<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 ------------------------------------------------------------------------