497 1 g94160fe497.htm NATIONS FUNDS TRUST 497(B) e497
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COLUMBIA FUNDS TRUST I
Columbia Tax-Managed Value Fund
COLUMBIA FUNDS TRUST III
Columbia Intermediate Government Income Fund
Columbia Mid Cap Value Fund
COLUMBIA FUNDS TRUST V
Columbia Florida Intermediate Municipal Bond Fund
Columbia Large Company Index Fund
Columbia Small Company Index Fund
COLUMBIA FUNDS TRUST VI
Columbia Growth & Income Fund
COLUMBIA FIXED INCOME SECURITIES FUND, INC.
COLUMBIA SHORT TERM BOND FUND, INC.
One Financial Center
Boston, Massachusetts 02111
Telephone: (866) 348-1468
     The enclosed combined proxy statement/prospectus includes proposals on: (i) the approval of an agreement and plan of reorganization for each fund noted above; and (ii) the election of Trustees of Columbia Funds Trust I, Columbia Funds Trust III, Columbia Funds Trust V, Columbia Funds Trust VI, Columbia Fixed Income Securities Fund, Inc. and Columbia Short Term Bond Fund, Inc.
     With regard to the second item – the election of Trustees – management has chosen to solicit the vote of shareholders of the funds of Columbia Funds Trust I, Columbia Funds Trust III, Columbia Funds Trust V and Columbia Funds Trust VI via a separate proxy statement that has already been mailed. Accordingly, for those funds, the enclosed combined proxy statement/prospectus should not be read to solicit any shareholders on the election of Trustees and the accompanying proxy ballot does not include a proposal to elect Trustees. For Columbia Fixed Income Securities Fund, Inc. and Columbia Short Term Bond Fund, Inc., however, the enclosed combined proxy statement/prospectus will serve to solicit shareholders on the election of Trustees and the accompanying proxy ballot does include a proposal to elect Trustees.
     We appreciate your participation in these matters and thank you for you continued support.

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COLUMBIA FUNDS TRUST I

Columbia Tax-Managed Value Fund

COLUMBIA FUNDS TRUST III

Columbia Intermediate Government Income Fund
Columbia Mid Cap Value Fund

COLUMBIA FUNDS TRUST V

Columbia Florida Intermediate Municipal Bond Fund
Columbia Large Company Index Fund
Columbia Small Company Index Fund

COLUMBIA FUNDS TRUST VI

Columbia Growth & Income Fund

COLUMBIA FIXED INCOME SECURITIES FUND, INC.

COLUMBIA SHORT TERM BOND FUND, INC.

ONE FINANCIAL CENTER

BOSTON, MASSACHUSETTS 02111
TELEPHONE: (866) 348-1468

NATIONS FUNDS TRUST

Nations Florida Municipal Bond Fund
Nations Short-Intermediate Government Fund

ONE BANK OF AMERICA PLAZA

101 SOUTH TRYON STREET
CHARLOTTE, NORTH CAROLINA 28255
TELEPHONE: (866) 348-1468

July 27, 2005

DEAR SHAREHOLDER:

      We are pleased to invite you to special meetings of shareholders of the Columbia Funds and Nations Funds noted above (each a “Fund,” and collectively, the “Funds”). The meetings will be jointly held at 10:00 a.m., Eastern time, on September 16, 2005, at One Financial Center, Boston, Massachusetts (the “Meetings”). At the Meetings, you will be asked to approve a reorganization (each a “Reorganization,” and collectively the “Reorganizations”) of your Fund into a corresponding acquiring mutual fund (an “Acquiring Fund”) in Nations Funds Trust. With respect to the Columbia Funds only, you will be asked to vote on the election of Trustees/ Directors of your Fund.

      The proposed Reorganizations are recommended by Banc of America Capital Management, LLC (“BACAP”), the investment adviser for the Nations Funds, and Columbia Management Group, LLC (“Columbia Management Group”), the parent company of the investment adviser to the Columbia Funds (BACAP and Columbia Management Group are collectively, “Management”). Management and the Funds’ Boards of Trustees/Directors (the “Boards”) believe that the proposed Reorganizations will accomplish two important goals. First, by reorganizing Funds with generally similar investment objectives and principal investment strategies, Management can create larger, more efficient investment portfolios. Second, by streamlining their product offerings, Management can more efficiently concentrate their investment management and distribution resources on a more focused group of portfolios. Importantly, the pro forma

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total operating expense ratios of all Acquiring Fund share classes after the Reorganizations are expected to be lower than they are currently for each corresponding Fund share class (with one exception relating to Class T Shares of Columbia Intermediate Government Income Fund, where Fund and pro forma Acquiring Fund total operating expense ratios are expected to be the same).

      If shareholder approval is obtained and the other conditions to the Reorganizations are satisfied, it is anticipated that your Fund will be reorganized into its Acquiring Fund by September 2005, when Fund shares will be exchanged for shares of a designated class of shares of the corresponding Acquiring Fund of equal dollar value. It is expected that the exchange of shares in each Reorganization will be tax-free for U.S. federal income tax purposes.

      THE BOARDS UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR THE PROPOSED REORGANIZATION OF YOUR FUND.

      THE BOARDS UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR ALL OF THE NOMINEES FOR TRUSTEES/ DIRECTORS OF YOUR FUND.

      The formal Notice of Special Meetings, Combined Proxy Statement/Prospectus and Proxy Ballot(s) are enclosed. The Reorganizations and the reasons for the unanimous recommendations of the Boards are discussed in more detail in the enclosed materials, which you should read carefully. If you have any questions, please do not hesitate to contact us at the toll-free number set forth above. We look forward to your attendance at the meetings or to receiving your Proxy Ballot so that your shares may be voted at the meetings.

      We appreciate your participation and prompt response in these matters and thank you for you continued support.

  Sincerely,
 
  CHRISTOPHER L. WILSON
  President and Chief Executive Officer
  Nations Funds Trust
  Columbia Trust I
  Columbia Trust III
  Columbia Trust V
  Columbia Trust VI
  Columbia Fixed Income Securities Fund, Inc.
  Columbia Short Term Bond Fund, Inc.

      YOUR VOTE IS IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN. PLEASE VOTE BY SUBMITTING YOUR PROXY BALLOT ACCORDING TO THE INSTRUCTIONS SHOWN ON THE BALLOTS.

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COLUMBIA FUNDS TRUST I

Columbia Tax-Managed Value Fund

COLUMBIA FUNDS TRUST III

Columbia Intermediate Government Income Fund
Columbia Mid Cap Value Fund

COLUMBIA FUNDS TRUST V

Columbia Florida Intermediate Municipal Bond Fund
Columbia Large Company Index Fund
Columbia Small Company Index Fund

COLUMBIA FUNDS TRUST VI

Columbia Growth & Income Fund

ONE FINANCIAL CENTER

BOSTON, MASSACHUSETTS 02111

NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS

To Be Held on September 16, 2005

SHAREHOLDERS:

     PLEASE TAKE NOTE THAT special meetings of shareholders of the Columbia Funds noted above (the “Funds”) will be held jointly at 10:00 a.m., Eastern time, on September 16, 2005, at One Financial Center, Boston, Massachusetts, for the following purpose:

     ITEM 1. To approve an Agreement and Plan of Reorganization, as described in the accompanying Combined Proxy Statement/ Prospectus.

     ITEM 2. To elect Trustees of Columbia Funds Trust I, Columbia Funds Trust III, Columbia Funds Trust V and Columbia Funds Trust VI. Mses. Kelly and Verville and Messrs. Hacker, Lowry, Mayer, Nelson, Neuhauser, Simpson, Stitzel, Theobald and Woolworth (each of whom has agreed to serve) are nominees for election as Trustees and are to be elected by the shareholders of the Funds of Columbia Funds Trust I, Columbia Funds Trust III, Columbia Funds Trust V and Columbia Funds Trust VI.

     ITEM 3. Such other business as may properly come before the meetings or any adjournment(s).

     THE BOARDS OF TRUSTEES OF COLUMBIA FUNDS TRUST I, COLUMBIA FUNDS TRUST III, COLUMBIA FUNDS TRUST V AND COLUMBIA FUNDS TRUST VI (THE “BOARDS”) UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR THE PROPOSED REORGANIZATION OF YOUR FUND.

     THE BOARDS UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR ALL OF THE NOMINEES FOR TRUSTEES OF YOUR FUND.

     Shareholders of record as of the close of business on July 8, 2005 are entitled to notice of, and to vote at the meetings or any adjournment(s) thereof.

  By Order of the Boards,
 
  R. SCOTT HENDERSON
  Secretary
  Columbia Trust I
  Columbia Trust III
  Columbia Trust V
  Columbia Trust VI

July 27, 2005

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COLUMBIA FIXED INCOME SECURITIES FUND, INC.

COLUMBIA SHORT TERM BOND FUND, INC.

ONE FINANCIAL CENTER

BOSTON, MASSACHUSETTS 02111

NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS

To Be Held on September 16, 2005

SHAREHOLDERS:

      PLEASE TAKE NOTE THAT special meetings of shareholders of Columbia Fixed Income Securities Fund, Inc. and Columbia Short Term Bond Fund, Inc. (the “Funds”) will be held jointly at 10:00 a.m., Eastern time, on September 16, 2005, at One Financial Center, Boston, Massachusetts, for the following purpose:

      ITEM 1. To approve an Agreement and Plan of Reorganization, as described in the accompanying Combined Proxy Statement/ Prospectus, which among other things, contemplates the dissolution of the Funds under state law.

      ITEM 2. To elect Directors of the Funds. Mses. Kelly and Verville and Messrs. Hacker, Lowry, Mayer, Nelson, Neuhauser, Simpson, Stitzel, Theobald and Woolworth (each of whom has agreed to serve) are nominees for election as Directors and are to be elected by the shareholders of the Funds.

      ITEM 3. Such other business as may properly come before the meetings or any adjournment(s).

      Shareholders of the Columbia Fixed Income Securities Fund, Inc. and the Columbia Short Term Bond Fund, Inc. are or may be entitled to asset dissenters’ rights under Oregon law. Please see “The Reorganizations — Description of the Reorganization Agreement” in the enclosed combined proxy statement/prospectus.

      THE BOARDS OF DIRECTORS OF THE FUNDS (THE “BOARDS”) UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR THE PROPOSED REORGANIZATION OF YOUR FUND, INCLUDING THE DISSOLUTION OF EACH FUND FOLLOWING THE PROPOSED REORGANIZATIONS.

      THE BOARDS UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR ALL OF THE NOMINEES FOR DIRECTORS OF YOUR FUND.

      Shareholders of record as of the close of business on July 8, 2005 are entitled to notice of, and to vote at the meetings or any adjournment(s) thereof.

  By Order of the Boards,
 
  R. SCOTT HENDERSON
  Secretary
  Columbia Fixed Income Securities Fund, Inc.
  Columbia Short Term Bond Fund, Inc.

July 27, 2005

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NATIONS FUNDS TRUST

Nations Florida Municipal Bond Fund
Nations Short-Intermediate Government Fund

ONE BANK OF AMERICA PLAZA

101 SOUTH TRYON STREET
CHARLOTTE, NORTH CAROLINA 28255

NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS

To Be Held on September 16, 2005

SHAREHOLDERS:

      PLEASE TAKE NOTE THAT special meetings of shareholders of the Nations Funds noted above will be held jointly at 10:00 a.m., Eastern time, on September 16, 2005, at One Financial Center, Boston, Massachusetts, for the following purpose:

      ITEM 1. To approve an Agreement and Plan of Reorganization, as described in the accompanying Combined Proxy Statement/ Prospectus.

      ITEM 2. Such other business as may properly come before the meetings or any adjournment(s).

      THE BOARD OF TRUSTEES OF NATIONS FUNDS TRUST (THE “BOARD”) UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSED REORGANIZATION OF YOUR FUND.

      Shareholders of record as of the close of business on July 8, 2005 are entitled to notice of, and to vote at the meetings or any adjournment(s) thereof.

  By Order of the Board,
 
  R. SCOTT HENDERSON
  Secretary
  Nations Funds Trust

July 27, 2005

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COMBINED PROXY STATEMENT/ PROSPECTUS

Dated July 27, 2005

PROXY STATEMENT FOR:

COLUMBIA FUNDS TRUST I

Columbia Tax-Managed Value Fund

COLUMBIA FUNDS TRUST III

Columbia Intermediate Government Income Fund
Columbia Mid Cap Value Fund

COLUMBIA FUNDS TRUST V

Columbia Florida Intermediate Municipal Bond Fund
Columbia Large Company Index Fund
Columbia Small Company Index Fund

COLUMBIA FUNDS TRUST VI

Columbia Growth & Income Fund

COLUMBIA FIXED INCOME SECURITIES FUND, INC.

COLUMBIA SHORT TERM BOND FUND, INC.

ONE FINANCIAL CENTER

BOSTON, MASSACHUSETTS 02111
TELEPHONE: (866) 348-1468

NATIONS FUNDS TRUST

Nations Florida Municipal Bond Fund
Nations Short-Intermediate Government Fund

PROSPECTUS FOR:

NATIONS FUNDS TRUST

Nations Bond Fund
Nations Florida Intermediate Municipal Bond Fund
Nations Intermediate Bond Fund
Nations LargeCap Index Fund
Nations MidCap Value Fund
Nations SmallCap Index Fund
Nations Short-Term Income Fund
Nations Value Fund

ONE BANK OF AMERICA PLAZA

101 SOUTH TRYON STREET
CHARLOTTE, NORTH CAROLINA 28255
TELEPHONE: (866) 348-1468

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       For ease of reading, certain terms or names that are used in this Proxy/Prospectus have been shortened or abbreviated. A list of these terms and their corresponding full names or definitions can be found at Appendix A. A shareholder may find it helpful to review the terms and names in Appendix A before reading this Proxy/Prospectus.

      This Proxy/Prospectus contains information that you should know before voting on the following proposals:

     
Proposal: To be voted on by shareholders of:
ITEM 1. Approval of an Agreement and Plan of Reorganization   Columbia Fixed Income Securities Fund, Inc., Columbia Florida Intermediate Municipal Bond Fund, Columbia Intermediate Government Income Fund, Columbia Growth & Income Fund, Columbia Large Company Index Fund, Columbia Mid Cap Value Fund, Columbia Short Term Bond Fund, Inc., Columbia Small Company Index Fund, Columbia Tax-Managed Value Fund, Nations Florida Municipal Bond Fund and Nations Short-Intermediate Government Fund
ITEM 2. The election of the Trustees/Directors
  Columbia Tax-Managed Value Fund, Columbia Intermediate Government Income Fund, Columbia Mid Cap Value Fund, Columbia Florida Intermediate Municipal Bond Fund, Columbia Large Company Index Fund, Columbia Small Company Index Fund, Columbia Growth & Income Fund, Columbia Fixed Income Securities Fund, Inc., and Columbia Short Term Bond Fund, Inc.

      This Proxy/Prospectus, which should be read carefully and retained for future reference, sets forth concisely information about the proposed Reorganizations, and information about each Acquiring Fund that a shareholder should know before deciding how to vote. It is both a proxy statement for the Meetings and a prospectus offering shares in each Acquiring Fund. It is expected that this Proxy/Prospectus will be mailed to shareholders on or about July 28, 2005.

      Additional information about each Fund and its Acquiring Fund is available in their prospectuses, statements of additional information (or SAIs) and annual and semi-annual reports to shareholders. The information contained in the prospectuses for each Fund and Acquiring Fund is legally deemed to be part of this Proxy/Prospectus and is incorporated by reference. In addition, a copy of the appropriate Acquiring Fund prospectus also accompanies this Proxy/Prospectus. The Nations Funds’ annual reports to shareholders for the fiscal years ended March 31, 2005 previously have been mailed to shareholders. The following annual reports also have been previously mailed to shareholders: Columbia Large Company Index Fund and Columbia Small Company Index Fund for the fiscal years ended March 31, 2005; Columbia Intermediate Government Income Fund for the fiscal year ended April 30, 2005; Columbia Growth & Income Fund for the fiscal year ended July 31, 2004; Columbia Short Term Bond Fund, Inc. and Columbia Fixed Income Securities Fund, Inc. for the fiscal years ended August 31, 2004; Columbia Mid Cap Value Fund for the fiscal year ended September 30, 2004; and Columbia Tax-Managed Value Fund and Columbia Florida Intermediate Municipal Bond Fund for the fiscal years ended October 31, 2004. Subsequent to the mailing of the Funds’ annual shareholder reports, the following semi-annual reports also have been previously mailed to shareholders: Columbia Growth & Income Fund for the fiscal period ended January 31, 2005; Columbia Short Term Bond Fund, Inc. and Columbia Fixed Income Securities Fund, Inc. for the fiscal period ended February 28, 2005; Columbia Mid Cap Value Fund for the fiscal period ended March 31, 2005; and Columbia Tax-Managed Value Fund and Columbia Florida Intermediate Municipal Bond Fund for the fiscal period ended April 30, 2005.

      The SAI relating to this Proxy/Prospectus is incorporated by reference and is dated July 27, 2005. Additional copies of any Columbia Funds documents are available without charge by writing to the address or calling the phone number given above. Additional copies of any Nations Funds documents are available without charge by writing to the address or calling the phone number given above. These documents also are available on the SEC’s website at www.sec.gov.

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      THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROXY/PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

      The Meetings have been called to consider the election of the Board of Trustees/Directors for certain Funds and to consider the Reorganization Agreement dated as of July 27, 2005 that provides for the Reorganization of each Fund into its respective Acquiring Fund as shown below.

      On or about August 22, 2005, the class designations of the Nations Funds will change according to the table below:

     
Current Share Class Names New Share Class Names
Investor A Shares
  Class A Shares
Investor B Shares
  Class B Shares
Investor C Shares
  Class C Shares
Primary A Shares
  Class Z Shares
         
You Would Receive Shares of this
If You Own Shares in this Fund Acquiring Fund in the Reorganization
Columbia Fixed Income Securities Fund, Inc.
Class A Shares
Class B Shares
Class C Shares
Class D Shares
Class Z Shares
  &   Nations Bond Fund
  Class A Shares
  Class B Shares
  Class C Shares
  Class C Shares
  Class Z Shares
Columbia Florida Intermediate Municipal Bond Fund
Class A Shares
Class B Shares
Class C Shares
Class Z Shares
  &   Nations Florida Intermediate Municipal
Bond Fund
  Class A Shares
  Class B Shares
  Class C Shares
  Class Z Shares
Nations Florida Municipal Bond Fund
Class A Shares
Class B Shares
Class C Shares
Class Z Shares
  &    
Columbia Growth & Income Fund
Class A Shares
Class B Shares
Class C Shares
Class Z Shares
  &   Nations Value Fund
  Class A Shares
  Class B Shares
  Class C Shares
  Class Z Shares
Columbia Tax-Managed Value Fund
Class A Shares
Class B Shares
Class C Shares
Class Z Shares
  &    
Columbia Intermediate Government Income Fund
Class A Shares
Class B Shares
Class C Shares
Class Z Shares
Class G Shares
Class T Shares
  &   Nations Intermediate Bond Fund
  Class A Shares
  Class B Shares
  Class C Shares
  Class Z Shares
  Class Z Shares
  Class A Shares

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You Would Receive Shares of this
If You Own Shares in this Fund Acquiring Fund in the Reorganization
Columbia Large Company Index Fund
Class A Shares
Class B Shares
Class C Shares
Class Z Shares
  &   Nations LargeCap Index Fund
  Class A Shares
  Class B Shares
  Class A Shares
  Class Z Shares
Columbia Mid Cap Value Fund
Class A Shares
Class B Shares
Class C Shares
Class Z Shares
  &   Nations MidCap Value Fund
  Class A Shares
  Class B Shares
  Class C Shares
  Class Z Shares
Columbia Short Term Bond Fund, Inc.
Class A Shares
Class B Shares
Class C Shares
Class D Shares
Class Z Shares
Class G Shares
Class T Shares
  &   Nations Short-Term Income Fund
  Class A Shares
  Class B Shares
  Class C Shares
  Class C Shares
  Class Z Shares
  Class Z Shares
  Class A Shares
Nations Short-Intermediate Government Fund
Class A Shares
Class B Shares
Class C Shares
Class Z Shares
  &    
Columbia Small Company Index Fund
Class A Shares
Class B Shares
Class C Shares
Class Z Shares
  &   Nations SmallCap Index Fund
  Class A Shares
  Class A Shares
  Class A Shares
  Class Z Shares

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ITEM 1 — APPROVAL OF THE REORGANIZATION AGREEMENT

SUMMARY OF PROPOSED REORGANIZATIONS

      The following is an overview of certain information relating to the proposed Reorganizations. More complete information is contained throughout the Proxy/Prospectus and its Appendices.

Fee Tables

      The table shows: (i) the current total operating expense ratios of each Fund; and (ii) the pro forma total operating expense ratios of its corresponding Acquiring Fund. The current total operating expense ratios of each Fund and the pro forma total operating expense ratios shown below are both before and after waivers and/or reimbursements and are as of March 31, 2005. The table shows that (after waivers and reimbursements) the pro forma expense ratios of all Acquiring Fund share classes after the Reorganizations are expected to be lower than they are currently for each corresponding Fund share class (with one exception relating to Class T Shares of Columbia Intermediate Government Income Fund, where Fund and pro forma Acquiring Fund total operating expense ratios are expected to be the same). If the Reorganizations occur, Reorganization-related expenses will be allocated to the Funds, which will reduce the each Fund’s net asset value immediately prior to Closing. Based on the expense ratios shown in Appendix B, it is projected that, after the Reorganizations, former Fund shareholders will benefit from expense savings that will offset the allocated Reorganization-related expenses. However, the benefit of these projected expense savings will not be realized immediately. It is projected that the aggregate expense savings will not exceed the allocated Reorganization-related expenses until approximately six months after the Reorganization. If a shareholder redeems his or her shares prior to that time, the shareholder will receive no net benefit from the projected expense savings.

      All expense ratios shown are annualized. Pro forma total operating expense ratios are based upon the fee arrangements that will be in place upon consummation of the Reorganizations and assume in each case that a Fund’s shareholders approve their Fund’s Reorganization. It is possible that one Fund’s shareholders will approve a Reorganization while the shareholders of another Fund involved in the same Reorganization do not. These scenarios (if they result in any change to a shareholder’s current total operating expense ratios) are shown, along with other detailed pro forma total operating expense information, in Appendix B.

      The names of the classes of the Acquiring Funds are changing on or about August 22, 2005. The corresponding former share class names are shown on page 3 of this Proxy/Prospectus.

                           
Pro Forma
Total Operating
Total Operating Expense Ratios
Expense Ratios (before/after
(before/after waivers Combined Acquiring Fund/ Class Post- waivers and
Fund/Share Class and reimbursements) Reorganization reimbursements)*
Columbia Fixed Income Securities Fund, Inc.            &   Nations Bond Fund        
 
Class A Shares
    1.00%/1.00%             Class A Shares     0.79%/0.79%  
 
Class B Shares
    1.75%/1.75%             Class B Shares     1.54%/1.54%  
 
Class C Shares
    1.75%/1.75%             Class C Shares     1.54%/1.54%  
 
Class D Shares
    1.75%/1.75%             Class C Shares     1.54%/1.54%  
 
Class Z Shares
    0.75%/0.75%             Class Z Shares     0.54%/0.54%  
 
Columbia Florida Intermediate Municipal Bond Fund           &   Nations Florida Intermediate Municipal Bond Fund        
 
Class A Shares
    1.05%/1.05%             Class A Shares     0.95%/0.75%  
 
Class B Shares
    1.80%/1.80%             Class B Shares     1.70%/1.50%  
 
Class C Shares
    1.80%/1.80%             Class C Shares     1.70%/1.45%  
 
Class Z Shares
    0.80%/0.80%             Class Z Shares     0.70%/0.50%  

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Pro Forma
Total Operating
Total Operating Expense Ratios
Expense Ratios (before/after
(before/after waivers Combined Acquiring Fund/ Class Post- waivers and
Fund/Share Class and reimbursements) Reorganization reimbursements)*
Nations Florida Municipal Bond Fund*           &   Nations Florida Intermediate Municipal Bond Fund        
 
Class A Shares
    1.02%/0.85%             Class A Shares     0.95%/0.75%  
 
Class B Shares
    1.77%/1.60%             Class B Shares     1.70%/1.50%  
 
Class C Shares
    1.77%/1.60%             Class C Shares     1.70%/1.45%  
 
Class Z Shares
    0.77%/0.60%             Class Z Shares     0.70%/0.50%  
 
Columbia Growth & Income Fund           &   Nations Value Fund        
 
Class A Shares
    1.23%/1.23%             Class A Shares     0.99%/0.98%  
 
Class B Shares
    1.98%/1.98%             Class B Shares     1.74%/1.73%  
 
Class C Shares
    1.98%/1.98%             Class C Shares     1.74%/1.73%  
 
Class Z Shares
    0.98%/0.98%             Class Z Shares     0.74%/0.73%  
 
Columbia Tax-Managed Value Fund           &   Nations Value Fund        
 
Class A Shares
    1.44%/1.44%             Class A Shares     0.99%/0.98%  
 
Class B Shares
    2.14%/2.14%             Class B Shares     1.74%/1.73%  
 
Class C Shares
    2.14%/2.14%             Class C Shares     1.74%/1.73%  
 
Class Z Shares
    1.14%/1.14%             Class Z Shares     0.74%/0.73%  
 
Columbia Intermediate Government Income Fund           &   Nations Intermediate Bond Fund        
 
Class A Shares
    0.92%/0.92%             Class A Shares     0.83%/0.82%  
 
Class B Shares
    1.67%/1.67%             Class B Shares     1.58%/1.58%  
 
Class C Shares
    1.67%/1.67%             Class C Shares     1.58%/1.52%  
 
Class G Shares
    1.47%/1.47%             Class Z Shares     0.58%/0.58%  
 
Class T Shares
    0.82%/0.82%             Class A Shares     0.83%/0.82%  
 
Class Z Shares
    0.67%/0.67%             Class Z Shares     0.58%/0.58%  
 
Columbia Large Company Index Fund           &   Nations LargeCap Index Fund        
 
Class A Shares
    0.45%/0.45%             Class A Shares     0.45%/0.39%  
 
Class B Shares
    1.20%/1.20%             Class B Shares     1.20%/1.14%  
 
Class C Shares
    1.20%/1.20%             Class A Shares     0.45%/0.39%  
 
Class Z Shares
    0.28%/0.28%             Class Z Shares     0.20%/0.14%  
 
Columbia Mid Cap Value Fund           &   Nations MidCap Value Fund        
 
Class A Shares
    1.13%/1.13%             Class A Shares     1.07%/1.07%  
 
Class B Shares
    1.88%/1.88%             Class B Shares     1.82%/1.82%  
 
Class C Shares
    1.88%/1.88%             Class C Shares     1.82%/1.82%  
 
Class Z Shares
    0.89%/0.89%             Class Z Shares     0.83%/0.83%  
 
Columbia Short Term Bond Fund, Inc.            &   Nations Short-Term Income Fund        
 
Class A Shares
    0.89%/0.89%             Class A Shares     0.76%/0.73%  
 
Class B Shares
    1.64%/1.64%             Class B Shares     1.51%/1.48%  
 
Class C Shares
    1.64%/1.64%             Class C Shares     1.51%/1.04%  
 
Class D Shares
    1.64%/1.64%             Class C Shares     1.51%/1.04%  
 
Class G Shares
    1.44%/1.44%             Class Z Shares     0.51%/0.48%  
 
Class T Shares
    0.79%/0.79%             Class A Shares     0.76%/0.73%  
 
Class Z Shares
    0.64%/0.64%             Class Z Shares     0.51%/0.48%  
 
Nations Short-Intermediate Government Fund*           &   Nations Short-Term Income Fund        
 
Class A Shares
    0.80%/0.80%             Class A Shares     0.76%/0.73%  
 
Class B Shares
    1.55%/1.55%             Class B Shares     1.51%/1.48%  
 
Class C Shares
    1.55%/1.55%             Class C Shares     1.51%/1.04%  
 
Class Z Shares
    0.55%/0.55%             Class Z Shares     0.51%/0.48%  

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Pro Forma
Total Operating
Total Operating Expense Ratios
Expense Ratios (before/after
(before/after waivers Combined Acquiring Fund/ Class Post- waivers and
Fund/Share Class and reimbursements) Reorganization reimbursements)*
 
Columbia Small Company Index Fund           &   Nations SmallCap Index Fund        
 
Class A Shares
    0.46%/0.46%             Class A Shares     0.45%/0.45%  
 
Class B Shares
    1.21%/1.21%             Class A Shares     0.45%/0.45%  
 
Class C Shares
    1.21%/1.21%             Class A Shares     0.45%/0.45%  
 
Class Z Shares
    0.21%/0.21%             Class Z Shares     0.20%/0.20%  

*  The Nations Funds’ investment adviser and/or some of their other service providers have agreed to waive a portion of their fees until July 31, 2006. There is no guarantee that these waivers will continue after July 31, 2006.

Overview of the Reorganization Agreement

      The document that governs the Reorganizations is the Reorganization Agreement. The Reorganization Agreement provides for: (i) the transfer of all of the assets and liabilities of each Fund to its corresponding Acquiring Fund in exchange for a designated class of shares of the Acquiring Fund; (ii) the distribution of the Acquiring Fund shares to Fund shareholders in liquidation of their Fund; and (iii) in the case of Columbia Fixed Income Securities Fund, Inc. and Columbia Short Term Bond Fund, Inc., the dissolution of each Fund under state law. In other words, as a result of the Reorganizations, Fund shareholders will become shareholders of the corresponding Acquiring Fund and will hold, immediately after the Reorganizations, Acquiring Fund shares of a designated class that have a total dollar value equal to the total dollar value of the Fund shares that the shareholder held immediately before the Reorganizations. The consummation of one Reorganization is not dependent on the consummation of another Reorganization.

      The Reorganizations are expected to occur in September 2005. It is expected that the exchange of Fund shares for corresponding Acquiring Fund shares in each Reorganization will be tax-free for U.S. federal income tax purposes. Fund shareholders will not pay any sales charge or sales load on the exchange, although the shares that they receive will be subject to contingent deferred sales charges to the extent the shares they currently own are so subject.

      Management, the Funds and the Acquired Funds will each bear a portion of the out-of-pocket expenses associated with the Reorganizations. Out-of-pocket expenses associated with the Reorganizations include but are not limited to: (i) the expenses associated with the preparation, printing and mailing of any shareholder communications, including this Prospectus/Proxy Statement, and any filings with the SEC and/or other governmental authorities in connection with the Reorganizations; (ii) the fees and expenses of any proxy solicitation firm retained in connection with the Reorganizations; (iii) the legal fees and expenses incurred in connection with the Reorganizations; and (iv) the Trustees’/Directors’ fees and out-of-pocket expenses incurred as a result of the Reorganizations. The out-of-pocket expenses of Reorganization are first allocated to the Fund or Acquiring Fund. Reorganization-related costs that are specifically allocable to a Fund or Acquiring Fund are allocated to that Fund or Acquiring Fund (e.g., the costs of printing and mailing this Prospectus/Proxy Statement are allocated exclusively to the Funds). Costs of a Reorganization that are not specifically allocable to either a Fund or Acquiring Fund are divided equally between the Fund and Acquiring Fund. Following this initial allocation, Columbia limits the expenses actually allocated to a Fund or Acquiring Fund in each Reorganization to the lesser of: (i) the anticipated reductions in expenses borne by that Fund or Acquiring Fund over the first year following the Reorganization; and (ii) 75% of the initial allocation to that Fund or Acquiring Fund. Any reduction in the Reorganization expenses allocable to a Fund or Acquiring Fund as a result of these limitations is borne by Columbia. Should a Reorganization fail to occur, Columbia will bear all costs associated with the Reorganization.

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      Each Fund or Acquiring Fund is expected to bear the costs of their Reorganization as follows:

         
Allocation
Reorganization of Expenses
Columbia Fixed Income Securities Fund, Inc. 
   $ 82,310  
Nations Bond Fund (Acquiring)
  $ 0  
 
Columbia Florida Intermediate Municipal Bond Fund
  $ 42,704  
Nations Florida Municipal Bond Fund
  $ 46,308  
Nations Florida Intermediate Municipal Bond Fund (Acquiring)
  $ 0  
 
Columbia Growth & Income Fund
  $ 405,994  
Columbia Tax-Managed Value Fund
  $ 54,826  
Nations Value Fund (Acquiring)
  $ 42,671  
 
Columbia Intermediate Government Income Fund
  $ 54,319  
Nations Intermediate Bond Fund (Acquiring)
  $ 46,550  
 
Columbia Large Company Index Fund
  $ 0  
Nations LargeCap Index Fund (Acquiring)
  $ 0  
 
Columbia Mid Cap Value Fund
  $ 0  
Nations MidCap Value Fund (Acquiring)
  $ 46,411  
 
Columbia Short Term Bond Fund, Inc. 
   $ 67,894  
Nations Short-Intermediate Government Fund
  $ 51,850  
Nations Short-Term Income Fund (Acquiring)
  $ 0  
 
Columbia Small Company Index Fund
  $ 0  
Nations SmallCap Index Fund (Acquiring)
  $ 0  

      For more information about the Reorganizations and the Reorganization Agreement, see “The Reorganization — Description of the Reorganization Agreement.”

Overview of Investment Objectives and Principal Investment Strategies

 
Columbia Fixed Income Securities Fund, Inc. and Nations Bond Fund (Acquiring Fund)

      The investment objectives of the Fund and Acquiring Fund are similar. Columbia Fixed Income Securities Fund, Inc. seeks a high level of income by investing in a broad range of debt securities with intermediate to long-term maturities. Nations Bond Fund seeks total return (which includes elements of both capital appreciation and income) by investing in investment grade fixed income securities.

      The principal investment strategies of the Fund and Acquiring Fund are similar, although, unlike Columbia Fixed Income Securities Fund, Inc., Nations Bond Fund specifically limits the average dollar-weighted maturity of its investments to 10 years or less, and never more than 15 years.

      At its May 4-5, 2005 regular Board Meeting, the Nations Funds Board approved changes to the Acquiring Fund’s name. Effective September 23, 2005, Nations Bond Fund will be renamed Columbia Total Return Bond Fund. This change will not result in a change in the investment policy.

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Columbia Florida Intermediate Municipal Bond Fund, Nations Florida Municipal Bond Fund, and Nations Florida Intermediate Municipal Bond Fund (Acquiring Fund)

      The investment objectives of the Funds and Acquiring Fund are similar. Each generally seeks high income exempt from U.S. federal income and the Florida state intangibles tax.

      The principal investment strategies of the Funds and Acquiring Fund also are similar. Columbia Florida Intermediate Municipal Bond Fund normally invests at least 80% of its net assets plus any borrowings for investment purposes in the municipal securities of Florida, which are securities issued by that state and other governmental issuers (potentially including issuers located outside that state) and that pay interest which is exempt from both U.S. federal income tax (including the federal U.S. alternative minimum tax) and the income tax of Florida. Nations Florida Municipal Bond Fund and Nations Florida Intermediate Municipal Bond Fund will each invest at least 80% of its assets in securities that pay interest exempt from U.S. federal income tax, other than the federal alternative minimum tax, and Florida state intangibles tax. Nations Florida Municipal Bond Fund invests at least 80% of its assets in investment grade long-term municipal securities, while Nations Florida Intermediate Municipal Bond Fund invests at least 80% of its assets in intermediate-term municipal securities.

 
Columbia Growth & Income Fund, Columbia Tax-Managed Value Fund and Nations Value Fund (Acquiring Fund)

      The investment objectives of the Funds and Acquiring Fund are similar in that they all seek growth. There are, however, differences. Columbia Growth & Income Fund seeks long-term growth and income. Columbia Tax-Managed Value Fund seeks long-term capital growth while reducing shareholder exposure to taxes. Nations Value Fund seeks growth of capital by investing in companies that are believed to be undervalued.

      The principal investment strategies of the Funds and Acquiring Fund are similar in that they all invest principally in seek growth. Columbia Growth & Income Fund invests at least 65% of its total assets in common stocks of U.S. companies with equity market capitalizations at the time of purchase over $3 billion. When purchasing securities for Columbia Growth & Income Fund, the investment adviser generally chooses securities of companies it believes are undervalued. In this regard, the adviser uses a value investing strategy that focuses on buying stocks cheaply when they are undervalued or “out of favor.” Both Columbia Tax-Managed Value Fund and Nations Value Fund similarly use a value investing strategy. Columbia Tax-Managed Value Fund invests primarily in large capitalization and middle capitalization stocks. Large capitalization stocks are stocks of large companies that have market capitalizations similar in size to those companies in the Russell 1000 Value Index. In managing Columbia Tax-Managed Value Fund, the investment adviser uses investment strategies that are designed to reduce (but not eliminate) the payment by the Fund of taxable (i.e., capital gains) distributions to shareholders. Similarly, the investment adviser of Nations Value Fund uses strategies to reduce the amount of capital gains distributed to shareholders. Nations Value Fund normally invests at least 80% of its assets in common stocks of U.S. companies with market capitalizations of at least $1 billion and daily trade volumes of at least $3 million.

      At its May 4-5, 2005 regular Board Meeting, the Nations Funds Board approved the adoption of a new non-fundamental investment policy for the Nations Value Fund, and also approved changes to the Acquiring Fund’s name. Effective September 23, 2005, the Nations Value Fund will be renamed as Columbia Large Cap Value Fund, and will adopt a non-fundamental investment policy to invest, under normal circumstances, at least 80% of its assets in large capitalization companies whose market capitalizations are within the range of the companies within the Russell 1000 Value Index at the time of purchase. As of June 30, 2005, the Russell 1000 Value Index had a market capitalization range of approximately $859.0 million to $367.5 billion.

 
Columbia Intermediate Government Income Fund and Nations Intermediate Bond Fund (Acquiring Fund)

      The investment objectives of the Income Fund and the Acquiring Fund are generally similar with slight differences. Columbia Intermediate Government Income Fund seeks the highest level of current income consistent with prudent risk of capital, while Nations Intermediate Bond Fund seeks to obtain interest income and capital appreciation.

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      The principal investment strategies of the Fund and the Acquiring Fund are generally similar with slight differences. The investment strategies of Columbia Intermediate Government Income Fund focus a greater percentage of its assets in U.S. Government obligations than Nations Intermediate Bond Fund. In addition, Nations Intermediate Bond Fund is a feeder fund in a master-feeder structure. Unlike Columbia Intermediate Government Income Fund, which invests directly in portfolio securities, Nations Intermediate Bond Fund invests all of its assets in Nations Intermediate Bond Master Portfolio, which is a series of Nations Master Investment Trust (another registered investment company in the Nations Funds Complex).

      At its May 4-5, 2005 regular Board Meeting, the Nations Funds Board approved changes to the Acquiring Fund’s name. Effective September 23, 2005, Nations Intermediate Bond Fund will be renamed Columbia Intermediate Core Bond Fund. This change will not result in a change in the investment policy.

 
Columbia Large Company Index Fund and Nations LargeCap Index Fund (Acquiring Fund)

      The investment objectives of the Fund and the Acquiring Fund are similar in that each seeks to provide investment results that, before deduction of operating expenses, match the price and yield performance of the S&P 500 Index.

      The principal investment strategies of the Fund and Acquiring Fund are similar. Columbia Large Company Index Fund pursues an indexing strategy to approximate the investment performance of the S&P 500 Index. Nations LargeCap Index Fund will invest at least 80% of its assets in common stock that are included in the S&P 500 Index.

 
Columbia Mid Cap Value Fund and Nations MidCap Value Fund (Acquiring Fund)

      The investment objectives of the Fund and the Acquiring Fund are similar in that each seeks long-term growth. However, Nations MidCap Value Fund also seeks income as a secondary consideration.

      The principal investment strategies of the Fund and Acquiring Fund are similar in that each invests, under normal market conditions, at least 80% of its assets in middle capitalization (mid-cap) stocks. Mid-cap stocks are stocks of mid-size companies that have market capitalizations similar in size to those of the Russell Midcap Value Index. As of June 30, 2005, the Russell MidCap Value Index had a market capitalization range of approximately $1.4 billion and $13.4 billion.

 
Columbia Short Term Bond Fund, Inc., Nations Short-Intermediate Government Fund and Nations Short-Term Income Fund (Acquiring Fund)

      The investment objectives of Columbia Short Term Bond Fund, Inc., Nations Short-Intermediate Government Fund, and Nations Short-Term Income Fund are generally similar with slight differences. Columbia Short Term Bond Fund, Inc. seeks a high level of current income consistent with a high degree of principal stability by investing at least 80% of its net assets (plus any borrowings for investment purposes) in short-term, investment-grade, fixed income securities (rated BBB or higher by Standard & Poor’s (S&P) or Baa or higher by Moody’s Investors Service, Inc. (Moody’s), or if unrated, deemed to be of comparable quality). Nations Short-Intermediate Government Fund seeks high current income with modest fluctuations of principal, while Nations Short-Term Income Fund seeks high current income consistent with minimal fluctuations of principal.

      The principal investment strategies of Columbia Short Term Bond Fund, Inc. and Nations Short-Intermediate Government Fund focus a greater percentage of their assets in U.S. Government obligations than Nations Short-Term Income Fund, although generally similar, each has a slightly different duration approach. Columbia Short Term Bond Fund, Inc. intends to invest at least 50% of its assets in direct and indirect U.S. Government obligations and debt securities rated in the two highest categories by S&P. Nations Short-Intermediate Government Fund invests at least 80% of its assets in U.S. Government obligations and repurchase agreements secured by these securities. Nations Short-Term Income Fund invests at least 80% of its assets in income-producing securities.

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      At its May 4-5, 2005 regular Board Meeting, the Nations Funds Board approved the adoption of a new non-fundamental investment policy for the Nations Short-Term Income Fund, and also approved changes to the Acquiring Fund’s name. Effective September 23, 2005, the Nations Short-Term Income Fund will be renamed as Columbia Short Term Bond Fund, and will adopt a non-fundamental investment policy to invest, under normal circumstances, at least 80% of its assets in bonds.

 
Columbia Small Company Index Fund and Nations SmallCap Index Fund (Acquiring Fund)

      The investment objectives of the Fund and the Acquiring Fund are similar in that each seek to provide investment results that, before deduction of operating expenses, match the performance of the S&P SmallCap 600 Index.

      The principal investment strategies of the Fund and the Acquiring Fund are similar. Columbia Small Company Index Fund pursues an indexing strategy to approximate the investment performance of the S&P SmallCap 600 Index. Nations SmallCap Index Fund will invest at least 80% of its assets in common stock that are included in the S&P SmallCap 600 Index. The S&P SmallCap 600 Index is an unmanaged market capitalization index consisting of 600 common stocks with market capitalizations ranging from $500 million to $3 billion.

      For additional information about the similarities and differences between the investment objectives and principal investment strategies of the Funds and Acquiring Funds, see “The Reorganizations — Comparison of Investment Management, Investment Objective and Principal Investment Strategies.”

Overview of Service Providers

      BACAP, located at One Bank of America Plaza, Charlotte, North Carolina 28255, is the investment adviser to over 70 mutual funds in the Nations Funds Complex, including the Nations Funds described in this Proxy/ Prospectus. BACAP is a registered investment adviser and a wholly-owned subsidiary of Bank of America.

      Columbia, located at 100 Federal Street, Boston, Massachusetts 02110, serves as the Columbia Funds’ investment adviser. After each Columbia Fund reorganizes into its corresponding Acquiring Fund, BACAP will serve as the investment adviser.

      The Acquiring Funds are distributed by BACAP Distributors, LLC (“BACAP Distributors”), a registered broker-dealer located at One Bank of America Plaza, Charlotte, North Carolina 28255. On or about August 22, 2005, BACAP Distributors will merge into Columbia Funds Distributors, Inc., which will be renamed Columbia Management Distributor, Inc. (“CMD”). The Board has also approved distribution agreements with CMD pursuant to which CMD will replace, on or about August 22, 2005, BACAP Distributors as the exclusive distributor of the Nations Funds, including the Acquiring Funds. CMD may pay amounts received from the Funds and Acquiring Funds for commissions, distribution (12b-1) and shareholder servicing fees, and/or other compensation to companies for selling shares and providing services to investors. The Board also has approved Columbia as administrator of the Nations Funds, including the Acquiring Funds, and will be responsible for overseeing the administrative operations of the Acquiring Funds. The Acquiring Funds will pay CMD a fee for its services, plus certain out-of-pocket expenses. The fee is calculated as an annual percentage of the average daily net assets of the Funds, and is paid monthly.

      On or about August 22, 2005, CFSI will become the transfer agent for the Acquiring Funds’ shares. Its responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. CFSI is located at One Financial Center, Boston, Massachusetts 02110.

      The administration, distribution and transfer agency service provider changes discussed above are collectively referred to as the “Conversion.”

      State Street Bank and Trust Company, located at 2 Avenue de Lafayette, Boston Massachusetts, 02111-2900, is the custodian for the Columbia Funds’ assets. Bank of New York, located at 2 Hanson Place,

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7th Floor, Brooklyn, NY 11217, serves as custodian for the Nations Funds’ assets, including the Acquiring Funds. By October 2005, State Street Bank and Trust Company will serve as the custodian for all Acquiring Funds.

      Ropes & Gray LLP, located at One Financial Center, One International Place, Boston, MA 02111, serves as legal counsel to Columbia Funds Trust I, Columbia Funds Trust III, Columbia Funds Trust V, Columbia Funds Trust VI, Columbia Short Term Bond Fund, Inc. and Columbia Fixed Income Securities Fund, Inc.

      Morrison & Foerster LLP, located at 2000 Pennsylvania Avenue, N.W., Washington, D.C. 20006, serves as legal counsel to Nations Funds Trust.

      See the discussion under “The Reorganizations — Comparison of Service Providers.”

Overview of Purchase, Redemption, Distribution and Exchange Policies and Other Shareholder Transactions and Services

      After the Conversion of service providers on or about August 22, 2005, the purchase, redemption, distribution, exchange and other policies and procedures of each share class of the Acquiring Funds will be aligned with to those of the corresponding designated share class of the Funds prior to the Reorganizations.

      For a more detailed description, see “The Reorganizations — Comparison of Purchase, Redemption, Distribution and Exchange Policies and Other Shareholder Transactions and Services.”

Federal Income Tax Consequences

      The Reorganizations are not expected to result in the recognition of gain or loss, for U.S. federal income tax purposes, by the Funds, the Acquiring Funds or their respective shareholders. However, the sale of securities by any Fund prior to the Reorganizations, whether in the ordinary course of business or in anticipation of the Reorganizations, could result in taxable distributions to such Fund’s shareholders. See “The Reorganizations — Material U.S. Federal Income Tax Consequences” for additional information. Since their inception, each of the Funds and Acquiring Funds believes it has qualified as a “regulated investment company” under the Code. Accordingly, each Fund and Acquiring Fund believes it has been, and expects to continue to be, relieved of any U.S. federal income tax liability to the extent it makes distributions of its taxable income and gains to its shareholders.

Principal Risk Factors

      The following compares the principal investment risks of the Funds and the Acquiring Funds. In some instances, a risk described by the Columbia Funds was similar to risk described by a Nations Fund, but identified by a different name. For example, investment strategy risk applicable to certain Nations Funds is similar to management risk applicable to certain Columbia Funds. In those instances, the risk, as identified by Columbia Funds, appears in parentheses (i.e., investment strategy (management) risk). A more detailed description of the risks follows the comparisons below.

 
Columbia Fixed Income Securities Fund, Inc. and Nations Bond Fund (Acquiring Fund)

      Columbia Fixed Income Securities, Inc. and Nations Bond Fund are subject to investment strategy (management) risk, interest rate risk, credit risk, derivatives risk, mortgage-related securities risk and risk associated with investment in U.S. Government obligations. Columbia Fixed Income Securities Fund, Inc. is subject to market risk, structure risk, prepayment risk, reinvestment risk, and inflation risk. Nations Bond Fund is subject to asset-backed securities risk.

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Columbia Florida Intermediate Municipal Bond Fund, Nations Florida Municipal Bond Fund, and Nations Florida Intermediate Municipal Bond Fund (Acquiring Fund)

      Columbia Florida Intermediate Municipal Bond Fund, Nations Florida Municipal Bond Fund, and Nations Florida Intermediate Municipal Bond Fund are each subject to investment strategy (management) risk, interest rate risk, derivatives risk and state-specific risk. Columbia Florida Intermediate Municipal Bond Fund is subject to issuer risk, market risk, reinvestment risk, and risks associated with investment in tax-exempt bonds and U.S. Government obligations. Nations Florida Municipal Bond Fund is also subject to credit risk. Nations Florida Intermediate Municipal Bond is subject to the same risks as Nations Florida Municipal Bond Fund.

 
Columbia Growth & Income Fund, Columbia Tax-Managed Value Fund and Nations Value Fund (Acquiring Fund)

      Columbia Growth & Income Fund, Columbia Tax-Managed Value Fund, and Nations Value Fund are each subject to investment strategy (management) risk and stock market (equity) risk. Columbia Growth & Income Fund and Columbia Tax-Managed Value Fund are both subject to market risk and risk associated with investment in value stocks, small-cap companies, and mid-cap companies. Columbia Tax-Managed Value Fund and Nations Value Fund are both subject to foreign investment risk. Columbia Growth & Income Fund is also subject to interest rate risk and risk associated with investment in convertible securities. Nations Value Fund is subject to real estate investment trust risk.

 
Columbia Intermediate Government Income Fund and Nations Intermediate Bond Fund (Acquiring Fund)

      Columbia Intermediate Government Income Fund and Nations Intermediate Bond Fund are both subject to investment strategy (management) risk, interest rate risk, and derivatives risk. Columbia Intermediate Government Income Fund is subject to market risk, issuer risk, structure risk, prepayment risk, foreign investment risk and frequent trading risk. Nations Intermediate Bond Fund is subject to credit risk and risk associated with changing distribution levels and investment in mortgage-related securities and a Master Portfolio.

 
Columbia Large Company Index Fund and Nations LargeCap Index Fund (Acquiring Fund)

      Columbia Large Company Index Fund and Nations LargeCap Index Fund are both subject to stock market (equity) risk and futures risk. Columbia Large Company Index Fund is subject to market risk, indexing risk, credit risk, and sector risk. Nations LargeCap Index Fund is subject to investment strategy (management) risk.

 
Columbia Mid Cap Value Fund and Nations MidCap Value Fund (Acquiring Fund)

      Columbia Mid Cap Value Fund and Nations MidCap Value Fund are both subject to investment strategy (management) risk, stock market (equity) risk, foreign investment risk and real estate investment trust risk. Columbia Mid Cap Value Fund is subject to market risk and risk associated with investment in value stocks, small-cap companies and mid-cap companies.

 
Columbia Short Term Bond Fund, Inc., Nations Short-Intermediate Government Fund and Nations Short-Term Income Fund (Acquiring Fund)

      Columbia Short Term Bond Fund, Inc., Nations Short-Intermediate Government Fund, and Nations Short-Term Income Fund are each subject to investment strategy (management) risk, mortgage-related

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securities risk, interest rate risk, credit risk, and derivatives risk, and risk associated with investment in U.S. Government obligations. Columbia Short Term Bond Fund, Inc. is subject to market risk, structure risk, prepayment risk, reinvestment risk, inflation risk and risk associated with investment in over-the-counter instruments. Both Nations Short-Intermediate Government Fund and Nations Short-Term Income Fund are subject to risk associated with changing distribution levels. Nations Short-Term Income Fund is also subject to asset-backed securities risk.
 
Columbia Small Company Index Fund and Nations SmallCap Index Fund (Acquiring Fund)

      Columbia Small Company Index Fund and Nations Small Cap Index Fund are both subject to stock market (equity) risk, small company risk, and futures risk. Columbia Small Company Index Fund is subject to market risk, indexing risk, credit risk, and sector risk. Nations SmallCap Index Fund is subject to investment strategies risk.

Description of Principal Investment Risks

  •  Asset-backed securities risk — Payment of interest and repayment of principal may be impacted by the cash flows generated by the assets backing these securities. The value of a fund’s asset-backed securities may also be affected by changes in interest rates, the availability of information concerning the interests in and structure of the pools of purchase contracts, financing leases or sales agreements that are represented by these securities, the creditworthiness of the servicing agent for the pool, the originator of the loans or receivables, or the entities that provide any supporting letters of credit, surety bonds, or other credit enhancements.
 
  •  Changing distribution levels — The level of monthly income distributions paid by fund depends on the amount of income paid by the securities a fund holds. It is not guaranteed and will change. Changes in the value of the securities, however, generally should not affect the amount of income they pay.
 
  •  Convertible securities — Convertible securities are securities that can be converted into common stock, such as certain debt securities and preferred stock. Convertible securities are subject to the usual risks associated with fixed income investments, such as interest rate risk and credit risk. In addition, because they react to changes in the value of the equity securities into which they will convert, convertible securities are also subject to market risk.
 
  •  Credit risk — The fund could lose money if the issuer of a fixed income security is unable to pay interest or repay principal when it is due. Credit risk usually applies to most fixed income securities, but is generally not a factor for U.S. Government obligations. Some of the securities in which a fund invests are not investment grade and are generally considered speculative because they present a greater risk of loss, including default, than higher quality debt securities. These securities typically pay a premium — a high interest rate or yield — because of the increased risk of loss. These securities also can be subject to greater price volatility.
 
  •  Derivatives risk — The use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. Among the risks presented are market risk, credit risk, management risk and liquidity risk. The use of derivatives can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives. These risks are heightened when the portfolio manager uses derivatives to enhance a fund’s return or as a substitute for a position or security, rather than solely to hedge (or offset) the risk of a position or security held by the fund. The success of management’s derivatives strategies will depend on its ability to assess and predict the impact of market or economic developments on the underlying asset, index or rate and the derivative itself, without the benefit of observing the performance of the derivative under all possible market conditions. Liquidity risk exists when a security cannot be purchased or sold at the time desired, or cannot be purchased or sold without adversely affecting the price. The portfolio manager is not required to utilize derivatives to reduce risks.

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  •  Foreign investment risk — Foreign investments may be riskier than U.S. investments because of political and economic conditions, changes in currency exchange rates, foreign controls on investment, difficulties selling some securities and lack of or limited financial information. Significant levels of foreign taxes, including potentially confiscatory levels of taxation and withholding taxes, also may apply to some foreign investments.
 
  •  Frequent trading risk — Frequent trading of investments usually increases the chance that the Fund will pay investors short-term capital gains. These gains are taxable at higher rates than long-term capital gains. Frequent trading could also mean higher transaction costs, which could reduce the Fund’s return.
 
  •  Futures risk — The fund may use futures contracts as a substitute for the securities included in the index. There is a risk that this could result in losses, reduce returns, increase transaction costs or increase a fund’s volatility.
 
  •  Holding cash — The fund may hold cash while it is waiting to make an investment, as a temporary defensive strategy, or if the portfolio manager believes that attractive tax-exempt investments are not available. Any uninvested cash the Fund holds does not earn income.
 
  •  Indexing risk — Your investment in Columbia Large Company Index Fund or Columbia Small Company Index Fund will typically decline in value when its index declines. Since Columbia Large Company Index Fund and Columbia Small Company Index Fund are designed to track its index, each fund cannot purchase other securities that may help offset declines in its index. In addition, because Columbia Large Company Index Fund and Columbia Small Company Index Fund may not hold all issues included in its index, may not always be fully invested, and bears transaction costs and expenses, each fund’s performance may fail to match the performance of its index, after taking expenses into account.
 
  •  Inflation risk — Inflation risk is risk to investors who invest in fixed income instruments, such as bond or money market funds, because there is a chance that the returns on these instruments may not keep pace with inflation. Inflation represents the rising cost of goods and services over time.
 
  •  Interest rate risk — The prices of fixed income securities will tend to fall when interest rates rise. In general, fixed income securities with longer terms tend to fall more in value when interest rates rise than fixed income securities with shorter terms.
 
  •  Investment in other Nations funds — Nations Bond Fund and the master portfolio of Nations Intermediate Bond Fund may invest in Nations High Yield Portfolio rather than directly in securities. Nations Bond Fund may also invest in Nations Convertible Securities Fund. Nations High Yield Portfolio is a registered investment company in the Nations Funds Complex whose interests are offered by private placements only. In addition to the fees that BACAP and its affiliates may receive from Nations Bond Fund for services provided directly, BACAP and its affiliates are also entitled to reimbursement for certain expenses from Nations High Yield Portfolio and payment of fees for providing advisory and other services. BACAP and its affiliates may waive fees, which they are entitled to receive from either Nations High Yield Portfolio, Nations Convertible Securities Fund, or Nations Bond Fund.
 
  •  Investment in the Master Portfolio — Nations Intermediate Bond Fund is a feeder fund that invests all of its assets in Nations Intermediate Bond Master Portfolio. Other mutual funds and eligible investors can buy shares in Nations Intermediate Bond Master Portfolio. All investors in Nations Intermediate Bond Master Portfolio invest under the same terms and conditions as Nations Intermediate Bond Fund and pay a proportionate share of Nations Intermediate Bond Master Portfolio’s expenses. Other feeder funds that invest in Nations Intermediate Bond Master Portfolio may have different share prices and returns than Nations Intermediate Bond Fund because different feeder funds typically have varying sales charges, and ongoing administrative and other expenses. Nations Intermediate Bond Fund could withdraw its entire investment from Nations Intermediate Bond Master Portfolio if it believes it is in the best interests of the fund to do so (for example, if Nations Intermediate Bond Master Portfolio changed its investment

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  objective). It is unlikely that this would happen, but if it did, Nations Intermediate Bond Fund’s portfolio could be less diversified and therefore less liquid, and expenses could increase. Nations Intermediate Bond Fund might also have to pay brokerage, tax or other charges.
 
  •  Investment strategy (management) risk — This means generally the risk that the value of the investments that the portfolio manager chooses will not rise as high as the portfolio manager expects, or will fall. The adviser’s investment decisions might produce losses or cause a Fund to underperform when compared to other funds with a similar investment goal. Nations Florida Municipal Bond Fund and Nations Florida Intermediate Municipal Bond Fund are considered to be non-diversified because they invest most of their assets in securities of the state of Florida, its public authorities and local governments. The value of the Funds and the amount of interest they pay could also be affected by the financial conditions of the state, its public authorities and local governments. Nations LargeCap Index Fund tries to tries to match (before fees and expenses) the returns of the S&P 500, and is not actively managed. There is no assurance that the returns of Nations LargeCap Index Fund will match the returns of the S&P 500. Its value will rise and fall with the performance of the S&P 500. Nations SmallCap Index Fund tries to match (before fees and expenses) the returns of the S&P SmallCap 600 Index, and is not actively managed. There is no assurance that the returns of Nations SmallCap Index Fund will match the returns of the S&P SmallCap 600 Index. Its value will rise and fall with the performance of the S&P SmallCap 600 Index.
 
  •  Issuer risk — Issuer risk is the possibility that changes in the financial condition of the issuer of a security or the entity responsible for payment of a special revenue obligation, changes in general economic conditions, or changes in economic conditions that affect the issuer or the entity responsible for payments of a special revenue obligation may impact its actual or perceived willingness or ability to make timely payments of interest or principal. This could result in a decrease in the price of the security and in some cases a decrease in income.
 
  •  Market risk — Market risk means that security prices in a market, sector or industry may fall, reducing the value of your investment.
 
  •  Mortgage-related securities risk — The value of a Fund’s mortgage-backed securities can fall if the owners of the underlying mortgages pay off their mortgages sooner than expected, which could happen when interest rates fall, or later than expected, which could happen when interest rates rise. If the underlying mortgages are paid off sooner than expected, the fund may have to reinvest this money in mortgage-backed or other securities that have lower yields. Mortgage-backed securities are most commonly issued or guaranteed by the Government National Mortgage Association, Federal National Mortgage Association or Federal Home Loan Mortgage Corporation, but may also be issued or guaranteed by other private issuers. Mortgage-backed securities issued by private issuers, whether or not such obligations are subject to guarantees by the private issuer, may entail greater risk than obligations directly or indirectly guaranteed by the U.S. Government.
 
  •  Over-the-counter instruments — Over-the-counter instruments (investments not traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not meet its obligations.
 
  •  Prepayment risk — Prepayment risk is a particular type of structure risk that is associated with investments in asset-backed and mortgage-backed securities. With respect to investments in mortgage-backed securities, prepayment risk is the possibility that, as prevailing interest rates fall, homeowners are more likely to refinance their home mortgages. When mortgages are refinanced, the principal on mortgage-backed securities is paid earlier than expected. In an environment of declining interest rates, asset-backed and mortgage-backed securities may offer less potential for gain than other debt securities. During periods of rising interest rates, asset-backed and mortgage-backed securities have a high risk of declining in price because the declining prepayment rates effectively increase the expected life of the security. In addition, the potential impact of prepayment on the price of asset-backed and mortgage-backed securities may be difficult to predict and result in greater volatility.

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  •  Real estate investment trust risk — Real estate investment trust risk is the risk that changes in real estate values or economic downturns can have a significant negative effect on issuers in the real estate industry.
 
  •  Reinvestment risk — Reinvestment risk is the risk that income from a Fund’s debt securities will decline if and when the fund invests the proceeds from matured, traded or called securities at market interest rates that are below the current earnings rate of the fund’s portfolio.
 
  •  Sector risk — Sector risk is inherent in the investment strategy of Columbia Large Company Index Fund and Columbia Small Company Index Fund. Companies that are in different but closely related industries are sometimes described as being in the same broad economic sector. The values of stocks of different companies in a market sector may be similarly affected by particular economic or market events. To the extent that the stocks in a particular market sector comprise a significant portion of one of Columbia Large Company Index Fund’s and Columbia Small Company Index Fund’s index and, correspondingly, of its holdings, Columbia Large Company Index Fund and Columbia Small Company Index Fund will be especially susceptible to the risks associated with investments in those market sectors.
 
  •  Small cap- or mid-cap companies — Small cap- or mid-cap companies may be more susceptible to market downturns, and their prices could be more volatile. These companies are more likely than larger companies to have limited product lines, operating histories, markets or financial resources. They may depend heavily on a small management team and may trade less frequently, may trade in smaller volumes and may fluctuate more sharply in price than stocks of larger companies. In addition, such companies may not be widely followed by the investment community, which can lower the demand for their stocks.
 
  •  Small company risk — Stocks of smaller companies tend to have greater price swings than stocks of larger companies because they trade less frequently and in lower volumes. These securities may have a higher potential for gains but also carry more risk.
 
  •  State-specific risk — State-specific risk is the chance that a Fund, because it invests primarily in securities issued by Florida and its municipalities, is more vulnerable to unfavorable developments in Florida than funds that invest in municipal bonds of many different states. For example, the state’s economy relies on various industries including retirement migration, tourism and agriculture, which have historically driven the economy, as well as high technology jobs, service sector jobs and international trade which complement the three traditional industries. Adverse conditions affecting these industries could have an impact on Florida municipal securities. In addition, unfunded State of Florida mandates, including, but not limited to, classroom size limits, implementing a high speed rail system and increased security measures may have an adverse effect on the credit quality of certain of the issuers of Florida municipal securities.
 
  •  Stock market (equity) risk — The value of the stocks a Fund holds can be affected by changes in U.S. or foreign economies and financial markets, and the companies that issue the stocks, among other things. Stock prices can rise or fall over short as well as long periods. In general, stock markets tend to move in cycles, with periods of rising prices and periods of falling prices.
 
  •  Structure risk is the risk that an event will occur (such as a security being prepaid or called) that alters the security’s cash flows.
 
  •  Tax considerations — Most of the distributions paid by Nations Florida Intermediate Municipal Fund come from interest on Florida municipal obligations, which generally are free from U.S. federal income tax and investment in this fund generally is exempt from Florida state intangibles tax, but may be subject to alternative minimum taxes and state, and other local taxes. Any portion of a distribution that comes from income from nonexempt sources such as income from other kinds of securities or from realized capital gains generally is subject to U.S. federal, state and local taxes. Shares of Nations Florida Intermediate Municipal Fund would not be suitable investments for tax-advantaged accounts or tax-exempt investors. We generally rely on opinions of the issuer’s bond counsel that interest on a bond will be exempt from applicable taxes. Tax authorities are paying increased attention to whether

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  such interest is exempt, and we can’t assure you that a tax authority will not successfully challenge the exemption of a bond held by the Acquiring Fund.
 
  •  Tax-exempt bonds are subject to special risks. Changes in tax laws or adverse determinations by the Internal Revenue Service may make the income from some of these bonds taxable. Bonds that are backed by the issuer’s taxing authority, known as general obligation bonds, may depend for payment on legislative appropriation and/or aid from other governments. These bonds may be vulnerable to legal limits on a government’s power to raise revenue or increase taxes. Other tax-exempt bonds, known as special revenue obligations, are payable from revenues earned by a particular project or other revenue sources. These bonds are subject to greater risk of default than general obligation bonds because investors can look only to the revenue generated by the project or the private company backing the project, rather than to the credit of the state or local government issuer of the bonds.
 
  •  U.S. Government obligations — U.S. Government obligations include U.S. Treasury obligations, securities issued or guaranteed by various agencies of the U.S. Government, or by various instrumentalities, which have been established or sponsored by the U.S. Government. U.S. Treasury obligations are backed by the “full faith and credit” of the U.S. Government. Securities issued or guaranteed by U.S. federal agencies and U.S. Government sponsored instrumentalities may or may not be backed by the full faith and credit of the U.S. Government.
 
  •  Value stocks — Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the adviser’s opinion, undervalued. If the adviser’s assessment of a company’s prospectus is wrong, the price of the company’s stock may fall, or may not approach the value the adviser has placed on it.

MORE INFORMATION ABOUT THE REORGANIZATIONS

Description of the Reorganization Agreement

      As noted in the Summary, the Reorganization Agreement is the governing document of the Reorganizations. Among other things, it provides for: (i) the transfer of all of the assets and liabilities of each Fund to its corresponding Acquiring Fund in exchange for shares of a designated class of shares of the Acquiring Fund; (ii) the distribution of the Acquiring Fund shares to Fund shareholders in liquidation of the Fund; and (iii) in the case of Columbia Fixed Income Securities Fund, Inc. and Columbia Short Term Bond Fund, Inc., the dissolution of each Fund under state law. Liabilities include, among other things, existing rights to indemnification provided to the Columbia Funds’ Trustees/Directors and officers. The Reorganization Agreement also sets forth representations and warranties of the parties, describes the mechanics of the transaction and includes a number of conditions to the completion of the Reorganizations, such as the requirement that a good standing certificate be obtained by each party and that no stop-orders or similar regulatory barriers have been issued by the SEC. The completion of each Reorganization also is conditioned upon each party receiving an opinion from Morrison & Foerster LLP to the effect that each Reorganization will qualify as a “reorganization” for U.S. federal income tax purposes. The consummation of one Reorganization is not dependent on the consummation of another Reorganization.

      If approved by the shareholders of the Funds, the Closing of the Reorganizations is expected to occur in September 2005, or such other date as the parties may agree under the Reorganization Agreement. Below is a summary of key terms of the Reorganization Agreement.

  •  Each Fund will transfer all of the assets and liabilities attributable to each designated share class to the Acquiring Fund in exchange for shares of a designated class of shares of the Acquiring Fund with an aggregate net asset value equal to the net value of the transferred assets and liabilities.
 
  •  The Reorganizations will occur on the next business day after the time when the assets of each Fund are valued for the purposes of the Reorganizations.

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  •  After the Reorganizations, each of the Columbia Fixed Income Securities Fund, Inc.’s and the Columbia Short Term Bond Fund, Inc.’s affairs will be wound up in an orderly fashion and they will be dissolved under state law and deregistered under the 1940 Act.
 
  •  The shares of each designated class of shares of the Acquiring Fund received by the Fund will be distributed to the shareholders of the corresponding designated class of the Fund pro rata in accordance with their percentage ownership of such designated class of shares of each Fund in complete liquidation of the Fund.
 
  •  Shareholders of the Columbia Fixed Income Securities Fund, Inc. and the Columbia Short Term Bond Fund, Inc. who object to the Reorganization of their fund may be entitled under Oregon law to demand payment for, or an appraisal of, their shares. Information concerning dissenters’ rights is contained in Appendix G to this Proxy/Prospectus.
 
  •  The Reorganizations require approval by the Funds’ shareholders and satisfaction of a number of other conditions; the Reorganizations may be terminated at any time by mutual agreement.

      A copy of the Reorganization Agreement is available at no charge by calling (866) 348-1468 or writing the Nations Fund Trust at the address listed on the first page of the Proxy/Prospectus.

Reasons for the Reorganizations and Other Considerations

      Bank of America Corporation and FleetBoston Financial Corporation recently merged and their subsidiaries — BACAP and Columbia — became affiliates. As a result of the merger, certain mutual funds previously offered separately by each organization are now offered together in the same distribution and sales channels. Because several funds have overlapping investment objectives and principal investment strategies, and many of the same individuals (who are dual employees of BACAP and Columbia) are responsible for the day-to-day management of overlapping funds, Management and the Boards are proposing to reduce overlap and streamline the Columbia Funds and Nations Funds complexes by combining like funds.

      By reducing substantial overlap, Management and the Boards believe certain inefficiencies in fund marketing, distribution and sales and also potential confusion among investors about investment choices will be eliminated. Management and the Boards believe that the elimination of inefficiencies and potential confusion among investors will allow the Acquiring Funds to further grow in asset size, which will potentially benefit shareholders to the extent that the increase of fund assets results in financial and operational efficiencies and allows an Acquiring Fund to participate in greater investment opportunities.

Board Consideration

      Management presented the proposed Reorganizations to the Board of Trustees of Nations Funds Trust for consideration at meetings held on February 15, 2005 and March 21, 2005, and to the Columbia Funds Boards on February 9, 2005 and May 11, 2005. For the reasons discussed herein, the Boards, including all of the Directors/Trustees who are not “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the Funds and Acquiring Funds, determined that the interests of the shareholders of each of the Funds and the Acquiring Funds would not be diluted as a result of the proposed Reorganizations, and that the proposed Reorganizations are in the best interests of each of their respective Funds and Acquiring Funds and their shareholders.

      The Boards approved the Reorganizations upon consideration of a number of factors, including the following:

  •  Management’s continuing initiative to streamline and improve product offerings and reduce overlap in the Nations Funds and Columbia Funds families by eliminating overlapping funds and clarifying investor choices;
 
  •  Various potential shareholder benefits of the Reorganizations (e.g., reduced net expenses, the opportunity to attract more assets and achieve greater economies of scale, and greater diversification of assets thereby reducing exposure to risks);

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  •  The current asset level of the Funds and the combined pro forma asset level of each corresponding Acquiring Fund;
 
  •  Columbia Tax-Managed Value Fund is merging into Nations Value Fund, which does not have a tax-managed focus;
 
  •  The relative historical investment performance of each Fund and its Acquiring Fund, although no assurances can be given that the Acquiring Fund will achieve any particular level of performance after the Reorganizations;
 
  •  The expense ratios and information regarding fees and expenses of each Fund and its corresponding Acquiring Fund before and after each Reorganization, and that, in each case, the total operating expense ratios of the Funds were no higher than those of the Acquiring Funds;
 
  •  The possibility that the increased asset size of each Acquiring Fund on a post-Reorganization basis could provide each Acquiring Fund with more trading leverage and opportunities to purchase larger securities positions and participate in greater investment opportunities;
 
  •  Whether each Reorganization would dilute the interests of their respective Fund and Acquiring Fund shareholders;
 
  •  The similarities and differences in investment objectives, strategies, and risks of each Fund as compared with those of its corresponding Acquiring Fund;
 
  •  The similarities and differences in share classes of each Fund as compared with those of its corresponding Acquiring Fund;
 
  •  Columbia’s commitment, until the first anniversary of the Reorganizations, to waive a portion of the Acquiring Fund’s expenses;
 
  •  The fact that the shareholders of the Funds will experience no change in shareholder services as a result of the Reorganization;
 
  •  Various aspects of the Reorganizations and the Agreement and Plan of Reorganization, including the legal structure of the Acquiring Funds; and
 
  •  The tax consequences of the Reorganizations to each Fund and its shareholders, including the expected tax-free nature of each transaction for U.S. federal income tax purposes.

      The Boards also considered the future and potential benefits to Management and their affiliates in that its costs to advise and administer the Acquiring Funds may be reduced if the Reorganizations are approved.

      Nations Intermediate Bond Fund is a feeder fund that invests all of its assets in Nations Intermediate Bond Master Portfolio. Nations Intermediate Bond Master Portfolio is part of the Nations Master Investment Trust. The Board of Nations Master Investment Trust similarly considered the factors set forth above in connection with the Reorganization of Columbia Intermediate Government Income Fund into Nations Intermediate Bond Fund, and approved the Reorganization.

      THE BOARDS RECOMMEND THAT SHAREHOLDERS APPROVE THE REORGANIZATION OF EACH FUND WITH AND INTO ITS CORRESPONDING ACQUIRING FUND, AND FOR COLUMBIA FIXED INCOME SECURITIES FUND, INC. AND THE COLUMBIA SHORT TERM BOND FUND, INC., THE DISSOLUTION OF EACH UNDER STATE LAW.

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Comparison of Investment Objectives, Principal Investment Strategies

      Below describes the investment objectives and principal investment strategies of the Funds and their corresponding Acquiring Funds. The Reorganizations are not expected to cause significant portfolio turnover or transaction expenses from the sale of securities due to incompatible investment objectives or strategies.

             
Fund Acquiring Fund
Investment Objective   Columbia Fixed Income Securities Fund, Inc. — The Fund seeks a high level of income by investing in a broad range of debt securities with intermediate to long-term maturities.   &   Nations Bond Fund (acquiring) — The Acquiring Fund seeks total return (which includes capital appreciation and income) by investing in investment grade fixed income securities.
Principal
Investment
Strategies		   The Fund intends to invest 80% of its assets, under normal market conditions, in investment- grade debt securities or unrated securities determined by the Fund’s investment adviser to be of comparable quality, including obligations of the U.S. Government, its agencies and instrumentalities, corporate debt securities, asset-backed securities, collateralized bonds, and loan and mortgage obligations. The Fund may invest up to 20% of its assets in non-investment grade securities.

The Fund may purchase derivative instruments, such as futures, options, swap contracts, and inverse floaters, to gain or reduce exposure to particular securities or segments of the bond markets. The Fund may use derivatives for both hedging and non-hedging purposes, such as to adjust the Fund’s sensitivity to changes in interest rates, or to offset a potential loss in one position by establishing an opposite position. The Fund typically uses derivatives in an effort to achieve more efficiently economic exposures similar to those it could have achieved through the purchase and sale of fixed income securities. Investments in derivatives may be applied toward meeting a requirement to invest in a particular kind of investment if the derivatives have economic characteristics similar to investments of that kind.

At times, the Fund’s investment adviser may determine that adverse market conditions make it desirable to suspend temporarily the normal investment activities. During such times, the Fund may, but is not required to, invest in cash or high-quality, short-term debt securities, without limit.

In seeking to achieve its investment goal, the Fund may invest in various types of securities and engage in various investment 		      Under normal circumstances, the Acquiring Fund will invest at least 80% of its assets in bonds. The Acquiring Fund normally invests at least 65% of its assets in investment grade fixed income securities. The portfolio manager may choose unrated securities if it believes they are of comparable quality to investment grade securities at the time of investment.

The Acquiring Fund may invest in: corporate debt securities, including bonds, notes and debentures; U.S. government obligations; foreign debt securities denominated in U.S. dollars; mortgage-related securities issued by governments, their agencies or instrumentalities, or corporations; asset-backed securities; and municipal securities.

The Acquiring Fund may invest up to 10% of its total assets in high yield debt securities.

The Acquiring Fund may also engage in repurchase, reverse repurchase and forward purchase agreements. These investments will generally be short-term in nature and are primarily used to seek to enhance returns and manage liquidity. In addition, the Acquiring Fund may use futures, interest rate swaps, total return swaps, options and other derivative instruments, to seek to enhance return, to hedge some of the risks of its investments in fixed income securities or as a substitute for a position in the underlying asset. The Acquiring Fund may invest in private placements to seek to enhance its yield.

The Acquiring Fund may also invest in securities that are not part of its principal investment strategies, but it won’t hold more than 10% of its assets in any one type of these securities.

Normally, the Acquiring Fund’s average

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Fund Acquiring Fund
    techniques which are not the principal focus of the Fund.

As part of its investment strategy, the Fund may buy and sell securities frequently. This may result in higher transaction costs and additional tax liability. 		      dollar-weighted maturity will be 10 years or less and will never be more than 15 years.
The portfolio manager may sell a security when it believes the security is overvalued, if there is a deterioration in the security’s credit rating or in the issuer’s financial situation, when other investments are more attractive, or for other reasons.
Investment Objective   Columbia Florida Intermediate Municipal Bond Fund — The Fund seeks as high a level of current interest income exempt from U.S. federal income tax and, to the extent possible, from the personal income tax of its state, as is consistent with relative stability of principal.   &   Nations Florida Intermediate Municipal Bond Fund (acquiring) — The Acquiring Fund seeks high current income exempt from U.S. federal income and the Florida state intangibles taxes consistent with moderate fluctuation of principal.
Principal Investment Strategies   The Fund normally invests at least 80% of its net assets plus any borrowings for investment purposes in the municipal securities of its state, which are securities issued by that state and other governmental issuers (potentially including issuers located outside that state) and that pay interest which is exempt from both U.S. federal income tax (including the U.S. federal alternative minimum tax) and the income tax of that state. Under normal circumstances, the Fund will invest no more than 20% of its net assets in taxable obligations, such as U.S. Government obligations, money market instruments and repurchase agreements.

Municipal securities purchased by the Fund may include general obligation securities, revenue securities and private activity bonds. The interest on private activity bonds may be subject to the federal alternative minimum tax.

The Fund may purchase derivative instruments, such as futures, options, swap contracts, and inverse floaters, to gain or reduce exposure to particular securities or segments of the municipal bond markets. The Fund may use derivatives for both hedging and non-hedging purposes, such as to adjust the Fund’s sensitivity to changes in interest rates, or to offset a potential loss in one position by establishing an opposite position. The Fund typically uses derivatives in an effort to achieve more efficiently economic exposures similar to those they could have achieved through the purchase and sale of municipal securities. 		      Under normal circumstances, the Acquiring Fund will invest at least 80% of its assets in securities that pay interest exempt from U.S. federal income tax and Florida state intangibles tax. The Acquiring Fund also normally invests at least 80% of its assets in investment grade intermediate-term municipal securities.

The Acquiring Fund may invest up to 20% of its assets in debt securities that are taxable, including securities that are subject to the federal alternative minimum tax. The Acquiring Fund may invest up to 10% of its total assets in municipal high yield debt securities.

The Acquiring Fund may also engage in repurchase, reverse repurchase and forward purchase agreements. These investments will generally be short-term in nature and are primarily used to seek to enhance returns and manage liquidity. In addition, the Acquiring Fund may use futures, interest rate swaps, total return swaps, options and other derivative instruments, to seek to enhance return, to hedge some of the risks of its investments in fixed income securities or as a substitute for a position in the underlying asset.

The Acquiring Fund may also invest in securities that are not part of its principal investment strategies, but it will not hold more than 10% of its assets in any one type of these securities.

Normally, the Acquiring Fund’s average dollar-weighted maturity will be between three and 10 years, and its duration will be

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Fund Acquiring Fund
   



Nearly all of the investments of the Fund will be of investment grade quality. Under normal market conditions, the Fund will invest at least 65% of its total assets in securities that have one of the top three ratings assigned by S&P or Moody’s or unrated securities determined by its adviser to be of comparable quality. Occasionally, the rating of a security held by the Fund may be downgraded to below investment grade. If that happens, the Fund does not have to sell the security, unless the adviser determines that under the circumstances the security is no longer an appropriate investment for the Fund. However, the Fund will sell promptly any rated securities that are not rated investment grade by either S&P or Moody’s if the securities exceed 5% of the Fund’s net assets.

Under normal circumstances, the Fund’s average weighted maturity is expected to be between three and ten years.

The Fund will sell a security when, as a result of changes in the economy or the performance of the security or other circumstances, its adviser believes that holding the security is no longer consistent with the Fund’s investment goal.

At times, the adviser may determine that adverse market conditions make it desirable to suspend temporarily the Fund’s normal investment activities. During such times, the Fund may, but is not required to, invest in cash or high-quality, short-term debt securities, without limit.

In seeking to achieve its investment goal, the Fund may invest in various types of securities and engage in various investment techniques which are not the principal focus of the Fund. 		      between three and six years.


The portfolio manager may sell a security when it believes the security is overvalued, there is a deterioration in the security’s credit rating or in the issuer’s financial situation, when other investments are more attractive, or for other reasons.
Investment Objective   Nations Florida Municipal Bond Fund — The Fund seeks high current income exempt from U.S. federal income and the Florida state intangibles taxes with the potential for principal fluctuation associated with investments in long- term municipal securities.   &   Nations Florida Intermediate Municipal Bond Fund (acquiring) — The Acquiring Fund seeks high current income exempt from U.S. federal income and the Florida state intangibles taxes consistent with moderate fluctuation of principal.
Principal Investment Strategies   Under normal circumstances, the Fund will invest at least 80% of its assets in securities       Under normal circumstances, the Acquiring Fund will invest at least 80% of its assets in

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Fund Acquiring Fund
    that pay interest exempt from U.S. federal income tax and Florida state intangibles tax. The Fund also normally invests at least 80% of its assets in investment grade long-term municipal securities.

The Fund may invest up to 20% of its assets in debt securities that are taxable, including securities that are subject to the federal alternative minimum tax.

The Fund may invest up to 10% of its total assets in municipal high yield debt securities.

The Fund may also engage in repurchase, reverse repurchase and forward purchase agreements. These investments will generally be short-term in nature and are primarily used to seek to enhance returns and manage liquidity. In addition, the Fund may use futures, interest rate swaps, total return swaps, options and other derivative instruments, to seek to enhance return, to hedge some of the risks of its investments in fixed income securities or as a substitute for a position in the underlying asset.

The Fund may also invest in securities that are not part of its principal investment strategies, but it will not hold more than 10% of its assets in any one type of these securities.

The portfolio manager may sell a security when it believes the security is overvalued, there is a deterioration in the security’s credit rating or in the issuer’s financial situation, when other investments are more attractive, or for other reasons. 		      securities that pay interest exempt from U.S. federal income tax and Florida state intangibles tax. The Acquiring Fund also normally invests at least 80% of its assets in investment grade intermediate-term municipal securities.

The Acquiring Fund may invest up to 20% of its assets in debt securities that are taxable, including securities that are subject to the federal alternative minimum tax.

The Acquiring Fund may invest up to 10% of its total assets in municipal high yield debt securities.

The Acquiring Fund may also engage in repurchase, reverse repurchase and forward purchase agreements. These investments will generally be short-term in nature and are primarily used to seek to enhance returns and manage liquidity. In addition, the Acquiring Fund may use futures, interest rate swaps, total return swaps, options and other derivative instruments, to seek to enhance return, to hedge some of the risks of its investments in fixed income securities or as a substitute for a position in the underlying asset.

The Acquiring Fund may also invest in securities that are not part of its principal investment strategies, but it will not hold more than 10% of its assets in any one type of these securities.

Normally, the Acquiring Fund’s average dollar- weighted maturity will be between three and 10 years, and its duration will be between three and six years.

The portfolio manager may sell a security when it believes the security is overvalued, there is a deterioration in the security’s credit rating or in the issuer’s financial situation, when other investments are more attractive, or for other reasons.
Investment Objective   Columbia Growth & Income Fund — The Fund seeks long-term growth and income.   &   Nations Value Fund (acquiring) — The Acquiring Fund seeks growth of capital by investing in companies that are believed to be undervalued.
Principal Investment Strategies   Under normal market conditions, the Fund invests at least 65% of its total assets in common stocks of U.S. companies with equity market capitalizations at the time of purchase in excess of $3 billion. Up to 35%       The Acquiring Fund normally invests at least 80% of its assets in common stocks of U.S. companies. Under normal circumstances, the Acquiring Fund will invest at least 80% of its assets in large

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Fund Acquiring Fund
    of the Fund’s total assets may be invested in common stocks of U.S. companies with equity market capitalizations at the time of purchase between $1 billion and $3 billion. Also, up to 10% of the Fund’s total assets may be invested in a combination of (i) convertible bonds, (ii) corporate bonds that are rated investment grade and (iii) U.S. Government securities. When purchasing securities for the Fund, the Fund’s investment adviser generally chooses securities of companies it believes are undervalued.

At times, the adviser may determine that adverse market conditions make it desirable to suspend temporarily the Fund’s normal investment activities. During such times, the Fund may, but is not required to, invest in cash or high-quality, short-term debt securities, without limit.

In seeking to achieve its investment goal, the Fund may invest in various types of securities and engage in various investment techniques which are not the principal focus of the Fund. 		      capitalizations that are within the range of the companies within the Russell 1000 Value Index. It generally invests in companies in a broad range of industries with market capitalizations of at least $1 billion and daily trading volumes of at least $3 million. The Acquiring Fund may also invest up to 20% of its assets in foreign securities.

The Acquiring Fund may also invest in securities that are not part of its principal investment strategies, but it will hold more than 10% of its assets in any one type of these securities. The portfolio managers uses a three-pronged approach, combining fundamental and quantitative analysis with risk management to identify value opportunities and construct the portfolio.

Additionally, the portfolio manager uses analytical tools to actively monitor the risk profile of the portfolio.

The portfolio manager may sell a security when its price reaches a target set by the portfolio manager, if there is a deterioration in the company’s financial situation, when the portfolio manager believes other investments are more attractive, or for other reasons. The portfolio manager may use various strategies, consistent with the Acquiring Fund’s investment objective, to try to reduce the amount of capital gains distributed to shareholders.

These strategies also may be affected by changes in tax laws and regulations, or by court decisions.
Investment Objective   Columbia Tax-Managed Value Fund — The Fund seeks long-term capital growth while reducing shareholder exposure to taxes.   &   Nations Value Fund (acquiring) — The Acquiring Fund seeks growth of capital by investing in companies that are believed to be undervalued.
Principal Investment Strategies   The Fund invests primarily in large capitalization (large-cap) and middle capitalization (mid-cap) stocks. Large cap stocks are stocks of large-size companies that have market capitalizations similar in size to those companies in the Russell 1000 Value Index. Mid-cap stocks are stocks of mid-size companies that have market capitalizations similar in size to those companies in the Russell Mid Cap Value Index. All market capitalizations are determined at the time of purchase. The Fund also invests in foreign securities,       The Acquiring Fund normally invests at least 80% of its assets in common stocks of U.S. companies. Under normal circumstances, the Acquiring Fund will invest at least 80% of its assets in large capitalizations that are within the range of the companies within the Russell 1000 Value Index. It generally invests in companies in a broad range of industries with market capitalizations of at least $1 billion and daily trading volumes of at least $3 million. The Acquiring Fund may also invest up to 20% of its assets in

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Fund Acquiring Fund
    including depositary receipts.

