<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 811-3009
---------------------------------------------
Columbia Funds Trust II
- -------------------------------------------------------------------------------
(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, NA 02111
- -------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-617-772-3698
----------------------------
Date of fiscal year end: 3/31/05
--------------------------
Date of reporting period: 9/30/04
-------------------------
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>
FORM N-CSR ITEMS - PERIOD ENDED 9/30/04
COLUMBIA FUNDS TRUST II
ITEM 1. REPORTS TO STOCKHOLDERS.
<Page>
[GRAPHIC]
COLUMBIA MONEY MARKET FUND
SEMIANNUAL REPORT
SEPTEMBER 30, 2004
[COLUMBIAFUNDS(R) LOGO]
A MEMBER OF COLUMBIA MANAGEMENT GROUP
<Page>
TABLE OF CONTENTS
<Table>
Fund Profile 1
Understanding Your Expenses 2
Economic Update 3
Portfolio Manager's Report 4
Financial Statements 5
Investment Portfolio 6
Statement of Assets and Liabilities 12
Statement of Operations 13
Statements of Changes in Net Assets 14
Notes to Financial Statements 15
Financial Highlights 19
Important Information About This Report 23
Columbia Funds 24
</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
PRESIDENT'S MESSAGE
COLUMBIA MONEY MARKET FUND
DEAR SHAREHOLDER:
Your fund's legal and management team here at Columbia Funds have been working
hard to strengthen our mutual fund services operation and to ensure that all
operations and processes comply with legal and regulatory standards. In the
coming months, we will continue to monitor the oversight enhancements recently
put in place by your fund's Board of Trustees and make every effort to protect
the interests of all our shareholders in everything we do.
In our last report, we announced that your fund's advisor, Columbia Management
Advisors, Inc., and your fund's distributor, Columbia Funds Distributor, Inc.,
had reached an agreement with the Securities and Exchange Commission and the New
York Attorney General to settle charges involving market timing in some of our
mutual funds. We want to reassure you that the settlement and all associated
legal fees will be paid by Columbia Management, not by the affected funds or
their shareholders.
Recently the Securities and Exchange Commission has adopted new rules regarding
mutual fund governance. We think it is important for you to know that Columbia
Management complied with the majority of these rules well before they were
adopted. Your fund's Board of Trustees has taken the following important steps
to strengthen its capacity to oversee your fund and to comply with SEC rules.
- - THE BOARD OF TRUSTEES APPOINTED MARY JOAN HOENE AS CHIEF COMPLIANCE OFFICER
OF COLUMBIA FUNDS. IN THIS ROLE, MS. HOENE WILL REPORT DIRECTLY TO THE
BOARD OF TRUSTEES AND WILL WORK WITH THE BOARD OF TRUSTEES AS WELL AS THE
SENIOR LEADERSHIP OF COLUMBIA MANAGEMENT, THE INVESTMENT MANAGEMENT ARM OF
BANK OF AMERICA, AND WITH BANK OF AMERICA'S PRINCIPAL COMPLIANCE
EXECUTIVES. SHE WILL FOCUS ON THE OVERALL COMPLIANCE PROGRAM OF THE FUNDS
AND THE RESPONSIBILITY AND PERFORMANCE OF THE FUND'S SERVICE PROVIDERS.
PRIOR TO HER APPOINTMENT, MS. HOENE WAS A PARTNER IN THE LAW FIRM OF
CARTER, LEDYARD & MILBURN, LLP. PREVIOUSLY SHE ALSO SERVED AS ASSOCIATE
DIRECTOR AND DEPUTY DIRECTOR FOR THE SECURITIES AND EXCHANGE COMMISSION
DIVISION OF INVESTMENT MANAGEMENT. AS AN ACTIVE ADVISOR, MS. HOENE HAS
HELPED SEVERAL FUND BOARDS DEVELOP INDEPENDENT BOARD PRACTICES. THE BOARD
IS PLEASED TO HAVE MS. HOENE, WITH HER BROAD AND EXTENSIVE EXPERIENCE, IN
THIS IMPORTANT NEW POSITION.
- - THE BOARD OF TRUSTEES HAS ESTABLISHED OPERATIONAL GUIDELINES THAT RESULT IN
STRONGER, MORE VIGILANT TRUSTEESHIP ACROSS THE ENTIRE COLUMBIA MANAGEMENT
ORGANIZATION. BOARD COMMITTEES HAVE BEEN ESTABLISHED TO OVERSEE PRODUCTS BY
FUND CATEGORY, ALLOWING FOR GREATER SPECIALIZATION AMONG BOARD TRUSTEES.
SHAREHOLDERS WILL ELECT BOARD MEMBERS EVERY FIVE YEARS, BEGINNING IN 2005.
- - IN ADDITION TO ENHANCEMENTS TO OVERSIGHT WITHIN COLUMBIA MANAGEMENT, OUR
PARENT COMPANY -- BANK OF AMERICA -- HAS ALSO INCREASED THE ROLE THAT SUCH
PROFESSIONALS PLAY WITHIN THE BROADER ORGANIZATION. A CHIEF COMPLIANCE
OFFICER HAS BEEN NAMED TO REPORT DIRECTLY TO KEN LEWIS, BANK OF AMERICA'S
CHIEF EXECUTIVE OFFICER. BANK OF AMERICA HAS ALSO ADOPTED A CORPORATE CODE
OF ETHICS COMMITTEE, AN INTERNAL COMPLIANCE CONTROLS COMMITTEE AND A
REGULATORY IMPLEMENTATION GROUP TO ENSURE FULL ALIGNMENT AND EXECUTION OF
REMEDIAL ACTIONS AND BEST PRACTICES ACROSS THE COMPANY.
In the pages that follow, you'll find a discussion of the economic environment
during the period, followed by a detailed report from the fund's manager on key
factors that influenced performance. This report is rich in information, and you
should discuss it with your financial advisor if you have questions.
We are committed to providing quality products and services to our shareholders,
strengthening your confidence in us, and working hard to help you achieve
financial success. It is a privilege to play a role in your financial future,
and we value your business. Thank you for choosing Columbia Management.
Sincerely,
/s/ Christopher Wilson
Christopher Wilson
HEAD OF MUTUAL FUNDS, COLUMBIA MANAGEMENT
Christopher Wilson is Head of Mutual Funds for Columbia Management, responsible
for the day-to-day delivery of mutual fund services to the firm's investors.
With the exception of distribution, Chris oversees all aspects of the mutual
fund services operation, including treasury, investment accounting and
shareholder and broker services. Chris serves as Columbia Management's chief
liaison to the mutual fund boards of trustees.
Chris joined Bank of America in August 2004.
<Page>
FUND PROFILE
COLUMBIA MONEY MARKET 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.
PORTFOLIO BREAKDOWN AS OF 09/30/04 (%)
<Table>
Commercial paper 31.9
Corporate fixed-income bonds & notes 28.5
Government agencies and obligations 22.7
Municipal bonds 13.4
Certificates of deposit 3.7
</Table>
PORTFOLIO MATURITY AS OF 09/30/04 (%)
<Table>
1-4 days 0.0
5-14 days 47.0
15-29 days 30.7
30-59 days 8.0
More than 59 days 14.3
</Table>
(1) Lipper Inc., a widely respected data provider in the industry, calculates
an average total return for mutual funds with similar investment objectives
as those of the fund.
