Columbia Small Company Equity
SMALL VALUE
Columbia Small Cap
Columbia Small-Cap Value
BALANCED
Columbia Asset Allocation
Columbia Balanced
Columbia Liberty Fund
SPECIALTY
Columbia Real Estate Equity
Columbia Technology
Columbia Utilities
TAXABLE FIXED-INCOME
Columbia Contrarian Income
Columbia Corporate Bond
Columbia Federal Securities
Columbia Fixed Income Securities
Columbia High Yield
Columbia High Yield Opportunities
Columbia Income
Columbia Intermediate Bond
Columbia Intermediate Government Income
Columbia Quality Plus Bond
Columbia Short Term Bond
Columbia Strategic Income
FLOATING RATE
Columbia Floating Rate
Columbia Floating Rate Advantage
TAX EXEMPT
Columbia High Yield Municipal
Columbia Intermediate Tax-Exempt Bond
Columbia Managed Municipals
Columbia National Municipal Bond
Columbia Tax-Exempt
Columbia Tax-Exempt Insured
35
<Page>
SINGLE STATE TAX EXEMPT
Columbia California Tax-Exempt
Columbia Connecticut Intermediate Municipal Bond
Columbia Connecticut Tax-Exempt
Columbia Florida Intermediate Municipal Bond
Columbia Massachusetts Intermediate Municipal Bond
Columbia Massachusetts Tax-Exempt
Columbia New Jersey Intermediate Municipal Bond
Columbia New York Intermediate Municipal Bond
Columbia New York Tax-Exempt
Columbia Oregon Municipal Bond
Columbia Pennsylvania Intermediate Municipal Bond
Columbia Rhode Island Intermediate Municipal Bond
MONEY MARKET
Columbia Money Market
Columbia Municipal Money Market
INTERNATIONAL/GLOBAL
Columbia Acorn International
Columbia Acorn International Select
Columbia Europe
Columbia Global Equity
Columbia International Stock
Columbia Newport Asia Pacific
Columbia Newport Greater China
Columbia Newport Tiger
INDEX FUNDS
Columbia Large Company Index
Columbia Small Company Index
Columbia U.S. Treasury Index
Please consider the investment objectives, risks, charges and expenses of a
mutual fund carefully before investing. Contact us at 800-345-6611 for a
prospectus which contains this and other important information about the fund.
Read it carefully before you invest.
For complete product information on any Columbia fund, visit our website at
www.columbiafunds.com.
Columbia Management Group and Columbia Management refer collectively to the
various investment advisory subsidiaries of Columbia Management Group, including
Columbia Management Advisors, Inc., the registered investment advisor, and
Columbia Funds Distributor, Inc.
36
<Page>
This page intentionally left blank.
<Page>
[GRAPHIC]
eDelivery
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by eletronic delivery. With Columbia's eDelivery program, you receive an
e-mail message when your shareholder report becomes available online. If your
fund account is registered with Columbia Funds, you can sign up quickly and
easily on our website at www.columbiafunds.com.
Please note -- if you own your fund shares through a financial institution,
contact the institution to see if it offers electronic delivery. If you own your
fund shares through a retirement plan, electronic delivery may not be available
to you.
COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND PRSRT STD
SEMIANNUAL REPORT, FEBRUARY 29, 2004 U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
[COLUMBIAFUNDS(R) LOGO]
A MEMBER OF COLUMBIA MANAGEMENT GROUP
(C)2004 COLUMBIA FUNDS DISTRIBUTOR, INC.
ONE FINANCIAL CENTER, BOSTON, MA 02111-2621
800-345.6611 www.columbiafunds.com S87-03/318R-0204 (04/04) 04/0802
<Page>
ITEM 2. CODE OF ETHICS.
Not applicable at this time.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
Item 6. Schedule of Investments
Not applicable at this time.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable at this time.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable at this time.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant has not filed Schedule 14A subsequent to the effective date of
that Schedule's Item 7(d)(2)(ii)(G). However, it is the registrant's policy
to consider candidates for the Board of Trustees/Directors who are recommend
by shareholders. A Fund shareholder who wishes to nominate a candidate to the
Board may send information regarding prospective candidates to the Fund's
Governance Committee, care of the Fund's Secretary. The information should
include evidence of the shareholder's Fund ownership, a full listing of the
proposed candidate's education, experience, current employment, date of birth,
names and addresses of at least three professional references, information as
to whether the candidate is not an "interested person" under the 1940 Act and
"independent" under NYSE Listing Standards in relation to the Fund, and such
other information as may be helpful to the independent trustees/directors in
evaluating the candidate. All satisfactorily completed information packages
regarding a candidate will be forwarded to an independent trustee/director for
consideration.
ITEM 10. CONTROLS AND PROCEDURES.
<Page>
(a) The registrant's principal executive officer and principal financial
officer, based on his evaluation of the registrant's disclosure controls
and procedures as of a date within 90 days of the filing of this report,
has concluded that such controls and procedures are adequately designed to
ensure that information required to be disclosed by the registrant in Form
N-CSR is accumulated and communicated to the registrant's management,
including the principal executive officer and principal financial officer,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's last fiscal half-year (the
registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 11. EXHIBITS.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not
applicable at this time.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable at this time.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Columbia Institutional Floating Rate Income Fund
----------------------------------------------------------------
By (Signature and Title) /s/ J. Kevin Connaughton
----------------------------------------------------
J. Kevin Connaughton, President and Treasurer
Date May 6, 2004
------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.
By (Signature and Title) /s/ J. Kevin Connaughton
----------------------------------------------------
J. Kevin Connaughton, President and Treasurer
Date May 6, 2004
------------------------------------------------------------------------