In managing the Fund, the adviser uses a value investment strategy that focuses on buying stocks cheaply when they are undervalued or “out of favor.” The adviser buys stocks that in the adviser’s opinion have attractive current prices, consistent operating performance and/or favorable future growth prospects. The adviser’s strategy uses fact-based quantitative analysis in conjunction with fundamental business and financial analysis. 		      foreign securities.

The Acquiring Fund may also invest in securities that are not part of its principal investment strategies, but it will hold more than 10% of its assets in any one type of these securities. The portfolio managers uses a three- pronged approach, combining fundamental and quantitative analysis with risk management to identify value opportunities and construct the portfolio.

Additionally, the portfolio manager uses analytical tools to actively monitor the risk profile of the portfolio.

The portfolio manager may sell a security when its price reaches a target set by the portfolio manager, if there is a deterioration in the company’s financial situation, when the portfolio manager believes other investments are more attractive, or for other reasons. The portfolio manager may use various strategies, consistent with the Acquiring Fund’s investment objective, to try to reduce the amount of capital gains distributed to shareholders.

These strategies also may be affected by changes in tax laws and regulations, or by court decisions.
Investment Objective   Columbia Intermediate Government Income Fund — The Fund seeks the highest level of current income consistent with prudent risk of capital.   &   Nations Intermediate Bond Fund (acquiring) — The Acquiring Fund seeks to obtain interest income and capital appreciation.
Principal Investment Strategies   Under normal circumstances, the Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in debt obligations issued or guaranteed by the U.S. government or its agencies and instrumentalities and repurchase agreements backed by these obligations. The Fund also invests in debt obligations of U.S. and foreign corporations, asset-backed and mortgage- backed securities and money market instruments, such as commercial paper and obligations of U.S. and foreign banks.

The Fund may from time to time invest in a limited amount of interest rate futures contracts. The Fund will use interest rate futures contracts, which may be considered derivatives, in an effort to manage the impact to the Fund of changes in interest rates.

Nearly all Fund investments will be of 		      The Acquiring Fund invests all of its assets in Nations Intermediate Bond Master Portfolio (the “Master Portfolio”). Under normal circumstances, the Master Portfolio will invest at least 80% of its assets in bonds. The Master Portfolio normally invests at least 65% of its assets in intermediate and longer-term fixed income securities that are rated investment grade. The Master Portfolio can invest up to 35% of its assets in mortgage-backed securities, including collateralized mortgage obligations (CMOs), that are backed by the U.S. government, its agencies or instrumentalities, or corporations.

The Master Portfolio can invest up to 10% of its assets in high yield debt securities.

The Master Portfolio may also engage in repurchase, reverse repurchase and forward

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Fund Acquiring Fund
    investment grade quality and will have one of the top three ratings assigned by Standard & Poor’s Ratings Group (S&P) or Moody’s Investors Service, Inc. (Moody’s), or will be unrated securities determined by the adviser to be of comparable quality. The Fund’s average weighted maturity will be between three and ten years under normal circumstances.

The Fund will sell a portfolio security when, as a result of changes in the economy or the performance of the security or other circumstances, the adviser believes that holding the security is no longer consistent with the Fund’s investment goal.

As part of its investment strategy, the Fund may buy and sell securities frequently. This may result in higher transaction costs and additional tax liability. 		      purchase agreements. These investments will generally be short-term in nature and are primarily used to seek to enhance returns and manage liquidity. In addition, the Master Portfolio may use futures, interest rate swaps, total return swaps, options and other derivative instruments, to seek to enhance return, to hedge some of the risks of its investments in fixed income securities or as a substitute for a position in the underlying asset. The Master Portfolio may invest in private placement to seek to enhance its yield.

The Master Portfolio may also invest in securities that aren’t part of its principal investment strategies, but it won’t hold more than 10% of its assets in any one type of these securities.

Normally, the Master Portfolio’s average dollar-weighted maturity will be between three and six years.
Investment Objective   Columbia Large Company Index Fund — The Fund seeks to provide investment results that, before deduction of operating expenses, match the price and yield performance of the S&P 500 Index.   &   Nations LargeCap Index Fund (acquiring) — The Acquiring Fund seeks investment results that (before fees and expenses) correspond to the total return of the S&P 500 Index.
Principal Investment Strategies   The Fund pursues an indexing strategy to approximate the investment performance of the S&P 500 Index. The Fund invests substantially all of its assets (under normal circumstances, at least 80% of net assets plus any borrowing for investment purposes) in the securities of the S&P 500 Index.

The Fund normally holds all 500 stocks in the S&P 500 Index, in approximately the same percentage as each stock is represented in the S&P 500 Index. From time to time, however, when deemed advisable by the Fund’s investment adviser, the Fund may not hold all of the stocks in the S&P 500 Index or hold the stocks in the same percentages as the index.

To the extent that, from time to time, the stocks in a particular market sector, such as technology, comprise a significant proportion of the S&P 500 Index, those stocks will be represented in substantially the same proportion in their corresponding funds.

The Fund may also invest in stock index futures contracts in order to track the S&P 		      Under normal circumstances, the Acquiring Fund will invest at least 80% of its assets in common stocks that are included in the S&P 500 Index. The Acquiring Fund may buy stock index futures and financial futures as substitutes for the underlying securities in the S&P 500 Index. The Fund may also invest in securities that are not part of its principal investment strategies, but it won’t hold more than 10% of its assets in any one type of these securities.

In trying to match the performance of the S&P 500 Index, the portfolio manager will try to allocate the Acquiring Fund’s portfolio among common stocks in approximately the same weightings as the S&P 500 Index, beginning with the most heavily weighted stocks that make up a larger portion of the value of the S&P 500 Index. The Fund may buy shares of Bank of America Corporation, which is currently included in the S&P 500 Index, subject to certain restrictions.

The Acquiring Fund tries to achieve a correlation of at least 0.95 with the S&P 500 Index on an annual basis (before fees

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Fund Acquiring Fund
    500 Index, when the purchase of individual securities may be less efficient.

The Fund will only purchase a portfolio security that is included in its index at the time of purchase. The Fund will normally only buy or sell portfolio securities to adjust to changes in the composition of its index or to accommodate cash flows into and out of the Fund.

Under normal market conditions, it is expected that the quarterly performance of the Fund, before expenses, will track the performance of its index within a 0.95 correlation coefficient. 		      and expenses). The Fund’s ability to track the S&P 500 Index is affected by transaction costs and other expenses, changes in the composition of the S&P 500 Index, changes in the number of shares issued by the companies represented in the S&P 500 Index, and by the timing and amount of shareholder purchases and redemptions, among other things.
Investment Objective   Columbia Mid Cap Value Fund — The Fund seeks long-term growth.   &   Nations MidCap Value Fund (acquiring) — The Acquiring Fund seeks long-term growth of capital with income as a secondary consideration.
Principal Investment Strategies   The Fund invests, under normal market conditions, at least 80% of its net assets (plus any borrowings for investment purposes) in middle capitalization (mid-cap) stocks of companies that have market capitalizations similar in size to those companies in the Russell Midcap Value Index. The Fund may invest in real estate investment trusts (REITs), and may invest up to 20% of its assets in foreign securities, including American Depositary Receipts.

At times, the adviser may determine that adverse market conditions make it desirable to suspend temporarily the Fund’s normal investment activities. During such times, the Fund may, but is not required to, invest in cash or high-quality, short-term debt securities, without limit.

In seeking to achieve its investment goal, the Fund may invest in various types of securities and engage in various investment techniques which are not the principal focus of the Fund. 		      Under normal circumstances, the Acquiring Fund will invest at least 80% of its assets in equity securities of U.S. companies whose market capitalizations are within the range of the companies within the Russell Midcap Value Index and that are believed to have the potential for long-term growth. The Acquiring Fund may also invest up to 20% of its assets in foreign securities, and may invest in real estate investment trusts.

The Acquiring Fund may also invest in securities that aren’t part of its principal investment strategies, but it will not hold more than 10% of its assets in any one type of these securities. The portfolio manager uses a three prong approach, combining fundamental and quantitative analysis with risk management to identify value opportunities and construct the portfolio.

The portfolio manager may sell a security when its price reaches a target set by the portfolio manager, if there is a deterioration in the company’s financial situation, when the portfolio manager believes other investments are more attractive, or for other reasons.

The portfolio manager may use various strategies, consistent with the Acquiring Fund’s investment objective, to try to reduce the amount of capital gains distributed to shareholders.

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Fund Acquiring Fund
Investment Objective   Columbia Short Term Bond Fund, Inc. — The Fund seeks a high level of current income consistent with a high degree of principal stability by investing at least 80% of its net assets (plus any borrowings for investment purposes) in short-term, investment-grade, fixed income securities (rated BBB or higher by Standard & Poor’s (S&P) or Baa or higher by Moody’s Investors Service, Inc. (Moody’s), or if unrated, deemed to be of comparable quality).   &   Nations Short-Term Income Fund (acquiring) — The Acquiring Fund seeks high current income consistent with minimal fluctuations of principal.
Principal Investment Strategies   Under normal market conditions, the Fund intends to invest at least 50% of its assets in direct and indirect obligations of the U.S. Government, its agencies and instrumentalities, and debt securities rated in the two highest categories by S&P (AAA or AA) or Moody’s (Aaa or Aa).

The Fund’s average portfolio duration will not exceed three years.

The Fund may purchase derivative instruments, such as futures, options, swap contracts, and inverse floaters, to gain or reduce exposure to particular securities or segments of the bond markets. 		      Under normal circumstances, the Acquiring Fund will invest at least 80% of its assets in income-producing securities. The Acquiring Fund normally invests at least 65% of its total assets in investment grade fixed income securities. The portfolio manager may choose unrated securities if it believes they are of comparable quality to investment grade securities at the time of investment.

The Acquiring Fund may invest in: corporate debt securities, including bonds, notes and debentures; mortgage-related securities issued by governments, their agencies or instrumentalities, or corporations; asset-backed securities; and U.S. Government obligations.

The Acquiring Fund may also engage in repurchase, reverse repurchase and forward purchase agreements. These investments will generally be short-term in nature and are primarily used to seek to enhance returns and manage liquidity. In addition, the Acquiring Fund may use futures, interest rate swaps, total return swaps, options and other derivative instruments, to seek to enhance return, to hedge some of the risks of its investments in fixed income securities or as a substitute for a position in the underlying asset. The Acquiring Fund may invest in private placements to seek to enhance its yield.

The Acquiring Fund may also invest in securities that are not part of its principal investment strategies, but it will not hold more than 10% of its assets in any one type of these securities.

Normally, the Acquiring Fund’s average dollar-weighted maturity will be three years or less, and its duration will be three years or less.

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Fund Acquiring Fund
Investment Objective   Nations Short-Intermediate Government Fund — The Fund seeks high current income consistent with modest fluctuations of principal.   &   Nations Short-Term Income Fund (acquiring) — The Acquiring Fund seeks high current income consistent with minimal fluctuations of principal.
Principal Investment Strategies   Under normal circumstances, the Fund will invest at least 80% of its assets in U.S. Government obligations and repurchase agreements secured by these securities. It may invest in mortgage-related securities issued or backed by the U.S. government, its agencies or instrumentalities, or corporations.


The Fund may also engage in reverse repurchase and forward purchase agreements. These investments will generally be short-term in nature and are primarily used to seek to enhance returns and manage liquidity. In addition, the Fund may use futures, interest rate swaps, total return swaps, options and other derivative instruments, to seek to enhance return, to hedge some of the risks of its investments in fixed income securities or as a substitute for a position in the underlying asset.

The Fund may also invest in securities that are not part of its principal investment strategies, but it will not hold more than 10% of its assets in any one type of these securities.

Normally, the Fund’s average dollar-weighted maturity will be five years or less, and its duration will be four years or less. 		      Under normal circumstances, the Acquiring Fund will invest at least 80% of its assets in income-producing securities. The Acquiring Fund normally invests at least 65% of its total assets in investment grade fixed income securities. The portfolio manager may choose unrated securities if it believes they are of comparable quality to investment grade securities at the time of investment.

The Acquiring Fund may invest in: corporate debt securities, including bonds, notes and debentures; mortgage-related securities issued by governments, their agencies or instrumentalities, or corporations; asset-backed securities; and U.S. Government obligations.

The Acquiring Fund may also engage in repurchase, reverse repurchase and forward purchase agreements. These investments will generally be short-term in nature and are primarily used to seek to enhance returns and manage liquidity. In addition, the Acquiring Fund may use futures, interest rate swaps, total return swaps, options and other derivative instruments, to seek to enhance return, to hedge some of the risks of its investments in fixed income securities or as a substitute for a position in the underlying asset. The Acquiring Fund may invest in private placements to seek to enhance its yield.

The Acquiring Fund may also invest in securities that aren’t part of its principal investment strategies, but it will not hold more than 10% of its assets in any one type of these securities.

Normally, the Acquiring Fund’s average dollar-weighted maturity will be three years or less, and its duration will be three years or less.
Investment Objective   Columbia Small Company Index Fund — The Fund seeks to provide investment results that, before deduction of operating expenses, match the price and yield performance of the S&P SmallCap 600 Index.   &   Nations SmallCap Index Fund (acquiring) — The Acquiring Fund seeks investment results that (before fees and expenses) correspond to the total return of the S&P SmallCap 600 Index.
Principal Investment Strategies   The Fund pursues an indexing strategy to approximate the investment performance of       Under normal circumstances, the Acquiring Fund will invest at least 80% of its assets in

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Fund Acquiring Fund
    the S&P SmallCap 600 Index. The Fund invests substantially all of its assets (under normal circumstances, at least 80% of net assets plus any borrowing for investment purposes) in the securities of the S&P SmallCap 600 Index.

The Fund normally holds all 600 stocks in the S&P SmallCap 600 Index, in approximately the same percentage as each stock is represented in the S&P SmallCap 600 Index. From time to time, however, when deemed advisable by the Fund’s investment adviser, the Fund may not hold all of the stocks in the S&P SmallCap 600 Index or hold the stocks in the same percentages as the index.

To the extent that, from time to time, the stocks in a particular market sector, such as technology, comprise a significant proportion of the S&P SmallCap 600 Index, those stocks will be represented in substantially the same proportion in their corresponding funds.

The Fund may also invest in stock index futures contracts in order to track the S&P SmallCap 600 Index, when the purchase of individual securities may be less efficient.

The Fund will only purchase a portfolio security that is included in its index at the time of purchase. The Fund will normally only buy or sell portfolio securities to adjust to changes in the composition of its index or to accommodate cash flows into and out of the Fund.

Under normal market conditions, it is expected that the quarterly performance of the Fund, before expenses, will track the performance of its index within a .95 correlation coefficient. 		      common stocks that are included in the S&P SmallCap 600 Index. The Acquiring Fund may buy stock index futures and other financial futures as substitutes for the underlying securities in the S&P SmallCap 600 Index.

The Acquiring Fund may also invest in securities that are not part of its principal investment strategies, but it will not hold more than 10% of its assets in any one type of these securities.

Different common stocks have different weightings in the S&P SmallCap 600 Index, depending on the amount of stock outstanding and the stock’s current price. In trying to match the performance of the S&P SmallCap 600 Index, the portfolio manager will try to allocate the Fund’s portfolio among common stocks in approximately the same weightings as the S&P SmallCap 600 Index, beginning with the most heavily weighted stocks that make up a larger portion of the value of the S&P SmallCap 600 Index.

The Acquiring Fund tries to achieve a correlation of at least 0.95 with the S&P SmallCap 600 Index on an annual basis (before fees and expenses).

The Acquiring Fund’s ability to track the S&P SmallCap 600 Index is affected by transaction costs and other expenses, changes in the composition of the S&P SmallCap 600 Index, changes in the number of shares issued by the companies represented in the S&P SmallCap 600 Index, and by the timing and amount of shareholder purchases and redemptions, among other things.

      After the Reorganizations, certain Acquiring Funds will be renamed. As a result, some of the principal investment strategies will also change. Nations Value Fund will be renamed as Columbia Large Cap Value Fund, and will adopt a non-fundamental investment policy to invest, under normal circumstances, at least 80% of its assets in large capitalization companies whose market capitalizations are within the range of the companies within the Russell 1000 Value Index at the time of purchase. As of June 30, 2005, the Russell 1000 Value Index had a market capitalization range of approximately $859.0 million to $367.5 billion. Nations Value Fund’s current policy is to invest at least 80% of its assets in common stocks of U.S. companies.

      Nations Short-Term Income Fund will be renamed as Columbia Short Term Bond Fund, and will adopt a non-fundamental investment policy to invest, under normal circumstances, at least 80% of its assets in bonds.

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Nations Short-Term Income Fund’s current policy is to invest at least 80% of its assets in income-producing securities.

      After the Reorganizations, Nations Intermediate Bond Fund will be renamed Columbia Intermediate Core Bond Fund and Nations Bond Fund will be renamed Columbia Total Return Bond Fund; however, these changes will not result in a change in investment policy. The name and investment policy changes are expected to become effective September 23, 2005.

      In addition, at its July 13, 2005 special Board Meeting, the Board of the Nations Funds Complex approved name changes to the share classes of the Nations Funds. The share class names for each of the Nations Funds will be effective on or about August 22, 2005. The table below reflects the changes in share class names.

     
Current Share Class Names New Share Class Names
Investor A Shares
  Class A shares
Investor B Shares
  Class B shares
Investor C Shares
  Class C shares
Primary A Shares
  Class Z Shares

Comparison of Performance

      The bar charts in Appendix D show how each Fund and Acquiring Fund performed in the past for the 10-year period ending December 31, 2004, for Class A shares of the Funds and the Class A shares of the Acquiring Funds. The bar charts show how the performance of each Fund’s and Acquiring Fund’s return has varied from year to year. The returns do no reflect deductions of sales charges or account fees, if any, and would be lower if they did. Of course, past performance is not an indication of future results.

      The tables set forth in Appendix E show average annual total returns for Class A shares of the Funds and the Class A shares of the Acquiring Funds: (i) before taxes; (ii) after taxes on distributions and (iii) after taxes on distributions and sale of Fund or Acquiring Fund shares. After-tax returns are calculated using the historical highest individual U.S. federal marginal income tax rates and do not reflect the impact of state, local, or foreign taxes. The actual after-tax returns for an investor would depend on the investor’s tax situation and may differ from those shown in the table. In addition, the after-tax returns shown in the table are not relevant to tax-exempt investors or investors who hold their fund shares through tax-deferred arrangements, such as 401(k) plans or retirement accounts. The table also shows the returns for each period for an unmanaged index shown as a benchmark. The index is not available for investment and does not reflect fees, brokerage commissions, taxes or other expenses of investing.

Comparison of Investment Policies and Limitations

      For a detailed comparison of the fundamental investment policies of the Funds and the Acquiring Funds, see Appendix C to this Proxy/ Prospectus.

Comparison of Forms of Business Organizations and Governing Law

      Columbia Tax-Managed Value Fund is an open-end diversified series of Columbia Funds Trust I, which is organized as a Massachusetts business trust.

      Columbia Intermediate Government Income Fund and Columbia Mid Cap Value Fund are each an open-end diversified series of Columbia Funds Trust III, which is organized as a Massachusetts business trust.

      Columbia Large Company Index Fund and Columbia Small Company Index Fund are each an open-end diversified series of Columbia Funds Trust V. However, Columbia Florida Intermediate Municipal Bond Fund is an open-end non-diversified series of Columbia Funds Trust V, which is organized as a Massachusetts business trust.

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      Columbia Growth & Income Fund is an open-end diversified series of Columbia Funds Trust VI, which is organized as a Massachusetts business trust.

      Columbia Fixed Income Securities Fund, Inc. and Columbia Short Term Bond Fund, Inc. are each an open-end diversified Fund, organized as an Oregon corporation.

      Columbia Funds’ Trust I, III, V and VI and Columbia Fixed Income Securities Fund, Inc. and Columbia Sort Term Bond Fund, Inc. are each governed by a Board with 11 members.

      Nations Intermediate Bond Fund, Nations LargeCap Index Fund, Nations MidCap Value Fund, Nations Short-Intermediate Government Fund, Nations Short-Term Income Fund, Nations SmallCap Index Fund, and Nations Value Fund, are each an open-end diversified series of Nations Funds Trust. Nations Florida Intermediate Municipal Bond Fund and Nations Florida Municipal Bond Fund are each an open-end non-diversified series of Nations Funds Trust. Nations Funds Trust is a Delaware statutory trust and is governed by a Board of Trustees consisting of 5 members.

      The chart in Appendix F provides additional information with respect to the similarities and differences in the forms of organization of the entities (and Oregon law in the case of Columbia Fixed Income Securities Fund, Inc. and Columbia Short Term Bond Fund, Inc.).

Comparison of Service Providers

      The Funds and the Acquiring Funds have, in certain instances, different service providers. The table below shows the service providers for the Funds and Acquiring Funds before and after the Conversion.

             
Post-Conversion
for the
Columbia Funds Nations Funds Acquiring Funds
Investment Adviser
  Columbia   BACAP   BACAP
Distributor
  CMD   BACAP Distributors   CMD
Administrator
  Columbia   BACAP Distributors   Columbia
Custodian
  State Street Bank and Trust Company   Bank of New York   State Street Bank and Trust Company (transitioning June- Oct. 2005)
Transfer Agent
  CFSI   PFPC, Inc.   CFSI
Independent Accountants
  PwC   PwC   PwC

Investment Advisory Services Fees

      BACAP serves as the investment adviser for the Nations Funds, including the Acquiring Funds, which pay an advisory fee. The advisory fee is computed daily and paid monthly to BACAP based on average daily net assets. The table below sets forth the maximum advisory fees and breakpoints applicable to the Funds.

     
Funds Rate of Compensation
Columbia Fixed Income Securities Fund, Inc.
  0.50%
Columbia Growth & Income Fund
  0.77% up to $500 million
    0.72% in excess of $500 million up to $1 billion
    0.60% in excess of $1 billion up to $1.5 billion
    0.60% in excess of $1.5 billion up to $3 billion
    0.60% in excess of $3 billion up to $6 billion
    0.58% in excess of $6 billion
Columbia Intermediate Government Income Fund
  0.46% up to $500 million
    0.41% in excess of $500 million up to $1 billion
    0.38% in excess of $1 billion up to $1.5 billion
    0.35% in excess of $1.5 billion up to $3 billion
    0.34% in excess of $3 billion up to $6 billion
    0.33% in excess of $6 billion
Columbia Large Company Index Fund
  0.10%

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Funds Rate of Compensation
Columbia Mid Cap Value Fund
  0.70% up to $1 billion
    0.65% in excess of $1 billion up to $1.5 billion
    0.60% in excess of $1.5 billion
Columbia Short Term Bond Fund, Inc.
  0.45% up to $500 million
    0.40% in excess of $500 million
Columbia Small Company Index Fund
  0.10%
Columbia Tax-Managed Value Fund
  0.72% up to $500 million
    0.67% in excess of $500 million up to $1 billion
    0.62% in excess of $1 billion up to $1.5 billion
    0.57% in excess of $1.5 billion up to $3 billion
    0.55% in excess of $3 billion up to $6 billion
    0.53% in excess of $6 billion
Nations Florida Municipal Bond Fund
  0.41% up to $500 million
    0.36% in excess of $500 million up to $1 billion
    0.33% in excess of $1 billion up to $1.5 billion
    0.30% in excess of $1.5 billion up to $3 billion
    0.29% in excess of $3 billion up to $6 billion
    0.28% in excess of $6 billion
Nations Short-Intermediate Government Fund
  0.30% up to $500 million
    0.25% in excess of $500 million
     
Acquiring Funds Rate of Compensation
Nations Bond Fund
  0.40% up to $500 million
    0.35% in excess of $500 million up to $1 billion
    0.32% in excess of $1 billion up to $1.5 billion
    0.29% in excess of $1.5 billion up to $3 billion
    0.28% in excess of $3 billion up to $6 billion
    0.27% in excess of $6 billion
Nations Florida Intermediate Municipal Bond Fund
  0.40% up to $500 million
    0.35% in excess of $500 million up to $1 billion
    0.32% in excess of $1 billion up to $1.5 billion
    0.29% in excess of $1.5 billion up to $3 billion
    0.28% in excess of $3 billion up to $6 billion
    0.27% in excess of $6 billion
Nations Intermediate Bond Master Portfolio
  0.40% up to $500 million
    0.35% in excess of $500 million up to $1 billion
    0.32% in excess of $1 billion up to $1.5 billion
    0.29% in excess of $1.5 billion up to $3 billion
    0.28% in excess of $3 billion up to $6 billion
    0.27% in excess of $6 billion
Nations LargeCap Index Fund
  0.10%
Nations MidCap Value Fund
  0.65% up to $500 million
    0.60% in excess of $500 million up to $1 billion
    0.55% in excess of $1 billion up to $1.5 billion
    0.50% in excess of $1.5 billion
Nations Short-Term Income Fund
  0.30%
Nations SmallCap Index Fund
  0.10%
Nations Value Fund
  0.60% up to $500 million
    0.55% up to $1 billion
    0.50% up to $1.5 billion
    0.45% up to $3 billion
    0.43% up to $6 billion
    0.41% in excess of $6 billion

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Comparison of Purchase, Redemption, Distribution and Exchange Policies and Other Shareholder Transactions and Services

      For details on these aspects of the various Fund and Acquiring Fund share classes, shareholders should consult their Fund or Acquiring Fund prospectuses, as supplemented.

      After August 22, 2005, the purchase, redemption, distribution and exchange policies of the Columbia Funds’ share classes will be identical to those of the corresponding Acquiring Funds. With the exception of the Class C shares of Columbia Large Company Index Fund and Columbia Small Company Index Fund merging into Class A shares of its corresponding Acquiring Fund, the chart below shows the share class mapping of a Columbia Fund to a Nations Fund.

         
Columbia Fund Acquiring Nations Fund
Class A shares
    Class A shares  
Class B shares
    Class B shares  
Class C shares
    Class C shares  
Class D shares
    Class C shares  
Class G shares
    Class Z shares  
Class T shares
    Class A shares  
Class Z shares
    Class Z shares  

Material U.S. Federal Income Tax Consequences

      The following discussion summarizes the material U.S. federal income tax consequences of the Reorganizations that are applicable to Fund shareholders. It is based on the Code, applicable Treasury regulations, judicial authority, and administrative rulings and practice, all as of the date of this Proxy/ Prospectus and all of which are subject to change, including changes with retroactive effect. The discussion below does not address any state, local or foreign tax consequences of the Reorganizations. A Fund shareholder’s tax treatment may vary depending upon its particular situation. A Fund shareholder also may be subject to special rules not discussed below if it is a certain kind of Fund shareholder, including, but not limited to: an insurance company; a tax-exempt organization; a financial institution or broker-dealer; a person who is neither a citizen nor resident of the United States or entity that is not organized under the laws of the United States or political subdivision thereof; a holder of Fund shares as part of a hedge, straddle or conversion transaction; a person that does not hold Fund shares as a capital asset at the time of the Reorganizations; or an entity taxable as a partnership for U.S. federal income tax purposes.

      None of the parties have requested or will request an advance ruling from the Internal Revenue Service as to the U.S. federal income tax consequences of the Reorganizations or any related transaction. The Internal Revenue Service could adopt positions contrary to those discussed below and such positions could be sustained. Fund shareholders are urged to consult with their own tax advisors and financial planners as to the particular tax consequences of the Reorganizations to them, including the applicability and effect of any state, local or foreign laws, and the effect of possible changes in applicable tax laws.

     Qualification of Each Reorganization as a “Reorganization” under the Internal Revenue Code

      The obligation of the parties to consummate the Reorganizations is conditioned upon their receipt of an opinion of Morrison & Foerster LLP substantially to the effect that:

        a) The acquisition by an Acquiring Fund of the assets of its corresponding Fund in exchange for the Acquiring Fund’s assumption of the liabilities and obligations of the Fund and issuance of Acquiring Fund shares to the Fund, followed by the distribution by the Fund of such Acquiring Fund shares to the shareholders of the Fund in exchange for their shares of the Fund, will constitute a reorganization within the meaning of Section 368(a) of the Code, and the Fund and the corresponding Acquiring Fund will each be “a party to a reorganization” within the meaning of Section 368(b) of the Code;

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        b) No gain or loss will be recognized by a Fund (i) upon the transfer of its assets to its corresponding Acquiring Fund in exchange for the Acquiring Fund shares and the assumption by the Acquiring Fund of the liabilities of the Fund or (ii) upon the distribution of the Acquiring Fund shares by the Fund to its shareholders in liquidation, as contemplated in paragraph 1 hereof;
 
        c) No gain or loss will be recognized by an Acquiring Fund upon receipt of the assets of its corresponding Fund in exchange for the assumption of liabilities and obligations and issuance of the Acquiring Fund;
 
        d) The tax basis of the assets of a Fund will be the same as the tax basis of such assets in the hands of the Fund immediately prior to the transfer, and the holding period of the assets of the Fund in the hands of the Acquiring Fund will include the period during which those assets were held by the Fund;
 
        e) The holding periods of the assets of a Fund in the hands of its corresponding Acquiring Fund will include the periods during which such assets were held by the Fund;
 
        f) No gain or loss will be recognized by Fund shareholders upon the exchange of all of their Fund shares for Acquiring Fund shares;
 
        g) The aggregate tax basis of Acquiring Fund shares to be received by each shareholder of the Fund will be the same as the aggregate tax basis of the Fund shares exchanged therefor;
 
        h) A Fund shareholder’s holding period for Acquiring Fund shares to be received will include the period during which Fund shares exchanged therefor were held, provided that the shareholder held the Fund shares as a capital asset on the date of the exchange; and
 
        i) An Acquiring Fund will succeed to and take into account the items of its corresponding Fund described in Section 381(c) of the Code, subject to the conditions and limitations specified in Sections 381, 382, 383 and 384 of the Code and the regulations thereunder.

      The tax opinion described above will be based upon facts, representations and assumptions to be set forth or referred to in the opinion and the continued accuracy and completeness of representations made by each party, including representations in a certificate to be delivered by the management of each party, which if incorrect in any material respect would jeopardize the conclusions reached in the opinion. The opinion will be qualified to reflect that the Code requires that certain contracts or securities (including, in particular, futures contracts, certain foreign currency contracts, “non-equity” options and investments in “passive foreign investment companies”) to be marked-to-market (treated as sold for their fair market value) at the end of a taxable year (or upon their termination or transfer), and each Fund’s taxable year will end as a result of the Reorganization.

     Utilization of Loss Carryforwards and Unrealized Losses

      U.S. federal income tax law permits a regulated investment company, such as a Fund or its corresponding Acquiring Fund, to carry forward its net capital losses for a period of up to eight taxable years. A number of the Funds are presently entitled to significant net capital loss carryforwards for U.S. federal income tax purposes, as further detailed below. The Reorganizations will cause the tax years of the Acquired Funds to close, resulting in an earlier expiration of net capital loss carryforwards than would otherwise occur. In addition, the Reorganizations are expected to result in a limitation on the ability of certain of the Acquiring Funds to close their tax years, resulting in an earlier expiration of net capital loss carryforwards than would otherwise occur. In addition, the Reorganizations are expected to result in a limitation on the ability of certain of the Acquiring Funds to use carryforwards of the corresponding Funds, and, potentially, to use unrealized capital losses inherent in the tax basis of the assets acquired, once realized. These limitations, imposed by Section 382 of the Code, are imposed on an annual basis. Losses in excess of the limitation may be carried forward, subject to the overall eight-year limit. The Section 382 limitation as to a particular Fund generally will equal the product of the net asset value of the Fund immediately prior to the Reorganizations and the “long-term tax-exempt rate,” published by the Internal Revenue Service, in effect at

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such time. As of the date of this Proxy/ Prospectus, the long-term tax-exempt rate is 4.37%. However, no assurance can be given as to what long-term tax-exempt rate will be in effect at the time of the Reorganizations. While the ability of an Acquiring Fund to absorb the corresponding Fund’s losses in the future depends upon a variety of factors that cannot be known in advance, because capital loss carryforwards generally expire eight taxable years following realization, including the short taxable year resulting from the Reorganizations, it is expected that substantially all of a Fund’s losses may become permanently unavailable where the limitation applies. If an Acquiring Fund is able to utilize net capital loss carryforwards or unrealized losses of the corresponding Fund, the tax benefit resulting from those losses will be shared by both the Fund and Acquiring Fund shareholders following the Reorganizations. Therefore, a Fund shareholder may pay more taxes, or pay taxes sooner, than such shareholder otherwise would if the Reorganizations did not occur.

      In general, the limitation under Section 382 of the Code will apply to loss carryforwards and unrealized losses of a Fund when its shareholders will hold less than 50% of the outstanding shares of the corresponding Acquiring Fund immediately following the Reorganization. Accordingly, it is expected that the limitation will apply to any losses of the Columbia Fixed Income Securities Fund, Columbia Florida Intermediate Municipal Bond Fund, Columbia Growth & Income Fund, Columbia Intermediate Government Income Fund, Columbia Large Company Index Fund, Columbia Short Term Bond Fund, Columbia Small Company Index Fund, Columbia Tax-Managed Value Fund, Nations Florida Municipal Bond Fund and Nations Short-Intermediate Government Fund. Even if the Reorganizations do not result in the limitation on the use of losses, future transactions by the Acquiring Fund may do so.

      As of May 31, 2005, for U.S. federal income tax purposes, Columbia Fixed Income Securities Fund had no capital loss carryforwards and no net unrealized capital losses, Columbia Florida Intermediate Municipal Bond Fund had no capital loss carryforwards and no net unrealized capital losses, Columbia Growth & Income Fund had capital loss carryforwards of approximately $148,058,835 and no net unrealized capital losses, Columbia Intermediate Government Income Fund had capital loss carryforwards of approximately $12,335,552 and no net unrealized capital losses, Columbia Large Company Index Fund had capital loss carryforwards of approximately $7,398,607 and no net unrealized capital losses, Columbia Short Term Bond Fund had capital loss carryforwards of approximately $2,163,285 and net unrealized capital losses of approximately $1,713,579, Columbia Small Company Index Fund had no capital loss carryforwards and no net unrealized capital losses, Columbia Tax-Managed Value Fund had capital loss carryforwards of approximately $16,749,449 and no net unrealized capital losses, Nations Florida Municipal Bond Fund had no capital loss carryforwards and no net unrealized capital losses, and Nations Short-Intermediate Government Fund had capital loss carryforwards of approximately $481,561 and no net unrealized capital losses.

      Fund shareholders will benefit from any capital loss carryforwards and unrealized capital losses of the corresponding Acquiring Fund. An Acquiring Fund’s ability to use its own capital loss carryforwards and unrealized losses, once realized, may be subject to an annual limitation under Section 382 of the Code as well, such that losses in excess of the limitation cannot be used in the taxable year and must be carried forward. The limitation generally equals the product of the net asset value of the Acquiring Fund immediately prior to the Reorganizations and the long-term tax-exempt rate in effect at such time. While the ability of an Acquiring Fund to absorb its losses in the future depends upon a variety of factors that cannot be known in advance, because capital loss carryforwards generally expire eight taxable years following realization, it is expected that substantially all of its losses may become permanently unavailable where the limitation applies. In general, the limitation will apply to an Acquiring Fund when its shareholders will hold less than 50% of the combined Fund(s)/Acquiring Fund outstanding shares immediately following its Reorganizations. Accordingly, it is expected that the limitation will apply to any losses of Nations Mid Cap Value Fund and Nations Value Fund. Although, as of May 31, 2005, for U.S. federal income tax purposes, neither of these Acquiring Funds had any capital loss carryforwards or net unrealized capital losses. Even if the Reorganizations do not result in the limitation on the use of an Acquiring Fund’s losses, prior or future transactions involving an Acquiring Fund may cause such limitations to apply.

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          Status as a Regulated Investment Company

      Since its formation, each of the Funds and each of the Acquiring Funds believe it has qualified as a separate “regulated investment company” under the Code. Accordingly, each of the Funds and each of the Acquiring Funds believe that it has been, and expects to continue to be, relieved of U.S. federal income tax liability to the extent that it makes distributions of its taxable income and gains to its shareholders.

          Distribution of Income and Gains

      Prior to the Reorganizations, each Fund whose taxable year will end as a result of the Reorganizations generally is required to declare to its shareholders of record one or more distributions of all of its previously undistributed net investment income and net realized capital gain, including capital gains on any securities disposed of in connection with the Reorganizations. Such distributions will be made to such shareholders before or after the Reorganizations. A Fund shareholder will be required to include any such distributions in such shareholder’s taxable income. This may result in the recognition of income that could have been deferred or might never have been realized had the Reorganizations not occurred.

      Moreover, if an Acquiring Fund has realized net investment income or net capital gains but not distributed such income or gains prior to the Reorganizations, and a Fund shareholder acquires such shares of such Acquiring Fund in the Reorganizations, a portion of such shareholder’s subsequent distributions from the Acquiring Fund will, in effect, be a taxable return of part of such shareholder’s investment. Similarly, if a Fund shareholder acquires Acquiring Fund shares in the Reorganizations when such Acquiring Fund holds appreciated securities, such shareholder will receive a taxable return of part of such shareholder’s investment if and when the Acquiring Fund sells the appreciated securities and distributes the realized gain. The Acquiring Funds have built up, or have the potential to build up, high levels of unrealized appreciation.

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Capitalization

      The following tables show the total net assets, number of shares outstanding and net asset value per share of each Fund, each Acquiring Fund, and on a pro forma combined basis. This information is generally referred to as the “capitalization.” The term “pro forma capitalization” means the expected capitalization of each Acquiring Fund after it has combined with its corresponding Fund, i.e., as if the Reorganizations had already occurred. Where more than one Fund is involved in a Reorganization, the tables show several combination scenarios of the Funds and Acquiring Funds. They show the possibility of one Fund approving the Reorganization but not the other. They also show the possibility of both Funds approving the Reorganization.

      These capitalization tables are based on figures as of April 29, 2005 and are for information purposes only. The ongoing investment performance and daily share purchase and redemption activity of the Funds and Acquiring Funds affects capitalization. Therefore, the capitalization on the Closing date may vary from the capitalization shown in the following tables.

                                 
Nations
Columbia Nations Bond Fund
Fixed Income Bond Fund Pro Forma Pro Forma
Securities Fund, Inc. (Acquiring Fund) Adjustments Combined
Class A
                                
Net asset value
  $ —     $ 30,633,112     $ 12,610,321 (1)(2)   $ 43,243,433  
Shares outstanding
    —       3,097,911       1,275,058 (2)     4,372,969  
Net asset value per share
  $ —     $ 9.89             $ 9.89  
Class B
                                
Net asset value
  $ —     $ 9,426,863     $ 3,943,137 (1)(3)   $ 13,370,000  
Shares outstanding
    —       952,988       398,699 (3)     1,351,687  
Net asset value per share
  $ —     $ 9.89             $ 9.89  
Class C
                                
Net asset value
  $ —     $ 1,486,217     $ 1,598,947 (1)(4)   $ 3,085,164  
Shares outstanding
    —       150,319       161,673 (4)     311,992  
Net asset value per share
  $ —     $ 9.89             $ 9.89  
Class Z
                                
Net asset value
  $ —     $ 1,841,249,324     $ 254,136,317 (1)(5)   $ 2,095,385,641  
Shares outstanding
    —       186,068,692       25,670,335 (5)     211,739,027  
Net asset value per share
  $ —     $ 9.90             $ 9.90  
Class A(6)
                                
Net asset value
  $ 12,614,133     $ —     $ (12,614,133 )   $ —  
Shares outstanding
    953,268       —       (953,268 )     —  
Net asset value per share
  $ 13.23     $ —             $ —  
Class B(6)
                                
Net asset value
  $ 3,944,329     $ —     $ (3,944,329 )   $ —  
Shares outstanding
    298,078       —       (298,078 )     —  
Net asset value per share
  $ 13.23     $ —             $ —  
Class C(6)
                                
Net asset value
  $ 264,425     $ —     $ (264,425 )   $ —  
Shares outstanding
    19,983       —       (19,983 )     —  
Net asset value per share
  $ 13.23     $ —             $ —  
Class D(6)
                                
Net asset value
  $ 1,335,005     $ —     $ (1,335,005 )   $ —  
Shares outstanding
    100,888       —       (100,888 )     —  
Net asset value per share
  $ 13.23     $ —             $ —  
Class Z(6)
                                
Net asset value
  $ 254,213,140     $ —     $ (254,213,140 )   $ —  
Shares outstanding
    19,211,233       —       (19,211,233 )     —  
Net asset value per share
  $ 13.23     $ —             $ —  

(1)  Adjustments reflect one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of $82,310 and $0 to be borne by Columbia Fixed Income Securities Fund and Nations Bond Fund, respectively.
(2)  Includes net assets and shares from Class A. Class A shares of the Fund will merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
(3)  Includes net assets and shares from Class B. Class B shares of the Fund will merge into Class B shares of the Acquiring Fund on the date of the Reorganization.
(4)  Includes net assets and shares from Class C and Class D. Class C and Class D shares of the Fund will merge into Class C shares of the Acquiring Fund on the date of the Reorganization.
(5)  Includes net assets and shares from Class Z. Class Z shares of the Fund will merge into Class Z shares of the Acquiring Fund on the date of the Reorganization.
(6)  Class A, Class B, Class C, Class D and Class Z shares of Columbia Fixed Income Securities Fund are exchanged for Class A, Class B, Class C and Class Z shares of Nations Bond Fund based on the net asset value per share of Nations Bond Fund’s Class A, Class B, Class C, Class C and Class Z shares, respectively, at the time of the merger.

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Columbia Nations Florida
Florida Nations Florida Intermediate
Intermediate Intermediate Municipal Fund
Municipal Bond Municipal Fund Pro Forma Pro Forma
Fund (Acquiring Fund) Adjustments Combined
Class A
                                
Net asset value
  $ —     $ 16,639,321     $ 987,650 (1)(2)   $ 17,626,971  
Shares outstanding
    —       1,572,560       93,351 (2)     1,665,911  
Net asset value per share
  $ —     $ 10.58             $ 10.58  
Class B
                                
Net asset value
  $ —     $ 6,680,017     $ 487,228 (1)(3)   $ 7,167,245  
Shares outstanding
    —       630,881       46,008 (3)     676,889  
Net asset value per share
  $ —     $ 10.58             $ 10.59  
Class C
                                
Net asset value
  $ —     $ 8,216,461     $ 1,154,956 (1)(4)   $ 9,371,417  
Shares outstanding
    —       775,068       108,958 (4)     884,026  
Net asset value per share
  $ —     $ 10.60             $ 10.60  
Class Z
                                
Net asset value
  $ —     $ 154,211,265     $ 62,289,774 (1)(5)   $ 216,501,039  
Shares outstanding
    —       14,565,979       5,881,943 (5)     20,447,922  
Net asset value per share
  $ —     $ 10.59             $ 10.59  
Class A(6)
                                
Net asset value
  $ 988,300     $ —     $ (988,300 )   $ —  
Shares outstanding
    95,428       —       (95,428 )     —  
Net asset value per share
    10.36     $ —             $ —  
Class B(6)
                                
Net asset value
  $ 487,548     $ —     $ (487,548 )   $ —  
Shares outstanding
    47,077       —       (47,077 )     —  
Net asset value per share
    10.36     $ —             $ —  
Class C(6)
                                
Net asset value
  $ 1,155,716     $ —     $ (1,155,716 )   $ —  
Shares outstanding
    111,594       —       (111,594 )     —  
Net asset value per share
    10.36     $ —             $ —  
Class Z(6)
                                
Net asset value
  $ 62,330,749     $ —     $ (62,330,749 )   $ —  
Shares outstanding
    6,018,551       —       (6,018,551 )     —  
Net asset value per share
  $ 10.36     $ —             $ —  

(1)  Adjustments reflect one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of $42,704 and $0 to be borne by Columbia Florida Intermediate Municipal Bond Fund and Nations Florida Intermediate Municipal Fund, respectively.
 
(2)  Includes net assets and shares from Class A. Class A shares of the Fund will merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
 
(3)  Includes net assets and shares from Class B. Class B shares of the Fund will merge into Class B shares of the Acquiring Fund on the date of the Reorganization.
 
(4)  Includes net assets and shares from Class C. Class C shares of the Fund will merge into Class C shares of the Acquiring Fund on the date of the Reorganization.
 
(5)  Includes net assets and shares from Class Z. Class Z shares of the Fund will merge into Class Z shares of the Acquiring Fund on the date of the Reorganization.
 
(6)  Class A, Class B, Class C and Class Z shares of Columbia Florida Intermediate Municipal Bond Fund are exchanged for Class A, Class B, Class C and Class Z shares of Nations Florida Intermediate Municipal Fund based on the net asset value per share of Nations Florida Intermediate Municipal Fund’s Class A, Class B, Class C and Class Z shares, respectively, at the time of the merger.

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Nations Florida
Nations Florida Intermediate
Nations Florida Intermediate Municipal Fund
Municipal Bond Municipal Fund Pro Forma Pro Forma
Fund (Acquiring Fund) Adjustments Combined
Class A(6)
                                
Net asset value
  $ 34,848,214     $ 16,639,321     $ (18,650 ) (1)(2)   $ 51,468,885  
Shares outstanding
    3,600,897       1,572,560       (308,878 ) (2)     4,864,579  
Net asset value per share
  $ 9.68     $ 10.58             $ 10.58  
Class B(6)
                                
Net asset value
  $ 7,757,583     $ 6,680,017     $ (4,152 ) (1)(3)   $ 14,433,448  
Shares outstanding
    801,870       630,881       (69,724 ) (3)     1,363,027  
Net asset value per share
  $ 9.67     $ 10.58             $ 10.59  
Class C(6)
                                
Net asset value
  $ 458,282     $ 8,216,461     $ (245 ) (1)(4)   $ 8,674,498  
Shares outstanding
    47,424       775,068       (4,213 ) (4)     818,279  
Net asset value per share
  $ 9.66     $ 10.60             $ 10.60  
Class Z(6)
                                
Net asset value
  $ 43,463,928     $ 154,211,265     $ (23,260 ) (1)(5)   $ 197,651,933  
Shares outstanding
    4,491,142       14,565,979       (389,096 ) (5)     18,668,025  
Net asset value per share
  $ 9.68     $ 10.59             $ 10.59  

(1)  Adjustments reflect one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of $46,308 and $0 to be borne by Nations Florida Municipal Bond Fund and Nations Florida Intermediate Municipal Fund, respectively.
 
(2)  Includes net assets and shares from Class A. Class A shares of the Fund will merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
 
(3)  Includes net assets and shares from Class B. Class B shares of the Fund will merge into Class B shares of the Acquiring Fund on the date of the Reorganization.
 
(4)  Includes net assets and shares from Class C. Class C shares of the Fund will merge into Class C shares of the Acquiring Fund on the date of the Reorganization.
 
(5)  Includes net assets and shares from Class Z. Class Z shares of the Fund will merge into Class Z shares of the Acquiring Fund on the date of the Reorganization.
 
(6)  Class A, Class B, Class C and Class Z shares of Nations Florida Municipal Bond Fund are exchanged for Class A, Class B, Class C and Class Z shares of Nations Florida Intermediate Municipal Fund based on the net asset value per share of Nations Florida Intermediate Municipal Fund’s Class A, Class B, Class C and Class Z shares, respectively, at the time of the merger.

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Nations Florida
Columbia Florida Nations Florida Intermediate
Intermediate Nations Florida Intermediate Municipal Fund
Municipal Bond Municipal Bond Municipal Fund Pro Forma Pro Forma
Fund Fund (Acquiring Fund) Adjustments Combined
Class A
                                        
Net asset value
  $ —     $ 34,848,214     $ 16,639,321     $ 969,000 (1)(2)   $ 52,456,535  
Shares outstanding
    —       3,600,897       1,572,560       (215,527 ) (2)     4,957,930  
Net asset value per share
  $ —     $ 9.68     $ 10.58             $ 10.58  
Class B
                                        
Net asset value
  $ —     $ 7,757,583     $ 6,680,017     $ 483,076 (1)(3)   $ 14,920,676  
Shares outstanding
    —       801,870       630,881       (23,715 ) (3)     1,409,036  
Net asset value per share
  $ —     $ 9.67     $ 10.58             $ 10.59  
Class C
                                        
Net asset value
  $ —     $ 458,282     $ 8,216,461     $ 1,154,711 (1)(4)   $ 9,829,454  
Shares outstanding
    —       47,424       775,068       104,745 (4)     927,237  
Net asset value per share
  $ —     $ 9.66     $ 10.60             $ 10.60  
Class Z
                                        
Net asset value
  $ —     $ 43,463,928     $ 154,211,265     $ 62,266,514 (1)(5)   $ 259,941,707  
Shares outstanding
    —       4,491,142       14,565,979       5,492,847 (5)     24,549,968  
Net asset value per share
  $ —     $ 9.68     $ 10.59             $ 10.59  
Class A(6)
                                        
Net asset value
  $ 988,300     $ —     $ —     $ (988,300 )   $ —  
Shares outstanding
    95,428       —       —       (95,428 )     —  
Net asset value per share
    10.36     $ —     $ —             $ —  
Class B(6)
                                        
Net asset value
  $ 487,548     $ —     $ —     $ (487,548 )   $ —  
Shares outstanding
    47,077       —       —       (47,077 )     —  
Net asset value per share
    10.36     $ —     $ —             $ —  
Class C(6)
                                        
Net asset value
  $ 1,155,716     $ —     $ —     $ (1,155,716 )   $ —  
Shares outstanding
    111,594       —       —       (111,594 )     —  
Net asset value per share
    10.36     $ —     $ —             $ —  
Class Z(6)
                                        
Net asset value
  $ 62,330,749     $ —     $ —     $ (62,330,749 )   $ —  
Shares outstanding
    6,018,551       —       —       (6,018,551 )     —  
Net asset value per share
  $ 10.36     $ —     $ —             $ —  

(1)  Adjustments reflect one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of $42,704, $46,308 and $0 to be borne by Columbia Florida Intermediate Municipal Bond Fund and Nations Florida Intermediate Municipal Fund, respectively.
 
(2)  Includes net assets and shares from Class A. Class A shares of the Funds will merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
 
(3)  Includes net assets and shares from Class B. Class B shares of the Funds will merge into Class B shares of the Acquiring Fund on the date of the Reorganization.
 
(4)  Includes net assets and shares from Class C. Class C shares of the Funds will merge into Class C shares of the Acquiring Fund on the date of the Reorganization.
 
(5)  Includes net assets and shares from Class Z. Class Z shares of the Funds will merge into Class Z shares of the Acquiring Fund on the date of the Reorganization.
 
(6)  Class A, Class B, Class C and Class Z shares of Columbia Florida Intermediate Municipal Bond Fund and Class A, Class B, Class C and Class Z shares of Nations Florida Municipal Fund are exchanged for based on the net asset value per share of Nations Florida Intermediate Municipal Fund’s Class A, Class B, Class C and Class Z shares, respectively, at the time of the merger.

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Table of Contents

                                 
Nations Value
Columbia Nations Value Fund
Growth & Income Fund Pro Forma Pro Forma
Fund (Acquiring Fund) Adjustments Combined
Class A
                                
Net asset value
  $ —     $ 288,622,185     $ 585,072,699 (1)(2)   $ 873,694,884  
Shares outstanding
    —       22,516,301       45,638,045 (2)     68,154,346  
Net asset value per share
  $ —     $ 12.82             $ 12.82  
Class B
                                
Net asset value
  $ —     $ 82,114,667     $ 674,127,532 (1)(3)   $ 756,242,199  
Shares outstanding
    —       6,585,140       54,060,107 (3)     60,645,247  
Net asset value per share
  $ —     $ 12.47             $ 12.47  
Class C
                                
Net asset value
  $ —     $ 16,282,272     $ 78,961,480 (1)(4)   $ 95,243,752  
Shares outstanding
    —       1,306,381       6,337,229 (4)     7,643,610  
Net asset value per share
  $ —     $ 12.46             $ 12.46  
Class Z
                                
Net asset value
  $ —     $ 1,363,883,272     $ 516,932,721 (1)(5)   $ 1,880,815,993  
Shares outstanding
    —       106,237,404       40,262,146 (5)     146,499,550  
Net asset value per share
  $ —     $ 12.84             $ 12.84  
Class A(6)
                                
Net asset value
  $ 585,207,777     $ —     $ (585,207,777 )   $ —  
Shares outstanding
    32,724,151       —       (32,724,151 )     —  
Net asset value per share
    17.88     $ —             $ —  
Class B(6)
                                
Net asset value
  $ 674,277,065     $ —     $ (674,277,065 )   $ —  
Shares outstanding
    40,192,192       —       (40,192,192 )     —  
Net asset value per share
    16.78     $ —             $ —  
Class C(6)
                                
Net asset value
  $ 78,979,158     $ —     $ (78,979,158 )   $ —  
Shares outstanding
    4,674,693       —       (4,674,693 )     —  
Net asset value per share
    16.90     $ —             $ —  
Class Z(6)
                                
Net asset value
  $ 517,079,097     $ —     $ (517,079,097 )   $ —  
Shares outstanding
    28,889,794       —       (28,889,794 )     —  
Net asset value per share
  $ 17.90     $ —             $ —  

(1)  Adjustments reflect one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of $405,994 and $42,671 to be borne by Columbia Growth & Income Fund and Nations Value Fund, respectively.
 
(2)  Includes net assets and shares from Class A. Class A shares of the Fund will merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
 
(3)  Includes net assets and shares from Class B. Class B shares of the Fund will merge into Class B shares of the Acquiring Fund on the date of the Reorganization.
 
(4)  Includes net assets and shares from Class C. Class C shares of the Fund will merge into Class C shares of the Acquiring Fund on the date of the Reorganization.
 
(5)  Includes net assets and shares from Class Z. Class Z shares of the Fund will merge into Class Z shares of the Acquiring Fund on the date of the Reorganization.
 
(6)  Class A, Class B, Class C and Class Z shares of Columbia Growth & Income Fund are exchanged for Class A, Class B, Class C and Class Z shares of Nations Value Fund based on the net asset value per share of Nations Value Fund’s Class A, Class B, Class C and Class Z, respectively, at the time of the merger.

45

Table of Contents

                                 
Nations Value
Columbia Tax- Nations Value Fund
Managed Value Fund Pro Forma Pro Forma
Fund (Acquiring Fund) Adjustments Combined
Class A
                                
Net asset value
  $ —     $ 288,622,185     $ 14,424,723 (1)(2)   $ 303,046,908  
Shares outstanding
    —       22,516,301       1,125,722 (2)     23,642,023  
Net asset value per share
  $ —     $ 12.82             $ 12.82  
Class B
                                
Net asset value
  $ —     $ 82,114,667     $ 44,620,331 (1)(3)   $ 126,734,998  
Shares outstanding
    —       6,585,140       3,578,375 (3)     10,163,515  
Net asset value per share
  $ —     $ 12.47             $ 12.47  
Class C
                                
Net asset value
  $ —     $ 16,282,272     $ 10,940,267 (1)(4)   $ 27,222,539  
Shares outstanding
    —       1,306,381       878,063 (4)     2,184,444  
Net asset value per share
  $ —     $ 12.46             $ 12.46  
Class Z
                                
Net asset value
  $ —     $ 1,363,883,272     $ 32,517 (1)(5)   $ 1,363,915,789  
Shares outstanding
    —       106,237,404       5,121 (5)     106,242,525  
Net asset value per share
  $ —     $ 12.84             $ 12.84  
Class A(6)
                                
Net asset value
  $ 14,443,051     $ —     $ (14,443,051 )   $ —  
Shares outstanding
    1,213,736       —       (1,213,736 )     —  
Net asset value per share
    11.90     $ —             $ —  
Class B(6)
                                
Net asset value
  $ 44,657,251     $ —     $ (44,657,251 )   $ —  
Shares outstanding
    3,854,251       —       (3,854,251 )     —  
Net asset value per share
    11.59     $ —             $ —  
Class C(6)
                                
Net asset value
  $ 10,949,226     $ —     $ (10,949,226 )   $ —  
Shares outstanding
    945,116       —       (945,116 )     —  
Net asset value per share
    11.59     $ —             $ —  
Class Z(6)
                                
Net asset value
  $ 65,807     $ —     $ (65,807 )   $ —  
Shares outstanding
    5,471       —       (5,471 )     —  
Net asset value per share
  $ 12.03     $ —             $ —  

(1)  Adjustments reflect one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of $54,826 and $42,671 to be borne by Columbia Tax-Managed Value Fund and Nations Value Fund, respectively.
 
(2)  Includes net assets and shares from Class A. Class A shares of the Fund will merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
 
(3)  Includes net assets and shares from Class B. Class B shares of the Fund will merge into Class B shares of the Acquiring Fund on the date of the Reorganization.
 
(4)  Includes net assets and shares from Class C. Class C shares of the Fund will merge into Class C shares of the Acquiring Fund on the date of the Reorganization.
 
(5)  Includes net assets and shares from Class Z. Class Z shares of the Fund will merge into Class Z shares of the Acquiring Fund on the date of the Reorganization.
 
(6)  Class A, Class B, Class C and Class Z shares of Columbia Tax-Managed Value Fund are exchanged for Class A, Class B, Class C and Class Z shares of Nations Value Fund based on the net asset value per share of Nations Value Fund’s Class A, Class B, Class C and Class Z shares, respectively, at the time of the merger.

46

Table of Contents

                                         
Nations Value
Columbia Columbia Tax Nations Fund
Growth & Income Municipal Value Value Fund Pro Forma Pro Forma
Fund Fund (Acquiring Fund) Adjustments Combined
Class A
                                        
Net asset value
  $ —     $ —     $ 288,622,185     $ 599,504,456 (1)(2)   $ 888,126,641  
Shares outstanding
    —       —       22,516,301       46,763,767 (2)     69,280,068  
Net asset value per share
  $ —     $ —     $ 12.82             $ 12.82  
Class B
                                        
Net asset value
  $ —     $ —     $ 82,114,667     $ 718,749,864 (1)(3)   $ 800,864,531  
Shares outstanding
    —       —       6,585,140       57,638,482 (3)     64,223,622  
Net asset value per share
  $ —     $ —     $ 12.47             $ 12.47  
Class C
                                        
Net asset value
  $ —     $ —     $ 16,282,272     $ 89,902,144 (1)(4)   $ 106,184,416  
Shares outstanding
    —       —       1,306,381       7,215,292 (4)     8,521,673  
Net asset value per share
  $ —     $ —     $ 12.46             $ 12.46  
Class Z
                                        
Net asset value
  $ —     $ —     $ 1,363,883,272     $ 516,998,477 (1)(5)   $ 1,880,881,749  
Shares outstanding
    —       —       106,237,404       40,267,268 (5)     146,504,672  
Net asset value per share
  $ —     $ —     $ 12.84             $ 12.84  
Class A(6)
                                        
Net asset value
  $ 585,207,777     $ 14,443,051     $ —     $ (599,650,828 )   $ —  
Shares outstanding
    32,724,151       1,213,736       —       (33,937,887 )     —  
Net asset value per share
    17.88     $ 11.90     $ —             $ —  
Class B(6)
                                        
Net asset value
  $ 674,277,065     $ 44,657,251     $ —     $ (718,934,316 )   $ —  
Shares outstanding
    40,192,192       3,854,251       —       (44,046,443 )     —  
Net asset value per share
    16.78       11.59     $ —             $ —  
Class C(6)
                                        
Net asset value
  $ 78,979,158     $ 10,949,226     $ —     $ (89,928,384 )   $ —  
Shares outstanding
    4,674,693       945,116       —       (5,619,809 )     —  
Net asset value per share
    16.90     $ 11.59     $ —             $ —  
Class Z(6)
                                        
Net asset value
  $ 517,079,097     $ 65,807     $ —     $ (517,144,904 )   $ —  
Shares outstanding
    28,889,794       5,471       —       (28,895,265 )     —  
Net asset value per share
  $ 17.90     $ 12.03     $ —             $ —  

(1)  Adjustments reflect one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of $405,994, $54,826 and $42,671 to be borne by Columbia Growth & Income Fund, Columbia Tax-Managed Value Fund and Nations Value Fund, respectively.
 
(2)  Includes net assets and shares from Class A. Class A shares of the Funds will merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
 
(3)  Includes net assets and shares from Class B. Class B shares of the Funds will merge into Class B shares of the Acquiring Fund on the date of the Reorganization.
 
(4)  Includes net assets and shares from Class C. Class C shares of the Funds will merge into Class C shares of the Acquiring Fund on the date of the Reorganization.
 
(5)  Includes net assets and shares from Class Z. Class Z shares of the Funds will merge into Class Z shares of the Acquiring Fund on the date of the Reorganization.
 
(6)  Class A, Class B, Class C and Class Z shares of Columbia Growth & Income Fund and Columbia Tax-Managed Value Fund are exchanged for Class A, Class B, Class C and Class Z shares of Nations Value Fund based on the net asset value per share of Nations Value Fund’s Class A, Class B, Class C and Class Z shares, respectively, at the time of the merger.

47

Table of Contents

                                 
Nations
Columbia Nations Intermediate
Intermediate Intermediate Bond Fund
Government Bond Fund Pro Forma Pro Forma
Income Fund (Acquiring Fund) Adjustments Combined
Class A
                                
Net asset value
  $ —     $ 21,321,000     $ 35,601,977 (1)(2)   $ 56,922,977  
Shares outstanding
    —       2,228,809       3,720,330 (2)     5,949,139  
Net asset value per share
  $ —     $ 9.57             $ 9.57  
Class B
                                
Net asset value
  $ —     $ 8,543,183     $ 2,465,549 (1)(3)   $ 11,008,732  
Shares outstanding
    —       897,698       259,053 (3)     1,156,751  
Net asset value per share
  $ —     $ 9.52             $ 9.52  
Class C
                                
Net asset value
  $ —     $ 3,548,685     $ 1,423,086 (1)(4)   $ 4,971,771  
Shares outstanding
    —       333,046       133,648 (4)     466,694  
Net asset value per share
  $ —     $ 10.66             $ 10.65  
Class Z
                                
Net asset value
  $ —     $ 594,997,406     $ 303,612,621 (1)(5)   $ 898,610,027  
Shares outstanding
    —       62,413,467       31,863,242 (5)     94,276,709  
Net asset value per share
  $ —     $ 9.53             $ 9.53  
Class A(6)
                                
Net asset value
  $ 2,815,467     $ —     $ (2,815,467 )   $ —  
Shares outstanding
    270,805       —       (270,805 )     —  
Net asset value per share
  $ 10.40     $ —             $ —  
Class B(6)
                                
Net asset value
  $ 2,466,572     $ —     $ (2,466,572 )   $ —  
Shares outstanding
    237,250       —       (237,250 )     —  
Net asset value per share
  $ 10.40     $ —             $ —  
Class C(6)
                                
Net asset value
  $ 1,423,574     $ —     $ (1,423,574 )   $ —  
Shares outstanding
    136,926       —       (136,926 )     —  
Net asset value per share
    10.40     $ —             $ —  
Class G(6)
                                
Net asset value
  $ 2,591,704     $ —     $ (2,591,704 )   $ —  
Shares outstanding
    249,284       —       (249,284 )     —  
Net asset value per share
    10.40     $ —             $ —  
Class T(6)
                                
Net asset value
  $ 32,793,725     $ —     $ (32,793,725 )   $ —  
Shares outstanding
    3,154,300       —       (3,154,300 )     —  
Net asset value per share
  $ 10.40     $ —             $ —  
Class Z(6)
                                
Net asset value
  $ 301,113,060     $ —     $ (301,113,060 )   $ —  
Shares outstanding
    28,962,713       —       (28,962,713 )     —  
Net asset value per share
  $ 10.40     $ —             $ —  

(1)  Adjustments reflect one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of $54,319 and $46,550 to be borne by Columbia Intermediate Government Income Fund and Nations Intermediate Bond Fund, respectively.
 
(2)  Includes net assets and shares from Class A and Class T. Class A and Class T shares of the Fund will merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
 
(3)  Includes net assets and shares from Class B. Class B shares of the Fund will merge into Class B shares of the Acquiring Fund on the date of the Reorganization.
 
(4)  Includes net assets and shares from Class C. Class C shares of the Fund will merge into Class C shares of the Acquiring Fund on the date of the Reorganization.
 
(5)  Includes net assets and shares from Class G and Class Z. Class G and Class Z shares of the Fund will merge into Class Z shares of the Acquiring Fund on the date of the Reorganization.
 
(6)  Class A, Class B, Class C, Class G, Class T and Class Z shares of Columbia Intermediate Government Income Fund are exchanged for Class A, Class B, Class C and Class Z, Class A and Class Z shares of Nations Intermediate Bond Fund based on the net asset value per share of Nations Intermediate Bond Fund’s Class A, Class B, Class C, Class Z, Class A and Class Z shares, respectively, at the time of the merger.

48

Table of Contents

                                 
Nations
Nations LargeCap Index
Columbia LargeCap Fund
Large Company Index Fund Pro Forma Pro Forma
Index Fund (Acquiring Fund) Adjustments Combined
Class A
                                
Net asset value
  $ —     $ 36,627,536     $ 27,231,305 (1)(2)   $ 63,858,841  
Shares outstanding
    —       1,647,757       1,224,980 (2)     2,872,737  
Net asset value per share
  $ —     $ 22.23             $ 22.23  
Class B
                                
Net asset value
  $ —     $ —     $ 13,066,757 (1)(3)   $ 13,066,757  
Shares outstanding
    —       —       587,798 (3)     587,798  
Net asset value per share
  $ —     $ —             $ 22.23  
Class Z
                                
Net asset value
  $ —     $ ,1,452,250,948     $ 802,419,125 (1)(4)   $ 2,254,670,073  
Shares outstanding
    —       64,883,424       35,854,295 (4)     100,737,719  
Net asset value per share
  $ —     $ 22.38             $ 22.38  
Class A(5)
                                
Net asset value
  $ 24,127,628     $ —     $ (24,127,628 )   $ —  
Shares outstanding
    903,700       —       (903,700 )     —  
Net asset value per share
    26.70     $ —             $ —  
Class B(5)
                                
Net asset value
  $ 13,066,757     $ —     $ (13,066,757 )   $ —  
Shares outstanding
    491,712       —       (491,712 )     —  
Net asset value per share
    26.57     $ —             $ —  
Class C(5)
                                
Net asset value
  $ 3,103,677     $ —     $ (3,103,677 )   $ —  
Shares outstanding
    116,518       —       (116,518 )     —  
Net asset value per share
    26.64     $ —             $ —  
Class Z(5)
                                
Net asset value
  $ 802,419,125     $ —     $ (802,419,125 )   $ —  
Shares outstanding
    30,010,756       —       (30,010,756 )     —  
Net asset value per share
  $ 26.74     $ —             $ —  

(1)  Adjustments reflect one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of $0 and $0 to be borne by Columbia Large Company Index Fund and Nations LargeCap Index Fund, respectively.
 
(2)  Includes net assets and shares from Class A and Class C. Class A and Class C shares of the Fund will merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
 
(3)  Includes net assets and shares from Class B. Class B shares of the Fund will merge into Class B shares of the Acquiring Fund on the date of the Reorganization.
 
(4)  Includes net assets and shares from Class Z. Class Z shares of the Fund will merge into Class Z shares of the Acquiring Fund on the date of the Reorganization.
 
(5)  Class A, Class B, Class C and Class Z shares of Columbia Large Company Index Fund are exchanged for Class A, Class B, Class A and Class Z shares of Nations LargeCap Index Fund based on the net asset value per share of Nations LargeCap Index Fund’s Class A, Class B, Class A and Class Z, respectively, at the time of the merger.

49

Table of Contents

                                 
Nations
MidCap Value
Columbia Nations Fund
Mid Cap Value MidCap Value Fund Pro Forma Pro Forma
Fund (Acquiring Fund) Adjustments Combined
Class A
                                
Net asset value
  $ —     $ 10,097,576     $ 696,294,051 (1)(2)   $ 706,391,627  
Shares outstanding
    —       746,279       51,463,034 (2)     52,209,313  
Net asset value per share
  $ —     $ 13.53             $ 13.53  
Class B
                                
Net asset value
  $ —     $ 4,283,622     $ 309,972,026 (1)(3)   $ 314,255,648  
Shares outstanding
    —       319,692       23,132,266 (3)     23,451,958  
Net asset value per share
  $ —     $ 13.40             $ 13.40  
Class C
                                
Net asset value
  $ —     $ 1,119,717     $ 65,798,300 (1)(3)   $ 66,918,017  
Shares outstanding
    —       83,331       4,895,713 (3)     4,979,044  
Net asset value per share
  $ —     $ 13.44             $ 13.44  
Class Z
                                
Net asset value
  $ —     $ 573,429,196     $ 683,014,179 (1)(4)   $ 1,256,443,375  
Shares outstanding
    —       42,311,919       50,410,285 (4)     92,722,204  
Net asset value per share
  $ —     $ 13.55             $ 13.55  
Class A(6)
                                
Net asset value
  $ 696,294,847     $ —     $ (696,294,847 )   $ —  
Shares outstanding
    27,031,252       —       (27,031,252 )     —  
Net asset value per share
    25.76     $ —             $ —  
Class B(6)
                                
Net asset value
  $ 309,972,364     $ —     $ (309,972,364 )   $ —  
Shares outstanding
    13,267,564       —       (13,267,564 )     —  
Net asset value per share
    23.36     $ —             $ —  
Class C(6)
                                
Net asset value
  $ 65,798,388     $ —     $ (65,798,388 )   $ —  
Shares outstanding
    2,728,248       —       (2,728,248 )     —  
Net asset value per share
    24.12     $ —             $ —  
Class Z(6)
                                
Net asset value
  $ 683,059,368     $ —     $ (683,059,368 )   $ —  
Shares outstanding
    26,212,467       —       (26,212,467 )     —  
Net asset value per share
  $ 26.06     $ —             $ —  

(1)  Adjustments reflect one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of $0 and $46,411 to be borne by Columbia Mid Cap Value Fund and Nations MidCap Value Fund, respectively.
 
(2)  Includes net assets and shares from Class A. Class A shares of the Fund will merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
 
(3)  Includes net assets and shares from Class B. Class B shares of the Fund will merge into Class B shares of the Acquiring Fund on the date of the Reorganization.
 
(4)  Includes net assets and shares from Class C. Class C shares of the Fund will merge into Class C shares of the Acquiring Fund on the date of the Reorganization.
 
(5)  Includes net assets and shares from Class Z. Class Z shares of the Fund will merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
 
(6)  Class A, Class B, Class C and Class Z shares of Columbia Mid Cap Value Fund are exchanged for Class A, Class B, Class C and Class Z shares of Nations MidCap Value Fund based on the net asset value per share of Nations MidCap Value Fund’s Class A, Class B, Class C and Class Z, respectively, at the time of the merger.

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Nations Short-Term
Columbia Nations Short-Term Income Fund
Short Term Income Fund Pro Forma Pro Forma
Bond Fund, Inc. (Acquiring Fund) Adjustments Combined
Class A
                                
Net asset value
  $ —     $ 36,391,145     $ 39,380,286 (1)(2)   $ 75,771,431  
Shares outstanding
    —       3,695,600       3,997,999 (2)     7,693,599  
Net asset value per share
  $ —     $ 9.85             $ 9.85  
Class B
                                
Net asset value
  $ —     $ 1,443,271     $ 21,378,837 (1)(3)   $ 22,822,108  
Shares outstanding
    —       146,728       2,172,646 (3)     2,319,374  
Net asset value per share
  $ —     $ 9.84             $ 9.84  
Class C
                                
Net asset value
  $ —     $ 17,158,228     $ 10,054,357 (1)(4)   $ 27,212,585  
Shares outstanding
    —       1,743,917       1,021,784 (4)     2,765,701  
Net asset value per share
  $ —     $ 9.84             $ 9.84  
Class Z
                                
Net asset value
  $ —     $ 934,528,606     $ 400,008,493 (1)(5)   $ 1,334,537,099  
Shares outstanding
    —       95,073,529       40,692,624 (5)     135,766,153  
Net asset value per share
  $ —     $ 9.83             $ 9.83  
Class A(6)
                                
Net asset value
  $ 20,470,467     $ —     $ (20,470,476 )   $ —  
Shares outstanding
    2,390,053       —       (2,390,053 )     —  
Net asset value per share
  $ 8.56     $ —             $ —  
Class B(6)
                                
Net asset value
  $ 21,381,920     $ —     $ (21,381,920 )   $ —  
Shares outstanding
    2,496,548       —       (2,496,548 )     —  
Net asset value per share
  $ 8.56     $ —             $ —  
Class C(6)
                                
Net asset value
  $ 3,369,469     $ —     $ (3,369,469 )   $ —  
Shares outstanding
    393,419       —       (393,419 )     —  
Net asset value per share
  $ 8.56     $ —             $ —  
Class D(6)
                                
Net asset value
  $ 6,686,338     $ —     $ (6,686,338 )   $ —  
Shares outstanding
    780,758       —       (780,758 )     —  
Net asset value per share
    8.56     $ —             $ —  
Class G(6)
                                
Net asset value
  $ 710,598     $ —     $ (710,598 )   $ —  
Shares outstanding
    82,968       —       (82,968 )     —  
Net asset value per share
    8.56     $ —             $ —  
Class T(6)
                                
Net asset value
  $ 18,915,488     $ —     $ (18,915,488 )   $ —  
Shares outstanding
    2,208,567       —       (2,208,567 )     —  
Net asset value per share
  $ 8.56     $ —             $ —  
Class Z(6)
                                
Net asset value
  $ 399,355,578     $ —     $ (399,355,578 )   $ —  
Shares outstanding
    46,629,345       —       (46,629,345 )     —  
Net asset value per share
  $ 8.56     $ —             $ —  
(1)  Adjustments reflect one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of $67,894 and $0 to be borne by Columbia Short Term Bond Fund, Inc. and Nations Short-Term Income Fund, respectively.
 
(2)  Includes net assets and shares from Class A and Class T. Class A and Class T shares of the Fund will merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
 
(3)  Includes net assets and shares from Class B. Class B shares of the Fund will merge into Class B shares of the Acquiring Fund on the date of the Reorganization.
 
(4)  Includes net assets and shares from Class C and Class D. Class C and Class D shares of the Fund will merge into Class C shares of the Acquiring Fund on the date of the Reorganization.
 
(5)  Includes net assets and shares from Class G and Class Z. Class G and Class Z shares of the Fund will merge into Class Z shares of the Acquiring Fund on the date of the Reorganization.
 
(6)  Class A, Class B, Class C, Class D, Class G, Class T and Class Z shares of Columbia Short Term Bond Fund, Inc. are exchanged for Class A, Class B, Class C, Class C, Class Z, Class A and Class Z shares of Nations Short-Term Income based on the net asset value per share of Nations Short-Term Income Fund’s Class A, Class B, Class C, and Class Z shares, respectively, at the time of the merger.

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Nations Short-
Nations Term Income
Nations Short- Short-Term Fund
Immediate Income Fund Pro Forma Pro Forma
Government Fund (Acquiring Fund) Adjustments Combined
Class A(6)
                                
Net asset value
  $ 32,458,067     $ 36,391,145     $ (4,771 ) (1)(2)   $ 68,844,441  
Shares outstanding
    7,818,877       3,695,600       (4,524,126 ) (2)     6,990,351  
Net asset value per share
  $ 4.15     $ 9.85             $ 9.85  
Class B(6)
                                
Net asset value
  $ 19,101,184     $ 1,443,271     $ (2,808 ) (1)(3)   $ 20,541,647  
Shares outstanding
    4,597,779       146,728       (2,656,887 ) (3)     2,087,620  
Net asset value per share
  $ 4.15     $ 9.84             $ 9.84  
Class C(6)
                                
Net asset value
  $ 4,141,111     $ 17,158,228     $ (609 ) (1)(4)   $ 21,298,730  
Shares outstanding
    998,446       1,743,917       (577,663 ) (4)     2,164,700  
Net asset value per share
  $ 4.15     $ 9.84             $ 9.84  
Class Z(6)
                                
Net asset value
  $ 297,038,225     $ 934,528,606     $ (43,662 ) (1)(5)   $ 1,231,523,169  
Shares outstanding
    71,506,447       95,073,529       (41,293,368 ) (5)     125,286,608  
Net asset value per share
  $ 4.15     $ 9.83             $ 9.83  

(1)  Adjustments reflect one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of $51,850 and $0 to be borne by Nations Short-Intermediate Government Fund and Nations Short-Term Income Fund, respectively.
 
(2)  Includes net assets and shares from Class A. Class A shares of the Fund merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
 
(3)  Includes net assets and shares from Class B. Class B shares of the Fund merge into Class B shares of the Acquiring Fund on the date of the Reorganization.
 
(4)  Includes net assets and shares from Class C. Class C shares of the Fund merge into Class B shares of the Acquiring Fund on the date of the Reorganization.
 
(5)  Includes net assets and shares from Class Z. Class Z shares of the Fund merge into Class Z shares of the Acquiring Fund on the date of the Reorganization.
 
(6)  Class A, Class B, Class C and Class Z shares of Nations Short-Intermediate Government Fund are exchanged for Class A, Class B, Class C and Class Z shares of Nations Short-Term Income Fund based on the net asset value per share of Nations Short-Term Income Fund’s Class A, Class B, Class C and Class Z shares, respectively, at the time of the merger.

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Nations Short- Nations Short- Nations Short-
Columbia Intermediate Term Income Term Income
Short Term Government Fund Pro Forma Pro Forma Fund
Bond Fund, Inc. Fund (Acquiring Fund) Adjustments Combined
Class A(6)
                                        
Net asset value
  $ —     $ 32,458,067     $ 36,391,145     $ 39,375,515 (1)(2)   $ 108,224,727  
Shares outstanding
    —       7,818,877       3,695,600       (526,128 ) (2)     10,988,349  
Net asset value per share
  $ —     $ 4.15     $ 9.85             $ 9.85  
Class B(6)
                                        
Net asset value
  $ —     $ 19,101,184     $ 1,443,271     $ 21,376,029 (1)(3)   $ 41,920,484  
Shares outstanding
    —       4,597,779       146,728       (484,241 ) (3)     4,260,266  
Net asset value per share
  $ —     $ 4.15     $ 9.84             $ 9.84  
Class C(6)
                                        
Net asset value
  $ —     $ 4,141,111     $ 17,158,228     $ 10,053,748 (1)(4)   $ 31,353,087  
Shares outstanding
    —       998,446       1,743,917       444,121 (4)     3,186,484  
Net asset value per share
  $ —     $ 4.15     $ 9.84             $ 9.84  
Class Z(6)
                                        
Net asset value
  $ —     $ 297,038,225     $ 934,528,606     $ 399,964,831 (1)(5)   $ 1,631,531,662  
Shares outstanding
    —       71,506,447       95,073,529       (600,744 ) (5)     165,979,232  
Net asset value per share
  $ —     $ 4.15     $ 9.83             $ 9.83  
Class A(6)
                                        
Net asset value
  $ 20,470,476     $ —     $ —     $ (20,470,476 )   $ —  
Shares outstanding
    2,390,053       —       —       (2,390,053 )     —  
Net asset value per share
    8.56     $ —     $ —             $ —  
Class B(6)
                                        
Net asset value
  $ 21,381,920     $ —     $ —     $ (21,381,920 )   $ —  
Shares outstanding
    2,496,548       —       —       (2,496,546 )     —  
Net asset value per share
    8.56     $ —     $ —             $ —  
Class C(6)
                                        
Net asset value
  $ 3,369,469     $ —     $ —     $ (3,369,469 )   $ —  
Shares outstanding
    393,419       —       —       (393,419 )     —  
Net asset value per share
    8.56     $ —     $ —             $ —  
Class D(6)
                                        
Net asset value
  $ 6,686,338     $ —     $ —     $ (6,686,338 )   $ —  
Shares outstanding
    780,758       —       —       (780,758 )     —  
Net asset value per share
    8.56     $ —     $ —             $ —  
Class G(6)
                                        
Net asset value
  $ 710,598     $ —     $ —     $ (710,598 )   $ —  
Shares outstanding
    82,968       —       —       (82,968 )     —  
Net asset value per share
    8.56     $ —     $ —             $ —  
Class T(6)
                                        
Net asset value
  $ 18,915,488     $ —     $ —     $ (18,915,488 )   $ —  
Shares outstanding
    2,208,567       —       —       (2,208,567 )     —  
Net asset value per share
    8.56     $ —     $ —             $ —  
Class Z(6)
                                        
Net asset value
  $ 399,355,578     $ —     $ —     $ (399,355,578 )   $ —  
Shares outstanding
    46,629,345       —       —       (46,629,345 )     —  
Net asset value per share
  $ 8.56     $ —     $ —             $ —  

(1)  Adjustments reflect one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of $67,894, $51,850 and $0 to be borne by Columbia Short Term Bond Fund, Inc., Nations Short-Intermediate Government Fund and Nations Short-Term Income Fund, respectively.
 
(2)  Includes net assets and shares from Class A and Class T. Class A and Class T shares of the Funds will merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
 
(3)  Includes net assets and shares from Class B. Class B shares of the Funds will merge into Class B shares of the Acquiring Fund on the date of the Reorganization.
 
(4)  Includes net assets and shares from Class C. Class C shares of the Funds will merge into Class C shares of the Acquiring Fund on the date of the Reorganization.
 
(5)  Includes net assets and shares from Class G and Class Z. Class G and Class Z shares of the Funds will merge into Class Z shares of the Acquiring Fund on the date of the Reorganization.
 
(6)  Class A, Class B, Class C, Class D, Class G, Class T and Class Z shares of Columbia Short-Term Bond Fund, Inc. and Class A, Class B, Class C and Class Z shares of Nations Short-Intermediate Government Fund are exchanged for Class A, Class B, Class C and Class Z, Class A and Class Z shares of Nations Short-Term Income Fund based on the net asset value per share of Nations Short-Term Income Fund’s Class A, Class B, Class C and Class Z shares, respectively, at the time of the merger.

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Nations
Nations SmallCap
Columbia SmallCap Index Fund
Small Company Index Fund Pro Forma Pro Forma
Index Fund (Acquiring Fund) Adjustments Combined
Class A
                                
Net asset value
  $ —     $ 14,316,775     $ 15,076,361 (1)(2)   $ 29,393,136  
Shares outstanding
    —       791,929       833,870 (2)     1,625,799  
Net asset value per share
  $ —     $ 18.08             $ 18.08  
Class Z
                                
Net asset value
  $ —     $ 1,002,217,160     $ 307,751,585 (1)(3)   $ 1,309,968,745  
Shares outstanding
    —       55,191,191       16,946,673 (3)     72,137,864  
Net asset value per share
  $ —     $ 18.16             $ 18.16  
Class A(4)
                                
Net asset value
  $ 8,200,261     $ —     $ (8,200,261 )   $ —  
Shares outstanding
    416,454       —       (416,454 )     —  
Net asset value per share
    19.69     $ —             $ —  
Class B(4)
                                
Net asset value
  $ 3,347,414     $ —     $ (3,347,414 )   $ —  
Shares outstanding
    172,304       —       (172,304 )     —  
Net asset value per share
    19.43     $ —             $ —  
Class C(4)
                                
Net asset value
  $ 3,528,686     $ —     $ (3,528,686 )   $ —  
Shares outstanding
    181,446       —       (181,446 )     —  
Net asset value per share
    19.45     $ —             $ —  
Class Z(4)
                                
Net asset value
  $ 307,751,585     $ —     $ (307,751,585 )   $ —  
Shares outstanding
    15,604,774       —       (15,604,774 )     —  
Net asset value per share
  $ 19.72     $ —             $ —  

(1)  Adjustments reflect one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of $0 and $0 to be borne by Columbia Small Company Index Fund and Nations SmallCap Index Fund, respectively.
 
(2)  Includes net assets and shares from Class A, Class B and Class C. Class A Class B and Class C shares of the Fund will merge into Class A shares of the Acquiring Fund on the date of the Reorganization.
 
(3)  Includes net assets and shares from Class Z. Class Z shares of the Fund will merge into Class Z shares of the Acquiring Fund on the date of the Reorganization.
 
(4)  Class A, Class B, Class C and Class Z shares of Columbia Small Company Index Fund are exchanged for Class A, Class A, Class A, and Class Z shares of Nations SmallCap Index Fund based on the net asset value per share of Nations SmallCap Index Fund’s Class A and Class Z, respectively, at the time of the merger.

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ITEM 2 — ELECTION OF TRUSTEES/DIRECTORS (FOR COLUMBIA FUNDS ONLY)

      On February 9, 2005, pursuant to a settlement with the SEC, without admitting or denying the findings of the SEC, Columbia and Columbia Funds Distributor, Inc. consented to the entry of a settlement with the SEC. In connection with this settlement, the Columbia Funds, along with other funds in the Columbia Funds Complex, voluntarily undertook to elect Trustees/Directors at least every five years, commencing in 2005. A copy of the SEC order memorializing this settlement is available on the SEC’s website at www.sec.gov. In the event that a Reorganization of a Columbia Fund does not occur, the Columbia Fund, by asking shareholders to elect Trustees/Directors at the Meetings, will save the costs of soliciting proxies and scheduling a new meeting for the election of Trustees/Directors at a later date.

      The Columbia Funds are being asked in to elect all of the incumbent Trustees/Directors of the Columbia Funds. Each Governance Committee of Columbia Trust I, Columbia Trust III, Columbia Trust V, and Columbia Trust VI, as well as for Columbia Fixed Income Securities Fund, Inc. and Columbia Short Term Bond Fund, Inc., which consists solely of independent Trustees/Directors, makes recommendations concerning the nominees for Trustee/Director of Columbia Trust I, Columbia Trust III, Columbia Trust V, Columbia Trust VI, Columbia Fixed Income Securities Fund, Inc. and Columbia Short Term Bond Fund, Inc. Each Governance Committee recommends that you vote for the election of the following nominees, who currently serve as Trustees and/or Directors of each trust or company of the Columbia Funds: Mses. Kelly and Verville and Messrs. Hacker, Lowry, Nelson, Neuhauser, Mayer, Theobald, Simpson, Stitzel and Woolworth. You will find more information about the individual Trustees/Directors below.