Portfolio breakdown is calculated as a percentage of net assets. Portfolio
maturity is calculated as a percentage of total investments.
[SIDENOTE]
SUMMARY
- - FOR THE SIX-MONTH PERIOD ENDED SEPTEMBER 30, 2004, THE FUND'S CLASS A
SHARES RETURNED 0.28% WITHOUT SALES CHARGE.
- - THE FUND'S RETURN WAS HIGHER THAN THE AVERAGE RETURN OF ITS PEER GROUP, THE
LIPPER MONEY MARKET FUNDS CATEGORY, WHICH WAS 0.25% FOR THE SAME PERIOD.(1)
- - SHORT-TERM RATES ROSE BY THREE-QUARTERS OF A PERCENTAGE POINT DURING THE
PERIOD FOLLOWING A SERIES OF INTERVENTIONS BY THE FEDERAL RESERVE BOARD.
[CHART]
<Table>
CLASS A SHARES 0.28%
LIPPER MONEY MARKET FUNDS CATEGORY 0.25%
</Table>
OBJECTIVE
Seeks maximum current income
consistent with capital
preservation and the maintenance
of liquidity.
TOTAL NET ASSETS
$536.4 million
1
<Page>
UNDERSTANDING YOUR EXPENSES
COLUMBIA MONEY MARKET FUND
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also continuing costs, which generally
include investment advisory and/or Rule 12b-1 fees, and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the fund and to compare this cost with the continuing costs of
investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
APRIL 1, 2004 - SEPTEMBER 30, 2004
<Table>
<Caption>
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
Class A 1,000.00 1,000.00 1,003.36 1,021.21 3.87 3.90 0.77
Class B 1,000.00 1,000.00 999.65 1,018.90 6.17 6.23 1.23
Class C 1,000.00 1,000.00 1,000.85 1,019.50 5.57 5.62 1.11
Class Z 1,000.00 1,000.00 1,003.36 1,021.21 3.87 3.90 0.77
</Table>
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
365.
Had the Investment Advisor or Distributor not waived or reimbursed a portion of
Class B and Class C shares' expenses, Class B and Class C shares' total return
would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only continuing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided will not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other fund companies, it is important to note that hypothetical
examples are meant to highlight the continuing cost of investing in a fund and
do not reflect any transactional costs, such as sales charges or redemption or
exchange fees.
[SIDENOTE]
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
- - FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS
SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT
www.columbiafunds.com OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
- - FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD,"
LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE
COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1.
YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING
THE PERIOD
2
<Page>
ECONOMIC UPDATE
COLUMBIA MONEY MARKET FUND
During the six-month period that began April 1, 2004 and ended September 30,
2004, the US economy continued to grow at a healthy pace, despite uncertainty
about job growth, rising energy prices and a slowdown in consumer spending. The
economy encountered a soft patch in the spring, as the rate of growth slowed
from 4.5% to 3.3%, but data for the summer months suggested that it picked up
again in the third quarter.
Job growth dominated the economic news. More than one million jobs were created
between March and June, and consumer confidence soared to its highest level in
two years. However, job growth fell below expectations in July and August and
consumer confidence fell. According to the Labor Department's payroll survey,
the job market has not fully recovered from the losses incurred during the
economic downturn of 2000-2001, and that has left consumers cautious about the
months ahead.
Consumer spending held up in the first half of the period, as last year's tax
rebates and tax cuts continued to work their way into household budgets. Even
when spending declined during the summer, housing activity remained strong.
Also, the business sector stepped into the gap created by sagging consumer
spending. Industrial production rose; factories utilized more of their capacity;
and spending on technology, capital equipment and construction picked up.
BONDS EKE OUT A POSITIVE RETURN
Early in the period, the US bond market was beset with volatility. Bond prices
fell and yields rose when job growth picked up in the spring and investors began
to anticipate higher short-term interest rates. However, a shaky stock market,
higher energy prices and some mixed economic data gave the bond market a boost
in the last three months of the period. The 10-year Treasury yield ended the
period at 4.1%, very close to where it started. In this environment, the Lehman
Brothers Aggregate Bond Index returned 0.68%.
High-yield bonds, which can be less sensitive to changing interest rates, gained
3.72%, as measured by the Merrill Lynch US High Yield, Cash Pay Index. A
relatively strong economy improved credit quality and the sector's high yields
attracted investors seeking income. Municipal and mortgage bonds rose more than
1.4% for the six-month period, as measured by Lehman Brothers, outperforming
Treasury bonds.
STOCKS STAND STILL
Despite solid profit growth and a growing economy, the stock market failed to
advance during the reporting period. The S&P 500 Index returned negative 0.18%.
Leadership passed from small-cap stocks to mid- and large-cap stocks, and value
stocks continued to lead growth stocks. However, in the final month of the
period small- and mid-cap growth stocks bested their value counterparts. Energy
and real estate investment trusts were the best-performing sectors.
HIGHER SHORT TERM INTEREST RATES
After a year of the lowest short-term interest rates in recent history, the
Federal Reserve Board (the Fed) raised the federal funds rate, a key short-term
rate, from 1.00% to 1.75% in three equal steps during the period. The Fed
indicated that it would continue to raise short-term interest rates at a
"measured pace," in an attempt to balance economic growth against inflationary
pressures. Because the Fed's moves were widely anticipated, these rate increases
have had little, if any, impact on the financial markets since they commenced.
[SIDENOTE]
SUMMARY:
FOR THE SIX-MONTH PERIOD ENDED SEPTEMBER 30, 2004
- - INVESTMENT-GRADE BONDS EKED OUT MODEST GAINS. THE LEHMAN BROTHERS AGGREGATE
BOND INDEX RETURNED 0.68%. HIGH-YIELD BONDS, WHICH CAN BE LESS SENSITIVE TO
CHANGING INTEREST RATES, LED THE FIXED-INCOME MARKETS. THE MERRILL LYNCH US
HIGH YIELD, CASH PAY INDEX RETURNED 3.72%
[CHART]
<Table>
MERRILL LYNCH INDEX 3.72%
LEHMAN INDEX 0.68%
</Table>
- - STOCK PRICES WERE DOWN, AS MEASURED BY THE S&P 500 INDEX AND THE BROADER
RUSSELL 3000 INDEX. THE MARKET RETREATED AS A HOST OF UNCERTAINTIES
UNSETTLED INVESTORS.
[CHART]
<Table>
S&P 500 INDEX -0.18%
RUSSELL 3000 INDEX -0.60%
</Table>
The Lehman Brothers Aggregate Bond Index is a market value-weighted index that
tracks the performance of fixed-rate, publicly placed, dollar-denominated,
non-convertible investment-grade debt issues.
The Merrill Lynch US High Yield, Cash Pay Index is an unmanaged index that
tracks the performance of non-investment-grade corporate bonds.
The S&P 500 Index is an unmanaged index that tracks the performance of 500
widely held, large capitalization US stocks.
The Russell 3000 Index is an unmanaged index that tracks the performance of the
3,000 largest US companies based on total market capitalization.
3
<Page>
PORTFOLIO MANAGER'S REPORT
COLUMBIA MONEY MARKET FUND
For the six-month period ended September 30, 2004, Columbia Money Market Fund
class A shares returned 0.28%. The fund's return was higher than the average
return of its peer group, the Lipper Money Market Funds Category, which was
0.25% for the same period. Although returns were modest, short-term interest
rates moved sharply higher during the period, creating the potential for higher
money-market returns in the future.