      The Trustees/Directors are proposing that each of the current Trustees/Directors be elected by shareholders to serve as trustees of Columbia Trust I, Columbia Trust III, Columbia Trust V, and Columbia Trust VI, and directors of Columbia Fixed Income Securities Fund, Inc. and Columbia Short Term Bond Fund, Inc., as set out below:

      Mses. Kelly and Verville and Messrs. Hacker, Lowry, Mayer, Nelson, Neuhauser, Simpson, Stitzel, Theobald and Woolworth (who each have agreed to serve) are proposed for each election as Trustees of Columbia Trust I, Columbia Trust III, Columbia Trust V, and Columbia Trust VI, and Directors of Columbia Fixed Income Securities Fund, Inc. and Columbia Short Term Bond Fund, Inc., and are to be elected by the shareholders of each Columbia Fund.

      TRUSTEES OF COLUMBIA TRUST I, COLUMBIA TRUST III, COLUMBIA TRUST V, AND COLUMBIA TRUST VI, AND DIRECTORS OF COLUMBIA FIXED INCOME SECURITIES FUND, INC. AND COLUMBIA SHORT TERM BOND FUND, INC., ON BEHALF OF THE COLUMBIA FUNDS, UNANIMOUSLY RECOMMEND THAT YOU VOTE “FOR” THE ELECTION OF THE PROPOSED TRUSTEES/DIRECTORS.

Trustees/Directors and Officer Information

      The names and ages of the Trustees/Directors and executive officers of the Columbia Funds, the year that each first was elected or appointed to office, their principal business occupations during at least the last five years, the number of portfolios in the “Columbia Funds Complex” overseen by each Trustee/Director and other trusteeships/directorships that each Trustee/Director holds are shown below. As of December 31, 2004, the number of portfolios in the Columbia Funds Complex consisted of 127 open-end and 12 closed-end

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management investment company portfolios. The address of each Trustee/ Director and officer is One Financial Center, Boston, MA 02111-2621, unless otherwise indicated.
                                 
Number of
Portfolios in
Columbia
Year First Fund
Position Elected Or Complex
Name/Age and with Appointed Principal Occupation(s) During Overseen by Other Directorships/
Address Funds to Office1 Past Five Years Trustee Trusteeships Held
Non-Interested Trustee/Director
Douglas A. Hacker
(Age 49) 		  Trustee/
Director		     1996     Executive Vice President-Strategy of United Airlines since December, 2002 (formerly President of UAL Loyalty Services (airline services) from September, 2001 to December, 2002; Executive Vice President and Chief Financial Officer of United Airlines from March, 1993 to September, 2001; Senior Vice President and Chief Financial Officer of UAL, Inc. prior thereto).     118     None
Janet Langford Kelly
(Age 47) 		  Trustee/
Director		     1996     Adjunct Professor of Law, Northwestern University, since September, 2003; Private Investor since March, 2004 (formerly Chief Administration Officer and Senior Vice President, Kmart Holding Corporation (consumer goods), from September 2003 to March 2004; Executive Vice President- Corporate Department and Administration, General Counsel and Secretary, Kellogg Company (food manufacturer) from September, 1999 to August, 2003; Senior Vice President, Secretary and General Counsel, Sara Lee Corporation (branded, packaged, consumer-products manufacturer) from January, 1995 to September, 1999).     118     None
Richard W. Lowry 2
(Age 69) 		  Trustee/
Director		     1995     Private Investor since August, 1987 (formerly Chairman and Chief Executive Officer, U.S. Plywood Corporation (building products manufacturer)).     120     None
Charles R. Nelson
(Age 62) 		  Trustee/
Director		     1981     Professor of Economics, University of Washington, since January, 1976; Ford and Louisa Van Voorhis Professor of Political Economy, University of Washington, since September, 1993; (formerly Director, Institute for Economic Research, University of Washington, from September 2001 to June 2003; Adjunct Professor of Statistics, University of Washington, since September, 1980; Associate Editor, Journal of Money Credit and Banking, since September, 1993; consultant on econometric and statistical matters).     118     None
John J. Neuhauser 2,3
(Age 62) 		  Trustee/
Director		     1985     Academic Vice President and Dean of Faculties since August, 1999, Boston College (formerly Dean, Boston College School of Management from September, 1977 to September, 1999).     121     Saucony, Inc. (athletic footwear).
Patrick J. Simpson
(Age 61) 		  Trustee/
Director		     2000     Partner, Perkins Coie, LLP (law firm) 1988-present.     118     None

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Number of
Portfolios in
Columbia
Year First Fund
Position Elected Or Complex
Name/Age and with Appointed Principal Occupation(s) During Overseen by Other Directorships/
Address Funds to Office1 Past Five Years Trustee Trusteeships Held
Thomas E. Stitzel
(Age 69) 		  Trustee/
Director		     1998     Business Consultant since 1999 (formerly Professor of Finance from 1975 to 1999; College of Business, Boise State University); Chartered Financial Analyst.     118     None
Thomas C. Theobald4
(Age 68) 		  Trustee/
Director		     1996     Partner and Senior Advisor, Chicago Growth Partners (private equity investing) since September, 2004; formerly Managing Director, William Blair Capital Partners (private equity investing) from September, 1994 to September 2004).     118     Anixter International (network support equipment distributor); Ventas Inc. (real estate investment trust); Jones Lang LaSalle (real LaSalle (real estate management services) and Ambee Financial Group (financial guarantee insurance).
Anne-Lee Verville 3
(Age 59) 		  Trustee/
Director		     1998     Retired since 1997 (formerly General Manager, Global Education Industry from 1994 to 1997, IBM Corporation (computers and technology)).     119     Chairman of the Board of Trustees, Enesco Group, Inc. (designer, importer and distributor of giftware and collectibles).
Richard L. Woolworth
(Age 64) 		  Trustee/
Director		     1991     Retired since December, 2003 (formerly Chairman and Chief Executive Officer, The Regence Group (regional health insurer) 1971-2003; Chairman and Chief Executive Officer, Blue Cross and Blue Shield of Oregon 1971-2003; Certified Public Accountant, Arthur Young & Company 1963-1971).     118     Northwest Natural Gas Co. (a natural gas service provider).
Interested Trustee/Director
William E. Mayer 2,5
(Age 65) 		  Trustee/
Director		     1994     Managing Partner, Park Avenue Equity Partners (private equity fund) since February, 1999 (formerly Partner, Development Capital LLC from November, 1996 to February, 1999).     120     Lee Enterprises (print media); WR Hambrecht + Co. (financial service provider); First Health (healthcare); Readers Digest (publisher); Oppenfield Solutions (retail industry provider).

1 In December, 2000, the boards of each of the former Liberty Funds and the former Stein Roe Funds were combined into one board of trustees responsible for the oversight of both fund groups, consisting of 88 investment companies (collectively, the “Liberty Board”). On October 8, 2003, the trustees of the Liberty Board were elected to the boards of the Columbia Funds, consisting of 15 investment companies (the “Columbia Board”), and of the CMG Fund Trust, consisting of 15 publicly offered investment companies (the “CMG Funds Board”). Simultaneously with that election, Messrs. Simpson and Messrs. Woolworth, who had been trustees on the Columbia Board and on the CMG Funds Board, were elected to serve as trustees of the Liberty Board. Also on October 8, 2003, each of the Funds’ incumbent trustees were elected as trustees of the 15 Columbia Funds and as trustees of the 15 publicly offered funds in the CMG Fund Trust.

2 Messrs. Lowry, Neuhauser and Mayer each also serve as a trustee of the All-Star Funds, currently consisting of 2 investment companies, which are advised by an affiliate of Columbia.

3 Mr. Neuhauser and Ms. Verville also serve as disinterested trustees of Columbia Multi-Strategy Hedge Fund, LLC, which is advised by Columbia.

4 Mr. Theobald was appointed as Chairman of the Board effective December 10, 2003.

5 Mr. Mayer is an “interested person” (as defined in the 1940 Act) of the Fund, by reason of his affiliation with WR Hambrecht + Co, a registered broker-dealer.

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Year First
Position Elected or
Name/Age and with Appointed to
Address Funds Office Principal Occupation(s) During Past Five Years
Officers
Christopher L. Wilson
(Age 47) 		  Head of Mutual Funds since August 2004; President of the Columbia Funds since October 2004     2000     Formerly President and Chief Executive Officer, CDC IXIS Asset Management Services, Inc. from September 1998 to August 2004.
J. Kevin Connaughton
(Age 40) 		  Treasurer since December 14, 2000; President from February 27, 2004 to October 2004.     2000     Treasurer of the Columbia Funds (15 investment companies), Liberty Funds (88 investment companies) and Liberty All-Star Funds (2 investment companies) since February 2004 and December, 2000, respectively; Chief Financial Officer of the Columbia Funds since January, 2003 (formerly Controller of the Columbia Funds, Liberty Funds and of the Liberty All-Star Funds from February, 1998 to October, 2000); Treasurer of the Stein Roe Funds (13 investment companies) since February, 2001 (formerly Controller from May, 2000 to February, 2001); Treasurer of the Galaxy Funds (15 investment companies) since September, 2002 (formerly Vice President from April, 2000 to January, 2001); Treasurer of the Columbia Multi-Strategy Hedge Fund, LLC since December, 2002; Vice President of Columbia Advisors, Inc. since April, 2003 (formerly Vice President of Colonial from February, 1998 to October, 2000; Senior Tax Manager, Coopers & Lybrand, LLP from April, 1996 to January, 1998).
Mary Joan Hoene
(Age 54)
40 West 57th Street
New York, NY 10019 		  Senior Vice President and Chief Compliance Officer since 2004     2004     Formerly Partner, Carter, Ledyard & Milburn LLP from January 2001 to August 2004; Counsel, Carter, Ledyard & Milburn LLP from November 1999 to December 2000; Vice President and Counsel, Equitable Life Assurance Society of the United States from April 1998 to November 1999.
Michael G. Clarke
(Age 34) 		  Chief Accounting Officer since October 2004     2004     Formerly Controller of the Columbia Funds and of the Liberty All-Star Funds from May 2004 to October 2004; Assistant Treasurer from June 2002 to May 2004; Vice President, Product Strategy & Development of the Liberty Funds Group from February 2001 to June 2002; Assistant Treasurer of the Liberty Funds Group from February 2001 to June 2002; Assistant Treasurer of the Liberty Funds and of the Liberty All-Star Funds from August 1999 to February 2001; Audit Manager, Deloitte & Touche LLP from May 1997 to August 1999.
Jeffrey R. Coleman
(Age 35) 		  Controller since October 2004     2004     Formerly Vice President of IXIS Asset Management Services, Inc. and Deputy Treasurer of the CDC Nvest Funds and Loomis Sayles Funds from February 2003 to September 2004; Assistant Vice President of CDC IXIS Asset Management Services, Inc. and Assistant Treasurer of the CDC Nvest Funds from August 2000 to February 2003; Tax Manager of PFPC Inc. from November 1996 to August 2000
R. Scott Henderson
(Age 45) 		  Secretary since December 2004     2004     Formerly of Counsel Bingham McCutchen from April 2001 to September 2004; Executive Director and General Counsel, Massachusetts Pension Reserves Investment Management Board from September 1997 to March 2001.

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Trustees’/Directors’ Compensation

      The members of each Columbia Funds’ Board also serve as Trustees/Directors on the boards of all other funds within the Columbia Funds Complex. Two-thirds of the Trustees’/Directors’ fees are allocated among the funds within the Columbia Fund Complex based on the relative net assets of each fund, and one-third of the fees is allocated equally among the funds within the Columbia Fund Complex.

      The tables below show the compensation received by each of the Trustees/Directors.

      For the fiscal year ended March 31, 2005, the Trustees received from the following compensation for serving as Trustees/Directors:

         
Aggregate Compensation from
Columbia Large Company Index Fund
Disinterested Trustees
Douglas A. Hacker
  $ 1,965  
Janet Langford Kelly
  $ 2,228  
Richard W. Lowry
  $ 1,796  
Charles R. Nelson
  $ 2,070  
John J. Neuhauser
  $ 1,892  
Patrick J. Simpson
  $ 1,857  
Thomas E. Stitzel
  $ 2,132  
Thomas C. Theobald
  $ 2,569  
Anne-Lee Verville
  $ 2,255  
Richard L. Woolworth
  $ 1,813  
Interested Trustee
William E. Mayer
  $ 2,067  
         
Aggregate Compensation from
Columbia Small Company Index Fund
Disinterested Trustees
Douglas A. Hacker
  $ 939  
Janet Langford Kelly
  $ 1,053  
Richard W. Lowry
  $ 855  
Charles R. Nelson
  $ 983  
John J. Neuhauser
  $ 902  
Patrick J. Simpson
  $ 689  
Thomas E. Stitzel
  $ 784  
Thomas C. Theobald
  $ 1,212  
Anne-Lee Verville
  $ 1,074  
Richard L. Woolworth
  $ 872  
Interested Trustee
William E. Mayer
  $ 985  

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      For the fiscal year ended April 30, 2005, the Trustees received from the following compensation for serving as Trustees/Directors:

         
Aggregate Compensation from
Columbia Intermediate Government Income Fund
Disinterested Trustees
Douglas A. Hacker
  $ 1,153  
Janet Langford Kelly
  $ 1,305  
Richard W. Lowry
  $ 1,049  
Charles R. Nelson
  $ 1,202  
John J. Neuhauser
  $ 1,094  
Patrick J. Simpson
  $ 1,085  
Thomas E. Stitzel
  $ 1,231  
Thomas C. Theobald
  $ 1,509  
Anne-Lee Verville
  $ 1,317  
Richard L. Woolworth
  $ 1,055  
Interested Trustee
William E. Mayer
  $ 1,208  

      For the fiscal year ended July 31, 2004, the Trustees received from the following compensation for serving as Trustees/Directors:

         
Aggregate Compensation from
Columbia Growth & Income Fund
Disinterested Trustees
Douglas A. Hacker
  $ 3,956  
Janet Langford Kelly
  $ 3,873  
Richard W. Lowry
  $ 3,589  
Charles R. Nelson
  $ 3,824  
John J. Neuhauser
  $ 3,891  
Patrick J. Simpson
  $ 2,448  
Thomas E. Stitzel
  $ 3,870  
Thomas C. Theobald
  $ 4,969  
Anne-Lee Verville
  $ 4,566  
Richard L. Woolworth
  $ 2,599  
Interested Trustee
William E. Mayer
  $ 3,948  

      For the fiscal year ended August 31, 2004, the Directors received from the following compensation for serving as Trustees/Directors:

         
Aggregate Compensation from
Columbia Fixed Income Securities Fund, Inc.
Disinterested Directors
Douglas A. Hacker
  $ 498  
Janet Langford Kelly
  $ 549  
Richard W. Lowry
  $ 467  
Charles R. Nelson
  $ 523  
John J. Neuhauser
  $ 492  
Patrick J. Simpson
  $ 477  
Thomas E. Stitzel
  $ 552  
Thomas C. Theobald
  $ 634  
Anne-Lee Verville
  $ 581  
Richard L. Woolworth
  $ 484  
Interested Director
William E. Mayer
  $ 527  

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Aggregate Compensation from
Columbia Short Term Bond Fund, Inc.
Disinterested Directors
Douglas A. Hacker
  $ 1,205  
Janet Langford Kelly
  $ 1,184  
Richard W. Lowry
  $ 1,152  
Charles R. Nelson
  $ 1,179  
John J. Neuhauser
  $ 1,207  
Patrick J. Simpson
  $ 783  
Thomas E. Stitzel
  $ 1,262  
Thomas C. Theobald
  $ 1,355  
Anne-Lee Verville
  $ 1,406  
Richard L. Woolworth
  $ 850  
Interested Director
William E. Mayer
  $ 1,249  

      For the fiscal year ended September 30, 2004, the Trustees received from the following compensation for serving as Trustees/Directors:

         
Aggregate Compensation from
Columbia Mid Cap Value Fund
Disinterested Trustees
Douglas A. Hacker
  $ 3,375  
Janet Langford Kelly
  $ 3,485  
Richard W. Lowry
  $ 3,145  
Charles R. Nelson
  $ 3,463  
John J. Neuhauser
  $ 3,347  
Patrick J. Simpson
  $ 2,682  
Thomas E. Stitzel
  $ 3,461  
Thomas C. Theobald
  $ 4,122  
Anne-Lee Verville
  $ 3,927  
Richard L. Woolworth
  $ 2,646  
Interested Trustee
William E. Mayer
  $ 3,463  

      For the fiscal year ended October 31, 2004, the Trustees received from the following compensation for serving as Trustees/Directors:

         
Aggregate Compensation from
Columbia Tax-Managed Value Fund
Disinterested Trustees
Douglas A. Hacker
  $ 566  
Janet Langford Kelly
  $ 597  
Richard W. Lowry
  $ 536  
Charles R. Nelson
  $ 588  
John J. Neuhauser
  $ 560  
Patrick J. Simpson
  $ 548  
Thomas E. Stitzel
  $ 607  
Thomas C. Theobald
  $ 725  
Anne-Lee Verville
  $ 666  
Richard L. Woolworth
  $ 547  
Interested Trustee
William E. Mayer
  $ 600  

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Aggregate Compensation from
Columbia Florida Intermediate
Municipal Bond Fund
Disinterested Trustees
Douglas A. Hacker
  $ 751  
Janet Langford Kelly
  $ 784  
Richard W. Lowry
  $ 725  
Charles R. Nelson
  $ 783  
John J. Neuhauser
  $ 757  
Patrick J. Simpson
  $ 745  
Thomas E. Stitzel
  $ 837  
Thomas C. Theobald
  $ 909  
Anne-Lee Verville
  $ 893  
Richard L. Woolworth
  $ 771  
Interested Trustee
William E. Mayer
  $ 806  

      For the calendar year ended December 31, 2004, the Trustees/Directors received the following compensation for serving as Trustees/Directors:

             
Total Compensation from the
Columbia Funds Complex Paid to
Pension or Retirement Benefits the Trustees/Directors for the
Accrued as Part of Fund Calendar Year Ended
Expenses1 December 31, 2004
    Disinterested Trustees/Directors        
Douglas A. Hacker
  N/A   $ 135,000  
Janet Langford Kelly
  N/A   $ 148,500  
Richard W. Lowry
  N/A   $ 150,700  
Charles R. Nelson
  N/A   $ 141,500  
John J. Neuhauser
  N/A   $ 158,284  
Patrick J. Simpson
  N/A   $ 129,000  
Thomas E. Stitzel
  N/A   $ 149,000  
Thomas C. Theobald2
  N/A   $ 172,500  
Anne-Lee Verville2
  N/A   $ 157,000  
Richard L. Woolworth
  N/A   $ 131,000  
    Interested Trustee/Directors        
William E. Mayer
  N/A   $ 166,700  

1 The funds in the Columbia Funds Complex currently do not provide pension or retirement plan benefits to the Trustees/Directors.

2 During the calendar year ended December 31, 2004, Mr. Simpson deferred $129,000 of his total compensation pursuant to the deferred compensation plan, Mr. Theobald deferred $90,000 of his total compensation pursuant to the deferred compensation plan and Ms. Verville deferred $55,000 of her total compensation pursuant to the deferred compensation plan.

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Trustee/Director Share Ownership

      The following table shows the dollar range of equity securities beneficially owned by each Trustee/Director as of December 31, 2004 in (i) each Columbia Fund and (ii) all funds in the Fund Complex overseen by the Trustees, stated as one of the following ranges: A = $0; B = $1-$10,000; C = $10,001-$50,000; D = $50,001-$100,000; and E = over $100,000.

Beneficial Equity Ownership in Columbia Tax-Managed Value Fund and Columbia Fund Complex

Calendar Year Ended December 31, 2004
             
Dollar Range of Equity Securities of Aggregate Dollar Range of Equity
Nominee Columbia Tax-Managed Value Fund Securities of Columbia Funds Complex
    Disinterested Trustees        
Douglas A. Hacker
  A     E  
Janet Langford Kelly
  A     E  
Richard W. Lowry(1)
  A     E  
Charles R. Nelson
  A     E  
John J. Neuhauser(1)
  A     E  
Patrick J. Simpson
  A     E  
Thomas E. Stitzel
  A     E  
Thomas C. Theobald
  A     E  
Anne-Lee Verville
  A     E  
Richard L. Woolworth
  A     E  
    Interested Trustee        
William E. Mayer(1)
  A     D  

(1)  Messrs. Lowry, Mayer and Neuhauser also serve as trustees of the All-Star Funds.

Beneficial Equity Ownership in Columbia Intermediate Government Income Fund and Columbia Fund Complex

Calendar Year Ended December 31, 2004
             
Dollar Range of Equity Securities of
Columbia Intermediate Government Aggregate Dollar Range of Equity
Nominee Income Fund Securities of Columbia Funds Complex
    Disinterested Trustees        
Douglas A. Hacker
  A     E  
Janet Langford Kelly
  A     E  
Richard W. Lowry(1)
  A     E  
Charles R. Nelson
  A     E  
John J. Neuhauser(1)
  A     E  
Patrick J. Simpson
  A     E  
Thomas E. Stitzel
  A     E  
Thomas C. Theobald
  A     E  
Anne-Lee Verville
  A     E  
Richard L. Woolworth
  A     E  
    Interested Trustee        
William E. Mayer(1)
  A     D  

(1)  Messrs. Lowry, Mayer and Neuhauser also serve as trustees of the All-Star Funds.

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Beneficial Equity Ownership in Columbia Mid Cap Value Fund and Columbia Fund Complex

Calendar Year Ended December 31, 2004
             
Dollar Range of Equity Securities of Aggregate Dollar Range of Equity
Nominee Columbia Mid Cap Value Fund Securities of Columbia Funds Complex
    Disinterested Trustees        
Douglas A. Hacker
  E     E  
Janet Langford Kelly
  A     E  
Richard W. Lowry(1)
  A     E  
Charles R. Nelson
  C     E  
John J. Neuhauser(1)
  B     E  
Patrick J. Simpson
  A     E  
Thomas E. Stitzel
  A     E  
Thomas C. Theobald
  A     E  
Anne-Lee Verville
  A     E  
Richard L. Woolworth
  A     E  
    Interested Trustee        
William E. Mayer(1)
  A     D  

(1)  Messrs. Lowry, Mayer and Neuhauser also serve as trustees of the All-Star Funds.

Beneficial Equity Ownership in Columbia Florida Intermediate Municipal Bond Fund and Columbia Fund Complex

Calendar Year Ended December 31, 2004
             
Dollar Range of Equity Securities of
Columbia Florida Intermediate Aggregate Dollar Range of Equity
Nominee Municipal Bond Fund Securities of Columbia Funds Complex
    Disinterested Trustees        
Douglas A. Hacker
  A     E  
Janet Langford Kelly
  A     E  
Richard W. Lowry(1)
  A     E  
Charles R. Nelson
  A     E  
John J. Neuhauser(1)
  A     E  
Patrick J. Simpson
  A     E  
Thomas E. Stitzel
  A     E  
Thomas C. Theobald
  A     E  
Anne-Lee Verville
  A     E  
Richard L. Woolworth
  A     E  
    Interested Trustee        
William E. Mayer(1)
  A     D  

(1)  Messrs. Lowry, Mayer and Neuhauser also serve as trustees of the All-Star Funds.

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Beneficial Equity Ownership in Columbia Large Company Index Fund and Columbia Fund Complex

Calendar Year Ended December 31, 2004
             
Dollar Range of Equity Securities
of Columbia Large Company Aggregate Dollar Range of Equity
Nominee Index Fund Securities of Columbia Funds Complex
    Disinterested Trustees        
Douglas A. Hacker
  A     E  
Janet Langford Kelly
  A     E  
Richard W. Lowry(1)
  A     E  
Charles R. Nelson
  A     E  
John J. Neuhauser(1)
  A     E  
Patrick J. Simpson
  A     E  
Thomas E. Stitzel
  A     E  
Thomas C. Theobald
  A     E  
Anne-Lee Verville
  A     E  
Richard L. Woolworth
  A     E  
    Interested Trustee        
William E. Mayer(1)
  A     D  

(1)  Messrs. Lowry, Mayer and Neuhauser also serve as trustees of the All-Star Funds.

Beneficial Equity Ownership in Columbia Small Company Index Fund and Columbia Fund Complex

Calendar Year Ended December 31, 2004
             
Dollar Range of Equity Securities
of Columbia Small Company Aggregate Dollar Range of Equity
Nominee Index Fund Securities of Columbia Funds Complex
    Disinterested Trustees        
Douglas A. Hacker
  A     E  
Janet Langford Kelly
  A     E  
Richard W. Lowry(1)
  A     E  
Charles R. Nelson
  A     E  
John J. Neuhauser(1)
  A     E  
Patrick J. Simpson
  A     E  
Thomas E. Stitzel
  A     E  
Thomas C. Theobald
  A     E  
Anne-Lee Verville
  A     E  
Richard L. Woolworth
  A     E  
    Interested Trustee        
William E. Mayer(1)
  A     D  

(1)  Messrs. Lowry, Mayer and Neuhauser also serve as trustees of the All-Star Funds.

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Beneficial Equity Ownership in Columbia Growth & Income Fund and Columbia Fund Complex

Calendar Year Ended December 31, 2004
             
Dollar Range of Equity Securities of Aggregate Dollar Range of Equity
Nominee Columbia Growth & Income Fund Securities of Columbia Funds Complex
    Disinterested Trustees        
Douglas A. Hacker
  C     E  
Janet Langford Kelly
  E     E  
Richard W. Lowry(1)
  A     E  
Charles R. Nelson
  D     E  
John J. Neuhauser(1)
  B     E  
Patrick J. Simpson
  A     E  
Thomas E. Stitzel
  A     E  
Thomas C. Theobald
  A     E  
Anne-Lee Verville
  A     E  
Richard L. Woolworth
  A     E  
    Interested Trustee        
William E. Mayer(1)
  A     D  

(1)  Messrs. Lowry, Mayer and Neuhauser also serve as trustees of the All-Star Funds.

Beneficial Equity Ownership in Columbia Fixed Income Securities Fund, Inc. and Columbia Fund Complex

Calendar Year Ended December 31, 2004
             
Dollar Range of Equity Securities of
Columbia Fixed Income Securities Aggregate Dollar Range of Equity
Nominee Fund, Inc. Securities of Columbia Funds Complex
    Disinterested Directors        
Douglas A. Hacker
  A     E  
Janet Langford Kelly
  A     E  
Richard W. Lowry(1)
  A     E  
Charles R. Nelson
  A     E  
John J. Neuhauser(1)
  A     E  
Patrick J. Simpson
  A     E  
Thomas E. Stitzel
  A     E  
Thomas C. Theobald
  A     E  
Anne-Lee Verville
  A     E  
Richard L. Woolworth
  A     E  
    Interested Trustee        
William E. Mayer(1)
  A     D  

(1)  Messrs. Lowry, Mayer and Neuhauser also serve as trustees of the All-Star Funds.

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Beneficial Equity Ownership in Columbia Short Term Bond Fund, Inc. and Columbia Fund Complex

Calendar Year Ended December 31, 2004
             
Dollar Range of Equity Securities
of Columbia Short Term Bond Aggregate Dollar Range of Equity
Nominee Fund, Inc. Securities of Columbia Funds Complex
    Disinterested Directors        
Douglas A. Hacker
  A     E  
Janet Langford Kelly
  A     E  
Richard W. Lowry(1)
  A     E  
Charles R. Nelson
  A     E  
John J. Neuhauser(1)
  A     E  
Patrick J. Simpson
  A     E  
Thomas E. Stitzel
  A     E  
Thomas C. Theobald
  A     E  
Anne-Lee Verville
  A     E  
Richard L. Woolworth
  A     E  
    Interested Director        
William E. Mayer(1)
  A     D  

(1)  Messrs. Lowry, Mayer and Neuhauser also serve as trustees of the All-Star Funds.

     As of December 31, 2004, no disinterested Trustee/Director or any of his or her immediate family members owned beneficially or of record any class of securities of Bank of America Corporation, Columbia, another investment adviser, sub-adviser or portfolio manager of any of the funds in the Fund Complex or any person controlling, controlled by or under common control with any such entity. The term “immediate family member” refers to a person’s spouse, a child residing in the person’s household (including step and adoptive children) and any dependents of the person (see Section 152 of the Internal Revenue Code).

Shareholder Communication

      Shareholders may communicate with the Trustees/Directors as a group or individually. Any such communications should be sent to a Columbia Fund’s Board or to an individual Trustee/Director in writing, c/o the Secretary of the specified Columbia Fund, One Financial Center, Boston, MA 02111-2621. The Secretary may determine not to forward any communication to the Board or to a Trustee/Director that does not relate to the business of a Columbia Fund.

Trustees’/Directors’ Meetings and Committees

      Each Board of Trustees/Directors overseeing each Columbia Fund is responsible for the overall management and supervision of each respective Columbia Fund’s affairs and for protecting the interests of each Columbia Fund’s shareholders.

      The Columbia Funds do not have a formal policy on Trustee/Director attendance at shareholder meetings, but it encourages such attendance. The Columbia Funds are not required under their Declarations of Trust to hold annual meetings. None of the Columbia Funds held a shareholder meeting during the 2004 calendar year.

      Each Board has created several committees to perform specific functions on behalf of the Columbia Funds. The members of each committee, along with a description of each committee’s functions, appear below, followed by a table that sets forth the number of meetings held by each Board and each committee during each Columbia Fund’s most recent fiscal year.

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1. Audit Committee

      Each Board has an Audit Committee (collectively, the “Audit Committee”) comprised of only “Independent Trustees” and/or “Independent Directors” (as defined in the listing standards of the NYSE and the AMEX), who also are not “interested persons” (as defined in the 1940 Act) of any fund overseen by a Board. Each member of the Audit Committee must be financially literate and at least one member must have prior accounting experience or related financial management expertise. The Boards have determined, in accordance with applicable regulations of the NYSE and AMEX, that each member of the Audit Committee is financially literate and that at least one member has prior accounting experience or related financial management expertise.

      On February 10, 2004, each Audit Committee adopted a revised written charter that sets forth an Audit Committee’s structure, duties, powers and methods of operation. Each Audit Committee serves as an independent and objective party to monitor the funds’ accounting policies, financial reporting and internal control systems and the work of the funds’ independent registered public accountant. Each Audit Committee also serves to provide an open avenue of communication between the independent registered public accountants, Columbia’s internal accounting staff and each Board. The principal functions of each Audit Committee are to assist Board oversight of (1) the integrity of each fund’s financial statements, (2) each fund’s compliance with legal and regulatory requirements, (3) the independent registered public accountant’s qualifications and independence, (4) the performance of Columbia’s internal audit function, and (5) the independent registered public accountant. Each Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of the independent registered public accountant (including the resolution of disagreements between management and the independent registered public accountant regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other review or attest services for the funds.

Audit Committee Report

      At a meeting of each Audit Committee on February 8, 2005, each Audit Committee: (i) reviewed and discussed with management each Columbia Fund’s audited financial statements for the most recently completed fiscal year and (ii) discussed with PricewaterhouseCoopers LLP, each Columbia Fund’s independent registered public accountant, the matters required to be discussed by Statement on Auditing Standards No. 61 and other professional standards and regulatory requirements. At a meeting of each Audit Committee on February 8, 2005, each Audit Committee obtained from PricewaterhouseCoopers LLP a formal written statement consistent with Independence Standards Board Standard No. 1, “Independence Discussions with Audit Committees,” describing all relationships between PricewaterhouseCoopers LLP and each Columbia Fund that might bear on PricewaterhouseCoopers LLP’s independence, and discussed with PricewaterhouseCoopers LLP any relationships that may effect its objectivity and independence, and satisfied itself as to PricewaterhouseCoopers LLP’s independence. Based on their review and discussion, the Audit Committees recommended to the Boards that the audited financial statements for each Columbia Fund be included in each Columbia Fund’s annual report to shareholders. Each Columbia Fund’s Audit Committee members are Ms. Verville and Messrs. Hacker, Stitzel and Woolworth.

      Based on the recommendation from the Audit Committees and on their own review, the Boards selected PricewaterhouseCoopers LLP as independent registered public accountant for each Columbia Fund for their respective fiscal year end. Representatives of PricewaterhouseCoopers LLP are not expected to be at the Meetings, but have been given the opportunity to make a statement if they so desire, and will be available should any matter arise requiring their presence.

2. Governance Committee

      Messrs. Lowry, Mayer, Simpson and Theobald are members of each Governance Committee of the Columbia Funds. The Columbia Funds have no nominating or compensation committees. Each Governance Committee performs certain of the functions typically performed by these committees. Among other things, each Governance Committee recommends to the Boards nominees for Trustee/Director and nominees for

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appointment to various committees; performs periodic evaluations of the effectiveness of the Boards; reviews and recommends to each Board policies and practices to be followed in carrying out the Trustees/Directors’ duties and responsibilities; and reviews and makes recommendations to each Board regarding the compensation of the Trustees/Directors who are not affiliated with Columbia. The Governance Committees have not adopted a charter.

      Three of the four Governance Committee members, Messrs. Lowry, Simpson and Theobald, who are Independent Trustees and who are not “interested persons” (as defined in the 1940 Act) of any Columbia Fund (“Governance Committee Independent Trustees”), participate in the consideration, selection and nomination of Trustees/Directors. The Governance Committee Independent Trustees have considered and nominated all Trustees/Directors and Trustee/Director nominees. The Governance Committee Independent Trustees will consider candidates for Trustee/Director identified by any reasonable source, including current Independent Trustees/Directors, fund management, fund shareholders and other persons or entities. Shareholders of each Columbia Fund who wish to nominate a candidate to their respective Columbia Fund’s Board may send information regarding prospective candidates to a Governance Committee, in care of their respective Columbia Fund, at One Financial Center, Boston, MA 02111-2621. 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 an “interested person” of the applicable Columbia Fund under the 1940 Act and “independent” under NYSE and AMEX listing standards in relation to the applicable Columbia Fund, and such other information as may be helpful to the Governance Committee Independent Trustees in evaluating the candidate. All satisfactorily completed information packages regarding a candidate will be forwarded to a Governance Committee Independent Trustee for consideration. Recommendations for candidates will be evaluated in light of whether the number of Trustees/Directors of applicable the Columbia Fund is expected to be increased and in light of anticipated vacancies. All nominations from Columbia Fund shareholders will be considered. There may be times when a Governance Committee is not recruiting new Board members. In that case, shareholder recommendations will be maintained on file pending the active recruitment of Trustees/Directors.

      When considering candidates for Trustee/Director, the Governance Committee Independent Trustees consider, among other things, whether prospective nominees have distinguished records in their primary careers, personal and professional integrity and substantive knowledge in areas important to a Board’s operations, such as a background or an education in finance, auditing, securities law, the workings of the securities markets or investment advice. For candidates to serve as Independent Trustees/Directors, independence from the funds’ investment adviser, its affiliates and other principal service providers is critical, as is an independent and questioning mind-set. In each case, the Governance Committee Independent Trustees will evaluate whether a candidate is an “interested person” under the 1940 Act and “independent” under NYSE and AMEX listing standards. The Governance Committee Independent Trustees also consider whether a prospective candidate’s workload would be consistent with regular attendance at Board meetings and would allow him or her to be available for service on Board committees, and to devote the additional time and effort necessary to stay apprised of Board matters and the rapidly changing regulatory environment in which the funds operate. Different substantive areas may assume greater or lesser significance at particular times, in light of a Board’s present composition and its perceptions about future issues and needs.

      The Governance Committee Independent Trustees initially evaluate prospective candidates on the basis of their résumés, considered in light of the criteria discussed above. Those prospective candidates that appear likely to be able to fill a significant need of a Board would be contacted by a Governance Committee Independent Trustee by telephone to discuss the position; if there appeared to be sufficient interest, an in-person meeting with one or more of the Governance Committee Independent Trustees would be arranged. If a Governance Committee Independent Trustee, based on the results of these contacts, believes he or she has identified a viable candidate, he or she would air the matter with the other Governance Committee Independent Trustees for input. Any request by fund management to meet with the prospective candidate would be given appropriate consideration. The Columbia Funds have not paid a fee to third parties to assist in finding nominees.

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3. Advisory Fees & Expenses Committee

      Ms. Kelly and Messrs. Mayer, Nelson and Neuhauser are members of the Advisory Fees & Expenses Committee of each Columbia Fund. The Advisory Fees & Expenses Committees’ functions include reviewing and making recommendations to the Boards as to contracts requiring approval of a majority of the disinterested Trustees/Directors and as to any other contracts that may be referred to the committee by the Boards.

4. Compliance Committee

      Mses. Kelly and Verville and Messrs. Nelson and Simpson are members of each Compliance Committee of the Columbia Funds. Prior to August 10, 2004, Mses. Kelly and Verville and Mr. Nelson were members of the Compliance Committee of each Columbia Fund. The Compliance Committees’ functions include providing oversight of the monitoring processes and controls regarding each Columbia Fund. Each Compliance Committee supervises legal, regulatory and internal rules, policies, procedures and standards other than those relating to accounting matters and oversight of compliance by your Columbia Fund’s investment adviser, principal underwriter and transfer agent.

                                                 
Number of Number of Number of Number of Number of Number of
Meetings Meetings Meetings Meetings Meetings Meetings
for Fiscal for Fiscal for Fiscal for Fiscal for Fiscal for Fiscal
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
Mar. 31, Apr. 30, July 31, Aug. 31, Sept. 30, Oct. 31,
2005 2005 2004 2004 2004 2004
Board of Trustees/Directors
    11       9       19       19       19       19  
Audit Committee
    11       11       9       11       11       11  
Governance Committee
    6       6       4       4       4       5  
Advisory Fees & Expenses Committee
    8       8       5       5       7       7  
Compliance Committee
    6       6       5       5       5       6  

Audit Committee Pre-Approval of Independent Registered Public Accountant Services

      Each Audit Committee is required to pre-approve the engagement of its respective Columbia Fund’s independent registered public accountant to provide audit and non-audit services to a Columbia Fund and non-audit services to Columbia (not including any sub-adviser whose role is primarily portfolio management and which is contracted with or overseen by another investment adviser) or any entity controlling, controlled by or under common control with Columbia that provides ongoing services to the Columbia Funds (“Columbia Affiliate”), if the engagement relates directly to the operations or financial reporting of a Columbia Fund. The engagement may be entered into pursuant to preapproval policies and procedures established by the Audit Committees.

      Each Audit Committee has adopted an Audit and Non-Audit Services Pre-Approval Policy (“Policy”) for the pre-approval of audit and non-audit services provided to each Columbia Fund and non-audit services provided to Columbia and Columbia Affiliates, if the engagement relates directly to the operations or financial reporting of a Columbia Fund. The Policy sets forth the procedures and conditions pursuant to which services to be performed by a Columbia Fund’s independent registered public accountant are to be pre-approved. Unless a type of service receives general pre-approval under the Policy, it requires specific preapproval by the applicable Audit Committee if it is to be provided by the independent registered public accountant.

      The Policy provides for the general pre-approval by the Audit Committees of certain: (i) audit services to each Columbia Fund; (ii) audit-related services to each Columbia Fund; (iii) tax services to each Columbia Fund; (iv) other services to each Columbia Fund; and (v) fund-related services to Columbia Affiliates. The Policy requires each Columbia Fund’s Treasurer and/or Director of Trustee/Director Administration to submit to the applicable Audit Committee, at least annually, a schedule of the types of services that are subject to general pre-approval. The schedule(s) must provide a description of each type of service that is subject to general pre-approval and, when possible, must provide projected fee caps for each instance of providing each service. At least annually, the Audit Committees will review and approve the types of services and review the

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projected fees for the next year, and may add to, or subtract from, the list of pre-approved services from time to time, based on subsequent determinations. In addition to the fees for each individual service, each Audit Committee has the authority to implement a fee cap on the aggregate amount of non-audit services provided to a Columbia Fund. The fee amounts listed on the schedules will be updated to the extent necessary at each of the other regularly scheduled meetings of the Audit Committees.

Fees Paid to the Independent Registered Public Accounting Firm

      PricewaterhouseCoopers LLP for each Columbia Fund’s last two fiscal years for professional services rendered for (i) audit services, including the audit of each Columbia Fund’s financial statements and services normally provided in connection with statutory and regulatory filings or engagements for those fiscal years; (ii) audit-related services associated with the issuance of each Columbia Fund’s unaudited semi-annual financial statements, (iii) tax services and reviews of each Columbia Fund’s tax returns; and (iv) other services. Please note that the table includes amounts related to non-audit services that would have been subject to pre-approval if SEC rules relating to the pre-approval of non-audit services had been in effect at that time. All of the audit fees, audit-related fees, tax fees and other fees billed by PricewaterhouseCoopers LLP for services provided to each Columbia Fund in its respective fiscal year end were preapproved by each Audit Committee.

                                         
Audit Audit-Related Tax All Other
FYE Fees Fees Fees Fees
Columbia Tax-Managed Value Fund
    10/31/04     $ 16,830     $ 3,500     $ 2,300     $ 0  
      10/31/03     $ 17,990     $ 4,000     $ 2,100     $ 0  
Columbia Intermediate Government Income Fund
    4/30/05     $ 24,440     $ 3,700     $ 2,654     $ 0  
      4/30/04     $ 23,280     $ 4,000     $ 2,541     $ 0  
Columbia Mid Cap Value Fund
    9/30/04     $ 24,900     $ 3,500     $ 2,300     $ 0  
      9/30/03     $ 25,330     $ 4,000     $ 2,200     $ 0  
Columbia Florida Intermediate Municipal Bond Fund+
    10/31/04     $ 21,330     $ 3,500     $ 2,000     $ 0  
      10/31/03     $ 21,000     $ 4,000     $ 2,383     $ 0  
Columbia Large Company Index Fund
    3/31/05     $ 21,890     $ 3,700     $ 4,154     $ 0  
      3/31/04     $ 20,850     $ 4,000     $ 5,332     $ 0  
Columbia Small Company Index Fund
    3/31/05     $ 21,890     $ 3,700     $ 4,154     $ 0  
      3/31/04     $ 20,850     $ 4,000     $ 2,632     $ 0  
Columbia Growth & Income Fund*
    7/31/04     $ 30,030     $ 4,000     $ 2,441     $ 0  
      7/31/03     $ 47,985     $ 6,000     $ 4,600     $ 0  
Columbia Fixed Income Securities Fund, Inc. 
     8/31/04     $ 29,730     $ 3,500     $ 2,541     $ 0  
      8/31/03     $ 26,360     $ 3,500     $ 1,800     $ 0  
Columbia Short Term Bond Fund, Inc. 
     8/31/04     $ 27,980     $ 3,500     $ 2,341     $ 0  
      8/31/03     $ 24,690     $ 3,500     $ 3,800     $ 0  

*  The Fund changed its fiscal year end from 6/30/03 to 7/31/03. Figures for Audit fees, Audit-related fees and Tax fees include $31,990, $6,000 and $2,300, respectively, for June 30, 2003.

+  Effective March 1, 2004, PwC replaced Ernst & Young LLP as auditors.

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     The aggregate amount of fees paid for non-audit services billed to each Columbia Fund, Columbia and Columbia Affiliates was as follows:

     
Columbia Tax-Managed Value Fund
  $5,800 for the fiscal year ended October 31, 2004 and $6,100 for the fiscal year ended October 31, 2003;
Columbia Intermediate Government Income Fund
  $6,354 for the fiscal year ended April 30, 2005 and $6,541 for the fiscal year ended April 30, 2004;
Columbia Mid Cap Value Fund
  $5,800 for the fiscal year ended September 30, 2004 and $6,200 for the fiscal year ended September 30, 2003;
Columbia Florida Intermediate Municipal Bond Fund
  $5,500 for the fiscal year ended October 31, 2004 and $6,383 for the fiscal year ended October 31, 2003;
Columbia Large Company Index Fund
  $7,854 for the fiscal year ended March 31, 2005 and $9,332 for the fiscal year ended March 31, 2004;
Columbia Small Company Index Fund
  $7,854 for the fiscal year ended March 31, 2005 and $6,632 for the fiscal year ended March 31, 2004;
Columbia Growth & Income Fund
  $6,441 for the fiscal year ended July 31, 2004 and $10,600 for the fiscal year ended July 31, 2003;
Columbia Fixed Income Securities Fund, Inc. 
   $6,041 for the fiscal year ended August 31, 2004 and $5,300 for the fiscal year ended August 31, 2003.
Columbia Short Term Bond Fund, Inc. 
   $5,841 for the fiscal year ended August 31, 2004 and $7,300 for the fiscal year ended August 31, 2003.

      Not included in the table above is $95,000 paid to PwC annually for review of the affiliated transfer agent of the Columbia Funds Complex. The Audit Committees have determined that the provision of the services described above is compatible with maintaining the independence of PwC.

      THE BOARDS, ON BEHALF OF EACH COLUMBIA FUND, UNANIMOUSLY RECOMMEND THAT YOU VOTE “FOR” THE ELECTION OF THE PROPOSED TRUSTEES/DIRECTORS OF EACH COLUMBIA FUND.

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VOTING MATTERS

General Information

      This Proxy/Prospectus is being furnished in connection with the solicitation of proxies for the Meetings by the Boards. It is expected that the solicitation of proxies will be primarily by mail. Officers and service contractors of the Trusts also may solicit proxies by telephone or otherwise. In addition, ALAMO Direct Mail Services, Inc., 280 Oser Avenue, Hauppauge, NY 11788, has been engaged to assist in the solicitation of proxies, at an estimated cost of approximately $17,475 for Columbia Fixed Income Securities, Inc.; $142,562 for Columbia Growth & Income Fund; $43,687 for Columbia Large Company Index Fund; $108,273 for Columbia Mid Cap Value Fund; $29,695 for Small Company Index Fund and $2,992 for Columbia Tax-Managed Value Fund. Shareholders may submit their proxy by following the instructions shown on the proxy ballot(s). Any shareholder submitting a proxy may revoke it at any time before it is exercised at the Meetings by submitting a written notice of revocation addressed to one of the parties at the address shown on the cover page of this Proxy/Prospectus, or a subsequently executed proxy or by attending the Meetings and voting in person.

      Only shareholders of record at the close of business on July 8, 2005 will be entitled to vote at the Meetings. On that date, the following number of Fund shares were outstanding and are entitled to be voted.

           
Outstanding Shares
Fund as of 7/8/05
Columbia Fixed Income Securities Fund, Inc.
       
 
Class A Shares
    977,944  
 
Class B Shares
    310,949  
 
Class C Shares
    23,131  
 
Class D Shares
    99,025  
 
Class Z Shares
    17,865,245  
Columbia Florida Intermediate Municipal Bond Fund
       
 
Class A Shares
    111,002  
 
Class B Shares
    45,282  
 
Class C Shares
    112,229  
 
Class Z Shares
    5,603,604  
Columbia Growth & Income Fund
       
 
Class A Shares
    31,679,156  
 
Class B Shares
    38,544,234  
 
Class C Shares
    4,513,652  
 
Class Z Shares
    27,108,803  
Columbia Intermediate Government Income Fund
       
 
Class A Shares
    268,094  
 
Class B Shares
    225,717  
 
Class C Shares
    131,075  
 
Class Z Shares
    28,800,429  
 
Class G Shares
    234,060  
 
Class T Shares
    3,067,811  
Columbia Large Company Index Fund
       
 
Class A Shares
    954,901  
 
Class B Shares
    476,263  
 
Class C Shares
    110,791  
 
Class Z Shares
    29,606,189  
Columbia Mid Cap Value Fund
       
 
Class A Shares
    26,285,298  
 
Class B Shares
    12,760,840  
 
Class C Shares
    2,656,254  
 
Class Z Shares
    25,573,514  

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Outstanding Shares
Fund as of 7/8/05
Columbia Short Term Bond Fund, Inc.
       
 
Class A Shares
    2,143,893  
 
Class B Shares
    2,330,236  
 
Class C Shares
    339,224  
 
Class D Shares
    706,053  
 
Class Z Shares
    45,376,332  
 
Class G Shares
    72,388  
 
Class T Shares
    2,134,288  
Columbia Small Company Index Fund
       
 
Class A Shares
    422,262  
 
Class B Shares
    171,049  
 
Class C Shares
    173,571  
 
Class Z Shares
    15,244,572  
Columbia Tax-Managed Value Fund
       
 
Class A Shares
    1,113,559  
 
Class B Shares
    3,693,107  
 
Class C Shares
    902,407  
 
Class Z Shares
    5,508  
Nations Florida Municipal Bond Fund
       
 
Class A Shares
    3,511,895  
 
Class B Shares
    765,850  
 
Class C Shares
    41,042  
 
Class Z Shares
    4,305,384  
Nations Short-Intermediate Government Fund
       
 
Class A Shares
    7,549,999  
 
Class B Shares
    4,429,105  
 
Class C Shares
    974,627  
 
Class Z Shares
    68,437,934  

      Each whole and fractional share of a Fund is entitled to a whole or fractional vote.

      If the accompanying proxy ballot is executed and returned in time for the Meetings, the shares covered thereby will be voted in accordance with the proxy on all matters that may properly come before the Meetings.

      The consummation of one Reorganization is not dependent on the consummation of another Reorganization.

Quorum

      Shareholders of record on July 8, 2005 are entitled to attend and to vote at a Meeting or any adjournment of a Meeting. A quorum is constituted with respect to each Nations Fund by the presence in person or by proxy of the holders of at least one-third of the outstanding shares of the Fund entitled to vote at the Meetings. A quorum is constituted with respect to each Columbia Fund (other than the Columbia Fixed Income Securities Fund, Inc. and the Columbia Short Term Bond Fund, Inc.) by the presence in person or by proxy of the holders of at least 30% of the outstanding shares of the Fund entitled to vote at the Meetings. For each of the Columbia Fixed Income Securities Fund, Inc. and the Columbia Short Term Bond Fund, Inc., a quorum is constituted by the presence in person or by proxy of the holders of a majority of the outstanding shares of the Fund entitled to vote at the Meetings. For purposes of determining the presence of a quorum for transacting business at the Meetings, abstentions will be treated as shares that are present at the Meetings but which have not been voted. Accordingly, abstentions will have the effect of a “no” vote for purposes of obtaining the requisite approval of the Reorganization Agreement. Broker “non-votes” (that is, proxies from brokers or nominees indicating that such persons have not received instructions from the beneficial owners or other persons entitled to vote shares on a particular matter with respect to which the brokers or nominees do not have discretionary power) will be treated the same as abstentions.

      In the event that a quorum is not present at the Meetings, or in the event that a quorum is present at the Meetings but sufficient votes to approve the Reorganization Agreement are not received by a Fund, one or

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more adjournment(s) may be proposed to permit further solicitation of proxies in order to obtain a requisite vote. All Meetings may be adjourned for a reasonable period of time. Any such adjournment(s) will require the affirmative vote of a majority of those shares affected by the adjournment(s) that are represented at the Meeting in person or by proxy. If a quorum is present, the persons named as proxies will vote those proxies which they are entitled to vote FOR the particular proposal for which a quorum exists in favor of such adjournment(s), and will vote those proxies required to be voted AGAINST such proposal against any adjournment(s).

Shareholder Approval

 
The Reorganization Agreement

      For each of the Columbia Fixed Income Securities Fund, Inc. and Columbia Short Term Bond Fund, Inc. approval of the Reorganization Agreement and dissolution under state law will require the affirmative vote of the holders of more than 50% of the outstanding shares of the Fund.

      For all other Funds, the Reorganization Agreement must be approved by a “vote of a majority of the outstanding voting securities” of a Fund, as defined in by the 1940 Act, which means the affirmative vote of the lesser of: a) 67% or more of the shares present at the Meeting, if the holders of more than 50% of Fund shares are present or represented by proxy; or b) more than 50% of the Fund’s outstanding shares.

      A vote of the shareholders of the Acquiring Fund is not being solicited, since its approval or consent is not necessary for the Reorganizations.

 
Election of Trustees/Directors

      In connection with this Item: all shareholders of Columbia Tax-Managed Value Fund, regardless of the class of shares held, will vote together as a single class with all other shareholders of Columbia Funds Trust I; all shareholders of Columbia Intermediate Government Income Fund and Columbia Mid Cap Value Fund, regardless of the class of shares held, will vote together as a single class with all other shareholders of Columbia Funds Trust III; all shareholders of Columbia Florida Intermediate Municipal Bond Fund, Columbia Large Company Index Fund and Columbia Small Company Index Fund, regardless of the class of shares held, will vote together as a single class with all other shareholders of Columbia Funds Trust V; all shareholders of Columbia Growth & Income Fund, regardless of the class of shares held, will vote together as a single class with all other shareholders of Columbia Funds Trust VI; all shareholders of Columbia Fixed Income Securities Fund, Inc., regardless of the class of shares held, will vote together as a single class; and all shareholders of Columbia Short Term Bond Fund, Inc., regardless of the class of shares held, will vote together as a single class.

      The affirmative vote of a plurality of the shares of Columbia Funds Trust I, Columbia Funds Trust III, Columbia Funds Trust V and Columbia Funds Trust VI voted at the Meetings is required for a Nominee to be elected as a Trustee on the Board of each of Columbia Funds Trust I, Columbia Funds Trust III, Columbia Funds Trust V and Columbia Funds Trust VI, respectively. The affirmative vote of a plurality of the shares of Columbia Fixed Income Securities Fund, Inc. and Columbia Short Term Bond Fund, Inc. voted at the Meetings is required for a Nominee to be elected as a Director on the Board of each of Columbia Fixed Income Securities Fund, Inc. and Columbia Short Term Bond Fund, Inc. respectively.

      The term “plurality” means that the nominees who receive the largest number of votes cast “FOR” are elected as Trustees/Directors up to the maximum number of Trustees/Directors to be elected at the Meetings, which is eleven.

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Principal Shareholders

      The table below shows the name, address and share ownership of each person known to the Trusts to have ownership with respect to 5% or more of a class of each Fund and Acquiring Fund as of July 8, 2005. Each shareholder is known to own as of record the shares indicated below. Any shareholder known to the Trusts to own such shares beneficially is designated by an asterisk.

                                     
Percentage Percentage of
Total Percentage of Fund Acquiring Fund
Fund Name and Address Shares/Class of Class (All Classes) Post Closing
Columbia Fixed Income Securities Fund, Inc.                                
Class A
  Charles Schwab & Co Inc
Special Custody Acct for Exclusive Of Customers
Attn Mutual Funds
101 Montgomery
San Francisco CA 94104-4122 		    296,867.02       30.36%       1.54%       9.06%  
Class A
  MCB Trust Services Cust. FBO
Meridian Trust & Investment Co TTEE
AMAET, P.L.L.C.
700 17th Street
Suite 300
Denver CO 80202-3531 		    136,206.54       13.93%       0.71%       4.16%  
Class A
  MCB Trust Services Cust. FBO
Meridian Trust & Investment Co TTEE
Lawler-Wood, LLC
700 17th Street
Suite 300
Denver CO 80202-3531 		    51,467.72       5.26%       0.27%       1.57%  
Class C
  LPL Financial Services
9785 Towne Centre Dr
San Diego CA 92121-1968 		    3,755.64       16.24%       0.02%       1.57%  
Class C
  Legg Mason Wood Walker Inc
PO Box 1476
Baltimore MD 21202 		    3,686.10       15.94%       0.02%       1.55%  
Class C
  D A Davidson & Co Inc FBO
D A Davidson & Co Cust for
PO Box 5015
Great Falls MT 59403-5015 		    2,669.79       11.54%       0.01%       1.12%  
Class C
  Dean Witter FBO
Sylvia Ruder Personal Property
PO Box 250
New York NY 10008-0250 		    2,263.76       9.79%       0.01%       0.95%  
Class C
  American Enterprise Investment Svcs
FBO 322015501
PO Box 9446
Minneapolis MN 55440-9446 		    1,467.35       6.34%       0.01%       0.62%  
Class D
  Columbia Trust Company SEP IRA
Edward J Hannan
12 Miller Ln
Troy NY 12180-9615 		    8,754.36       8.84%       0.05%       3.67%  
Class D
  NFS LLC FEBO
Bridget A Carley
51 Carmen Rd
Harrington Pk NJ 07640-1851 		    8,371.22       8.45%       0.04%       3.51%  
Class D
  Pershing LLC
PO Box 2052
Jersey City NJ 07303-2052 		    7,358.35       7.43%       0.04%       3.08%  
Class D
  A G Edwards & Sons Inc FBO
Housing Authority
1 N Jefferson Ave
Saint Louis MO 63103-2205 		    6,264.19       6.33%       0.03%       2.63%  

76

Table of Contents

                                     
Percentage Percentage of
Total Percentage of Fund Acquiring Fund
Fund Name and Address Shares/Class of Class (All Classes) Post Closing
Class D
  NFS LLC FEBO
Norman G Duquette
Agnes V Duquette
21 Frankwyn St
E Longmeadow MA 01028-2348 		    5,778.86       5.84%       0.30%       2.42%  
Class D
  NFS LLC FEBO
Elizabeth Low
71 Ravenslea Road
London
United Kingdom 		    5,506.61       5.56%       0.03%       2.31%  
Class Z
  Charles Schwab & Co Inc
Special Custody Acct for Exclusive Of Customers
Attn Mutual Funds
101 Montgomery St
San Francisco CA 94104-4122 		    2,892,760.35       16.19%       15.01%       1.86%  
Nations Bond Fund                                
Class C
  Helen E Solberg Ttee
Helen Elizabeth Solberg Trust
1830 3rd Ave #516
Chula Vista Ca 91910 		    8,717.75       5.58%       0.00%       2.72%  
Class C
  Merrill Lynch, Pierce, Fenner & Smith Inc
For The Sole Benefit Of Its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246 		    51,198.67       32.77%       0.02%       15.99%  
Class C
  BNY CUST IRA FBO
James A Blanchard
9 Las Brisas
Austin Tx 78746 		    12,564.28       8.04%       0.00%       3.92%  
Class C
  Merrill Lynch, Pierce, Fenner & Smith INC
for the sole benefit
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246 		    51,198.67       32.78%       0.03%       15.99%  
Class C
  BNY Cust IRA
FBO James A Blanchard
9 Las Brisas
Austin TX 78746 		    12,564.28       8.04%       0.01%       3.92%  
Class C
  Helen E Solberg TTEE
Helen Elizabeth Solberg Trust
1830 3rd Ave #516
Chula Vista CA 91910 		    8,717.75       5.58%       0.01%       2.72%  
Class Z
  Bank of America NA
ATTN Funds Accounting (ACI)
TX1-945-06-07
411 North Akard St
Dallas TX 75201-3307 		    15,581,071.01       84.64%       82.75%       74.90%  
Class Z
  Nations Lifegoal Portfolios Inc
Lifegoal Balanced Growth Portfolio
Attn Brian Smith NC1-002-33-31
101 South Tryon St
Charlotte NC 28255 		    19,142,542.62       10.39%       10.16%       9.20%  
Columbia Florida Intermediate Municipal Bond Fund                                
Class A
  Charles Schwab & Co Inc Cust
Attn Mutual Funds Dept
101 Montgomery St
San Francisco CA 94104-4122 		    26,405.93       23.79%       0.45%       0.55%  
Class A
  A G Edwards & Sons Inc FBO
T Frank Syfrett & Patricia B Syfrett
1 N Jefferson Ave
Saint Louis MO 63103-2205 		    22,050.83       19.87%       0.38%       0.46%  

77

Table of Contents

                                     
Percentage Percentage of
Total Percentage of Fund Acquiring Fund
Fund Name and Address Shares/Class of Class (All Classes) Post Closing
Class A
  William F Davis TTEE
William F Davis Trust U/A 1/16/01
2949 Sunset Point RD
Clearwater FL 33759-1615 		    19,014.39       17.13%       0.32%       0.39%  
Class A
  Citigroup Global Markets Inc
House Account
Attn Peter Booth 7th floor
333 W 34th St
New York NY 10001-2402 		    12,228.83       11.02%       0.21%       0.25%  
Class B
  Janney Montgomery Scott LLC
U/W Elsie M Kelber 11-4-98
1801 Market St
Philadelphia PA 19103-1628 		    9,579.00       21.15%       0.16%       0.70%  
Class B
  Merrill Lynch, Pierce, Fenner & Smith
for the Sole Benefit of its Customers
Attn Fund Administration
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246-6484 		    6,557.53       14.48%       0.11%       0.48%  
Class B
  UBS Financial Services Inc FBO
Merrill G Sargeant, Jr. Trust
Merrill G Sargeant, Jr. TTEE Agreement Dated 8/23/01
PO Box 7082
Indian Lakes Est FL 33855-7082 		    3,660.57       8.08%       0.06%       0.27%  
Class B
  Citigroup Global Markets Inc
Attn Peter Booth 7th floor
333 W 34th St
New York NY 10001-2402 		    3,605.08       7.96%       0.06%       0.26%  
Class B
  NFS LLC FEBO
Sid Cox Jr TTEE
Sid Cox Jr Rev Trust
353 Kelly Plantation Dr
Destin FL 32541-3404 		    3,268.54       7.22%       0.06%       0.24%  
Class B
  NFS LLC FEBO
Jeremiah & Edith Danberg Revoc T
Jeremiah Danberg
104 Apache Way
Tewksbury MA 01876-4617 		    2,875.46       6.35%       0.05%       0.21%  
Class B
  NFS LLC FEBO
Vita H Cox
935 N Halifax Ave Apt 801
Daytona Beach FL 32118-3713 		    2,430.75       5.37%       0.04%       0.18%  
Class B
  Pershing LLC
PO Box 2052
Jersey City NJ 07303-2052 		    2,420.67       5.35%       0.04%       0.18%  
Class B
  Pershing LLC
PO Box 2052
Jersey City NJ 07303-2052 		    2,408.00       5.32%       0.04%       0.18%  
Class C
  Merrill Lynch, Pierce, Fenner & Smith
for the Sole Benefit of its Customers
Attn Fund Administration
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246-6484 		    67,619.53       60.25%       1.15%       7.62%  
Class C
  First Clearing LLC
John Chiang (Decd)
1255 Pasadena Ave S Apt 405
S Pasadena FL 33707-6207 		    19,817.89       17.66%       0.34%       2.23%  
Class C
  First Clearing LLC
Rita Cohen
57 Pratt St Ste 815
Hartford CT 06103-1614 		    8,577.95       7.64%       0.15%       0.97%  

78

Table of Contents

                                     
Percentage Percentage of
Total Percentage of Fund Acquiring Fund
Fund Name and Address Shares/Class of Class (All Classes) Post Closing
Class C
  Dean Witter FBO
Margaret E Gloster-Zawada Trust
PO Box 250
New York NY 10008-0250 		    7,951.36       7.08%       0.14%       0.90%  
Class C
  Dean Witter FBO
Theodore P Zawada Trust
PO Box 250
New York NY 10008-0250 		    5,612.72       5.00%       0.10%       0.63%  
Class Z
  Bank of America NA
Attn Joan Wray/Funds Accounting
TX1-945-08-18
411 N Akard St
Dallas TX 75201-3307 		    5,147,813.22       91.87%       87.67%       21.46%  
Nations Florida Municipal Bond Fund                                
Class B
  Merrill Lynch, Pierce, Fenner & Smith Inc
For The Sole Benefit of Its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246 		    76,516.63       9.99%       0.88%       5.16%  
Class C
  Merrill Lynch, Pierce, Fenner & Smith Inc
For The Sole Benefit of Its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246 		    40,061.38       97.61%       0.46%       4.17%  
Class Z
  Bank Of America NA
Attn Funds Accounting (ACI)
Tx1-945-06-07
411 North Akard St
Dallas TX 75201-3307 		    4,054,211.56       94.17%       46.97%       15.61%  
Nations Florida Intermediate Municipal Bond Fund                                
Class A
  Merrill Lynch, Pierce, Fenner & Smith Inc
for the Sole Benefit of its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246 		    219,315.96       15.11%       1.29%       4.63%  
Class A
  Guillermo M Miranda TTEE
IA Adelaida M Miranda QTIP
410 Leucadendra Drive
Coral Gables FL 33156 		    88,482.52       6.09%       0.52%       1.87%  
Class B
  Merrill Lynch, Pierce, Fenner & Smith Inc
for the Sole Benefit of its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246 		    120,091.60       19.89%       0.71%       8.96%  
Class C
  Merrill Lynch, Pierce, Fenner & Smith INC
for the Sole Benefit of its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246 		    493,105.82       68.41%       2.92%       56.84%  
Class C
  Arnold P Rosen
Muriel S Rosen
Nancy R Schaffel
9999 Collins Ave Apt 18B
Bal Harbor FL 33154 		    41,345.830       5.73%       0.24%       4.77%  
Class Z
  Bank of America NA
ATTN Funds Accounting (ACI)
TX1-946-06-07
411 North Akard St
Dallas TX 75201-3307 		    13,777,610.68       97.74%       81.65%       58.70%  

79

Table of Contents

                                     
Percentage Percentage of
Total Percentage of Fund Acquiring Fund
Fund Name and Address Shares/Class of Class (All Classes) Post Closing
Columbia Growth & Income Fund                                
Class A
  Charles Schwab & Co. Inc. Cust
Attn Mutual Funds Dept
101 Montgomery St.
San Francisco, CA 94104-4122 		    1,743,362.71       5.50%       1.76%       3.51%  
Class Z
  AMVESCAP Natl TR Co
As Agent for Fleet National Bank FBO Fleet Boston Financial Savings Plus
PO Box 105779
Atlanta, GA 30348-5779 		    11,414,858.52       42.11%       11.53%       11.72%  
    Bank of America NA
Attn Joan Wray/Funds Accounting
TX1-945-08-18
411 N Akard St.
Dallas, TX 75201-3307 		    3,935,826.64       14.52%       3.97%       4.04%  
    Charles Schwab & Co. Inc.
Special Custody Account for the Exclusive Benefit of Customers
Attn Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122 		    2,193,410.37       8.09%       2.22%       2.25%  
Columbia Tax-Managed Value Fund                                
Class A
  LPL Financial Services
9785 Towne Centre Dr
San Diego CA 92121-1968 		    79,649.28       7.15%       1.43%       0.11%  
Class Z
  Steven J Barbon TOD
Robert P Rohall
Subject to STA TOD Rules
PO Box 279
Temple PA 19560-0279 		    2,427.62       44.07%       0.04%       0.00%  
Class Z
  Rose Diaz & Robert R Diaz JTWROS
91 Salem Rd
Fishkill NY 12524-1420 		    1,424.65       25.86%       0.03%       0.00%  
Class Z
  Michael Dekema & Patricia Dekema TTEES
The Dekema Living Trust
PO Box 2174
Friday Harbor WA 98250-2174 		    929.76       16.88%       0.02%       0.00%  
Class Z
  Robert P Rohall
701 Georgia Ave
Reading PA 19605-1109 		    648.07       11.77%       0.01%       0.00%  
Nations Value Fund                                
Class C
  Merrill Lynch, Pierce, Fenner & Smith Inc
for the Sole Benefit of its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246 		    435,243.37       34.26%       0.33%       5.34%  
Class C
  A G Edwards & Sons Inc
C/F Gerald Winkley Decd
FBO Julie A Winkley Beneficiary Account
14900 Schroeder Rd
St Charles MI 48655-7508 		    90,643.74       7.13%       0.07%       1.11%  
Class Z
  Bank of America NA
ATTN Funds Accounting (ACI)
TX1-945-06-07
411 North Akard St
Dallas TX 75201-3307 		    67,771,814.55       69.74%       52.61%       50.33%  
Class Z
  Bank of America NA TTEE
Bank of America 401K Plan
Attn Norma Aja/TX4-213-06-14
PO Box 2518
Houston TX 77252-2518 		    12,824,419.88       13.19%       9.95%       9.52%  

80

Table of Contents

                                     
Percentage Percentage of
Total Percentage of Fund Acquiring Fund
Fund Name and Address Shares/Class of Class (All Classes) Post Closing
Class Z
  Nations Lifegoal Portfolios Inc
Lifegoal Growth Portfolio
Attn Brian Smith NC1-002-33-31
101 South Tryon St
Charlotte NC 28255 		    5,905,378.26       6.07%       4.58%       4.39%  
Class Z
  Nations Lifegoal Portfolios Inc
Lifegoal Balanced Growth Portfolio
Attn Brian Smith NC1-002-33-31
101 South Tryon St
Charlotte NC 28255 		    5,217,904.48       5.36%       4.05%       3.88%  
Columbia Intermediate Government Income Fund                                
Class A
  Ferris Baker Watts INC
John R Karlen R/O IRA
75 Arch St Ste 402
Akron OH 44304-1433 		    77,947.89       29.07%       0.24%       1.46%  
Class A
  MCB Trust Services Cust FBO
Impco Technologies Inc Deferred C
700 17th ST Ste 300
Denver CO 80202-3531 		    14,584.92       5.44%       0.05%       0.27%  
Class A
  Margaret J Smart
78 Wheelwright Farm
Cohasset MA 02025-1542 		    13,953.49       5.20%       0.04%       0.26%  
Class C
  UBS Financial Services Inc
FBO MS Public Health Workers
Federal Credit Union
2815 N State St
Jackson MS 39216-4306 		    28,901.30       22.05%       0.09%       6.44%  
Class C
  UBS financial Services Inc
FBO Ferguson FCU
577 N A Sandifer RD
Monticello MS 39654-7691 		    19,221.64       14.66%       0.06%       4.28%  
Class C
  UBS Financial Services Inc.
FBO Mississippi Public
Employees Credit Union
613 S West St
Jackson MS 39201-5506 		    14,312.98       10.92%       0.04%       3.19%  
Class C
  Peter Kotzen TTEE
Waldo H Lailer & Co Inc Empl PFT SH PL
35 New England Produce Center
Chelsea MA 02150-1719 		    10,130.17       7.73%       0.03%       2.26%  
Class Z
  Bank of America NA
Attn Joan Wray/Funds Accounting
TX1-945-08-18
411 N Akard St.
Dallas, TX 75201-3307 		    26,414,039.04       91.71%       80.71%       30.60%  
Nations Intermediate Bond Fund                                
Class A
  Union Bank Trust Nominee
FBO Angelus Sanitary Can Machine CO
PO Box 85484
San Diego CA 92186-5484 		    116,724.96       5.35%       0.17%       2.01%  
Class B
  Merrill Lynch, Pierce, Fenner & Smith Inc
for the Sole Benefit of its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246 		    63,928.99       7.37%       0.09%       5.74%  
Class C
  Merrill Lynch, Pierce, Fenner & Smith Inc
for the Sole Benefit of its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246 		    196,780.45       63.48%       0.29%       44.95%  

81

Table of Contents

                                     
Percentage Percentage of
Total Percentage of Fund Acquiring Fund
Fund Name and Address Shares/Class of Class (All Classes) Post Closing
Class Z
  Bank of America NA
ATTN Funds Accounting (ACI)
TX1-945-06-07
411 North Akard St
Dallas TX 75201-3307 		    62,055,165.04       99.48%       94.40%       66.02%  
Columbia Large Company Index Fund                                
Class A
  Bank of America
FBO Bristol Hospital Shareholder Svcs
411 N Akard St TX1-945-06-07
Dallas TX 75201-3307 		    164,879.86       17.27%       0.53%       6.81%  
Class C
  Gary J Gartner 2002 IRREV Trust
L F Gilberti, D J Gartner TTEE
599 Lexington Avenue
New York NY 10022-6030 		    8,894.64       8.03%       0.03%       0.37%  
Class C
  First Clearing LLC
Lowell S Morrow IRA R/O FCC As Custodian
10700 Wheat First DR
Glen Allen VA 23060-9243 		    5,579.86       5.04%       0.02%       0.23%  
Class Z
  Amvescap National Trust Co as Agent
For Fleet National Bank
FBO FleetBoston Financialsavings Plus
PO Box 105779
Atlanta GA 30348-5779 		    6,326,515.09       21.37%       20.32%       7.50%  
Class Z
  Bank of America NA
Attn Joan Wray/Funds Accounting
TX1-945-08-18
411 N Akard St
Dallas TX 75201-3307 		    5,801,338.82       19.60%       18.63%       6.87%  
Nations LargeCap Index Fund                                
Class A
  Patterson & Co FBO
Dress Barn Savings Plan
1525 West Wt Harris Blvd
Charlotte, NC 28288-1151 		    85,089.99       5.22%       0.13%       2.93%  
Class A
  Diversified Investment Advisors
Attn: Bheesham Persaud
Mail Drop 2-52
4 Manhattanville Road
Purchase NY 10577-2119 		    159,666.63       9.80%       0.24%       5.49%  
Class Z
  Bank Of America NA Ttee
Bank Of America 401k Plan
Attn Norma Aja/TX4-213-06-14
PO Box 2518
Houston TX 77252-2518 		    31,916,736.32       48.73%       47.56%       31.65%  
Class Z
  Bank Of America NA
Attn Funds Accounting (ACI)
TX1-945-06-07
411 North Akard St
Dallas TX 75201-3307 		    30,189,326.00       46.09%       44.98%       29.93%  
Columbia Mid Cap Value Fund                                
Class A
  Charles Schwab & Co Inc CUST
ATTN Mutual Funds Dept
101 Montgomery St
San Francisco CA 94104-4122 		    2,271,459.76       8.64%       3.43%       8.49%  
Class C
  Merrill Lynch, Pierce, Fenner & Smith
for the Sole Benefit of its Customers
Attn Fund Administration #97RD5
4800 Deer Lake Drive East 2rd Floor
Jacksonville FL 32246-6484 		    383,282.56       14.43%       0.54%       13.94%  
Class Z
  Bank of America NA
Attn Joan Wray/Funds Accounting
TX1-945-08-18
411 N Akard St
Dallas TX 75201-3307 		    8,092,401.35       31.64%       12.37%       17.80%  

82

Table of Contents

                                     
Percentage Percentage of
Total Percentage of Fund Acquiring Fund
Fund Name and Address Shares/Class of Class (All Classes) Post Closing
Class Z
  Charles Schwab & Co Inc CUST
Special Custody Account for the Exclusive Benefit of Customers
ATTN Mutual Funds Dept
101 Montgomery St
San Francisco CA 94104-4122 		    2,685,455.40       10.50%       4.11%       5.91%  
Nations MidCap Value Fund                                
Class A
  Merrill Lynch, Pierce, Fenner & Smith Inc
for the Sole Benefit of its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246 		    52,212.91       5.51%       0.12%       0.09%  
Class C
  Merrill Lynch, Pierce, Fenner & Smith Inc
for the Sole Benefit of its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246 		    89,204.01       48.83%       0.20%       1.67%  
Class C
  John R Svenson
36 Highland Cir
Wayland MA 01778 		    16,130.94       8.83%       0.03%       0.30%  
Class Z
  Bank of America NA
ATTN Funds Accounting (ACI)
TX1-945-06-07
411 North Akard St
Dallas TX 75201-3307 		    34,732,707.37       83.99%       81.07%       36.75%  
Class Z
  Nations Lifegoal Portfolios Inc
Lifegoal Balanced Growth Portfolio
Attn Brian Smith NC1-002-33-31
101 South Tryon St
Charlotte NC 28255 		    2,445,583.95       5.91%       5.70%       2.59%  
Class Z
  Nations Lifegoal Portfolios Inc
Lifegoal Balanced Growth Portfolio
Attn Brian Smith NC1-002-33-31
101 South Tryon St
Charlotte NC 28255 		    2,276,239.10       5.50%       5.31%       2.41%  
Columbia Short Term Bond Fund, Inc.                                
Class A
  Charles Schwab & Co Inc
Special Custody Acct for Exclusive Of Customers
Attn Mutual Funds
101 Montgomery St
San Francisco CA 94104-4122 		    424,750.12       19.81%       0.80%       3.55%  
Class C
  Merrill Lynch, Pierce, Fenner & Smith
for the Sole Benefit of its Customers
Attn Fund Administration
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246-6484 		    32,463.90       9.57%       0.06%       0.96%  
Class C
  Allen Weiss &
Donna Weiss TTEE
Weiss Family Trust
29280 Greenwater Dr
Malibu CA 90265-4121 		    32,068.43       9.45%       0.06%       0.95%  
Class G
  Melody J Wilder
4 Windsor St
Haverhill MA 01830-4127 		    9,872.80       13.64%       0.02%       0.01%  
Class Z
  Bank of America NA
Attn Joan Wray/Funds Accounting
TX1-945-08-18
411 N Akard St
Dallas TX 75201-3307 		    37,019,250.94       81.58%       69.71%       20.08%  
Nations Short-Term Income Fund                                
Class B
  West Anderson Rural Water & Sewer Co Inc
2767 Whitehall RD
Anderson SC 29625 		    49,252.18       33.81%       0.05%       1.22%  

83

Table of Contents

                                     
Percentage Percentage of
Total Percentage of Fund Acquiring Fund
Fund Name and Address Shares/Class of Class (All Classes) Post Closing
Class B
  West Anderson Rural Water & Sewer Reserve Fund
2767 Whitehall Rd
Anderson SC 29625 		    29,207.51       20.05%       0.03%       0.72%  
Class C
  Merrill Lynch, Pierce, Fenner & Smith Inc
for the Sole Benefit of its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246 		    204,944.80       12.57%       0.21%       6.95%  
Class Z
  Bank of America NA
ATTN Funds Accounting (ACI)
TX1-945-06-07
411 North Akard St
Dallas TX 75201-3307 		    68,220,335.72       74.22%       70.19%       42.54%  
Class Z
  Nations Lifegoal Portfolios Inc
Lifegoal Balanced Growth Portfolio
Attn Brian Smith NC1-002-33-31
101 South Tryon St
Charlotte NC 28255 		    7,724,378.91       8.40%       7.94%       4.82%  
Class Z
  Nations Lifegoal Portfolios Inc
Lifegoal Income & Growth Portfolio
Attn Brian Smith NC1-002-33-31
101 South Tryon St
Charlotte NC 28255 		    7,184,952.21       7.82%       7.39%       4.48%  
Class Z
  Growth Portfolio
Attn Brian Smith NC1-002-33-31
101 S Tryon St
Charlotte NC 28255 		    5,390,526.58       5.86%       5.54%       3.36%  
Nations Short-Intermediate Government Fund                                
Class A
  Burgess Pigment Co
PO Box 349 Deck Blvd
Sandersville GA 31082 		    1,178,942.11       15.61%       1.44%       4.77%  
Class B
  Merrill Lynch, Pierce, Fenner & Smith Inc
for the Sole Benefit of its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville Fl 32246 		    246,594.97       5.56%       0.30%       2.58%  
Class C
  Merrill Lynch, Pierce, Fenner & Smith Inc
for the Sole Benefit of its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville FL 32246 		    132,532.37       13.59%       0.16%       1.89%  
Class C
  K R Holbrook W M Leidig TTEE
UMWA PCG Training and Education Fund
PO Box 1270
Bristol VA 24203 		    58,714.63       6.02%       0.07%       0.84%  
Class Z
  Bank of America NA
ATTN Funds Accounting (ACI)
TX1-945-06-07
411 North Akard St
Dallas TX 75201-3307 		    67,482,230.79       98.60%       82.91%       17.79%  
Columbia Small Company Index Fund                                
Class A
  MCB Trust Services CUST
FBO Princeton Softech Inc
700 17th St Ste 300
Denver CO 80202-3531 		    29,933.60       7.09%       0.19%       1.98%  
Class A
  Reliance Trust Co Cust
FBO University Physicians Inc
PO Box 48529
Atlanta GA 30362-1529 		    26,867.10       6.36%       0.17%       1.78%  
Class A
  Mercer Trust Company
Transmetta 401(K) Plan
One Investors Way Attn DCPA Team
Norwood MA 02062-1599 		    21,589.50       5.11%       0.14%       1.43%  

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Percentage Percentage of
Total Percentage of Fund Acquiring Fund
Fund Name and Address Shares/Class of Class (All Classes) Post Closing
Class C
  Ministerial Fund of 1st Cong Church of Madison
C/O John S Hubbard
39 Sunny Hill Dr
Madison CT 06443-3305 		    17,351.44       10.00%       0.11%       1.13%  
Class C
  Madison Historical Society Inc
Attn Frederick P Murphy
PO Box 17
Madison CT 06443-0017 		    10,377.64       5.98%       0.06%       0.68%  
Nations SmallCap Index Fund                                
Class A
  Steven J Umberger TTEE
Steven J Umberger REV TR
6724 Epping Forest Way N
Jacksonville FL 32217 		    58,028.50       7.08%       0.10%       3.51%  
Class A
  Charles Schwab & Co Inc
Special Custody Account For Benefit of Customers
Attn Mutual Funds
101 Montgomery Street
San Francisco CA 94104 		    55,175.20       6.73%       0.09%       3.34%  
Class A
  Diversified Investment Advisors
Attn Bheesham Persaud
Mail Drop 2-52
4 Manhattanville Road
Purchase NY 10577-2119 		    43,835.75       5.34%       0.07%       2.65%  
Class A
  Merrill Lynch, Pierce, Fenner & Smith Inc
for the Sole Benefit of its Customers
Attention Service Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville FL 32246 		    43,739.92       5.33%       0.07%       2.65%  
Class Z
  Bank of America NA
ATTN Funds Accounting (ACI)
TX1-946-06-07
411 North Akard St
Dallas TX 75201-3307 		    42,483,235.56       78.13%       76.97%       59.84%  
Class Z
  Bank of America NA TTEE
Bank of America 401K Plan
Attn Norma Aja/TX4-213-06-14
PO Box 2518 Houston TX 77252-2518 		    11,037,775.90       20.29%       19.99%       15.55%  

      For purposes of the 1940 Act, any person who owns directly or through one or more controlled companies more than 25% of the voting securities of a company is presumed to “control” such company. Accordingly, to the extent that a shareholder identified in the foregoing table is identified as the beneficial holder of more than 25% of a class, or is identified as the holder of record of more than 25% of a class and has voting and/or investment power, it may be presumed to control such class. As of July 8, 2005, Bank of America had voting control of the outstanding shares of a Fund or Acquiring in the following percentages: 82.75% of Nations Bond Fund, 87.67% of Columbia Florida Intermediate Municipal Bond Fund, 46.97% of Nations Florida Municipal Bond Fund, 81.65% of Nations Florida Intermediate Municipal Bond Fund, 62.56% of Nations Value Fund, 80.71% of Columbia Intermediate Government Income Fund, 94.40% of Nations Intermediate Bond Fund, 92.54% of Nations LargeCap Index Fund, 81.07% of Nations MidCap Value Fund, 69.71% of Columbia Short Term Bond Fund, Inc., 70.19% of Nations Short-Term Income Fund, 82.91% of Nations Short-Intermediate Government Fund, and 96.96% of Nations SmallCap Index Fund. Accordingly, Bank of America may be considered to “control” each listed Fund or Acquiring Fund. The address of Bank of America is: 411 N. Akard Street, TX1-945-06-07, Dallas, TX 75201. Bank of America’s control of a Fund is likely to increase the chance that a Fund’s shareholders will approve its Reorganization.

      As of July 8, 2005, the officers and Trustees of Columbia Trust I, Columbia Trust III, Columbia Trust V, Columbia Trust VI and Nations Funds Trust as a group did not own more than 1% of any class of the Funds or Acquiring Funds.

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ADDITIONAL INFORMATION

Legal Proceedings

      On February 9, 2005, BACAP and BACAP Distributors, LLC (an affiliated predecessor to the Distributor) entered into an Assurance of Discontinuance with the New York Attorney General (the “NYAG Settlement”) and consented to the entry of a cease-and-desist order by the SEC (the “SEC Order”). A copy of the NYAG Settlement is available as part of the Bank of America Corporation Form 8-K filing on February 10, 2005 and a copy of the SEC Order is available on the SEC’s website. Under the terms of the NYAG Settlement and the SEC Order, BACAP and BACAP Distributors, LLC have agreed, among other things, to pay disgorgement and civil money penalties, to undertake various remedial measures to ensure compliance with the federal securities laws related to certain mutual fund trading practices, to retain an independent consultant to review their applicable supervisory, compliance, control and other policies and procedures and to reduce management fees for five years. BACAP and BACAP Distributors, LLC are currently in the process of implementing the various terms of the NYAG Settlement and SEC Order.

      In connection with the events that resulted in the NYAG Settlement and SEC Order, various parties filed suits against Nations Funds Trust, its Board of Trustees, Bank of America Corporation and certain of its affiliates, including BACAP and BACAP Distributors, LLC (collectively “BAC”). On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against several other mutual fund companies based on similar allegations to the Untied States District Court in Maryland for consolidated or coordinated pretrial proceedings (the “MDL”). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Nations Funds Trust, the Trustees, BAC and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of the Nations Funds Trust against BAC and others that asserts claims under the federal securities laws and state common law. Nations Funds Trust is a nominal defendant in this action. The MDL is ongoing. Accordingly, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

      Separately, a putative class action (Reinke v. Bank of America N.A., et al.) was filed against Nations Funds Trust and others on December 16, 2004 in the United States District Court for the Easter District of Missouri relating to the conversion of common trust funds and the investment of assets held in fiduciary accounts in the Funds. Nations Funds Trust has filed a motion to dismiss that is pending, and no discovery had been taken. At the present time, we cannot predict what liability, if any, Nations Funds Trust will have in this matter.

Other Business

      The Boards know of no other business to be brought before the Meetings. However, if any other matters properly come before the Meetings, it is the intention that proxies, which do not contain specific restrictions to the contrary, will be voted on such matters in accordance with the judgment of the persons named in the enclosed form of proxy.

Shareholder Inquiries

      Shareholders may find more information about the Funds and Acquiring Funds in the following documents:

  •  Annual and semi-annual reports

The annual and semi-annual reports contain information about the Funds’ investments and performance, the financial statements and the independent accountants’ reports. The annual report also includes a discussion about the market conditions and investment strategies that had a significant effect on the Funds’ and Acquiring Funds’ performance during the period.

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  •  SAI

The SAI for the Funds and Acquiring Funds contain additional information about the Funds and Acquiring Funds and their permissible investments and policies. The SAI is legally part of their prospectuses (it is incorporated by reference). Copies have been filed with the SEC.

  Shareholders may obtain free copies of these documents, request other information about the Nations Fund and make shareholder inquiries by contacting Nations Funds:
 
  By telephone:     (866) 348-1468
 
  By mail:
Nations Funds
One Bank of America Plaza
33rd Floor
Charlotte, NC 28255
 
  On the Internet:     www.nationsfunds.com
 
  Shareholders may obtain free copies of these documents, request other information about the Columbia Funds and make shareholder inquiries by contacting Columbia Funds:
 
  By telephone:     (866) 348-1468
 
  By mail:
Columbia Funds
One Financial Center
Boston, MA 02111
 
  On the Internet:     www.columbiafunds.com
 
  Information about the Funds and Acquiring Funds can be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling the SEC at (202) 942-8090. The reports and other information about the Funds are available on the EDGAR Database on the SEC’s Internet site at http://www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, Washington, D.C. 20549-0102.

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APPENDIX A

GLOSSARY

     
Term Used in Proxy/Prospectus Definition
1933 Act
  Securities Act of 1933, as amended
1934 Act
  Securities Exchange Act of 1934, as amended
1940 Act
  Investment Company Act of 1940, as amended
Acquiring Fund(s)
  Nations Value Fund, Nations MidCap Value Fund, Nations LargeCap Index Fund, Nations SmallCap Index Fund, Nations Short-Term Income Fund, Nations Bond Fund, Nations Intermediate Bond Fund, and Nations Florida Intermediate Municipal Bond Fund (each a Fund of Nations Funds Trust)
BACAP
  Banc of America Capital Management, LLC
BACAP Distributors
  BACAP Distributors, LLC
Bank of America
  Bank of America, N.A.
Board(s)
  The Boards of Trustees/Directors of the Nations Funds Trust, Columbia Trust I, Columbia Trust III, Columbia Trust V, Columbia Trust VI, Columbia Short Term Bond Fund, Inc., and Columbia Fixed Income Securities Fund, Inc.
Closing
  Closing of each Reorganization, expected to occur in September 2005
CFSI
  Columbia Funds Services, Inc.
CMD
  Columbia Management Distributor, Inc.
Columbia
  Columbia Management Advisors, Inc.
Columbia Funds
  Columbia Tax-Managed Value Fund, Columbia Intermediate Government Income Fund, Columbia Mid Cap Value Fund, Columbia Florida Intermediate Municipal Bond Fund, Columbia Large Company Index Fund, Columbia Small Company Index Fund, Columbia Growth & Income Fund, Columbia Fixed Income Securities Fund, Inc., and Columbia Short Term Bond Fund, Inc.
Columbia Funds Complex
  All portfolios in all registered investment companies advised by Columbia
Columbia Management Group
  Columbia Management Group, LLC.
Code
  Internal Revenue Code of 1986, as amended
Fund(s)
  Columbia Fixed Income Securities Fund, Inc, Columbia Florida Intermediate Municipal Bond Fund, Columbia Intermediate Government Income Fund, Columbia Growth & Income Fund, Columbia Large Company Index Fund, Columbia Mid Cap Value Fund, Columbia Short Term Bond Fund, Inc., Columbia Small Company Index Fund, Columbia Tax-Managed Value Fund, Nations Florida Municipal Bond Fund and Nations Short-Intermediate Government Fund
Management
  BACAP and Columbia Management Group
Meeting(s)
  The shareholder meeting(s) of the Funds that will be jointly held at 10:00 a.m., Eastern time, September 16, 2005, at One Financial Center, Boston, Massachusetts

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Term Used in Proxy/Prospectus Definition
Nations Funds
  Nations Bond Fund, Nations Florida Intermediate Municipal Bond Fund, Nations Florida Municipal Bond Fund, Nations Intermediate Bond Fund, Nations LargeCap Index Fund, Nations MidCap Value Fund, Nations SmallCap Index Fund, Nations Short-Term Income Fund, Nations Short-Intermediate Government Fund, and Nations Value Fund
Nations Funds Complex
  All series of Nations Funds Trust, Nations Separate Account Trust and Nations Master Investment Trust
Proxy/Prospectus
  This Combined Proxy Statement/Prospectus
PwC
  PricewaterhouseCoopers LLP
Reorganization(s)
  The reorganization(s) of the Fund(s) into corresponding Acquiring Fund(s)
Reorganization Agreement
  The Agreement and Plan of Reorganization dated as of July 27, 2005, is by and among: Columbia Funds Trust I, a Massachusetts business trust, for itself and on behalf of its series Columbia Tax-Managed Value Fund; Columbia Funds Trust III, a Massachusetts business trust, for itself and on behalf of its series Columbia Mid Cap Value Fund and Columbia Intermediate Government Income Fund; Columbia Funds Trust V, a Massachusetts business trust, for itself and on behalf of its series Columbia Large Company Index Fund, Columbia Small Company Index Fund and Columbia Florida Intermediate Municipal Bond Fund; Columbia Fund’s Trust VI, a Massachusetts business trust, for itself and on behalf of its series Columbia Growth & Income Fund; Columbia Short Term Bond Fund, Inc., an Oregon corporation; Columbia Fixed Income Securities Fund, Inc., an Oregon corporation; Nations Funds Trust, a Delaware statutory trust, for itself and on behalf of its series Nations Short-Intermediate Government Fund, Nations Florida Intermediate Municipal Bond Fund, Nations Florida Municipal Bond Fund, Nations Value Fund, Nations MidCap Value Fund, Nations LargeCap Index Fund, Nations SmallCap Index Fund, Nations Short-Term Income Fund, Nations Bond Fund, Nations Intermediate Bond Fund and Nations Florida Intermediate Municipal Bond Fund; and Columbia.
SAI
  Statement of Additional Information
SEC
  United States Securities and Exchange Commission

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APPENDIX B

COMPARISON OF FEES AND EXPENSES

      The tables below describe the fees and expenses associated with holding Fund and Acquiring Fund shares, as of March 31, 2005. In particular, the tables compare the fees and expenses for each class of each Fund and the corresponding class of the Acquiring Fund, and show the estimated fees and expenses for each combined Acquiring Fund on a pro forma basis after giving effect to each Reorganization.

      Where more than one Fund is involved in a Reorganization, the tables show several combination scenarios of the Funds and Acquiring Funds. They show the possibility of one Fund approving the Reorganization but not the other. They also show the possibility of both Funds approving the Reorganization.

      The operating expense levels shown in this Proxy/ Prospectus assume net asset levels; pro forma expense levels shown should not be considered an actual representations of future expenses or performance. Such pro forma expense levels project anticipated levels but may be greater or less than those shown.

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IF COLUMBIA FIXED INCOME SECURITIES FUND, INC. IS REORGANIZED:

Class A/Class A

                         
Pro Forma
Columbia Nations
Fixed Income Nations Bond Fund
Securities Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    4.75%       3.25%       3.25%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A 2     N/A 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.50%       0.49% 4     0.48% 5
• Distribution (12b-1) and/or shareholder servicing fees
    0.25% 6     0.25%       0.25%  
• Other expenses
    0.25% 7     0.05%       0.06%  
     
     
     
 
• Total annual Fund operating expenses
    1.00%       0.79% 8     0.79% 8
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 A 1.00% maximum deferred sales charge applies to investors who buy $1 million or more of Class A shares and sell them within twelve months of buying them.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The Acquiring Fund pays an advisory fee of 0.34% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.33% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

6 The Fund may pay distribution and service (12b-1) fees up to a maximum of 0.35% of the Fund’s average daily net assets attributable to Class A shares (comprised of up to 0.25% for shareholder liaison services and up to 0.10% for distribution services), but will limit such fees to an aggregate of not more than 0.25%.

7 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

8 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.60% (exclusive of distribution and services fees, interest and tax expense) until July 31, 2006. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

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Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Bond Fund
  $403   $569   $749   $1,271
Columbia Fixed Income Securities Fund, Inc.
  $572   $778   $1,001   $1,641
Pro Forma Nations Bond Fund (acquiring)
  $403   $569   $749   $1,271

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Table of Contents

IF COLUMBIA FIXED INCOME SECURITIES FUND, INC. IS REORGANIZED:

Class B/Class B

                         
Pro Forma
Columbia Nations
Fixed Income Nations Bond Fund
Securities Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00% 2     3.00% 2     3.00% 2
• Redemption fee (%) (as a percentage of the lesser of purchase price or redemption)
    N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.50%       0.49% 3     0.48% 4
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%  
• Other expenses
    0.25% 5     0.05%       0.06%  
     
     
     
 
• Total annual Fund operating expenses
    1.75%       1.54% 6     1.54% 6
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge decreases over time.

3 The Acquiring Fund pays an advisory fee of 0.34% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

4 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.33% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

5 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.60% (exclusive of distribution and service fees, interest and tax expense) until July 31, 2006. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

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Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Bond Fund
               
 
Did not sell your shares
   $157   $486   $839   $1,632
 
Sold your shares at end of period
   $457   $586   $839   $1,632
Columbia Fixed Income Securities Fund, Inc.
               
 
Did not sell your shares
   $178   $551   $949   $1,864
 
Sold your shares at end of period
   $678   $851   $1,149   $1,864
Pro Forma Nations Bond Fund (acquiring)
               
 
Did not sell your shares
   $157   $486   $839   $1,632
 
Sold your shares at end of period
   $457   $586   $839   $1,632

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Table of Contents

IF COLUMBIA FIXED INCOME SECURITIES FUND, INC. IS REORGANIZED:

Class C/Class C

                         
Pro Forma
Columbia Nations
Fixed Income Nations Bond Fund
Securities Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00%       1.00% 2     1.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.50%       0.49% 3     0.48% 4
• Distribution (12b-1) and/or shareholder servicing fees
    1.00% 5     1.00%       1.00%  
• Other expenses
    0.25% 6     0.05%       0.06%  
     
     
     
 
• Total annual Fund operating expenses
    1.75%       1.54% 7     1.54% 7
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies to investors who buy Class C shares and sell them within one year of buying them.

3 The Acquiring Fund pays an advisory fee of 0.34% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

4 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.33% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

5 The Fund’s distributor has voluntarily agreed to waive a portion of the 12b-1 fee for Class C shares. As a result, the 12b-1 fee for Class C shares would be 0.85%, and the total annual fund operating expenses for the Class C shares would be 1.60%. This arrangement may be modified or terminated at any time.

6 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

7 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.60% (exclusive of service fees, distribution and interest and expense) until July 31, 2006. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-6

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Bond Fund
               
 
Did not sell your shares
   $157   $486   $839   $1,834
 
Sold your shares at end of period
   $257   $486   $839   $1,834
Columbia Fixed Income Securities Fund, Inc.
               
 
Did not sell your shares
   $163   $536   $935   $2,050
 
Sold your shares at end of period
   $263   $536   $935   $2,050
Pro Forma Nations Bond Fund (acquiring)
               
 
Did not sell your shares
   $157   $486   $839   $1,834
 
Sold your shares at end of period
   $257   $486   $839   $1,834

B-7

Table of Contents

IF COLUMBIA FIXED INCOME SECURITIES IS REORGANIZED:

Class D/Class C

                         
Pro Forma
Columbia Nations
Fixed Income Nations Bond Fund
Securities Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A 2     N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00%       1.00% 3     1.00% 3
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 4     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
• Management fees
    0.50%       0.49% 5     0.48% 6
• Distribution (12b-1) and/or shareholder servicing fees
    1.00% 7     1.00%       1.00%  
• Other expenses
    0.25% 8     0.05%       0.06%  
     
     
     
 
• Total annual Fund operating expenses
    1.75%       1.54% 9     1.54% 9
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 The Fund’s adviser has agreed to waive indefinitely its front end sales charge for the purchase of Class D shares by existing Class D shareholders. Otherwise, a maximum sales charge (load) on purchases of 1.00% applies.

3 This charge applies to investors who buy Class C shares and sell them within one year of buying them.

4 There is a $7.50 charge for wiring sales proceeds to your bank.

5 The Acquiring Fund pays an advisory fee of 0.34% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.33% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

7 The Fund’s distributor has voluntarily agreed to waive a portion of the 12b-1 fee for Class D shares. As a result, the 12b-1 fee for Class D shares would be 0.85%, and the total annual fund operating expenses for the Class D shares would be 1.60%. This arrangement may be modified or terminated at any time.

8 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

9 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.60% (exclusive of distribution and service fees, interest and tax expense) until July 31, 2006. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-8

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Bond Fund
               
 
Did not sell your shares
   $157   $486   $839   $1,834
 
Sold your shares at end of period
   $257   $486   $839   $1,834
Columbia Fixed Income Securities Fund, Inc.
               
 
Did not sell your shares
   $163   $536   $935   $2,050
 
Sold your shares at end of period
   $263   $536   $935   $2,050
Pro Forma Nations Bond Fund (acquiring)
               
 
Did not sell your shares
   $157   $486   $839   $1,834
 
Sold your shares at end of period
   $257   $486   $839   $1,834

B-9

Table of Contents

IF COLUMBIA FIXED INCOME SECURITIES FUND, INC. IS REORGANIZED:

Class Z/Class Z

                         
Pro Forma
Columbia Nations
Fixed Income Nations Bond Fund
Securities Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.50%       0.49% 3     0.48% 4
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.00%       0.00%  
• Other expenses
    0.25% 5     0.05%       0.06%  
     
     
     
 
• Total annual Fund operating expenses
    0.75%       0.54% 6     0.54% 6
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Acquiring Fund pays an advisory fee of 0.34% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

4 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.33% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

5 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.60% (exclusive of distribution and service fees, interest and tax expense) until July 31, 2006. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-10

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Bond Fund
  $55   $173   $302   $677
Columbia Fixed Income Securities Fund, Inc.
  $77   $240   $417   $930
Pro Forma Nations Bond Fund (acquiring)
  $55   $173   $302   $677

B-11

Table of Contents

IF ONLY COLUMBIA FLORIDA INTERMEDIATE MUNICIPAL BOND FUND IS REORGANIZED:

Class A/Class A

                         
Pro Forma
Nations
Columbia Nations Florida
Florida Florida Intermediate
Intermediate Intermediate Municipal
Municipal Municipal Bond Fund
Bond Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    4.75%       3.25%       3.25%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00% 2     N/A 3     N/A 3
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 4     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.55% 5     0.55% 6     0.55% 7
• Distribution (12b-1) and/or shareholder servicing fees
    0.25%       0.25%       0.25%  
• Other expenses
    0.25%       0.12%       0.13%  
     
     
     
 
• Total annual Fund operating expenses
    1.05%       0.92%       0.93%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.17)%       (0.18)%  
     
     
     
 
• Total net expenses
    1.05%       0.75% 8     0.75% 8
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies only to certain Class A shares bought without an initial sales charge that are sold within 18 months of purchase.

3 A 1.00% maximum deferred sales charge applies to investors who buy $1 million or more of Class A shares and sell them within twelve months of buying them.

4 There is a $7.50 charge for wiring sales proceeds to your bank.

5 The Fund pays an advisory fee of 0.48% and an administration fee of 0.07%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

6 The Acquiring Fund pays an advisory fee of 0.40% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

7 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.40% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

8 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.50% (exclusive of distribution and service fees, interest and tax expense) until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-12

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Florida Intermediate Municipal Bond Fund
  $399   $592   $802   $1,404
Columbia Florida Intermediate Municipal Bond Fund
  $577   $793   $1,027   $1,697
Pro Forma Nations Florida Intermediate Municipal Bond Fund (acquiring)
  $399   $594   $806   $1,415

B-13

Table of Contents

IF ONLY NATIONS FLORIDA MUNICIPAL BOND FUND IS REORGANIZED:

Class A/Class A

                         
Pro Forma
Nations
Nations Florida
Florida Intermediate
Nations Intermediate Municipal
Florida Municipal Municipal Bond Fund
Bond Fund Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    4.75%       3.25%       3.25%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A 1     N/A 1     N/A 1
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.55% 2     0.55% 2     0.55% 3
• Distribution (12b-1) and/or shareholder servicing fees
    0.25%       0.25%       0.25%  
• Other expenses
    0.22%       0.12%       0.17%  
     
     
     
 
• Total annual Fund operating expenses
    1.02%       0.92%       0.97%  
• Fee waivers and/or reimbursements
    (0.17)%       (0.17)%       (0.22)%  
     
     
     
 
• Total net expenses
    0.85% 4     0.75% 4     0.75% 4
     
     
     
 

1 A 1.00% maximum deferred sales charge applies to investors who buy $1 million or more of Class A shares and sell them within twelve months of buying them.

2 The Fund pays an advisory fee of 0.41% and an administration fee of 0.14%. The Acquiring Fund pays an advisory fee of 0.40% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

3 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.40% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

4 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.50% (exclusive of distribution and service fees, interest and tax expense) until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-14

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Florida Intermediate Municipal Bond Fund
  $399   $592   $802   $1,404
Nations Florida Municipal Bond Fund
  $558   $768   $996   $1,649
Pro Forma Nations Florida Intermediate Municipal Bond Fund (acquiring)
  $399   $603   $823   $1,457

B-15

Table of Contents

IF BOTH COLUMBIA FLORIDA INTERMEDIATE MUNICIPAL BOND FUND AND NATIONS FLORIDA MUNICIPAL BOND FUND ARE REORGANIZED:

Class A/Class A/Class A

                                 
Pro Forma
Nations
Columbia Nations Florida
Florida Nations Florida Intermediate
Intermediate Florida Intermediate Municipal
Municipal Municipal Municipal Bond Fund
Bond Fund1 Bond Fund Bond Fund (acquiring)
Shareholder Fees
                                
(Fees paid directly from your investment)
                               
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    4.75%       4.75%       3.25%       3.25%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00% 2     N/A 3     N/A 3     N/A 3
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 4     N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                                
(Expenses that are deducted from the Fund’s assets)
                               
• Management fees
    0.55%5       0.55% 6     0.55% 6     0.55% 7
• Distribution (12b-1) and/or shareholder servicing fees
    0.25%       0.25%       0.25%       0.25%  
• Other expenses
    0.25%       0.22%       0.12%       0.15%  
     
     
     
     
 
• Total annual Fund operating expenses
    1.05%       1.02%       0.92%       0.95%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.17)%       (0.17)%       (0.20)%  
     
     
     
     
 
• Total net expenses
    1.05%       0.85% 8     0.75% 8     0.75% 8
     
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies only to certain Class A shares bought without an initial sales charge that are sold within 18 months of purchase.

3 A 1.00% maximum deferred sales charge applies to investors who buy $1 million or more of Class A shares and sell them within twelve months of buying them.

4 There is a $7.50 charge for wiring sales proceeds to your bank.

5 The Fund pays an advisory fee of 0.48% and an administration fee of 0.07%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

6 The Fund pays an advisory fee of 0.41% and an administration fee of 0.14%. The Acquiring Fund pays an advisory fee of 0.40% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

7 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.40% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

8 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.50% (exclusive of distribution and services fees, interest and tax expense) until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-16

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Florida Intermediate Municipal Bond Fund
  $399   $592   $802   $1,404
Columbia Florida Intermediate Municipal Bond Fund
  $577   $793   $1,027   $1,697
Nations Florida Municipal Bond Fund
  $558   $768   $996   $1,649
Pro Forma Nations Florida Intermediate Municipal Bond Fund (acquiring)
  $399   $599   $815   $1,436

B-17

Table of Contents

IF ONLY COLUMBIA FLORIDA INTERMEDIATE MUNICIPAL BOND FUND IS REORGANIZED:

Class B/Class B

                           
Pro Forma
Nations
Columbia Nations Florida
Florida Florida Intermediate
Intermediate Intermediate Municipal
Municipal Municipal Bond Fund
Bond Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00% 2     3.00% 2     3.00% 2
• Redemption fee (%)
                       
  (as a percentage of the lesser of purchase price or redemption)     N/A 3     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.55% 4     0.55% 5     0.55% 6
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%  
• Other expenses
    0.25%       0.12%       0.13%  
     
     
     
 
• Total annual Fund operating expenses
    1.80%       1.67%       1.68%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.17)%       (0.18)%  
     
     
     
 
• Total net expenses
    1.80%       1.50% 7     1.50% 7
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge decreases over time.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The Fund pays an advisory fee of 0.48% and an administration fee of 0.07%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.40% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.40% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

7 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.50% (exclusive of distribution and service fees, interest and tax expense) until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-18

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Florida Intermediate Municipal Bond Fund
               
 
Did not sell your shares
   $153   $510   $891   $1,762
 
Sold your shares at end of period
   $453   $710   $891   $1,762
Columbia Florida Intermediate Municipal Bond Fund
               
 
Did not sell your shares
   $183   $566   $975   $1,919
 
Sold your shares at end of period
   $683   $866   $1,175   $1,919
Pro Forma Nations Florida Intermediate Municipal Bond Fund (acquiring)
               
 
Did not sell your shares
   $153   $512   $896   $1,772
 
Sold your shares at end of period
   $453   $712   $896   $1,772

B-19

Table of Contents

IF ONLY NATIONS FLORIDA MUNICIPAL BOND FUND IS REORGANIZED:

Class B/Class B

                           
Pro Forma
Nations
Nations Florida
Nations Florida Intermediate
Florida Intermediate Municipal
Municipal Municipal Bond Fund
Bond Fund Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00% 1     3.00% 1     3.00% 1
• Redemption fee (%)
                       
  (as a percentage of the lesser of purchase price or redemption)     N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
• Management fees
    0.55% 2     0.55% 2     0.55% 3
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%  
• Other expenses
    0.22%       0.12%       0.17%  
     
     
     
 
• Total annual Fund operating expenses
    1.77%       1.67%       1.72%  
• Fee waivers and/or reimbursements
    (0.17)%       (0.17)%       (0.22)%  
     
     
     
 
• Total net expenses
    1.60% 4     1.50% 4     1.50% 4
     
     
     
 

1 This charge decreases over time.

2 The Fund pays an advisory fee of 0.41% and an administration fee of 0.14%. The Acquiring Fund pays an advisory fee of 0.40% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/ Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

3 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.40% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

4 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.50% (exclusive of distribution and service fees, interest and tax expense) until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-20

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Florida Intermediate Municipal Bond Fund
               
 
Did not sell your shares
   $153   $510   $891   $1,762
 
Sold your shares at end of period
   $453   $710   $891   $1,762
Nations Florida Municipal Bond Fund
               
 
Did not sell your shares
   $163   $541   $943   $1,872
 
Sold your shares at end of period
   $663   $841   $1,143   $1,872
Pro Forma Nations Florida Intermediate Municipal Bond Fund (acquiring)
               
 
Did not sell your shares
   $153   $520   $913   $1,813
 
Sold your shares at end of period
   $453   $720   $913   $1,813

B-21

Table of Contents

IF BOTH COLUMBIA FLORIDA INTERMEDIATE MUNICIPAL BOND FUND AND NATIONS FLORIDA MUNICIPAL BOND FUND ARE REORGANIZED:

Class B/Class B/Class B

                                 
Pro Forma
Nations
Columbia Nations Florida
Florida Nations Florida Intermediate
Intermediate Florida Intermediate Municipal
Municipal Municipal Municipal Bond Fund
Bond Fund1 Bond Fund Bond Fund (acquiring)
Shareholder Fees
                                
(Fees paid directly from your investment)
                               
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00% 2     5.00% 2     3.00% 2     3.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                                
(Expenses that are deducted from the Fund’s assets)
• Management fees
    0.55% 4     0.55% 5     0.55% 5     0.55% 6
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%       1.00%  
• Other expenses
    0.25%       0.22%       0.12%       0.15%  
     
     
     
     
 
• Total annual Fund operating expenses
    1.80%       1.77%       1.67%       1.70%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.17)%       (0.17)%       (0.20)%  
     
     
     
     
 
• Total net expenses
    1.80%       1.60% 7     1.50% 7     1.50% 7
     
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge decreases over time.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The Fund pays an advisory fee of 0.48% and an administration fee of 0.07%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Fund pays an advisory fee of 0.41% and an administration fee of 0.14%. The Acquiring Fund pays an advisory fee of 0.40% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.40% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

7 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.50% (exclusive of distribution and service fees, interest and tax expense) until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-22

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Florida Intermediate Municipal Bond Fund
               
 
Did not sell your shares
   $153   $510   $891   $1,762
 
Sold your shares at end of period
   $453   $710   $891   $1,762
Columbia Florida Intermediate Municipal Bond Fund
               
 
Did not sell your shares
   $183   $566   $975   $1,919
 
Sold your shares at end of period
   $683   $866   $1,175   $1,919
Nations Florida Municipal Bond Fund
               
 
Did not sell your shares
   $163   $541   $943   $1,872
 
Sold your shares at end of period
   $663   $841   $1,143   $1,872
Pro Forma Nations Florida Intermediate Municipal Bond Fund (acquiring)
               
 
Did not sell your shares
   $153   $516   $904   $1,793
 
Sold your shares at end of period
   $453   $716   $904   $1,793

B-23

Table of Contents

IF ONLY COLUMBIA FLORIDA INTERMEDIATE MUNICIPAL BOND FUND IS REORGANIZED:

Class C/Class C

                         
Pro Forma
Nations
Columbia Nations Florida
Florida Florida Intermediate
Intermediate Intermediate Municipal
Municipal Municipal Bond Fund
Bond Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00% 2     1.00% 2     1.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.55% 4     0.55% 5     0.55% 6
• Distribution (12b-1) and/or shareholder servicing fees
    1.00% 7     1.00%       1.00%  
• Other expenses
    0.25%       0.12%       0.13%  
     
     
     
 
• Total annual Fund operating expenses
    1.80%       1.67%       1.68%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.17)%       (0.23)%  
     
     
     
 
• Total net expenses
    1.80%7       1.50% 8     1.45% 8
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies to investors who buy Class C shares and sell them within one year of buying them.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The Fund pays an advisory fee of 0.48% and an administration fee of 0.07%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.40% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.40% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

7 The Fund’s distributor has voluntarily agreed to waive a portion of the 12b-1 fee for Class C shares. If this waiver were reflected in the table, the 12b-1 fee for Class C shares would be 0.65% and total annual fund operating expenses for Class C shares would be 1.45%. This arrangement may be modified or terminated by the distributor at any time.

8 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-24

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Florida Intermediate Municipal Bond Fund
               
 
Did not sell your shares
   $153   $510   $891   $1,962
 
Sold your shares at end of period
   $253   $510   $891   $1,962
Columbia Florida Intermediate Municipal Bond Fund
               
 
Did not sell your shares
   $183   $566   $975   $2,116
 
Sold your shares at end of period
   $283   $566   $975   $2,116
Pro Forma Nations Florida Intermediate Municipal Bond Fund (acquiring)
               
 
Did not sell your shares
   $148   $507   $891   $1,968
 
Sold your shares at end of period
   $248   $507   $891   $1,968

B-25

Table of Contents

IF ONLY NATIONS FLORIDA MUNICIPAL BOND FUND IS REORGANIZED:

Class C/Class C

                         
Pro Forma
Nations
Nations Florida
Nations Florida Intermediate
Florida Intermediate Municipal
Municipal Municipal Bond Fund
Bond Fund Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00% 1     1.00% 1     1.00% 1
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.55% 2     0.55% 2     0.55% 3
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%  
• Other expenses
    0.22%       0.12%       0.17%  
     
     
     
 
• Total annual Fund operating expenses
    1.77%       1.67%       1.72%  
• Fee waivers and/or reimbursements
    (0.17)%       (0.17)%       (0.22)%  
     
     
     
 
• Total net expenses
    1.60% 4     1.50% 4     1.50% 4
     
     
     
 

1 This charge applies to investors who buy Class C shares and sell them within one year of buying them.

2 The Fund pays an advisory fee of 0.41% and an administration fee of 0.14%. The Acquiring Fund pays an advisory fee of 0.40% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

3 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.40% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

4 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.50% (exclusive of distribution and service fees, interest and tax expense) until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-26

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Florida Intermediate Municipal Bond Fund
               
 
Did not sell your shares
   $153   $510   $891   $1,962
 
Sold your shares at end of period
   $253   $510   $891   $1,962
Nations Florida Municipal Bond Fund
               
 
Did not sell your shares
   $163   $541   $943   $2,070
 
Sold your shares at end of period
   $263   $541   $943   $2,070
Pro Forma Nations Florida Intermediate Municipal Bond Fund
               
 
(acquiring)
               
 
Did not sell your shares
   $153   $520   $913   $2,012
 
Sold your shares at end of period
   $253   $520   $913   $2,012

B-27

Table of Contents

IF BOTH COLUMBIA FLORIDA INTERMEDIATE MUNICIPAL BOND FUND AND NATIONS FLORIDA MUNICIPAL BOND FUND ARE REORGANIZED:

Class C/Class C/Class C

                                 
Pro Forma
Nations
Columbia Nations Florida
Florida Nations Florida Intermediate
Intermediate Florida Intermediate Municipal
Municipal Municipal Municipal Bond Fund
Bond Fund1 Bond Fund Bond Fund (acquiring)
Shareholder Fees
                                
(Fees paid directly from your investment)
                               
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00% 2     1.00% 2     1.00% 2     1.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                                
(Expenses that are deducted from the Fund’s assets)
                               
• Management fees
    0.55% 4     0.55% 5     0.55% 5     0.55% 6
• Distribution (12b-1) and/or shareholder servicing fees
    1.00% 7     1.00%       1.00%       1.00%  
• Other expenses
    0.25%       0.22%       0.12%       0.15%  
     
     
     
     
 
• Total annual Fund operating expenses
    1.80%       1.77%       1.67%       1.70%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.17)%       (0.17)%       (0.25)%  
     
     
     
     
 
• Total net expenses
    1.80% 7     1.60% 8     1.50% 8     1.45% 8
     
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies to investors who buy Class C shares and sell them within one year of buying them.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The Fund pays an advisory fee of 0.48% and an administration fee of 0.07%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Fund pays an advisory fee of 0.41% and an administration fee of 0.14%. The Acquiring Fund pays an advisory fee of 0.40% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.40% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

7 The Fund’s distributor has voluntarily agreed to waive a portion of the 12b-1 fee for Class C shares. If this waiver were reflected in the table, the 12b-1 fee for Class C shares would be 0.65% and total annual fund operating expenses for Class C shares would be 1.45%. This arrangement may be modified or terminated by the distributor at any time.

8 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-28

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Florida Intermediate Municipal Bond Fund 
                
 
Did not sell your shares
   $153   $510   $891   $1,962
 
Sold your shares at end of period
   $253   $510   $891   $1,962
Columbia Florida Intermediate Municipal Bond Fund
               
 
Did not sell your shares
   $183   $566   $975   $2,116
 
Sold your shares at end of period
   $283   $566   $975   $2,116
Nations Florida Municipal Bond Fund
               
 
Did not sell your shares
   $163   $541   $943   $2,070
 
Sold your shares at end of period
   $263   $541   $943   $2,070
Pro Forma Nations Florida Intermediate Municipal Bond Fund (acquiring)
               
 
Did not sell your shares
   $148   $511   $900   $1,988
 
Sold your shares at end of period
   $248   $511   $900   $1,988

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Table of Contents

IF ONLY COLUMBIA FLORIDA INTERMEDIATE MUNICIPAL BOND FUND IS REORGANIZED:

Class Z/Class Z

                         
Pro Forma
Nations
Columbia Nations Florida
Florida Florida Intermediate
Intermediate Intermediate Municipal
Municipal Municipal Bond Fund
Bond Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.55% 3     0.55% 4     0.55% 5
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.00%       0.00%  
• Other expenses
    0.25%       0.12%       0.13%  
     
     
     
 
• Total annual Fund operating expenses
    0.80%       0.67%       0.68%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.17)%       (0.18)%  
     
     
     
 
• Total net expenses
    0.80%       0.50% 6     0.50% 6
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.48% and an administration fee of 0.07%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.40% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.40% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.05% (exclusive of distribution and service fees, interest and tax expense) until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-30

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Florida Intermediate Municipal Bond Fund
  $51   $197   $356   $818
Columbia Florida Intermediate Municipal Bond Fund
  $82   $255   $444   $990
Pro Forma Nations Florida Intermediate Municipal Bond Fund (acquiring)
  $51   $199   $361   $830

B-31

Table of Contents

IF ONLY NATIONS FLORIDA MUNICIPAL BOND FUND IS REORGANIZED:

Class Z/Class Z

                         
Pro Forma
Nations
Nations Florida
Nations Florida Intermediate
Florida Intermediate Municipal
Municipal Municipal Bond Fund
Bond Fund Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.55% 1     0.55% 1     0.55% 2
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.00%       0.00%  
• Other expenses
    0.22%       0.12%       0.17%  
     
     
     
 
• Total annual Fund operating expenses
    0.77%       0.67%       0.72%  
• Fee waivers and/or reimbursements
    (0.17)%       (0.17)%       (0.22)%  
     
     
     
 
• Total net expenses
    0.60% 3     0.50% 3     0.50% 3
     
     
     
 

1 The Fund pays an advisory fee of 0.41% and an administration fee of 0.14%. The Acquiring Fund pays an advisory fee of 0.40% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

2 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.40% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

3 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.50% (exclusive of distribution and service fees, interest and tax expense) until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-32

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Florida Intermediate Municipal Bond Fund
  $51   $197   $356   $818
Nations Florida Municipal Bond Fund
  $61   $229   $411   $938
Pro Forma Nations Florida Intermediate Municipal Bond Fund (acquiring)
  $51   $208   $379   $874

B-33

Table of Contents

IF BOTH COLUMBIA FLORIDA INTERMEDIATE MUNICIPAL BOND FUND AND NATIONS FLORIDA MUNICIPAL BOND FUND ARE REORGANIZED:

Class Z/Class Z/Class Z

                                 
Pro Forma
Nations
Columbia Nations Florida
Florida Nations Florida Intermediate
Intermediate Florida Intermediate Municipal
Municipal Municipal Municipal Bond Fund
Bond Fund1 Bond Fund Bond Fund (acquiring)
Shareholder Fees
                                
(Fees paid directly from your investment)
                               
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                                
(Expenses that are deducted from the Fund’s assets)
                               
• Management fees
    0.55% 3     0.55% 4     0.55% 4     0.55% 5
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.00%       0.00%       0.00%  
• Other expenses
    0.25%       0.22%       0.12%       0.15%  
     
     
     
     
 
• Total annual Fund operating expenses
    0.80%       0.77%       0.67%       0.70%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.17)%       (0.17)%       (0.20)%  
     
     
     
     
 
• Total net expenses
    0.80%       0.60% 6     0.50% 6     0.50% 6
     
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.48% and an administration fee of 0.07%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Fund pays an advisory fee of 0.41% and an administration fee of 0.14%. The Acquiring Fund pays an advisory fee of 0.40% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.40% and an administration fee of 0.15%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.50% (exclusive of distribution and service fees, interest and tax expense) until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

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Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Florida Intermediate Municipal Bond Fund
  $51   $197   $356   $818
Columbia Florida Intermediate Municipal Bond Fund
  $82   $255   $444   $990
Nations Florida Municipal Bond Fund
  $61   $229   $411   $938
Pro Forma Nations Florida Intermediate Municipal Bond Fund (acquiring)
  $51   $204   $370   $852

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Table of Contents

IF ONLY COLUMBIA GROWTH & INCOME FUND IS REORGANIZED:

Class A/Class A

                         
Pro Forma
Columbia Nations
Growth & Nations Value Fund
Income Fund1 Value Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    5.75%       5.75%       5.75%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00% 2     N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.67% 4     0.72% 5     0.64% 6
• Distribution (12b-1) and/or shareholder servicing fees
    0.25%       0.25%       0.25%  
• Other expenses
    0.31% 7     0.05%       0.10%  
     
     
     
 
• Total annual Fund operating expenses
    1.23%       1.02%       0.99%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.01)% 8     (0.01)%  
     
     
     
 
• Total net expenses
    1.23%       1.01% 9     0.98% 9
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies only to certain Class A shares bought without an initial sales charge that are sold within 18 months of purchase.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.55% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.47% and an administration fee of 0.17%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

7 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

8 The Administrator has contractually agreed to waive 0.04% of the first $500 million in net assets for 5 years.

9 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-36

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Value Fund
  $672   $878   $1,101   $1,746
Columbia Growth & Income Fund
  $693   $943   $1,212   $1,978
Pro Forma Nations Value Fund (acquiring)
  $669   $869   $1,086   $1,713

B-37

Table of Contents

IF ONLY COLUMBIA TAX-MANAGED VALUE FUND IS REORGANIZED:

Class A/Class A

                         
Pro Forma
Columbia Nations
Tax-Managed Nations Value Fund
Value Fund1 Value Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    5.75%       5.75%       5.75%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00% 2     N/A 3     N/A 3
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 4     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.77% 5     0.72% 6     0.71% 7
• Distribution (12b-1) and/or shareholder servicing fees
    0.30%       0.25%       0.25%  
• Other expenses
    0.37% 8     0.05%       0.08%  
     
     
     
 
• Total annual Fund operating expenses
    1.44%       1.02%       1.04%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.01)%       (0.01)%  
     
     
     
 
• Total net expenses
    1.44%       1.01% 9     1.03% 9
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies only to certain Class A shares bought without an initial sales charge that are sold within 18 months of purchase.

3 A 1.00% maximum deferred sales charge applies to investors who buy $1 million or more of Class A shares and sell them within twelve months of buying them.

4 There is a $7.50 charge for wiring sales proceeds to your bank.

5 The Fund pays an advisory fee of 0.72% and an administration fee of 0.05%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

6 The Acquiring Fund pays an advisory fee of 0.55% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

7 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.54% and an administrative fee of 0.17%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

8 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

9 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-38

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Value Fund
  $672   $878   $1,101   $1,746
Columbia Tax-Managed Value Fund
  $713   $1,004   $1,317   $2,200
Pro Forma Nations Value Fund (acquiring)
  $674   $884   $1,111   $1,768

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Table of Contents

IF BOTH COLUMBIA GROWTH & INCOME FUND AND COLUMBIA TAX-MANAGED VALUE FUND ARE REORGANIZED:

Class A/Class A/Class A

                                 
Columbia Pro Forma
Growth & Columbia Nations
Income Tax-Managed Nations Value Fund
Fund1 Value Fund1 Value Fund (acquiring)
Shareholder Fees
                                
(Fees paid directly from your investment)
                               
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    5.75%       5.75%       5.75%       5.75%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00% 2     N/A 2     N/A 3     N/A 3
• Redemption fee(%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 4     N/A 4     N/A       N/A  
 
Annual Fund Operating Expenses
                                
(Expenses that are deducted from the Fund’s assets)
                               
• Management fees
    0.67% 5     0.77% 6     0.72% 7     0.64%  
• Distribution (12b-1) and/or shareholder servicing fees
    0.25%       0.30%       0.25%       0.25%  
• Other expenses
    0.31% 8     0.37%       0.05%       0.10%  
     
     
     
     
 
• Total annual Fund operating expenses
    1.23%       1.44%       1.02%       0.99%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.00)%       (0.01)%       (0.01)%  
     
     
     
     
 
• Total net expenses
    1.23%       1.44%       1.01% 9     0.98% 9
     
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies only to certain Class A shares bought without an initial sales charge that are sold within 18 months of purchase.

3 A 1.00% maximum deferred sales charge applies to investors who buy $1 million or more of Class A shares and sell them within twelve months of buying them.

4 There is a $7.50 charge for wiring sales proceeds to your bank.

5 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

6 The Fund pays an advisory fee of 0.72% and an administration fee of 0.05%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

7 The Acquiring Fund pays an advisory fee of 0.55% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

8 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

9 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-40

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Value Fund
  $672   $878   $1,101   $1,746
Columbia Growth & Income Fund
  $693   $943   $1,212   $1,978
Columbia Tax-Managed Value Fund
  $713   $1,004   $1,317   $2,200
Pro Forma Nations Value Fund (acquiring)
  $669   $869   $1086   $1,713

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Table of Contents

IF ONLY COLUMBIA GROWTH & INCOME FUND IS REORGANIZED:

Class B/Class B

                         
Pro Forma
Columbia Nations
Growth & Nations Value Fund
Income Fund1 Value Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00%       5.00% 2     5.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.67% 4     0.72% 5     0.64%  
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%  
• Other expenses
    0.31% 6     0.05%       0.10%  
     
     
     
 
• Total annual Fund operating expenses
    1.98%       1.77%       1.74%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.01)%       (0.01)%  
     
     
     
 
• Total net expenses
    1.98%       1.76% 7     1.73% 7
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge decreases over time.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.55% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

7 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

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Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Value Fund
               
 
Did not sell your shares
   $179   $554   $954   $1,881
 
Sold your shares at end of period
   $679   $854   $1,154   $1,881
Columbia Growth & Income Fund
               
 
Did not sell your shares
   $201   $621   $1,068   $2,113
 
Sold your shares at end of period
   $701   $921   $1,268   $2,113
Pro Forma Nations Value Fund (acquiring)
               
 
Did not sell your shares
   $176   $545   $939   $1,849
 
Sold your shares at end of period
   $676   $845   $1,139   $1,849

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Table of Contents

IF ONLY COLUMBIA TAX-MANAGED VALUE FUND IS REORGANIZED:

Class B/Class B

                         
Pro Forma
Columbia Nations Nations
Tax-Managed Value Value Fund
Value Fund1 Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00%       5.00% 2     5.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.77% 4     0.72% 5     0.71%  
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%  
• Other expenses
    0.37%       0.05%       0.08%  
     
     
     
 
• Total annual Fund operating expenses
    2.14%       1.77%       1.79%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.01)%       (0.01)%  
     
     
     
 
• Total net expenses
    2.14%       1.76% 6     1.78% 6
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge decreases over time.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The Fund pays an advisory fee of 0.72% and an administration fee of 0.05%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.55% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-44

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Value Fund
               
 
Did not sell your shares
   $179   $554   $954   $1,881
 
Sold your shares at end of period
   $679   $854   $1,154   $1,881
Columbia Tax-Managed Value Fund
               
 
Did not sell your shares
   $217   $670   $1,149   $2,294
 
Sold your shares at end of period
   $717   $970   $1,349   $2,294
Pro Forma Nations Value Fund (acquiring)
               
 
Did not sell your shares
   $181   $560   $964   $1,903
 
Sold your shares at end of period
   $681   $860   $1,164   $1,903

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Table of Contents

IF BOTH COLUMBIA GROWTH & INCOME FUND AND COLUMBIA TAX-MANAGED VALUE FUND ARE REORGANIZED:

Class B/Class B/Class B

                                 
Pro Forma
Columbia Columbia Nations
Growth & Tax-Managed Nations Value Fund
Income Fund1 Value Fund1 Value Fund (acquiring)
Shareholder Fees
                                
(Fees paid directly from your investment)
                               
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00%       5.00%       5.00% 2     5.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                                
(Expenses that are deducted from the Fund’s assets)
                               
• Management fees
    0.67% 4     0.77% 5     0.72% 6     0.64%  
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%       1.00%  
• Other expenses
    0.31% 7     0.37%       0.50%       0.10%  
     
     
     
     
 
• Total annual Fund operating expenses
    1.98%       2.14%       1.77%       1.74%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.00)%       (0.01)%       (0.01)%  
     
     
     
     
 
• Total net expenses
    1.98%       2.14%       1.76% 8     1.73% 8
     
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge decreases over time.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Fund pays an advisory fee of 0.72% and an administration fee of 0.05%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

6 The Acquiring Fund pays an advisory fee of 0.55% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

7 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

8 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

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Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Value Fund
               
 
Did not sell your shares
   $179   $554   $954   $1,881
 
Sold your shares at end of period
   $679   $854   $1,154   $1,881
Columbia Growth & Income Fund
               
 
Did not sell your shares
   $201   $621   $1,068   $2,113
 
Sold your shares at end of period
   $701   $921   $1,268   $2,113
Columbia Tax-Managed Value Fund
               
 
Did not sell your shares
   $217   $670   $1,149   $2,294
 
Sold your shares at end of period
   $717   $970   $1,349   $2,294
Pro Forma Nations Value Fund (acquiring)
               
 
Did not sell your shares
   $176   $545   $939   $1,849
 
Sold your shares at end of period
   $676   $845   $1,139   $1,849

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Table of Contents

IF ONLY COLUMBIA GROWTH & INCOME FUND IS REORGANIZED:

Class C/Class C

                         
Pro Forma
Columbia Nations
Growth & Nations Value Fund
Income Fund1 Value Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00%       1.00% 2     1.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.67% 4     0.72% 5     0.64%  
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%  
• Other expenses
    0.31% 6     0.05%       0.10%  
     
     
     
 
• Total annual Fund operating expenses
    1.98%       1.77%       1.74%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.01)%       (0.01)%  
     
     
     
 
• Total net expenses
    1.98%       1.76% 7     1.73% 7
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies to investors who buy Class C shares and sell them within one year of buying them.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.55% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

7 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-48

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Value Fund
               
 
Did not sell your shares
   $179   $554   $954   $2,079
 
Sold your shares at end of period
   $279   $554   $954   $2,079
Columbia Growth & Income Fund
               
 
Did not sell your shares
   $201   $621   $1,068   $2,306
 
Sold your shares at end of period
   $301   $621   $1,068   $2,306
Pro Forma Nations Value Fund (acquiring)
               
 
Did not sell your shares
   $176   $545   $939   $2,047
 
Sold your shares at end of period
   $276   $545   $939   $2,047

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Table of Contents

IF ONLY COLUMBIA TAX-MANAGED VALUE FUND IS REORGANIZED:

Class C/Class C

                         
Pro Forma
Columbia Nations
Tax-Managed Nations Value Fund
Value Fund1 Value Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00%       1.00% 2     1.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.77% 4     0.72% 5     0.71%  
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%  
• Other expenses
    0.37%       0.05%       0.08%  
     
     
     
 
• Total annual Fund operating expenses
    2.14%       1.77%       1.79%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.01)%       (0.01)%  
     
     
     
 
• Total net expenses
    2.14%       1.76% 6     1.78% 6
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies to investors who buy Class C shares and sell them within one year of buying them.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The Fund pays an advisory fee of 0.72% and an administration fee of 0.05%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.55% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

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Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Value Fund
               
 
Did not sell your shares
   $179   $554   $954   $2,079
 
Sold your shares at end of period
   $279   $554   $954   $2,079
Columbia Tax-Managed Value Fund
               
 
Did not sell your shares
   $217   $670   $1,149   $2,472
 
Sold your shares at end of period
   $317   $670   $1,149   $2,472
Pro Forma Nations Value Fund (acquiring)
               
 
Did not sell your shares
   $181   $560   $964   $2,101
 
Sold your shares at end of period
   $281   $560   $964   $2,101

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Table of Contents

IF BOTH COLUMBIA GROWTH & INCOME FUND AND COLUMBIA TAX-MANAGED VALUE FUND ARE REORGANIZED:

Class C/Class C/Class C

                                 
Pro Forma
Columbia Columbia Nations
Growth & Tax-Managed Nations Value Fund
Income Fund1 Value Fund1 Value Fund (acquiring)
Shareholder Fees
                                
(Fees paid directly from your investment)
                               
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00%       1.00%       1.00% 2     1.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                                
(Expenses that are deducted from the Fund’s assets)
                               
• Management fees
    0.67% 4     0.77% 5     0.72% 6     0.64%  
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%       1.00%  
• Other expenses
    0.31% 7     0.37%       0.05%       0.10%  
     
     
     
     
 
• Total annual Fund operating expenses
    1.98%       2.14%       1.77%       1.74%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.00)%       (0.01)%       (0.01)%  
     
     
     
     
 
• Total net expenses
    1.98%       2.14%       1.76% 8     1.73% 8
     
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies to investors who buy Class C shares and sell them within one year of buying them.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Fund pays an advisory fee of 0.72% and an administration fee of 0.05%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

6 The Acquiring Fund pays an advisory fee of 0.55% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

7 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

8 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

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Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Value Fund
               
 
Did not sell your shares
   $179   $554   $954   $2,079
 
Sold your shares at end of period
   $279   $554   $954   $2,079
Columbia Growth & Income Fund
               
 
Did not sell your shares
   $201   $621   $1,068   $2,306
 
Sold your shares at end of period
   $301   $621   $1,068   $2,306
Columbia Tax-Managed Value Fund
               
 
Did not sell your shares
   $217   $670   $1,149   $2,472
 
Sold your shares at end of period
   $317   $670   $1,149   $2,472
Pro Forma Nations Value Fund (acquiring)
               
 
Did not sell your shares
   $176   $545   $939   $2,047
 
Sold your shares at end of period
   $276   $545   $939   $2,047

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IF ONLY COLUMBIA GROWTH & INCOME FUND IS REORGANIZED:

Class Z/Class Z

                         
Pro Forma
Columbia Nations
Growth & Nations Value Fund
Income Fund1 Value Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.67% 3     0.72% 4     0.64%  
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.00%       0.00%  
• Other expenses
    0.31% 5     0.05%       0.10%  
     
     
     
 
• Total annual Fund operating expenses
    0.98%       0.77%       0.74%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.01)%       (0.01)%  
     
     
     
 
• Total net expenses
    0.98%       0.76% 6     0.73% 6
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.55% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

5 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

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Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Value Fund
  $78   $243   $422   $949
Columbia Growth & Income Fund
  $100   $312   $542   $1,201
Pro Forma Nations Value Fund (acquiring)
  $75   $233   $406   $913

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IF ONLY COLUMBIA TAX-MANAGED VALUE FUND IS REORGANIZED:

Class Z/Class Z

                         
Pro Forma
Columbia Nations
Tax-Managed Nations Value Fund
Value Fund1 Value Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)                        
• Management fees
    0.77% 3     0.72% 4     0.71%  
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.00%       0.00%  
• Other expenses
    0.37%       0.05%       0.08%  
     
     
     
 
• Total annual Fund operating expenses
    1.14%       0.77%       0.79%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.01)%       (0.01)%  
     
     
     
 
• Total net expenses
    1.14%       0.76% 5     0.78% 5
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.72% and an administration fee of 0.05%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.55% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

5 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

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Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Value Fund
  $78   $243   $422   $949
Columbia Tax-Managed Value Fund
  $116   $362   $628   $1,386
Pro Forma Nations Value Fund (acquiring)
  $80   $249   $433   $973

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IF BOTH COLUMBIA GROWTH & INCOME FUND AND COLUMBIA TAX-MANAGED VALUE FUND ARE REORGANIZED:

Class Z/Class Z/Class Z

                                 
Pro Forma
Columbia Columbia Nations
Growth & Tax-Managed Nations Value Fund
Income Fund1 Value Fund1 Value Fund (acquiring)
Shareholder Fees
                                
(Fees paid directly from your investment)
                               
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                                
(Expenses that are deducted from the Fund’s assets)                                
• Management fees
    0.67% 3     0.77% 4     0.72% 5     0.64%  
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.00%       0.00%       0.00%  
• Other expenses
    0.31% 6     0.37%       0.05%       0.10%  
     
     
     
     
 
• Total annual Fund operating expenses
    0.98%       1.14%       0.77%       0.74%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.00)%       (0.01)%       (0.01)%  
     
     
     
     
 
• Total net expenses
    0.98%       1.14%       0.76% 7     0.73% 7
     
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Fund pays an advisory fee of 0.72% and an administration fee of 0.05%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.55% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

7 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

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Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Value Fund
  $78   $243   $422   $949
Columbia Growth & Income Fund
  $100   $312   $542   $1,201
Columbia Tax-Managed Value Fund
  $116   $362   $628   $1,386
Pro Forma Nations Value Fund (acquiring)
  $75   $233   $406   $913

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IF COLUMBIA INTERMEDIATE GOVERNMENT INCOME FUND IS REORGANIZED:

Class A/Class A

                         
Pro Forma
Columbia Nations
Intermediate Nations Intermediate
Government Intermediate Bond Fund
Income Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    4.75%       3.25%       3.25%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00% 2     N/A 3     N/A 3
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 4     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.53% 5     0.54% 6     0.50% 7
• Distribution (12b-1) and/or shareholder servicing fees
    0.25%       0.25%       0.25%  
• Other expenses
    0.14%       0.07%       0.08%  
     
     
     
 
• Total annual Fund operating expenses
    0.92%       0.86%       0.83%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.00)%       (0.01)% 8
     
     
     
 
• Total net expenses
    0.92%       0.86% 9     0.82% 9
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies only to certain Class A shares bought without an initial sales charge that are sold within 18 months of purchase.

3 A 1.00% maximum deferred sales charge applies to investors who buy $1 million or more of Class A shares and sell them within twelve months of buying them.

4 There is a $7.50 charge for wiring sales proceeds to your bank.

5 The Fund pays an advisory fee of 0.46% and an administrative fee of 0.07%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

6 The Acquiring Fund pays an advisory fee of 0.39% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

7 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.37% and an administrative fee of 0.13%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

8 Columbia has agreed to a contractual waiver of 0.01% of service fees for one year after the consummation of the Reorganization.

9 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.81% (exclusive of distribution and service fees, interest and tax expense), until July 31, 2006. The figures shown here are after waivers. There is no guarantee that these waivers or limitations will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

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Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Intermediate Bond Fund
  $410   $590   $786   $1,351
Columbia Intermediate Government Income
  $564   $754   $960   $1,553
Pro Forma Nations Intermediate Bond Fund (acquiring)
  $406   $580   $770   $1,316

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IF COLUMBIA INTERMEDIATE GOVERNMENT INCOME FUND IS REORGANIZED:

Class B/Class B

                         
Pro Forma
Columbia Nations
Intermediate Nations Intermediate
Government Intermediate Bond Fund
Income Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00% 2     3.00% 2     3.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
• Management fees
    0.53% 4     0.54% 5     0.50% 6
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%  
• Other expenses
    0.14%       0.07%       0.08%  
     
     
     
 
• Total annual Fund operating expenses
    1.67%       1.61% 7     1.58% 7
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge decreases over time.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The Fund pays an advisory fee of 0.46% and an administrative fee of 0.07%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.39% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.37% and an administrative fee of 0.13%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

7 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.81% (exclusive of distribution and service fees, interest and tax expense), until July 31, 2006. The figures shown here are after waivers. There is no guarantee that these waivers or limitations will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

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Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Intermediate Bond Fund
               
 
Did not sell your shares
   $164   $508   $876   $1,710
 
Sold your shares at end of period
   $464   $708   $876   $1,710
Columbia Intermediate Government Income
               
 
Did not sell your shares
   $170   $526   $907   $1,777
 
Sold your shares at end of period
   $670   $826   $1,107   $1,777
Pro Forma Nations Intermediate Bond Fund (acquiring)
               
 
Did not sell your shares
   $161   $499   $860   $1,677
 
Sold your shares at end of period
   $461   $699   $860   $1,677

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Table of Contents

IF COLUMBIA INTERMEDIATE GOVERNMENT INCOME FUND IS REORGANIZED:

Class C/Class C

                         
Pro Forma
Columbia Nations
Intermediate Nations Intermediate
Government Intermediate Bond Fund
Income Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00%       1.00%       1.00%  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.53% 3     0.54% 4     0.50% 5
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%6       1.00%       1.00%  
• Other expenses
    0.14%       0.07%       0.08%  
     
     
     
 
• Total annual Fund operating expenses
    1.67%       1.61%       1.58%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.00)%       (0.06)% 7
     
     
     
 
• Total net expenses
    1.67%       1.61% 8     1.52% 8
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.46% and an administrative fee of 0.07%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.39% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.37% and an administrative fee of 0.13%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

6 The Fund’s distributor has voluntarily agreed to waive a portion of the 12b-1 fees for Class C shares. If this were reflected in the table, the 12b-1 fees for Class C shares would be 0.85% and the total annual operating expenses would be 1.52%. This arrangement may be modified or terminated by the distributor at any time.

7 Columbia has agreed to a contractual waiver of 0.06% of distribution fees for one year after the consummation of the Reorganization.

8 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.81% (exclusive of distribution and service fees, interest and tax expense), until July 31, 2006. The figures shown here are after waivers. There is no guarantee that these waivers or limitations will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

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Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

                   
Fund 1 year 3 years 5 years 10 years
Nations Intermediate Bond Fund
               
 
Did not sell your shares
   $164   $508   $876   $1,911
 
Sold your shares at end of period
   $264   $508   $876   $1,911
Columbia Intermediate Government Income
               
 
Did not sell your shares
   $170   $526   $907   $1,976
 
Sold your shares at end of period
   $270   $526   $907   $1,976
Pro Forma Nations Intermediate Bond Fund (acquiring)
               
 
Did not sell your shares
   $155   $493   $855   $1,873
 
Sold your shares at end of period
   $255   $493   $855   $1,873

B-65

Table of Contents

IF COLUMBIA INTERMEDIATE GOVERNMENT INCOME FUND IS REORGANIZED:

Class Z/Class Z

                         
Pro Forma
Columbia Nations
Intermediate Nations Intermediate
Government Intermediate Bond Fund
Income Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.53% 3     0.54% 4     0.50% 5
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.00%       0.00%  
• Other expenses
    0.14%       0.07%       0.08%  
     
     
     
 
• Total annual Fund operating expenses
    0.67%       0.61% 6     0.58% 6
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.46% and an administrative fee of 0.07%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.39% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.37% and an administrative fee of 0.13%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.81% (exclusive of distribution and service fees, interest and tax expense), until July 31, 2006. The figures shown here are after waivers. There is no guarantee that these waivers or limitations will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-66

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

                 
Fund 1 year 3 years 5 years 10 years
Nations Intermediate Bond Fund
  $62   $195   $340   $762
Columbia Intermediate Government Income
  $68   $214   $373   $835
Pro Forma Nations Intermediate Bond Fund (acquiring)
  $59   $186   $324   $726

B-67

Table of Contents

IF COLUMBIA INTERMEDIATE GOVERNMENT INCOME FUND IS REORGANIZED:

Class G/Class Z

                         
Pro Forma
Columbia Nations
Intermediate Nations Intermediate
Government Intermediate Bond Fund
Income Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00%       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.53% 3     0.54% 4     0.50% 5
• Distribution (12b-1) and/or shareholder servicing fees
    0.80% 6     0.00%       0.00%  
• Other expenses
    0.14%       0.07%       0.08%  
     
     
     
 
• Total annual Fund operating expenses
    1.47%       0.61% 7     0.58% 7
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.46% and an administrative fee of 0.07%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.39% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.37% and an administrative fee of 0.13%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

6 The Fund may pay distribution and service (12b-1) fees up to a maximum of 1.15% of the Fund’s average daily net assets attributable to Class G shares (comprised of up to 0.65% for distribution services, up to 0.25% for shareholder liaison services and up to 0.25% for administrative support services), but will limit such fees to an aggregate fee of not more than 0.80% during the current fiscal year.

7 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 0.81% (exclusive of distribution and service fees, interest and tax expense), until July 31, 2006. The figures shown here are after waivers. There is no guarantee that these waivers or limitations will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-68

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Intermediate Bond Fund
  $62   $195   $340   $762
Columbia Intermediate Government Income
               
Did not sell your shares
  $150   $465   $803   $1,581
Sold your shares at end of period
  $650   $865   $1,103   $1,581
Pro Forma Nations Intermediate Bond Fund (acquiring)
  $59   $186   $324   $726

B-69

Table of Contents

IF COLUMBIA INTERMEDIATE GOVERNMENT INCOME FUND IS REORGANIZED:

Class T/Class A

                         
Pro Forma
Columbia Nations
Intermediate Nations Intermediate
Government Intermediate Bond Fund
Income Fund1 Bond Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    4.75%       3.25%       3.25%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A 2     N/A 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.53% 3     0.54% 5     0.50% 6
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.25%       0.25%  
• Other expenses
    0.29% 7     0.07%       0.08%  
     
     
     
 
• Total annual Fund operating expenses
    0.82%       0.86%       0.83%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.00)%       (0.01)% 8
     
     
     
 
• Total net expenses
    0.82%       0.86% 9     0.82% 9
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 A 1.00% maximum deferred sales charge applies to investors who buy $1 million or more of Class A shares and sell them within twelve months of buying them.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The Fund pays an advisory fee of 0.46% and an administrative fee of 0.07%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.39% and an administration fee of 0.15%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.37% and an administrative fee of 0.13%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

7 The Fund may pay shareholder services fees (which are included in other expenses) up to a maximum of 0.50% of such Fund’s average daily net assets attributable to Class T shares (comprised of up to 0.25% for shareholder liaison services and up to 0.25% for administrative support services), but will limit such fees to an aggregate fee of not more than 0.15% during the current fiscal year.

8 Columbia has agreed to a contractual waiver of 0.01% of service fees for one year after the consummation of the Reorganization.

9 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 1.06% until July 31, 2006. The figures shown here are after waivers. There is no guarantee that these waivers or limitations will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-70

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Intermediate Bond Fund
  $410   $590   $786   $1,351
Columbia Intermediate Government Income
  $555   $724   $908   $1,440
Pro Forma Nations Intermediate Bond Fund (acquiring)
  $406   $580   $770   $1,316

B-71

Table of Contents

IF COLUMBIA LARGE COMPANY INDEX FUND IS REORGANIZED:

Class A/Class A

                         
Pro Forma
Nations
Columbia Nations LargeCap
Large Company LargeCap Index Fund
Index Fund1 Index Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    5.75%       N/A       5.75%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.20% 3     0.20% 4     0.20% 5
• Distribution (12b-1) and/or shareholder servicing fees
    0.25%       0.25%       0.25%  
• Other expenses
    0.00%       0.05%       0.00%  
     
     
     
 
• Total annual Fund operating expenses
    0.45%       0.50%       0.45%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.11)%       (0.06)%  
     
     
     
 
• Total net expenses
    0.45%       0.39% 6     0.39% 6
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.10% and an administration fee of 0.10%. Management fees have been restated to reflect contractual changes to the administration fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.10% and an administration fee of 0.10%.

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.10% and an administration fee of 0.10%.

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-72

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations LargeCap Index Fund
  $40   $149   $269   $618
Columbia Large Company Index Fund
  $618   $711   $813   $1,109
Pro Forma Nations LargeCap Index Fund (acquiring)
  $613   $705   $807   $1,104

B-73

Table of Contents

IF COLUMBIA LARGE COMPANY INDEX FUND IS REORGANIZED:

Class B/Class B

                         
Pro Forma
Nations
Columbia Nations LargeCap
Large Company LargeCap Index Fund
Index Fund1 Index Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00%       N/A       5.00%  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.20% 3     0.20% 4     0.20% 5
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%  
• Other expenses
    0.00%       0.05%       0.00%  
     
     
     
 
• Total annual Fund operating expenses
    1.20%       1.25%       1.20%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.11)%       (0.06)%  
     
     
     
 
• Total net expenses
    1.20%       1.14% 6     1.14% 6
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.10% and an administration fee of 0.10%. Management fees have been restated to reflect contractual changes to the administration fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.10% and an administration fee of 0.10%.

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.10% and an administration fee of 0.10%.

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-74

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations LargeCap Index Fund
               
 
Did not sell your shares
   $116   $386   $676   $1,293
 
Sold your shares at end of period
   $616   $686   $876   $1,293
Columbia Large Company Index Fund
               
 
Did not sell your shares
   $122   $381   $660   $1,246
 
Sold your shares at end of period
   $622   $681   $860   $1,246
Pro Forma LargeCap Index Fund (acquiring)
               
 
Did not sell your shares
   $116   $375   $654   $1,240
 
Sold your shares at end of period
   $616   $675   $854   $1,240

B-75

Table of Contents

IF COLUMBIA LARGE COMPANY INDEX FUND IS REORGANIZED:

Class C/Class A

                         
Pro Forma
Nations
Columbia Nations LargeCap
Large Company LargeCap Index Fund
Index Fund1 Index Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       5.75%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00%       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.20% 3     0.20% 4     0.20% 5
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       0.25%       0.25%  
• Other expenses
    0.00%       0.05%       0.00%  
     
     
     
 
• Total annual Fund operating expenses
    1.20%       0.50%       0.45%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.11)%       (0.06)%  
     
     
     
 
• Total net expenses
    1.20%       0.39% 6     0.39% 6
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.10% and an administration fee of 0.10%. Management fees have been restated to reflect contractual changes to the administration fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.10% and an administration fee of 0.10%.

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.10% and an administration fee of 0.10%.

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-76

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations LargeCap Index Fund
  $40   $149   $269   $618
Columbia Large Company Index Fund
               
 
Did not sell your shares
   $122   $381   $660   $1,455
 
Sold your shares at end of period
   $222   $381   $660   $1,455
Pro Forma LargeCap Index Fund (acquiring)
  $613   $705   $807   $1,104

B-77

Table of Contents

IF COLUMBIA LARGE COMPANY INDEX FUND IS REORGANIZED:

Class Z/Class Z

                         
Pro Forma
Nations
Columbia Nations LargeCap
Large Company LargeCap Index Fund
Index Fund1 Index Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.20% 3     0.20% 4     0.20% 5
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.00%       0.00%  
• Other expenses
    0.08% 6     0.05%       0.00%  
     
     
     
 
• Total annual Fund operating expenses
    0.28%       0.25%       0.20%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.11)%       (0.06)%  
     
     
     
 
• Total net expenses
    0.28%       0.14% 7     0.14% 7
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.10% and an administration fee of 0.10%. Management fees have been restated to reflect contractual changes to the administration fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.10% and an administration fee of 0.10%.

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.10% and an administration fee of 0.10%.

6 The adviser and/or its affiliates have voluntarily agreed to reimburse 0.01% of other expenses for Class Z shares. As a result, other expenses would be 0.07% and total annual fund operating expenses would be 0.27%. This arrangement may be modified or terminated by the adviser and/or its affiliates at any time.

7 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-78

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations LargeCap Index Fund
  $14   $69   $130   $307
Columbia Large Company Index Fund
  $29   $90   $157   $356
Pro Forma Nations LargeCap Index Fund (acquiring)
  $14   $58   $107   $249

B-79

Table of Contents

IF COLUMBIA MID CAP VALUE FUND IS REORGANIZED:

Class A/Class A

                         
Pro Forma
Nations
Columbia Nations MidCap
Mid Cap MidCap Value Fund
Value Fund1 Value Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    5.75%       5.75%       5.75%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00%2       N/A3       N/A3  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A4       N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.67%5       0.82%6       0.74%7  
• Distribution (12b-1) and/or shareholder servicing fees
    0.24%8       0.25%       0.24%  
• Other expenses
    0.22%9       0.09%       0.09%  
     
     
     
 
• Total annual Fund operating expenses
    1.13%       1.16% 10     1.07% 10
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies only to certain Class A shares bought without an initial sales charge that are sold within 18 months of purchase.

3 A 1.00% maximum deferred sales charge applies to investors who buy $1 million or more of Class A shares and sell them within twelve months of buying them.

4 There is a $7.50 charge for wiring sales proceeds to your bank.

5 The fees have been restated to reflect contractual changes effective November 1, 2004.

6 The Acquiring Fund pays an advisory fee of 0.65% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

7 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.57% and an administration fee of 0.17%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

8 The annual service fee portion of the 12b-1 fee may equal up to 0.15% on net assets attributable to shares issued prior to April 1, 1989 and 0.25% on net assets attributable to shares issued thereafter. This arrangement results in a rate of service fee for all shares that is a blend between the 0.15% and the 0.25% rates.

9 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

10 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 1.50% until July 31, 2006. The figures shown here are after waivers. There is no guarantee that these waivers or limitations will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-80

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations MidCap Value Fund
  $686   $922   $1,177   $1,903
Columbia Mid Cap Value Fund
  $684   $913   $1,161   $1,871
Pro Forma Nations MidCap Value Fund (acquiring)
  $678   $896   $1,131   $1,806

B-81

Table of Contents

IF COLUMBIA MID CAP VALUE FUND IS REORGANIZED:

Class B/Class B

                         
Pro Forma
Nations
Columbia Nations MidCap
Mid Cap MidCap Value Fund
Value Fund1 Value Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00%       5.00% 2     5.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.67% 4     0.82% 5     0.74% 6
• Distribution (12b-1) and/or shareholder servicing fees
    0.99% 7     1.00%       0.99%  
• Other expenses
    0.22% 8     0.09%       0.09%  
     
     
     
 
• Total annual Fund operating expenses
    1.88%       1.91% 9     1.82% 9
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge decreases over time.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The fees have been restated to reflect contractual changes effective November 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.65% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.57% and an administration fee of 0.17%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

7 The annual service fee portion of the 12b-1 fee may equal up to 0.15% on net assets attributable to shares issued prior to April 1, 1989 and 0.25% on net assets attributable to shares issued thereafter. This arrangement results in a rate of service fee for all shares that is a blend between the 0.15% and the 0.25% rates.

8 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

9 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 2.25% until July 31, 2006. The figures shown here are after waivers. There is no guarantee that these waivers or limitations will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-82

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations MidCap Value Fund
               
 
Did not sell your shares
   $194   $600   $1,032   $2,038
 
Sold your shares at end of Period
   $694   $900   $1,232   $2,038
Columbia Mid Cap Value Fund
               
 
Did not sell your shares
   $191   $591   $1,016   $2,005
 
Sold your shares at end of Period
   $691   $891   $1,216   $2,005
Pro Forma Nations MidCap Value Fund (acquiring)
               
 
Did not sell your shares
   $185   $573   $985   $1,940
 
Sold your shares at end of Period
   $685   $873   $1,185   $1,940

B-83

Table of Contents

IF COLUMBIA MID CAP VALUE FUND IS REORGANIZED:

Class C/Class C

                         
Pro Forma
Nations
Columbia Nations MidCap
Mid Cap MidCap Value Fund
Value Fund1 Value Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00%       1.00% 2     1.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.67% 4     0.82% 5     0.74% 6
• Distribution (12b-1) and/or shareholder servicing fees
    0.99% 7     1.00%       0.99%  
• Other expenses
    0.22% 8     0.09%       0.09%  
     
     
     
 
• Total annual Fund operating expenses
    1.88%       1.91% 9     1.82% 9
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies to investors who buy Class C shares and sell them within one year of buying them.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The fees have been restated to reflect contractual changes effective November 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.65% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.57% and an administration fee of 0.17%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

7 The annual service fee portion of the 12b-1 fee may equal up to 0.15% on net assets attributable to shares issued prior to April 1, 1989 and 0.25% on net assets attributable to shares issued thereafter. This arrangement results in a rate of service fee for all shares that is a blend between the 0.15% and the 0.25% rates.

8 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

9 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 2.25% until July 31, 2006. The figures shown here are after waivers. There is no guarantee that these waivers or limitations will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-84

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations MidCap Value Fund
               
 
Did not sell your shares
   $194   $600   $1,032   $2,233
 
Sold your shares at end of Period
   $294   $600   $1,032   $2,233
Columbia Mid Cap Value Fund
               
 
Did not sell your shares
   $191   $591   $1,016   $2,201
 
Sold your shares at end of Period
   $291   $591   $1,016   $2,201
Pro Forma Nations MidCap Value Fund (acquiring)
               
 
Did not sell your shares
   $185   $573   $ 985   $2,137
 
Sold your shares at end of Period
   $285   $573   $ 985   $2,137

B-85

Table of Contents

IF COLUMBIA MID CAP VALUE FUND IS REORGANIZED:

Class Z/Class Z

                         
Pro Forma
Nations
Columbia Nations MidCap
Mid Cap MidCap Value Fund
Value Fund1 Value Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.67% 3     0.82% 4     0.57% 5
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.00%       0.00%  
• Other expenses
    0.22% 6     0.09%       0.26%  
     
     
     
 
• Total annual Fund operating expenses
    0.89%       0.91% 7     0.83% 7
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The fees have been restated to reflect contractual changes effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.65% and an administration fee of 0.17%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/ Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

5 The advisory fee has been restated to reflect contractual changes effective December 1, 2004. The administrative fee has been restated to reflect the administration fee upon the consummation of the Reorganization.

6 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

7 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to limit total annual operating expenses to 1.25% until July 31, 2006. The figures shown here are after waivers. There is no guarantee that these waivers or limitations will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

B-86

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations MidCap Value Fund
  $93   $290   $504   $1,120
Columbia Mid Cap Value Fund
  $91   $284   $493   $1,096
Pro Forma Nations MidCap Value Fund (acquiring)
  $85   $265   $460   $1,025

B-87

Table of Contents

IF ONLY COLUMBIA SHORT TERM BOND FUND, INC. IS REORGANIZED:

Class A/Class A

                         
Pro Forma
Nations
Columbia Nations Short-Term
Short Term Short-Term Income Fund
Bond Fund, Inc.1 Income Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    4.75%       1.00%       1.00%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00% 2     N/A 3     N/A 3
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 4     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.45% 5     0.44% 6     0.44% 7
• Distribution (12b-1) and/or shareholder servicing fees
    0.25% 8     0.25%       0.25%  
• Other expenses
    0.19% 9     0.06%       0.07%  
     
     
     
 
• Total annual Fund operating expenses
    0.89%       0.75%       0.76%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.02)%       (0.03)%  
     
     
     
 
• Total net expenses
    0.89%       0.73% 10     0.73% 10
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies only to certain Class A shares bought without an initial sales charge that are sold within 18 months of purchase.

3 A 1.00% maximum deferred sales charge applies to investors who buy $1 million or more of Class A shares and sell them within twelve months of buying them.

4 There is a $7.50 charge for wiring sales proceeds to your bank.

5 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

6 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

7 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

8 The Fund may pay distribution and service (12b-1) fees up to a maximum of 0.35% of the Fund’s daily net assets attributable to Class A shares (comprised of up to 0.25% for shareholder liaison services and up to 0.10% for distribution services), but will limit such fees to an aggregate fee of not more than 0.25%.

9 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

10 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-88

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                                 
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
    $174       $331       $502       $1,011  
Columbia Short Term Bond Fund, Inc. 
     $562       $745       $945       $1,519  
Pro Forma Nations Short-Term Income Fund (acquiring)
    $174       $333       $506       $1,022  

B-89

Table of Contents

IF ONLY NATIONS SHORT-INTERMEDIATE GOVERNMENT FUND IS REORGANIZED:

Class A/Class A

                         
Pro Forma
Nations
Nations Nations Short-Term
Short-Intermediate Short-Term Income Fund
Government Fund Income Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    1.00%       1.00%       1.00%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A 1     N/A 1     N/A 1
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.45% 2     0.44% 3     0.44% 4
• Distribution (12b-1) and/or shareholder servicing fees
    0.25%       0.25%       0.25%  
• Other expenses
    0.10%       0.06%       0.06%  
     
     
     
 
• Total annual Fund operating expenses
    0.80%       0.75%       0.75%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.02)%       (0.02)%  
     
     
     
 
• Total net expenses
    0.80%       0.73% 5     0.73% 5
     
     
     
 

1 A 1.00% maximum deferred sales charge applies to investors who buy $1 million or more of Class A shares and sell them within twelve months of buying them.

2 The Fund pays an advisory fee of 0.30% and an administration fee of 0.15% effective December 1, 2004.

3 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

4 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

5 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-90

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
  $174   $331   $502   $1,011
Nations Short-Intermediate Government Fund
  $181   $353   $540   $1,080
Pro Forma Nations Short-Term Income Fund (acquiring)
  $174   $331   $502   $1,011

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Table of Contents

IF BOTH COLUMBIA SHORT TERM BOND FUND, INC. AND NATIONS SHORT-INTERMEDIATE GOVERNMENT FUND ARE REORGANIZED:

Class A/Class A/Class A

                                 
Nations Pro Forma
Short- Nations
Columbia Intermediate Nations Short-Term
Short Term Government Short-Term Income Fund
Bond Fund, Inc.1 Fund Income Fund (acquiring)
Shareholder Fees
                                
(Fees paid directly from your investment)
                               
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    4.75%       1.00%       1.00%       1.00%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00% 2     N/A 3     N/A 3     N/A 3
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 4     N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                                
(Expenses that are deducted from the Fund’s assets)                                
• Management fees
    0.45% 5     0.45% 6     0.44% 7     0.44% 8
• Distribution (12b-1) and/or shareholder servicing fees
    0.25%       0.25%       0.25%       0.25%  
• Other expenses
    0.19% 9     0.10%       0.06%       0.07%  
     
     
     
     
 
• Total annual Fund operating expenses
    0.89%       0.80%       0.75%       0.76%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.00)%       (0.02)%       (0.03)%  
     
     
     
     
 
• Total net expenses
    0.89%       0.80%       0.73% 10     0.73% 10
     
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies only to certain Class A shares bought without an initial sales charge that are sold within 18 months of purchase.

3 A 1.00% maximum deferred sales charge applies to investors who buy $1 million or more of Class A shares and sell them within twelve months of buying them.

4 There is a $7.50 charge for wiring sales proceeds to your bank.

5 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

6 The Fund pays an advisory fee of 0.30% and an administration fee of 0.15% effective December 1, 2004.

7 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

8 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

9 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

10 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-92

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
  $174   $331   $502   $1,011
Columbia Short Term Bond Fund, Inc. 
   $562   $745   $945   $1,519
Nations Short-Intermediate Government Fund
  $181   $353   $540   $1,080
Pro Forma Nations Short-Term Income Fund (acquiring)
  $174   $333   $506   $1,022

B-93

Table of Contents

IF ONLY COLUMBIA SHORT TERM BOND FUND, INC. IS REORGANIZED:

Class B/Class B

                         
Pro Forma
Nations
Columbia Nations Short-Term
Short Term Short-Term Income Fund
Bond Fund, Inc.1 Income Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00%       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)                        
• Management fees
    0.45% 3     0.44% 4     0.44% 5
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%  
• Other expenses
    0.19% 6     0.06%       0.07%  
     
     
     
 
• Total annual Fund operating expenses
    1.64%       1.50%       1.51%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.02)%       (0.03)%  
     
     
     
 
• Total net expenses
    1.64%       1.48% 7     1.48% 7
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

6 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

7 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-94

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
               
 
Did not sell your shares
   $151   $468   $808   $1,578
 
Sold your shares at end of Period
   $151   $468   $808   $1,578
Columbia Short Term Bond Fund, Inc.
               
 
Did not sell your shares
   $167   $517   $892   $1,743
 
Sold your shares at end of Period
   $667   $817   $1,092   $1,743
Pro Forma Nations Short-Term Income Fund (acquiring)
               
 
Did not sell your shares
   $151   $470   $812   $1,588
 
Sold your shares at end of Period
   $151   $470   $812   $1,588

B-95

Table of Contents

IF ONLY NATIONS SHORT-INTERMEDIATE GOVERNMENT FUND IS REORGANIZED:

Class B/Class B

                         
Pro Forma
Nations
Nations Nations Short-Term
Short-Intermediate Short-Term Income Fund
Government Fund Income Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    3.00% 1     N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)                        
• Management fees
    0.45% 2     0.44% 3     0.44% 4
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%  
• Other expenses
    0.10%       0.06%       0.06%  
     
     
     
 
• Total annual Fund operating expenses
    1.55%       1.50%       1.50%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.02)%       (0.02)%  
     
     
     
 
• Total net expenses
    1.55%       1.48% 5     1.48% 5
     
     
     
 

1 This charge decreases over time.

2 The Fund pays an advisory fee of 0.30% and an administration fee of 0.15% effective December 1, 2004.

3 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

4 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

5 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-96

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
               
 
Did not sell your shares
   $151   $468   $808   $1,578
 
Sold your shares at end of Period
   $151   $468   $808   $1,578
Nations Short-Intermediate Government Fund
               
 
Did not sell your shares
   $158   $490   $845   $1,643
 
Sold your shares at end of Period
   $458   $690   $845   $1,643
Pro Forma Nations Short-Term Income Fund (acquiring)
               
 
Did not sell your shares
   $151   $468   $808   $1,578
 
Sold your shares at end of Period
   $151   $468   $808   $1,578

B-97

Table of Contents

IF BOTH COLUMBIA SHORT TERM BOND FUND, INC. AND NATIONS SHORT-INTERMEDIATE GOVERNMENT FUND ARE REORGANIZED:

Class B/Class B/Class B

                                 
Pro Forma
Nations
Columbia Nations Nations Short-Term
Short Term Short-Intermediate Short-Term Income Fund
Bond Fund, Inc.1 Government Fund Income Fund (acquiring)
Shareholder Fees
                                
(Fees paid directly from your investment)
                               
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00%       3.00% 2     N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                                
(Expenses that are deducted from the Fund’s assets)
                               
• Management fees
    0.45% 4     0.45% 5     0.44% 6     0.44% 7
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%       1.00%  
• Other expenses
    0.19% 8     0.10%       0.06%       0.07%  
     
     
     
     
 
• Total annual Fund operating expenses
    1.64%       1.55%       1.50%       1.51%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.00)%       (0.02)%       (0.03)%  
     
     
     
     
 
• Total net expenses
    1.64%       1.55%       1.48% 9     1.48% 9
     
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge decreases over time.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Fund pays an advisory fee of 0.30% and an administration fee of 0.15% effective December 1, 2004.

6 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

7 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

8 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

9 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-98

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
               
 
Did not sell your shares
   $151   $468   $ 808   $1,578
 
Sold your shares at end of Period
   $151   $468   $ 808   $1,578
Columbia Short Term Bond Fund, Inc.
               
 
Did not sell your shares
   $167   $517   $ 892   $1,743
 
Sold your shares at end of Period
   $667   $817   $1,092   $1,743
Nations Short-Intermediate Government Fund
               
 
Did not sell your shares
   $158   $490   $ 845   $1,643
 
Sold your shares at end of Period
   $458   $690   $ 845   $1,643
Pro Forma Nations Short-Term Income Fund (acquiring)
               
 
Did not sell your shares
   $151   $470   $ 812   $1,588
 
Sold your shares at end of Period
   $151   $470   $ 812   $1,588

B-99

Table of Contents

IF ONLY COLUMBIA SHORT TERM BOND FUND, INC. IS REORGANIZED:

Class C/Class C

                         
Pro Forma
Nations
Columbia Nations Short-Term
Short-Term Short-Term Income Fund
Bond Fund, Inc.1 Income Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00%       1.00% 2     1.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.45% 4     0.44% 5     0.44% 6
• Distribution (12b-1) and/or shareholder servicing fees
    1.00% 7     1.00%       1.00%  
• Other expenses
    0.19% 8     0.06%       0.07%  
     
     
     
 
• Total annual Fund operating expenses
    1.64%       1.50%       1.51%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.02)%       (0.47)%  
     
     
     
 
• Total net expenses
    1.64%       1.48% 9     1.04% 9
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies to investors who buy Class C shares and sell them within one year of buying them.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

7 The Fund’s distributor has voluntarily agreed to waive a portion of the 12b-1 fee for Class C shares. As a result, the 12b-1 fee for Class C shares would be 0.40%, and the total annual fund operating expense for Class C shares would be 1.04%. This arrangement may be modified at any time.

8 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

9 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-100

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
               
 
Did not sell your shares
   $151   $468   $808   $1,781
 
Sold your shares at end of Period
   $251   $468   $808   $1,781
Columbia Short Term Bond Fund, Inc.
               
 
Did not sell your shares
   $167   $520   $896   $1,954
 
Sold your shares at end of Period
   $267   $520   $896   $1,954
Pro Forma Nations Short-Term Income Fund (acquiring)
               
 
Did not sell your shares
   $106   $427   $771   $1,754
 
Sold your shares at end of Period
   $206   $427   $771   $1,754

B-101

Table of Contents

IF ONLY NATIONS SHORT-INTERMEDIATE GOVERNMENT FUND IS REORGANIZED:

Class C/Class C

                         
Pro Forma
Nations
Nations Nations Short-Term
Short-Intermediate Short-Term Income Fund
Government Fund Income Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00% 1     1.00% 1     1.00% 1
• Redemption fee(%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.45% 3     0.44% 4     0.44% 5
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       1.00%       1.00%  
• Other expenses
    0.10%       0.06%       0.06%  
     
     
     
 
• Total annual Fund operating expenses
    1.55%       1.50%       1.50%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.02)%       (0.02)%  
     
     
     
 
• Total net expenses
    1.55%       1.48% 6     1.48% 6
     
     
     
 

1 This charge applies to investors who buy Class C shares and sell them within one year of buying them.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.30% and an administration fee of 0.15% effective December 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-102

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
               
 
Did not sell your shares
   $151   $468   $808   $1,781
 
Sold your shares at end of Period
   $251   $468   $808   $1,781
Nations Short-Intermediate Government Fund
               
 
Did not sell your shares
   $158   $490   $845   $1,845
 
Sold your shares at end of Period
   $258   $490   $845   $1,845
Pro Forma Nations Short-Term Income Fund (acquiring)
               
 
Did not sell your shares
   $151   $468   $808   $1,781
 
Sold your shares at end of Period
   $251   $468   $808   $1,781

B-103

Table of Contents

IF BOTH COLUMBIA SHORT TERM BOND FUND, INC. AND NATIONS SHORT-INTERMEDIATE GOVERNMENT FUND ARE REORGANIZED:

Class C/Class C/Class C

                                 
Pro Forma
Nations
Columbia Nations Nations Short-Term
Short Term Short-Intermediate Short-Term Income Fund
Bond Fund, Inc.1 Government Fund Income Fund (acquiring)
Shareholder Fees
                                
(Fees paid directly from your investment)
                               
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00%       1.00% 2     1.00% 2     1.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                                
(Expenses that are deducted from the Fund’s assets)
                               
• Management fees
    0.45% 4     0.45% 5     0.44% 6     0.44% 7
• Distribution (12b-1) and/or shareholder servicing fees
    1.00% 8     1.00%       1.00%       1.00%  
• Other expenses
    0.19% 9     0.10%       0.06%       0.07%  
     
     
     
     
 
• Total annual Fund operating expenses
    1.64%       1.55%       1.50%       1.51%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.00)%       (0.02)%       (0.47)%  
     
     
     
     
 
• Total net expenses
    1.64%       1.55%       1.48% 10     1.04% 10
     
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies to investors who buy Class C shares and sell them within one year of buying them.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Fund pays an advisory fee of 0.30% and an administration fee of 0.15% effective December 1, 2004.

6 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

7 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

8 The Fund’s distributor has voluntarily agreed to waive a portion of the 12b-1 fee for Class C shares. As a result, the 12b-1 fee for Class C shares would be 0.40%, and the total annual fund operating expense for Class C shares would be 1.04%. This arrangement may be modified at any time.

9 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

10 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-104

Table of Contents

Example

      This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
               
 
Did not sell your shares
   $151   $468   $808   $1,781
 
Sold your shares at end of Period
   $251   $468   $808   $1,781
Columbia Short Term Bond Fund, Inc.
               