THE FEDERAL RESERVE BOARD REVERSES COURSE
When the period began, short-term interest rates were at historical lows, the
result of a multi-year effort by the Federal Reserve Board (the Fed) to
stimulate the US economy. On June 30, following several quarters of robust
economic growth and three months of especially strong employment reports, the
Fed decided that improved economic conditions warranted a change in monetary
policy. Their response was to raise a key short-term interest rate--the federal
funds rate--by one quarter of one percentage point, from 1.00% to 1.25%. The fed
funds rate is the rate that member banks pay for overnight borrowing. Two rate
hikes of the same magnitude were initiated during the third calendar quarter,
bringing the fed funds rate to 1.75%.
WEIGHTED AVERAGE MATURITY ADJUSTED DOWNWARD
Because we expected short-term interest rates to move higher during the period,
we reduced the fund's weighted average maturity from 50 days to 32. We took this
action in order to minimize price volatility and to increase our ability to
reinvest the fund's assets at higher rates when securities mature.
Our securities selection remained fundamentally unchanged. We continue to
emphasize VRDNs (Variable Rate Demand Notes) and other floating rate securities,
which altogether account for 60% of the fund's net assets. VRDNs are attractive
holdings because the rates they pay are adjusted upward or downward each time
the interest rate to which they are tied changes. In an environment of rising
interest rates, VRDNs offer the fund flexibility and the opportunity to capture
higher rates more quickly than securities with fixed rates.
A TREND TOWARD HIGHER YIELDS
The Federal Reserve Board has indicated that it will continue to make small, but
ongoing, increases in the fed funds rate. If the Fed continues to operate in
this manner, we plan to keep the fund's average maturity relatively low. In
particular, we do not anticipate purchasing any one-year securities until the
yield on those securities provides adequate compensation, in our opinion, for
their higher risks.
[PHOTO OF KAREN ARNEIL]
Karen Arneil has managed Columbia Money Market Fund since July 2002 and has been
with the advisor or its predecessors or affiliate organizations since 1996.
/s/ Karen M. Arneil
[SIDENOTE]
DISTRIBUTIONS DECLARED PER SHARE 04/01/04 - 09/30/04 ($)
<Table>
Class A 0.003
Class B 0.001
Class C 0.001
Class Z 0.003
</Table>
7-DAY YIELDS ON 09/30/04 (%)
<Table>
Class A 0.96
Class B 0.10
Class C 0.56
Class Z 0.96
</Table>
30-DAY YIELDS ON 09/30/04 (%)
<Table>
Class A 0.87
Class B 0.10
Class C 0.46
Class Z 0.87
</Table>
The 30-day SEC yields reflect the portfolios earning power, net of expenses,
expressed as an annualized percentage of the public offering price at the end of
the period.
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY
BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE INVESTMENT
RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THE 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.
An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the fund.
4
<Page>
FINANCIAL STATEMENTS
SEPTEMBER 30, 2004 COLUMBIA MONEY MARKET 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 as of the last day of the reporting period. 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 accrued by the
fund during the reporting period. 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) during the
reporting period. The Statement of Changes in Net Assets also details changes in
the number of shares outstanding.
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.
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 the classes' performance and certain key ratios (e.g., class
expenses and net investment income as a percentage of average net assets).
5
<Page>
INVESTMENT PORTFOLIO
SEPTEMBER 30, 2004 (UNAUDITED) COLUMBIA MONEY MARKET FUND
<Table>
<Caption>
PAR ($) VALUE ($)
- -----------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER - 31.9%
BARCLAYS BANK PLC 1.765% 05/25/05 10,000,000 9,998,023
BAVARIA TRR CORP. 1.800% 10/20/04 15,000,000 14,985,750
CHARTA CORP. 1.840% 11/17/04 15,000,000 14,963,966
GIRO BALANCED FUNDING 1.780% 10/22/04 16,000,000 15,983,387
GOVCO, INC. 1.500% 10/06/04 10,000,000 9,997,917
JUPITER SECURITIZATION CORP. 1.690% 10/08/04 20,000,000 19,993,428
LLOYDS BANK PLC 1.160% 10/13/04 15,000,000 14,994,200
NEW CENTER ASSET TRUST 1.750% 11/12/04 20,000,000 19,959,283
PARADIGM FUNDING LLC 1.780% 10/12/04 20,000,000 19,989,122
THORNBURG MORTGAGE, INC. 1.890% 12/16/04 15,000,000 14,939,517
VICTORY RECEIVABLE CORP. 1.800% 10/18/04 15,000,000 14,987,250
TOTAL COMMERCIAL PAPER
(COST OF $170,791,843) 170,791,843
CORPORATE FIXED-INCOME BONDS & NOTES - 28.5%
FINANCIALS - 28.5%
BANKS - 5.6%
HBOS TREASURY SERVICES PLC 1.890% 07/29/05 (a)(b) 10,000,000 10,007,430
US BANK NA 1.780% 10/25/04 (b) 10,000,000 9,999,862
WELLS FARGO & CO. 1.730% 11/15/05 (a)(b) 10,000,000 10,000,000
Banks Total 30,007,292
DIVERSIFIED FINANCIAL SERVICES - 22.9%
AMERICAN EXPRESS CREDIT CORP. 1.736% 03/05/08 (b) 13,000,000 13,000,000
1.841% 12/20/05 (a)(b) 12,000,000 12,000,000
AMERICAN HEALTHCARE FUNDING LLC LOC: LaSalle Bank NA, UMB Bank NA
1.840% 03/01/29 (b) 3,992,000 3,992,000
AUTUMN HOUSE AT POWDER MILL, INC. LOC: SunTrust Bank
1.850% 02/01/28 (a)(b) 3,860,000 3,860,000
BEST ONE TIRE & SERVICES LLC LOC: Fifth Third Bank
1.840% 02/01/18 (b) 7,815,000 7,815,000
</Table>
See Accompanying Notes to Financial Statements.
6
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- ------------------------------------------------------------------------------------------------------------------------------
CORPORATE FIXED-INCOME BONDS & NOTES - (CONTINUED)
FINANCIALS - (CONTINUED)
DIVERSIFIED FINANCIAL SERVICES - (CONTINUED)
CENTRAL AVENUE PROPERTIES LOC: Fifth Third Bank
1.840% 11/01/23 (b) 1,225,000 1,225,000
CENTRAL SUPPLY CO., INC. LOC: Fifth Third Bank
1.840% 08/01/23 (b) 2,000,000 2,000,000
CHAGRIN VALLEY PARTNERS LLC LOC: Fifth Third Bank
1.840% 11/01/13 (b)(c) 1,180,000 1,180,000
CONGREGATION MKOR SHALOM LOC: Wachovia Bank
1.910% 06/01/23 (b) 2,225,000 2,225,000
CONNECTICUT WATER CO. LOC: Citizens Bank of Rhode Island
1.800% 01/04/29 (b) 4,500,000 4,500,000
CRESCENT PAPER TUBE CO. LOC: Fifth Third Bank
1.840% 08/01/22 (b)(c) 2,710,000 2,710,000
CRESTMONT NURSING HOME LOC: Fifth Third Bank
1.790% 03/01/24 (b)(c) 1,000,000 1,000,000
CRESTMONT REALTY CORP. LOC: Fifth Third Bank
1.840% 11/01/22 (b) 4,515,000 4,515,000
DOMINICAN SISTERS LOC: Fifth Third Bank
1.840% 10/01/23 (b)(c) 4,050,000 4,050,000
GENERAL ELECTRIC CAPITAL CORP. 1.868% 10/17/05 (b) 13,000,000 13,000,000
GILEAD FRIENDS CHURCH LOC: Fifth Third Bank
1.840% 10/01/17 (b)(c) 1,000,000 1,000,000
JMB REALTY CORP. LOC: Fifth Third Bank
1.840% 05/01/22 (b)(c) 1,770,000 1,770,000
JUL-MARK INVESTMENTS LLC LOC: Fifth Third Bank
1.840% 10/01/25 (b)(c) 1,000,000 1,000,000
K.C. JORDAN & ASSOCIATES, INC. LOC: Fifth Third Bank
1.840% 04/01/23 (b) 1,000,000 1,000,000
KINGSTON CARE CENTER OF SYLVANIA LOC: Bank One NA
1.870% 05/01/33 (b) 11,675,000 11,675,000
MICHIGAN EQUITY GROUP LLC LOC: Fifth Third Bank
1.840% 04/01/34 (b) 1,350,000 1,350,000
1.840% 04/01/34 (b)(c) 2,540,000 2,540,000
MORGAN STANLEY 1.850% 11/25/05 (b) 12,000,000 12,000,000
PRECISION RADIOTHERAPY LLC LOC: Fifth Third Bank
1.840% 08/01/18 (b) 2,430,000 2,430,000
</Table>
See Accompanying Notes to Financial Statements.
7
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- ------------------------------------------------------------------------------------------------------------------------------
CORPORATE FIXED-INCOME BONDS & NOTES - (CONTINUED)
FINANCIALS - (CONTINUED)
DIVERSIFIED FINANCIAL SERVICES - (CONTINUED)
PS GREETINGS, INC. LOC: LaSalle Bank NA
1.940% 12/01/33 (b) 1,080,000 1,080,000
SHEPHERD CAPITAL LLC LOC: Old Kent Bank & Trust
1.960% 03/15/49 (b) 1,990,000 1,990,000
SKELETEL PROPERTIES LLC 1.840% 06/01/34 (b) 1,000,000 1,000,000
LOC: Fifth Third Bank
1.840% 11/01/14 (b) 2,000,000 2,000,000
SPARTAN MEDICAL FACILITY LP LOC: Fifth Third Bank
1.840% 12/01/26 (b)(c) 1,500,000 1,500,000
TITAN HOLDINGS GROUP LLC LOC: Fifth Third Bank
1.840% 05/01/12 (b) 1,155,000 1,155,000
YOUNG MEN'S CHRISTIAN ASSOCIATION LOC: Wachovia Bank
1.840% 02/01/24 (b) 2,490,000 2,490,000
-----------
Diversified Financial Services
Total 123,052,000
-----------
FINANCIALS TOTAL 153,059,292
TOTAL CORPORATE FIXED-INCOME BONDS & NOTES
(COST OF $153,059,292) 153,059,292
GOVERNMENT AGENCIES & OBLIGATIONS - 22.7%
U.S. GOVERNMENT AGENCIES & OBLIGATIONS - 22.7%
FEDERAL HOME LOAN BANK 1.350% 04/15/05 - 04/29/05 13,000,000 13,000,000
1.540% 04/19/05 (b) 15,000,000 14,997,546
1.760% 04/25/05 (b) 7,000,000 6,998,410
FEDERAL HOME LOAN MORTGAGE CORP. 1.538% 10/07/05 (b) 30,000,000 30,000,000
1.610% 12/07/04 10,000,000 9,970,036
1.665% 11/07/05 (b) 8,000,000 8,000,000
FEDERAL NATIONAL MORTGAGE ASSOCIATION 1.550% 05/04/05 6,000,000 6,000,000
1.600% 05/13/05 3,000,000 3,000,000
1.750% 05/23/05 5,000,000 5,000,000
1.860% 03/23/05 (b) 25,000,000 24,997,618
-----------
U.S. GOVERNMENT AGENCIES &
OBLIGATIONS TOTAL 121,963,610
TOTAL GOVERNMENT AGENCIES & OBLIGATIONS
(COST OF $121,963,610) 121,963,610
</Table>
See Accompanying Notes to Financial Statements.
8
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- ------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - 13.4%
CALIFORNIA - 2.9%
ABAG FINANCE AUTHORITY FOR NONPROFIT CORPS. California Multifamily Revenue:
Bachenheimer Building Apartments, Series 2002,
LOC: FNMA,
1.840% 07/15/35 (b) 2,100,000 2,100,000
Berkeleyan LLC, Series 2003,
LOC: FNMA,
1.840% 05/15/33 (b) 2,200,000 2,200,000
Darling Florist Building Apartments, Series 2002,
LOC: FNMA,
1.840% 07/15/35 (b) 1,500,000 1,500,000
Fine Arts Building Apartments, Series 2002,
LOC: FNMA,
1.840% 07/15/35 (b) 3,800,000 3,800,000
Gaia Building LLC, Series 2000,
LOC: FNMA,
1.840% 09/15/32 (b) 2,375,000 2,375,000
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY Vineyard Creek Apartments, Series 2003,
LOC: Federal Home Loan Bank,
1.860% 12/01/36 (b) 3,700,000 3,700,000
----------
CALIFORNIA TOTAL 15,675,000
GEORGIA - 0.2%
BURKE COUNTY DEVELOPMENT AUTHORITY Series 2003,
LOC: Fifth Third Bank,
1.840% 08/01/18 (b) 1,000,000 1,000,000
----------
GEORGIA TOTAL 1,000,000
INDIANA - 0.5%
FIRST PENTECOSTAL CHURCH OF NOBLESVILLE, INC. Series 2003,
LOC: Bank One NA,
1.840% 11/01/26 (b) 1,660,000 1,660,000
INDIANA STATE DEVELOPMENT FINANCE AUTHORITY Lawrence Utilities, Series 2003 B,
LOC: Fifth Third Bank,
1.840% 07/01/23 (b) 1,000,000 1,000,000
----------
INDIANA TOTAL 2,660,000
IOWA - 0.5%
IOWA FINANCE AUTHORITY St. Luke's Health Foundation, Series 2003 B,
LOC: General Electric Capital Corp.,
1.840% 03/01/18 (b) 2,565,000 2,565,000
----------
IOWA TOTAL 2,565,000
MICHIGAN - 1.8%
MICHIGAN STATE UNIVERSITY REVENUE Series 2003 C,
SPA: Landesbank Hessen-Thurigen GZ,
1.830% 02/15/33 (b) 9,850,000 9,850,000
----------
MICHIGAN TOTAL 9,850,000
</Table>
See Accompanying Notes to Financial Statements.