 
Did not sell your shares
   $167   $520   $896   $1,954
 
Sold your shares at end of Period
   $267   $520   $896   $1,954
Nations Short-Intermediate Government Fund
               
 
Did not sell your shares
   $158   $490   $845   $1,845
 
Sold your shares at end of Period
   $258   $490   $845   $1,845
Pro Forma Nations Short-Term Income Fund (acquiring)
               
 
Did not sell your shares
   $106   $427   $771   $1,754
 
Sold your shares at end of Period
   $206   $427   $771   $1,754

B-105

Table of Contents

IF ONLY COLUMBIA SHORT TERM BOND FUND, INC. IS REORGANIZED:

Class Z/Class Z

                         
Pro Forma
Nations
Columbia Nations Short-Term
Short Term Short-Term Income Fund
Bond Fund, Inc.1 Income Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.45% 3     0.44% 4     0.44% 5
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.00%       0.00%  
• Other expenses
    0.19% 6     0.06%       0.07%  
     
     
     
 
• Total annual Fund operating expenses
    0.64%       0.50%       0.51%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.02)%       (0.03)%  
     
     
     
 
• Total net expenses
    0.64%       0.48% 7     0.48% 7
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

6 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

7 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-106

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
  $49   $154   $269   $618
Columbia Short Term Bond Fund, Inc. 
   $65   $205   $357   $798
Pro Forma Nations Short-Term Income Fund (acquiring)
  $49   $156   $273   $629

B-107

Table of Contents

IF ONLY NATIONS SHORT-INTERMEDIATE GOVERNMENT FUND IS REORGANIZED:

Class Z/Class Z

                         
Pro Forma
Nations
Nations Nations Short-Term
Short-Intermediate Short-Term Income Fund
Government Fund Income Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.45% 1     0.44% 2     0.44% 3
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.00%       0.00%  
• Other expenses
    0.10%       0.06%       0.06%  
     
     
     
 
• Total annual Fund operating expenses
    0.55%       0.50%       0.50%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.02)%       (0.02)%  
     
     
     
 
• Total net expenses
    0.55%       0.48% 4     0.48% 4
     
     
     
 

1 The Fund pays an advisory fee of 0.30% and an administration fee of 0.15% effective December 1, 2004.

2 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

3 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

4 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-108

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
  $49   $154   $269   $618
Nations Short-Intermediate Government Fund
  $56   $176   $307   $689
Pro Forma Nations Short-Term Income Fund (acquiring)
  $49   $154   $269   $618

B-109

Table of Contents

IF BOTH COLUMBIA SHORT TERM BOND FUND, INC. AND NATIONS SHORT-INTERMEDIATE GOVERNMENT FUND ARE REORGANIZED:

Class Z/Class Z/Class Z

                                 
Pro Forma
Nations
Columbia Short Nations Nations Short-Term
Term Bond Short-Intermediate Short-Term Income Fund
Fund, Inc.1 Government Fund Income Fund (acquiring)
Shareholder Fees
                                
(Fees paid directly from your investment)
                               
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A       N/A  
 
Annual Fund Operating Expenses
                                
(Expenses that are deducted from the Fund’s assets)
                               
• Management fees
    0.45% 3     0.45% 4     0.44% 5     0.44% 6
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.00%       0.00%       0.00%  
• Other expenses
    0.19% 7     0.10%       0.06%       0.07%  
     
     
     
     
 
• Total annual Fund operating expenses
    0.64%       0.55%       0.50%       0.51%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.00)%       (0.02)%       (0.03)%  
     
     
     
     
 
• Total net expenses
    0.64%       0.55%       0.48% 8     0.48% 8
     
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Fund pays an advisory fee of 0.30% and an administration fee of 0.15% effective December 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

7 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

8 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-110

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
  $49   $154   $269   $618
Columbia Short Term Bond Fund, Inc. 
   $65   $205   $357   $798
Nations Short-Intermediate Government Fund
  $56   $176   $307   $689
Pro Forma Nations Short-Term Income Fund (acquiring)
  $49   $156   $273   $629

B-111

Table of Contents

IF COLUMBIA SHORT TERM BOND FUND, INC. IS REORGANIZED:

Class D/Class C

                         
Pro Forma
Nations
Columbia Nations Short-Term
Short Term Bond Short-Term Income Fund
Fund, Inc.1 Income Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00%       1.00% 2     1.00% 2
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 3     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.45% 4     0.44% 5     0.44% 6
• Distribution (12b-1) and/or shareholder servicing fees
    1.00% 7     1.00%       1.00%  
• Other expenses
    0.19% 8     0.06%       0.07%  
     
     
     
 
• Total annual Fund operating expenses
    1.64%       1.50%       1.51%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.02)%       (0.47)%  
     
     
     
 
• Total net expenses
    1.64%       1.48% 9     1.04% 9
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 This charge applies to investors who buy Class C shares and sell them within one year of buying them.

3 There is a $7.50 charge for wiring sales proceeds to your bank.

4 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

5 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

6 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

7 The Fund’s distributor has voluntarily agreed to waive a portion of the 12b-1 fee for Class D shares. As a result, the 12b-1 fee for Class D shares would be 0.40%, and the total annual fund operating expense for Class C shares would be 1.04%. This arrangement may be modified at any time.

8 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

9 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

B-112

Table of Contents

Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
               
 
Did not sell you shares
   $151   $468   $808   $1,781
 
Sold your shares at end of Period
   $251   $468   $808   $1,781
Columbia Short Term Bond Fund, Inc.
               
 
Did not sell your shares
   $167   $520   $896   $1,954
 
Sold your shares at end of Period
   $267   $520   $896   $1,954
Pro Forma Nations Short-Term Income Fund (acquiring)
               
 
Did not sell your shares
   $106   $427   $771   $1,754
 
Sold your shares at end of Period
   $206   $427   $771   $1,754

B-113

Table of Contents

IF COLUMBIA SHORT TERM BOND FUND, INC. IS REORGANIZED:

Class G/Class Z

                         
Pro Forma
Nations
Columbia Nations Short-Term
Short Term Short-Term Income Fund
Bond Fund, Inc.1 Income Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00%       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.45% 3     0.44% 4     0.44% 5
• Distribution (12b-1) and/or shareholder servicing fees
    0.80% 6     0.00%       0.00%  
• Other expenses
    0.19% 7     0.06%       0.07%  
     
     
     
 
• Total annual Fund operating expenses
    1.44%       0.50%       0.51%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.02)%       (0.03)%  
     
     
     
 
• Total net expenses
    1.44%       0.48% 8     0.48% 8
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

6 The Fund may pay distribution and service (12b-1) fees up to a maximum of 1.15% of the Fund’s average daily net assets attributable to Class G shares (comprised of up to 0.65% for distribution services, up to 0.25% for shareholder liaison services and up to 0.25% for administrative support services), but will limit such fees to an aggregate fee of not more than 0.80%.

7 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003.

8 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

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Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
  $49   $154   $269   $618
Columbia Short Term Bond Fund, Inc.
               
 
Did not sell your shares
   $147   $456   $787   $1,547
 
Sold your shares at end of Period
   $647   $856   $1,087   $1,547
Pro Forma Nations Short-Term Income Fund (acquiring)
  $49   $154   $269   $618

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IF ONLY COLUMBIA SHORT TERM BOND FUND, INC. IS REORGANIZED:

Class T/Class A

                         
Pro Forma
Nations
Columbia Nations Short-Term
Short Term Short-Term Income Fund
Bond Fund, Inc.1 Income Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    4.75%       1.00%       1.00%  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A 2     N/A 3     N/A 3
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 4     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.45% 5     0.44% 6     0.44% 7
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.25%       0.25%  
• Other expenses
    0.34% 8     0.06%       0.07%  
     
     
     
 
• Total annual Fund operating expenses
    0.79%       0.75%       0.76%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.02)%       (0.03)%  
     
     
     
 
• Total net expenses
    0.79%       0.73% 9     0.73% 9
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 A 1.00% charge may apply to certain Class T shares bought without an initial sales charge that are sold within 18 months of purchase, unless the shares were sold because of the death or post-purchase disability of the shareholder or withdrawn through a Systematic Withdrawal Plan in an amount that does not annually exceed 12% of the account’s value.

3 A 1.00% maximum deferred sales charge applies to investors who buy $1 million or more of Class A shares and sell them within twelve months of buying them.

4 There is a $7.50 charge for wiring sales proceeds to your bank.

5 The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

6 The Acquiring Fund pays an advisory fee of 0.30% and an administration fee of 0.14%. The Acquiring Fund’s investment adviser has implemented a breakpoint schedule for the Acquiring Fund’s investment advisory fees effective December 1, 2004. The investment advisory fees charged to the Acquiring Fund will decline as Acquiring Fund assets grow and will continue to be based on a percentage of the Acquiring Fund’s average daily net assets. The breakpoint schedule for the Acquiring Fund may be found in the Proxy/Prospectus under “More Information About the Reorganizations — Investment Advisory Services Fees.”

7 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.30% and an administration fee of 0.14%. The advisory fee has been restated to reflect contractual changes effective December 1, 2004.

8 Other expenses have been restated to reflect changes to the transfer agency fees effective November 1, 2003. The Fund may pay shareholder services fees (which are included in other expense) up to a maximum of 0.50% of the Fund’s daily net assets attributable to Class T shares (comprised of up to 0.25% for shareholder liaison services and up to 0.25% for administrative support services), but will not exceed the Fund’s net investment income attributable to Class T and will limit such fees to an aggregate fee of not more than 0.15%.

9 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006.

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Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations Short-Term Income Fund
  $174   $331   $502   $1,011
Columbia Short Term Bond Fund, Inc. 
   $552   $715   $893   $1,406
Pro Forma Nations Short-Term Income Fund (acquiring)
  $174   $333   $506   $1,022

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IF COLUMBIA SMALL COMPANY INDEX FUND IS REORGANIZED:

Class A/Class A

                         
Pro Forma
Nations
Columbia Nations SmallCap
Small Company SmallCap Index Fund
Index Fund1 Index Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    5.75%       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.20% 3     0.20% 4     0.20% 5
• Distribution (12b-1) and/or shareholder servicing fees
    0.25%       0.25%       0.25%  
• Other expenses
    0.01%       0.06%       0.00%  
     
     
     
 
• Total annual Fund operating expenses
    0.46%       0.51%       0.45%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.05)%       (0.00)%  
     
     
     
 
• Total net expenses
    0.46%       0.46% 6     0.45% 6
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.10% and an administration fee of 0.10%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.10% and an administration fee of 0.10% effective December 1, 2004.

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.10% and an administration fee of 0.10%.

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

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Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations SmallCap Index Fund
  $47   $159   $280   $636
Columbia Small Company Index Fund
  $619   $714   $818   $1,121
Pro Forma Nations SmallCap Index Fund (acquiring)
  $46   $144   $252   $567

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IF COLUMBIA SMALL COMPANY INDEX FUND IS REORGANIZED:

Class B/Class A

                         
Pro Forma
Nations
Columbia Nations SmallCap
Small Company SmallCap Index Fund
Index Fund1 Index Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    5.00%       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.20% 3     0.20% 4     0.20% 5
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       0.25%       0.25%  
• Other expenses
    0.01%       0.06%       0.00%  
     
     
     
 
• Total annual Fund operating expenses
    1.21%       0.51%       0.45%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.05)%       (0.00)%  
     
     
     
 
• Total net expenses
    1.21%       0.46% 6     0.45% 6
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.10% and an administration fee of 0.10%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.10% and an administration fee of 0.10% effective December 1, 2004.

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.10% and an administration fee of 0.10%.

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

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Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                                   
Fund 1 year 3 years 5 years 10 years
Nations SmallCap Index Fund
    $47       $159       $280       $636  
Columbia Small Company Index Fund
                               
 
Did not sell your shares
     $123       $384       $665       $1,257  
 
Sold your shares at end of Period
     $623       $684       $865       $1,257  
Pro Forma SmallCap Index Fund (acquiring)
    $46       $144       $252       $567  

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IF COLUMBIA SMALL COMPANY INDEX FUND IS REORGANIZED:

Class C/Class A

                         
Pro Forma
Nations
Columbia Nations SmallCap
Small Company SmallCap Index Fund
Index Fund1 Index Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    1.00%       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.20% 3     0.20% 4     0.20% 5
• Distribution (12b-1) and/or shareholder servicing fees
    1.00%       0.25%       0.25%  
• Other expenses
    0.01%       0.06%       0.00%  
     
     
     
 
• Total annual Fund operating expenses
    1.21%       0.51%       0.45%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.05)%       (0.00)%  
     
     
     
 
• Total net expenses
    1.21%       0.46% 6     0.45% 6
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.10% and an administration fee of 0.10%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.10% and an administration fee of 0.10% effective December 1, 2004.

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.10% and an administration fee of 0.10%.

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

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Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                   
Fund 1 year 3 years 5 years 10 years
Nations SmallCap Index Fund
  $47   $159   $280   $636
Columbia Small Company Index Fund
               
 
Did not sell your shares
   $123   $384   $665   $1,466
 
Sold your shares at end of Period
   $223   $384   $665   $1,466
Pro Forma SmallCap Index Fund (acquiring)
  $46   $144   $252   $567

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IF COLUMBIA SMALL COMPANY INDEX FUND IS REORGANIZED:

Class Z/Class Z

                         
Pro Forma
Nations
Columbia Nations SmallCap
Small Company SmallCap Index Fund
Index Fund1 Index Fund (acquiring)
Shareholder Fees
                        
(Fees paid directly from your investment)
                       
• Maximum sales charge (load) imposed on purchases, as a % of offering price
    N/A       N/A       N/A  
• Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value
    N/A       N/A       N/A  
• Redemption fee (%)
(as a percentage of the lesser of purchase price or redemption)
    N/A 2     N/A       N/A  
 
Annual Fund Operating Expenses
                        
(Expenses that are deducted from the Fund’s assets)
                       
• Management fees
    0.20% 3     0.20% 4     0.20% 5
• Distribution (12b-1) and/or shareholder servicing fees
    0.00%       0.00%       0.00%  
• Other expenses
    0.01%       0.06%       0.00%  
     
     
     
 
• Total annual Fund operating expenses
    0.21%       0.26%       0.20%  
• Fee waivers and/or reimbursements
    (0.00)%       (0.05)%       (0.00)%  
     
     
     
 
• Total net expenses
    0.21%       0.21% 6     0.20% 6
     
     
     
 

1 A $10 annual fee may be deducted from accounts of less than $1,000 and paid to the transfer agent.

2 There is a $7.50 charge for wiring sales proceeds to your bank.

3 The Fund pays an advisory fee of 0.10% and an administration fee of 0.10%. The advisory fee has been restated to reflect contractual changes to the advisory fee for the Fund effective November 1, 2004.

4 The Acquiring Fund pays an advisory fee of 0.10% and an administration fee of 0.10% effective December 1, 2004.

5 After the Reorganization, the Acquiring Fund will pay an advisory fee of 0.10% and an administration fee of 0.10%.

6 The Acquiring Fund’s investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2006. The figures shown here are after waivers and/or reimbursements. There is no guarantee that this limitation will continue after July 31, 2006. The investment adviser is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed for a three-year period following the date of such waiver or reimbursement under this arrangement if such recovery does not cause the Acquiring Fund’s expenses to exceed the expense limitation in effect at the time of the recovery.

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Example

This example is intended to help you compare the costs of investing in the Fund, before voluntary fee waivers and expense absorptions, if any, with the cost of investing in other mutual funds. The maximum initial sales charge, if any, is reflected in this example. The example assumes that you invest $10,000 in the Fund, reinvest all distributions for the time periods indicated, and then either redeem or do not redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that each Fund’s Total Annual Fund Operating Expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
                 
Fund 1 year 3 years 5 years 10 years
Nations SmallCap Index Fund
  $22   $79   $141   $326
Columbia Small Company Index Fund
  $22   $68   $118   $268
Pro Forma Nations SmallCap Index Fund (acquiring)
  $20   $64   $113   $255

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APPENDIX C

COMPARISON OF FUNDAMENTAL POLICIES AND LIMITATIONS

OF THE FUNDS AND THE ACQUIRING FUNDS

      The chart comparing fundamental policies and limitations of each Fund and its corresponding Acquiring Fund may describe differences that stem from the construction of the trusts and corporations; however, the day-to-day operations are not impacted by these differences.

     
Columbia Fixed Income Securities Fund, Inc. may not: The Acquiring Fund (Nations Bond Fund) may not:
1. Underwrite securities of other issuers, except the Fund may acquire portfolio securities in circumstances where, if the securities are later publicly offered or sold by the Fund, it might be deemed to be an underwriter for purposes of the Securities Act of 1933.
 
1. Same with inclusion of following provision:
  • or in connection with the purchase of securities directly from the issuer thereof in accordance with its investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.
 
2. Buy or sell real estate. However, the Fund may purchase or hold readily marketable securities issued by companies such as real estate investment trusts, which operate in real estate or interests therein, and participation interests in pools of real estate mortgage loans.
 
2. Same.
 
3. Buy or sell commodities or commodity futures contracts.
 
3. Same. Except that a Fund may to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, and purchase and sell options, forward contracts, futures contracts, and options on futures contracts. This limitation does not apply to foreign currency transactions including without limitation forward currency contracts.

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Table of Contents

     
Columbia Fixed Income Securities Fund, Inc. may not: The Acquiring Fund (Nations Bond Fund) may not:
 
4. Concentrate investments in any industry. However, it may (a) invest up to 25 percent of the value of its total assets in any one industry, (b) invest up to 100 percent of the value of its total assets in securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, and (c) invest for defensive purposes up to 80 percent of the value of its total assets in certificates of deposit (CDs) and bankers’ acceptances with maturities not greater than one year. CDs and bankers’ acceptances will be limited to domestic banks which have total assets in excess of one billion dollars and are subject to regulatory supervision by the U.S. Government or state governments. Commitments to purchase securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities on a “when-issued” basis may not exceed 20 percent of the total assets of the Fund. Emphasis on investments in securities of a particular industry will be shifted whenever the Adviser determines that such action is desirable for investment reasons. The Board of Directors will periodically review these decisions of the Adviser.
 
4. Purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (a) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions, and (b) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment copies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
5. Make loans, except that the Fund may (a) purchase debt obligations which are consistent with its investment objectives and policies; (b) enter into repurchase agreements; and (c) loan its portfolio securities, to the fullest extent permitted under the 1940 Act.
 
5. Make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
6. Borrow money except as a temporary measure for extraordinary or emergency purposes. Its borrowings may not exceed 5 percent of the value of the gross assets of the Fund taken at the lesser of cost or market value, nor may it pledge, mortgage, or hypothecate assets taken at market to an extent greater than 10 percent of the value of the gross assets taken at cost of the Fund. The Fund may not issue senior securities, bonds, or debentures.
 
6. Borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.

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Table of Contents

     
Columbia Fixed Income Securities Fund, Inc. may not: The Acquiring Fund (Nations Bond Fund) may not:
 
7. The Fund may not purchase the securities of any issuer if the purchase, at the time thereof, would cause more than 10 percent of the outstanding voting securities of that issuer to be held in the Fund or would cause more than 5 percent of the value of its total assets at market value to be invested in the securities of that issuer (other than obligations of the U.S. Government and its instrumentalities), with reference to 75 percent of the assets of the Fund. In addition, the Fund may not invest in the securities of any company if the purchase, at the time thereof, would cause more than 5 percent of the value of the Fund’s total assets to be invested in companies which, including predecessors and parents, have a record of less than three years continuous operation.
 
7. Same without reference to investment in those companies which have a record of less than three years continuous operation.
 
8. Buy any securities or other property on margin, or purchase or sell puts or calls, or combinations thereof.
 
8. No corresponding fundamental investment policy.
 
9. Invest in companies to exercise control or management.
 
9. No corresponding fundamental investment policy.
 
10. Purchase or retain securities issued by an issuer, any of whose officers or directors or security holders is an officer or director of the Fund or of its adviser if, or so long as, the officers and directors of the Fund and of its adviser together own beneficially more than 5 percent of any class of securities of the issuer.
 
10. No corresponding fundamental investment policy.
 
11. Engage in short sales of securities except to the extent that it owns other securities convertible into an equivalent amount of such securities. These short sales may only be made to protect a profit in or to attempt to minimize a loss with respect to convertible securities. In any event, no more than 10 percent of the value of the Fund’s net assets taken at market may, at any time, be held as collateral for such sales.
 
11. No corresponding fundamental investment policy.

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The Acquiring Fund (Nations Florida Intermediate Municipal
Columbia Florida Intermediate Municipal Bond Fund may not: Bond Fund) may not:
1. Not invest, except during temporary defensive periods, any less than 80% of its net assets (plus any borrowings for investment purposes) in Municipal Securities, issued by or on behalf of the State of Florida, its political subdivisions, authorities, agencies, instrumentalities and corporations, the interest on which, in the opinion of bond counsel to the issuer, is exempt from regular U.S. federal income taxes (including the U.S. federal alternative minimum tax), and that are exempt from Florida intangible personal property tax.
 
1. Invest any less than 80% of its assets in securities that pay interest exempt from U.S. federal income tax, other than the U.S. federal alternative minimum tax, and Florida state intangibles tax.
 
2. Underwrite securities of other issuers, except insofar as the Fund technically may be deemed to be an underwriter under the Securities Act of 1933 in connection with the purchase and sale of its portfolio securities.
 
2. Same with inclusion of following provision:
  • or in connection with the purchase of securities directly from the issuer thereof in accordance with its investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.
 
3. Purchase or sell real estate, except that the Fund may purchase securities of issuers which deal or invest in real estate and may purchase securities which are secured by real estate or interests in real estate.
 
3. Same.
 
4. Purchase or sell commodities or commodity contracts except that a Fund may, to the extent consistent with its investment goal and policies, purchase and sell financial futures contracts and related options and foreign currency forward contracts, futures contracts and related options.
 
4. Same.
 
5. Make loans except to the extent permitted by the 1940 Act.
 
5. Same.
 
6. Borrow money, issue senior securities or mortgage, pledge or hypothecate its assets except to the extent permitted by the 1940 Act.
 
6. Same.
 
7. Purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that (a) up to 25% of its total assets may be invested without regard to these limitations and (b) a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
7. Same.

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The Acquiring Fund (Nations Florida Intermediate Municipal
Columbia Florida Intermediate Municipal Bond Fund may not: Bond Fund) may not:
 
8. Purchase or sell real estate, except that the Fund may purchase securities of issuers which deal or invest in real estate and may purchase securities which are secured by real estate or interests in real estate.
 
8. Same.
 
9. Purchase or sell commodities or commodity contracts except that a Fund may, to the extent consistent with its investment goal and policies, purchase and sell financial futures contracts and related options and foreign currency forward contracts, futures contracts and related options.
 
9. Purchase or sell commodities, except that a Fund may to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, and purchase and sell options, forward contracts, futures contracts, and options on futures contracts. This limitation does not apply to foreign currency transactions including without limitation forward currency contracts.
 
10. Make loans except to the extent permitted by the 1940 Act.
 
10. Same.
 
11. Borrow money, issue senior securities or mortgage, pledge or hypothecate its assets except to the extent permitted by the 1940 Act.
 
11. Same.
 
12. Purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that (a) up to 25% of its total assets may be invested without regard to these limitations and (b) a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
12. Same with inclusion of following provision:
  • a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.

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The Acquiring Fund (Nations Florida Intermediate Municipal
Nations Florida Municipal Bond Fund may not: Bond Fund) may not:
1. Invest any less than 80% of its assets in securities that pay interest exempt from U.S. federal income tax, other than the U.S. federal alternative minimum tax, and Florida state intangibles tax.
 
1. Same.
   
 
2. Underwrite any issue of securities within the meaning of the 1933 Act except when it might technically be deemed to be an underwriter either (a) in connection with the disposition of a portfolio security, or (b) in connection with the purchase of securities directly from the issuer thereof in accordance with its investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.
 
2. Same.
   
 
3. Purchase or sell real estate, except a Fund may purchase securities of issuers which deal or invest in real estate and may purchase securities which are secured by real estate or interests in real estate.
 
3. Same.
   
 
4. Purchase or sell commodities, except that a Fund may to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, and purchase and sell options, forward contracts, futures contracts, and options on futures contracts. This limitation does not apply to foreign currency transactions including without limitation forward currency contracts.
 
4. Same.
   
 
5. Purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (a) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions, and (b) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment copies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
5. Same.
   
 
6. Make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
6. Same.
   

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The Acquiring Fund (Nations Florida Intermediate Municipal
Nations Florida Municipal Bond Fund may not: Bond Fund) may not:
 
7. Borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
7. Same.
   
 
8. Purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that (a) up to 25% of its total assets may be invested without regard to these limitations and (b) a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
8. Same.
   
 
9. Underwrite any issue of securities within the meaning of the 1933 Act except when it might technically be deemed to be an underwriter either (a) in connection with the disposition of a portfolio security, or (b) in connection with the purchase of securities directly from the issuer thereof in accordance with its investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.
 
9. Same.
   
 
10. Purchase or sell real estate, except a Fund may purchase securities of issuers which deal or invest in real estate and may purchase securities which are secured by real estate or interests in real estate.
 
10. Same.
   
 
11. Purchase or sell commodities, except that a Fund may to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, and purchase and sell options, forward contracts, futures contracts, and options on futures contracts. This limitation does not apply to foreign currency transactions including without limitation forward currency contracts.
 
11. Same.
   

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The Acquiring Fund (Nations Florida Intermediate Municipal
Nations Florida Municipal Bond Fund may not: Bond Fund) may not:
 
12. Purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (a) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions, and (b) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment copies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
12. Same.
   
 
13. Make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
13. Same.
   
 
14. Borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
14. Same.
   
 
15. Purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that (a) up to 25% of its total assets may be invested without regard to these limitations and (b) a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
15. Same.
   

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Columbia Growth & Income Fund and Columbia Mid Cap Value The Acquiring Funds (Nations Value Fund and Nations MidCap
Fund may: Value Fund) may not:
1. Underwrite securities issued by others only when disposing of portfolio securities;
 
1. Underwrite any issue of securities within the meaning of the 1933 Act except when it might technically be deemed to be an underwriter either (a) in connection with the disposition of a portfolio security, or (b) in connection with the purchase of securities directly from the issuer thereof in accordance with its investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.
 
2. Only own real estate acquired as the result of owning securities; the value of such real estate may not exceed 5% of total assets;
 
2. Purchase or sell real estate, except a Fund may purchase securities of issuers which deal or invest in real estate and may purchase securities which are secured by real estate or interests in real estate.
 
3. Purchase and sell futures contracts and related options so long as the total initial margin and premiums on the contracts do not exceed 5% of its total assets;
 
3. Purchase or sell commodities, except that a Fund may to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, and purchase and sell options, forward contracts, futures contracts, and options on futures contracts. This limitation does not apply to foreign currency transactions including without limitation forward currency contracts.
 
4. Not issue senior securities except as provided in paragraph 1 above and to the extent permitted by the Act;
 
4. Purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (a) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions, and (b) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment copies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
5. Make loans (a) through lending of securities, (b) through the purchase of debt instruments or similar evidences of indebtedness typically sold privately to financial institutions, (c) through an interfund lending program with other affiliated funds provided that no such loan may be made if, as a result, the aggregate of such loans would exceed 33 1/3% of the value of its total assets (taken at market value at the time of such loans) and (d) through repurchase agreements.
 
5. Make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.

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Columbia Growth & Income Fund and Columbia Mid Cap Value The Acquiring Funds (Nations Value Fund and Nations MidCap
Fund may: Value Fund) may not:
 
6. Borrow from banks, other affiliated funds and other entities to the extent permitted by applicable law, provided that the Fund’s borrowings shall not exceed 33 1/3% of the value of its total assets (including the amount borrowed) less liabilities (other than borrowings) or such other percentage permitted by law;
 
6. Borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
7. Not concentrate more than 25% of its total assets in any one industry or, with respect to 75% of total assets, purchase any security (other than obligations of the U.S. Government and cash items including receivables) if as a result more than 5% of its total assets would then be invested in securities of a single issuer or purchase voting securities of an issuer if, as a result of such purchase, the Fund would own more than 10% of the outstanding voting shares of such issuer.
 
7. Same with the inclusion of the following provision:
  • a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
     
Columbia Tax-Managed Value Fund may: The Acquiring Fund (Nations Value Fund) may not:
1. Underwrite securities issued by others only when disposing of portfolio securities;
 
1. Underwrite any issue of securities within the meaning of the 1933 Act except when it might technically be deemed to be an underwriter either (a) in connection with the disposition of a portfolio security, or (b) in connection with the purchase of securities directly from the issuer thereof in accordance with its investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.
 
2. Only own real estate acquired as the result of owning securities; the value of such real estate may not exceed 5% of total assets;
 
2. Purchase or sell real estate, except a Fund may purchase securities of issuers which deal or invest in real estate and may purchase securities which are secured by real estate or interests in real estate.
 
3. Not invest in commodities, except that the Fund may purchase and sell futures contracts and related options to the extent that total initial margin and premiums on the contracts do not exceed 5% of its total assets;
 
3. Purchase or sell commodities, except that a Fund may to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, and purchase and sell options, forward contracts, futures contracts, and options on futures contracts. This limitation does not apply to foreign currency transactions including without limitation forward currency contracts.

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Columbia Tax-Managed Value Fund may: The Acquiring Fund (Nations Value Fund) may not:
 
4. Not concentrate more than 25% of its total assets in any one industry.
 
4. Purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (a) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions, and (b) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment copies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
5. Make loans (a) through lending of securities, (b) through the purchase of debt instruments or similar evidences of indebtedness typically sold privately to financial institutions, (c) through an interfund lending program with other affiliated funds provided that no such loan may be made if, as a result, the aggregate of such loans would exceed 33 1/3% of the value of its total assets (taken at market value at the time of such loans) and (d) through repurchase agreements.
 
5. Make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
6. Borrow from banks, other affiliated funds and other entities to the extent permitted by applicable law, provided that the Fund’s borrowings shall not exceed 33 1/3% of the value of its total assets (including the amount borrowed) less liabilities (other than borrowings) or such other percentage permitted by law. In addition, the Fund may not issue senior securities except as provided in paragraph 1 above and to the extent permitted by the Act.
 
6. Borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
7. Purchase any security (other than obligations of the U.S. Government and cash items including receivables) if as a result more than 5% of its total assets would then be invested in securities of a single issuer or purchase voting securities of an issuer if, as a result of such purchase, the Fund would own more than 10% of the outstanding voting shares of such issuer.
 
7. Purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that (a) up to 25% of its total assets may be invested without regard to these limitations and (b) a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.

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Columbia Intermediate Government Income Fund may not: The Acquiring Fund (Nations Intermediate Bond Fund) may not:
1. Underwrite securities of other issuers, except insofar as the Fund technically may be deemed to be an underwriter under the Securities Act of 1933 in connection with the purchase and sale of its portfolio securities.
 
1. Same with inclusion of following provision:
  • or in connection with the purchase of securities directly from the issuer thereof in accordance with its investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.
 
2. Purchase or sell real estate, except that the Fund may purchase securities of issuers which deal or invest in real estate and may purchase securities which are secured by real estate or interests in real estate.
 
2. Same.
 
3. Purchase or sell commodities or commodity contracts except that the Fund may, to the extent consistent with its investment objective and policies, purchase and sell financial futures contracts and related options and foreign currency forward contracts, futures contracts and related options.
 
3. Same.
 
4. Make loans except to the extent permitted by the 1940 Act.
 
4. Same.
 
5. Borrow money, issue senior securities or mortgage, pledge or hypothecate its assets except to the extent permitted by the Investment Company Act of 1940, as amended (1940 Act).
 
5. Same.
 
6. Purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that (a) up to 25% of its total assets may be invested without regard to these limitations and (b) a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
6. Same with inclusion of following provision:
  • a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.

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Columbia Large Company Index Fund and Columbia Small The Acquiring Funds (Nations LargeCap Index Fund and Nations
Company Index Fund may not: SmallCap Index Fund) may not:
1. Underwrite any issue of securities except to the extent that the sale of portfolio securities in accordance with the Fund’s investment objective, policies and limitations may be deemed to be underwriting.
 
 1. Same with inclusion of following provision:
  • or in connection with the purchase of securities directly from the issuer thereof in accordance with its investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.
 
2. Purchase or sell real estate or real estate limited partnership interests, or invest in oil, gas or mineral leases, or mineral exploration or development programs, except that the Fund may invest in securities secured by real estate, mortgages or interests therein and may purchase securities issued by companies that invest or deal in any of the above.
 
 2. Same.
 
3. Invest in commodities, except that the Funds may invest in stock index futures.
 
 3. Purchase or sell commodities, except that a Fund may to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, and purchase and sell options, forward contracts, futures contracts, and options on futures contracts. This limitation does not apply to foreign currency transactions including without limitation forward currency contracts.
 
4. Make loans, except that the Fund may purchase or hold debt obligations, lend portfolio securities and enter into repurchase agreements, as described in the SAI and in the prospectuses.
 
 4. Make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
5. Borrow money or issue senior securities except that the Fund may borrow from banks for temporary or emergency purposes, and not for leveraging, and then in amounts not in excess of 33 1/3% of the value of the Fund’s total assets at the time of such borrowing; or mortgage, pledge or hypothecate any assets except in connection with any bank borrowing and in amounts not in excess of the lesser of the dollar amounts borrowed or 33 1/3% of the value of the Fund’s total assets at the time of such borrowing. Whenever borrowings are outstanding, a Fund will not make any additional investments (including roll-overs). For purposes of this restriction, collateral arrangements with respect to (a) the purchase and sale of options on stock indexes and (b) initial and variation margin for futures contracts will not be deemed to be issuances of senior securities or to be pledges of a Fund’s assets.
 
 5. Borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.

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Columbia Large Company Index Fund and Columbia Small The Acquiring Funds (Nations LargeCap Index Fund and Nations
Company Index Fund may not: SmallCap Index Fund) may not:
 
6. Purchase the securities of any issuer if as a result more than 5% of the value of the Fund’s total assets would be invested in the securities of such issuer, except that (a) this 5% limitation does not apply to U.S. Government securities and (b) up to 25% of the value of the Fund’s total assets may be invested without regard to this 5% limitation. The Fund may also not purchase more than 10% of the voting securities of any one issuer, more than 10% of the securities of any class of any one issuer or more than 10% of the outstanding debt securities of any one issuer; provided that this limitation shall not apply to investments in U.S. Government securities.
 
 6. Same with the inclusion of the following provision:
  • a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
7. Make short sales of securities or maintain a short position.
 
 7. No corresponding fundamental investment policy.
 
8. Purchase securities on margin, except that a Fund may obtain any short-term credits necessary for the clearance of purchases and sales of securities. For purposes of this restriction, the deposit or payment of initial or variation margin in connection with futures contracts or related options will not be deemed to be a purchase of securities on margin by the Fund.
 
 8. No corresponding fundamental investment policy.
 
9. Invest more than 5% of the value of the Fund’s net assets in securities which may be illiquid because of legal or contractual restrictions on resale or securities for which there are no readily available market quotations. For purposes of this limitation, repurchase agreements with maturities greater than seven days shall be considered illiquid securities.
 
 9. No corresponding fundamental investment policy.
 
10. Invest in companies for the purpose of exercising control or management.
 
10. No corresponding fundamental investment policy.
 
11. Purchase securities of other investment companies except as they may be acquired in connection with a merger, consolidation, acquisition, reorganization or offer of exchange and except as permitted under the 1940 Act. Purchases made in connection with this restriction may subject shareholders to duplicate fees and expenses.
 
11. No corresponding fundamental investment policy.

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Columbia Short Term Bond Fund, Inc. may not: The Acquiring Fund (Nations Short-Term Income Fund) may not:
1. Underwrite securities of other issuers, except the Fund may acquire portfolio securities in circumstances where, if the securities are later publicly offered or sold by the Fund, it might be deemed to be an underwriter for purposes of the Securities Act of 1933, as amended.
 
 1. Same with inclusion of following provision:
  • or in connection with the purchase of securities directly from the issuer thereof in accordance with its investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.
 
2. Buy or sell real estate. However, the Fund may purchase or hold securities issued by companies, such as real estate investment trusts, that deal in real estate or interests therein, and participation interests in pool of real estate mortgage loans.
 
 2. Same.
 
3. Buy or sell commodities or commodities contracts or oil, gas or mineral programs, except that the Fund may purchase, sell or enter into financial futures contracts and options on future contracts, foreign currency forward contracts, foreign currency options, or any interest rate, securities-related or foreign currency related hedging instrument, including swap agreements and other derivative instruments, subject to compliance with any applicable provisions of the federal securities or commodities laws.
 
 3. Purchase or sell commodities, except that a Fund may to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, and purchase and sell options, forward contracts, futures contracts, and options on futures contracts. This limitation does not apply to foreign currency transactions including without limitation forward currency contracts.
 
4. Concentrate investments in any industry. However, it may (a) invest up to 25 percent of the value of its total assets in any one industry, (b) invest up to 100 percent of the value of its total assets in securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, and (c) invest for temporary defensive purposes up to 80 percent of the value of its total assets in certificates of deposit (CD’s) and bankers’ acceptances with maturities not greater than one year. CD’s and bankers’ acceptances will be limited to domestic banks that have total assets in excess of $1 billion and are subject to regulatory supervision by the U.S. Government or state governments. Commitments to purchase securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities on a ‘when-issued‘ basis may not exceed 20 percent of the total assets of the Fund. Emphasis on investments in securities of a particular industry will be shifted whenever the Adviser determines that such action is desirable for investment reasons. The directors will periodically review these decisions of the Adviser.
 
 4. Purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (a) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions, and (b) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment copies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.

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Columbia Short Term Bond Fund, Inc. may not: The Acquiring Fund (Nations Short-Term Income Fund) may not:
 
5. Make loans, except that the Fund may (a) purchase debt obligations which are consistent with its investment objectives and policies; (b) enter into repurchase agreements; and (c) loan its portfolio securities, to the fullest extent permitted under the 1940 Act.
 
 5. Make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
6. Borrow money, issue senior securities, or pledge, mortgage or hypothecate its assets, except that the Fund may (i) borrow from banks, but only if immediately after each borrowing there is asset coverage of 300 percent, (ii) enter into transactions in options futures, options on futures, and other derivative instruments as described in the Prospectus and this Statement of Additional Information (the deposit of assets in escrow in connection with the writing of covered put and call options and the purchase of securities on a when-issued or delayed delivery basis, collateral arrangements with respect to initial or variation margin deposit for futures contracts and commitments entered into under swap agreements or other derivative instruments, will not be deemed to be pledges of the Fund’s assets), (iii) enter into reverse repurchase agreements, dollar roll transactions or economically similar transactions to the extent its commitment under such transaction is covered by the segregation of assets, and (iv) borrow money as a temporary measure for extraordinary or emergency purposes provided that such borrowings do not exceed 5 percent of the gross assets of the Fund valued at the lesser of cost or market value, and the Fund does not pledge, mortgage, or hypothecate assets valued at market to an extent greater than 10 percent of the gross assets valued at cost of the Fund.
 
 6. Borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
7. Purchase the securities of any issuer if the purchase, at the time thereof, would cause more than (a) 5 percent of the value of its total assets at market value to be invested in the securities of that issuer (other than obligations of the U.S. Government and its instrumentalities), with reference to 75 percent of the assets of the Fund, (b) 5 percent of the value of the Fund’s total assets to be invested in companies which, including predecessors and parents, have a record of less than three years of continuous operation, or (c) 10 percent of the outstanding voting securities of that issuer to be held in the Fund.
 
 7. Same, however, there is no limitation in regards to issuers who have a record of less than 3 years continuous operation.

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Columbia Short Term Bond Fund, Inc. may not: The Acquiring Fund (Nations Short-Term Income Fund) may not:
 
8. Buy any securities or other property on margin except for use of short-term credit necessary for clearance of purchases and sales of portfolio securities, but it may make margin deposits in connection with transactions in options, futures, and options on futures or purchase or sell puts or calls, or confirmations thereof.
 
 8. No corresponding fundamental investment policy.
 
9. Invest in companies to exercise control or management.
 
 9. No corresponding fundamental investment policy.
 
10. Purchase or retain securities of an issuer, any of whose officers or directors or security holders is an officer or director of the Fund or of its adviser if, or so long as, the officers and directors of the Fund and of its adviser together own beneficially more than 5 percent of any class of securities of the issuer.
 
10. No corresponding fundamental investment policy.
 
11. Engage in short sale of securities except to the extent that it owns other securities convertible into an equivalent amount of such securities. These short sales may only be made to protect a profit in or to attempt to minimize a loss with respect to convertible securities. In any event, no more than 10 percent of the Fund’s net assets valued at market may, at any time, be held as collateral for such sales.
 
11. No corresponding fundamental investment policy.
     
Nations Short-Intermediate Government Fund may not: The Acquiring Fund (Nations Short-Term Income Fund) may not:
1. Underwrite any issue of securities within the meaning of the 1933 Act except when it might technically be deemed to be an underwriter either (a) in connection with the disposition of a portfolio security, or (b) in connection with the purchase of securities directly from the issuer thereof in accordance with its investment objective. This restriction shall not limit the Fund’s ability to invest in securities issued by other registered investment companies.
 
1. Same.
 
2. Purchase or sell real estate, except a Fund may purchase securities of issuers which deal or invest in real estate and may purchase securities which are secured by real estate or interests in real estate.
 
2. Same.

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Nations Short-Intermediate Government Fund may not: The Acquiring Fund (Nations Short-Term Income Fund) may not:
 
3. Purchase or sell commodities, except that a Fund may to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, and purchase and sell options, forward contracts, futures contracts, and options on futures contracts. This limitation does not apply to foreign currency transactions including without limitation forward currency contracts.
 
3. Same.
 
4. Purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (a) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions, and (b) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment copies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
4. Same.
 
5. Make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
5. Same.
 
6. Borrow money or issue senior securities except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
6. Same.
 
7. Purchase securities (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) of any one issuer if, as a result, more than 5% of its total assets will be invested in the securities of such issuer or it would own more than 10% of the voting securities of such issuer, except that (a) up to 25% of its total assets may be invested without regard to these limitations and (b) a Fund’s assets may be invested in the securities of one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
 
7. Same.

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APPENDIX D

ANNUAL TOTAL RETURNS FOR PERIODS ENDING DECEMBER 31

Columbia Fixed Income Securities Fund, Inc. — Class A*

                                             
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
    18.91%   3.37%   9.56%   7.44%   -1.50%   11.27%   8.13%   7.56%   3.38%   3.87%    

For period shown in bar chart:

             
Best quarter: 2nd quarter 1995:
     6.36 %    
Worst quarter: 2nd quarter 2004:
     2.53 %    

*  Class A is a newer class of shares. Its performance information includes returns of the Fund’s Class Z shares (the oldest existing fund class) for period prior to its inception. These returns have not been restated to reflect any differences in expenses (such as Rule 12b-1 fees) between Class A shares and Class Z shares. If differences in expenses had been reflected, the returns shown for periods prior to the inception of the newer classes of shares would have been lower. Class A shares were initially offered on November 1, 2002, and Class Z shares were initially offered on February 25, 1983.

Nations Bond Fund — Class A (Acquiring)

                                             
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
    17.05%   1.92%   8.26%   6.94%   -1.45%   9.83%   7.60%   7.10%   4.64%   4.62%    

For period shown in bar chart:

             
Best quarter: 2nd quarter 1995:
     5.90 %    
Worst quarter: 2nd quarter 2004:
     - 2.51 %    

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Columbia Florida Intermediate Municipal Bond Fund — Class A*

                                             
1998 1999 2000 2001 2002 2003 2004
    6.37%   -2.78%   9.08%   4.74%   8.30%   2.92%   2.02%                

For period shown in bar chart:

             
Best quarter: 3rd quarter 2002:
     3.57 %    
Worst quarter: 2nd quarter 2004:
     - 2.68 %    

*  The calendar year total returns shown for Class A shares include the returns of Trust Shares (the predecessor to the Fund’s Class Z shares) of the Galaxy Florida Municipal Bond Fund (the Galaxy Florida Fund), the predecessor to the Fund, for periods prior to November 18, 2002, the date on which Class A shares were initially offered by the Fund, and returns of shares of the Boston 1784 Florida Tax-Exempt Income Fund (the 1784 Florida Fund), the predecessor to the Galaxy Florida Fund, for periods prior to June 26, 2000. Class A, B and C shares would have substantially similar returns because they are invested in the same portfolio of securities, although the returns would be lower to the extent that expenses for Class A, B and C shares (in particular, 12b-1 fees, which Class Z shares do not pay) exceed expenses paid by Class Z shares.

Nations Florida Municipal Bond Fund — Class A

                                             
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
    19.65%   2.96%   8.72%   5.63%   -2.78%   11.06%   4.55%   9.25%   3.82%   2.56%    

For period shown in bar chart:

             
Best quarter: 1st quarter 1995:
     8.16 %    
Worst quarter: 1st quarter 1996:
     - 2.50 %    

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Nations Florida Intermediate Municipal Bond Fund — Class A (Acquiring)

                                             
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
    14.08%   3.53%   6.99%   5.16%   -0.90%   8.01%   4.52%   6.51%   3.60%   2.17%    

For period shown in bar chart:

             
Best quarter: 1st quarter 1995:
     5.80 %    
Worst quarter: 2nd quarter 2004:
     - 2.31 %    

Columbia Growth & Income Fund — Class A

                                             
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
    29.49%   19.69%   35.18%   20.05%   11.40%   16.25%   -0.54%   - 21.75%   19.14%   13.45%    

For period shown in bar chart:

             
Best quarter: 4th quarter 1998:
     21.59 %    
Worst quarter: 3rd quarter 2002:
     - 20.04 %    

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Columbia Tax-Managed Value Fund — Class A

                                             
2000 2001 2002 2003 2004
    14.10%   -0.42%   - 23.22%   19.08%   12.73%                        

For period shown in bar chart:

             
Best quarter: 2nd quarter 2003:
     18.84 %    
Worst quarter: 3rd quarter 2002:
     - 20.51 %    

Nations Value Fund — Class A (Acquiring)

                                             
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
    35.78%   20.85%   26.30%   17.14%   0.99%   3.66%   -7.45%   - 19.32%   31.22%   13.37%    

For period shown in bar chart:

             
Best quarter: 4th quarter 1998:
     19.39 %    
Worst quarter: 3rd quarter 2002:
     - 20.50 %    

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Columbia Intermediate Government Income Fund — Class A*

                                             
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
    15.67%   1.75%   7.83%   8.32%   -1.95%   11.43%   7.44%   8.71%   1.76%   2.27%    

For period shown in bar chart:

             
Best quarter: 2nd quarter 1995:
     5.34 %    
Worst quarter: 2nd quarter 2004:
     - 2.39 %    

*  Class A is a newer class of shares. Its performance information includes returns of the Fund’s Class T shares (the oldest existing fund class) for period prior to its inception. Prior to November 25, 2002, the Fund’s Class T shares were designated as Retail A shares of the Galaxy Intermediate Government Income Fund, the predecessor to the Fund. These returns have not been restated to reflect any differences in expenses (such as Rule 12b-1 fees) between Class T shares and the newer class of shares. If differences in expenses had been reflected, the returns shown for periods prior to the inception of the newer class of shares would have been lower. Class A shares were initially offered on November 25, 2002, and T shares were initially offered on September 1, 1988.

Nations Intermediate Bond Fund — Class A (Acquiring)

                                             
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
    14.54%   3.14%   6.54%   7.32%   0.38%   7.96%   8.23%   8.35%   3.03%   2.27%    

For period shown in bar chart:

             
Best quarter: 2nd quarter 1995:
     4.50 %    
Worst quarter: 2nd quarter 2004:
     -2.73 %    

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Columbia Large Company Index Fund — Class A*

                                             
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
    37.09%   22.54%   32.81%   28.06%   20.49%   -9.08%   - 12.22%   - 22.05%   27.67%   10.16%    

For period shown in bar chart:

             
Best quarter: 4th quarter 1998:
     21.24 %    
Worst quarter: 3rd quarter 2002:
     - 17.03 %    

*  The calendar year total returns shown for Class A shares include the returns of the Fund’s Class Z shares for periods prior to December 9, 2002, the date on which Class A shares were initially offered by the Fund. Prior to December 9, 2002, the Fund’s Class Z shares were designated as Trust Shares of the Galaxy II Large Company Index Fund, the predecessor to the Fund. Class A shares would have had substantially similar annual returns because they would have been invested in the same portfolio of securities, although the returns would have been lower to the extent that expenses for Class A shares (in particular, 12b-1 fees, which Class Z shares do not pay) exceed expenses paid by Class Z shares.

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Nations LargeCap Index Fund — Class A (Acquiring)

                                             
1996 1997 1998 1999 2000 2001 2002 2003 2004
    22.22%   32.04%   28.06%   20.34%   -9.60%   - 12.45%   - 22.57%   27.98%   10.45%        

For period shown in bar chart:

             
Best quarter: 4th quarter 1998:
     21.12 %    
Worst quarter: 3rd quarter 2002:
     -17.41 %    

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Columbia Mid Cap Value Fund — Class A

                                             
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
    38.00%   20.47%   33.20%   14.36%   9.11%   15.47%   2.21%   -12.25%   27.51%   15.32%    

For period shown in bar chart:

             
Best quarter: 4th quarter 1998:
     19.74 %    
Worst quarter: 3rd quarter 2002:
     -16.12 %    

Nations MidCap Value Fund — Class A (Acquiring)

                                             
2002 2003 2004
    -13.24%   36.53%   20.64%                                

For period shown in bar chart:

             
Best quarter: 2nd quarter 2003:
     17.14 %    
Worst quarter: 3rd quarter 2002:
     -17.90 %    

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Columbia Short Term Bond Fund, Inc. — Class A*

                                             
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
    10.21%   3.85%   5.76%   6.43%   1.80%   7.26%   8.07%   5.51%   2.14%   1.38%    

For period shown in bar chart:

             
Best quarter: 3rd quarter 2001:
     3.73 %    
Worst quarter: 2nd quarter 2004:
     -1.12 %    

*  Class A is a newer class of shares. Its performance includes returns of the Fund’s Class Z shares (the oldest existing fund class) for periods prior to its inception. These returns have not been restated to reflect any differences in expenses (such as Rule 12b-1 fees) between Class A shares and Class Z shares. If differences in expenses had been reflected, the returns shown for periods prior to the inception of the newer classes of shares would have been lower. Class A shares were initially offered on November 1, 2002, and Class Z shares were initially offered on November 6, 1986.

Nations Short-Intermediate Government Fund — Class A

                                             
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
    12.22%   2.98%   7.03%   6.39%   0.23%   9.32%   7.35%   9.65%   1.22%   1.73%    

For period shown in bar chart:

             
Best quarter: 3rd quarter 2002:
     4.70 %    
Worst quarter: 2nd quarter 2004:
     -2.49 %    

Nations Short-Term Income Fund — Class A (Acquiring)

                                             
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
    11.08%   4.68%   5.82%   6.08%   3.00%   6.90%   8.45%   5.14%   1.86%   1.03%    

For period shown in bar chart:

             
Best quarter: 2nd quarter 1995:
     3.47 %    
Worst quarter: 2nd quarter 2004:
     -1.11 %    

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Columbia Small Company Index Fund — Class A*

                                             
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
    33.11%   19.68%   23.56%   -1.75%   11.66%   11.00%   6.21%   - 15.31%   37.73%   21.75%    

For period shown in bar chart:

             
Best quarter: 4th quarter 2001:
     20.50 %    
Worst quarter: 3rd quarter 1998:
     -20.89 %    

*  The calendar year total returns shown for Class A shares include the returns of the Fund’s Class Z shares, for periods prior to November 25, 2002, the date on which Class A shares were initially offered by the Fund. Prior to November 25, 2002, the Fund’s Class Z shares were designated as Trust Shares of the Galaxy II Small Company Index Fund, the predecessor to the Fund. Class A shares would have substantially similar annual returns because they would been invested in the same portfolio of securities, although the returns would have been lower to the extent that expenses for Class A shares (in particular, 12b-1 fees, which Class Z shares do not pay) exceed expenses paid by Class Z shares.

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Nations SmallCap Index Fund — Class A (Acquiring)

                                             
1997 1998 1999 2000 2001 2002 2003 2004
    27.50%   -1.89%   5.27%   9.20%   5.66%   - 15.37%   37.94%   22.08%            

Best and worst quarterly returns during this period

             
Best quarter: 4th quarter 2001:
     20.49 %    
Worst quarter: 3rd quarter 1998:
     - 20.89 %    

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APPENDIX E

AVERAGE ANNUAL TOTAL RETURNS

Columbia Fixed Income Securities Fund, Inc.

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    -1.04%       5.77%       6.55%  
 
Return After Taxes on Distributions
    -2.55%       3.77%       4.17%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    -0.50%       3.70%       4.12%  
Class B (%)
                       
 
Return Before Taxes
    -1.85%       6.14%       6.90%  
 
Return After Taxes on Distributions
    -3.16%       4.22%       4.57%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    -1.01%       4.08%       4.47%  
Class C (%)
                       
 
Return Before Taxes
    2.24%       6.49%       6.91%  
 
Return After Taxes on Distributions
    0.89%       4.58%       4.59%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    1.65%       4.39%       4.48%  
Class D (%)
                       
 
Return Before Taxes
    2.26%       6.32%       6.84%  
 
Return After Taxes on Distributions
    0.90%       4.40%       4.50%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    1.66%       4.23%       4.40%  
Class Z (%)
                       
 
Return Before Taxes
    4.08%       6.98%       7.16%  
 
Return After Taxes on Distributions
    2.42%       4.89%       4.74%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    2.84%       4.70%       4.64%  
Lehman Brothers Aggregate Bond Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    4.34%       7.71%       7.72%  
*  Class A, Class B, Class C and Class D are newer classes of shares. Their performance information includes returns of the Fund’s Class Z shares (the oldest existing fund class) for periods prior to their inception. These returns have not been restated to reflect any differences in expenses (such as Rule 12b-1 fees) between Class Z shares and the newer classes of shares. If the differences in expenses had been reflected, the returns shown for periods prior to the inception of the newer classes of shares would have been lower. Class C shares were initially offered on October 13, 2003, Class A, B and D shares were initially offered on November 1, 2002, and Class Z shares were initially offered on February 25, 1983.

Nations Bond Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    1.18%       6.05%       6.20%  
 
Return After Taxes on Distributions
    -0.45%       3.99%       3.93%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    0.79%       3.90%       3.89%  
Class B (%)
                       
 
Return Before Taxes
    0.75%       5.94%       5.87%  
Class C (%)
                       
 
Return Before Taxes
    2.85%       5.94%       5.90%  
Class Z (%)
                       
 
Return Before Taxes
    4.77%       7.00%       6.79%  
 
Return After Taxes on Distributions
    3.00%       4.83%       4.41%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    3.13%       4.66%       4.34%  
Lehman Brothers U.S. Aggregate Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    4.34%       7.71%       7.77%  
*  The inception dates of Class A shares, Class B shares and Class C shares are November 19, 1992, June 7, 1993 and November 16, 1992, respectively. The inception date of Class Z shares is October 30, 1992. The return for the index shown is from inception of Class A shares.

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Columbia Florida Intermediate Municipal Bond Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    -2.87%       4.35%       4.06%  
 
Return After Taxes on Distributions
    -2.87%       4.35%       4.02%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    -0.88%       4.25%       4.02%  
Class B (%)
                       
 
Return Before Taxes
    -3.69%       4.71%       4.52%  
 
Return After Taxes on Distributions
    -3.69%       4.71%       4.48%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    -1.63%       4.54%       4.40%  
Class C (%)
                       
 
Return Before Taxes
    0.63%       5.20%       4.62%  
 
Return After Taxes on Distributions
    0.63%       5.20%       5.58%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    1.30%       4.98%       4.40%  
Class Z (%)
                       
 
Return Before Taxes
    2.28%       5.49%       4.81%  
 
Return After Taxes on Distributions
    2.28%       5.49%       4.77%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    2.61%       5.27%       4.70%  
Lehman 3-15 Year Bond Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    3.76%       6.71%       5.93%  
*  Class A, Class B and Class C are newer classes of shares. Their performance information includes returns of the Fund’s Class Z shares for periods prior to their inception (adjusted to reflect the sales charges applicable to Class A, B and C shares, respectively) and include the returns for Trust Shares of the Galaxy Florida Fund for periods prior to November 18, 2002, the date on which Class Z Shares were initially offered by the Fund, and returns of the 1784 Florida Fund (whose shares were initially offered on June 30, 1997) for periods prior to June 26, 2000. These returns have not been adjusted to reflect any differences in expenses (such as 12b-1 fees) between any of the predecessor shares and the newer classes of shares. If differences in expenses had been reflected, the returns shown for periods prior to the inception of the newer classes of shares would have been lower, Class A, B and C shares were initially offered on November 18, 2002. The return from the index shown is from June 30, 1997.

Nations Florida Municipal Bond Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    -2.32%       5.16%       5.87%  
 
Return After Taxes on Distributions
    -2.49%       4.99%       5.79%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    0.05%       5.03%       5.73%  
Class B (%)
                       
 
Return Before Taxes
    -3.07%       5.08%       5.67%  
Class C (%)
                       
 
Return Before Taxes
    0.83%       5.38%       5.70%  
Class Z (%)
                       
 
Return Before Taxes
    2.82%       6.46%       6.63%  
 
Return After Taxes on Distributions
    2.64%       6.29%       6.54%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    3.56%       6.21%       6.44%  
Lehman Municipal Bond Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    4.48%       7.20%       7.06%  
*  The inception dates of Class A shares, Class B shares and Class C shares are December 10, 1993, October 22, 1993 and November 3, 1994, respectively. The inception date of Class Z shares is December 13, 1993. The return for the index shown is from December 31, 1993.

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Table of Contents

Nations Florida Intermediate Municipal Bond Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    -1.12%       4.24%       4.95%  
 
Return After Taxes on Distributions
    -1.16%       4.23%       4.95%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    0.46%       4.22%       4.89%  
Class B (%)
                       
 
Return Before Taxes
    -1.65%       4.13%       4.67%  
Class C (%)
                       
 
Return Before Taxes
    0.41%       4.16%       4.67%  
Class Z (%)
                       
 
Return Before Taxes
    2.32%       5.18%       5.54%  
 
Return After Taxes on Distributions
    2.28%       5.17%       5.53%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    2.83%       5.08%       5.45%  
Lehman Brothers Quality Intermediate Municipal Index Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    3.02%       6.18%       6.21%  
Lehman Brothers 7-Year Municipal Bond Index Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    3.15%       6.61%       6.48%  
*  The inception dates of Class A shares, Class B shares and Class C shares are December 14, 1992, June 7, 1993 and December 17, 1992, respectively. The inception date of Class Z shares is December 11, 1992. The returns for the indices shown are from December 31, 1992.

Columbia Growth & Income Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    6.93%       2.88%       12.44%  
 
Return After Taxes on Distributions
    6.74%       1.38%       10.39%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    4.76%       1.87%       10.04%  
Class B (%)
                       
 
Return Before Taxes
    7.55%       3.03%       12.26%  
 
Return After Taxes on Distributions
    7.46%       1.55%       10.30%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    5.03%       2.02%       9.97%  
Class C (%)
                       
 
Return Before Taxes
    11.53%       3.32%       12.26%  
 
Return After Taxes on Distributions
    11.43%       1.87%       10.19%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    7.62%       2.28%       9.85%  
Class Z (%)
                       
 
Return Before Taxes
    13.71%       4.34%       13.24%  
 
Return After Taxes on Distributions
    13.47%       2.76%       11.14%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    9.23%       3.08%       10.75%  
Russell Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    16.49%       5.27%       13.83%  
*  Class C is a newer class of shares. Its performance information includes returns of the Fund’s Class B shares for periods prior to its inception. These returns have not been restated to reflect any differences in expenses (such as Rule 12b-1 fees) between Class B shares and the newer class of shares. Class Z is also a newer class of shares. Its performance information includes returns of the Fund’s Class A shares (the oldest existing fund class) for periods prior to its inception. These returns have not been restated to reflect any differences in expenses (such as Rule 12b-1 fees) between Class A shares and the newer class of shares. The Class A share returns have been adjusted to take into account the fact that Class Z shares are should without sales charges. If differences in expenses had been reflected the returns shown for periods prior to the inception of the newer class of shares would have been higher, since Class Z shares are not subject to any Rule 12b-1 fees. Class A & Class B shares were initially offered on July 1, 1992, Class C shares were initially offered on July 1, 1994, and Class Z shares were initially offered on February 7, 2001.

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Table of Contents

Columbia Tax-Managed Value Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    6.25%       1.99%       -0.62%  
 
Return After Taxes on Distributions
    6.11%       1.94%       -0.67%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    4.25%       1.70%       -0.53%  
Class B (%)
                       
 
Return Before Taxes
    7.03%       2.13%       -0.43%  
 
Return After Taxes on Distributions
    6.98%       2.12%       -0.44%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    4.62%       1.82%       -0.37%  
Class C (%)
                       
 
Return Before Taxes
    11.03%       2.50%       -0.25%  
 
Return After Taxes on Distributions
    10.98%       2.49%       -0.26%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    7.22%       2.14%       -0.21%  
Class Z (%)
                       
 
Return Before Taxes
    13.11%       3.52%       0.72%  
 
Return After Taxes on Distributions
    12.91%       3.45%       0.66%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    8.77%       3.01%       0.61%  
Russell Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    16.49%       5.27%       4.41%  
*  Class A shares, Class B shares, Class C shares, and Class Z shares were initially offered June 1, 1999. Performance information is from June 1, 1999.

Nations Value Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    6.84%       1.65%       10.28%  
 
Return After Taxes on Distributions
    6.64%       0.04%       7.83%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    4.68%       0.81%       7.98%  
Class B (%)
                       
 
Return Before Taxes
    7.45%       1.79%       10.15%  
Class C (%)
                       
 
Return Before Taxes
    11.49%       2.08%       10.22%  
Class Z (%)
                       
 
Return Before Taxes
    13.62%       3.14%       11.21%  
 
Return After Taxes on Distributions
    13.37%       1.43%       8.65%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    9.15%       2.02%       8.76%  
Russell 1000 Value Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    16.49%       5.27%       13.83%  
*  The inception dates of Class A shares, Class B shares and Class C shares are December 6, 1989, June 7, 1993 and June 17, 1992, respectively. The inception date of Class Z shares is September 30, 1989. The return for the index shown is from inception of Class A shares.

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Table of Contents

Columbia Intermediate Government Income Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    -2.61%       5.23%       5.68%  
 
Return After Taxes on Distributions
    -3.73%       3.45%       3.60%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    -1.71%       3.37%       3.55%  
Class B (%)
                       
 
Return Before Taxes
    -3.44%       5.11%       5.71%  
 
Return After Taxes on Distributions
    -4.34%       3.60%       3.81%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    -2.24%       3.44%       3.70%  
Class C (%)
                       
 
Return Before Taxes
    0.67%       5.51%       5.74%  
 
Return After Taxes on Distributions
    -0.28%       3.99%       3.83%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    0.43%       3.78%       3.72%  
Class Z (%)
                       
 
Return Before Taxes
    2.53%       6.55%       6.50%  
 
Return After Taxes on Distributions
    1.27%       4.64%       4.29%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    1.64%       4.43%       4.18%  
Lehman Intermediate Government Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    2.33%       6.57%       6.75%  
Lehman Aggregate Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    4.34%       7.71%       7.72%  
*  Class A, Class B and Class C are newer classes of shares. Their performance information includes returns of Retail A shares (for Class A shares) and Retail B shares (for Class B and Class C shares) of Galaxy Intermediate Government Income Fund for periods prior to their inception. The returns shown for Retail B shares also include the returns of Retail A shares for periods prior to the inception of Retail B shares of Galaxy Intermediate Government Income Fund. These returns have not been restated to reflect any differences in expenses (such as Rule 12b-1 fees) between Retail A shares, Retail B shares and the newer classes of shares. If differences in expenses had been reflected, the returns shown for periods prior to the inception of the newer classes of shares would have been lower. The average total returns shown for the Class Z shares include returns of Trust shares of Galaxy Intermediate Government Income for periods prior to its inception. Class A, Class B, Class C, and Class Z shares were initially offered on November 25, 2002, Retail A shares were initially offered on September 1, 1988, and Retail B shares were initially offered on November 1, 1998.

Nations Intermediate Bond Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    -1.05%       5.23%       5.76%  
 
Return After Taxes on Distributions
    -2.23%       3.44%       3.61%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    -0.58%       3.39%       3.59%  
Class B (%)
                       
 
Return Before Taxes
    -1.45%       5.14%       5.07%  
Class C (%)
                       
 
Return Before Taxes
    0.54%       6.46%       5.58%  
Class Z (%)
                       
 
Return Before Taxes
    2.44%       6.16%       5.54%  
 
Return After Taxes on Distributions
    1.12%       4.24%       3.56%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    1.70%       4.11%       3.53%  
Lehman Brothers Intermediate Government/ Credit Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    3.04%       7.21%       6.24%  
*  The inception dates of Class A shares, Class B shares and Class C shares are January 24, 1994, October 20, 1999 and November 20, 1996, respectively. The inception date of Class Z shares is May 31, 1999. The return for the index shown is January 31, 1994.

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Table of Contents

Columbia Large Company Index Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    3.83%       -3.79%       11.00%  
 
Return After Taxes on Distributions
    3.03%       -4.81%       9.78%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    3.47%       -3.49%       9.26%  
Class B (%)
                       
 
Return Before Taxes
    4.28%       -3.28%       11.47%  
 
Return After Taxes on Distributions
    3.55%       -4.28%       10.27%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    3.67%       -3.06%       9.70%  
Class C (%)
                       
 
Return Before Taxes
    8.29%       -2.92%       11.49%  
 
Return After Taxes on Distributions
    7.57%       -3.92%       10.29%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    6.28%       -2.77%       9.72%  
Class Z (%)
                       
 
Return Before Taxes
    10.33%       -2.56%       11.70%  
 
Return After Taxes on Distributions
    9.46%       -3.61%       10.47%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    7.79%       -2.48%       9.91%  
S&P 500 Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    10.88%       -2.30%       12.70%  
*  Class A, Class B and Class C are newer classes of shares. Their performance information includes returns of the Fund’s Class Z shares for periods prior to December 9, 2002, the date on which Class A shares, Class B shares, Class C shares, and Class Z shares were initially offered by the Fund. Prior to December 9, 2002, the Fund’s Class Z shares were designated as Trust Shares of the Galaxy II Large Company Index Fund, the predecessor to the Fund. The returns have not been adjusted to reflect any differences in expenses (such as 12b-1 fees) between Class Z and the newer classes of shares. If differences in expenses had been reflected, the returns shown for periods prior to the inception of the newer classes of shares would have been lower. Trust shares were initially offered on October 1, 1990.

Nations LargeCap Index Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    10.45%       -2.83%       9.49%  
 
Return After Taxes on Distributions
    9.87%       -3.16%       8.73%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    6.79%       -2.57%       7.96%  
Class B (shell class) (%)
                       
 
Return Before Taxes
    —       —       —  
Class Z (%)
                       
 
Return Before Taxes
    10.73%       -2.58%       11.72%  
 
Return After Taxes on Distributions
    10.06%       -2.99%       10.85%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    6.98%       -2.41%       9.96%  
S&P 500 Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    10.88%       -2.30%       10.13%  
*  The inception date of Class A shares is October 10, 1995. The return for the index shown is from that date. The inception date for the Class Z shares is December 15, 1993.

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Table of Contents

Columbia Mid Cap Value Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    8.69%       7.49%       14.77%  
 
Return After Taxes on Distributions
    8.03%       6.43%       12.88%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    6.50%       5.96%       12.16%  
Class B (%)
                       
 
Return Before Taxes
    9.44%       7.66%       14.58%  
 
Return After Taxes on Distributions
    8.69%       6.52%       12.66%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    7.11%       6.08%       11.99%  
Class C (%)
                       
 
Return Before Taxes
    13.45%       7.97%       14.60%  
 
Return After Taxes on Distributions
    12.72%       6.87%       12.71%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    9.69%       6.37%       12.03%  
Class Z (%)
                       
 
Return Before Taxes
    15.58%       9.04%       15.61%  
 
Return After Taxes on Distributions
    14.85%       7.94%       13.70%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    11.07%       7.30%       12.93%  
Russell MidCap Value Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    23.71%       13.48%       15.72%  
*  Class C and Class Z are newer classes of shares. Their performance information includes returns of the Fund’s Class A shares (the oldest existing fund class) for periods prior to their inception. Class C returns have not been restated to reflect any differences in expenses (such as Rule 12b-1 fees) between Class A shares and Class C shares. If differences in expenses had been reflected, the returns shown for periods prior to the inception of the Class C of shares would have been lower. The Class A share returns have been adjusted to take into account the fact that Class Z shares are sold without sales charges. If differences in expenses had been reflected, the returns shown for the periods prior to the inception of the Class Z shares would have been higher, since Class Z shares are not subject to any Rule 12b-1 fees. Class A shares were initially offered on July 21, 1949, Class C shares were initially offered on August 1, 1997, and Class Z shares were initially offered on February 8, 2001.

Nations MidCap Value Fund

                   
10 Years or
Life of the
1 Year Fund*
Class A (%)
               
 
Return Before Taxes
    13.73%       12.11%  
 
Return After Taxes on Distributions
    11.81%       11.33%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    10.19%       10.14%  
Class B (%)
               
 
Return Before Taxes
    14.71%       12.66%  
Class C (%)
               
 
Return Before Taxes
    18.77%       13.43%  
Class Z (%)
               
 
Return Before Taxes
    20.89%       14.54%  
 
Return After Taxes on Distributions
    18.78%       13.68%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    14.93%       12.24%  
Russell MidCap Value Index (%)
               
 
(reflects no deductions for fees, expenses or taxes)
    23.71%       16.60%  
*  The inception date of Class A shares, Class B shares, Class C shares, and Class Z shares is November 20, 2001. The return for the index shown is from that date.

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Table of Contents

Columbia Short Term Bond Fund, Inc.

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    -3.41%       3.82%       4.69%  
 
Return After Taxes on Distributions
    -4.14%       2.34%       2.95%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    -2.22%       2.34%       2.91%  
Class B (%)
                       
 
Return Before Taxes
    -4.36%       4.15%       5.03%  
 
Return After Taxes on Distributions
    -4.86%       2.77%       3.34%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    -2.84%       2.68%       3.24%  
Class C (%)
                       
 
Return Before Taxes
    0.18%       4.63%       5.10%  
 
Return After Taxes on Distributions
    -0.52%       3.22%       3.39%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    0.11%       3.08%       3.29%  
Class Z (%)
                       
 
Return Before Taxes
    1.63%       4.97%       5.27%  
 
Return After Taxes on Distributions
    0.77%       3.43%       3.49%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    1.06%       3.30%       3.40%  
ML 1-3 Year Treasury Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    0.91%       4.93%       5.71%  
*  Class A, Class B and Class C are newer classes of shares. Their performance information includes returns of the Fund’s Class Z shares (the oldest existing fund class) for periods prior to their inception. These returns have not been restated to reflect any differences in expenses (such as Rule 12b-1 fees) between Class Z shares and the newer classes of shares. If differences in expenses had been reflected, the returns shown for periods prior to the inception of the newer classes of shares would have been lower. Class C shares were initially offered on October 13, 2003, Class A share and Class B shares were initially offered on November 1, 2002, and Class Z shares were initially offered on November 6, 1986.

Nations Short-Immediate Government Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    -1.53%       5.11%       5.39%  
 
Return After Taxes on Distributions
    -2.46%       3.43%       3.45%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    -0.94%       3.37%       3.41%  
Class B (%)
                       
 
Return Before Taxes
    -2.23%       4.99%       5.07%  
Class C (%)
                       
 
Return Before Taxes
    -0.01%       5.05%       5.13%  
Class Z (%)
                       
 
Return Before Taxes
    1.74%       6.04%       5.97%  
 
Return After Taxes on Distributions
    0.69%       4.25%       3.93%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    1.19%       4.11%       3.86%  
Lehman U.S. Government Intermediate Government Index (%) (reflects no deductions for fees, expenses or taxes)
    2.33%       6.57%       6.75%  
*  The inception dates of Class A shares, Class B shares and Class C shares are August 5, 1991, June 7, 1993 and June 17, 1992, respectively. The inception date of Class Z shares is August 1, 1991. The return for the index shown is from inception of Class A shares.

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Nations Short-Term Income Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    0.04%       4.42%       5.26%  
 
Return After Taxes on Distributions
    -0.73%       2.93%       3.33%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    0.03%       2.86%       3.29%  
Class B (%)
                       
 
Return Before Taxes
    0.28%       3.85%       4.88%  
Class C (%)
                       
 
Return Before Taxes
    -0.61%       3.86%       4.84%  
Class Z (%)
                       
 
Return Before Taxes
    1.39%       4.88%       5.59%  
 
Return After Taxes on Distributions
    0.52%       3.29%       3.58%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    0.91%       3.19%       3.52%  
Merrill Lynch 1-3 Year Treasury Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    0.91%       4.93%       5.71%  
*  The inception dates of Class A shares, Class B shares and Class C shares are October 2, 1992, June 7, 1993 and October 2, 1992, respectively. The inception date of Class Z shares is September 30, 1992. The returns for the index shown is from inception of Class A shares.

Columbia Small Company Index Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    14.73%       9.55%       13.04%  
 
Return After Taxes on Distributions
    13.73%       8.22%       10.49%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    10.64%       7.64%       10.18%  
Class B (%)
                       
 
Return Before Taxes
    15.88%       10.23%       13.53%  
 
Return After Taxes on Distributions
    14.96%       8.91%       10.98%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    11.46%       8.26%       10.65%  
Class C (%)
                       
 
Return Before Taxes
    19.92%       10.53%       13.55%  
 
Return After Taxes on Distributions
    18.99%       9.22%       11.00%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    14.09%       8.54%       10.66%  
Class Z (%)
                       
 
Return Before Taxes
    22.06%       10.57%       13.77%  
 
Return After Taxes on Distributions
    20.90%       9.60%       11.19%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    15.47%       8.88%       10.84%  
S&P SmallCap 600 Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    22.65%       11.60%       14.29%  
*  Class A, Class B and Class C are newer classes of shares. Their performance information includes returns of the Fund’s Class Z shares for periods prior to November 25, 2002, the date of which Class A, Class B and Class C shares were initially offered by the Fund. Prior to November 25, 2002, the Fund’s Class Z shares were designed as Trust Shares of the Galaxy II Small Company Index Fund, the predecessor to the Fund. The returns have not been adjusted to reflect any differences in expenses (such as 12b-1 fees) between Class Z and the newer classes of shares. If differences in expenses had been reflected, the returns shown for periods prior to the inception of the newer classes of shares would have been lower. Class A, Class B, Class C, and Class Z shares were initially offered on November 25, 2002, and Trust shares were initially offered on October 1, 1990.

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Nations SmallCap Index Fund

                           
10 Years or
Life of the
1 Year 5 Years Fund*
Class A (%)
                       
 
Return Before Taxes
    22.08%       10.46%       10.29%  
 
Return After Taxes on Distributions
    20.97%       10.07%       9.83%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    15.11%       8.96%       8.86%  
Class Z (%)
                       
 
Return Before Taxes
    22.33%       10.76%       10.57%  
 
Return After Taxes on Distributions
    21.13%       10.28%       10.02%  
 
Return After Taxes on Distributions and Sale of Fund Shares
    15.27%       9.16%       9.05%  
S&P SmallCap 600 Index (%)
                       
 
(reflects no deductions for fees, expenses or taxes)
    22.65%       11.60%       11.86%  
*  The inception date of Class A shares and Class Z shares is October 15, 1996. The return for the index shown is from that date.

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APPENDIX F

COMPARISON OF ORGANIZATIONAL DOCUMENTS AND GOVERNING LAW

      The table below summarizes the significant differences between the Amended and Restated Declaration of Trust of Nations Funds Trust (the “Proposed Surviving Trust”) and the organizational documents (or Oregon law in the case of the Columbia Short Term Bond Fund, Inc. and the Columbia Fixed Income Securities Fund, Inc.) for the Funds. For additional information, shareholders of any Fund should refer directly to such documents, copies of which may be obtained by contacting Nations Funds Trust at its address listed on the cover page of this Proxy Statement/ Prospectus.

             
Proposed Surviving Trust: Acquired Trusts: Acquired Corporations:
Nations Funds Trust Columbia Funds Trust I Columbia Short Term Bond
Columbia Funds Trust III Fund, Inc.
Columbia Funds Trust V Columbia Fixed Income
Columbia Funds Trust VI Securities Fund, Inc.
Shareholder Liability:   If any shareholder or former shareholder shall be exposed to liability by reason of a claim or demand relating solely to his being or having been a shareholder, and not because of his acts or omissions, the shareholder or former shareholder (or his heirs, executors, administrators, or other legal representatives or in the case of a corporation or other entity, its corporate or other general successor) shall be entitled to be held harmless from and indemnified out of the assets of the Trust against all loss and expense arising from such claim or demand.

No corresponding provisions.

Any person extending credit to, contracting with or having any claim against any series may look only to the assets of that series to satisfy or enforce any debt, with respect to that series. 		  In case any shareholder or former shareholder shall be held to be personally liable solely by reason of his or her being or having been a shareholder and not because of his or her acts or omissions or for some other reason, the shareholder or former shareholder (or his or her heirs, executors, administrators or other legal representatives or, in the case of a corporation or other entity, its corporate or other general successor) shall be entitled to be held harmless from and indemnified against all loss and expense arising from such liability, but only out of the particular series of shares of which he or she is or was a shareholder.

Neither the Trust nor the Trustees, nor any officer, employee or agent of the Trust, shall have the power to bind personally any shareholder, nor except as provided by the Declaration of Trust, to call upon any shareholder for the payment of any sum of money or assessment whatsoever other than such as the shareholder may at any time personally agree to pay.

All persons extending credit to, contracting with or having any claim against the Trust or a particular series of Shares shall look only to the assets of the Trust or the assets of that particular series of Shares for payment under such credit, contract or claim; and neither the Shareholders nor the Trustees, nor any of the Trust’s officers, 		  No corresponding provisions.

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Proposed Surviving Trust: Acquired Trusts: Acquired Corporations:
Nations Funds Trust Columbia Funds Trust I Columbia Short Term Bond
Columbia Funds Trust III Fund, Inc.
Columbia Funds Trust V Columbia Fixed Income
Columbia Funds Trust VI Securities Fund, Inc.
        employees or agents, whether past, present or future, shall be personally liable therefor.

Every note, bond, contract, instrument, certificate or undertaking made or issued by the Trustees or by any officers or officer must recite that the same was executed or made by or on behalf of the Trust or by them as Trustees or Trustee or as officers or officer and not individually and that the obligations of such instrument are not binding upon any of them or the shareholders individually but are binding only upon the assets and property of the Trust, but the omission thereof shall not operate to bind any Trustees or Trustee or officers or officer of shareholders or shareholder individually. 		   
Shareholder Voting Rights:   Shareholders have only the voting powers expressly granted under the 1940 Act or under Delaware law applicable to business trusts and have the right to vote on other matters only as the Board of Trustees may consider desirable and so authorize. Currently the 1940 Act requires that shareholders have the right to vote, under certain circumstances, to: (a) elect Trustees; (b) approve investment advisory agreements and principal underwriting agreements; (c) approve a change in subclassification; (d) approve any change in fundamental investment policies; (e) approve a distribution plan under Rule 12b-1 of the 1940 Act; and (f) terminate the Trust’s independent public accountant. Shareholders have the right to vote to remove Trustees but only if and to the extent that the SEC staff takes the position by rule, interpretive or other public release, or by no-action letter, that Section 16(c) of the 1940 Act gives them such right.   Shareholders have the power to vote only (i) for the election or removal of Trustees; (ii) for investment advisory agreements; (iii) with respect to any termination of the Trust or series of the Trust; (iv) with respect to any amendment of the Declaration of Trust (other than amendments that change the name of the Trust or that correct or supplement any inconsistent, defective or ambiguous provision); (v) to the same extent as the stockholders of a Massachusetts business corporation as to whether a court action, proceeding or claim should not be brought or maintained derivatively or as a class action on behalf of the Trust or shareholders; (vi) with respect to any other matters regarding the Trust as required by law, the organizational documents, or as the Board of Trustees may consider necessary or desirable.   The shareholders may remove one or more directors with or without cause at a meeting called expressly for that purposes, unless the Articles of Incorporation provide for removal for cause only.
Shareholder Meetings:   Shareholders have no specific right to call meetings except special meetings to remove   Shareholders have no specific right to call meetings, except as may be required by applicable   Special meetings of shareholders may only be called, unless proscribed by statute, by the

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Proposed Surviving Trust: Acquired Trusts: Acquired Corporations:
Nations Funds Trust Columbia Funds Trust I Columbia Short Term Bond
Columbia Funds Trust III Fund, Inc.
Columbia Funds Trust V Columbia Fixed Income
Columbia Funds Trust VI Securities Fund, Inc.
    Trustees, and then only if and to the extent that the SEC staff takes the position by rule, interpretive or other public release, or by no-action letter, that Section 16(c) of the 1940 Act gives them such right.   law, including the Investment Company Act of 1940.   President or the Board of Directors.
Shareholder Quorum:   Except when required by applicable law or by the Declaration of Trust, thirty-three and one-third percent (33 1/3%) of the shares entitled to vote at the meeting shall constitute a quorum. When any one or more series or classes is to vote on a separate matter, 33 1/3% of the shares of each such series or class entitled to vote shall constitute a quorum.   Thirty percent (30%) of the shares entitled to vote at the meeting shall be a quorum, except where any provision of law or of the Declaration of Trust permits or requires holders of a series or class to vote as a series or class, then thirty (30%) of the aggregate number of shares of that series or class entitled to vote shall be necessary to constitute a quorum for the transaction of business by that series or class.   A majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter.
Required Shareholder Vote:   When a quorum is present, a majority of the shares represented at a meeting shall decide any matters and a plurality shall elect a Trustee, except when a larger vote is required by the Declaration of Trust or applicable law.   Except when a larger vote is required by the Declaration of Trust or By-Laws, a majority of the shares voted (or of the individual series or class) shall decide any matters and a plurality shall elect a Trustee.   If a quorum exists, the votes cast within the voting group favoring the action must exceed those opposing the action to approve a matter, unless otherwise required by law or the Articles of Incorporation. Directors are elected by a plurality of the votes cast by shares entitled to vote at the meeting.
Shareholder Action by Written Consent:   Majority written consent of the shares entitled to vote on the matter (or any larger proportion as expressly required by the Declaration of Trust) and holding a majority of the shares of any series or class entitled to vote on the matter (or any larger proportion required) is required for shareholder action taken without a meeting. Such consent shall be treated for all purposes as a vote taken at a meeting of shareholders.   Same, but no express provisions regarding consent of shareholders of a series or class.   Action to be taken at a shareholder meeting may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action, as evidenced by one or more written consents.
Shareholder Adjournment:   Any meeting of Shareholders may be adjourned by a majority of the votes whether or not a quorum is present.   Any number less than that required for a quorum, i.e., thirty percent (30%) of shares (or of the series or class) entitled to vote, shall be sufficient for adjournment.   A majority of votes represented at the meeting, although less than a quorum, may adjourn the meeting from time to time to a different time and place without further notice to any shareholder of any adjournment.
Notice to Shareholders:   Notice of shareholder meetings is to be given either: personally, or by telephone, first-class mail, express mail, overnight mail,   Same, except for the following differences:
  (i) no maximum time limit on delivery of notice; and 		  Same, except for the following differences:
  (i) only delivery method is mailed with postage prepaid;

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Proposed Surviving Trust: Acquired Trusts: Acquired Corporations:
Nations Funds Trust Columbia Funds Trust I Columbia Short Term Bond
Columbia Funds Trust III Fund, Inc.
Columbia Funds Trust V Columbia Fixed Income
Columbia Funds Trust VI Securities Fund, Inc.
    telegram, electronic mail, telefacsimile, internet or other similar electronic medium, charges prepaid, addressed to the shareholder at the address of that shareholder appearing on the books of the Trust or its transfer agent or given by the shareholder to the Trust for the purpose of notice not less than seven (7) nor more than one hundred and twenty (120) days before the date of the meeting.

Notice need not state the purpose for which the meeting is called. 		    (ii) only delivery methods allowed are personal delivery and mailing, postage prepaid.     (ii) notice must be given not earlier than 60 days nor less than 10 days before the meeting date; and
  (iii) in the case of a special meeting or a meeting for which special notice is required by law, the notice must include the purposes for which the meeting is called.
Shareholder Proxies:   A validly executed proxy that does not state that it is irrevocable is not revoked until:
  (i) revoked by the maker of the proxy in writing delivered to the Trust before the vote pursuant to the proxy; or
  (ii) written notice of the death or incapacity of the maker of the proxy is received by the Trust before the vote pursuant to the proxy; provided, however, that a proxy is valid up to eleven months from the date of the proxy unless otherwise provided in the proxy. 		  Shareholders may put a proxy in place for a duration of up to six (6) months before a meeting.   A proxy appointment is valid up to eleven months from the date of the proxy unless otherwise provided in the proxy. An appointment is revocable by the shareholder unless the form conspicuously states that it is irrevocable and the appointment is coupled with an interest that has not been extinguished.
Trustee’s Power to Amend Declaration of Trust/ Director’s Power to Amend Articles of Incorporation:   The Declaration of Trust may be amended by the Trustees without shareholder approval unless expressly required by the 1940 Act or Delaware law. Notice must be given to all shareholders who purchase shares that the Declaration of Trust may be so amended.   The Declaration of Trust may be amended at any time by an instrument in writing signed by a majority of the then Trustees when authorized to do so by a vote of shareholders holding a majority of the shares (or of each series or class) entitled to vote, provided that ministerial amendments shall not require shareholder authorization.   The Articles of Incorporation may only be amended with shareholder approval.
Termination of Trust/ Corporation or Series:   Except to the extent the 1940 Act expressly grants shareholders the power to vote on such terminations, the Trust or any series thereof, may be terminated at any time by the Board with written notice to shareholders. To the extent the 1940 Act expressly grants shareholders the right to vote on such terminations, the Trust, or any series thereof, may be terminated by a vote of a majority of the shares, or of the series, entitled to vote.   The Trust may be terminated at any time by vote of shareholders holding at least 2/3 of the shares of each series entitled to vote or by the Trustees by written notice to the shareholders. A series of the Trust may be terminated at any time by a vote of shareholders holding at least 2/3 of the shares of the series entitled to vote or by the Trustees by written notice to the series’ shareholders.   No corresponding provisions.

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Table of Contents

             
Proposed Surviving Trust: Acquired Trusts: Acquired Corporations:
Nations Funds Trust Columbia Funds Trust I Columbia Short Term Bond
Columbia Funds Trust III Fund, Inc.
Columbia Funds Trust V Columbia Fixed Income
Columbia Funds Trust VI Securities Fund, Inc.
Merger or Consolidation of Trust/ Corporation or Series:   Except to the extent the 1940 Act expressly grants shareholders the power to vote on the matters below, the Board may cause:
  i) the Trust to be merged into or consolidated with another trust or company;
  (ii) a series of the Trust to be merged into or consolidated with another series of the Trust or other trust or company;
  (iii) the shares of a class of a series to be converted into another class of the same series;
  (iv) the shares of the Trust or any series to be converted into beneficial interests in another business trust (or its series); or
  (v) the shares of the Trust or any series to be exchanged for shares in another trust or company pursuant to any state or federal statute to the extent permitted by law without shareholder approval with written notice to the shareholders. To the extent the 1940 Act expressly grants shareholders the right to vote on such transactions, shareholders, a vote of the majority of the shares (or of the series) entitled to vote and voting in the aggregate is required to authorize the applicable transaction.