9
<Page>
<Table>
<Caption>
PAR ($) VALUE ($)
- ------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
NEW HAMPSHIRE - 1.3%
NEW HAMPSHIRE BUSINESS FINANCE AUTHORITY Series 2002 A,
SPA: Bank of New York,
1.890% 11/01/20 (b) 7,100,000 7,100,000
-----------
NEW HAMPSHIRE TOTAL 7,100,000
NEW JERSEY - 3.6%
NEW JERSEY ECONOMIC DEVELOPMENT Series 2003,
AUTHORITY LEASE REVENUE Insured: FSA,
SPA: Dexia Credit Local,
1.840% 02/15/29 (b) 19,000,000 19,000,000
-----------
NEW JERSEY TOTAL 19,000,000
TENNESSEE - 0.4%
COFFEE COUNTY INDUSTRIAL BOARD, INC. REVENUE Stamtec, Inc., Series 1999,
LOC: First Union National Bank,
1.910% 09/01/14 (b) 2,020,000 2,020,000
-----------
TENNESSEE TOTAL 2,020,000
TEXAS - 2.2%
SAN ANTONIO EDUCATION FACILITIES
CORPORATION REVENUE St. Anthony Catholic High School,
Series 2003 B,
LOC: Bank One NA,
1.890% 12/01/23 (b) 1,070,000 1,070,000
TEXAS STATE Veterans' Housing, Series 2002 B,
SPA: Landesbank Hessen-Thuringen GZ,
1.840% 06/01/23 (b) 10,750,000 10,750,000
-----------
TEXAS TOTAL 11,820,000
TOTAL MUNICIPAL BONDS
(COST OF $71,690,000) 71,690,000
CERTIFICATES OF DEPOSIT - 3.7%
Canadian Imperial 1.810% 10/14/05 (b)(d) 20,000,000 20,000,000
TOTAL CERTIFICATES OF DEPOSIT
(COST OF $20,000,000) 20,000,000
TOTAL INVESTMENTS - 100.2%
(COST OF $537,504,745) (e) 537,504,745
OTHER ASSETS & LIABILITIES, NET - (0.2)% (1,111,964)
NET ASSETS - 100.0% 536,392,781
</Table>
See Accompanying Notes to Financial Statements.
10
<Page>
NOTES TO INVESTMENT PORTFOLIO:
(a) Security exempt from registration pursuant to Rule 144A under the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
September 30, 2004, these securities amounted to $35,867,430, which
represents 6.7% of net assets.
(b) Variable rate security. The interest rate shown reflects the rate as of
September 30, 2004.
(c) Security exempt from registration under Section 4(2) of the Securities Act
of 1933. This security may only be resold in exempt transactions to
qualified buyers. Private resale of this security to qualified
institutional buyers is also exempt from registration pursuant to Rule 144A
under the Securities Act of 1933. At September 30 2004, these securities
amounted to $16,750,000 which represents 3.1% of net assets.
(d) The rate shown represents the annualized yield at the date of purchase or
the date of coupon reset.
(e) Cost for both financial statement and federal income tax purposes is the
same.
<Table>
<Caption>
ACRONYM NAME
- -----------------------------------------------------------------------
Abag Association of Bay Area Government
FNMA Federal National Mortgage Association
FSA Financial Security Assurance Co.
LOC Letter of Credit/Line of Credit
SPA Stand-by Purchase Agreement
</Table>
See Accompanying Notes to Financial Statements.
11
<Page>
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2004 (UNAUDITED) COLUMBIA MONEY MARKET FUND
<Table>
<Caption>
($)
-----------------------------------------------------------------------------
ASSETS Investments, at cost 537,504,745
-----------
Investments, at value 537,504,745
Receivable for:
Fund shares sold 473,786
Interest 600,412
Expense reimbursement due from Investment Advisor 15,112
Deferred Trustees' compensation plan 23,298
-----------
Total Assets 538,617,353
LIABILITIES Payable to custodian bank 587,069
Payable for:
Fund shares repurchased 1,110,663
Distributions 11,551
Investment advisory fee 112,763
Administration fee 117,947
Transfer agent fee 143,804
Pricing and bookkeeping fees 23,059
Custody fee 1,094
Distribution and service fees 62,379
Deferred Trustees' fees 23,298
Other liabilities 30,945
-----------
Total Liabilities 2,224,572
NET ASSETS 536,392,781
COMPOSITION OF NET ASSETS Paid-in capital 536,430,738
Overdistributed net investment income (30,807)
Accumulated net realized loss (7,150)
-----------
NET ASSETS 536,392,781
CLASS A Net assets 226,348,064
Shares outstanding 226,401,561
Net asset value and offering price per share 1.00(a)
CLASS B Net assets 81,264,649
Shares outstanding 81,296,918
Net asset value and offering price per share 1.00(a)
CLASS C Net assets 11,826,659
Shares outstanding 11,831,675
Net asset value and offering price per share 1.00(a)
CLASS Z Net assets 216,953,409
Shares outstanding 217,205,704
Net asset value, offering and redemption price per share 1.00
</Table>
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
See Accompanying Notes to Financial Statements.
12
<Page>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2004 (UNAUDITED)
COLUMBIA MONEY MARKET FUND
<Table>
<Caption>
($)
-----------------------------------------------------------------------------
INVESTMENT INCOME Interest 3,787,051
EXPENSES Investment advisory fee 706,516
Administration fee 697,649
Distribution fee:
Class B 319,983
Class C 49,282
Service fee:
Class B 106,661
Class C 16,474
Transfer agent fee 611,379
Pricing and bookkeeping fees 76,331
Trustees' fees 9,514
Custody fee 10,243
Other expenses 95,723
---------
Total Expenses 2,699,755
Distribution and service fees reimbursed by Investment Advisor:
Class B (232,397)
Class C (3,729)
Fees waived by Distributor - Class C (39,398)
Custody earnings credit (1,356)
---------
Net Expenses 2,422,875
---------
Net Investment Income 1,364,176
NET REALIZED LOSS ON INVESTMENTS Net realized loss on investments (609)
---------
Net Increase in Net Assets from Operations 1,363,567
</Table>
See Accompanying Notes to Financial Statements.
13
<Page>
STATEMENT OF CHANGES IN NET ASSETS
COLUMBIA MONEY MARKET FUND
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS ENDED PERIOD ENDED YEAR ENDED
SEPTEMBER 30, MARCH 31, JUNE 30,
INCREASE (DECREASE) IN NET ASSETS: 2004 ($) 2004(a) ($) 2003(b) ($)
- ---------------------------------------- --------------------------------------------------------------------------------------
OPERATIONS Net investment income 1,364,176 1,035,604 3,538,268
Net realized loss on investments (609) (149) --
------------------------------------------------
Net Increase from Operations 1,363,567 1,035,455 3,538,268
DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income:
Class A (644,244) (441,305) (1,493,624)
Class B (42,758) (73,946) (208,504)
Class C (13,705) (12,956) (55,169)
Class Z (663,624) (588,244) (1,763,556)
------------------------------------------------
Total Distributions Declared to
Shareholders (1,364,331) (1,116,451) (3,520,853)
SHARE TRANSACTIONS Class A:
Subscriptions 127,218,494 271,755,492 910,150,826
Distributions reinvested 617,440 412,583 1,302,088
Redemptions (130,237,093) (309,985,945) (855,426,770)
------------------------------------------------
Net Increase (Decrease) (2,401,159) (37,817,870) 56,026,144
Class B:
Subscriptions 34,881,707 54,247,449 155,689,122
Distributions reinvested 37,329 64,742 158,062
Redemptions (35,992,370) (82,734,676) (141,953,170)
------------------------------------------------
Net Increase (Decrease) (1,073,334) (28,422,485) 13,894,014
Class C:
Subscriptions 13,082,677 33,670,794 120,063,340
Distributions reinvested 11,951 10,662 45,279
Redemptions (16,660,815) (35,609,703) (123,559,631)
------------------------------------------------
Net Decrease (3,566,187) (1,928,247) (3,451,012)
Class Z:
Subscriptions 94,140,168 167,190,771 262,511,827
Proceeds received in connection
with merger -- -- 338,355,029
Distributions reinvested 632,915 565,585 1,710,449
Redemptions (126,143,411) (208,829,522) (313,151,895)
------------------------------------------------
Net Increase (Decrease) (31,370,328) (41,073,166) 289,425,410
Net Increase (Decrease) from
Share Transactions (38,411,008) (109,241,768) 355,894,556
------------------------------------------------
Total Increase (Decrease)
in Net Assets (38,411,772) (109,322,764) 355,911,971
NET ASSETS Beginning of period 574,804,553 684,127,317 328,215,346
End of period 536,392,781 574,804,553 684,127,317
Undistributed (overdistributed)
net investment income at end
of period (30,807) (30,652) 42,533
------------------------------------------------
CHANGES IN SHARES Class A:
Subscriptions 127,218,494 271,755,491 910,150,825
Issued for distributions reinvested 617,440 412,582 1,302,088
Redemptions (130,237,093) (309,985,944) (855,426,769)
------------------------------------------------
Net Increase (Decrease) (2,401,159) (37,817,871) 56,026,144
Class B:
Subscriptions 34,881,706 54,247,449 155,689,123
Issued for distributions reinvested 37,329 64,742 158,062
Redemptions (35,992,364) (82,734,670) (141,953,166)
------------------------------------------------
Net Increase (Decrease) (1,073,329) (28,422,479) 13,894,019
Class C:
Subscriptions 13,082,677 33,670,794 120,063,342
Issued for distributions reinvested 11,951 10,662 45,279
Redemptions (16,660,815) (35,609,703) (123,559,630)
------------------------------------------------
Net Decrease (3,566,187) (1,928,247) (3,451,009)
Class Z:
Subscriptions 94,140,168 167,190,771 262,735,612
Issued in connection with merger -- -- 338,355,029
Issued for distributions reinvested 632,915 565,585 1,710,449
Redemptions (126,143,411) (208,829,520) (313,151,894)
------------------------------------------------
Net Increase (Decrease) (31,370,328) (41,073,164) 289,649,196
</Table>
(a) The Fund changed its fiscal year end from June 30 to March 31.
(b) Class Z shares commenced operations on July 29, 2002.
See Accompanying Notes to Financial Statements.
14
<Page>
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2004 (UNAUDITED) COLUMBIA MONEY MARKET FUND
NOTE 1. ORGANIZATION
Columbia Money Market Fund (the "Fund"), a series of Columbia Funds Trust II
(the "Trust"), is a diversified portfolio. The Trust is a Massachusetts business
trust registered under the Investment Company Act of 1940 (the "1940 Act"), as
amended, as an open-end management investment company.
INVESTMENT GOAL
The Fund seeks maximum current income consistent with capital preservation and
the maintenance of liquidity.
FUND SHARES
The Fund may issue an unlimited number of shares and offers four classes of
shares: Class A, Class B, Class C and Class Z. Each share class has its own
sales charge and expense structure.
Class A shares are sold at net asset value. Class A shares are subject to a
1.00% contingent deferred sales charge ("CDSC") on shares sold within eighteen
months on an original purchase of $1 million to $25 million. When exchanged for
Class A shares in another Columbia Fund, a sales charge may be imposed. Class B
shares are subject to a maximum CDSC of 5.00% based upon the holding period
after purchase. Class B shares will convert to Class A shares in a certain
number of years after purchase, depending on the program under which shares were
purchased. Class C shares are subject to a 1.00% CDSC on shares sold within one
year after purchase. Class Z shares are offered continuously at net asset value.
There are certain restrictions on the purchase of Class Z shares, as described
in the Fund's prospectus.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
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
Securities in the Fund are valued utilizing the amortized cost valuation method
permitted in accordance with Rule 2a-7 under the 1940 Act provided certain
conditions are met. This method involves valuing a portfolio security initially
at its cost and thereafter assuming a constant accretion or amortization to
maturity of any discount or premium, respectively.
SECURITY TRANSACTIONS
Security transactions are accounted for on the trade date. Cost is determined
and gains (losses) are based upon the specific identification method for both
financial statement and federal income tax purposes.
REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions with institutions that
the Fund's investment advisor has determined are creditworthy. The Fund, 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
Fund's ability to dispose of the underlying securities and a possible decline in
the value of the underlying securities during the period while the Fund seeks to
assert its rights.
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Premium and discount are
amortized and accreted, respectively, on all debt securities.
DETERMINATION OF CLASS NET ASSET VALUES
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations) and realized and unrealized gains (losses) are
allocated to each class of the Fund on a daily basis for purposes of determining
the net asset value of each class. Income and expenses are allocated to each
class based on the settled shares method, while realized and unrealized gains
(losses) are allocated based on the relative net assets of each class.
15
<Page>
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 Fund intends to
distribute in each calendar year substantially all of its net investment income,
capital gains and certain other amounts, if any, such that the Fund should not
be subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared daily and paid monthly. Net
realized capital gains, if any, are distributed at least annually.
NOTE 3. FEDERAL TAX INFORMATION
The tax character of distributions paid during the period ended March 31, 2004
and the year ended June 30, 2003 was as follows:
<Table>
<Caption>
MARCH 31, 2004 JUNE 30, 2003
- --------------------------------------------------------------
Distributions paid from:
Ordinary Income* $ 1,116,451 $ 3,520,853
</Table>
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
The following capital loss carryforwards, determined as of March 31, 2004, 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
- --------------------------------------------------------
2005 $ 266
2006 2,756
2007 1,437
2008 1,578
2009 355
2012 149
-------
Total $ 6,541
</Table>
Of the capital loss carryforwards attributable to the Fund, $4,030 ($266 will
expire on March 31, 2005, $2,756 will expire on March 31, 2006, $13 will expire
on March 31, 2007 and $995 will expire on March 31, 2008) was obtained in the
merger with Stein Roe Cash Reserves Fund.
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
Columbia Management Advisors, Inc. ("Columbia") is the investment advisor to the
Fund. Columbia, the transfer agent and the distributor, are each indirect wholly
owned subsidiaries of Bank of America Corporation ("BOA").
INVESTMENT ADVISORY FEE
Columbia receives a monthly investment advisory fee based on the Fund's average
daily net assets at the following annual rates:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
- -------------------------------------------------------
First $500 million 0.250%
Next $500 million 0.225%
Over $1 billion 0.200%
</Table>
For the six months ended September 30, 2004, the Fund's annualized effective
investment advisory fee rate was 0.25%.
ADMINISTRATION FEE
Columbia provides administrative and other services to the Fund for a monthly
administration fee based on the Fund's average daily net assets at the following
annual rates:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
- -------------------------------------------------------
First $500 million 0.250%
Next $500 million 0.200%
Over $1 billion 0.150%
</Table>
For the six months ended September 30, 2004 the Fund's annualized effective
administration fee rate was 0.24%.
PRICING AND BOOKKEEPING FEES
Columbia is responsible for providing pricing and bookkeeping services to 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"). As a result, Columbia pays the total fees
collected to State Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual flat fee of $10,000 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
16
<Page>
rate is applied to the average daily net assets of the Fund for that month. The
Fund also pays additional fees for pricing services based on the number of
securities held by the Fund.