These provisions established by the Declaration of Trust eliminate any right to vote on a merger, consolidation, sale of assets or conversion that might otherwise be conferred by Section 3815, Section 3821 or any other provision of the Delaware Act. 		  No corresponding provisions.   No corresponding provisions.
Removal of Trustees/ Directors:   A Trustee may be removed with or without cause at any time by a written instrument signed by at least two-thirds of the other Trustees specifying the date of removal. Additionally, if required by Section 16(c) of the 1940 Act, any Trustee may be removed at any shareholder meeting by a vote of at least two-thirds of the outstanding shares.   By vote of a majority of the Trustees then in office, the Trustees may remove a Trustee with or without cause. At any meeting called for the purpose, a Trustee may be removed, with or without cause, by vote of the holders of two-thirds of the outstanding shares.   The shareholders may remove one or more directors with or without cause at a meeting called expressly for that purpose, unless the Articles of Incorporation provide for removal for cause only.
Trustee/ Director Committees:   Any committee formed by the Board has the authority of the   The Trustees may appoint an executive committee which may,   Subject to any limitation imposed by the Board of Directors or by

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Table of Contents

             
Proposed Surviving Trust: Acquired Trusts: Acquired Corporations:
Nations Funds Trust Columbia Funds Trust I Columbia Short Term Bond
Columbia Funds Trust III Fund, Inc.
Columbia Funds Trust V Columbia Fixed Income
Columbia Funds Trust VI Securities Fund, Inc.
    Board except with respect to:
  (i) the approval of any action which, under applicable law, requires shareholder approval or specific approval by a majority of the Board or certain Board members;
  (ii) the filling of vacancies on the Board or any committees;
  (iii) the fixing of compensation of the Trustees for serving on the Board or on any committee;
  (iv) the amendment or repeal of the Declaration of Trust;
  (v) the amendment or repeal of any Board resolution that by its express terms is not amendable or repealable; and
  (vi) the appointment of any other Board committees or committee members.

The Trust shall have a standing Audit Committee and a standing Nominating Committee. 		  when the Trustees are not in session, exercise some or all of the power and authority of the Board as the Board may determine.

The Trustees may appoint a Dividend Committee of not less than three persons, who may (but need not) be Trustees. 		  law, each committee may exercise all the authority of the Board in the management of the Corporation. A committee may not take any action that a committee is prohibited from taking by the Oregon Business Corporation Act.
Trustee/ Director Liability:   Each Trustee may be liable only by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the Trustee’s office.   Trustees are not responsible or liable in any event for any neglect or wrongdoing of any officer, agent, employee, adviser, principal underwriter of the Trust or other Trustee. However, Trustees are not protected against any liability to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

Every note, bond, contract, instrument, certificate or undertaking made or issued on behalf of the Trust or Trustees by any Trustees is deemed to be executed or done only with respect to their capacity as Trustees and such Trustees shall not be personally liable thereon. 		  No director of the Corporation shall be personally liable to the Corporation or its shareholders for monetary damages for conduct as a director, provided that this Article shall not eliminate the liability of a director for any act or omission for which such elimination of liability is not permitted under the Oregon Business Corporation Act or the 1940 Act. No amendment to the Oregon Business Corporation Act that further limits the acts or omissions for which elimination of liability is permitted shall affect a director’s liability for any act or omission occurring before the effective date of the amendment.
Trustee Indemnification:   The Trust shall indemnify a Trustee who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of the Trust) against all amounts actually and reasonably incurred in connection with such   The Trust shall indemnify a Trustee against all liabilities and expenses, including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and as counsel fees, reasonably incurred in connection with handling any action, suit or   The Corporation shall indemnify to the fullest extent not prohibited by law, including the Oregon Business Corporation Act and the 1940 Act, any current or former director who is made, or threatened to be made, a party to an action, suit or proceeding,

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Table of Contents

             
Proposed Surviving Trust: Acquired Trusts: Acquired Corporations:
Nations Funds Trust Columbia Funds Trust I Columbia Short Term Bond
Columbia Funds Trust III Fund, Inc.
Columbia Funds Trust V Columbia Fixed Income
Columbia Funds Trust VI Securities Fund, Inc.
    proceeding if it is determined that the Trustee acted in good faith and reasonably believed:
  (i) in the case of conduct in his official capacity as a Trustee, that his conduct was in the Trust’s best interests;
  (ii) in all other cases, that his conduct was at least not opposed to the Trust’s best interests; and
  (iii) in the case of criminal proceedings, that he had no reasonable cause to believe his conduct was unlawful. The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in the best interests of this Trust or that the person had reasonable cause to believe that the person’s conduct was unlawful.

The Trust shall indemnify a Trustee who was or is a party or is threatened to be made a party to any action by or in the right of the Trust to procure a judgment in its favor by reason of the fact that the Trustee is or was an agent of the Trust, against expenses incurred in defending or settling such action if the Trustee acted in good faith, in a manner the Trustee believed to be in the best interests of the Trust and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. 		  proceeding (civil or criminal) in which the Trustee was or may be a party by reason of the person’s capacity as a Trustee.

In the absence of a final decision on the merits by an adjudicating body that a Trustee is liable to the Trust or its shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the Trustee’s office, indemnification shall be provided if:
  (i) approved as in the best interest of the Trust, after notice that it involves such indemnification, by at least a majority of the disinterested Trustees, if determined that the Trustee is not liable of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the Trustee’s office; or
  (ii) independent legal counsel has provided a written opinion to the effect that such indemnification would not protect the Trustee against any liability to the Trust to which the Trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the Trustee’s office. 		  whether civil, criminal, administrative, investigative, or other (including an action, suit, or proceeding by or in the right of the Corporation), by reason of the fact that such person is or was a director, officer, employee or agent of the Corporation or a fiduciary within the meaning of the Employee Retirement Income Security Act of 1974 with respect to any employee benefit plan of the Corporation, or serves or served at the request of the Corporation as a director, officer, employee or agent, or as a fiduciary of an employee benefit plan, of another corporation, partnership, joint venture, trust, or other enterprise.
Exceptions to Trustee/ Director Indemnification:   Same as Columbia Funds Trust I, Columbia Funds Trust III, Columbia Funds Trust V and Columbia Funds Trust VI, except that, in addition, the Trust will make no indemnification with respect to the above situations for indemnification:
  (i) with respect to any claim, issue or matter where the Trustee was judged to be liable on the basis that personal benefit was 		  The Trust will not indemnify its Trustees against any liability to the Trust or to its shareholders to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the Trustee’s office.   No corresponding provisions.

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Table of Contents

             
Proposed Surviving Trust: Acquired Trusts: Acquired Corporations:
Nations Funds Trust Columbia Funds Trust I Columbia Short Term Bond
Columbia Funds Trust III Fund, Inc.
Columbia Funds Trust V Columbia Fixed Income
Columbia Funds Trust VI Securities Fund, Inc.
    improperly received, whether or not the benefit resulted from an action taken in the person’s official capacity as Trustee; or
  (ii) with respect to any claim, issue or matter where the Trustee was judged to be liable in the performance of his Trustee’s duty to the Trust, unless and only to the extent that the adjudicator deems the Trustee to be fairly and reasonably entitled to indemnity; or
  (iii) of amounts paid to settle or otherwise dispose of a threatened or pending action, with or without court approval, or of expenses incurred in defending a threatened or pending action which is settled or otherwise disposed of without court approval, unless required approval by: (a) a majority vote of a quorum consisting of Trustees who are not parties to the proceeding and are disinterested persons of the Trust; or (b) a written opinion by legal counsel is obtained. 		       
Advance of Expenses:   The Trust may advance expenses incurred in defending any proceeding before its final disposition:
  (i) upon a written agreement by or on behalf of the Trustee to repay the amount of the advance if it is determined that the Trustee is not entitled to indemnification, together with at least one of the following:
  (ii) security for the undertaking;
  (iii) insurance protecting the Trust against losses arising by reason of any lawful advances; or
  (iii) a determination by a majority of a quorum of disinterested, non-party Trustees, or by an independent legal counsel, that there is reason to believe that the Trustee ultimately will be found entitled to indemnification. 		  Same as Nations Funds Trust.   The Corporation shall pay for or reimburse the reasonable expenses incurred by any current or former director in an action, suit or proceeding in advance of its final disposition if the director sets forth in writing:
  (i) the director’s good faith belief that he or she is entitled to indemnification under this Article; and
  (ii) the director’s agreement to repay all advances if it is ultimately determined that he or she is not entitled to indemnification under this Article.
Distributions:   The Board has full discretion, to the extent not inconsistent with the 1940 Act, to determine which items shall be treated as income   Same as Nations Funds Trust.   No dividend, distribution, subdivision, combination or reclassification of any class of common stock shall occur unless

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Table of Contents

             
Proposed Surviving Trust: Acquired Trusts: Acquired Corporations:
Nations Funds Trust Columbia Funds Trust I Columbia Short Term Bond
Columbia Funds Trust III Fund, Inc.
Columbia Funds Trust V Columbia Fixed Income
Columbia Funds Trust VI Securities Fund, Inc.
    and which items as capital, and each such determination and allocation is conclusive and binding upon the shareholders.       a like dividend, distribution, subdivision, combination or reclassification is made with respect to all other classes of common stock then outstanding; provided that any charges and expenses that apply to one or more classes shall be reflected in the amount of dividends or distributions made to those classes.
Conversion to a Master-Feeder Structure:   Funds have the ability to convert to a feeder fund in a master-feeder structure without shareholder approval.   Funds do not have the ability to convert to a master-feeder structure without shareholder approval.   Funds do not have the ability to convert to a master-feeder structure without shareholder approval.

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APPENDIX G

DISSENTERS’ RIGHTS UNDER OREGON LAW

Right to Dissent and Obtain Payment for Shares

      60.551 Definitions for 60.551 to 60.594. As used in ORS 60.551 to 60.594:

        (1) “Beneficial shareholder” means the person who is a beneficial owner of shares held in a voting trust or by a nominee as the record shareholder.
 
        (2) “Corporation” means the issuer of the shares held by a dissenter before the corporate action, or the surviving or acquiring corporation by merger or share exchange of that issuer.
 
        (3) “Dissenter” means a shareholder who is entitled to dissent from corporate action under ORS 60.554 and who exercises that right when and in the manner required by ORS 60.561 to 60.587.
 
        (4) “Fair value,” with respect to a dissenter’s shares, means the value of the shares immediately before the effectuation of the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable.
 
        (5) “Interest” means interest from the effective date of the corporate action until the date of payment, at the average rate currently paid by the corporation on its principal bank loans or, if none, at a rate that is fair and equitable under all the circumstances.
 
        (6) “Record shareholder” means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation.
 
        (7) “Shareholder” means the record shareholder or the beneficial shareholder. [1987 c.52 §124; 1989 c.1040 §30]

      60.554 Right to dissent. (1) Subject to subsection (2) of this section, a shareholder is entitled to dissent from, and obtain payment of the fair value of the shareholder’s shares in the event of, any of the following corporate acts:

        (a) Consummation of a plan of merger to which the corporation is a party if shareholder approval is required for the merger by ORS 60.487 or the articles of incorporation and the shareholder is entitled to vote on the merger or if the corporation is a subsidiary that is merged with its parent under ORS 60.491;
 
        (b) Consummation of a plan of share exchange to which the corporation is a party as the corporation whose shares will be acquired, if the shareholder is entitled to vote on the plan;
 
        (c) Consummation of a sale or exchange of all or substantially all of the property of the corporation other than in the usual and regular course of business, if the shareholder is entitled to vote on the sale or exchange, including a sale in dissolution, but not including a sale pursuant to court order or a sale for cash pursuant to a plan by which all or substantially all of the net proceeds of the sale will be distributed to the shareholders within one year after the date of sale;
 
        (d) An amendment of the articles of incorporation that materially and adversely affects rights in respect of a dissenter’s shares because it:

        (A) Alters or abolishes a preemptive right of the holder of the shares to acquire shares or other securities; or
 
        (B) Reduces the number of shares owned by the shareholder to a fraction of a share if the fractional share so created is to be acquired for cash under ORS 60.141;

        (e) Any corporate action taken pursuant to a shareholder vote to the extent the articles of incorporation, bylaws or a resolution of the board of directors provides that voting or nonvoting shareholders are entitled to dissent and obtain payment for their shares; or

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        (f) Conversion to a noncorporate business entity pursuant to ORS 60.472.

      (2) A shareholder entitled to dissent and obtain payment for the shareholder’s shares under ORS 60.551 to 60.594 may not challenge the corporate action creating the shareholder’s entitlement unless the action is unlawful or fraudulent with respect to the shareholder or the corporation.

      (3) Dissenters’ rights shall not apply to the holders of shares of any class or series if the shares of the class or series were registered on a national securities exchange or quoted on the National Association of Securities Dealers, Inc. Automated Quotation System as a National Market System issue on the record date for the meeting of shareholders at which the corporate action described in subsection (1) of this section is to be approved or on the date a copy or summary of the plan of merger is mailed to shareholders under ORS 60.491, unless the articles of incorporation otherwise provide. [1987 c.52 §125; 1989 c.1040 §31; 1993 c.403 §9; 1999 c.362 §15]

      60.557 Dissent by nominees and beneficial owners. (1) A record shareholder may assert dissenters’ rights as to fewer than all the shares registered in the shareholder’s name only if the shareholder dissents with respect to all shares beneficially owned by any one person and notifies the corporation in writing of the name and address of each person on whose behalf the shareholder asserts dissenters’ rights. The rights of a partial dissenter under this subsection are determined as if the shares regarding which the shareholder dissents and the shareholder’s other shares were registered in the names of different shareholders.

      (2) A beneficial shareholder may assert dissenters’ rights as to shares held on the beneficial shareholder’s behalf only if:

        (a) The beneficial shareholder submits to the corporation the record shareholder’s written consent to the dissent not later than the time the beneficial shareholder asserts dissenters’ rights; and
 
        (b) The beneficial shareholder does so with respect to all shares of which such shareholder is the beneficial shareholder or over which such shareholder has power to direct the vote. [1987 c.52 §126]

      (Procedure for Exercise of Rights)

      60.561 Notice of dissenters’ rights. (1) If proposed corporate action creating dissenters’ rights under ORS 60.554 is submitted to a vote at a shareholders’ meeting, the meeting notice must state that shareholders are or may be entitled to assert dissenters’ rights under ORS 60.551 to 60.594 and be accompanied by a copy of ORS 60.551 to 60.594.

      (2) If corporate action creating dissenters’ rights under ORS 60.554 is taken without a vote of shareholders, the corporation shall notify in writing all shareholders entitled to assert dissenters’ rights that the action was taken and send the shareholders entitled to assert dissenters’ rights the dissenters’ notice described in ORS 60.567. [1987 c.52 §127]

      60.564 Notice of intent to demand payment. (1) If proposed corporate action creating dissenters’ rights under ORS 60.554 is submitted to a vote at a shareholders’ meeting, a shareholder who wishes to assert dissenters’ rights shall deliver to the corporation before the vote is taken written notice of the shareholder’s intent to demand payment for the shareholder’s shares if the proposed action is effectuated and shall not vote such shares in favor of the proposed action.

      (2) A shareholder who does not satisfy the requirements of subsection (1) of this section is not entitled to payment for the shareholder’s shares under this chapter. [1987 c.52 §128]

      60.567 Dissenters’ notice. (1) If proposed corporate action creating dissenters’ rights under ORS 60.554 is authorized at a shareholders’ meeting, the corporation shall deliver a written dissenters’ notice to all shareholders who satisfied the requirements of ORS 60.564.

      (2) The dissenters’ notice shall be sent no later than 10 days after the corporate action was taken, and shall:

        (a) State where the payment demand shall be sent and where and when certificates for certificated shares shall be deposited;

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        (b) Inform holders of uncertificated shares to what extent transfer of the shares will be restricted after the payment demand is received;
 
        (c) Supply a form for demanding payment that includes the date of the first announcement of the terms of the proposed corporate action to news media or to shareholders and requires that the person asserting dissenters’ rights certify whether or not the person acquired beneficial ownership of the shares before that date;
 
        (d) Set a date by which the corporation must receive the payment demand. This date may not be fewer than 30 nor more than 60 days after the date the subsection (1) of this section notice is delivered; and
 
        (e) Be accompanied by a copy of ORS 60.551 to 60.594. [1987 c.52 §129]

      60.571 Duty to demand payment. (1) A shareholder sent a dissenters’ notice described in ORS 60.567 must demand payment, certify whether the shareholder acquired beneficial ownership of the shares before the date required to be set forth in the dissenters’ notice pursuant to ORS 60.567 (2)(c), and deposit the shareholder’s certificates in accordance with the terms of the notice.

      (2) The shareholder who demands payment and deposits the shareholder’s shares under subsection (1) of this section retains all other rights of a shareholder until these rights are canceled or modified by the taking of the proposed corporate action.

      (3) A shareholder who does not demand payment or deposit the shareholder’s share certificates where required, each by the date set in the dissenters’ notice, is not entitled to payment for the shareholder’s shares under this chapter. [1987 c.52 §130]

      60.574 Share restrictions. (1) The corporation may restrict the transfer of uncertificated shares from the date the demand for their payment is received until the proposed corporate action is taken or the restrictions released under ORS 60.581.

      (2) The person for whom dissenters’ rights are asserted as to uncertificated shares retains all other rights of a shareholder until these rights are canceled or modified by the taking of the proposed corporate action. [1987 c.52 §131]

      60.577 Payment. (1) Except as provided in ORS 60.584, as soon as the proposed corporate action is taken, or upon receipt of a payment demand, the corporation shall pay each dissenter who complied with ORS 60.571, the amount the corporation estimates to be the fair value of the shareholder’s shares, plus accrued interest.

      (2) The payment must be accompanied by:

        (a) The corporation’s balance sheet as of the end of a fiscal year ending not more than 16 months before the date of payment, an income statement for that year and the latest available interim financial statements, if any;
 
        (b) A statement of the corporation’s estimate of the fair value of the shares;
 
        (c) An explanation of how the interest was calculated;
 
        (d) A statement of the dissenter’s right to demand payment under ORS 60.587; and
 
        (e) A copy of ORS 60.551 to 60.594. [1987 c.52 §132; 1987 c.579 §4]

      60.581 Failure to take action. (1) If the corporation does not take the proposed action within 60 days after the date set for demanding payment and depositing share certificates, the corporation shall return the deposited certificates and release the transfer restrictions imposed on uncertificated shares.

      (2) If after returning deposited certificates and releasing transfer restrictions, the corporation takes the proposed action, it must send a new dissenters’ notice under ORS 60.567 and repeat the payment demand procedure. [1987 c.52 §133]

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      60.584 After-acquired shares. (1) A corporation may elect to withhold payment required by ORS 60.577 from a dissenter unless the dissenter was the beneficial owner of the shares before the date set forth in the dissenters’ notice as the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action.

      (2) To the extent the corporation elects to withhold payment under subsection (1) of this section, after taking the proposed corporate action, it shall estimate the fair value of the shares plus accrued interest and shall pay this amount to each dissenter who agrees to accept it in full satisfaction of such demand. The corporation shall send with its offer a statement of its estimate of the fair value of the shares an explanation of how the interest was calculated and a statement of the dissenter’s right to demand payment under ORS 60.587. [1987 c.52 §134]

      60.587 Procedure if shareholder dissatisfied with payment or offer. (1) A dissenter may notify the corporation in writing of the dissenter’s own estimate of the fair value of the dissenter’s shares and amount of interest due, and demand payment of the dissenter’s estimate, less any payment under ORS 60.577 or reject the corporation’s offer under ORS 60.584 and demand payment of the dissenter’s estimate of the fair value of the dissenter’s shares and interest due, if:

        (a) The dissenter believes that the amount paid under ORS 60.577 or offered under ORS 60.584 is less than the fair value of the dissenter’s shares or that the interest due is incorrectly calculated;
 
        (b) The corporation fails to make payment under ORS 60.577 within 60 days after the date set for demanding payment; or
 
        (c) The corporation, having failed to take the proposed action, does not return the deposited certificates or release the transfer restrictions imposed on uncertificated shares within 60 days after the date set for demanding payment.

      (2) A dissenter waives the right to demand payment under this section unless the dissenter notifies the corporation of the dissenter’s demand in writing under subsection (1) of this section within 30 days after the corporation made or offered payment for the dissenter’s shares. [1987 c.52 §135]

      (Judicial Appraisal of Shares)

      60.591 Court action. (1) If a demand for payment under ORS 60.587 remains unsettled, the corporation shall commence a proceeding within 60 days after receiving the payment demand under ORS 60.587 and petition the court under subsection (2) of this section to determine the fair value of the shares and accrued interest. If the corporation does not commence the proceeding within the 60-day period, it shall pay each dissenter whose demand remains unsettled the amount demanded.

      (2) The corporation shall commence the proceeding in the circuit court of the county where a corporation’s principal office is located, or if the principal office is not in this state, where the corporation’s registered office is located. If the corporation is a foreign corporation without a registered office in this state, it shall commence the proceeding in the county in this state where the registered office of the domestic corporation merged with or whose shares were acquired by the foreign corporation was located.

      (3) The corporation shall make all dissenters, whether or not residents of this state, whose demands remain unsettled parties to the proceeding as in an action against their shares. All parties must be served with a copy of the petition. Nonresidents may be served by registered or certified mail or by publication as provided by law.

      (4) The jurisdiction of the circuit court in which the proceeding is commenced under subsection (2) of this section is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend decision on the question of fair value. The appraisers have the powers described in the court order appointing them, or in any amendment to the order. The dissenters are entitled to the same discovery rights as parties in other civil proceedings.

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      (5) Each dissenter made a party to the proceeding is entitled to judgment for:

        (a) The amount, if any, by which the court finds the fair value of the dissenter’s shares, plus interest, exceeds the amount paid by the corporation; or
 
        (b) The fair value, plus accrued interest, of the dissenter’s after-acquired shares for which the corporation elected to withhold payment under ORS 60.584. [1987 c.52 §136]

      60.594 Court costs and counsel fees. (1) The court in an appraisal proceeding commenced under ORS 60.591 shall determine all costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court. The court shall assess the costs against the corporation, except that the court may assess costs against all or some of the dissenters, in amounts the court finds equitable, to the extent the court finds the dissenters acted arbitrarily, vexatiously, or not in good faith in demanding payment under ORS 60.587.

      (2) The court may also assess the fees and expenses of counsel and experts of the respective parties in amounts the court finds equitable:

        (a) Against the corporation and in favor of any or all dissenters if the court finds the corporation did not substantially comply with the requirements of ORS 60.561 to 60.587; or
 
        (b) Against either the corporation or a dissenter, in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously or not in good faith with respect to the rights provided by this chapter.

      (3) If the court finds that the services of counsel for any dissenter were of substantial benefit to other dissenters similarly situated, and that the fees for those services should not be assessed against the corporation, the court may award to counsel reasonable fees to be paid out of the amount awarded the dissenters who were benefited. [1987 c.52 §137]

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Statement of Additional Information
Dated July 27, 2005
NATIONS FUNDS TRUST
One Bank of America Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
1-800-321-7854
(September 16, 2005 Special Meetings of Shareholders of Columbia Tax-Managed Value Fund of Columbia Funds Trust I;
Columbia MidCap Value Fund and Columbia Intermediate Government Income Fund of Columbia Funds Trust III;
Columbia Large Company Index Fund, Columbia Small Company Index Fund and Columbia Florida Intermediate Municipal Bond
Fund of Columbia Funds Trust V; Columbia Growth &Income Fund of Columbia Funds Trust VI;
Columbia Short Term Bond Fund, Inc; Columbia Fixed Income Securities Fund, Inc.;
and Nations Short-Intermediate Government Fund and Nations Florida Municipal Fund of Nations Funds Trust)
     This Statement of Additional Information is not a prospectus but should be read in conjunction with the Proxy/Prospectus dated the date hereof, for the Special Meeting of Shareholders of the Funds of the Trust to be held on September 16, 2005. Copies of the Proxy/Prospectus may be obtained at no charge by writing or calling Nations Funds Trust at the address or telephone number set forth above. Unless otherwise indicated, capitalized terms used herein and not otherwise defined have the same meanings as are given to them in the Proxy/Prospectus.
     Nations Funds Class Name Change
     On August 1, 2005, the names of the Nations Funds classes changed. Investor A Shares became Class A Shares, Investor B Shares became Class B Shares, Investor C Shares became Class C Shares and Primary A Shares became Class Z Shares. The pro forma financial statements included with this Statement of Additional Information are dated as of March 31, 2005, and accordingly, reference the former names of the Nations Funds classes.
Incorporation of Documents by Reference in Statements of Additional Information
     Further information about the Class A Shares (formerly Investor A Shares), Class B Shares (formerly Investor B Shares), Class C Shares (formerly Investor C Shares) and Class Z Shares (formerly Primary A Shares) of the Nations Funds is contained in and incorporated herein by reference to the Statement of Additional Information for the Nations Funds dated August 1, 2005.
     Further information about the Class Z Shares, Class A Shares, Class B Shares, Class C Shares, of the Funds of Columbia Funds Trust I is contained in and incorporated herein by reference to the Statements of Additional Information for the Columbia Funds of Columbia Funds Trust I dated March 1, 2005, as supplemented.
     Further information about the Class Z Shares, Class A Shares, Class B Shares, Class C Shares, Class D Shares, Class G Shares and Class T Shares of the Funds of Columbia Funds Trust III is contained in and incorporated herein by reference to the Statements of Additional Information for the Columbia Funds of Columbia Funds Trust I dated September 1, 2004 and February 1, 2005, as supplemented.

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     Further information about the Class Z Shares, Class A Shares, Class B Shares, and Class C Shares of the Funds of Columbia Funds Trust V is contained in and incorporated herein by reference to the Statements of Additional Information for the Columbia Funds of Columbia Funds Trust V dated August 1, 2004 and March 1, 2005, as supplemented.
     Further information about the Class Z Shares, Class A Shares, Class B Shares, Class C Shares, of the Funds of Columbia Funds Trust I is contained in and incorporated herein by reference to the Statements of Additional Information for the Columbia Funds of Columbia Funds Trust I dated December 1, 2004, as supplemented.
     Further information about the Class Z Shares, Class A Shares, Class B Shares, Class C Shares, Class D Shares and Class T Shares of the Funds of Columbia Short Term Bond Fund, Inc. is contained in and incorporated herein by reference to the Statement of Additional Information for the Columbia Short Term Bond Fund, Inc., dated January 1, 2005, as supplemented.
     Further information about the Class Z Shares, Class A Shares, Class B Shares, Class C Shares, and Class D Shares of the Columbia Fixed Income Securities Fund, Inc. is contained in and incorporated herein by reference to the Statement of Additional Information for the Columbia Fixed Income Securities Fund, Inc., dated January 1, 2005, as supplemented.
     The audited financial statements and related Report of Independent Accountants for the fiscal year ended March 31, 2005 for Columbia Tax-Managed Value Fund of Columbia Funds Trust I; September 30, 2004 for Columbia MidCap Value Fund of Columbia Funds Trust III; April 30, 2005 for Columbia Intermediate Government Income Fund of Columbia Funds Trust III; March 31, 2005 for Columbia Large Company Index Fund, Columbia Small Company Index Fund and Columbia Florida Intermediate Municipal Bond Fund of Columbia Funds Trust V; July 31, 2004 for Columbia Growth & Income Fund of Columbia Funds Trust VI; August 31, 2004 for Columbia Short Term Bond Fund, Inc; August 31, 2004 for Columbia Fixed Income Securities Fund, Inc.; and March 31, 2005 for Nations Short-Intermediate Government Fund and Nations Florida Municipal Fund of Nations Funds Trust are incorporated herein by reference. The unaudited financial statements for the semi-annual period ended January 31, 2005 for Columbia Growth & Income Fund; for the semi-annual period ended February 28, 2005 for Columbia Short Term Bond Fund, Inc. and Columbia Fixed Income Securities Fund, Inc.; for the semi-annual period ended March 21, 2005 for Columbia MidCap Value Fund; and for the semi-annual period ended April 30, 2005 for Columbia Tax-Managed Value Fund and Columbia Florida Intermediate Municipal Bond Fund are incorporated herein by reference. No other parts of the annual and semi-annual reports are incorporated herein by reference.

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Table of Contents
         
General Information
     3  
Introductory Note to Pro Forma Financial Information
     4  

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General Information
     The Reorganizations contemplates the transfer of the assets and liabilities of the Funds to the Acquiring Funds in exchange for shares of designated classes of the Acquiring Funds. The shares issued by the Acquiring Funds will have an aggregate dollar value equal to the aggregate dollar value of the shares of the Funds that are outstanding immediately before the closing of the Reorganization. The Acquiring Funds will serve as the accounting survivor in the Reorganization.
     Immediately after the Closing, the Funds will distribute the shares of the Acquiring Funds received in the Reorganization to its shareholders in liquidation of the Funds. Each shareholder owning Fund shares at the Closing will receive shares of a designated class of the corresponding Acquiring Fund, and will receive any unpaid distributions that were declared before the Closing on the Fund shares. If the Reorganization Agreement is approved and consummated, the Funds will transfer all of its assets and liabilities, as of the Closing, and all outstanding shares of the Funds will be redeemed and canceled in exchange for shares of the corresponding Acquiring Funds.
     For further information about the transaction, see the Proxy/Prospectus.

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Introductory Note to Pro Forma Financial Information
     The following unaudited pro forma information gives effect to the proposed transfer of the assets and liabilities of each Fund to its corresponding Acquiring Fund accounted for as if the transfer had occurred as of March 31, 2004. In addition, the pro forma combined statement of operations has been prepared as if the transfer had occurred at the beginning of the fiscal year ended March 31, 2005 and based upon the proposed fee and expense structure of the Acquiring Fund. The pro forma combined statement of operations has been prepared by adding the statement of operations at March 31, 2005 for each Fund to the statement of operations for each corresponding Acquiring Fund and making adjustments for changes in the expense structure of the combined fund.
     The pro forma financial information should be read in conjunction with the historical financial statements and notes thereto of the Funds and the Acquiring Funds included or incorporated herein by reference in the Statements of Additional Information.

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            Columbia Growth & Income Fund     Columbia Tax Managed Value Fund     Nations Value Fund              
            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
COMMON STOCKS
     98.0 %                                                                        
 
                                                                                
CONSUMER DISCRETIONARY
     9.8 %                                                                        
Hotels Restaurants & Leisure
     2.3 %                                                                        
CARNIVAL CORPORATION
             —       —       —       —       180       9,344       —       180       9,344  
HARRAH’S ENTERTAINMENT INC
             101       6,524       4       254       254       16,371       —       358       23,149  
MCDONALD’S CORPORATION
             660       20,550       25       791       521       16,215       —       1,206       37,555  
STARWOOD HOTELS & RES WORLDWIDE INC.
             —       —       —       —       274       16,430       —       274       16,430  
 
                                                                        
Hotels Restaurants & Leisure Total                     27,074               1,045               58,360                       86,479  
 
                                                                        
 
                                                                                
Media
     3.0 %             —                                                       —  
CLEAR CHANNEL COMMUNICATIONS
             146       5,026       6       192       —       —       —       151       5,218  
COMCAST CORP CLASS A (a)
             286       9,650       11       371       496       16,762       —       793       26,782  
MCGRAW HILL COS INC
             252       22,011       10       864       —       —       —       262       22,875  
NEWS CORP INC – CL A
             —       —       —       —       1,033       17,485       —       1,033       17,485  
TIME WARNER INC
             1,216       21,344       47       820       —       —       —       1,263       22,164  
VIACOM INC CL A
             230       8,045       9       313       —       —       —       239       8,358  
VIACOM INC CLASS B
             —       —       —       —       278       9,690       —       278       9,690  
 
                                                                        
Media Total
                     66,075               2,560               43,936                       112,572  
 
                                                                        
 
                                                                                
Multiline Retail
     2.3 %                                                                        
FEDERATED DEPARTMENT STORES (a)
             312       19,879       12       765       295       18,780       —       619       39,424  
MAY DEPARTMENT STORES COMPANY
             —       —       —       —       331       12,239       —       331       12,239  
PENNEY (J.C.) COMPANY
             261       13,528       10       521       423       21,947       —       693       35,996  
 
                                                                        
Multiline Retail Total
                     33,407               1,286               52,966                       87,659  
 
                                                                        
 
                                                                                
Specialty Retail
     2.2 %                                                                        
HOME DEPOT INC
             575       21,991       22       841       —       —       —       597       22,833  
LIMITED BRANDS INC.COM
             450       10,946       17       421       575       13,980       —       1,043       25,346  
OFFICE DEPOT INC
             504       11,169       19       430       —       —       —       523       11,599  
SHERWIN WILLIAMS CO
             157       6,916       6       266       —       —       —       163       7,182  
STAPLES INCORPORATED
             —       —       —       —       434       13,641       —       434       13,641  
 
                                                                        
Specialty Retail Total
                     51,022               1,958               27,620                       80,601  
 
                                                                        
CONSUMER DISCRETIONARY TOTAL
                     177,579               6,850               182,882                       367,311  
 
                                                                        
 
                                                                                
CONSUMER STAPLES
     9.0 %                                                                        
Beverages
     2.1 %                                                                        
DIAGEO PLC SPONSORED ADR
             —       —       —       —       441       25,073       —       441       25,073  
PEPSICO INCORPORATED
             597       31,649       23       1,226       378       20,024       —       998       52,899  
 
                                                                        
Beverages Total
                     31,649               1,226               45,097                       77,972  
 
                                                                        
 
                                                                                
Food Products
     1.3 %                                                                        
CONAGRA FOODS INC
             327       8,833       13       340       —       —       —       339       9,173  

 

Table of Contents

                                                                                 
            Columbia Growth & Income Fund     Columbia Tax Managed Value Fund     Nations Value Fund              
            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
HERSHEY FOODS CORP
             231       13,996       9       539       —       —       —       240       14,535  
KRAFT FOODS
             748       24,732       29       951       —       —       —       777       25,683  
 
                                                                        
Food Products Total
                     47,561               1,830               —                       49,391  
 
                                                                        
 
                                                                                
Household Products
     2.2 %                                                                        
CLOROX CO
             329       20,733       13       798       —       —       —       342       21,531  
KIMBERLY CLARK CORPORATION
             390       25,613       15       987       312       20,535       —       717       47,136  
PROCTER & GAMBLE CO
             272       14,403       10       554       —       —       —       282       14,957  
 
                                                                        
Household Products Total
                     60,749               2,340               20,535                       83,624  
 
                                                                        
 
                                                                                
Personal Products
     0.6 %                                                                        
GILLETTE CO
             435       21,935       17       843       —       —       —       451       22,778  
 
                                                                        
Personal Products Total
                     21,935               843               —                       22,778  
 
                                                                        
 
                                                                                
Tobacco
     2.8 %                                                                        
ALTRIA GROUP INC
             525       34,298       20       1,312       888       58,069       —       1,433       93,679  
UST INC
             180       9,296       7       356       —       —       —       187       9,652  
 
                                                                        
Tobacco Total
                     43,594               1,668               58,069                       103,332  
 
                                                                        
CONSUMER STAPLES TOTAL
                     205,488               7,907               123,701                       337,097  
 
                                                                        
 
                                                                                
ENERGY
     13.6 %                                                                        
Energy Equipment & Services
     2.1 %                                                                        
ENSCO INTERNATIONAL INC
             —       —       —       —       178       6,685       —       178       6,685  
FLEXTRONICS INTL LTD
             —       —       —       —       1,254       15,093       —       1,254       15,093  
HALLIBURTON COMPANY
             344       14,864       13       570       410       17,737       —       767       33,171  
NABORS INDUSTRIES LTD. (a)
             —       —       —       —       161       9,523       —       161       9,523  
SHLUMBERGER LTD
             135       9,501       5       366       62       4,356       —       202       14,222  
 
                                                                        
Energy Equipment & Services Total
                     24,365               936               53,393                       78,694  
 
                                                                        
 
                                                                                
Oil, Gas & Consumable Fuels
     11.5 %                                                                        
BP PLC ADR.
             596       37,164       23       1,425       203       12,692       —       822       51,281  
CHEVRONTEXACO CORPORATION.
             290       16,900       11       646       575       33,509       —       876       51,056  
CONOCOPHILLIPS
             507       54,652       20       2,104       185       19,917       —       711       76,673  
EOG RESOURCES INC. (b)
             —       —       —       —       193       9,412       —       193       9,412  
EXXON MOBIL CORPORATION
             1,416       84,369       54       3,232       1,375       81,944       —       2,845       169,546  
MARATHON OIL CORP
             250       11,739       10       451       —       —       —       260       12,190  
MURPHY OIL CORPORATION
             —       —       —       —       80       7,859       —       80       7,859  
OCCIDENTAL PETROLEUM CORP
             —       —       —       —       110       7,836       —       110       7,836  
ROYAL DUTCH PETROLEUM COMPANY.
             154       9,221       6       354       289       17,364       —       449       26,938  
WILLIAMS COMPANIES, INC.
             —       —       —       —       942       17,719       —       942       17,719  
 
                                                                        
Oil, Gas & Consumable Fuels Total
                     214,046               8,212               208,252                       430,510  
 
                                                                        
ENERGY TOTAL
                     238,411               9,148               261,645                       509,204  
 
                                                                        

 

Table of Contents

                                                                                 
            Columbia Growth & Income Fund     Columbia Tax Managed Value Fund     Nations Value Fund              
            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
FINANCIALS
     26.7 %                                                                        
Capital Markets
     4.8 %                                                                        
BANK OF NEW YORK CO INC
             802       23,309       31       890       682       19,812       —       1,515       44,012  
EDWARDS (A.G.), INC
             109       4,873       4       187       —       —       —       113       5,060  
FRANKLIN RESOURCES INC
             134       9,208       5       353       —       —       —       139       9,561  
GOLDMAN SACHS GROUP INC
             220       24,221       8       927       204       22,427       —       433       47,574  
JANUS CAPITAL GROUP INC
             592       8,265       23       318       —       —       —       615       8,582  
MERRILL LYNCH & CO
             242       13,678       9       520       714       40,387       —       964       54,584  
MORGAN STANLEY
             175       10,017       7       385       —       —       —       182       10,402  
 
                                                                        
Capital Markets Total
                     93,570               3,580               82,626                       179,775  
 
                                                                        
 
                                                                                
Commercial Banks
     7.3 %                                                                        
MARSHALL & ILSLEY CORP.
             118       4,921       4       187       323       13,473       —       445       18,581  
NATIONAL CITY CORP
             274       9,187       11       353       —       —       —       285       9,540  
NORTH FORK BANCORPORATION
             167       4,629       6       176       —       —       —       173       4,805  
PNC FINANCIAL SERVICES GROUP
             169       8,675       6       333       —       —       —       175       9,008  
UNIONBANCAL CORPORATION
             —       —       —       —       212       12,973       —       212       12,973  
US BANCORP (b)
             1,295       37,336       49       1,420       1,025       29,543       —       2,370       68,299  
WACHOVIA CORP
             716       36,472       27       1,387       867       44,120       —       1,610       81,978  
WELLS FARGO & COMPANY (NEW)
             637       38,112       24       1,449       487       29,099       —       1,148       68,660  
 
                                                                        
Commercial Banks Total
                     139,331               5,306               129,207                       273,844  
 
                                                                        
 
                                                                                
Consumer Finance
     0.4 %                                                                        
MBNA CORP
             576       14,150       22       544       —       —       —       599       14,694  
 
                                                                        
Consumer Finance Total
                     14,150               544               —                       14,694  
 
                                                                        
 
                                                                                
Diversified Financial Services
     5.8 %                                                                        
CIT GROUP INC
             —       —       —       —       403       15,314       —       403       15,314  
CITIGROUP INC.
             1,705       76,618       66       2,979       1,385       62,247       —       3,156       141,845  
GENWORTH FINANCIAL INC PFD
             —       —       —       —       136       4,369       —       136       4,369  
JPMORGAN CHASE & CO.
             1,066       36,883       41       1,419       492       17,013       —       1,599       55,315  
 
                                                                        
Diversified Financial Services Total
                     113,501               4,398               98,943                       216,843  
 
                                                                        
 
                                                                                
Insurance
     5.5 %                                                                        
ACE LIMITED (b)
             —       —       —       —       291       12,014       —       291       12,014  
ALLSTATE CORP
             189       10,192       7       390       —       —       —       196       10,582  
AMBAC FINANCIAL GROUP, INC.
             194       14,480       7       554       173       12,902       —       374       27,936  
AMER INTERNATIONAL GROUP INC
             249       13,796       9       525       —       —       —       258       14,321  
CHUBB CORP
             135       10,739       5       413       —       —       —       141       11,152  
GENWORTH FINANCIAL INC. – CL A
             —       —       —       —       1,097       30,195       —       1,097       30,195  
HARTFORD FINANCIAL SERVICES GROUP.
             240       16,477       9       632       292       20,033       —       542       37,143  
LINCOLN NATIONAL CORP IND
             506       22,836       19       878       —       —       —       525       23,714  
ST. PAUL TRAVELERS COS INC
             —       —       —       —       215       7,881       —       215       7,881  
WILLIS GROUP HOLDINGS
             262       9,677       10       369       —       —       —       272       10,046  

 

Table of Contents

                                                                                 
            Columbia Growth & Income Fund     Columbia Tax Managed Value Fund     Nations Value Fund              
            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
XL CAPITAL LTD-CLASS A
             277       20,063       11       799       —       —       —       288       20,862  
 
                                                                        
Insurance Total
                     118,261               4,560               83,025                       205,846  
 
                                                                        
 
                                                                                
Real Estate
     2.4 %                                                                        
ARCHSTONE-SMITH TRUST
             334       11,397       13       444       470       16,039       —       817       27,879  
AVALON BAY COMMUNITIES INC
             156       10,461       6       399       —       —       —       162       10,859  
EQUITY OFFICE PROPERTIES TRUST
             —       —       —       —       855       25,758       —       855       25,758  
HOST MARRIOT CORP (NEW) COM (b)
             —       —       —       —       781       12,935       —       781       12,935  
KIMCO REALTY CORP
             227       12,217       9       479       —       —       —       236       12,697  
 
                                                                        
Real Estate Total
                     34,075               1,322               54,732                       90,128  
 
                                                                        
 
                                                                                
Thrifts & Mortgage Finance
     0.5 %                                                                        
COUNTRYWIDE FINANCIAL CORP
             268       8,694       10       331       —       —       —       278       9,024  
FREDDIE MAC
             150       9,506       6       363       —       —       —       156       9,869  
 
                                                                        
Thrifts & Mortgage Finance Total
                     18,200               694               —                       18,894  
 
                                                                        
FINANCIALS TOTAL
                     531,088               20,404               448,532                       1,000,024  
 
                                                                        
 
                                                                                
HEALTH CARE
     5.2 %                                                                        
Health Care Equipment & Supplies
     2.3 %                                                                        
AETNA US HEALTHCARE-WI
             260       19,515       10       751       203       15,200       —       473       35,466  
BAUSCH & LOMB INC
             66       4,871       3       187       —       —       —       69       5,058  
BAXTER INTERNATIONAL INC.
             —       —       —       —       280       9,514       —       280       9,514  
CIGNA CORP
             111       9,901       4       381       —       —       —       115       10,282  
HOSPIRA INC (a)
             —       —       —       —       310       10,019       —       310       10,019  
MEDCO HEALTH SOLUTIONS INC (a)
             —       —       —       —       299       14,797       —       299       14,797  
 
                                                                        
Health Care Equipment & Supplies Total
                     34,287               1,319               49,530                       85,136  
 
                                                                        
 
                                                                                
Pharmaceuticals
     2.9 %                                                                        
ABBOTT LABORATORIES
             —       —       —       —       374       17,445       —       374       17,445  
BRISTOL-MYERS SQUIBB CO
             346       8,813       13       343       —       —       —       360       9,156  
GLAXOSMITHKLINE ADRS
             194       8,916       7       343       —       —       —       202       9,259  
JOHNSON & JOHNSON
             229       15,380       9       592       —       —       —       238       15,972  
MERCK & CO INC
             415       13,446       16       517       —       —       —       431       13,963  
NOVARTIS ADR
             198       9,268       8       355       —       —       —       206       9,623  
PFIZER INC
             598       15,712       23       601       703       18,461       —       1,324       34,774  
 
                                                                        
Pharmaceuticals Total
                     71,534               2,752               35,906                       110,192  
 
                                                                        
HEALTH CARE TOTAL
                     105,821               4,071               85,436                       195,328  
 
                                                                        
 
                                                                                
INDUSTRIALS
     13.6 %                                                                        
Aerospace & Defense
     4.0 %                                                                        
GENERAL DYNAMICS CORP
             236       25,282       9       985       —       —       —       245       26,266  
GOODRICH CORPORATION
             —       —       —       —       473       18,126       —       473       18,126  
HONEYWELL INTERNATIONAL INC.
             —       —       —       —       466       17,342       —       466       17,342  

 

Table of Contents

                                                                                 
            Columbia Growth & Income Fund     Columbia Tax Managed Value Fund     Nations Value Fund              
            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
NORTHROP GRUMMAN CORP
             —       —       —       —       286       15,433       —       286       15,433  
UNITED TECHNOLOGIES CORPORATION
             354       35,958       13       1,371       332       33,771       —       699       71,100  
 
                                                                        
Aerospace & Defense Total
                     61,240               2,356               84,672                       148,268  
 
                                                                        
 
                                                                                
Building Products
     0.3 %     —       —       —       —       —       —       —       —       —  
AMERICAN STANDARD COMPANIES, INC.
             —       —       —       —       209       9,705       —       209       9,705  
 
                                                                        
Building Products Total
                     —               —               9,705                       9,705  
 
                                                                        
 
                                                                                
Commercial Services & Supplies
     2.0 %                                                                        
CENDANT CORPORATION (CD.N)
             429       8,821       17       340       604       12,412       —       1,050       21,573  
PHH CORP (a)
             —       —       —       —       30       661       —       30       661  
REPUBLIC SERVICES INC
             167       5,607       6       214       —       —       —       174       5,821  
WASTE MANAGEMENT INC (NEW)
             702       20,254       27       773       840       24,220       —       1,568       45,247  
 
                                                                        
Commercial Services & Supplies Total
                     34,683               1,326               37,293                       73,302  
 
                                                                        
 
                                                                                
Industrial Conglomerates
     4.5 %                                                                        
GENERAL ELECTRIC COMPANY
             2,203       79,450       85       3,058       1,371       49,449       —       3,659       131,957  
TEXTRON INC
             481       35,870       18       1,359       —       —       —       499       37,229  
 
                                                                        
Industrial Conglomerates Total
                     115,320               4,417               49,449                       169,186  
 
                                                                        
 
                                                                                
Machinery
     2.2 %                                                                        
CATERPILLAR INC
             —       —       —       —       152       13,917       —       152       13,917  
DEERE & COMPANY (b)
             200       13,446       8       518       199       13,386       —       407       27,350  
EATON CORPORATION
             219       14,305       8       546       124       8,136       —       351       22,986  
INGERSOLL-RAND CO-CLASS A
             —       —       —       —       212       16,894       —       212       16,894  
 
                                                                        
Machinery Total
                     27,751               1,063               52,332                       81,147  
 
                                                                        
 
                                                                                
Road & Rail
     0.7 %                                                                        
BURLINGTON NORTHERN SANTA FE
             —       —       —       —       251       13,536       —       251       13,536  
UNION PACIFIC CORPORATION
             —       —       —       —       202       14,100       —       202       14,100  
 
                                                                        
Road & Rail Total
                     —               —               27,637                       27,637  
 
                                                                        
INDUSTRIALS TOTAL
                     238,993               9,163               261,088                       509,244  
 
                                                                        
 
                                                                                
INFORMATION TECHNOLOGY
     5.0 %                                                                        
Communications Equipment
     0.6 %                                                                        
NOKIA CORP ADR
             1,340       20,682       52       805       —       —       —       1,393       21,488  
 
                                                                        
Communications Equipment Total
                     20,682               805               —                       21,488  
 
                                                                        
 
                                                                                
Computers & Peripherals
     2.2 %                                                                        
HEWLETT-PACKARD COMPANY
             —       —       —       —       609       13,372       —       609       13,372  
INTERNATIONAL BUSINESS MACHINES
             214       19,592       8       763       314       28,729       —       537       49,083  
LEXMARK INTERNATIONAL INC
             229       18,343       9       723       —       —       —       238       19,066  
 
                                                                        
Computers & Peripherals Total
                     37,934               1,486               42,100                       81,521  
 
                                                                        

 

Table of Contents

                                                                                 
            Columbia Growth & Income Fund     Columbia Tax Managed Value Fund     Nations Value Fund              
            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Electronic Equipment & Instruments
     0.5 %                                                                        
AGILENT TECHNOLOGIES INC (a)
             —       —       —       —       768       17,050       —       768       17,050  
 
                                                                        
Electronic Equipment & Instruments Total
                     —               —               17,050                       17,050  
 
                                                                        
 
                                                                                
IT Services
                                                                                
ACCENTURE LTD.
     0.9 %     907       21,895       37       887       —       —       —       943       22,782  
AUTOMATIC DATA PROCESSING INC
             218       9,818       8       377       —       —       —       227       10,195  
 
                                                                        
IT Services Total
                     31,713               1,264               —                       32,976  
 
                                                                        
 
                                                                                
Office Electronics
     0.4 %                                                                        
XEROX CORP
             884       13,399       34       512       —       —       —       918       13,911  
 
                                                                        
Office Electronics Total
                     13,399               512               —                       13,911  
 
                                                                        
 
                                                                                
Semiconductors & Semiconductor Equipment
     0.2 %                                                                        
FAIRCHILD SEMICON INTL INC (a)
             —       —       —       —       449       6,876       —       449       6,876  
 
                                                                        
Semiconductors & Semiconductor Equipment Total
                     —               —               6,876                       6,876  
 
                                                                        
 
                                                                                
Software
     0.4 %                                                                        
MICROSOFT CORP
             577       13,939       22       536       —       —       —       599       14,475  
 
                                                                        
Software Total
                     13,939               536               —                       14,475  
 
                                                                        
INFORMATION TECHNOLOGY TOTAL
                     117,667               4,604               66,026                       188,296  
 
                                                                        
 
                                                                                
MATERIALS
     5.7 %                                                                        
Chemicals
     2.7 %                                                                        
AIR PRODUCTS & CHEMICALS INC
             567       35,892       19       1,192       —       —       —       586       37,084  
DOW CHEMICAL
             —       —       —       —       252       12,572       —       252       12,572  
EASTMAN CHEMICAL COMPANY (EMN)
             —       —       —       —       305       18,019       —       305       18,019  
PPG INDUSTRIES INC
             109       7,774       4       299       124       8,868       —       237       16,942  
ROHM & HAAS COMPANY
             —       —       —       —       348       16,714       —       348       16,714  
 
                                                                        
Chemicals Total
                     43,666               1,491               56,173                       101,330  
 
                                                                        
 
                                                                                
Containers & Packaging
     0.5 %                                                                        
BEMIS COMPANY
             —       —       —       —       561       17,446       —       561       17,446  
 
                                                                        
Containers & Packaging Total
                     —               —               17,446                       17,446  
 
                                                                        
 
                                                                                
Metals & Mining
     0.8 %                                                                        
ALCOA INC
             —       —       —       —       425       12,916       —       425       12,916  
FREEPORT MCMORAN COPPER & GOLD INC.
             —       —       —       —       390       15,452       —       390       15,452  
 
                                                                        
Metals & Mining Total
                     —               —               28,368                       28,368  
 
                                                                        
 
                                                                                
Paper & Forest Products
     1.8 %                                                                        
INTERNATIONAL PAPER CO
             —       —       —       —       254       9,342       —       254       9,342  
MEADWESTVACO CORPORATION
             760       24,168       24       764       —       —       —       784       24,932  
WEYERHAUSER CO
             246       16,822       10       655       209       14,296       —       464       31,773  
 
                                                                        

 

Table of Contents

                                                                                 
            Columbia Growth & Income Fund     Columbia Tax Managed Value Fund     Nations Value Fund              
            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Paper & Forest Products Total
                     40,990               1,419               23,638                       66,047  
 
                                                                        
MATERIALS TOTAL
                     84,656               2,910               125,624                       213,191  
 
                                                                        
 
                                                                                
TELECOMMUNICATION SERVICES
     3.9 %                                                                        
Diversified Telecommunication Services
     3.9 %                                                                        
BELLSOUTH CORP
             557       14,646       21       559       517       13,583       —       1,095       28,788  
SBC COMMUNICATIONS INC
             1,613       38,215       62       1,470       790       18,708       —       2,465       58,394  
VERIZON COMMUNICATIONS
             869       30,835       34       1,201       707       25,111       —       1,610       57,146  
 
                                                                        
Diversified Telecommunication Services Total
                     83,696               3,229               57,402                       144,328  
 
                                                                        
TELECOMMUNICATION SERVICES TOTAL
                     83,696               3,229               57,402                       144,328  
 
                                                                        
 
                                                                                
UTILITIES
     5.3 %                                                                        
Electric Utilities
     4.2 %                                                                        
AMERICAN ELECTRIC POWER CO INC
             —       —       11       363       —       —       —       11       363  
ENTERGY CORPORATION
             274       19,378       11       784       185       13,086       —       471       33,249  
EXELON CORPORATION
             341       15,649       13       601       561       25,731       —       915       41,980  
FPL GROUP INC
             252       10,129       10       389       —       —       —       262       10,518  
P G & E CORPORATION (b)
             310       10,578       12       404       512       17,464       —       834       28,446  
TXU CORPORATION
             379       30,164       15       1,161       147       11,706       —       540       43,031  
 
                                                                        
Electric Utilities Total
                     85,898               3,702               67,987                       157,587  
 
                                                                        
 
                                                                                
Multi-Utilities
     1.1 %                                                                        
DOMINION RESOURCES INC
             —       —       —       —       244       18,168       —       244       18,168  
DUKE ENERGY CORP.
             —       —       —       —       849       23,786       —       849       23,786  
 
                                                                        
Multi-Utilities Total
                     —               —               41,955                       41,955  
 
                                                                        
UTILITIES TOTAL
                     85,898               3,702               109,941                       199,542  
 
                                                                        
TOTAL COMMON STOCKS
                     1,869,298               71,987               1,722,278                       3,663,563  
 
                                                                        
 
                                                                                
INVESTMENT MANAGEMENT COMPANY
     2.0 %                                                                        
NATIONS CASH RESERVE
             —       —       —       —       41,510       41,510       —       41,510       41,510  
ISHARES RUSSELL 1000 VALUE
             492       32,355       10       654       —       —       —       502       33,009  
 
                                                                        
INVESTMENT MANAGEMENT COMPANY
                     32,355               654               41,510                       74,519  
 
                                                                        
 
                                                                                
REPURCHASE AGREEMENTS (d)
                                                                                
Repurchase agreement with ABN AMRO, Inc. dated 03/31/05 due 04/01/05 at 2.830%, collateralized by U.S. Government Agency securities with various maturities to 05/15/29, market value $13,692 (repurchase proceeds $13,564)
                                             13,563       13,563                       13,563  
 
                                                                                
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.840%, collateralized by U.S. Government Agency securities with various maturities to 05/20/33, market value $16,489 (repurchase proceeds $16,276)
                                             16,275       16,275                       16,275  

 

Table of Contents

                                                                         
       
    Columbia Growth & Income Fund     Columbia Tax Managed Value Fund     Nations Value Fund              
    Target Fund   Target Fund   Acquiring Fund   Pro forma   Pro Forma Combined  
As of 3/31/05   Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.920%, collateralized by U.S. Government Agency securities with various maturities to 03/231/35, market value $21,523 (repurchase proceeds $21,191)
                                     21,189       21,189                       21,189  
TOTAL REPURCHASE AGREEMENTS
                                             51,027       —       —       51,027  
 
                                                                        
Total Investments
     102.5 %     1,901,653               72,641               1,814,815                       3,789,109  
Other Assets & Liabilities
     -2.5 %     (4,106 )             (206 )             (44,122 )     (503 )             (48,937 )
 
                                                              
Net Assets
     100.0 %   $ 1,897,547             $ 72,435               1,770,693       (503 )             3,740,172  
 
                                                                
 
                                                                        
Investments at cost
             1,605,199               59,748               1,518,186                       3,183,133  

Notes to Investment Portfolio:

(a)  Non-income producing security
 
(b)  All or a portion of this security was on loan at March 31, 2005. The aggregate cost and market value of securities on loan at March 31, 2005 is $40,172 and $49,965 respectively.
 
(c)  Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by Banc of America Capital Management, LLC.
 
(d)  This amount represents cash collateral received from securities lending activity.
 
(e)  Cost for federal income tax purposes is $1,605,199 for the Columbia Growth and Income Fund, $59,748 for the Columbia Tax Managed Value Fund, $1,520,176 for the Nations Value fund, and $3,185,123 for the funds combined.

ABBREVIATIONS
ADR - American Depositary Receipt
REIT - Real Estate Investment Trust

 

Table of Contents

                                         
Pro -forma Combining
Statement of Assets & Liabilities
As of March 31, 2005 (unaudited)
    Columbia     Columbia     Nations              
    Growth & Income     Tax-Managed     Value              
    Fund     Value Fund     Fund     Pro Forma     Pro Forma  
In Thousands   Target Fund     Target Fund     Acquiring Fund     Adjustments     Combined  
Assets:
                                        
Investments, at cost
   $ 1,605,199     $ 59,748     $ 1,425,649     $ —     $ 3,090,596  
Affiliated Investments, at cost
   $ —     $ —     $ 92,541     $ —     $ 92,541  
                   
Investments, at value
     1,901,653       72,641       1,722,278       —       3,696,572  
Affiliated Investments, at value
     —       —       92,541       —       92,541  
Receivable for:
                                        
Investments sold
     —       —       3,594       —       3,594  
Fund shares sold
     318       16       6,450       —       6,784  
Dividend Receivable
     3,395       130       3,605       —       7,130  
Expense reimbursement due from Investment Advisor
     —       —  (f)     —       —       0  (f)
Deferred Trustees’ compensation plan
     53       6       —       —       59  
                   
Total Assets
     1,905,419       72,793       1,828,468       —       3,806,680  
                   
 
                                        
Liabilities:
                                        
Payable for:
                                        
Collateral on securities loaned
     —       —       51,031       —       51,031  
Payable to custodian bank
     3,222       94       —       —       —  
Investments purchased
     576       18       3,401       —       3,995  
Fund shares repurchased
     1,510       102       1,804       —       3,416  
Investment advisory fee
     1,121       46       801       —       1,968  
Administration fee
     —       4       238       —       242  
Transfer agent fee
     529       34       —       —       563  
Pricing and bookkeeping fees
     35       2       —       —       37  
Trustees’ fees
     —       —       148       —       148  
Audit fee
     26               —       —       26  
Custody fee
     —       —       13       —       13  
Distribution and service fees
     777       48       149       —       974  
Tax withheld liability
     —       (0 ) (f)     —       —       (0 ) (f)
Future variation margin payable
     —       —       —       —       —  
Deferred compensation plan
     53       6       —       —       53  
Other liabilities
     23       4       190       503  (d)     720  
                   
Total Liabilities
     7,872       358       57,775       503       63,186  
                   
Net Assets
   $ 1,897,547     $ 72,435     $ 1,770,693     $ (503 ) (d)   $ 3,740,172  
                   
 
                                        
Composition of Net Assets:
                                        
Paid-in capital
   $ 1,750,459     $ 76,706     $ 1,463,022       —     $ 3,290,187  
Overdistributed net investment income
     5,658       112       1,296       (503 ) (d)   $ 6,563  
Accumulated net realized gain (loss)
     (155,023 )     (17,276 )     9,746       —     $ (162,553 )
Unrealized appreciation on investments
     296,453       12,893       296,629       —     $ 605,975  
                   
Net Assets
   $ 1,897,547     $ 72,435     $ 1,770,693     $ (503 ) (d)   $ 3,740,172  
                   

Table of Contents

                                                                 
    Columbia     Columbia             Nations                              
    Growth & Income     Tax-Managed             Value                              
    Fund     Value Fund             Fund     Pro Forma             Pro Forma          
    Target Fund     Target Fund             Acquiring Fund     Adjustments             Combined          
Investors A:
                                                                
Net assets
   $ —     $ —             $ 292,037,133     $ 613,228,897             $ 905,266,030          
Shares outstanding
     —       —               22,289,494       46,811,903               69,101,397          
                                           
Net asset value per share (b)
   $ —     $ —             $ 13.10                     $ 13.10          
                                           
Maximum sales charge
                             5.75 %                     5.75 %        
Maximum offering price per share (c)
                             13.90                       13.90          
 
                                                                
Investors B: (a)
                                                                
Net assets
   $ —     $ —             $ 84,755,505     $ 741,684,024             $ 826,439,529          
Shares outstanding
     —       —               6,645,746       58,171,456       (e )     64,817,202          
                                           
Net asset value and offering price per share (b)
   $ —     $ —             $ 12.75                     $ 12.75          
                                           
 
                                                                
Investors C: (a)
                                                                
Net assets
   $ —     $ —             $ 17,209,756     $ 92,817,230             $ 110,026,986          
Shares outstanding
     —       —               1,350,085       7,281,857       (e )     8,629,568          
                                           
Net asset value and offering price per share (b)
   $ —     $ —             $ 12.75                     $ 12.75          
                                           
 
                                                                
Primary A: (a)
                                                                
Net assets
   $ —     $ —             $ 1,376,690,685     $ 521,747,529             $ 1,898,439,214          
Shares outstanding
     —       —               104,933,527       39,769,871       (e )     144,703,398          
                                           
Net asset value and offering price per share (b)
   $ —     $ —             $ 13.12                     $ 13.12          
                                           
 
                                                                
Class A: (a)
                                                                
Net assets
   $ 598,512,119     $ 14,863,122             $ —     $ (613,375,241 )           $ —          
Shares outstanding
     32,986,077       1,231,388               —       (34,217,465 )             —          
                                           
Net asset value per share (b)
   $ 18.14     $ 12.07             $ —                     $ —          
                                           
Maximum sales charge
     4.75 %     4.75 %                                                
Maximum offering price per share (c)
     19.05       12.67                                                  
 
                                                                
Class B: (a)
                                                                
Net assets
   $ 695,717,688     $ 46,152,165             $ —     $ (741,869,853 )           $ —          
Shares outstanding
     40,848,099       3,924,712               —       (44,772,811 )             —          
                                           
Net asset value, offering and redemption price per share
   $ 17.03     $ 11.76             $ —                     $ —          
                                           
 
                                                                
Class C: (a)
                                                                
Net assets
   $ 81,490,893     $ 11,352,781             $ —     $ (92,843,674 )           $ —          
Shares outstanding
     4,750,967       965,547               —       (5,716,514 )             —          
                                           
Net asset value, offering and redemption price per share
   $ 17.15     $ 11.76             $ —                     $ —          
                                           
 
                                                                
Class Z:
                                                                
Net assets
   $ 521,825,819     $ 66,584             $ —     $ (521,892,403 )           $ —          
Shares outstanding
     28,741,164       5,459               —       (28,746,623 )             —          
                                           
Net asset value, offering and redemption price per share
   $ 18.16     $ 12.20                                     $ —          
                                           

(a)   Class A, B, C and Z shares of The Columbia Growth & Income Fund and The Columbia Tax-Managed Value Fund are exchanged for new Class A, B, C and Z shares of Nations Value Fund shares, respectively based on the Net Asset Value per share of Nations Value Fund’s Investors A,B,C and Primary A shares, respectively at the time of the merger
 
(b)   Redemption price per share is equal to net assets value less any applicable contingent deferred sales charge.
 
(c)   On sales of $50,000 or more the offering price is reduced.
 
(d)   Adjustment reflects one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of Trustees of $405,994, $54,826 and $42,671. to be borne by Columbia Growth & Income Fund, Columbia Tax-Managed Value Fund and Nations Value Fund, respectively.
 
(e)   Reflects estimated shares issued to Target fund at the time of the merger.
 
(f)   Amount rounds to less than $500

 

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Pro- forma Combining
Statement of Operations
For the Twelve Months Ended March 31, 2005 (Unaudited)

                                                                         
    Columbia     Columbia             Nations                                      
    Growth & Income     Tax-Managed             Value                                      
    Fund     Value Fund             Fund             Pro Forma     Pro Forma                  
In Thousands   Target Fund     Target Fund             Acquiring Fund             Adjustments     Combined                  
Investment Income:
                                                                        
Interest
   $ 125     $ 5             $ —             $ —     $ 130                  
Dividend income from affiliates
     —       —               513               —     $ 513                  
Dividends
     48,197       1,906               37,052                     $ 87,155                  
Security lending
     —       —               17               —     $ 17                  
Foreign taxes withheld
     (4 )     (15 )             —               —     $ (19 )                
                                               
Total Investment Income
     48,326       1,896               37,582               —       87,804                  
                                               
 
                                                                        
Expenses:
                                                                        
Investment advisory fee
     13,336       580               9,382               (6,601 )     16,697       (a )        
Administration fee
     —       38               3,205               2,785       6,028       (b )     (e )
Distribution fee:
                                                     —                  
Class A
     —       8                               (8 )     —       (b )        
Class B
     5,439       361               628                       6,428       (b )        
Class C
     706       92               157                       955       (b )        
Class G
     —       —               —               —       —                  
Service fee:
                                                                        
Class A
     1,547       38               596                       2,181       (b )        
Class B
     1,813       120               210                       2,143       (b )        
Class C
     235       31               52               —       318       (b )        
Class G
     —       —               —               —       —                  
Shareholder services fee — Class T
     —       —               —               —       —                  
Transfer agent fee:
     2,673       119               411               (1,206 )     1,997       (c )        
Pricing and bookkeeping fees
     408       29               —               (296 )     141       (e )        
Trustees’ fees
     44       8               27               (17 )     62       (c )        
Printing fees
     436       27               121               (69 )     515                  
Custody fee
     77       10               89               —       176                  
Registration fees
     95       49               54               (123 )     75       (c )        
Non-Recurring Costs (see Note 5)
     89       4               420               —       513                  
Other expenses
     143       31               183               (64 )     293       (c )        
                                               
Total Operating Expenses
     27,041       1,545               15,535               (5,599 )     38,522                  
Interest expense
     —       —               —               —       —                  
                                               
Total Expenses
     27,041       1,545               15,535               (5,599 )     38,522                  
Fees and expenses waived or reimbursed by Investment Advisor/Administrator
             —               (1,532 )             1,332       (200 )                
Fees waived by Distributor — Class C
     —       —               —               —       —                  
Custody earnings credit
     (3 )     (0 ) (d)             —  (d)             —       (3 )                
Taxes
     —       —               —                       —                  
Non-recurring costs assumed by Investment Advisor (see Note 5)
     (89 )     (4 )             (420 )             —       (513 )                
                                               
Net Expenses
     26,949       1,541               13,583               (4,267 )     37,806                  
                                               
Net Investment Income
     21,377       355               23,999               4,267       49,998                  
                                               
 
                                                                        
Net Realized and Unrealized Gain (Loss) on Investments:
                                                                        
Net realized gain on investments
     174,762       7,104               70,719               —       252,585                  
Net change in unrealized appreciation/depreciation on investments
     (34,485 )     (1,806 )             90,473               —       54,182                  
                                               
Net
     140,277       5,298               161,192               —       306,767                  
                                               
 
                                                                        
Net Increase in Net Assets from Operations
   $ 161,654     $ 5,653             $ 185,191             $ 4,267     $ 356,765                  
                                               

(a)   Adjustment to realign Nations Value Fund’s fees to Columbia Growth & Income Fund’s fee structure.
 
(b)   Based on the contract in effect for Nations Value Fund, the surviving fund.
 
(c)   Reflects elimination of duplicate expenses achieved as a result of merging funds.
 
(d)   Amount rounds to less than $500.
 
(e)   Adjustment to realign Nations Value Fund’s fee to Columbia Growth & Income Fund’s and Columbia Tax Managed Value Fund’s fee structure.

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NATIONS VALUE FUND,

COLUMBIA GROWTH & INCOME FUND
AND
COLUMBIA TAX-MANAGED VALUE FUND

PRO FORMA COMBINING FINANCIAL STATEMENTS

Notes to Financial Statements
March 31, 2005
(unaudited)

Note 1. Organization

Nations Value Fund (the “Acquiring Fund”), a series of Nations Funds Trust (the “Trust”), is a Delaware business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Columbia Growth & Income Fund and Columbia Tax-Managed Value Fund (collectively “Target Funds”), are each registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

Investment Goal

The Acquiring Fund seeks growth of capital by investing in companies that are believed to be undervalued. Columbia Growth & Income Fund seeks long term growth and income. Columbia Tax-Managed Value Fund seeks long term capital growth while reducing shareholder exposure to taxes.

Fund Shares

The Acquiring Fund and the Target Funds each may issue an unlimited number of shares. The Acquiring Fund offers four classes of shares: Primary A, Investor A, Investor B and Investor C shares. The Target Funds each offer four classes of shares: Class A, Class B, Class C and Class Z shares. Each share class has its own expense structure.

Note 2. Basis of Combination

The accompanying pro-forma financial statements are presented to show the effect of the proposed merger of the Target Funds by the Acquiring Fund as if such merger had occurred on April 1, 2004. The following notes refer to the accompanying pro-forma financial statements of such proposed merger.

Under the terms of the merger, the combination of the Target Funds and Acquiring Fund will be accounted for by the method of accounting for tax-free mergers of investment companies. The merger will be accomplished by a combination of the net assets of the Target Funds into the Acquiring Fund in exchange for new shares of the Acquiring Fund at net asset value.

The Pro forma Investment Portfolio and Pro forma Statement of Assets and Liabilities of the Target Funds and Acquiring Fund have been combined to reflect balances as of March 31, 2005. The Pro forma Statement of Operations of the Target Funds and Acquiring Fund has been combined to reflect twelve months ended March 31, 2005. Banc of America Capital Management, LLC. (“BACAP”) expects that all of the securities held by the Target Funds as of March 31, 2005, would comply with the compliance guidelines and/or investment restrictions of the Acquiring Fund.

The pro forma investment portfolio, statement of assets and liabilities and statement of operations shows the combination of Columbia Growth & Income Fund and Columbia Tax-Managed Value Fund reorganizing into Nations Value Fund. They do not reflect the separate combinations of Columbia Growth & Income Fund reorganizing into Nations Value Fund and Columbia Tax-Managed Value Fund reorganizing into Nations Value Fund because the net assets of Columbia Tax-Managed Value Fund are less than 10% of the net assets of both Columbia Growth & Income Fund and Nations Value Fund.

Following the merger the Acquiring Fund will be the accounting survivor. In accordance with accounting principles generally accepted in the United States of America, the historical cost of investment securities will be

 

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carried forward to the Acquiring Fund and the results of operations for pre-combined periods will not be re-stated.

The accompanying pro-forma financial statements should be read in conjunction with the financial statements of the Acquiring Fund and the Target Funds included within their respective annual and semi-annual shareholder reports. The annual shareholder reports are dated March 31, 2005, July 31, 2004 and October 31, 2004 for the Acquiring Fund, Columbia Growth & Income Fund and Columbia Tax-Managed Value Fund, respectively. The semi-annual shareholder reports are dated September 30, 2004, January 31, 2005 and April 30, 2004 for the Acquiring Fund, Columbia Growth & Income Fund and Columbia Tax-Managed Value Fund, respectively.

Note 3. Significant Accounting Policies

Security Valuation

The Acquiring Fund and the Target Fund use the identical policy for security valuation. Equity securities are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the mean of the latest bid and asked prices 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.

Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

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.

Securities Lending

Under an agreement with Bank of New York (“BNY”), the Fund may lend its securities to certain approved brokers, dealers and other financial institutions. Each loan is collateralized by cash, in an amount at least equal to the market value of the securities loaned plus accrued income from the investment of the collateral. The cash collateral received is invested in repurchase agreements. A portion of the income generated by the investment of the collateral, net of any rebates paid by BNY to the borrowers, is remitted to BNY as lending agent, and the remainder is paid to the Fund. Generally, in the event of borrower default, the Fund has the right to use the collateral to offset any losses incurred. In the event the Fund is delayed or prevented from exercising its right to dispose of the collateral, there may be a potential loss to the Fund. The Fund bears the risk of loss with respect to the investment of collateral. The income earned by each Fund from securities lending is included in its Statement of Operations.

Income Recognition

Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities. Corporate actions and dividend income are recorded on the ex-date.

Determination of Class Net Asset Values

 

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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, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

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 tax-exempt or 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.

Note 4. Fees and Compensations Paid to Affiliates

Investment Advisory Fee

BACAP, a wholly-owned subsidiary of Bank of America, N.A. (‘‘Bank of America’’), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, is the investment advisor to the Acquiring Fund. Effective December 1, 2004, BACAP is entitled to receive an investment advisory fee, calculated daily and payable monthly, based on the Fund’s average daily net assets at the following annual rates:

     
Average Daily Net Assets   Annual Fee Rate
First $500 million
   0.60%
$500 million to $1 billion
   0.55%
$1 billion to $1.5 billion
   0.50%
$1.5 billion to $3 billion
   0.45%
$3 billion to $6 million
   0.43%
Over $6 billion
   0.41%

Prior to December 1, 2004, BACAP received a monthly investment advisory fee at the annual rate of 0.65% of the Fund’s average daily net assets. In addition, prior to December 1, 2004, BACAP voluntarily waived a portion of its investment advisory fee for Fund at the annual rate of 0.05% of the Fund’s average daily net assets.

For the year ended March 31, 2005, the Fund’s effective investment advisory fee rate was 0.61%.

Administration Fee

BACAP Distributors, LLC (‘‘BACAP Distributors’’), a wholly-owned subsidiary of Bank of America, provides administrative and other services to the Fund. Effective December 1, 2004, BACAP Distributors is entitled to receive an administration fee, computed daily and paid monthly, at the annual rate of 0.17% of the Fund’s average daily net assets. BACAP Distributors has voluntarily agreed to waive a portion of its administration fee for the Fund at an annual rate of 0.04% of the Fund’s average daily net assets. BACAP Distributors, at its discretion, may revise or discontinue this arrangement any time

Prior to December 1, 2004, BACAP Distributors received a monthly administration fee at the annual rate of 0.23 of the Fund’s average daily net assets. In addition, prior to December 1, 2004, BACAP Distributors voluntarily waived a portion of its administration fee for the Fund at the annual rate of 0.10% of the Fund’s average daily net assets.

For the year ended March 31, 2005, the Fund’s effective administration fee rate was 0.21%.

 

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Transfer Agent Fee

PFPC Inc. serves as the transfer agent for the Fund’s shares. Bank of America serves as the sub-transfer agent for the Primary A Shares of the Fund. Bank of America is entitled to receive from the transfer agent a fee equal to the costs incurred by Bank of America in providing services pursuant to its obligations as sub-transfer agent at the annual rate of up to 0.01% of the net assets attributable to the Primary A shares of the Fund. For the year ended March 31, 2005, Bank of America earned $26,000 in sub-transfer agent fees from the Fund for providing such services. This amount is included in ‘‘Transfer agent fees’’ in the Fund’s Statement of Operations.

Underwriting Discounts, Service and Distribution Fees

BACAP Distributors serves as the distributor of the Fund’s shares. For the year ended March 31, 2005, the Distributor has retained net underwriting discounts of $107,000 on sales of the Fund’s Investor A shares and received net CDSC fees of $1,000, $103,000 and $5,000 on Investor A, Investor B and Investor C share redemptions, respectively.

For the year ended March 31, 2005, the Fund paid brokerage commissions of $7,915 to certain affiliates of BACAP in connection with the execution of various portfolio transactions.

The Fund has adopted shareholder servicing plans and distribution plans for the Investor B and Investor C shares of the Fund and a combined distribution and shareholder servicing plan for Investor A Shares of the Fund. The shareholder servicing plans permit the Fund to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes’ shares. Payments are made at an annual rate and paid monthly, as a percentage of average daily net assets, set from time to time by the Board of Trustees, and are charged as expenses of the Fund directly to the applicable share class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Bank of America and BACAP Distributors.

For the year ended March 31, 2005, the annual rates in effect and plan limits, as a percentage of average daily net assets, were as follows:

         
    Current   Plan
    Rate   Limit
Investor A Combined Distribution and Shareholder Servicing Plan
   0.25%   0.25%
Investor B and Investor C Shareholder Servicing Plans
   0.25%   0.25%
Investor B and Investor C Distribution Plans
   0.75%   0.75%

Fees Paid to Officers and Trustees

With the exception of one officer, no officer, director or employee of Bank of America, BACAP Distributors or BACAP, or any affiliate thereof, receives any compensation from the Fund for serving as Trustee or Officer of the Trust. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. The Fund’s fee for the Office of the Chief Compliance Officer will not exceed $15,000 per year.

The Fund’s eligible Trustees may participate in a non-qualified deferred compensation plan which may be terminated at any time. All benefits provided under this plan are unfunded and any payments to plan participants are paid solely out of the Fund’s assets. Income earned on the plan participant’s deferral account is based on the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected,

 

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on the rate of return of Nations Treasury Reserves, another portfolio of the Trust. The expense for the deferred compensation plan is included in ‘‘Trustees’ fees and expenses’’ in the Statement of operations. The liability for the deferred compensation plan is included in ‘‘Accrued Trustees’ fees and expenses’’ in the Statement of assets and liabilities.

Custody Credits

The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses on the Statement of Operations. 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.

Other

The Fund has made daily investments of cash balances in Nations Cash Reserves, another portfolio of the Trust, pursuant to an exemptive order received from the Securities and Exchange Commission. The income earned by the Fund from such investments is included in its Statement of operations as ‘‘Dividend income from affiliated funds.’’ BACAP and BACAP Distributors earn advisory and administration fees on the investments made in the Nations Cash Reserves in addition to the advisory and administration fees earned by BACAP and BACAP Distributors from the Fund. For the year ended March 31, 2005, BACAP and BACAP Distributors earned $37,000 of investment advisory Fees and $19,000 of administration fees, respectively, related to investments in affiliated funds.

A significant portion of the Fund’s Primary A shares represents investments by fiduciary accounts over which Bank of America has either sole or joint investment discretion.

Note 5. Capital Shares

The pro-forma combining net asset value per share assumes the issuance of Acquiring Fund shares to Target Fund shareholders in connection with the proposed merger. The number of shares assumed to be issued is equal to the net asset value of the Target Fund divided by the net asset value per share of the Acquiring Fund as of March 31, 2005. The pro-forma number of shares outstanding, by class, for the combined entity consists of the following at March 31, 2005.

To be updated

                         
    Shares of     Additional Shares     Total Shares  
    Acquiring Fund     Assumed Issued     Outstanding  
Class of Shares   Pre-Combination     with Merger     Post Combination  
 
Primary A
     104,933,527       39,778,384       144,698,111  
Investor A
     22,289,494       46,822,537       69,104,277  
Investor B
     6,645,746       58,182,382       64,818,787  
Investor C
     1,350,085       7,281,857       8,629,568  

Note 6. Contingencies and Other Events

On February 9, 2005, BACAP and BACAP Distributors entered into an Assurance of Discontinuance with the New York Attorney General (the ‘‘NYAG Settlement’’) and consented to the entry of a cease-and-desist order by the U.S. Securities and Exchange Commission (the ‘‘SEC’’) (the ‘‘SEC Order’’). A copy of the NYAG Settlement is available as part of the Bank of America Corporation Form 8-K filing on February 10, 2005 and a copy of the SEC Order is available on the SEC’s website.

Under the terms of the SEC Order, BACAP and its affiliate, Banc of America Securities, LLC (‘‘BAS’’) have agreed, among other things, (1) to pay $250 million in disgorgement and $125 million in civil money penalties; (2) to cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; (3) to

 

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undertake various remedial measures to ensure compliance with the federal securities laws related to certain mutual fund trading practices; and (4) to retain an independent consultant to review their applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement also requires, among other things, BACAP along with Columbia Management Advisors, Inc. and Columbia Funds Distributors, Inc. — the investment advisor to and distributor of the Columbia Funds, respectively, — to reduce Columbia Funds, Nations Funds and other mutual funds management fees collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions. BACAP and BACAP Distributors are currently in the process of implementing the various terms of the NYAG Settlement and SEC Order.

Pursuant to the procedures set forth in the SEC Order, $375 million will be distributed in accordance with a distribution plan to be developed by the independent distribution consultant. The distribution plan must be based on a methodology developed in consultation with the BACAP, BACAP Distributors and the independent trustees of the Nations Funds and not unacceptable to the staff of the SEC. Although the distribution plan has not yet been formulated, it is anticipated that a significant portion of the settlement fund will be paid to shareholders or mutual funds of other mutual fund complexes that may have been harmed by the trading of the third parties referenced in the Settlements through systems provided by BAS. At this time, the distribution plan is still under development. As such, any gain to the Nations Funds or their shareholders cannot currently be determined. More specific information on the distribution plan will be communicated on a later date.

As a result of these matters or any adverse publicity or other developments resulting from them, including lawsuits brought by shareholders of the affected Nations Funds, 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 Nations Funds.

Civil Litigation

In connection with the events that resulted in the NYAG Settlement and SEC Order, various parties filed suits against Bank of America Corporation and certain of its affiliates, including BACAP and BACAP Distributors (collectively ‘‘BAC’’), Nations Funds Trust and its Board of Trustees. On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against several other mutual fund companies based on similar allegations to the United States District Court in Maryland for consolidated or coordinated pretrial proceedings (the ‘‘MDL’’). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Nations Funds Trust, the Trustees, BAC and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of Nations Funds Trust against BAC and others that asserts claims under the federal securities laws and state common law. The MDL is ongoing. Accordingly, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

Separately, a putative class action (Reinke v. Bank of America N.A., et al.) was filed against Nations Funds Trust and others on December 16, 2004 in the United States District Court for the Eastern District of Missouri relating to the conversion of common trust funds and the investment of assets held in fiduciary accounts in the Funds. Nations Funds Trust has filed a motion to dismiss that is pending, and no discovery has been taken. At the present time, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

For the fiscal year ended March 31, 2005, Bank of America Corporation has assumed $6.7 million of legal, shareholder communications, audit related, transfer agent, consulting and Trustee costs and fees incurred by the Funds impacted in connection with the regulatory and civil litigation matters discussed above. These non-recurring costs were allocated to the Funds based on their respective average nets assets for the year ended March 31, 2005. These non-recurring costs on a per Fund basis are shown in that Fund’s respective Statement of operations. Because these costs were borne by Bank of America Corporation and not any Fund, an offsetting waiver of these costs is also presented in each respective Fund’s Statement of operations as, ‘‘Costs assumed by Bank of America Corporation’’. The impact to the expense ratio of each impacted Fund is reflected in the Fund’s Financial highlights.