For the six months ended September 30, 2004, the annualized effective pricing
and bookkeeping fee rate for the Fund, inclusive of out-of-pocket expenses, was
0.027%.
TRANSFER AGENT FEE
Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia,
provides shareholder services to the Fund. For such services, the Transfer Agent
receives a fee, paid monthly, at the annual rate of $33.50 per open account. The
Transfer Agent also receives reimbursement for certain out-of-pocket expenses.
For the six months ended September 30, 2004, the Fund's annualized effective
transfer agent fee rate, inclusive of out-of-pocket expenses, was 0.21%.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Columbia Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia,
is the principal underwriter of the Fund. For the six months ended September 30,
2004, the Distributor has received CDSC fees of $531, $233,002 and $12,026 on
Class A, Class B and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan (the "Plan") which requires the payment of a
monthly service fee to the Distributor at the annual rate of 0.25% of the
average daily net assets attributable to Class B and Class C shares of the Fund.
The Plan also requires the payment of a monthly distribution fee to the
Distributor at the annual rate of 0.75% of the average daily net assets
attributable to Class B and Class C shares only. The Distributor has voluntarily
agreed to waive a portion of the Class C share distribution fee so that it will
not exceed 0.15% annually of Class C average daily net assets. In addition,
Columbia has voluntarily agreed to reimburse a portion of the Class B share
service fee and a portion of the Class B and Class C share distribution fees.
The CDSC and the fees received from the Plan are used principally as repayment
to the Distributor for amounts paid by the Distributor to dealers who sold such
shares.
CUSTODY CREDITS
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. The Fund could have invested a portion of the
assets utilized in connection with the expense offset arrangement in an
income-producing asset if it had not entered into such an agreement.
FEES PAID TO OFFICERS AND TRUSTEES
The Fund pays no compensation to its officers, all of whom are employees of
Columbia or its affiliates. Effective August 23, 2004, the Board of Trustees
appointed a Chief Compliance Officer to the Fund in accordance with federal
securities regulations. The Fund, along with other affiliated funds, will pay
its pro-rata share of the expenses associated with the Chief Compliance Officer
role. The Fund's fee will not exceed $15,000 per year.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
OTHER
Columbia provides certain services to the Fund related to Sarbanes-Oxley
compliance. For the six months ended September 30, 2004, the Fund paid $1,145 to
Columbia for such services. This amount is included in "Other expenses" on the
Statement of Operations.
NOTE 5. LINE OF CREDIT
The Fund 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 September 30,
2004, the Fund did not borrow under this arrangement.
NOTE 6. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES
CONCENTRATION OF CREDIT RISK
The Fund holds investments that are insured by private insurers who guarantee
the payment of principal and interest in the event of default or that are
supported by a letter of credit. At September 30, 2004, investments supported by
private insurers that represent greater than 5% of the total investments of the
Fund were as follows:
Fifth Third Bank 7.9%
17
<Page>
LEGAL PROCEEDINGS
Columbia, the Distributor, 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 as well as
other industry wide issues. The Columbia Group has not uncovered any instances
where Columbia or the Distributor 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 the Distributor, 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 the Distributor alleging that Columbia
and the Distributor had violated certain New York anti-fraud statutes. If either
Columbia or the Distributor 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, the Distributor or any company that is an affiliated person of
Columbia and the Distributor from serving as an investment advisor or
distributor for any registered investment company, including your fund. Your
fund has been informed by Columbia and the Distributor 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 the Distributor entered into agreements in principle with the SEC
Division of Enforcement and NYAG in settlement of the charges. Under the
agreements, Columbia and the Distributor agreed, among other things, to the
following conditions: payment of $70 million in disgorgement; payment of $70
million in civil penalties; an order requiring Columbia and the Distributor 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 the Distributor's compliance
policies and procedures. The agreement requires the final approval of the SEC.
In a separate agreement with the NYAG, the Columbia Group and its affiliate Banc
of America Capital Management, LLC have agreed to collectively reduce mutual
fund fees by $160 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.
In connection with the events described in detail above, various parties have
filed suit against certain funds, their Boards and/or FleetBoston (and
affiliated entities). More than 300 cases (including those filed against
entities unaffiliated with the funds, their Boards and/or FleetBoston and its
affiliated entities) have been consolidated in a multi-district proceeding and
transferred to the Federal District Court in Maryland. Recently, certain
Columbia funds and affiliated entities have been named as defendants in several
derivative actions under various sections of the Investment Company Act of 1940,
as amended, alleging, among other things, that the fees and expenses paid by
those funds are excessive. The funds and the other defendants to these actions,
including Columbia and various of its affiliates, certain other mutual funds
advised by Columbia and its affiliates, and various directors of such funds,
have denied these allegations and are contesting the plaintiffs' claims. These
suits and certain regulatory investigations are ongoing, however, based on
currently available information, Columbia believes that these lawsuits are
without merit, that the likelihood they will have a material adverse impact on
any fund is remote, and that the lawsuits are not likely to materially affect
its ability to provide investment management services to its clients, including
the funds.
NOTE 7. NAME CHANGE
Effective October 13, 2003, the Liberty Money Market Fund was renamed Columbia
Money Market Fund. Also on this date, the Liberty Funds Trust II was renamed
Columbia Funds Trust II.
NOTE 8. COMPARABILITY OF FINANCIAL STATEMENTS
The fiscal year end of the Fund was changed from June 30 to March 31.
18
<Page>
FINANCIAL HIGHLIGHTS
COLUMBIA MONEY MARKET FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30, MARCH 31, YEAR ENDED JUNE 30,
CLASS A SHARES 2004 2004(a) 2003(b) 2002(b) 2001(b)
- --------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.003(c) 0.002(c) 0.006(c) 0.015 0.052
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment
income (0.003) (0.002) (0.006) (0.015) (0.052)
NET ASSET VALUE,
END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total return (d) 0.28%(e) 0.22%(e)(f) 0.60% 1.56% 5.34%(f)
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses 0.77%(g)(h) 0.88%(g)(h) 0.89%(g) 1.01% 0.70%
Net investment income 0.56%(g)(h) 0.27%(g)(h) 0.61%(g) 1.54% 5.31%
Waiver/reimbursement -- 0.04%(h) -- -- 0.19%
Net assets, end of
period (000's) $ 226,348 $ 228,750 $ 266,602 $ 210,616 $ 189,822
<Caption>
YEAR ENDED JUNE 30,
CLASS A SHARES 2000(b) 1999(b)
- ----------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.000 $ 1.000
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.052 0.046
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment
income (0.052) (0.046)
NET ASSET VALUE,
END OF PERIOD $ 1.000 $ 1.000
Total return (d) 5.26%(f) 4.70%(f)
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses 0.65%(g) 0.68%(g)
Net investment income 5.13%(g) 4.61%(g)
Waiver/reimbursement 0.19% 0.19%
Net assets, end of
period (000's) $ 178,678 $ 157,790
</Table>
(a) The Fund changed its fiscal year end from June 30 to March 31.
(b) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
the SR&F Cash Reserves Portfolio, prior to the merger.
(c) Per share data was calculated using average shares outstanding during the
period.
(d) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(e) Not annualized.