 

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Pro Forma Combining Portfolio of Investments (unaudited)

                                                                 
            Columbia Mid Cap Value Fund     Nations MidCap Value Fund              
            Target Fund     Acquiring Fund     Compliance     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
COMMON STOCKS
                                                                
 
                                                                
CONSUMER DISCRETIONARY
                                                                
Auto Components
                                                                
BORG WARNER AUTO
             183       8,904       —       —               183       8,904  
JOHNSON CONTROLS INC
             247       13,778       —       —               247       13,778  
 
                                                          
Auto Components Total
     0.9 %             22,682               —                       22,682  
 
                                                          
 
                                                                
Hotels, Restaurants & Leisure
                                                                
BRINKER INTERNATIONAL, INC. (a)
             483       17,478       151       5,455               633       22,933  
HARRAH’S ENTERTAINMENT INC
             276       17,850       77       4,966               353       22,816  
STARWOOD HOTELS & RESORTS WORLDWIDE INC.
             —       —       105       6,315               105       6,315  
 
                                                          
Hotels, Restaurants & Leisure Total
     2.1 %             35,328               16,736                       52,064  
 
                                                          
 
                                                                
Leisure Equipment & Products
                                                                
MATTEL INC.
             447       9,550       143       3,048               590       12,598  
 
                                                          
Leisure Equipment & Products Total
     0.5 %             9,550               3,048                       12,598  
 
                                                          
 
                                                                
Media
                                                                
DOW JONES & COMPANY INC. (DJ)
             —       —       135       5,045               135       5,045  
KNIGHT RIDDER INC
             146       9,792       —       —               146       9,792  
NEW YORK TIMES CO CLASS A
             259       9,471       —       —               259       9,471  
 
                                                          
Media Total
     1.0 %             19,262               5,045                       24,307  
 
                                                          
 
                                                                
Multiline Retail
                                                                
DOLLAR GENERAL CORPORATION
             623       13,659       323       7,073               946       20,731  
FEDERATED DEPARTMENT STORES
             321       20,441       101       6,447               423       26,888  
MAY DEPARTMENT STORES COMPANY
             355       13,138       140       5,168               495       18,306  
PENNEY (J.C.) COMPANY
             396       13,780       87       4,501               483       18,281  
 
                                                          
Multiline Retail Total
     3.4 %             61,018               23,189                       84,207  
 
                                                          
 
                                                                
Specialty Retail
                                                                
LIMITED BRANDS INC.COM
             —       —       206       5,011               206       5,011  
LINENS ‘N THINGS INC (a)
             —       —       194       4,804               194       4,804  
OFFICEMAX INC
             346       11,598       89       2,995               436       14,593  
SHERWIN-WILLIAMS COMPANY
             —       —       126       5,547               126       5,547  
TJX COMPANIES INC.
             749       18,455       252       6,197               1,001       24,652  
UNITED RENTALS, INC. (a)
           included below     included below                                          
BORDERS GROUP INC
             737       19,608       —       —               737       19,608  
 
                                                          
Specialty Retail Total
     3.0 %             49,661               24,554                       74,215  
 
                                                          
 
                                                                
Textiles, Apparel & Luxury Goods
                                                                
REEBOK INTERNATIONAL LTD
             213       9,423       69       3,061               282       12,484  
 
                                                          
Textiles, Apparel & Luxury Goods Total
     0.5 %             9,423               3,061                       12,484  
 
                                                          
CONSUMER DISCRETIONARY TOTAL
     11.6 %             206,924               75,632                       282,556  
 
                                                          
 
                                                                
CONSUMER STAPLES
                                                                
Beverages
                                                                
PEPSI BOTTLING GROUP INC
             596       16,587       171       4,751               766       21,339  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Mid Cap Value Fund     Nations MidCap Value Fund              
            Target Fund     Acquiring Fund     Compliance     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Beverages Total
     0.9 %             16,587               4,751                       21,339  
 
                                                          
 
                                                                
Food & Staples Retailing
                                                                
KROGER COMPANY (a)
             748       11,984       242       3,876               989       15,860  
SUPERVALU INCORPORATED
             —       —       135       4,512               135       4,512  
 
                                                          
Food & Staples Retailing Total
     0.8 %             11,984               8,388                       20,372  
 
                                                          
 
                                                                
Food Products
                                                                
DEL MONTE FOODS COMPANY (a)
             —       —       629       6,824               629       6,824  
DEAN FOODS (a)
             532       18,234       —       —               532       18,234  
HORMEL FOODS CORP
             343       10,661       —       —               343       10,661  
 
                                                          
Food Products Total
     1.5 %             28,895               6,824                       35,719  
 
                                                          
 
                                                                
Tobacco
                                                                
UST INC
             483       24,966       149       7,693               632       32,659  
 
                                                          
Tobacco Total
     1.3 %             24,966               7,693                       32,659  
 
                                                          
CONSUMER STAPLES TOTAL
     4.5 %             82,433               27,656                       110,089  
 
                                                          
 
                                                                
ENERGY
                                                                
Energy Equipment & Services
                                                                
BAKER HUGHES INC
             —       —       127       5,646               127       5,646  
ENSCO INTERNATIONAL INC
             —       —       179       6,745               179       6,745  
NATIONAL OILWELL VARCO INC (a)
             191       8,920       63       2,938               254       11,858  
TECHNIP SA ADR
             221       9,209       73       3,039               294       12,249  
BJ SERVICES CO
             235       12,171       —       —               235       12,171  
NOBLE CORP
             360       20,236       —       —               360       20,236  
TRANSOCEAN, INC (a)
             421       21,654       —       —               421       21,654  
WEATHERFORD INTERNATIONAL Ltd. (a)
             172       9,983       —       —               172       9,983  
 
                                                          
Energy Equipment & Services Total
     4.1 %             82,173               18,368                       100,541  
 
                                                          
 
                                                                
Oil, Gas & Consumable Fuels
                                                                
ASHLAND INC
             —       —       71       4,797               71       4,797  
EOG RESOURCES INC.
             122       5,956       50       2,437               172       8,393  
MARATHON OIL CORP
             —       —       153       7,160               153       7,160  
MURPHY OIL CORPORATION
             54       5,302       22       2,212               76       7,513  
OCCIDENTAL PETROLEUM CORP
             —       —       76       5,373               76       5,373  
WILLIAMS COMPANIES, INC.
             674       12,676       241       4,535               915       17,211  
AMERADA HESS CORP
             334       32,144       —       —               334       32,144  
XTO ENERGY INC
             839       27,550       —       —               839       27,550  
 
                                                          
Oil, Gas & Consumable Fuels Total
     4.5 %             83,628               26,514                       110,142  
 
                                                          
ENERGY TOTAL
     8.6 %             165,801               44,882                       210,683  
 
                                                          
 
                                                                
FINANCIALS
                                                                
Capital Markets
                                                                
LEGG MASON INC.
             —       —       58       4,532               58       4,532  
BEAR STEARNS COMPANIES INC
             186       18,571       —       —               186       18,571  
JANUS CAPITAL GROUP INC
             1,119       15,610       —       —               1,119       15,610  
LEHMAN BROTHERS HLDG INC
             167       15,762       —       —               167       15,762  
 
                                                          
Capital Markets Total
     2.2 %             49,944               4,532                       54,476  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Mid Cap Value Fund     Nations MidCap Value Fund              
            Target Fund     Acquiring Fund     Compliance     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Commercial Banks
                                                                
CITY NATIONAL CORPORATION
             196       13,713       60       4,210               257       17,923  
COMPASS BANCSHARES, INC.
             —       —       93       4,227               93       4,227  
CULLEN FROST BANKERS
             192       8,646       60       2,693               251       11,339  
HIBERNIA CORPORATION
             —       —       155       4,968               155       4,968  
MARSHALL & ILSLEY CORP.
             462       19,289       192       8,033               654       27,321  
MERCANTILE BANKSHARES CORP.
             —       —       55       2,818               55       2,818  
UNIONBANCAL CORPORATION
             215       13,163       67       4,110               282       17,273  
WACHOVIA CORP
             —       —       106       5,392               106       5,392  
ZIONS BANCORPORATION
             —       —       88       6,070               88       6,070  
NORTH FORK BANCORPORATION
             501       13,885       —       —               501       13,885  
TD BANKNORTH, INC (a) COM
             305       9,537       —       —               305       9,537  
TORONTO DOMINION BK ONT COM N
             146       6,056       —       —               146       6,056  
 
                                                          
Commercial Banks Total
     5.2 %             84,288               42,520                       126,808  
 
                                                          
 
                                                                
Diversified Financial Services
                                                                
CIT GROUP INC
             350       13,311       115       4,378               466       17,689  
 
                                                          
Diversified Financial Services Total
     0.7 %             13,311               4,378                       17,689  
 
                                                          
 
                                                                
Insurance
                                                                
ACE LIMITED
             209       8,617       96       3,941               304       12,558  
ENDURANCE SPECIALTY HOLDINGS LIMITED
             413       15,609       181       6,860               594       22,469  
AMBAC FINANCIAL GROUP, INC.
             224       16,733       60       4,470               284       21,203  
GENWORTH FINANCIAL INC. — CL A
             341       9,373       226       6,225               567       15,598  
HARTFORD FINANCIAL SERVICES GROUP.
             208       14,267       65       4,429               273       18,696  
HARTFORD FINANCIAL SERVICES PFD
             —       —               —               —       —  
LINCOLN NATIONAL CORPORATION
             300       13,524       143       6,450               443       19,974  
LOEWS CORPORATION
             226       16,620       63       4,604               289       21,224  
OLD REPUBLIC INTERNATIONAL CORPORATION
             556       12,941       168       3,920               724       16,861  
CINCINNATI FINANCIAL CORP
             194       8,458       —       —               194       8,458  
NATIONWIDE FINANCIAL SERV A
             310       11,125       —       —               310       11,125  
 
                                                          
Insurance Total
     6.9 %             127,268               40,899                       168,167  
 
                                                          
 
                                                                
Real Estate
                                                                
ARCHSTONE-SMITH TRUST
             267       9,094       164       5,597               431       14,691  
AVALONBAY COMMUNITIES INC
             —       —       64       4,293               64       4,293  
BOSTON PROPERTIES INC
             —       —       100       6,023               100       6,023  
CAMDEN PROPERTY TRUST USD 0.01
             —       —       81       3,800               81       3,800  
EQUITY OFFICE PROPERTIES TRUST
             462       13,905       184       5,556               646       19,461  
HOST MARRIOT CORP (NEW) COM
             1,186       19,634       373       6,177               1,559       25,810  
 
                                                          
Real Estate Total
     3.0 %             42,632               31,446                       74,078  
 
                                                          
 
                                                                
Thrifts & Mortgage Finance
                                                                
GOLDEN WEST FINANCIAL CORPORATION
             526       31,829       51       3,067               577       34,896  
PMI GROUP INCORPORATED
             559       21,240       157       5,968               716       27,208  
SOVREIGN BANCORP, INC.
             1,037       22,971       233       5,159               1,269       28,130  
WEBSTER FINANCIAL CORP
             406       18,432       —       —               406       18,432  
 
                                                          
Thrifts & Mortgage Finance Total
     4.4 %             94,472               14,194                       108,666  
 
                                                          
FINANCIALS TOTAL
     22.5 %             411,915               137,969                       549,884  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Mid Cap Value Fund     Nations MidCap Value Fund              
            Target Fund     Acquiring Fund     Compliance     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
HEALTH CARE
                                                                
Health Care Equipment & Supplies
                                                                
MILLIPORE CORPORATION (a)
             347       15,051       69       2,982               416       18,033  
VARIAN INC (a)
             273       10,344       —       —               273       10,344  
 
                                                          
Health Care Equipment & Supplies Total
     1.2 %             25,395               2,982                       28,377  
 
                                                          
 
                                                                
Health Care Providers & Services
                                                                
AETNA US HEALTHCARE-WI
             —       —       44       3,328               44       3,328  
COMMUNITY HEALTH SYSTEMS (a)
             312       10,874       120       4,182               431       15,057  
MEDCO HEALTH SOLUTIONS INC (a)
             332       16,457       102       5,046               434       21,503  
TRIAD HOSPITALS INC (a)
             —       —       130       6,493               130       6,493  
HCA INC
             306       16,414       —       —               306       16,414  
WELLPOINT INC (a) COM
             117       14,628       —       —               117       14,628  
 
                                                          
Health Care Providers & Services Total
     3.2 %             58,374               19,049                       77,423  
 
                                                          
 
                                                                
Pharmaceuticals
                                                                
IVAX CORPORATION (a)
             472       9,326       155       3,054               626       12,380  
SHIRE PHARMACEUTICALS GROUP PLC — ADR
             565       19,351       190       6,499               754       25,851  
 
                                                          
Pharmaceuticals Total
     1.6 %             28,677               9,554                       38,231  
 
                                                          
HEALTH CARE TOTAL
     5.9 %             112,446               31,585                       144,030  
 
                                                          
 
                                                                
INDUSTRIALS
                                                                
Aerospace & Defense
                                                                
GOODRICH CORPORATION
             496       19,007       161       6,161               657       25,168  
NORTHROP GRUMMAN CORP
             263       14,208       72       3,883               335       18,090  
ROCKWELL COLLINS
             —       —       64       3,060               64       3,060  
 
                                                          
Aerospace & Defense Total
     1.9 %             33,215               13,103                       46,318  
 
                                                          
 
                                                                
Building Products
                                                                
AMERICAN STANDARD COMPANIES, INC.
             228       10,602       102       4,727               330       15,329  
 
                                                          
Building Products Total
     0.6 %             10,602               4,727                       15,329  
 
                                                          
 
                                                                
Commercial Services & Supplies
                                                                
AVERY-DENNISON CORP
             226       14,021       74       4,601               301       18,622  
MANPOWER INCORPORATED
             324       14,083       105       4,578               429       18,661  
PITNEY-BOWES INC
             —       —       157       7,066               157       7,066  
WASTE MANAGEMENT INC (NEW)
             453       13,063       238       6,863               691       19,927  
BRINK’S CO/THE
             682       23,601       —       —               682       23,601  
CENDANT CORP
             669       13,737       —       —               669       13,737  
 
                                                          
Commercial Services & Supplies Total
     4.2 %             78,505               23,109                       101,614  
 
                                                          
 
                                                                
Construction & Engineering
                                                                
FLUOR CORPORATION (NEW)
             164       9,113       72       3,985               236       13,098  
 
                                                          
Construction & Engineering Total
     0.5 %             9,113               3,985                       13,098  
 
                                                          
 
                                                                
Electrical Equipment
                                                                
COOPER INDUSTRIES INC. CLASS — A
             —       —       83       5,958               83       5,958  
AMETEK INC
             395       15,883       —       —               395       15,883  
HUBBELL INC CL B
             167       8,549       —       —               167       8,549  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Mid Cap Value Fund     Nations MidCap Value Fund              
            Target Fund     Acquiring Fund     Compliance     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Electrical Equipment Total
     1.2 %             24,432               5,958                       30,389  
 
                                                          
 
                                                                
Industrial Conglomerates
                                                                
CARLISLE COS INC
             259       18,091       —       —               259       18,091  
 
                                                          
Industrial Conglomerates Total
     0.7 %             18,091               —                       18,091  
 
                                                          
 
                                                                
Machinery
                                                                
INGERSOLL-RAND CO-CLASS A
             222       17,714       73       5,791               295       23,505  
AGCO CORPORATION (a)
             492       8,977       161       2,933               653       11,910  
DOVER CORPORATION
             264       9,961       78       2,929               341       12,890  
HARSCO CORP.
             —       —       83       4,948               83       4,948  
KENNAMETAL INC.
             229       10,875       115       5,476               344       16,351  
NAVISTAR INTERNATIONAL (a)
             481       17,501       140       5,111               621       22,612  
PALL CORP
             —       —       153       4,157               153       4,157  
PARKER-HANNIFIN CORP (a)
             196       11,910       58       3,509               253       15,419  
 
                                                          
Machinery Total
     4.6 %             76,939               34,852                       111,791  
 
                                                          
 
                                                                
Road & Rail
                                                                
BURLINGTON NORTHERN SANTA FE
             410       22,084       128       6,892               537       28,977  
NORFOLK SOUTHERN CORP
             —       —       157       5,809               157       5,809  
 
                                                          
Road & Rail Total
     1.4 %             22,084               12,702                       34,786  
 
                                                          
 
                                                                
Trading Companies & Distributors
                                                                
GATX CORPORATION
             —       —       187       6,206               187       6,206  
UNITED RENTALS INC. (a)
             443       8,955       308       6,223               751       15,178  
 
                                                          
Trading Companies & Distributors Total
     0.9 %             8,955               12,429                       21,384  
 
                                                          
INDUSTRIALS TOTAL
     16.1 %             281,936               110,865                       392,801  
 
                                                          
 
                                                                
INFORMATION TECHNOLOGY
                                                                
Communications Equipment
                                                                
ANDREW CORP (a)
             1,322       15,478       225       2,630               1,546       18,108  
HARRIS CORPORATION
             —       —       125       4,089               125       4,089  
 
                                                          
Communications Equipment Total
     0.9 %             15,478               6,719                       22,198  
 
                                                          
 
                                                                
Computers & Peripherals
                                                                
SEAGATE TECHNOLOGY ESCROW POS (a) (b)
             106       1       —       —               106       1  
 
                                                          
Computers & Peripherals Total
     0.0 %             1               —                       1  
 
                                                          
 
                                                                
Electronic Equipment & Instruments
                                                                
FLEXTRONICS INTL LTD (a)
             702       8,457       383       4,614               1,086       13,071  
AGILENT TECHNOLOGIES INC (a)
             394       8,745       125       2,775               519       11,520  
ARROW ELECTRONICS INCORPORATED (a)
             581       14,728       178       4,512               759       19,241  
INGRAM MICRO INC (a)
             270       4,504       88       1,474               359       5,978  
METTLER-TOLEDO INTERNATIONAL INC (a)
             183       8,702       60       2,864               244       11,566  
TEKTRONIX INC
             —       —       122       2,984               122       2,984  
AVX CORP
             658       8,056       —       —               658       8,056  
AMPHENOL CORP CL A
             493       18,264       —       —               493       18,264  
LITTLEFUSE INC (a)
             430       12,320       —       —               430       12,320  
 
                                                          
Electronic Equipment & Instruments Total
     4.2 %             83,776               19,223                       102,999  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Mid Cap Value Fund     Nations MidCap Value Fund              
            Target Fund     Acquiring Fund     Compliance     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
IT Services
                                                                
AFFILIATED COMPUTER SVCS INC-A (a)
             314       16,701       —       —               314       16,701  
DST SYSTEMS INC (a)
             167       7,707       —       —               167       7,707  
 
                                                          
IT Services Total
     1.0 %             24,409               —                       24,409  
 
                                                          
 
                                                                
Semiconductors & Semiconductor Equipment
                                                                
FAIRCHILD SEMICON INTL INC (a)
             —       —       292       4,481               292       4,481  
INTERGRATED DEVICE TECHNOLOGIES
             —       —       254       3,050               254       3,050  
 
                                                          
Semiconductors & Semiconductor Equipment Total
     0.3 %             —               7,531                       7,531  
 
                                                          
INFORMATION TECHNOLOGY TOTAL
     6.4 %             123,664               33,473                       157,137  
 
                                                          
 
                                                                
MATERIALS
                                                                
Chemicals
                                                                
AGRIUM INC
             —       —       248       4,517               248       4,517  
CELANESE CORP (a)
             494       8,882       175       3,148               669       12,030  
EASTMAN CHEMICAL COMPANY (EMN)
             345       20,349       90       5,304               435       25,653  
INTERNATIONAL FLAVORS & FRAGRANCES, INC.
             451       17,815       129       5,099               580       22,914  
LUBRIZOL CORPORATION
             441       17,918       145       5,877               586       23,795  
LYONDELL CHEMICAL COMPANY
             —       —       100       2,781               100       2,781  
NALCO HOLDING CO (a)
             637       11,989       200       3,766               837       15,755  
ROHM & HAAS COMPANY
             380       18,235       125       5,995               505       24,230  
AIR PRODUCTS & CHEMICALS INC
             324       20,500       —       —               324       20,500  
AGRIUM INC COM
             756       13,788       —       —               756       13,788  
ENGELHARD CORPORATION
             440       13,201       —       —               440       13,201  
PPG INDUSTRIES INC
             211       15,069       —       —               211       15,069  
CELANESE PFD STOCK (a)
             68       1,890       —       —               68       1,890  
 
                                                          
Chemicals Total
     8.0 %             159,635               36,487                       196,123  
 
                                                          
 
                                                                
Construction Materials
                                                                
MARTIN MARIETTA MATERIALS INC
             251       14,058       138       7,695               389       21,753  
 
                                                          
Construction Materials Total
     0.9 %             14,058               7,695                       21,753  
 
                                                          
 
                                                                
Containers & Packaging
                                                                
BEMIS COMPANY
             423       13,161       155       4,811               578       17,972  
CROWN HLDGS INC COM (a)
             839       13,050       273       4,248               1,112       17,298  
SMURFIT-STONE CONTAINER CORP (a)
             —       —       346       5,357               346       5,357  
TEMPLE-INLAND, INC
             —       —       33       2,400               33       2,400  
PACKAGING CORP OF AMERICA
             759       18,431       —       —               759       18,431  
PACTIV CORP (a)
             512       11,953       —       —               512       11,953  
 
                                                          
Containers & Packaging Total
     3.0 %             56,595               16,816                       73,411  
 
                                                          
 
                                                                
Metals & Mining
                                                                
ARCH COAL INC.
             —       —       104       4,478               104       4,478  
NEWMONT MINING CORPORATION
             —       —       107       4,541               107       4,541  
 
                                                          
Metals & Mining Total
     0.4 %             —               9,019                       9,019  
 
                                                          
 
                                                                
Paper & Forest Products
                                                                
GEORGIA PACIFIC (GP.N)
             636       22,565       84       2,985               720       25,549  
MEADWESTVACO CORPORATION
             587       18,687       —       —               587       18,687  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Mid Cap Value Fund     Nations MidCap Value Fund              
            Target Fund     Acquiring Fund     Compliance     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Paper & Forest Products Total
     1.8 %             41,252               2,985                       44,237  
 
                                                          
MATERIALS TOTAL
     14.1 %             271,541               73,002                       344,542  
 
                                                          
 
                                                                
TELECOMMUNICATION SERVICES
                                                                
Wireless Telecommunication Services
                                                                
TELEPHONE AND DATA SYSTEMS INC
             372       30,355       36       2,946               408       33,301  
 
                                                          
Wireless Telecommunication Services Total
     1.4 %             30,355               2,946                       33,301  
 
                                                          
TELECOMMUNICATION SERVICES TOTAL
     1.4 %             30,355               2,946                       33,301  
 
                                                          
 
                                                                
UTILITIES
                                                                
Electric Utilities
                                                                
CONSOLIDATED EDISON INC.
             —       —       85       3,598               85       3,598  
DTE ENERGY COMPANY
             —       —       99       4,507               99       4,507  
EDISON INTERNATIONAL
             457       15,867       140       4,847               597       20,714  
ENTERGY CORPORATION
             263       18,591       87       6,119               350       24,710  
NSTAR
             —       —       64       3,470               64       3,470  
P G & E CORPORATION
             543       18,520       176       6,002               719       24,521  
PPL CORPORATION
             248       13,406       83       4,481               331       17,887  
ALLETE INC COM N
             0       0       —       —               0       0  
EXELON CORPORATION
             511       23,464       —       —               511       23,464  
 
                                                          
Electric Utilities Total
     5.0 %             89,847               33,024                       122,870  
 
                                                          
 
                                                                
Multi-Utilities
                                                                
CONSTELLATION ENERGY GROUP
             529       27,344       163       8,401               691       35,745  
PUBLIC SERVICE ENTERPRISE GP
             —       —       57       3,089               57       3,089  
SEMPRA ENERGY
             —       —       176       7,020               176       7,020  
ENERGY EAST CORPORATION
             541       14,190       —       —               541       14,190  
 
                                                          
Multi-Utilities Total
     2.5 %             41,534               18,510                       60,045  
 
                                                          
UTILITIES TOTAL
     7.5 %             131,381               51,534                       182,915  
 
                                                          
TOTAL COMMON STOCKS
(Cost of $1,789,246)
     98.5 %             1,818,394               589,545               —       2,407,937  
 
                                                          
 
                                                                
INVESTMENT MANAGEMENT COMPANY
                                                                
NATIONS CASH RESERVES FUND (c)
             —       —               16,619                       16,619  
 
                                                            
Total Investment Management Co (Cost of $16,619)
     0.7 %                             16,619                       16,619  
 
                                                                
Convertible preferred stocks
                                                                
Basic Materials, Chemicals
                                                                
Celanese AG
                             25       694                       694  
Financials, Insurance
                                                                
Hartford Financial Services Group, Inc.
                             42       2,681                       2,681  
 
                                                            
Total convertible preferred stocks (cost of $2,763)
     0.1 %     —                       3,375               —       3,375  
 
                                                                
SHORT-TERM OBLIGATION
                                                                
Repurchase agreement with State Street Bank & Trust Co., dated 03/31/05, due 04/01/05 at 2.45%, collateralized by a U.S. Treasury Bond maturing 05/19/05, market value of $23,306,400 (repurchase proceeds $22,846,555)
(Cost of $22,845)
     0.9 %     22,845       22,845       —       —               22,845       22,845  

 

Table of Contents

                                                                 
            Columbia Mid Cap Value Fund     Nations MidCap Value Fund              
            Target Fund     Acquiring Fund     Compliance     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Total Investments
     100.3 %             1,841,239               609,539               —       2,450,778  
Other Assets & Liabilities, net
     -0.3 %             (4,183 )             (2,571 )     (46 )             (6,800 )
 
                                                        
Net Assets
     100.0 %           $ 1,837,056             $ 606,968       (46 )           $ 2,443,978  
 
                                                        
Investments at cost
               $ 1,343,780             $ 487,694                 $ 1,831,474  
 
                                                        

Notes to Investment Portfolio:

(a)  Non-income producing security.
 
(b)  Represents fair value as determined in good faith under procedures approved by the Board of Trustees.
 
(c)  Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by Banc of America Capital Management, LLC.
 
(d)  Cost for federal income tax purposes is $1,343,780 for the Columbia Mid Cap Value Fund, $488,823 for the Nations MidCap Value Fund, and $1,832,603 for the two funds combined.

     
Acronym   Name
ADR
  American Depositary Receipt
REIT
  Real Estate Investment Trust

 

Table of Contents

Pro -forma Combining
Statement of Assets & Liabilities
As of March 31, 2005 (unaudited)

                                 
    Columbia     Nations              
    Mid Cap Value     MidCap Value              
    Fund     Fund              
    (000)     (000)     Pro Forma     Pro Forma  
In Thousands   Target Fund     Acquiring Fund     Adjustments     Combined  
Assets:
                                
Investments, at cost
   $ 1,343,780     $ 471,075     $ —     $ 1,814,855  
Affiliated Investments, at cost
   $ —     $ 16,619     $ —     $ 16,619  
 
                        
Investments, at value
     1,841,239       592,920       —       2,434,159  
Affiliated Investments, at value
     —       16,619       —       16,619  
Cash
     1,436       474       —       1,910  
Receivable for:
                                
Investments sold
     14,798       3,881       —       18,679  
Fund shares sold
     1,893       715       —       2,608  
Interest
     2       —       —       2  
Dividend Receivable
     2,304       934       —       3,238  
Deferred Trustees’ compensation plan
     39       —       —       39  
other assets
     25       1       —       26  
 
                        
Total Assets
     1,861,736       615,544       —       2,477,280  
 
                        
 
                                
Liabilities:
                                
Payable for:
                                
Investments purchased
     20,502       7,614               28,116  
Investments purchased on a delayed delivery basis
     —       —       —       —  
Fund shares repurchased
     2,253       384       —       2,637  
Investment advisory fee
     1,040       331       —       1,371  
Administration fee
     —       88       —       88  
Transfer agent fee
     336       —       —       336  
Pricing and bookkeeping fees
     25       —       —       25  
Trustees’ fees
     —       29       —       29  
Custody fee
     —       5       —       5  
Distribution and service fees
     485       7       —       492  
Other liabilities
     39       118       46 (d)     203  
 
                        
Total Liabilities
     24,680       8,576       46       33,302  
 
                        
Net Assets
   $ 1,837,056     $ 606,968     $ (46 ) (d)   $ 2,443,978  
 
                        
 
                                
Composition of Net Assets:
                                
Paid-in capital
   $ 1,179,592     $ 443,254       —     $ 1,622,846  
Undistributed net investment income
     1,874       347       (46 ) (d)   $ 2,175  
Accumulated net realized gain (loss)
     158,130       41,522       —     $ 199,652  
Unrealized appreciation on investments
     497,459       121,845       —       619,304  
 
                        
Net Assets
   $ 1,837,055     $ 606,968     $ (46 ) (d)   $ 2,443,977  
 
                        

 

Table of Contents

                                 
    Columbia     Nations              
    Mid Cap Value     MidCap Value              
    Fund     Fund              
    (000)     (000)     Pro Forma     Pro Forma  
    Target Fund     Acquiring Fund     Adjustments     Combined  
Investor A: (a)
                                
Net assets
   $ —     $ 10,257,670     $ 726,398,327     $ 736,655,997  
Shares outstanding
     —       731,725       51,811,578  (e)     52,543,303  
 
                          
Net asset value per share (b)
   $ —     $ 14.02             $ 14.02  
 
                          
Maximum sales charge
             5.75 %             4.75 %
Maximum offering price per share (c)
             14.88               14.88  
 
                                
Investor B: (a)
                                
Net assets
   $ —     $ 4,447,435     $ 327,118,418     $ 331,565,853  
Shares outstanding
     —       320,173       23,550,642  (e)     23,870,815  
 
                          
Net asset value and offering price per share (b)
   $ —     $ 13.89             $ 13.89  
 
                          
 
                                
Investor C: (a)
                                
Net assets
   $ —     $ 944,369     $ 68,249,559     $ 69,193,928  
Shares outstanding
     —       67,794       4,899,466  (e)     4,967,260  
 
                          
Net asset value and offering price per share (b)
   $ —     $ 13.93             $ 13.93  
 
                          
 
                                
Primary A: (a)
                               
Net assets
   $ —     $ 591,318,218     $ 715,242,892     $ 1,306,561,110  
Shares outstanding
     —       42,121,576       50,943,226  (e)     93,064,802  
 
                          
Net asset value and offering price per share (b)
     —     $ 14.04             $ 14.04  
 
                          
 
                                
Class A: (a)
                               
Net assets
   $ 726,399,111     $ —     $ (726,399,111 )   $ —  
Shares outstanding
     27,197,522       —       (27,197,522 ) (e)     —  
 
                          
Net asset value per share (b)
   $ 26.71     $ —             $ —  
 
                          
Maximum sales charge
     5.75 %                        
Maximum offering price per share (c)
     28.34                          
 
                                
Class B: (a)
                               
Net assets
   $ 327,118,758     $ —     $ (327,118,758 )   $ —  
Shares outstanding
     13,495,512       —       (13,495,512 )     —  
 
                          
Net asset value, offering and redemption price per share
   $ 24.24     $ —             $ —  
 
                          
 
                                
Class C: (a)
                               
Net assets
   $ 68,249,631     $ —     $ (68,249,631 )   $ —  
Shares outstanding
     2,727,631       —       (2,727,631 )     —  
 
                          
Net asset value, offering and redemption price per share
   $ 25.02     $ —             $ —  
 
                          
 
                                
Class Z: (a)
                               
Net assets
   $ 715,288,107     $ —     $ (715,288,107 )   $ —  
Shares outstanding
     26,479,105       —       (26,479,105 )     —  
 
                          
Net asset value, offering and redemption price per share
   $ 27.01     $ —             $ —  
 
                          

(a)   Class A, B, C and Z shares of Columbia Mid Cap Value Fund are exchanged for new Investor A, B, C and Primary A MidCap Value Fund shares, respectively based on the Net Asset Value per share of Nations MidCap Value Fund’s Investor A,B,C and Primary A shares, respectively at the time of the merger
 
(b)   Redemption price per share is equal to net assets value less any applicable contingent deferred sales charge.
 
(c)   On sales of $50,000 or more the offering price is reduced.
 
(d)   Adjustment reflects one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of Trustees of $46,411 to be borne by Nations Mid Cap Value, respectively.
 
(e)   Reflects estimated shares issued to Target fund at the time of the merger.

 

Table of Contents

Pro- forma Combining
Statement of Operations
For the Twelve Months Ended March 31, 2005 (Unaudited)

                                 
    Columbia     Nations              
    Mid Cap Value     MidCap Value              
    Fund     Fund              
    (000s)     (000s)     Pro Forma     Pro Forma  
    Target Fund     Acquiring Fund     Adjustments     Combined  
Investment Income:
                                
Interest
   $ 898     $ 415     $ —     $ 1,313  
Interest from affiliates
     —       —       —     $ —  
Dividends
     24,089       11,340             $ 35,429  
Security lending
     —       —       —     $ —  
Foreign taxes withheld
     —       —       —       —  
 
                        
Total Investment Income
     24,987       11,755       —       36,742  
 
                        
 
                                
Expenses:
                                
Investment advisory fee
     11,835       3,472       (2,291 )     13,016  (c)(e)
Administration fee
     —       1,116       2,799       3,915  (c)(e)
Distribution fee:
                                
Class B
     2,496       28       —       2,524  (a)
Class C
     505       6       —       511  (a)
Service fee:
                                
Class A
     1,664       22       —       1,686  (a)
Class B
     803       10       —       813  (a)
Class C
     162       2       —       164  (a)
Transfer agent fee:
     2,468       137       (1,299 )     1,306  (d)
Pricing and bookkeeping fees
     433       —       (290 )     143  (b)(e)
Trustees’ fees
     40       27       (13 )     54  (b)
Printing fees
     298       88       (45 )     341  (b)
Custody fees
     45       40               85  
Legal and Audit Fees
     82       130       (29 )     183  (b)
Registration and filing fees
     86       45       (86 )     45  (b)
Non-Recurring Costs (see Note 6)
     91       —       —       91  
Other expenses
     98       25               123  (b)
 
                        
Total Operating Expenses
     21,106       5,148       (1,254 )     25,000  
Interest expense
     —       1       —       1  
 
                        
Total Expenses
     21,106       5,149       (1,254 )     25,001  
Custody earnings credit
     (1 )     (1 )     —       (2 )
Fees waived or reimbursed by investment advisor and/or administrator (see Note 3)
     —     (2 )     2       0
Non-recurring costs assumed by Investment Advisor (see Note 6)
     (91 )     —       —       (91 )
 
                        
Net Expenses
     21,014       5,146       (1,255 )     24,908  
 
                        
Net Investment Income
     3,973       6,609       1,252       11,834  
 
                        
 
Net Realized and Unrealized Gain (Loss) on Investments:
                                
Net realized gain on investments
     218,805       66,140       —       284,945  
Net change in unrealized appreciation/depreciation on investments
     (40,547 )     27,259       —       (13,288 )
 
                        
Net
     178,258       93,399       —       271,657  
 
                        
 
Net Increase in Net Assets from Operations
   $ 182,231     $ 100,008     $ 1,252     $ 283,491  
 
                        

(a)  Based on the contract in effect for Columbia Mid Cap Value Fund, the target fund.
 
(b)  Reflects elimination of duplicate expenses achieved as a result of merging funds.
 
(c)  Certain fees have been reduced based on the terms of the New York Attorney General Settlement. See Note 6 of the notes to the financial statements.
 
(d)  Reflects the reduction of fees due to the consolidation of transfer agency services with one vendor.
 
(e)  Adjustment to realign Columbia Mid Cap Value Fund’s fee to Nation’s MidCap Value Fund’s fee structure.

 

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NATIONS MIDCAP VALUE FUND
AND
COLUMBIA MID CAP VALUE FUND

PRO FORMA COMBINING FINANCIAL STATEMENTS

Notes to Financial Statements
March 31, 2005
(unaudited)

Note 1. Organization

Nations MidCap Value Fund (the “Acquiring Fund”), a series of Nations Funds Trust (the “Trust”), is a Delaware business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Columbia Mid Cap Value Fund (“Target Fund”), a series of Columbia Funds Trust III, is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

Investment Goal

The Acquiring Fund seeks long-term growth of capital with income as a secondary consideration. The Target Fund seeks long-term growth by investing primarily in middle capitalization equities.

Fund Shares

The Acquiring Fund and the Target Fund each may issue an unlimited number of shares. The Acquiring Fund offers four classes of shares: Primary A, Investor A, Investor B and Investor C shares. The Target Fund also offers four classes of shares: Class A, Class B, Class C and Class Z shares. Each share class has its own expense structure.

Note 2. Basis of Combination

The accompanying pro-forma financial statements are presented to show the effect of the proposed merger of the Target Fund by the Acquiring Fund as if such merger had occurred on April 1, 2004. The following notes refer to the accompanying pro-forma financial statements of such proposed merger.

Under the terms of the merger, the combination of the Target Fund and Acquiring Fund will be accounted for by the method of accounting for tax-free mergers of investment companies. The merger will be accomplished by a combination of the net assets of the Target Fund into the Acquiring Fund in exchange for new shares of the Acquiring Fund at net asset value.

The Pro Forma Investment Portfolios and Pro Forma Statements of Assets and Liabilities of the Target Fund and Acquiring Fund have been combined to reflect balances as of March 31, 2005. The Pro Forma Statements of Operations of the Target Fund and Acquiring Fund has been combined to reflect twelve months ended March 31, 2005. Banc of America Capital Management, LLC. (“BACAP”) expects that all of the securities held by the Target Fund as of March 31, 2005, would comply with the compliance guidelines and/or investment restrictions of the Acquiring Fund.

Following the merger the Acquiring Fund will be the accounting survivor. In accordance with accounting principles generally accepted in the United States of America, the historical cost of investment securities will be carried forward to the Acquiring Fund and the results of operations for pre-combined periods will not be re-stated.

 

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The accompanying pro-forma financial statements should be read in conjunction with the financial statements of the Acquiring Fund and the Target Fund included within their respective annual shareholder reports dated March 31, 2005 and September 30, 2004 for the Acquiring Fund and the Target Fund, respectively, as well as the semi-annual shareholder reports dated September 30, 2004 and March 31, 2005 for the Acquiring Fund and the Target Fund, respectively.

Note 3. Significant Accounting Policies

Security Valuation

The Acquiring Fund and the Target Fund use the identical policy for security valuation. Equity securities are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the mean of the latest bid and asked prices 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.

Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

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.

Income Recognition

Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities. Corporate actions and dividend income are recorded on the ex-date.

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, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

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 tax-exempt or 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.

Note 4. Fees and Compensations Paid to Affiliates

Investment Advisory Fee

BACAP, a wholly-owned subsidiary of Bank of America, N.A. (“Bank of America”), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, is the investment advisor to the Acquiring Fund. Effective December 1, 2004, BACAP

 

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is entitled to receive an investment advisory fee, calculated daily and payable monthly, based on the Fund’s average daily net assets at the following annual rates:

     
Average Daily Net Assets   Annual Fee Rate
First $500 million
   0.65%
$500 million to $1 billion
   0.60%
$1 billion to $1.5 billion
   0.55%
Over $1.5 billion
   0.50%

Prior to December 1, 2004, BACAP received a monthly investment advisory fee at the annual rate of 0.65% of the Fund’s average daily net assets. For the year ended March 31, 2005, the Fund’s effective investment advisory fee rate was 0.65%.

Administration Fee

BACAP Distributors, LLC (“BACAP Distributors”), a wholly-owned subsidiary of Bank of America, provides administrative and other services to the Fund. Effective December 1, 2004, BACAP Distributors is entitled to receive an administration fee, computed daily and paid monthly, at the annual rate of 0.17% of the Fund’s average daily net assets. Prior to December 1, 2004, BACAP Distributors received a monthly administration fee at the annual rate of 0.23 of the Fund’s average daily net assets. For the year ended March 31, 2005, the Fund’s effective administration fee rate was 0.21%.

Transfer Agent Fee

PFPC Inc. serves as the transfer agent for the Fund’s shares. Bank of America serves as the sub-transfer agent for the Primary A Shares of the Fund. Bank of America is entitled to receive from the transfer agent a fee equal to the costs incurred by Bank of America in providing services pursuant to its obligations as sub-transfer agent at the annual rate of up to 0.01% of the net assets attributable to the Primary A shares of the Fund. For the year ended March 31, 2005, Bank of America earned $15,000 in sub-transfer agent fees from the Fund for providing such services. This amount is included in ‘‘Transfer agent fees’’ in the Fund’s Statement of Operations.

Underwriting Discounts, Service and Distribution Fees

BACAP Distributors serves as the distributor of the Fund’s shares. For the year ended March 31, 2005, the Distributor has retained net underwriting discounts of $20,000 on sales of the Fund’s Investor A shares and received net CDSC fees of $0, $8,000 and $500 on Investor A, Investor B and Investor C share redemptions, respectively.

For the year ended March 31, 2005, the Fund paid brokerage commissions of $4,670 to certain affiliates of BACAP in connection with the execution of various portfolio transactions.

The Fund has adopted shareholder servicing plans and distribution plans for the Investor B and Investor C shares of the Fund and a combined distribution and shareholder servicing plan for Investor A Shares of the Fund. The shareholder servicing plans permit the Fund to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes’ shares. Payments are made at an annual rate and paid monthly, as a percentage of average daily net assets, set from time to time by the Board of Trustees, and are charged as expenses of the Fund directly to the applicable share class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Bank of America and BACAP Distributors.

For the year ended March 31, 2005, the annual rates in effect and plan limits, as a percentage of average daily net assets, were as follows:

 

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    Current     Plan  
    Rate     Limit  
Investor A Combined Distribution and Shareholder Servicing Plan
     0.25 %     0.25 %
Investor B and Investor C Shareholder Servicing Plans
     0.25 %     0.25 %
Investor B and Investor C Distribution Plans
     0.75 %     0.75 %

Fees Paid to Officers and Trustees

With the exception of one officer, no officer, director or employee of Bank of America, BACAP Distributors or BACAP, or any affiliate thereof, receives any compensation from the Fund for serving as Trustee or Officer of the Trust. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. The Fund’s fee for the Office of the Chief Compliance Officer will not exceed $15,000 per year.

The Fund’s eligible Trustees may participate in a non-qualified deferred compensation plan which may be terminated at any time. All benefits provided under this plan are unfunded and any payments to plan participants are paid solely out of the Fund’s assets. Income earned on the plan participant’s deferral account is based on the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, on the rate of return of Nations Treasury Reserves, another portfolio of the Trust. The expense for the deferred compensation plan is included in ‘‘Trustees’ fees and expenses’’ in the Statement of operations. The liability for the deferred compensation plan is included in ‘‘Accrued Trustees’ fees and expenses’’ in the Statement of assets and liabilities.

Custody Credits

The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses on the Statement of Operations. 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.

Other

The Fund has made daily investments of cash balances in Nations Cash Reserves, another portfolio of the Trust, pursuant to an exemptive order received from the Securities and Exchange Commission. The income earned by the Fund from such investments is included in its Statement of operations as “Dividend income from affiliated funds.” BACAP and BACAP Distributors earn advisory and administration fees on the investments made in the Nations Cash Reserves in addition to the advisory and administration fees earned by BACAP and BACAP Distributors from the Fund. For the year ended March 31, 2005, BACAP and BACAP Distributors earned $13,000 of investment advisory Fees and $6,000 of administration fees, respectively, related to investments in affiliated funds.

A significant portion of the Fund’s Primary A shares represents investments by fiduciary accounts over which Bank of America has either sole or joint investment discretion.

Expense Limits and Fee Reimbursements

BACAP and/or BACAP Distributors have agreed to waive fees and reimburse the Fund through July 31, 2005 for certain expenses to the extent that total expenses (exclusive of interest expense, shareholder servicing and distribution fees) exceed 1.25% annually of the Fund’s average daily net assets.

BACAP and/or BACAP Distributors is entitled to recover from the Fund any fees waived or expenses reimbursed by BACAP and/or BACAP Distributors during the three year period following the date of such waiver or reimbursement, to the extent that such recovery would not cause the affected fund to exceed the expense limitations in effect at the time of recovery. There is no guarantee that these expense limitations will continue.

 

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As of March 31, 2005, the amounts potentially recoverable by BACAP and/or BACAP Distributors pursuant to this arrangement within one year, two years and three years are $117,740, $60,263 and $21,754, respectively.

Note 5. Capital Shares

The pro-forma combining net asset value per share assumes the issuance of Acquiring Fund shares to Target Fund shareholders in connection with the proposed merger. The number of shares assumed to be issued is equal to the net asset value of the Target Fund divided by the net asset value per share of the Acquiring Fund as of March 31, 2005. The pro-forma number of shares outstanding, by class, for the combined entity consists of the following at March 31, 2005.

                         
      Shares of       Additional Shares       Total Shares  
      Acquiring Fund       Assumed Issued       Outstanding  
Class of Shares     Pre-Combination       with Merger       Post Combination  
Primary A
     42,121,576           50,943,226           93,064,802      
Investor A
     731,725           51,811,578           52,543,303      
Investor B
     320,173           23,550,642           23,870,815      
Investor C
     67,794           4,899,466           4,967,260      

Note 6. Contingencies and Other Events

On February 9, 2005, BACAP and BACAP Distributors entered into an Assurance of Discontinuance with the New York Attorney General (the “NYAG Settlement”) and consented to the entry of a cease-and-desist order by the U.S. Securities and Exchange Commission (the ‘‘SEC’’) (the ‘‘SEC Order’’). A copy of the NYAG Settlement is available as part of the Bank of America Corporation Form 8-K filing on February 10, 2005 and a copy of the SEC Order is available on the SEC’s website.

Under the terms of the SEC Order, BACAP and its affiliate, Banc of America Securities, LLC (“BAS”) have agreed, among other things, (1) to pay $250 million in disgorgement and $125 million in civil money penalties; (2) to cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; (3) to undertake various remedial measures to ensure compliance with the federal securities laws related to certain mutual fund trading practices; and (4) to retain an independent consultant to review their applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement also requires, among other things, BACAP along with Columbia Management Advisors, Inc. and Columbia Funds Distributors, Inc. — the investment advisor to and distributor of the Columbia Funds, respectively, — to reduce Columbia Funds, Nations Funds and other mutual funds management fees collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions. BACAP and BACAP Distributors are currently in the process of implementing the various terms of the NYAG Settlement and SEC Order.

Pursuant to the procedures set forth in the SEC Order, $375 million will be distributed in accordance with a distribution plan to be developed by the independent distribution consultant. The distribution plan must be based on a methodology developed in consultation with the BACAP, BACAP Distributors and the independent trustees of the Nations Funds and not unacceptable to the staff of the SEC. Although the distribution plan has not yet been formulated, it is anticipated that a significant portion of the settlement fund will be paid to shareholders or mutual funds of other mutual fund complexes that may have been harmed by the trading of the third parties referenced in the Settlements through systems provided by BAS. At this time, the distribution plan is still under development. As such, any gain to the Nations Funds or their shareholders cannot currently be determined. More specific information on the distribution plan will be communicated on a later date.

As a result of these matters or any adverse publicity or other developments resulting from them, including lawsuits brought by shareholders of the affected Nations Funds, 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 Nations Funds.

 

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Civil Litigation

In connection with the events that resulted in the NYAG Settlement and SEC Order, various parties filed suits against Bank of America Corporation and certain of its affiliates, including BACAP and BACAP Distributors (collectively “BAC”), Nations Funds Trust and its Board of Trustees. On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against several other mutual fund companies based on similar allegations to the United States District Court in Maryland for consolidated or coordinated pretrial proceedings (the “MDL”). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Nations Funds Trust, the Trustees, BAC and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of Nations Funds Trust against BAC and others that asserts claims under the federal securities laws and state common law. The MDL is ongoing. Accordingly, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

Separately, a putative class action (Reinke v. Bank of America N.A., et al.) was filed against Nations Funds Trust and others on December 16, 2004 in the United States District Court for the Eastern District of Missouri relating to the conversion of common trust funds and the investment of assets held in fiduciary accounts in the Funds. Nations Funds Trust has filed a motion to dismiss that is pending, and no discovery has been taken. At the present time, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

For the fiscal year ended March 31, 2005, Bank of America Corporation has assumed $6.7 million of legal, shareholder communications, audit related, transfer agent, consulting and Trustee costs and fees incurred by the Funds impacted in connection with the regulatory and civil litigation matters discussed above. These non-recurring costs were allocated to the Funds based on their respective average nets assets for the year ended March 31, 2005. These non-recurring costs on a per Fund basis are shown in that Fund’s respective Statement of operations. Because these costs were borne by Bank of America Corporation and not any Fund, an offsetting waiver of these costs is also presented in each respective Fund’s Statement of operations as, ‘‘Costs assumed by Bank of America Corporation’’. The impact to the expense ratio of each Impacted fund is reflected in the Fund’s Financial highlights.

 

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Pro Forma Combining Portfolio of Investments (unaudited)

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
COMMON STOCKS
     98.4 %                                                        
 
                                                                
CONSUMER DISCRETIONARY
     13.1 %                                                        
Auto Components
     0.2 %                                                        
COOPER TIRE & RUBBER
             6       103       10       177       —       15       280  
DANA CORPORATION
             12       152       21       264       —       33       416  
DELPHI CORPORATION
             45       200       77       346       —       122       546  
GOODYEAR TIRE & RUBBER COMPANY (a)(b)
             14       187       24       322       —       38       509  
JOHNSON CONTROLS INC.
             15       848       26       1,469       —       42       2,317  
VISTEON CORPORATION (a)
             10       59       18       102       —       28       161  
 
                                                          
Auto Components Total
     0.2 %             1,548               2,681                       4,229  
 
                                                          
 
                                                                
Automobiles
     0.5 %                                                        
FORD MOTOR COMPANY
             146       1,650       252       2,855       —       398       4,505  
GENERAL MOTORS CORPORATION (b)
             45       1,320       78       2,284       —       123       3,603  
HARLEY-DAVIDSON INCORPORATED
             23       1,340       40       2,321       —       63       3,661  
 
                                                          
Automobiles Total
                     4,309               7,459                       11,768  
 
                                                          
 
                                                                
Distributors
     0.1 %                                                        
GENUINE PARTS COMPANY
             14       605       24       1,045       —       38       1,649  
 
                                                          
Distributors Total
                     605               1,045                       1,649  
 
                                                          
 
                                                                
Hotels, Restaurants & Leisure
     1.5 %                                                        
CARNIVAL CORPORATION
             42       2,171       73       3,759       —       114       5,930  
DARDEN RESTAURANTS INC.
             12       362       20       624       —       32       986  
HARRAH’S ENTERTAINMENT INC
             9       588       16       1,012       —       25       1,600  
HILTON HOTELS CORPORATION
             31       684       53       1,182       —       84       1,866  
INTERNATIONAL GAME TECHNOLOGY
             27       730       48       1,266       —       75       1,997  
MARRIOTT INTERNATIONAL CLASS A
             16       1,070       28       1,849       —       44       2,918  
MCDONALD’S CORPORATION
             101       3,151       175       5,451       —       276       8,602  
STARBUCKS CORPORATION (a)
             32       1,643       55       2,841       —       87       4,484  
STARWOOD HOTELS & RESORTS WORLDWIDE INC.
             17       1,015       29       1,757       —       46       2,772  
WENDY’S INTERNATIONAL INC
             9       355       16       612       —       25       967  
YUM BRANDS INC COM
             23       1,202       40       2,079       —       63       3,281  
 
                                                          
Hotels, Restaurants & Leisure Total
                     12,971               22,433                       35,404  
 
                                                          
 
                                                                
Household Durables
     2.4 %                                                        
BLACK & DECKER CORP.
             6       506       11       875       —       17       1,380  
CENTEX CORP
             10       578       17       995       —       27       1,573  
FORTUNE BRANDS INC.
             12       927       20       1,607       —       31       2,534  
KB HOME
             3       388       6       672       —       9       1,060  
LEGGETT AND PLATT INCORPORATED
             15       439       26       760       —       42       1,199  

 

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            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
MAYTAG CORPORATION (b)
             6       88       11       153       —       17       241  
NEWELL RUBBERMAID INC
             22       480       38       830       —       60       1,311  
PULTE HOMES INC
             9       692       16       1,198       —       26       1,890  
SNAP-ON INCORPORATED
             5       146       8       254       —       13       401  
STANLEY WORKS
             6       272       10       471       —       16       742  
WHIRLPOOL CORPORATION
             5       359       9       625       —       15       984  
CLOROX CO-DEL
             12       768       21       1,332       —       33       2,101  
COLGATE-PALMOLIVE COMPANY
             42       2,181       72       3,771       —       114       5,951  
KIMBERLY CLARK CORPORATION
             38       2,517       66       4,351       —       105       6,869  
PROCTER & GAMBLE COMPANY
             201       10,632       347       18,398       —       548       29,029  
 
                                                          
Household Durables Total
                     20,974               36,292                       57,265  
 
                                                          
 
                                                                
Internet & Catalog Retail
     0.4 %                                                        
EBAY INC. (a)
             96       3,588       167       6,215       —       263       9,803  
 
                                                          
Internet & Catalog Retail Total
                     3,588               6,215                       9,803  
 
                                                          
 
                                                                
Leisure Equipment & Products
     0.2 %                                                        
BRUNSWICK CORP
             8       361       13       624       —       21       985  
EASTMAN KODAK COMPANY
             23       742       39       1,284       —       62       2,026  
HASBRO, INC.
             13       272       23       469       —       36       741  
MATTEL INC.
             33       707       57       1,223       —       90       1,930  
 
                                                          
Leisure Equipment & Products Total
                     2,082               3,601                       5,682  
 
                                                          
 
                                                                
Media
     3.9 %                                                        
CLEAR CHANNEL COMMUNICATION (b)
             42       1,444       72       2,496       —       114       3,941  
COMCAST CORP CLASS A (a)
             176       5,942       304       10,283       —       480       16,225  
WALT DISNEY COMPANY
             163       4,677       282       8,095       —       445       12,772  
DOW JONES & COMPANY INC. (DJ)
             6       209       10       362       —       15       571  
GANNETT COMPANY, INC.
             20       1,582       35       2,736       —       55       4,318  
INTERPUBLIC GROUP OF COMPAINES, INC. (a)
             34       413       58       714       —       92       1,127  
KNIGHT-RIDDER INC (b)
             6       404       10       696       —       16       1,100  
MCGRAW-HILL COMPANIES INC
             15       1,317       26       2,286       —       41       3,603  
MEREDITH CORP.
             4       168       6       295       —       10       463  
NEW YORK TIMES CO-CLASS A (b)
             12       424       20       733       —       32       1,158  
NEWS CORP INC — CL A
             229       3,878       397       6,709       —       626       10,587  
OMNICON GROUP INCORPORATED
             15       1,310       26       2,273       —       40       3,583  
TIME WARNER COMPANIES INCORPORATED (a)
             366       6,416       632       11,100       —       998       17,516  
TRIBUNE COMPANY
             24       945       41       1,637       —       65       2,582  
UNIVISION COMMUNICATIONS INC (a)
             23       642       40       1,112       —       63       1,754  
VIACOM INC CLASS B
             136       4,723       235       8,173       —       370       12,896  
 
                                                          
Media Total
                     34,495               59,698                       94,194  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Multiline Retail
     1.2 %                                                        
BIG LOTS INC (a)
             9       108       16       187       —       25       295  
DILLARDS INC. CL A
             6       151       10       260       —       15       411  
DOLLAR GENERAL CORPORATION
             24       526       41       908       —       65       1,434  
FAMILY DOLLAR STORES
             13       404       23       701       —       36       1,105  
FEDERATED DEPARTMENT STORES
             14       859       23       1,483       —       37       2,342  
KOHLS CORPORATION (a)
             26       1,337       45       2,314       —       71       3,652  
MAY DEPARTMENT STORES COMPANY
             23       859       40       1,489       —       63       2,348  
NORDSTROM INCORPORATED
             10       554       17       962       —       27       1,516  
PENNEY (J.C.) COMPANY
             23       1,179       39       2,043       —       62       3,222  
SEARS HOLDINGS CORP (a)(b)
             8       1,096       14       1,912       —       23       3,008  
TARGET CORPORATION
             71       3,561       123       6,165       —       194       9,726  
 
                                                          
Multiline Retail Total
                     10,634               18,426                       29,059  
 
                                                          
 
                                                                
Specialty Retail
     2.3 %                                                        
AUTONATION INC (a)
             18       341       31       589       —       49       929  
AUTOZONE INCORPORATED (a)
             5       463       9       799       —       15       1,262  
BED BATH & BEYOND INC (a)
             24       881       42       1,521       —       66       2,402  
BEST BUY COMPANY INC
             24       1,280       41       2,223       —       65       3,503  
CIRCUIT CITY STORES-CIRCUIT CITY GROUP.
             15       244       26       423       —       42       667  
GAP, INC.
             59       1,280       101       2,212       —       160       3,492  
HOME DEPOT, INC.
             175       6,681       302       11,555       —       477       18,236  
LIMITED BRANDS INC.COM
             30       739       53       1,278       —       83       2,016  
LOWE’S COMPANIES, INC.
             62       3,511       106       6,073       —       168       9,584  
OFFICEMAX INC
             7       248       13       430       —       20       678  
OFFICE DEPOT (a)
             25       552       43       955       —       68       1,507  
RADIOSHACK CORP.
             13       309       22       533       —       34       842  
SHERWIN-WILLIAMS COMPANY
             10       444       17       767       —       28       1,211  
STAPLES INCORPORATED
             39       1,238       68       2,143       —       108       3,381  
TJX COMPANIES INC.
             38       943       66       1,634       —       105       2,577  
TIFFANY & COMPANY
             12       400       20       690       —       32       1,090  
TOYS “R” US INC (a)
             17       440       30       762       —       47       1,202  
 
                                                          
Specialty Retail Total
                     19,994               34,584                       54,579  
 
                                                          
 
                                                                
Textiles, Apparel & Luxury Goods
     0.4 %                                                        
COACH INC (a)
             15       861       26       1,489       —       42       2,350  
JONES APPAREL GROUP INC
             10       325       17       563       —       27       887  
LIZ CLAIBORNE INCORPORATED
             9       345       15       601       —       24       946  
NIKE INCORPORATED, CLASS-B
             18       1,525       32       2,639       —       50       4,163  
REEBOK INTERNATIONAL LTD
             5       199       8       340       —       12       539  
VF CORP
             8       473       14       815       —       22       1,288  
 
                                                          
Textiles, Apparel & Luxury Goods Total
                     3,728               6,446                       10,174  
 
                                                          
CONSUMER DISCRETIONARY TOTAL
                     114,927               198,880                       313,807  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
CONSUMER STAPLES
     8.3 %                                                        
 
                                                                
Beverages
     2.2 %                                                        
ANHEUSER-BUSCH COS INC
             62       2,929       107       5,067       —       169       7,996  
BROWN-FORMAN CORP -CL B
             7       394       12       680       —       20       1,074  
COCA-COLA COMPANY
             180       7,509       312       12,988       —       492       20,496  
COCA-COLA ENTERPRISES
             28       577       49       996       —       77       1,573  
MOLSON COORS BREWING CO            CL B
             6       494       11       855       —       17       1,349  
PEPSI BOTTLING GROUP INC
             16       437       27       755       —       43       1,192  
PEPSICO INCORPORATED
             134       7,080       231       12,247       —       364       19,327  
 
                                                          
Beverages Total
                     19,419               33,588                       53,007  
 
                                                          
 
                                                                
Food & Staples Retailing
     2.8 %                                                        
ALBERTSON’S INC (b)
             29       605       51       1,046       —       80       1,651  
CVS CORPORATION
             32       1,673       55       2,895       —       87       4,569  
COSTCO WHOLESALE CORPORATION.
             38       1,661       65       2,873       —       103       4,534  
KROGER COMPANY (a)
             58       933       101       1,615       —       159       2,548  
SAFEWAY INC (a)
             36       660       62       1,141       —       97       1,801  
SUPERVALU INCORPORATED
             11       357       19       619       —       29       975  
SYSCO CORPORATION
             51       1,815       88       3,137       —       138       4,952  
WAL-MART STORES, INC
             270       13,505       466       23,364       —       736       36,868  
WALGREEN CO
             81       3,607       141       6,243       —       222       9,850  
 
                                                          
Food & Staples Retailing Total
                     24,816               42,933                       67,748  
 
                                                          
 
                                                                
Food Products
     1.2 %                                                        
ARCHER-DANIELS-MIDLAND CO
             50       1,219       86       2,109       —       135       3,328  
CAMPBELL SOUP CO
             26       752       45       1,302       —       71       2,053  
CONAGRA INC
             41       1,108       71       1,917       —       112       3,025  
GENERAL MILLS INC.
             29       1,425       50       2,470       —       79       3,895  
HEINZ (H.J.) COMPANY
             28       1,024       48       1,775       —       76       2,799  
HERSHEY FOODS CORPORATION
             17       1,052       30       1,821       —       48       2,873  
KELLOGG COMPANY
             28       1,207       48       2,090       —       76       3,297  
MCCORMICK & COMPANY, INC.
             11       372       19       643       —       29       1,015  
SARA LEE CORPORATION
             63       1,392       109       2,407       —       171       3,798  
WRIGLEY (WM.) JR COMPANY
             16       1,023       27       1,767       —       43       2,790  
 
                                                          
Food Products Total
                     10,574               18,300                       28,874  
 
                                                          
 
                                                                
Personal Products
     0.7 %                                                        
ALBERTO-CULVER CO
             7       321       12       557       —       18       878  
AVON PRODUCTS, INC.
             38       1,610       65       2,788       —       102       4,398  
GILLETTE COMPANY
             79       3,978       136       6,887       —       215       10,865  
 
                                                          
Personal Products Total
                     5,909               10,232                       16,140  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Tobacco
     1.4 %                                                        
ALTRIA GROUP INC
             165       10,757       285       18,612       —       449       29,368  
REYNOLDS AMERICAN INC.
             9       749       16       1,289       —       25       2,039  
UST INC
             13       677       23       1,176       —       36       1,853  
 
                                                          
Tobacco Total
                     12,183               21,077                       33,261  
 
                                                          
CONSUMER STAPLES TOTAL
                     72,901               126,130                       199,030  
 
                                                          
 
                                                                
ENERGY
     8.6 %                                                        
Energy Equipment & Services
     1.2 %                                                        
NABORS INDUSTRIES LTD. (a)
             11       668       19       1,152       —       31       1,820  
NOBLE CORPORATION (a)
             11       607       19       1,051       —       30       1,658  
TRANSOCEAN INC (a)
             26       1,312       44       2,272       —       70       3,584  
B.J. SERVICES COMPANY
             13       669       22       1,162       —       35       1,831  
BAKER HUGHES INC
             27       1,197       47       2,069       —       73       3,266  
HALLIBURTON COMPANY
             40       1,734       69       3,000       —       109       4,735  
NATIONAL OILWELL VARCO INC (a)
             13       621       23       1,079       —       36       1,700  
ROWAN COMPANIES INCORPORATED (a)
             9       254       15       442       —       23       697  
SHLUMBERGER LTD
             47       3,306       81       5,721       —       128       9,027  
 
                                                          
Energy Equipment & Services Total
                     10,369               17,948                       28,317  
 
                                                          
 
                                                                
Oil, Gas & Consumable Fuels
     7.5 %                                                        
AMERADA HESS CORP
             7       654       12       1,126       —       19       1,780  
ANADARKO PETROLEUM CORP.
             19       1,431       33       2,481       —       51       3,912  
APACHE CORPORATION
             26       1,592       45       2,753       —       71       4,345  
ASHLAND INC
             5       358       9       614       —       14       972  
BURLINGTON RESOURCES INC
             31       1,542       53       2,667       —       84       4,210  
CHEVRONTEXACO CORPORATION.
             167       9,761       290       16,885       —       457       26,646  
CONOCOPHILLIPS
             55       5,964       96       10,323       —       151       16,287  
DEVON ENERGY CORPORATION
             38       1,819       66       3,152       —       104       4,971  
EOG RESOURCES INC.
             19       926       33       1,601       —       52       2,527  
EL PASO CORPORATION
             51       542       89       936       —       140       1,478  
EXXON MOBIL CORPORATION
             508       30,271       879       52,371       —       1,387       82,641  
KERR-MGEE CORPORATION
             13       1,018       22       1,759       —       35       2,777  
KINDER MORGAN INC KANS
             9       659       15       1,141       —       24       1,800  
MARATHON OIL CORP
             28       1,295       48       2,240       —       75       3,535  
OCCIDENTAL PETROLEUM CORP
             32       2,249       55       3,888       —       86       6,137  
SUNOCO INC
             6       569       10       983       —       15       1,553  
UNOCAL CORPORATION
             22       1,326       37       2,298       —       59       3,624  
VALERO ENERGY CORP
             20       1,495       35       2,590       —       56       4,085  
WILLIAMS COMPANIES, INC.
             45       854       78       1,475       —       124       2,329  
XTO ENERGY INC
             28       905       48       1,569       —       75       2,474  
 
                                                          
Oil, Gas & Consumable Fuels Total
                     65,230               112,852                       178,081  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
ENERGY TOTAL
                     75,599               130,800                       206,399  
 
                                                          
 
                                                                
FINANCIALS
     19.5 %                                                        
Capital Markets
     2.8 %                                                        
BANK OF NEW YORK CO INC
             62       1,798       107       3,111       —       169       4,909  
BEAR STEARNS COMPANY INCORPORATED
             9       899       16       1,561       —       25       2,460  
E*TRADE GROUP INC (a)
             30       354       51       612       —       81       966  
FEDERATED INVESTORS INC
             8       215       13       369       —       21       585  
FRANKLIN RESOURCES INC
             16       1,078       27       1,867       —       43       2,945  
GOLDMAN SACHS GROUP INC
             36       3,916       62       6,773       —       97       10,688  
JANUS CAPITAL GROUP INC
             19       262       33       453       —       51       716  
LEHMAN BROTHERS HOLDING INCORPORATE
             22       2,072       38       3,580       —       60       5,652  
MELLON FINANCIAL CORPORATION.
             34       962       58       1,663       —       92       2,625  
MERRILL LYNCH & CO
             74       4,188       128       7,249       —       202       11,437  
MORGAN STANLEY
             89       5,067       153       8,764       —       242       13,830  
NORTHERN TRUST CORPORATION
             16       704       28       1,215       —       44       1,919  
T ROWE PRICE GROUP INC
             10       582       17       1,009       —       27       1,591  
SCHWAB (CHARLES) CORP
             91       960       158       1,656       —       249       2,615  
STATE STREET CORPORATION.
             27       1,159       46       2,007       —       72       3,165  
 
                                                          
Capital Markets Total
                     24,214               41,889                       66,104  
 
                                                          
 
                                                                
Commercial Banks
     5.7 %                                                        
AMSOUTH BANCORPORATION
             28       732       49       1,268       —       77       2,000  
BB & T CORPORATION
             44       1,704       75       2,950       —       119       4,653  
BANK OF AMERICA CORP (c)
             322       14,218       558       24,601       —       880       38,819  
COMERICA INCORPORATED
             14       744       23       1,288       —       37       2,031  
COMPASS BANCSHARES, INC.
             10       445       17       772       —       27       1,217  
FIFTH THIRD BANCORP
             41       1,779       72       3,074       —       113       4,854  
FIRST HORIZON NATIONAL CORPORATION
             10       400       17       691       —       27       1,091  
HUNTINGTON BANCSHARES INC
             18       440       32       764       —       50       1,203  
KEYCORP
             32       1,048       56       1,815       —       88       2,863  
M&T BANK CORPORATION
             8       796       14       1,378       —       21       2,174  
MARSHALL & ILSLEY CORP.
             17       689       29       1,195       —       45       1,884  
NATIONAL CITY CORPORATION
             47       1,585       81       2,727       —       129       4,311  
NORTH FOLK
             37       1,037       65       1,796       —       102       2,833  
PNC FINANCIAL SERVICES GROUP
             23       1,158       39       2,000       —       61       3,158  
Regions Financial Corp
             37       1,199       64       2,071       —       101       3,270  
SUNTRUST BANKS INCORPORATED
             27       1,946       47       3,358       —       74       5,304  
SYNOVUS FINANCIAL CORPORATION
             25       688       43       1,192       —       67       1,880  
US BANCORP
             147       4,248       255       7,349       —       402       11,597  
WACHOVIA CORP
             126       6,420       218       11,109       —       344       17,528  
WELLS FARGO & COMPANY (NEW)
             135       8,067       233       13,953       —       368       22,020  
ZIONS BANCORPORATION
             7       490       12       856       —       20       1,346  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Commercial Banks Total
                     49,832               86,205                       136,037  
 
                                                          
 
                                                                
Consumer Finance
     1.2 %                                                        
AMERICAN EXPRESS COMPANY
             93       4,793       161       8,287       —       255       13,080  
CAPITAL ONE FINANCIAL CORPORATION
             20       1,473       34       2,540       —       54       4,013  
MBNA CORPORATION
             102       2,494       176       4,316       —       277       6,810  
PROVIDIAN FINANCIAL CORP (a)
             23       400       40       693       —       64       1,093  
SLM CORP
             34       1,705       59       2,946       —       93       4,650  
 
                                                          
Consumer Finance Total
                     10,864               18,782                       29,647  
 
                                                          
 
                                                                
Diversified Financial Services
     3.5 %                                                        
CIT GROUP INC
             17       638       29       1,102       —       46       1,740  
CITIGROUP INC.
             416       18,677       719       32,313       —       1,135       50,990  
JPMORGAN CHASE & CO.
             283       9,781       489       16,920       —       772       26,701  
MOODY’S CORPORATION
             11       881       19       1,528       —       30       2,410  
THE PRINCIPAL FINANCIAL GROUP
             24       916       41       1,588       —       65       2,504  
 
                                                          
Diversified Financial Services Total
                     30,894               53,451                       84,345  
 
                                                          
 
                                                                
Insurance
     4.1 %                                                        
ACE LIMITED
             23       933       39       1,616       —       62       2,548  
XL CAPITAL LIMITED - CLASS A
             11       803       19       1,386       —       30       2,189  
AFLAC INCORPORATED
             40       1,487       69       2,575       —       109       4,061  
ALLSTATE CORPORATION
             54       2,919       93       5,051       —       147       7,970  
AMBAC FINANCIAL GROUP, INC.
             9       643       15       1,118       —       24       1,760  
AMERICAN INTERNATIONAL GROUP
             207       11,481       358       19,858       —       566       31,339  
AON CORPORATION
             25       576       44       995       —       69       1,570  
CHUBB CORP
             15       1,205       26       2,087       —       42       3,292  
CINCINNATI FINANCIAL CORPORATION
             13       549       22       955       —       35       1,505  
HARTFORD FINANCIAL SERVICES GROUP.
             24       1,611       41       2,787       —       64       4,398  
JEFFERSON-PILOT CORP
             11       535       19       922       —       30       1,457  
LINCOLN NATIONAL CORPORATION
             14       627       24       1,084       —       38       1,712  
LOEWS CORPORATION
             13       934       22       1,616       —       35       2,550  
MBIA INC (b)
             11       586       19       1,010       —       31       1,596  
MARSH & MCLENNAN COS
             42       1,281       73       2,215       —       115       3,496  
METLIFE INC
             58       2,280       101       3,943       —       159       6,223  
PROGRESSIVE CORPORATION
             16       1,459       28       2,528       —       43       3,987  
PRUDENTIAL FINANCIAL, INC.
             42       2,394       72       4,140       —       114       6,534  
SAFECO CORPORATION
             10       492       18       855       —       28       1,347  
ST. PAUL TRAVELERS COS INC
             53       1,954       92       3,383       —       145       5,337  
TORCHMARK CORP
             9       449       15       778       —       24       1,227  
UNUMPROVIDENT CORPORATION (b)
             24       403       41       697       —       65       1,100  
 
                                                          
Insurance Total
                     35,600               61,598                       97,197  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Thrifts & Mortgage Finance
     1.6 %                                                        
COUNTRYWIDE FINANCIAL CORP
             46       1,500       80       2,593       —       126       4,093  
FEDERAL HOME LOAN MORTGAGE CORPORATION
             55       3,457       95       5,985       —       149       9,442  
FANNIE MAE
             77       4,193       133       7,251       —       210       11,444  
GOLDEN WEST FINANCIAL CORPORATION
             23       1,361       39       2,353       —       61       3,715  
MGIC INVESTMENT CORPORATION
             8       475       13       819       —       21       1,294  
SOVREIGN BANCORP, INC.
             30       660       52       1,142       —       81       1,802  
WASHINGTON MUTUAL INC.
             70       2,745       120       4,747       —       190       7,492  
 
                                                          
Thrifts & Mortgage Finance Total
                     14,391               24,891                       39,282  
 
                                                          
 
                                                                
Real Estate
     0.5 %                                                        
APARTMENT INVESTMENT & MANAGMENT COMPANY
             8       283       13       491       —       21       774  
ARCHSTONE-SMITH TRUST
             16       542       28       938       —       43       1,480  
EQUITY OFFICE PROPERTIES TRUST
             32       967       55       1,671       —       88       2,638  
EQUITY RESIDENTIAL PROPS TR
             23       725       39       1,255       —       61       1,979  
PLUM CREEK TIMBER CO INC
             15       521       25       903       —       40       1,424  
PROLOGIS
             15       542       25       940       —       40       1,481  
SIMON PROPERTY GROUP
             18       1,066       30       1,846       —       48       2,912  
 
                                                          
Real Estate Total
                     4,646               8,043                       12,689  
 
                                                          
FINANCIALS TOTAL
                     170,442               294,859                       465,301  
 
                                                          
 
                                                                
HEALTH CARE
     12.8 %                                                        
Biotechnology
     1.2 %                                                        
AMGEN INCORPORATED (a)
             100       5,798       172       10,036       —       272       15,834  
APPLERA CORP-APPLIED BIOSYS
             16       308       27       533       —       43       841  
BIOGEN IDEC INCORPORATED (a)
             27       915       46       1,582       —       72       2,497  
CHIRON CORPORATION (a)(b)
             12       410       20       713       —       32       1,123  
GENZYME CORP-GENERAL DIVISION (a)
             20       1,128       34       1,955       —       54       3,082  
GILEAD SCIENCES, INC. (a)
             34       1,232       60       2,132       —       94       3,363  
MEDIMMUNE INC. (a)
             20       471       34       814       —       54       1,286  
 
                                                          
Biotechnology Total
                     10,261               17,766                       28,027  
 
                                                          
 
                                                                
Health Care Equipment & Supplies
     2.2 %                                                        
BARD (C.R.) INC
             8       565       14       982       —       23       1,547  
BAUSCH & LOMB INCORPORATED
             4       315       7       539       —       12       854  
BAXTER INTERNATIONAL INC.
             49       1,675       85       2,898       —       135       4,573  
BECTON DICKINSON & CO.
             20       1,174       35       2,036       —       55       3,210  
BIOMET INC
             20       730       35       1,261       —       55       1,991  
BOSTON SCIENTIFIC CORPORATION (a)
             61       1,772       105       3,062       —       165       4,834  
FISHER SCIENTIFIC INTERNATIONAL INC. (a)
             9       529       16       918       —       25       1,447  
GUIDANT CORPORATION
             26       1,899       44       3,281       —       70       5,180  
HOSPIRA INC (a)
             12       400       21       692       —       34       1,092  
MEDTRONIC INCORPORATED
             96       4,901       166       8,481       —       263       13,382  

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
MILLIPORE CORPORATION (a)
             4       174       7       296       —       11       470  
PERKINELMER INC.
             10       212       18       368       —       28       580  
ST JUDE MEDICAL INC (a)
             29       1,033       50       1,789       —       78       2,822  
STRYKER CORPORATION
             30       1,329       52       2,300       —       81       3,629  
THERMO ELECTRON CORP (a)
             13       321       22       557       —       35       878  
WATERS CORPORATION (a)
             10       344       17       595       —       26       939  
ZIMMER HOLDINGS INC (a)
             20       1,525       34       2,644       —       54       4,169  
 
                                                          
Health Care Equipment & Supplies Total
                     18,900               32,698                       51,598  
 
                                                          
 
                                                                
Health Care Providers & Services
     2.5 %                                                        
AETNA US HEALTHCARE-WI
             23       1,754       41       3,035       —       64       4,789  
AMERISOURCEBERGEN CORPORATION
             9       504       15       874       —       24       1,378  
CIGNA CORP
             11       938       18       1,619       —       29       2,556  
CARDINAL HEALTH
             35       1,925       60       3,328       —       94       5,254  
CAREMARK RX, INC. (a)
             36       1,444       63       2,502       —       99       3,946  
EXPRESS SCRIPTS INC (a)
             6       532       10       913       —       17       1,445  
HCA INC
             33       1,752       57       3,041       —       89       4,793  
HEALTH MANAGEMENT ASSOCIATES INC.-CLASS A (b)
             19       508       34       880       —       53       1,388  
HUMANA INC. (a)
             13       409       22       707       —       35       1,116  
IMS HEALTH INC.
             18       449       32       779       —       50       1,228  
LABORATORY CRP OF AMER HLDGS (a)
             11       516       19       897       —       29       1,412  
HCR MANOR CARE INC
             7       251       12       431       —       19       682  
MCKESSON CORPORATION
             24       887       41       1,533       —       64       2,420  
MEDCO HEALTH SOLUTIONS INC (a)
             22       1,086       38       1,879       —       60       2,965  
QUEST DIAGNOSTICS INC
             7       767       13       1,322       —       20       2,089  
TENET HEALTHCARE CORPORATION (a)(b)
             37       429       64       743       —       102       1,172  
UNITEDHEALTH GROUP INCORPORATED.
             51       4,864       88       8,417       —       139       13,282  
WELLPOINT INC (a)
             24       3,046       42       5,258       —       66       8,304  
 
                                                          
Health Care Providers & Services Total
                     22,060               38,159                       60,219  
 
                                                          
 
                                                                
Pharmaceuticals
     6.9 %                                                        
ABBOTT LABORATORIES
             124       5,781       214       9,999       —       338       15,780  
ALLERGAN INC
             11       729       18       1,261       —       29       1,990  
BRISTOL-MYERS SQUIBB CO.
             155       3,956       269       6,846       —       424       10,802  
FOREST LABORATORIES, INC. (a)
             28       1,031       48       1,787       —       76       2,817  
JOHNSON & JOHNSON
             237       15,883       409       27,484       —       646       43,367  
KING PHARMACEUTICALS INC (a)
             19       160       33       277       —       52       436  
LILLY (ELI) COMPANY
             90       4,694       156       8,118       —       246       12,813  
MERCK & COMPANY
             176       5,684       304       9,836       —       479       15,521  
MYLAN LABORATORIES INCORPORATED (b)
             21       379       37       656       —       58       1,035  
PFIZER INC
             593       15,589       1,027       26,970       —       1,620       42,558  
SCHERING-PLOUGH
             117       2,129       203       3,684       —       320       5,813  
WATSON PHARMACEUTICAL INCORPORATED
             9       267       15       463       —       24       731  

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
WYETH
             106       4,484       184       7,757       —       290       12,241  
 
                                                          
Pharmaceuticals Total
                     60,767               105,137                       165,904  
 
                                                          
HEALTH CARE TOTAL
                     111,988               193,760                       305,747  
 
                                                          
 
                                                                
INDUSTRIALS
     11.7 %                                                        
Aerospace & Defense
     2.2 %                                                        
BOEING COMPANY
             66       3,870       115       6,695       —       181       10,565  
GENERAL DYNAMICS CORP
             16       1,702       28       2,944       —       43       4,646  
GOODRICH CORPORATION
             10       368       17       632       —       26       999  
HONEYWELL INTERNATIONAL INC.
             68       2,519       117       4,355       —       185       6,874  
L-3 COMMUNICATIONS HLDGS
             9       653       16       1,122       —       25       1,776  
LOCKHEED MARTIN
             32       1,948       55       3,369       —       87       5,317  
NORTHROP GRUMMAN CORP
             29       1,549       50       2,675       —       78       4,224  
RAYTHEON COMPANY
             36       1,393       62       2,411       —       98       3,804  
ROCKWELL COLLINS
             14       676       25       1,168       —       39       1,844  
UNITED TECHNOLOGIES CORPORATION
             41       4,138       70       7,162       —       111       11,300  
 
                                                          
Aerospace & Defense Total
                     18,816               32,533                       51,348  
 
                                                          
 
                                                                
Air Freight & Logistics
     1.0 %                                                        
FEDEX CORPORATION
             24       2,255       42       3,899       —       66       6,154  
RYDER SYSTEM INCORPORATED
             5       213       9       367       —       14       580  
UNITED PARCEL SERVICE, INC.
             89       6,474       154       11,200       —       243       17,674  
 
                                                          
Air Freight & Logistics Total
                     8,941               15,466                       24,407  
 
                                                          
 
                                                                
Airlines
     0.1 %                                                        
DELTA AIR LINES, INC. (a)(b)
             11       45       19       78       —       30       123  
SOUTHWEST AIRLINES
             59       834       101       1,445       —       160       2,279  
 
                                                          
Airlines Total
                     879               1,522                       2,402  
 
                                                          
 
                                                                
Building Products
     0.2 %                                                        
AMERICAN STANDARD COMPANIES, INC. (a)
             14       665       25       1,152       —       39       1,816  
MASCO CORPORATION
             36       1,234       62       2,138       —       97       3,373  
 
                                                          
Building Products Total
                     1,899               3,290                       5,189  
 
                                                          
 
                                                                
Commercial Services & Supplies
     0.9 %                                                        
ALLIED WASTE INDUSTRIES INC. (a)(b)
             22       158       38       275       —       59       433  
APOLLO GROUP INC CLASS A (a)
             13       978       23       1,685       —       36       2,662  
AVERY-DENNISON CORP
             8       502       14       867       —       22       1,369  
BLOCK H & R INC
             13       663       23       1,148       —       36       1,811  
CENDANT CORPORATION (CD.N)
             84       1,723       145       2,982       —       229       4,705  
CINTAS CORPORATION
             12       492       21       849       —       32       1,341  
DONNELLEY ( R R) & SONS
             17       541       30       938       —       47       1,479  
EQUIFAX INC
             11       328       19       570       —       29       898  

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
MONSTER WORLDWIDE INC (a)
             10       269       17       465       —       26       734  
PITNEY-BOWES INC
             18       830       32       1,431       —       50       2,262  
ROBERT HALF INTERNATIONAL INC
             13       345       22       596       —       35       941  
WASTE MANAGEMENT INC (NEW)
             45       1,304       78       2,256       —       123       3,560  
 
                                                          
Commercial Services & Supplies Total
                     8,132               14,063                       22,195  
 
                                                          
 
                                                                
Construction & Engineering
     0.0 %                                                        
FLUOR CORPORATION (NEW)
             7       377       12       653       —       19       1,030  
 
                                                          
Construction & Engineering Total
                     377               653                       1,030  
 
                                                          
 
                                                                
Electrical Equipment
     0.4 %                                                        
COOPER INDUSTRIES INC. CLASS - A
             7       529       13       910       —       20       1,439  
AMERICAN POWER CONVERSION
             14       373       25       646       —       39       1,020  
EMERSON ELECTRIC COMPANY (EMR)
             33       2,169       58       3,748       —       91       5,917  
ROCKWELL AUTOMATION INC
             14       787       24       1,366       —       38       2,154  
 
                                                          
Electrical Equipment Total
                     3,859               6,671                       10,529  
 
                                                          
 
                                                                
Industrial Conglomerates
     4.8 %                                                        
GENERAL ELECTRIC COMPANY (d)
             843       30,399       1,459       52,595       —       2,302       82,994  
TEXTRON, INC.
             11       806       19       1,386       —       29       2,192  
3M CO
             61       5,261       106       9,105       —       168       14,366  
TYCO INTERNATIONAL LTD.
             160       5,411       277       9,365       —       437       14,777  
 
                                                          
Industrial Conglomerates Total
                     41,877               72,451                       114,328  
 
                                                          
 
                                                                
Machinery
     1.4 %                                                        
INGERSOLL-RAND CO-CLASS A
             14       1,099       24       1,898       —       38       2,997  
CATERPILLAR INC
             27       2,496       47       4,311       —       74       6,808  
CUMMINS INC
             3       239       6       415       —       9       654  
DANAHER CORP.
             22       1,170       38       2,022       —       60       3,191  
DEERE & COMPANY
             20       1,316       34       2,279       —       54       3,595  
DOVER CORPORATION
             16       612       28       1,058       —       44       1,670  
EATON CORPORATION
             12       798       21       1,373       —       33       2,171  
ITT INDUSTRIES INCORPORATED
             7       659       13       1,148       —       20       1,807  
ILLINOIS TOOL WORKS, INC.
             22       1,961       38       3,386       —       60       5,347  
NAVISTAR INTERNATIONAL (a)
             5       189       9       329       —       14       519  
PACCAR INC
             14       999       24       1,734       —       38       2,733  
PALL CORP
             10       268       17       462       —       27       731  
PARKER-HANNIFIN CORP
             10       585       17       1,010       —       26       1,595  
 
                                                          
Machinery Total
                     12,391               21,426                       33,818  
 
                                                          
 
                                                                
Road & Rail
     0.6 %                                                        
BURLINGTON NORTHERN SANTA FE
             30       1,623       52       2,810       —       82       4,433  
CSX CORPORATION
             17       716       30       1,236       —       47       1,952  

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
NORFOLK SOUTHERN CORP
             32       1,178       55       2,040       —       87       3,218  
UNION PACIFIC CORPORATION
             21       1,450       36       2,500       —       57       3,950  
 
                                                          
Road & Rail Total
                     4,968               8,586                       13,553  
 
                                                          
 
                                                                
Trading Companies & Distributors
     0.0 %                                                        
GRAINGER (W.W) INC.
             7       411       11       715       —       18       1,126  
 
                                                          
Trading Companies & Distributors Total
                     411               715                       1,126  
 
                                                          
INDUSTRIALS TOTAL
                     102,550               177,375                       279,925  
 
                                                          
INFORMATION TECHNOLOGY
     14.9 %                                                        
Communications Equipment
     2.4 %                                                        
ADC TELECOMMUNICATIONS INC. (a)
             65       128       112       222       —       176       350  
ANDREW CORP (a)
             13       150       22       259       —       35       409  
AVAYA INC. (a)
             38       446       66       772       —       104       1,218  
CIENA CORPORATION (a)
             46       78       79       135       —       124       214  
CISCO SYSTEMS, INCORPORATED (a)
             514       9,197       890       15,913       —       1,404       25,110  
COMVERSE TECHNOLOGY INC. (a)
             16       396       27       685       —       43       1,081  
CORNING INC (a)
             112       1,248       194       2,159       —       306       3,406  
JDS UNIPHASE CORP. (a)
             115       192       199       332       —       314       524  
LUCENT TECHNOLOGIES INC (a)
             352       969       610       1,677       —       962       2,646  
MOTOROLA INCORPORATED
             195       2,919       337       5,050       —       532       7,969  
QUALCOMM INCORPORATED
             131       4,797       226       8,299       —       357       13,097  
SCIENTIFIC-ATLANTA INC
             12       341       21       590       —       33       931  
TELLABS INCORPORATED (a)
             37       268       64       464       —       100       732  
 
                                                          
Communications Equipment Total
                     21,131               36,558                       57,688  
 
                                                          
 
                                                                
Computers & Peripherals
     3.8 %                                                        
APPLE COMPUTER INC (a)
             65       2,709       112       4,686       —       177       7,394  
DELL INC. (a)
             196       7,515       338       13,000       —       534       20,515  
EMC CORPORATION (a)
             191       2,357       331       4,078       —       522       6,435  
GATEWAY INC. (a)
             24       96       41       166       —       65       262  
HEWLETT-PACKARD COMPANY
             230       5,053       398       8,741       —       629       13,794  
INTERNATIONAL BUSINESS MACHINES
             130       11,870       225       20,533       —       355       32,403  
LEXMARK INTERNATIONAL, INC. (a)
             10       808       17       1,389       —       27       2,197  
NCR CORPORATION (a)
             15       499       26       864       —       40       1,363  
NETWORK APPLIANCE, INC (a)
             29       805       50       1,393       —       79       2,198  
QLOGIC CORPORATION (a)
             7       296       13       512       —       20       808  
SEAGATE TECHNOLOGY ESCROW POS (a) (c)
             19       0       —       —       —       19       0  
SUN MICROSYSTEMS INCORPORATED (a)
             269       1,086       465       1,878       —       734       2,963  
 
                                                          
Computers & Peripherals Total
                     33,093               57,241                       90,333  
 
                                                          
 
                                                                
Electronic Equipment & Instruments
     0.3 %                                                        
AGILENT TECHNOLOGIES INC (a)
             34       764       60       1,321       —       94       2,085  

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
JABIL CIRCUIT INC. (a)
             15       416       25       719       —       40       1,136  
MOLEX INC
             13       351       23       608       —       36       959  
SANMINA CORP.(a)
             42       217       72       376       —       114       593  
SOLECTRON CORP. (a)
             77       268       134       464       —       211       732  
SYMBOL TECHNOLOGIES INCORPORATED
             19       280       33       484       —       53       764  
TEKTRONIX INC
             7       174       12       301       —       19       475  
 
                                                          
Electronic Equipment & Instruments Total
                     2,470               4,274                       6,744  
 
                                                          
 
                                                                
Internet Software & Services
     0.4 %                                                        
YAHOO! INC
             104       3,515       180       6,085       —       283       9,600  
 
                                                          
Internet Software & Services Total
                     3,515               6,085                       9,600  
 
                                                          
 
                                                                
IT Services
     1.1 %                                                        
AFFILIATED COMPUTER SVCS-A (a)
             10       538       17       926       —       28       1,464  
AUTOMATIC DATA PROCESSING
             46       2,086       80       3,606       —       127       5,692  
COMPUTER SCIENCES CORPORATION (a)
             15       697       26       1,204       —       41       1,900  
CONVERGYS CORPORATION (a)
             11       169       20       292       —       31       460  
ELECTRONIC DATA SYSTEMS CORP
             41       852       71       1,472       —       112       2,324  
FIRST DATA CORPORATION
             64       2,508       110       4,339       —       174       6,847  
FISERV INCORPORATED (a)
             15       613       27       1,057       —       42       1,670  
PAYCHEX INC
             28       929       49       1,605       —       77       2,534  
SABRE HOLDINGS CORP (b)
             11       230       18       396       —       29       626  
SUNGARD DATA SYSTEMS INC (a)
             23       794       40       1,372       —       63       2,166  
UNISYS CORPORATION (a)
             27       189       46       328       —       73       517  
 
                                                          
IT Services Total
                     9,603               16,596                       26,199  
 
                                                          
 
                                                                
Office Electronics
     0.1 %                                                        
XEROX CORPORATION (a)
             76       1,153       132       1,996       —       208       3,149  
 
                                                          
Office Electronics Total
                     1,153               1,996                       3,149  
 
                                                          
 