(f) Had the Investment Advisor/Administrator and/or Distributor not waived a
portion of expenses, total return would have been reduced.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
19
<Page>
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30, MARCH 31, YEAR ENDED JUNE 30,
CLASS B SHARES 2004 2004(a) 2003(b) 2002(b) 2001(b)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.001(c) 0.001(c) 0.002(c) 0.007 0.042
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment
income (0.001) (0.001) (0.002) (0.007) (0.042)
NET ASSET VALUE,
END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total return (d) (e) 0.05%(f) 0.08%(f) 0.17% 0.73% 4.31%
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses 1.23%(g)(h) 1.06%(g)(h) 1.41%(g) 1.84% 1.70%
Net investment income 0.10%(g)(h) 0.09%(g)(h) 0.10%(g) 0.71% 4.31%
Waiver/reimbursement 0.54%(h) 0.86%(h) 0.56% 0.17% 0.19%
Net assets, end of
period (000's) $ 81,265 $ 82,338 $ 110,776 $ 96,827 $ 80,879
<Caption>
YEAR ENDED JUNE 30,
CLASS B SHARES 2000(b) 1999(b)
- ---------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.000 $ 1.000
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.041 0.036
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment
income (0.041) (0.036)
NET ASSET VALUE,
END OF PERIOD $ 1.000 $ 1.000
Total return (d) (e) 3.99% 3.68%
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses 1.65%(g) 1.68%(g)
Net investment income 4.13%(g) 3.61%(g)
Waiver/reimbursement 0.19% 0.19%
Net assets, end of
period (000's) $ 69,214 $ 93,821
</Table>
(a) The Fund changed its fiscal year end from June 30 to March 31.
(b) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
the SR&F Cash Reserves Portfolio, prior to the merger.
(c) Per share data was calculated using average shares outstanding for the
period.
(d) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(e) Had the Investment Advisor/Administrator and/or Distributor not waived a
portion of expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
20
<Page>
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30, MARCH 31, YEAR ENDED JUNE 30,
CLASS C SHARES 2004 2004(a) 2003(b) 2002(b) 2001(b)
- --------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.001(c) 0.001(c) 0.003(c) 0.011 0.048
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment
income (0.001) (0.001) (0.003) (0.011) (0.048)
NET ASSET VALUE,
END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total return (d) (e) 0.11%(f) 0.08%(f) 0.27% 1.16% 4.93%
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses 1.12%(g)(h) 1.06%(g)(h) 1.23%(g) 1.41% 1.10%
Net investment income 0.21%(g)(h) 0.10%(g)(h) 0.30%(g) 1.14% 4.91%
Waiver/reimbursement 0.66%(h) 0.86%(h) 0.66% 0.60% 0.79%
Net assets, end of
period (000's) $ 11,827 $ 15,393 $ 17,324 $ 20,772 $ 10,010
<Caption>
YEAR ENDED JUNE 30,
CLASS C SHARES 2000(b) 1999(b)
- ----------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.000 $ 1.000
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.048 0.042
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment
income (0.048) (0.042)
NET ASSET VALUE,
END OF PERIOD $ 1.000 $ 1.000
Total return (d) (e) 4.71% 4.30%
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Expenses 1.05%(g) 1.08%(g)
Net investment income 4.73%(g) 4.21%(g)
Waiver/reimbursement 0.79% 0.79%
Net assets, end of
period (000's) $ 3,950 $ 2,194
</Table>
(a) The Fund changed its fiscal year end from June 30 to March 31.
(b) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
the SR&F Cash Reserves Portfolio, prior to the merger.
(c) Per share data was calculated using average shares outstanding for the
period.
(d) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(e) Had the Investment Advisor/Administrator and/or Distributor not waived a
portion of expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
21
<Page>
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<Table>
<Caption>
(UNAUDITED) PERIOD PERIOD
SIX MONTHS ENDED ENDED ENDED
SEPTEMBER 30, MARCH 31, JUNE 30,
CLASS Z SHARES 2004 2004(a) 2003(b)
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (c) 0.003 0.002 0.006
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.003) (0.002) (0.006)
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000
Total return (d) (e) 0.28% 0.22%(f) 0.55%
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (g) (h) 0.77% 0.88% 0.89%
Net investment income (g) (h) 0.56% 0.27% 0.61%
Waiver/reimbursement -- 0.04%(h) --
Net assets, end of period (000's) $ 216,953 $ 248,324 $ 289,425
</Table>
(a) The Fund changed its fiscal year end from June 30 to March 31.
(b) Class Z shares were initially offered on July 29, 2002. Per share data and
total return reflect activity from that date.
(c) Per share data was calculated using average shares outstanding during the
period.
(d) Not annualized.
(e) Total return at net asset value assuming all distributions reinvested.
(f) Had the Investment Advisor/Administrator and/or Distributor not waived a
portion of expenses, total return would have been reduced.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
22
<Page>
IMPORTANT INFORMATION ABOUT THIS REPORT
COLUMBIA MONEY MARKET 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 02110
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 Money Market 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 their portfolio securities and a copy of the fund's
voting record are available (i) at www.columbiamanagement.com; (ii) on the
Securities and Exchange Commission's website at www.sec.gov and (iii) without
charge, upon request, by calling 800-368-0346.
23
<Page>
COLUMBIA FUNDS
COLUMBIA MONEY MARKET FUND
<Table>
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
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
</Table>
24
<Page>
<Table>
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 Equity*
Columbia International Stock
Columbia Newport Asia Pacific**
Columbia Newport Greater China
Columbia Newport Tiger
INDEX Columbia Large Company Index
Columbia Small Company Index
Columbia U.S. Treasury Index
</Table>
* The fund will be closed to new investments after the close of business on
November 10, 2004. The fund's trustees have approved the merger, which will
take effect on or about February 26, 2005, pending shareholder approval.
** The fund will be closed to new investments after the close of business on
November 10, 2004. The fund's trustees have approved the liquidation, which
will take effect on December 10, 2004.
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 and distributor subsidiaries of Columbia Management
Group, including Columbia Management Advisors, Inc., the registered investment
advisor, and Columbia Funds Distributor, Inc.
25
<Page>
[GRAPHIC]
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by electronic 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 MONEY MARKET FUND SEMIANNUAL REPORT, SEPTEMBER 30, 2004 PRSRT STD
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
757-03/976S-0904 (11/04) 04/3389
<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
The registrant's "Schedule I - Investments in securities of unaffiliated
issuers" (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form
N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have not been any material changes to the procedures by which shareholders
may recommend nominees to the registrant's board of directors, since those
procedures were last disclosed in response to the requirements of Item
7(d)(2)(ii)(G) of Schedule 14A or this Item.
<Page>
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officers, based on their evaluation of the registrant's disclosure
controls and procedures as of a date within 90 days of the filing of
this report, have concluded that such controls and procedures are
adequately designed to ensure that information required to be disclosed
by the registrant in Form N-CSR is accumulated and communicated to the
registrant's management, including the principal executive officer and
principal financial officer, or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.
(b) There 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.
(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 Funds Trust II
---------------------------------------------------------
By (Signature and Title) /s/ Christopher L. Wilson
--------------------------------------------
Christopher L. Wilson, President
Date November 24, 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/ Christopher L. Wilson
--------------------------------------------
Christopher L. Wilson, President
Date November 24, 2004
----------------------------------------------------------------
By (Signature and Title) /s/ J. Kevin Connaughton
--------------------------------------------
J. Kevin Connaughton, Treasurer
Date November 24, 2004
----------------------------------------------------------------