                                                                
Semiconductors & Semiconductor Equipment
     3.0 %                                                        
ADVANCED MICRO DEVICES (a)
             31       505       54       874       —       86       1,379  
ALTERA CORPORATION (a)
             30       585       51       1,013       —       81       1,599  
ANALOG DEVICES INC
             30       1,070       51       1,851       —       81       2,921  
APPLIED MICRO CIRCUITS CORP (a)
             25       81       42       140       —       67       220  
APPLIED MATERIALS INCORPORATED
             133       2,156       229       3,729       —       362       5,885  
BROADCOM CORPORATION — CL A (a)
             23       691       40       1,197       —       63       1,888  
FREESCALE SEMICONDUCTOR INC (a)
             32       550       55       953       —       87       1,504  
INTEL CORPORATION
             495       11,506       857       19,905       —       1,352       31,411  
KLA-TENCOR CORP.
             16       718       27       1,246       —       43       1,963  
LSI LOGIC CORPORATION (a)
             31       171       53       296       —       84       467  
LINEAR TECHNOLOGY CORPORATION
             24       935       42       1,619       —       67       2,553  
MAXIM INTERGRATED PRODUCTS
             26       1,063       45       1,839       —       71       2,902  

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
MICRON TECHNOLOGY INC (a)
             49       505       84       873       —       133       1,378  
NATIONAL SEMICONDUCTOR CORP.
             28       583       49       1,008       —       77       1,591  
NOVELLUS SYSTEMS INC (a)
             11       297       19       515       —       30       812  
NVIDIA CORP (a)
             13       314       23       544       —       36       858  
PMC – SIERRA INC. (a)
             14       126       25       218       —       39       344  
TERADYNE INCORPORATED (b)
             15       225       27       390       —       42       615  
TEXAS INSTRUMENTS, INC.
             137       3,490       237       6,039       —       374       9,528  
XILINX INCORPORATED
             28       810       48       1,402       —       76       2,212  
 
                                                          
Semiconductors & Semiconductor Equipment Total
                     26,378               45,652                       72,030  
 
                                                          
 
                                                                
Software
     3.7 %                                                        
ADOBE SYSTEMS, INCORPORATED
             19       1,303       33       2,247       —       53       3,550  
AUTODESK INC
             18       545       32       939       —       50       1,484  
BMC SOFTWARE INC (a)
             18       264       30       457       —       48       721  
CITRIX SYSTEMS INC (a)
             14       322       23       556       —       37       877  
COMPUTER ASSOCIATES INTERNATIONAL INC.
             43       1,152       73       1,988       —       116       3,141  
COMPUWARE CORPORATION (a)
             31       222       53       384       —       84       606  
ELECTRONIC ARTS (ERTS.O) (a)
             25       1,269       42       2,195       —       67       3,464  
INTUIT, INC. (a)
             15       643       26       1,116       —       40       1,760  
MERCURY INTERACTIVE CORPORATION (a)
             7       317       12       551       —       18       868  
MICROSOFT CORP (a)
             805       19,452       1,392       33,656       —       2,197       53,108  
NOVELL INC (a)(b)
             30       179       52       311       —       82       490  
ORACLE CORPORATION (a)
             357       4,460       620       7,740       —       978       12,200  
PARAMETRIC TECHNOLGY CORPORATION (a)
             22       120       37       208       —       59       328  
SIEBEL SYSTEMS INC (a)
             41       373       71       647       —       112       1,020  
SYMANTEC CORPORATION (a)
             56       1,203       98       2,083       —       154       3,286  
VERITAS SOFTWARE CORP (a)
             34       780       58       1,350       —       92       2,130  
 
                                                          
Software Total
                     32,605               56,426                       89,031  
 
                                                          
INFORMATION TECHNOLOGY TOTAL
                     129,948               224,828                       354,775  
 
                                                          
 
                                                                
MATERIALS
     3.2 %                                                        
Chemicals
     1.8 %                                                        
AIR PRODUCTS & CHEMICALS INC
             18       1,146       31       1,979       —       49       3,125  
DOW CHEMICAL
             76       3,779       131       6,539       —       207       10,318  
DU PONT (E.I.) DE NEMOURS & COMPANY
             79       4,063       137       7,029       —       216       11,092  
EASTMAN CHEMICAL COMPANY (EMN)
             6       366       11       631       —       17       997  
ECOLAB INC. (ECL)
             18       582       30       1,004       —       48       1,586  
ENGELHARD CORPORATION (EC)
             10       291       17       504       —       26       795  
GREAT LAKES CHEMICAL CORP
             4       132       7       227       —       11       359  
HERCULES INC. (a)
             9       129       15       224       —       24       353  
INTERNATIONAL FLAVORS & FRAGRANCES, INC.
             7       277       12       480       —       19       756  
MONSANTO COMPANY
             21       1,367       37       2,361       —       58       3,728  
PPG INDUSTRIES INC
             14       987       24       1,704       —       38       2,691  

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
PRAXAIR INCORPORATED
             26       1,230       44       2,126       —       70       3,356  
ROHM & HAAS COMPANY
             16       744       27       1,288       —       42       2,032  
SIGMA-ALDRICH CORPORATION
             6       337       9       579       —       15       916  
 
                                                          
Chemicals Total
                     15,429               26,675                       42,103  
 
                                                          
 
                                                                
Construction Materials
     0.1 %                                                        
VULCAN MATERIAL COMPANY
             8       466       14       803       —       22       1,269  
 
                                                          
Construction Materials Total
                     466               803                       1,269  
 
                                                          
 
                                                                
Containers & Packaging
     0.2 %                                                        
BALL CORPORATION
             9       361       15       627       —       24       988  
BEMIS COMPANY
             9       265       15       460       —       23       724  
PACTIV CORPRATION INC. (a)
             12       276       20       478       —       32       753  
SEALED AIR CORP (a)
             7       343       12       599       —       18       941  
TEMPLE-INLAND, INC
             5       334       8       570       —       12       903  
 
                                                          
Containers & Packaging Total
                     1,577               2,733                       4,310  
 
                                                          
 
                                                                
Metals & Mining
     0.7 %                                                        
ALCOA INC
             69       2,106       120       3,645       —       189       5,751  
ALLEGHENY TECHNOLOGIES INCORPORATED (b)
             7       171       12       297       —       19       468  
FREEPORT MCMORAN COPPER & GOLD INC.
             14       562       25       976       —       39       1,539  
NEWMONT MINING CORPORATION
             35       1,491       61       2,581       —       96       4,073  
NUCOR CORP
             13       731       22       1,263       —       35       1,994  
PHELPS DODGE CORP
             8       783       13       1,356       —       21       2,139  
UNITED STATES STEEL CORP (b)
             9       463       16       801       —       25       1,264  
 
                                                          
Metals & Mining Total
                     6,308               10,920                       17,228  
 
                                                          
 
                                                                
Paper & Forest Products
     0.5 %                                                        
GEORGIA PACIFIC (GP.N)
             21       735       36       1,269       —       56       2,003  
INTERNATIONAL PAPER CO
             39       1,435       67       2,481       —       106       3,915  
LOUISANA-PACIFIC CORPORATION
             9       221       15       383       —       24       605  
MEADWESTVACO CORPORATION
             16       512       28       889       —       44       1,401  
WEYERHAUSER CO
             19       1,322       33       2,290       —       53       3,612  
 
                                                          
Paper & Forest Products Total
                     4,225               7,311                       11,536  
 
                                                          
MATERIALS TOTAL
                     28,005               48,441                       76,446  
 
                                                          
 
                                                                
TELECOMMUNICATION SERVICES
     3.1 %                                                        
Diversified Telecommunication Services
     2.8 %                                                        
A T & T CORPORATION
             64       1,194       110       2,066       —       174       3,260  
ALLTEL CORP
             24       1,322       42       2,285       —       66       3,606  
BELLSOUTH CORP
             146       3,830       252       6,625       —       398       10,456  
CENTURYTEL, INC.
             11       351       19       608       —       29       960  
CITIZENS COMMUNICATIONS CO
             27       345       46       597       —       73       942  

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
QWEST COMMUNICATIONS INTERNATIONAL INC. (a)
             133       492       230       851       —       363       1,343  
SBC COMMUNICATIONS INC
             263       6,226       455       10,770       —       717       16,996  
SPRINT CORPORATION (FON GROUP)
             118       2,675       203       4,628       —       321       7,303  
VERIZON COMMUNICATIONS
             220       7,821       381       13,532       —       601       21,352  
 
                                                          
Diversified Telecommunication Services Total
                     24,257               41,961                       66,218  
 
                                                          
 
                                                                
Wireless Telecommunication Services
     0.3 %                                                        
NEXTEL COMMUNICATIONS, INC (a)
             90       2,546       155       4,407       —       245       6,954  
 
                                                          
Wireless Telecommunication Services Total
                     2,546               4,407                       6,954  
 
                                                          
TELECOMMUNICATION SERVICES TOTAL
                     26,804               46,368                       73,172  
 
                                                          
 
                                                                
UTILITIES
     3.1 %                                                        
Electric Utilities
     2.1 %                                                        
ALLEGHENY ENERGY INC (a)
             11       225       19       390       —       30       616  
AMEREN CORPORATION.
             16       760       27       1,320       —       42       2,079  
AMERICAN ELECTRIC POWER
             31       1,039       53       1,798       —       83       2,836  
CENTERPOINT ENERGY INC. (b)
             23       277       40       479       —       63       756  
CINERGY CORP
             15       616       26       1,069       —       42       1,685  
CONSOLIDATED EDISON INC.
             19       814       33       1,407       —       53       2,221  
DTE ENERGY COMPANY
             14       628       24       1,090       —       38       1,718  
EDISON INTERNATIONAL
             26       899       45       1,557       —       71       2,456  
ENTERGY CORPORATION
             17       1,201       29       2,072       —       46       3,273  
EXELON CORPORATION
             53       2,428       92       4,199       —       144       6,627  
FPL GROUP INC.
             31       1,245       54       2,160       —       85       3,405  
FIRSTENERGY CORPORATION
             26       1,099       45       1,906       —       72       3,005  
P G & E CORPORATION (b)
             29       979       50       1,692       —       78       2,671  
PPL CORPORATION
             15       810       26       1,402       —       41       2,212  
PINNACLE WEST CAPITAL CORPORATION
             7       310       13       537       —       20       847  
PROGRESS ENERGY INC
             20       822       34       1,426       —       54       2,249  
SOUTHERN COMPANY
             59       1,881       102       3,254       —       161       5,135  
TECO ENERGY INC
             16       257       28       446       —       45       703  
TXU CORPORATION
             19       1,521       33       2,634       —       52       4,155  
XCEL ENERGY INC
             32       548       55       948       —       87       1,496  
 
                                                          
Electric Utilities Total
                     18,358               31,786                       50,144  
 
                                                          
 
                                                                
Gas Utilities
     0.1 %                                                        
KEYSPAN CORPORATION
             13       499       22       863       —       35       1,362  
NICOR INC
             4       130       6       225       —       10       355  
NISOURCE INC
             22       492       37       850       —       59       1,342  
PEOPLES ENERGY CORP
             3       126       5       218       —       8       344  
 
                                                          
Gas Utilities Total
                     1,247               2,157                       3,403  
 
                                                          
 
                                                                
Multi-Utilities
     0.9 %                                                        

 

Table of Contents

                                                                 
            Columbia Large Company Index     Nations Large Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
AES CORP. (a)
             52       845       89       1,462       —       141       2,307  
CMS ENERGY CORPORATION (a)
             16       223       27       350       —       42       573  
CALPINE CORPORATION (a)(b)
             43       119       74       206       —       116       325  
CONSTELLATION ENERGY GROUP
             14       729       24       1,260       —       38       1,989  
DOMINION RESOURCES INC
             27       2,017       47       3,489       —       74       5,506  
DUKE ENERGY CORP.
             75       2,090       129       3,615       —       204       5,705  
DYNEGY INC CL A (a)
             26       103       46       178       —       72       281  
PUBLIC SERVICE ENTERPRISE GP (b)
             19       1,033       33       1,781       —       52       2,815  
SEMPRA ENERGY
             19       753       33       1,307       —       52       2,060  
 
                                                          
Multi-Utilities Total
                     7,912               13,649                       21,561  
 
                                                          
UTILITIES TOTAL
                     27,517               47,591                       75,108  
 
                                                          
TOTAL COMMON STOCKS
                   860,679               1,489,031                       2,349,710  
 
                                                          
 
                                                                
INVESTMENT COMPANY
     2.0 %                                                        
SPDR Trust Series 1
             16       1,864       —       —       —       16       1,864  
NATIONS CASH RESERVES FUND (e)
             —       —       46,516       46,516       —       46,516       46,516  
 
                                                          
TOTAL INVESTMENT COMPANY
                     1,864               46,516                       48,380  
 
                                                          
SHORT-TERM OBLIGATION
     0.0 %                                                        
Repurchase agreement with State Street Bank & Trust
             1,040       1,040                               1,040       1,040  
Co., dated 03/31/05, due 04/01/05 at 2.45% collateralized by a U.S. Treasury Bond maturing 08/25/22 market value of $1,060,950 (repurchase proceeds $1,040,078)
                                                                
 
                                                          
TOTAL SHORT-TERM OBLIGATION
                     1,040               —                       1,040  
 
                                                          
Total Investments
     100.5 %             863,583               1,535,547                       2,399,130  
                                                               
Other Assets & Liabilities
     -0.5 %             1,357               (12,256 )                     (10,899 )
 
                                                
Net Assets
     100.0 %           $ 864,940             $ 1,523,291                     $ 2,388,231  
 
                                                
Investments at Cost
                   $ 768,893             $ 1,315,648                     $ 2,084,541  
 
                                                  

Notes to Investment Portfolio:

 

Table of Contents

 (a) Non-income producing security.
 
 (b) All or a portion of this security was on loan at March 31, 2005. The aggregate cost and market value of securities on loan at March 31, 2005 is $17,657 and $16,948, respectively.
 
 (c) Investments in Affiliates as of March 31, 2005: Security Name: Bank of America Corp., effective April 1, 2004, the parent company of the Investment Advisor.
       
Shares as of 04/01/04:
   173,000  
Shares purchased:
   76,700  
Shares sold:
   (6,025 )
Shares acquired from merger:
   70,925  
Shares acquired through 2
     
For 1 stock split:
   243,250  
Shares as of 03/31/05:
   557,850  
Net realized gain:
   18  

(d)  Security pledged as collateral for open futures contracts.
 
(e)  Money Market mutual fund registered under the investment company Act of 1940, as amended, and advised by Banc of America Capital Management, LLC. A portion of this amount represents cash collateral received from securities lending activity. The portion that represents cash collateral is $17,660.
 
(f)  Cost for federal income tax purposes is $778,967,814 for the Columbia Large Company Index, $1,345,484 for the Nations Large Cap Index and $2,123,122 for the funds combined.

At March 31, 2005, the Fund held the following open short futures contracts:

                                               
          Value of     Market                  
          Contracts     Value                  
    Number of     When     of     Expiration     Unrealized      
Type   Contracts     Opened     Contracts     Date     Depreciation      
 
                                
S&P500 Futures (long position)
   106     32,072       31,373     Jun-05     (699 )  
 
                                        
     
Acronym   Name
 
REIT
  Real Estate Investment Trust

 

Table of Contents

           
As of 3/31/05
   Market Value ($000)    
 
          
Consumer Discretionary
     13.1 %  
Health Care
     12.8 %  
Industrials
     11.7 %  
Energy
     8.6 %  
Consumer Staples
     8.3 %  
Materials
     3.2 %  
Utilities
     3.1 %  
Telecommunication Services
     3.1 %  
Investment Management Company
     2.0 %  
Other Assets & Liabilities, Net
     -0.5 %  
 
          
 
     100.0 %  

 

Table of Contents

Pro -forma Combining
Statement of Assets & Liabilities
As of March 31, 2005 (unaudited)

                                 
    Columbia     Nations              
    Large Company Index     Large Cap Index              
    Fund     Fund     Pro Forma     Pro Forma  
(in thousands)   Target Fund     Acquiring Fund     Adjustments     Combined  
Assets:
                                
Investments, at cost
   $ 758,759     $ 1,269,132     $ —     $ 2,027,891  
Affiliated Investments, at cost
   $ 10,134     $ 46,516     $ —     $ 56,650  
 
                        
Investments, at value
     849,365       1,489,031       —       2,338,396  
Affiliated Investments, at value
     14,218       46,516       —       60,734  
Cash
     412       522       —       934  
Receivable for:
                                
Investments sold
     —       —       —       —  
Investments sold on a delayed delivery basis
     —       —               —  
Fund shares sold
     1,558       3,929       —       5,487  
Interest
     — (e)     —       —       —  
Income Receivable
     1,156       2       —       1,158  
Dividend Receivable
             2,030               2,030  
Futures variation margin
     —       —       —       —  
Dollar roll fee income
             —       —       —  
Receivable from investment administrator
     —       205       —       205  
Deferred Trustees’ compensation plan
     5       —       —       5  
Prepaid Expense
     — (e)     3       —       3  
 
                        
Total Assets
     866,714       1,542,238       —       2,408,952  
 
                        
 
                                
Liabilities:
                                
Collateral on securities loaned
             17,660               17,660  
Payable for:
                             —  
Payable to custodian bank
     —       —               —  
Income payable
     —       —               —  
Interest purchased
     —       —               —  
Investments purchased
     432       —               432  
Investments purchased on a delayed delivery basis
     —       —       —       —  
Fund shares repurchased
     1,031       775       —       1,806  
Distributions
     —       8       —       8  
Investment advisory fee
     75       130       —       205  
Administration fee
     209       130       —       339  
Transfer agent fee
     —       —       —       —  
Pricing and bookkeeping fees
     —       —       —       —  
Trustees’ fees
     — (e)     88       —       88  
Audit fee
     —       —       —       —  
Custody fee
     —       —       —       —  
Distribution and service fees
     20       —       —       20  
Future variation margin payable
     —       41       —       41  
Deferred compensation plan
     5       —       —       5  
Other liabilities
     2       115       0       117  
 
                        
Total Liabilities
     1,774       18,947       —       20,721  
 
                        
Net Assets
   $ 864,940     $ 1,523,291     $ —     $ 2,388,231  
 
                        
 
                                
Composition of Net Assets:
                                
Paid-in capital
   $ 757,169     $ 1,513,592       —     $ 2,270,761  
Overdistributed net investment income
     3,366       5,913       0     $ 9,279  
Accumulated net realized gain (loss)
     9,716       (215,414 )     —     $ (205,698 )
Unrealized appreciation on investments
     94,689       219,200       —       313,889  
 
                        
Net Assets
   $ 864,940     $ 1,523,291     $ —     $ 2,388,231  
 
                        
 
                                
Investors A: (a)
                                
Net assets
   $ —     $ 37,088     $ 27,531     $ 64,619  
Shares outstanding
     —       1,636       1,214       2,850  
 
                          
Net asset value per share (b)
           $ 22.67             $ 22.67  
 
                          
Maximum sales charge
                                
Maximum offering price per share ( c)
                                
 
                                
Investors B: (a)
                                
Net assets
   $ —     $ —     $ 13,027     $ 13,027  
Shares outstanding
     —       —       480 (d)     480  
 
                          
Net asset value, offering and redemption price per share
   $ —     $ —             $ 27.11  
 
                          
 
                                
Primary A: (a)
                                
Net assets
   $ —     $ 1,486,203     $ 824,382     $ 2,310,585  
Shares outstanding
     —       65,132       36,128 (d)     101,260  
 
                          
Net asset value, offering and redemption price per share
   $ —     $ 22.82             $ 22.82  
 
                          
 
                                
Class A: (a)
                                
Net assets
   $ 24,398     $ —     $ (24,398 )   $ —  
Shares outstanding
     896       —       (896 )     —  
 
                          
Net asset value per share (b)
   $ 27.22     $ —             $ —  
 
                          
Maximum sales charge
     5.75 %     0.00 %                
Maximum offering price per share ( c)
     28.88       0.00                  
 
Class B: (a)
                                
Net assets
   $ 13,027     $ —     $ (13,027 )   $ —  
Shares outstanding
     480       —       (480 )     —  
 
                          
Net asset value and offering price per share
   $ 27.11     $ —             $ —  
 
                          
 
Class C: (a)
                                
Net assets
   $ 3,133     $ —     $ (3,133 )   $ —  
Shares outstanding
     115       —       (115 )     —  
 
                          
Net asset value and offering price per share
   $ 27.18     $ —             $ —  
 
                          
 
Class Z: (a)
                                
Net assets
   $ 824,382     $ —     $ (824,382 )   $ —  
Shares outstanding
     30,242       —       (30,242 )     —  
 
                          
Net asset value and offering price per share
   $ 27.26     $ —             $ —  
 
                          

(a)   Class A, B, C and Z shares of Columbia Large Company Index Fund are exchanged for Investor A, B, A and Primary A shares of Nations Large Cap Index Fund based on the net asset value per share of Nations Large Cap Index Fund’s Investor A, B, A and Primary A shares, respectively, at the time of the merger.
 
(b)   Redemption price per share is equal to net assets value less any applicable contingent deferred sales charge.
 
(c)   On sales of $50,000 or more the offering price is reduced.
 
(d)   Reflects estimated shares issued to Target fund at the time of the merger.
 
(e)   Amount rounds to less than $1,000.

 

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Pro- forma Combining
Statement of Operations
As of March 31, 2005 (unaudited)

                                 
    Columbia     Nations              
    Large Company Index     Large Cap Index              
    Fund     Fund     Pro Forma     Pro Forma  
(in thousands)   Target Fund     Acquiring Fund     Adjustments     Combined  
Investment Income:
                                
Dividends
   $ 17,497     $ 25,992     $ —     $ 43,489  
Dividends from affiliates
     575       1,379       —     $ 1,954  
Securities Lending
     —       14             $ 14  
Interest
     27       —       —     $ 27  
Foreign taxes withheld
     —       —       —       —  
 
                        
Total Investment Income
     18,099       27,385       —       45,484  
 
                        
 
                                
Expenses:
                                
Investment advisory fee
     872       1,328       —       2,200 (a)
Administration fee
     1,888       1,328       (1,016 )     2,200 (a)
Distribution fee:
                             —  
Class B
     85       —       —       85 (a)
Class C
     19       —       (19 )     — (e)
Service fee:
                             —  
Investor A / Class A
     46       86       6       138 (e)
Class B
     28       —       —       28 (a)
Class C
     6       —       (6 )     — (e)
Sub-account services fee - Class Z
     633               (633 )     — (d)
Transfer agent fee:
     —       299       (299 )     — (d)
Trustees’ fees
     23       28       (8 )     43 (b)
Printing fees
     —       16       (16 )     — (d)
Custody fee
     —       94       (94 )     — (d)
Registration fees
     —       27       (27 )     — (d)
Non-Recurring Costs (see Note 6)
     45       362       —       407  
Other expenses
     12       205       (188 )     29 (b)
 
                        
Total Operating Expenses
     3,657       3,773       (2,300 )     5,130  
Interest expense
     —       —       —       —  
 
                        
Total Expenses
     3,657       3,773       (2,300 )     5,130  
Fees and expenses waived or reimbursed by Investment Advisor
     —       (1,465 )     73       (1,392 )(c)
Fees Reimbursed by Advisor Class Z
     (84 )     —       84       — (d)
Custody earnings credit
     —       (1 )     1       — (d)
Non-recurring costs assumed by Investment Advisor (see Note 6)
     (45 )     (362 )     —       (407 )
 
                        
Net Expenses
     3,528       1,945       (2,142 )     3,331  
 
                        
Net Investment Income
     14,571       25,440       2,142       42,153  
 
                        
 
                                
Net Realized and Unrealized Gain (Loss) on Investments:
                                
Net realized gain on unaffiliated investments
     44,375       (14,100 )             30,275  
Net realized gain on affiliated investments
     1,007       18       —       1,025  
Net realized gain from futures
             4,338               4,338  
Net realized loss on the disposal of investments in violation of restrictions
(See Note 6)
     —                          
Net change in unrealized appreciation/depreciation on investments
     (7,004 )     67,191       —       60,187  
 
                        
Net
     38,378       57,447       —       95,825  
 
                        
 
                                
Net Increase in Net Assets from Operations
   $ 52,949     $ 82,887     $ 2,142     $ 137,978  
 
                        

(a)   Based on the contract in effect for Nations Large Cap Index Fund, the surviving fund.
 
(b)   Reflects elimination of duplicate expenses achieved as a result of merging funds.
 
(c)   Based on the expense cap of Nations Large Cap Index Fund, the Surviving Fund.
 
(d)   Proposed Unified fee structure for Surviving Fund
 
(e)   Adjustment to realign Columbia Large Company Index Fund’s fees to Nations Large Cap Index Fund’s fee structure.

 

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NATIONS LARGECAP INDEX FUND
AND
COLUMBIA LARGE COMPANY INDEX FUND

PRO FORMA COMBINING FINANCIAL STATEMENTS

Notes to Financial Statements
March 31, 2005
(unaudited)

Note 1. Organization

Nations LargeCap Index Fund (the “Acquiring Fund”), a series of Nations Funds Trust (the “Trust”), is a Delaware business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Columbia Large Company Index Fund (“Target Fund”), a series of Columbia Funds Trust V, is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

Investment Goal

The Acquiring Fund seeks investment results that (before fees and expenses) correspond to the total return of the S&P 500 Index. The Target Fund seeks to provide investment results that match the price and yield performance of the S&P 500 Index.

Fund Shares

The Acquiring Fund and the Target Fund each may issue an unlimited number of shares. The Acquiring Fund offers three classes of shares: Primary A, Investor A, and Investor B shares. The Target Fund offers four classes of shares: Class A, Class B, Class C, and Class Z shares. Each share class has its own expense structure.

Note 2. Basis of Combination

The accompanying pro-forma financial statements are presented to show the effect of the proposed merger of the Target Fund by the Acquiring Fund as if such merger had occurred on April 1, 2004. The following notes refer to the accompanying pro-forma financial statements of such proposed merger.

Under the terms of the merger, the combination of the Target Fund and Acquiring Fund will be accounted for by the method of accounting for tax-free mergers of investment companies. The merger will be accomplished by a combination of the net assets of the Target Fund into the Acquiring Fund in exchange for new shares of the Acquiring Fund at net asset value.

The Pro Forma Investment Portfolio and Pro Forma Statement of Assets and Liabilities of the Target Fund and Acquiring Fund have been combined to reflect balances as of March 31, 2005. The Pro Forma Statement of Operations of the Target Fund and Acquiring Fund has been combined to reflect twelve months ended March 31, 2005. Banc of America Capital Management, LLC. (“BACAP”) expects that all of the securities held by the Target Fund as of March 31, 2005, would comply with the compliance guidelines and/or investment restrictions of the Acquiring Fund.

Following the merger the Acquiring Fund will be the accounting survivor. In accordance with accounting principles generally accepted in the United States of America, the historical cost of investment securities will be carried forward to the Acquiring Fund and the results of operations for pre-combined periods will not be re-stated.

 

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The accompanying pro-forma financial statements should be read in conjunction with the financial statements of the Acquiring Fund and the Target Fund included within their respective annual shareholder reports dated March 31, 2005, as well as the semi-annual shareholder reports dated September 30, 2004.

Note 3. Significant Accounting Policies

Security Valuation

The Acquiring Fund and the Target Fund use the identical policy for security valuation. Equity securities are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the mean of the latest bid and asked prices 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.

Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.

Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

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.

Securities Lending

Under an agreement with Bank of New York (“BNY”), the Fund may lend its securities to certain approved brokers, dealers and other financial institutions. Each loan is collateralized by cash, in an amount at least equal to the market value of the securities loaned plus accrued income from the investment of the collateral. The cash collateral received is invested in Nations Cash Reserves. A portion of the income generated by the investment of the collateral, net of any rebates paid by BNY to the borrowers, is remitted to BNY as lending agent, and the remainder is paid to the Fund. Generally, in the event of borrower default, the Fund has the right to use the collateral to offset any losses incurred. In the event the Fund is delayed or prevented from exercising its right to dispose of the collateral, there may be a potential loss to the Fund. The Fund bears the risk of loss with respect to the investment of collateral. The income earned by the Fund from securities lending is included in the Statement of Operations.

Futures Contracts

The Fund may invest in municipal and U.S. Treasury futures contracts. The Fund will invest in these instruments to hedge against the effects of changes in the value of portfolio securities due to anticipated changes in interest rates and/or market conditions, for duration management, or when the transactions are economically appropriate to the reduction of risk inherent in the management of the Fund and not for trading purposes. The use of futures contracts involves certain risks, which include: (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the instrument or the underlying securities, or (3) an inaccurate prediction by Columbia Management Advisors, Inc. of the future direction of interest rates. Any of these risks may involve amounts exceeding the variation margin recorded in the Fund’s Statement of Assets and Liabilities at any given time.

 

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Upon entering into a futures contract, the Fund deposits cash or securities with the broker in an amount sufficient to meet the initial margin requirement. Subsequent payments are made or received by the Fund equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in unrealized gains or losses. The Fund also identifies portfolio securities as segregated with the custodian in a separate account in an amount equal to the futures contract. The Fund recognizes a realized gain or loss when the contract is closed or expires.

Income Recognition

Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities. Corporate actions and dividend income are recorded on the ex-date.

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, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

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 tax-exempt or 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.

Note 4. Fees and Compensations Paid to Affiliates

Investment Advisory Fee

BACAP, a wholly-owned subsidiary of Bank of America, N.A. (“Bank of America”), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, is the investment advisor to the Acquiring Fund. BACAP receives a monthly investment advisory fee at the annual rate of 0.10% of the Fund’s average daily net assets.

Administration Fee

BACAP Distributors, LLC (“BACAP Distributors”), a wholly-owned subsidiary of Bank of America, provides administrative and other services to the Fund for a monthly administration fee, computed daily and paid monthly, at the annual rate of 0.10% of the Fund’s average daily net assets.

Transfer Agent Fee

PFPC Inc. serves as the transfer agent for the Fund’s shares. Bank of America serves as the sub-transfer agent for the Primary A Shares of the Fund. Bank of America is entitled to receive from the transfer agent a fee equal to the costs incurred by Bank of America in providing services pursuant to its obligations as sub-transfer agent at the annual rate of up to 0.01% of the net assets attributable to the Primary A shares of the Fund. For the year ended March 31, 2005, Bank of America earned $17,000 in sub-transfer agent fees from the Fund for providing such services. This amount is included in ‘‘Transfer agent fees’’ in the Fund’s Statement of Operations.

Underwriting Discounts, Service and Distribution Fees

The Fund has adopted a combined shareholder servicing and distribution plan for the Investor A Shares of the Fund. The shareholder servicing plan permits the Fund to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plan, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the distributor and/or selling agents for

 

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activities or expenses primarily intended to result in the sale of the classes’ shares. Payments are made at an annual rate and paid monthly, as a percentage of average daily net assets, set from time to time by the Board of Trustees, and are charged as expenses of the Fund directly to the applicable class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Bank of America and BACAP Distributors.

For the year ended March 31, 2005, the annual rates in effect and plan limits, as a percentage of average daily net assets, were as follows:

                 
    Current     Plan  
    Rate     Limit  
Investor A Combined Distribution and Shareholder Servicing Plan
     0.25 %     0.25 %

Fees Paid to Officers and Trustees

With the exception of one officer, no officer, director or employee of Bank of America, BACAP Distributors or BACAP, or any affiliate thereof, receives any compensation from the Fund for serving as Trustee or Officer of the Trust. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. The Fund’s fee for the Office of the Chief Compliance Officer will not exceed $15,000 per year.

The Fund’s eligible Trustees may participate in a non-qualified deferred compensation plan which may be terminated at any time. All benefits provided under this plan are unfunded and any payments to plan participants are paid solely out of the Fund’s assets. Income earned on the plan participant’s deferral account is based on the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, on the rate of return of Nations Treasury Reserves, another portfolio of the Trust. The expense for the deferred compensation plan is included in “Trustees’ fees and expenses” in the Statement of operations. The liability for the deferred compensation plan is included in “Accrued Trustees’ fees and expenses” in the Statement of assets and liabilities.

Custody Credits

The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses on the Statement of Operations. 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.

Other

The Fund has made daily investments of cash balances in Nations Cash Reserves, another portfolio of the Trust, pursuant to an exemptive order received from the Securities and Exchange Commission. The income earned by the Fund from such investments is included in its Statement of Operations as “Dividend income from affiliated funds.” BACAP and BACAP Distributors earn advisory and administration fees on the investments made in the Nations Cash Reserves in addition to the advisory and administration fees earned by BACAP and BACAP Distributors from the Fund. For the year ended March 31, 2005, BACAP and BACAP Distributors earned $37,000 of investment advisory Fees and $19,000 of administration fees, respectively, related to investments in affiliated funds.

A significant portion of the Fund’s Primary A shares represents investments by fiduciary accounts over which Bank of America has either sole or joint investment discretion.

Expense Limits and Fee Reimbursements

BACAP and/or BACAP Distributors have contractually agreed to waive fees and reimburse the Fund through July 31, 2006 for certain expenses to the extent that total expenses (exclusive of distribution and service fees,

 

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brokerage commissions, interest, taxes and extraordinary expenses, if any) exceed 0.14% annually of the Fund’s average daily net assets.

BACAP and/or BACAP Distributors is entitled to recover from the Fund any fees waived or expenses reimbursed by BACAP and/or BACAP Distributors during the three year period following the date of such waiver or reimbursement, to the extent that such recovery would not cause the affected fund to exceed the expense limitations in effect at the time of recovery. There is no guarantee that these expense limitations will continue.

As of March 31, 2005, the amounts potentially recoverable by BACAP and/or BACAP Distributors pursuant to this arrangement within one year, two years and three years are $3,143,000, $2,494,000 and $1,465,000, respectively.

Note 5. Capital Shares

The pro-forma combining net asset value per share assumes the issuance of Acquiring Fund shares to Target Fund shareholders in connection with the proposed merger. The number of shares assumed to be issued is equal to the net asset value of the Target Fund divided by the net asset value per share of the Acquiring Fund as of March 31, 2005. The pro-forma number of shares outstanding, by class, for the combined entity consists of the following at March 31, 2005.

                         
      Shares of       Additional Shares       Total Shares  
      Acquiring Fund       Assumed Issued       Outstanding  
Class of Shares     Pre-Combination       with Merger       Post Combination  
Primary A
     65,132              36,128              101,260         
Investor A
     1,636              1,214              2,850         
Investor B
     0              480              480         

Note 6. Contingencies and Other Events

On February 9, 2005, BACAP and BACAP Distributors entered into an Assurance of Discontinuance with the New York Attorney General (the “NYAG Settlement”) and consented to the entry of a cease-and-desist order by the U.S. Securities and Exchange Commission (the “SEC”) (the “SEC Order”). A copy of the NYAG Settlement is available as part of the Bank of America Corporation Form 8-K filing on February 10, 2005 and a copy of the SEC Order is available on the SEC’s website.

Under the terms of the SEC Order, BACAP and its affiliate, Banc of America Securities, LLC (“BAS”) have agreed, among other things, (1) to pay $250 million in disgorgement and $125 million in civil money penalties; (2) to cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; (3) to undertake various remedial measures to ensure compliance with the federal securities laws related to certain mutual fund trading practices; and (4) to retain an independent consultant to review their applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement also requires, among other things, BACAP along with Columbia Management Advisors, Inc. and Columbia Funds Distributors, Inc. — the investment advisor to and distributor of the Columbia Funds, respectively, — to reduce Columbia Funds, Nations Funds and other mutual funds management fees collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions. BACAP and BACAP Distributors are currently in the process of implementing the various terms of the NYAG Settlement and SEC Order.

Pursuant to the procedures set forth in the SEC Order, $375 million will be distributed in accordance with a distribution plan to be developed by the independent distribution consultant. The distribution plan must be based on a methodology developed in consultation with the BACAP, BACAP Distributors and the independent trustees of the Nations Funds and not unacceptable to the staff of the SEC. Although the distribution plan has not yet been formulated, it is anticipated that

 

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a significant portion of the settlement fund will be paid to shareholders or mutual funds of other mutual fund complexes that may have been harmed by the trading of the third parties referenced in the Settlements through systems provided by BAS. At this time, the distribution plan is still under development. As such, any gain to the Nations Funds or their shareholders cannot currently be determined. More specific information on the distribution plan will be communicated on a later date.

As a result of these matters or any adverse publicity or other developments resulting from them, including lawsuits brought by shareholders of the affected Nations Funds, 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 Nations Funds.

Civil Litigation

In connection with the events that resulted in the NYAG Settlement and SEC Order, various parties filed suits against Bank of America Corporation and certain of its affiliates, including BACAP and BACAP Distributors (collectively “BAC”), Nations Funds Trust and its Board of Trustees. On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against several other mutual fund companies based on similar allegations to the United States District Court in Maryland for consolidated or coordinated pretrial proceedings (the “MDL”). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Nations Funds Trust, the Trustees, BAC and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of Nations Funds Trust against BAC and others that asserts claims under the federal securities laws and state common law. The MDL is ongoing. Accordingly, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

Separately, a putative class action (Reinke v. Bank of America N.A., et al.) was filed against Nations Funds Trust and others on December 16, 2004 in the United States District Court for the Eastern District of Missouri relating to the conversion of common trust funds and the investment of assets held in fiduciary accounts in the Funds. Nations Funds Trust has filed a motion to dismiss that is pending, and no discovery has been taken. At the present time, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

For the fiscal year ended March 31, 2005, Bank of America Corporation has assumed $6.7 million of legal, shareholder communications, audit related, transfer agent, consulting and Trustee costs and fees incurred by the Funds impacted in connection with the regulatory and civil litigation matters discussed above. These non-recurring costs were allocated to the Funds based on their respective average nets assets for the year ended March 31, 2005. These non-recurring costs on a per Fund basis are shown in that Fund’s respective Statement of operations. Because these costs were borne by Bank of America Corporation and not any Fund, an offsetting waiver of these costs is also presented in each respective Fund’s Statement of operations as, “Costs assumed by Bank of America Corporation”. The impact to the expense ratio of each impacted Fund is reflected in the Fund’s Financial highlights.

 

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Pro forma Combining
Portfolio of Investments (Unaudited)

                                                                 
               
            Columbia Small Company Index     Nations Small Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
COMMON STOCKS
     99.1 %                                                        
 
                                                                
CONSUMER DISCRETIONARY
     18.0 %                                                        
Auto Components
     0.2 %                                                        
MIDAS INC. (a)
             10       231       32       731       —       42       961  
STANDARD MOTOR PRODUCTS
             10       119       33       380       —       43       500  
SUPERIOR INDUSTRIES INTERNATIONAL INC (b)
             17       438       53       1,397       —       70       1,835  
 
                                                          
Auto Components Total
                     788               2,508                       3,296  
 
                                                          
 
                                                                
Automobiles
     0.4 %                                                        
COACHMEN INDUSTRIES INCORPORATED
             10       137       32       439       —       42       577  
FLEETWOOD ENTERPRISES INC. (a)(b)
             38       328       120       1,045       —       158       1,373  
MONACO COACH CORP
             20       323       64       1,027       —       84       1,350  
WINNEBAGO INDUSTRIES, INC. (b)
             21       651       66       2,070       —       86       2,721  
 
                                                          
Automobiles Total
                     1,439               4,581                       6,020  
 
                                                          
 
                                                                
Distributors
     0.1 %                                                        
ADVANCED MARKETING SERVICES (a)
             12       70       37       223       —       49       292  
BUILDING MATERIALS HLDG CORP
             9       414       30       1,321       —       39       1,735  
 
                                                          
Distributors Total
                     483               1,544                       2,027  
 
                                                          
 
                                                                
Hotels, Restaurants & Leisure
     3.9 %                                                        
ARGOSY GAMING COMPANY (a)
             19       877       61       2,787       —       80       3,664  
AZTAR CORPORATION (a)
             24       674       75       2,148       —       99       2,822  
BALLY TOTAL FITNESS HOLDING CORP (a)(b)
             23       80       74       256       —       97       337  
CEC ENTERTAINMENT INC. (a)
             25       904       79       2,875       —       103       3,779  
IHOP CORP.
             14       644       43       2,055       —       57       2,699  
JACK IN THE BOX INC. (a)
             25       920       79       2,927       —       104       3,847  
LANDRY’S RESTAURANTS INC (b)
             16       474       52       1,507       —       69       1,981  
LONE STAR STEAKHOUSE & SALOON
             13       387       43       1,237       —       56       1,624  
MARCUS CORPORATION.
             19       383       60       1,220       —       78       1,603  
MULTIMEDIA GAMES USD 0.01 (a)(b)
             19       147       61       470       —       80       618  
O’CHARLEY INC (a)
             15       315       46       1,004       —       61       1,320  
P.F. CHANGS CHINA BISTRO INC (a)(b)
             18       1,052       56       3,343       —       74       4,395  
PANERA BREAD CO CL — A (a)(b)
             21       1,165       66       3,703       —       86       4,867  
PAPA JOHN’S INTERNATIONAL INC (a)
             10       333       31       1,062       —       40       1,396  
PINNACLE ENTERTAINMENT INC (a)
             27       453       86       1,438       —       113       1,890  
RARE HOSPITALITY INTL INC (a)
             23       720       74       2,294       —       98       3,014  
RYAN’S RESTAURANT GROUP INC. (a)
             29       414       91       1,316       —       119       1,731  
SHUFFLE MASTER INC (a)(b)
             24       698       77       2,226       —       101       2,924  
SONIC CORPORATION (a)
             41       1,366       130       4,345       —       171       5,711  
THE STEAK N SHAKE CO (a)
             19       364       60       1,155       —       79       1,519  
TRIARC COMPANIES, INC
             37       514       118       1,637       —       156       2,152  
WMS INDUSTRIES, INC.
             18       501       57       1,597       —       75       2,098  
 
                                                          
Hotels, Restaurants & Leisure Total
                     13,387               42,604                       55,991  
 
                                                          
 
                                                                
Household Durables
     3.6 %                                                        
APPLICA INCORPORATED (a)
             15       77       48       245       —       64       322  
BASSETT FURNITURE INDS
             8       148       24       471       —       31       619  
CHAMPION ENTERPRISES INCORPORATED (a)
             49       463       157       1,474       —       206       1,937  
DEPARTMENT 56, INCORPORATED (a)
             9       161       29       510       —       38       670  

 

Table of Contents

                                                                 
            Columbia Small Company Index     Nations Small Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
ENESCO GROUP INC. (a)
             10       65       31       207       —       41       272  
ETHAN ALLEN INTERIORS INC (b)
             24       771       77       2,454       —       101       3,226  
FEDDERS CORPORATION
             18       51       58       162       —       77       213  
INTERFACE INC (a)
             33       226       106       722       —       139       948  
LA-Z-BOY INCORPORATED (b)
             35       493       113       1,571       —       148       2,064  
LIBBEY INC
             9       197       30       626       —       39       823  
MDC HOLDINGS INC (b)
             26       1,783       82       5,707       —       108       7,490  
MERITAGE HOMES CORPORATION (a)
             16       925       50       2,946       —       66       3,871  
NVR, INC. (a)(c )
             4       3,062       12       9,656       —       16       12,717  
NATIONAL PRESTO INDUSTRIES INC
             4       157       13       504       —       16       661  
RUSS BERRIE & COMPANY INC
             12       220       37       699       —       48       919  
SKYLINE CORPORATION
             5       200       17       635       —       22       835  
STANDARD PACIFIC CORPORATION (b)
             23       1,660       73       5,277       —       96       6,937  
VIALTA INC (a)
             0       0                       —       0       0  
RAYOVAC CORP (a)
             29       1,206       92       3,844       —       121       5,050  
WD-40 COMPANY
             11       367       36       1,163       —       47       1,530  
 
                                                          
Household Durables Total
                     12,234               38,871                       51,105  
 
                                                          
 
                                                                
Internet & Catalog Retail
     0.2 %                                                        
INSIGHT ENTERPRISES INC (a)
             34       592       107       1,884       —       141       2,476  
J. JILL GROUP INC (a)
             13       178       41       563       —       54       740  
 
                                                          
Internet & Catalog Retail Total
                     769               2,447                       3,216  
 
                                                          
 
                                                                
Leisure Equipment & Products
     1.5 %                                                        
ACTION PERFORMANCE COMPANIES INC (b)
             13       167       40       531       —       53       697  
ARCTIC CAT INC
             11       292       34       925       —       45       1,218  
JAKKS PACIFIC, INC. (a)(b)
             18       382       57       1,217       —       75       1,600  
K2 INC (a)
             32       436       101       1,387       —       133       1,823  
MEADE INSTRUMENTS CORP (a)
             11       33       36       106       —       48       139  
NAUTILUS INC (b)
             21       504       68       1,604       —       89       2,108  
POLARIS INDUSTRIES INC
             29       2,051       93       6,531       —       122       8,582  
SCP POOL CORPORATION
             36       1,131       113       3,605       —       149       4,736  
STURM, RUGER & COMPANY INC
             17       114       52       363       —       69       477  
 
                                                          
Leisure Equipment & Products Total
                     5,110               16,270                       21,380  
 
                                                          
 
                                                                
Media
     0.6 %                                                        
ADVO INC
             21       794       67       2,522       —       89       3,316  
ARBITRON INC
             21       909       68       2,896       —       89       3,805  
4KIDS ENTERTAINMENT INC (a)(b)
             9       201       29       639       —       38       840  
THOMAS NELSON INC.
             9       208       28       665       —       37       873  
 
                                                          
Media Total
                     2,113               6,722                       8,834  
 
                                                          
 
                                                                
Multiline Retail
     0.3 %                                                        
FRED’S INC. (b)
             27       460       85       1,462       —       112       1,922  
SHOPKO STORES INC
             20       447       64       1,420       —       84       1,866  
 
                                                          
Multiline Retail Total
                     907               2,882                       3,789  
 
                                                          
 
                                                                
Specialty Retail
     5.2 %                                                        
AARON RENTS INCORPORATED CLASS B
             30       602       96       1,915       —       126       2,517  
BURLINGTON COAT FACTORY WAREHOUSE
             22       617       69       1,966       —       90       2,583  
CATO CORPORATION
             14       455       45       1,445       —       59       1,900  
THE CHILDREN’S PLACE RETAIL STORES, INC. (a)(b)
             14       673       45       2,149       —       59       2,822  
CHRISTOPHER & BANKS CORPORATION (a)(b)
             24       428       77       1,359       —       102       1,786  

 

Table of Contents

                                                                 
               
            Columbia Small Company Index     Nations Small Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
COST PLUS INC/CALIFORNIA (a)
             15       398       47       1,266       —       62       1,664  
DRESS BARN INCORPORATED (a)
             18       321       56       1,020       —       74       1,341  
ELECTRONIC BOUTIQUE HOLDINGS CORP (a)(b)
             12       516       38       1,646       —       50       2,161  
THE FINISH LINE-CL A
             31       722       99       2,299       —       131       3,021  
GAMESTOP CORP USD 0.001 (a)
             35       769       110       2,446       —       144       3,216  
GENESCO INC (a)
             15       429       48       1,370       —       63       1,799  
GOODY’S FAMILY CLOTHING
             18       161       57       512       —       75       673  
GROUP 1 AUTOMOTIVE, INC. (a)
             16       413       50       1,315       —       66       1,728  
GUITAR CENTER INC (a)
             17       943       55       2,999       —       72       3,942  
GYMBOREE CORPORATION (a)
             21       263       67       839       —       88       1,102  
HANCOCK FABRICS INC.
             13       97       41       307       —       54       404  
HAVERTY FURNITURE COMPANIES INC
             15       235       49       746       —       64       981  
HIBBET SPORTING GOODS INC. (a)
             16       478       51       1,523       —       67       2,001  
HOT TOPIC INC (a)(b)
             31       675       98       2,150       —       129       2,825  
JO-ANN STORES INC. (a)
             16       435       49       1,383       —       65       1,819  
LINENS ‘N THINGS INC (a)(b)
             31       762       98       2,426       —       128       3,188  
MEN’S WEARHOUSE INC (a)(b)
             23       983       74       3,136       —       98       4,120  
Movie Gallery Inc
             19       551       61       1,752       —       80       2,303  
PEP BOYS-MANNY MOE & JACK
             39       682       124       2,173       —       162       2,855  
SELECT COMFORT CORP (a)
             25       513       80       1,633       —       105       2,146  
SONIC AUTOMOTIVE INC USD 0.01
             24       552       77       1,758       —       102       2,310  
STAGE STORES INC USD 0.01 (a)
             12       472       39       1,505       —       52       1,977  
STEIN MART INC (a)
             23       520       74       1,656       —       97       2,176  
TBC CORPORATION (a)
             15       421       48       1,340       —       63       1,761  
TOO INC. (a)
             24       582       75       1,850       —       99       2,432  
TRACTOR SUPPLY COMPANY (a)
             24       1,048       76       3,326       —       100       4,374  
ZALE CORPORATION (a)
             35       1,034       111       3,287       —       145       4,321  
 
                                                          
Specialty Retail Total
                     17,750               56,498                       74,247  
 
                                                          
 
                                                                
Textiles, Apparel & Luxury Goods
     2.0 %                                                        
ASHWORTH INC (a)
             9       106       30       337       —       39       443  
BROWN SHOE COMPANY INC.
             12       425       39       1,347       —       52       1,772  
FOSSIL INC (a)
             38       990       121       3,149       —       160       4,139  
HAGGAR CORPORATION.
             4       87       14       275       —       18       361  
K-SWISS INC (b)
             21       684       66       2,180       —       87       2,864  
KELLWOOD COMPANY (b)
             19       541       60       1,722       —       79       2,263  
OSHKOSH B’GOSH INC
             8       244       25       775       —       33       1,019  
OXFORD INDUSTRIES INC
             10       381       33       1,211       —       44       1,592  
PHILLIPS-VAN HEUSEN
             20       538       65       1,718       —       85       2,256  
QUIKSILVER INC. (a)(b)
             39       1,132       124       3,603       —       163       4,735  
RUSSELL CORPORATION
             22       401       71       1,276       —       93       1,678  
STRIDE RITE CORPORATION
             25       327       78       1,040       —       103       1,367  
WOLVERINE WORLD WIDE (a)(b)
             39       836       124       2,657       —       163       3,493  
 
                                                          
Textiles, Apparel & Luxury Goods Total
                     6,692               21,289                       27,981  
 
                                                          
CONSUMER DISCRETIONARY TOTAL
                     61,672               196,215                       257,887  
 
                                                          
 
                                                                
CONSUMER STAPLES
     3.1 %                                                        
Food & Staples Retailing
     1.1 %                                                        
CASEY’S GENERAL STORES INC
             34       613       108       1,948       —       143       2,561  
GREAT ATLANTIC & PACIFIC TEA COMPANY (a)(b)
             19       286       61       909       —       80       1,195  
LONGS DRUG STORES, INC. (b)
             22       763       71       2,426       —       93       3,189  
NASH FINCH COMPANY (b)
             9       327       27       1,041       —       36       1,368  
PERFORMANCE FOOD GROUP CO (a)
             32       880       101       2,798       —       133       3,679  
UNITED NATURAL FOODS INC. (a)(b)
             26       742       82       2,359       —       108       3,101  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Small Company Index     Nations Small Cap Index                
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Food & Staples Retailing Total
                     3,610               11,482                       15,092  
 
                                                          
Food Products
     1.6 %                                                        
AMERICAN ITALIAN PASTA COMPANY (b)
             13       343       40       1,088       —       52       1,430  
CORN PRODUCTS INTERNATIONAL INC. (CPO.N)
             51       1,325       163       4,223       —       214       5,549  
DELTA & PINE LAND COMPANY (b)
             26       707       84       2,255       —       110       2,962  
FLOWERS FOODS INC
             27       753       85       2,401       —       112       3,154  
HAIN CELESTIAL GROUP INC (a)(b)
             23       421       72       1,340       —       95       1,761  
J & J SNACK FOODS CORP.
             5       248       17       796       —       22       1,044  
LANCE, INC.
             19       310       61       985       —       81       1,295  
RALCORP HOLDINGS INC (a)
             20       947       64       3,021       —       84       3,968  
SANDERSON FARMS INC
             10       449       33       1,439       —       44       1,888  
 
                                                          
Food Products Total
                     5,505               17,548                       23,052  
 
                                                          
 
                                                                
Personal Products
     0.4 %                                                        
NBTY INC (a)
             42       1,041       132       3,317       —       174       4,358  
NATURE’S SUNSHINE PRODUCTS INC.
             9       158       29       503       —       39       661  
 
                                                          
Personal Products Total
                     1,199               3,820                       5,019  
 
                                                          
 
                                                                
Tobacco
     0.1 %                                                        
DIMON INC
             31       193       98       613       —       129       806  
 
                                                          
Tobacco Total
                     193               613                       806  
 
                                                          
CONSUMER STAPLES TOTAL
                     10,507               33,462                       43,969  
 
                                                          
ENERGY
     6.6 %                                                        
Energy Equipment & Services
     3.0 %                                                        
ATWOOD OCEANICS INCORPORATED (a)
             9       612       29       1,943       —       38       2,555  
CAL DIVE INTERNATIONAL INC (a)
             26       1,182       83       3,760       —       109       4,942  
CARBO CERAMICS INC
             10       687       31       2,189       —       41       2,876  
DRIL-QUIP (a)
             8       249       26       793       —       34       1,042  
HYDRIL (a)
             15       847       46       2,693       —       61       3,540  
INPUT/OUTPUT INC (a)(b)
             46       299       148       957       —       195       1,256  
LONE STAR TECHNOLOGIES (a)
             20       785       63       2,496       —       83       3,281  
MAVERICK TUBE CORPORATION (MAVK.O) (a)(b)
             29       943       92       2,997       —       121       3,940  
OCEANEERING INTERNATIONAL, INC. (a)
             17       653       55       2,078       —       73       2,730  
OFFSHORE LOGISTICS INC. (a)
             16       526       50       1,676       —       66       2,202  
SEACOR HOLDINGS INC. (a)
             12       791       40       2,518       —       52       3,309  
TETRA TECHNOLOGIES INCORPORATED (a)(b)
             15       432       48       1,378       —       64       1,810  
UNIT CORP (a)
             28       1,278       90       4,065       —       118       5,344  
VERITAS DGC INC (a)
             23       680       72       2,163       —       95       2,843  
W-H ENERGY SERVICES (a)
             19       452       60       1,443       —       79       1,895  
 
                                                          
Energy Equipment & Services Total
                     10,417               33,148                       43,565  
 
                                                          
 
                                                                
Oil Gas & Consumable Fuels
     3.6 %                                                        
CABOT OIL AND GAS CORPORATION (b)
             22       1,213       70       3,866       —       92       5,079  
CIMAREX ENERGY COMPANY (a)(b)
             28       1,104       90       3,506       —       118       4,610  
FRONTIER OIL CORP (b)
             18       667       59       2,128       —       77       2,796  
PATINA OIL & GAS CORP
             48       1,936       154       6,156       —       202       8,092  
PENN VIRGINIA CORP COM STK US 6.25
             13       578       40       1,836       —       53       2,414  
Petroleum Development Corp (a)
             11       426       36       1,349       —       47       1,775  
REMINGTON OIL & GAS CORP (a)
             17       536       54       1,702       —       71       2,238  
ST MARY LAND & EXPLORATION (b)
             20       981       62       3,118       —       82       4,099  
SOUTHWESTERN ENERGY COMPANY (a)
             25       1,408       79       4,473       —       104       5,880  

 

Table of Contents

                                                                 
            Columbia Small Company Index     Nations Small Cap Index                
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
SPINNAKER EXPLORATION CO (a)
             21       735       66       2,345       —       87       3,080  
STONE ENERGY CORPORATION (a)
             17       835       55       2,662       —       72       3,497  
SWIFT ENERGY CO (a)
             19       540       61       1,723       —       80       2,264  
VINTAGE PETROLEUM INC.
             41       1,284       130       4,090       —       171       5,373  
 
                                                          
Oil Gas & Consumable Fuels Total
                     12,244               38,955                       51,198  
 
                                                          
ENERGY TOTAL
                     22,661               72,103                       94,763  
 
                                                          
   
FINANCIALS
     14.1 %                                                        
Capital Markets
     0.3 %                                                        
INVESTMENT TECHNOLOGY GROUP INC. (a)
             29       499       91       1,586       —       119       2,084  
PIPER JAFFRAY COMPANIES, INC (a)
             14       516       45       1,636       —       59       2,151  
SWS GROUP,INC
             11       175       35       555       —       46       729  
 
                                                          
Capital Markets Total
                     1,189               3,776                       4,965  
 
                                                          
   
Commercial Banks
     5.5 %                                                        
BOSTON PRIVATE FINL HOLDINGS, INC.
             19       444       60       1,416       —       78       1,860  
CHITTENDEN CORPORATION
             32       821       100       2,613       —       132       3,434  
COMMUNITY BANK SYSTEMS, INC.
             21       477       66       1,517       —       87       1,993  
EAST WEST BANCORP INC
             36       1,318       114       4,190       —       149       5,508  
FIRST BANCORP PUERTO RICO
             26       1,099       83       3,496       —       109       4,595  
FIRST MIDWEST BANCORP INC
             31       1,010       99       3,212       —       130       4,222  
FIRST REPUBLIC BANK
             16       511       50       1,633       —       66       2,145  
GOLD BANC CORPORATION INC.
             27       383       87       1,219       —       114       1,602  
HUDSON UNITED BANCORP
             31       1,075       97       3,426       —       128       4,501  
IRWIN FINANCIAL CORP (b)
             16       361       50       1,151       —       66       1,512  
NARA BANCORP INC USD 0.001
             16       222       50       708       —       66       930  
PRIVATEBANCORP INC
             13       402       41       1,275       —       53       1,677  
PROVIDENT BANKSHARES CORPORATION
             23       742       72       2,360       —       94       3,102  
REPUBLIC BANCORP (b)
             48       647       152       2,061       —       200       2,708  
RIGGS NATIONAL CORPORATION WASHINGTON D.C. (b)
             18       340       57       1,082       —       75       1,422  
SOUTH FINANCIAL GROUP, INC. (b)
             48       1,475       154       4,694       —       202       6,169  
SOUTHWEST BANCORP OF TEXAS
             48       873       151       2,778       —       199       3,652  
STERLING BANCSHARES INC
             31       436       98       1,386       —       128       1,822  
SUSQUEHANNA BANCSHARES INC
             32       770       101       2,450       —       132       3,221  
TRUSTCO BANK CORP NY
             51       580       161       1,846       —       211       2,427  
UCBH HOLDINGS INC (b)
             31       1,233       98       3,926       —       129       5,159  
UMPQUA HOLDINGS CORP (b)
             30       708       97       2,253       —       127       2,961  
UNITED BANKSHARES INC
             27       885       85       2,810       —       112       3,695  
WHITNEY HOLDING CORPORATION
             29       1,269       91       4,042       —       119       5,310  
WINTRUST FINANCIAL CORP
             15       688       47       2,194       —       61       2,882  
 
                                                          
Commercial Banks Total
                     18,769               59,741                       78,509  
 
                                                          
 
                                                                
Consumer Finance
     0.2 %                                                        
CASH AMERICA INTERNATIONAL INC.
             20       436       63       1,388       —       83       1,825  
REWARDS NETWORK INC (a)
             14       58       45       185       —       59       243  
WORLD ACCEPTANCE CORP NPV (a)
             13       329       41       1,049       —       54       1,378  
 
                                                          
Consumer Finance Total
                     824               2,622                       3,446  
 
                                                          
 
                                                                
Diversified Financial Services
     0.1 %                                                        
FINANCIAL FEDERAL CORPORATION (b)
             12       417       38       1,330       —       49       1,747  
 
                                                          
Diversified Financial Services Total
                     417               1,330                       1,747  
 
                                                          
   
Insurance
     2.4 %                                                        

 

Table of Contents

                                                                 
            Columbia Small Company Index     Nations Small Cap Index                
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
DELPHI FINANCIAL GROUP-CLASS A
             20       869       64       2,769       —       85       3,638  
HILB, ROGAL AND HAMILTON COMPANY (b)
             24       874       78       2,785       —       102       3,659  
INFINITY PROPERTY + CASUALTY CORP
             14       438       45       1,397       —       59       1,835  
LANDAMERICA FINANCIAL GROUP
             12       615       39       1,956       —       51       2,572  
PHILADELPHIA CONS HLDG CO (a)
             14       1,062       44       3,396       —       58       4,458  
PRESIDENTIAL LIFE
             17       282       55       899       —       73       1,180  
PROASSURANCE CORP COM (a)(b)
             20       782       63       2,492       —       83       3,275  
RLI CORP (b)
             16       651       50       2,073       —       66       2,723  
SCPIE HOLDINGS INC. (a)
             7       74       21       236       —       28       310  
SELECTIVE INSURANCE GROUP
             19       878       61       2,797       —       80       3,675  
STEWART INFO SVCS
             12       461       39       1,467       —       51       1,929  
UICI
             27       662       87       2,110       —       114       2,772  
ZENITH NATIONAL INSURANCE (b)
             13       690       42       2,199       —       56       2,889  
 
                                                          
Insurance Total
                     8,337               26,576                       34,913  
 
                                                          
 
                                                                
Real Estate
     3.2 %                                                        
CAPITAL AUTOMOTIVE REIT (b)
             27       907       87       2,891       —       115       3,799  
COLONIAL PROPERTIES TRUST (b)
             19       714       59       2,274       —       78       2,988  
COMMERCIAL NET LEASE REALTY
             35       651       112       2,072       —       148       2,723  
CRT PPTYS INC USD 0.01
             21       462       68       1,470       —       89       1,932  
ENTERTAINMENT PROPERTY TRUST SHS OF
             17       704       54       2,241       —       71       2,946  
ESSEX PROPERTY TRUST INC
             16       1,078       50       3,427       —       65       4,505  
GABLES RESIDENTIAL TRUST
             20       663       63       2,108       —       83       2,771  
GLENBOROUGH REALTY TRUST INC
             22       415       69       1,319       —       91       1,734  
KILROY REALTY CORP (b)
             20       798       62       2,541       —       82       3,338  
LEXINGTON CORPORATE PROPERTIES TRUST (b)
             33       722       105       2,299       —       138       3,021  
New Century Financial Corp (b)
             35       1,615       110       5,143       —       144       6,758  
PARKWAY PROPERTIES
             10       448       30       1,420       —       40       1,868  
SHURGARD STORAGE CENTERS-A (b)
             32       1,295       101       4,118       —       132       5,413  
SOVRAN SELF STORAG COM STK USD0.01 (b)
             11       424       34       1,351       —       45       1,775  
 
                                                          
Real Estate Total
                     10,897               34,676                       45,573  
 
                                                          
 
                                                                
Thrifts & Mortgage Finance
     2.3 %                                                        
ANCHOR BANCORP WISCONSIN INC
             14       399       45       1,271       —       59       1,670  
BANKATLANTIC BANCORP, INC
             36       623       114       1,982       —       150       2,605  
BANKUNITED FINANCIAL CORPORATION (a)
             19       513       61       1,633       —       80       2,146  
BROOKLINE BANCORP INC
             42       624       133       1,986       —       175       2,610  
COMMERCIAL FEDERAL CORPORATION
             27       738       85       2,347       —       112       3,086  
DIME COMMUNITY BANCSHARES
             23       347       73       1,102       —       95       1,449  
DOWNEY FINANCIAL CORPORATION
             16       991       51       3,150       —       67       4,141  
FIRSTFED FINANCIAL CORPORATION (a)
             11       571       36       1,821       —       47       2,392  
FLAGSTAR BANCORP, INC. (b)
             32       620       101       1,971       —       133       2,590  
FREMONT GENERAL CORPORATION (b)
             48       1,060       153       3,371       —       202       4,431  
MAF BANCORP INC.
             22       901       69       2,862       —       91       3,764  
STERLING FINL CORP COM STK USD1 (a)
             16       553       49       1,758       —       65       2,312  
 
                                                          
Thrifts & Mortgage Finance Total
                     7,941               25,255                       33,195  
 
                                                          
FINANCIALS TOTAL
                     48,374               153,975                       202,349  
 
                                                          
 
                                                                
HEALTH CARE
     12.7 %                                                        
Biotechnology
     0.2 %                                                        
ARQULE INC (a)
             21       100       68       318       —       89       418  
ENZO BIOCHEM INC (a)
             21       296       65       940       —       86       1,236  
REGENERON PHARMACEUTICALS, INC. (a)
             33       166       103       527       —       136       693  
SAVIENT PHARMACEUTICALS (a)
             41       113       131       359       —       172       472  

 

Table of Contents

                                                                 
            Columbia Small Company Index     Nations Small Cap Index                
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Biotechnology Total
                     675               2,145                       2,820  
 
                                                          
 
                                                                
Health Care Equipment & Supplies
     6.0 %                                                        
ADVANCED MEDICAL OPTICS, INC. (a)(b)
             25       916       80       2,911       —       106       3,827  
AMERICAN MEDICAL SYSTEMS HOLDINGS (a)
             41       708       131       2,257       —       173       2,965  
ANALOGIC CORPORATION
             9       372       27       1,176       —       36       1,548  
ARTHROCARE CORPORATION (a)
             16       456       51       1,454       —       67       1,910  
BIOLASE TECHNOLOGY INC (b)
             16       133       50       426       —       66       559  
BIOSITE INC (a)
             11       593       36       1,889       —       48       2,482  
CONMED CORP. (a)
             20       611       65       1,943       —       85       2,554  
COOPER COMPANIES INC
             29       2,121       93       6,743       —       122       8,865  
CYBERONICS INC USD 0.01 (a)(b)
             15       676       49       2,147       —       64       2,822  
DJ ORTHOPEDICS LLC COM STK USD0.01 (a)(b)
             14       338       43       1,080       —       57       1,418  
DATASCOPE CORPORATION
             9       281       29       899       —       39       1,180  
DIAGNOSTIC PRODUCTS CORPORATION.
             18       860       57       2,739       —       75       3,598  
HAEMONETICS CORPORATION (a)
             18       742       56       2,361       —       74       3,103  
HOLOGIC INC. (a)
             14       453       45       1,438       —       59       1,890  
ICU MEDICAL INC (a)(b)
             9       327       29       1,040       —       39       1,367  
IDEXX LABORATORIES ICN (a)
             23       1,240       73       3,937       —       96       5,178  
IMMUCOR INC COM STK US 0.10 (a)
             31       924       97       2,941       —       128       3,865  
INTEGRA LIFESCIENCES HOLDINGS (a)(b)
             17       588       53       1,867       —       70       2,455  
INTERMAGNETICS GENERAL CORPORATION (a)
             17       424       55       1,345       —       73       1,768  
INVACARE CORPORATION.
             21       955       68       3,035       —       89       3,990  
KENSEY NASH CORP (a)(b)
             8       209       25       666       —       32       875  
MENTOR CORPORATION (b)
             24       767       76       2,446       —       100       3,213  
MERIT MEDICAL SYSTEMS INC (a)
             18       216       57       685       —       75       900  
OSTEOTECH INC (a)
             12       44       37       141       —       49       185  
POLYMEDICA CORP (b)
             19       597       60       1,906       —       79       2,503  
POSSIS MEDICAL INC (a)
             12       99       38       316       —       50       414  
RESMED INC (a)
             23       1,314       74       4,174       —       97       5,488  
RESPIRONICS, INC. (a)
             24       1,404       77       4,475       —       101       5,879  
SURMODICS, INC. (a)(b)
             11       361       36       1,149       —       47       1,509  
SYBRON DENTAL SPECIALTIES, INC. (a)
             27       976       87       3,105       —       114       4,082  
THERAGENICS CORP. (a)
             20       70       65       223       —       85       293  
VIASYS HEALTHCARE INC (a)
             20       382       64       1,215       —       84       1,597  
VITAL SIGNS, INC
             6       251       20       790       —       26       1,041  
WILSON GREATBACH TECHNOLOGIES INC (a)(b)
             15       264       46       843       —       61       1,107  
 
                                                          
Health Care Equipment & Supplies Total
                     20,673               65,759                       86,433  
 
                                                          
 
                                                                
Health Care Providers & Services
     5.4 %                                                        
ACCREDO HEALTH (a)
             33       1,474       106       4,701       —       139       6,175  
AMEDISYS INC USD 0.001 (a)
             10       315       33       995       —       43       1,310  
AMERICAN HEALTHWAYS INC (a)(b)
             23       743       72       2,361       —       94       3,104  
AMERIGROUP CORP (a)
             35       1,261       110       4,020       —       144       5,281  
AMSURG CORP (a)(b)
             20       503       63       1,599       —       83       2,102  
CENTENE CORPORATION (a)(b)
             28       846       90       2,687       —       118       3,533  
CERNER CORPORATION (a)(b)
             22       1,166       71       3,712       —       93       4,878  
CHEMED CORP INC.
             9       650       27       2,065       —       36       2,715  
CROSS COUNTRY HEALTHCARE INC (a)
             18       300       57       952       —       75       1,252  
CRYOLIFE INC (a)(b)
             15       93       48       298       —       63       392  
CURATIVE HEALTH SERVICES INC (a)
             9       30       28       95       —       37       125  
DENDRITE INTERNATIONAL INC (a)
             28       399       90       1,268       —       119       1,667  
GENTIVA HEALTH SERVICES IN USD 0.1 (a)
             16       264       52       840       —       68       1,103  
HOOPER HOLMES INC
             44       169       141       537       —       185       706  
LCA-VISION INC COM PAR 0.001
             12       406       39       1,292       —       51       1,698  

 

Table of Contents

                                                                 
            Columbia Small Company Index     Nations Small Cap Index                
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
LABONE INC USD 0.01 (a)
             12       403       37       1,279       —       49       1,683  
NDCHEALTH CORPORATION
             24       390       78       1,243       —       102       1,633  
OCA INC (a)(b)
             32       134       100       426       —       132       560  
Odyssey HealthCare Inc (a)
             23       274       74       872       —       97       1,146  
OWENS & MINOR, INC. HOLDING COMPANY
             27       730       86       2,321       —       112       3,052  
PAREXEL INTERNATIONAL CORP. (a)
             18       418       57       1,332       —       75       1,751  
PEDIATRIX MEDICAL GROUP INC (a)
             16       1,063       49       3,375       —       65       4,438  
PHARMACEUTICAL PRODUCT DEVELOPMENT (a)
             36       1,739       114       5,528       —       150       7,268  
PRIORITY HEALTHCARE CORP-B (a)
             25       530       78       1,689       —       103       2,219  
PROVINCE HEALTHCARE CO (a)(b)
             34       814       108       2,592       —       141       3,406  
REHABCARE GROUP INC (a)
             11       319       36       1,019       —       47       1,338  
SFBC INTERNATIONAL INC USD 0.001 (a)
             11       402       36       1,279       —       48       1,681  
SIERRA HEALTH SERVICES, INC. (a)
             18       1,156       58       3,684       —       76       4,839  
SUNRISE SENIOR LIVING INC (a)(b)
             13       617       40       1,963       —       53       2,581  
UNITED SURGICAL PARTNERS INT (a)
             20       897       62       2,851       —       82       3,749  
 
                                                          
Health Care Providers & Services Total
                     18,506               58,878                       77,384  
 
                                                          
 
                                                                
Pharmaceuticals
     1.1 %                                                        
ALPHARMA INC CLASS A
             32       392       101       1,249       —       133       1,641  
BRADLEY PHARMACEUTICALS INC (a)(b)
             10       97       32       308       —       42       404  
CONNETICS CORPORATION (a)(b)
             24       617       78       1,965       —       102       2,582  
MGI PHARMA INC (a)
             49       1,226       155       3,904       —       203       5,130  
MEDICIS PHARMACEUTICAL CORP CL A (b)
             37       1,106       118       3,523       —       154       4,629  
NOVEN PHARMACEUTICALS INC (a)
             16       270       51       860       —       67       1,130  
 
                                                          
Pharmaceuticals Total
                     3,707               11,809                       15,516  
 
                                                          
HEALTH CARE TOTAL
                     43,291               137,731                       181,022  
 
                                                          
 
                                                                
INDUSTRIALS
     18.1 %                                                        
Aerospace & Defense
     2.5 %                                                        
AAR CORPORATION (a)
             22       298       70       948       —       92       1,246  
APPLIED SIGNAL TECHNO NPV
             8       176       25       563       —       32       740  
ARMOR HOLDINGS INC (a)
             23       860       74       2,741       —       97       3,601  
CERADYNE, INC. (a)
             17       371       53       1,179       —       69       1,550  
CUBIC CORP (b)
             14       271       46       864       —       60       1,135  
CURTISS-WRIGHT CORPORATION
             15       832       46       2,639       —       61       3,471  
DRS TECHNOLOGIES INC (a)
             19       791       59       2,512       —       78       3,302  
EDO CORPORATION
             12       361       38       1,145       —       50       1,506  
ENGINEERED SUPPORT SYSTEMS
             18       974       58       3,103       —       76       4,077  
ESTERLINE TECHNOLOGIES CORPORATION (a)
             17       587       54       1,873       —       71       2,460  
GENCORP INC. (b)
             35       696       111       2,220       —       146       2,916  
KAMAN CORPORATION
             15       192       49       613       —       65       804  
MERCURY COMPUTER SYSTEMS, INC. (a)
             14       394       46       1,258       —       60       1,652  
MOOG INC (a)
             17       750       53       2,389       —       69       3,139  
TELEDYNE TECHNOLOGIES INCORPORATED (a)
             23       704       72       2,244       —       94       2,948  
TRIUMPH GROUP INC (a)
             11       421       34       1,340       —       45       1,760  
 
                                                          
Aerospace & Defense Total
                     8,679               27,629                       36,308  
 
                                                          
 
                                                                
Air Freight & Logistics
     0.4 %                                                        
EGL INC (a)
             31       716       100       2,278       —       131       2,994  
FORWARD AIR CORPORATION (b)
             15       622       47       1,980       —       61       2,602  
 
                                                          
Air Freight & Logistics Total
                     1,338               4,258                       5,595  
 
                                                          
 
                                                                
Airlines
     0.3 %                                                        
FRONTIER AIRLINES INC (a)
             24       254       77       808       —       101       1,062  

 

Table of Contents

                                                                 
            Columbia Small Company Index     Nations Small Cap Index                
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
MESA AIR GROUP INC. (a)(b)
             21       144       66       460       —       86       604  
SKYWEST, INC (b)
             39       729       125       2,318       —       164       3,047  
 
                                                          
Airlines Total
                     1,127               3,586                       4,713  
 
                                                          
 
                                                                
Building Products
     1.0 %                                                        
APOGEE ENTERPRISES INCORPORATED
             19       266       59       844       —       78       1,110  
ELKCORPORATION
             13       496       41       1,577       —       54       2,073  
GRIFFON CORPORATION (a)(b)
             18       388       58       1,233       —       76       1,621  
LENNOX INTERNATIONAL INC.
             37       815       119       2,598       —       156       3,413  
SIMPSON MANUFACTURING COMPANY INC
             29       887       91       2,824       —       120       3,711  
UNIVERSAL FOREST PRODUCTS
             12       451       37       1,437       —       49       1,888  
 
                                                          
Building Products Total
                     3,302               10,513                       13,815  
 
                                                          
 
                                                                
Commercial Services & Supplies
     3.9 %                                                        
ABM INDUSTRIES INC
             30       579       96       1,846       —       126       2,425  
ADMINISTAFF, INC.
             16       232       51       740       —       67       972  
ANGELICA CORPORATION
             6       171       20       546       —       26       717  
BOWNE & CO INC
             24       365       78       1,166       —       102       1,531  
BRADY (WH) COMPANY
             30       980       97       3,122       —       127       4,102  
CDI CORPORATION
             11       235       34       744       —       44       978  
CPI CORPORATION
             5       80       17       254       —       22       334  
CENTRAL PARKING CORPORATION
             21       368       68       1,170       —       90       1,538  
Coinstar Inc (a)
             17       363       55       1,155       —       72       1,518  
CONSOLIDATED GRAPHICS INC. (a)
             9       452       28       1,447       —       36       1,899  
G & K SERVICES, INC.
             14       576       46       1,833       —       60       2,409  
HARLAND (JOHN H.) COMPANY
             19       649       60       2,065       —       79       2,714  
HEIDRICK & STRUGGLES INTERNATIONAL, INC. (a)
             13       478       42       1,526       —       55       2,004  
IMAGISTICS INTL.INC (a)
             11       384       35       1,226       —       46       1,610  
INSURANCE AUTO AUCTIONS, INC. (a)
             7       198       23       627       —       30       824  
LABOR READY INC (a)
             29       539       92       1,716       —       121       2,255  
MOBILE MINI INC (a)
             10       400       32       1,277       —       42       1,677  
NCO GROUP, INC. (a)
             22       426       69       1,355       —       91       1,781  
ON ASSIGNMENT, INC. (a)
             17       88       55       278       —       72       366  
PRG — SCHULTZ INTERNATIONAL (a)
             29       145       92       462       —       121       608  
PRE-PAID LEAGAL SERVICES INC. (b)
             9       315       30       1,008       —       39       1,323  
SCHOOL SPECIALTY, INC. (a)
             16       607       49       1,931       —       65       2,538  
SOURCECORP (a)
             11       215       34       687       —       45       902  
SPHERION CORP (a)
             41       310       132       988       —       173       1,298  
THE STANDARD REGISTER COMPANY
             18       224       57       716       —       75       940  
TETRA TECH, INC (a)
             38       485       122       1,541       —       161       2,026  
UNITED STATIONERS INC (a)
             23       1,018       72       3,235       —       94       4,254  
VERTRUE INC (a)(b)
             6       223       20       709       —       26       932  
VIAD CORP
             15       404       48       1,289       —       63       1,692  
VOLT INFORMATION SCIENCES, INC. (a)
             8       193       26       616       —       34       809  
WASTE CONNECTIONS, INC. (a)
             32       1,126       103       3,584       —       136       4,710  
WATSON WYATT & CO HOLDINGS
             22       601       70       1,915       —       93       2,516  
 
                                                          
Commercial Services & Supplies Total
                     13,430               42,772                       56,202  
 
                                                          
 
                                                                
Construction & Engineering
     0.7 %                                                        
EMCOR GROUP INC (a)
             10       487       33       1,550       —       44       2,037  
INSITUFORM TECHNOLOGIES CLASS A (a)
             18       264       58       840       —       76       1,104  
THE SHAW GROUP INC. (a)(b)
             44       948       139       3,019       —       182       3,968  
URS CORPORATION (a)
             27       768       85       2,450       —       112       3,217  
 
                                                          
Construction & Engineering Total
                     2,467               7,859                       10,326  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Small Company Index     Nations Small Cap Index                
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
Electrical Equipment
     1.6 %                                                        
ACUITY BRANDS INC
             29       794       94       2,530       —       123       3,324  
ARTESYN TECHNOLOGIES INC. (a)
             27       233       85       739       —       112       972  
BALDOR ELECTRIC COMPANY
             21       532       66       1,693       —       86       2,225  
C&D TECHNOLOGIES INC
             17       173       55       551       —       72       724  
MAGNETEK, INC. (a)
             19       103       62       329       —       81       432  
REGAL BELOIT CORP
             20       567       63       1,805       —       82       2,372  
ROPER INDUSTRIES INCORPORATED
             29       1,873       91       5,967       —       120       7,840  
SMITH A.O. CORPORATION (b)
             17       482       53       1,539       —       70       2,021  
VICOR CORPORATION DESIGNS
             21       218       66       693       —       87       911  
WOODWARD GOVERNOR COMPANY
             7       516       23       1,642       —       30       2,158  
 
                                                          
Electrical Equipment Total
                     5,491               17,488                       22,980  
 
                                                          
 
                                                                
Industrial Conglomerates
     0.2 %                                                        
STANDEX INTERNATIONAL CORPORATION
             8       216       25       685       —       33       901  
TREDEGAR INDUSTRIES INCORPORATED
             23       379       72       1,209       —       94       1,588  
 
                                                          
Industrial Conglomerates Total
                     595               1,894                       2,489  
 
                                                          
 
                                                                
Machinery
     4.9 %                                                        
ALBANY INTL CORP CL A
             22       664       69       2,118       —       90       2,782  
ASTEC INDUSTRIES INC (a)
             13       276       40       875       —       52       1,151  
BARNES GROUP INCORPORATED
             14       391       46       1,247       —       60       1,638  
BRIGGS & STRATTON
             35       1,274       111       4,056       —       146       5,330  
CUNO INCORPORATED (a)
             12       601       37       1,912       —       49       2,513  
CLARCOR, INC’
             17       904       55       2,879       —       73       3,783  
GARDNER DENVER INC. (a)
             14       533       43       1,695       —       56       2,228  
IDEX CORPORATION
             35       1,392       110       4,432       —       144       5,825  
JLG INDUSTRIES INCORPORATED
             34       728       108       2,317       —       141       3,045  
KAYDON CORPORATION
             19       603       61       1,919       —       80       2,521  
LINDSAY MANUFACTURING COMPANY
             8       153       26       487       —       34       639  
LYDALL INC. (a)
             11       121       35       386       —       46       507  
MANITOWOC
             20       812       64       2,577       —       84       3,389  
MASCOTECH, INC. ESCROWED SHARES (a) (g)
             32       —                               32       —  
MILACRON INC (a)(b)
             29       90       93       285       —       123       375  
MUELLER INDUSTRIES INCORPORATION
             25       701       79       2,227       —       104       2,928  
OSHKOSH TRUCK CORPORATION
             25       2,017       78       6,428       —       103       8,445  
ROBBINS & MYERS INCORPORATED
             9       194       28       616       —       37       810  
STEWART & STEVENSON SERVICES, INC.
             20       449       62       1,424       —       82       1,872  
THOMAS INDUSTRIES INCORPORATED
             10       396       32       1,257       —       42       1,653  
TIMKEN COMPANY
             62       1,695       197       5,391       —       259       7,087  
TORO COMPANY
             15       1,301       47       4,133       —       61       5,434  
VALMONT INDUSTRIES
             14       308       44       984       —       58       1,292  
WABASH NATIONAL CORPORATION
             21       512       67       1,627       —       88       2,140  
WATTS WATER TECHNOLOGIES INC.
             20       639       62       2,028       —       82       2,667  
WOLVERINE TUBE INC (a)
             10       90       32       288       —       42       379  
 
                                                          
Machinery Total
                     16,845               53,588                       70,433  
 
                                                          
 
                                                                
Marine
     0.2 %                                                        
KIRBY CORPORATION (a)
             16       672       51       2,139       —       67       2,812  
 
                                                          
Marine Total
                     672               2,139                       2,812  
 
                                                          
 
                                                                
Road & Rail
     1.5 %                                                        
ARKANSAS BEST CORPORATION
             16       616       52       1,965       —       68       2,580  

 

Table of Contents

                                                                 
            Columbia Small Company Index     Nations Small Cap Index                
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
HEARTLAND EXPRESS INC
             41       791       131       2,515       —       173       3,306  
KANSAS CITY SOUTHERN INDUSTRIES, INC. (a)
             43       832       137       2,646       —       181       3,478  
KNIGHT TRANSPORTATION, INC. (b)
             32       787       101       2,502       —       133       3,289  
LANDSTAR SYSTEM INC. (a)
             41       1,349       131       4,294       —       172       5,643  
USF CORP
             19       917       61       2,920       —       80       3,837  
 
                                                          
Road & Rail Total
                     5,292               16,841                       22,133  
 
                                                          
 
                                                                
Trading Companies & Distributors
     0.8 %                                                        
APPLIED INDUSTRIAL TECH INC
             18       500       59       1,598       —       77       2,098  
HUGHES SUPPLY INCORPORATED
             45       1,336       143       4,251       —       188       5,587  
LAWSON PRODUCTS
             5       225       15       721       —       20       945  
WATSCO INC
             17       716       54       2,282       —       71       2,998  
 
                                                          
Trading Companies & Distributors Total
                     2,777               8,852                       11,628  
 
                                                          
INDUSTRIALS TOTAL
                     62,014               197,420                       259,434  
 
                                                          
 
                                                                
INFORMATION TECHNOLOGY
     15.0 %                                                        
Communications Equipment
     1.1 %                                                        
AUDIOVOX CORPORATION (a)
             14       181       45       577       —       60       758  
BEL FUSE INC CLASS B”
             8       230       24       730       —       32       961  
BELDEN CDT INC (b)
             32       706       101       2,251       —       133       2,957  
BLACK BOX CORPORATION (b)
             12       441       37       1,399       —       49       1,841  
BROOKTROUT INC. (a)
             9       97       28       309       —       36       406  
C-COR.NET CORPORATION (a)
             32       197       103       627       —       136       824  
DIGI INTERNATIONAL INC. (a)
             15       209       49       665       —       64       874  
HARMONIC INC. (a)(b)
             49       469       156       1,493       —       205       1,963  
INTER-TEL INC (b)
             16       387       50       1,232       —       66       1,619  
NETWORK EQUIPMENT TECHNOLOGIES INC.(a)
             17       96       54       304       —       71       400  
PC TEL INC (a)
             13       99       43       314       —       56       412  
SYMMETRICOM INC. (a)
             31       347       100       1,106       —       131       1,453  
TOLLGRADE COMMUNICATIONS INC (a)
             9       64       29       203       —       39       267  
VIASAT INC (a)
             16       307       52       976       —       69       1,282  
 
                                                          
Communications Equipment Total
                     3,830               12,186                       16,016  
 
                                                          
 
                                                                
Computers & Peripherals
     0.9 %                                                        
ADAPTEC INCORPORATED (a)
             76       363       241       1,155       —       317       1,518  
AVID TECHNOLOGY INCORPORATED (a)
             23       1,250       73       3,972       —       97       5,223  
HUTCHINSON TECHNOLOGY INCORPORATED (a)
             17       595       54       1,892       —       72       2,487  
PINNACLE SYSTEMS, INC. (a)
             47       265       151       844       —       198       1,108  
SBS TECHNOLOGIES, INC. (a)
             11       118       34       376       —       44       494  
SYNAPTICS INC COM STK USD0.001 (a)
             18       413       57       1,318       —       75       1,731  
 
                                                          
Computers & Peripherals Total
                     3,004               9,557                       12,561  
 
                                                          
 
                                                                
Electronic Equipment & Instruments
     4.2 %                                                        
AEROFLEX INC (a)
             51       473       161       1,504       —       212       1,977  
AGILYSYS, INC
             20       383       62       1,223       —       82       1,606  
ANIXTER INTERNATIONAL, INC (a)
             23       846       75       2,700       —       98       3,546  
BEI TECHNOLOGIES
             9       216       29       686       —       38       901  
BELL MICROPRODUCTS (a)
             19       144       61       459       —       81       603  
BENCHMARK ELECTRONICS INC (a)
             28       894       89       2,844       —       117       3,738  
CTS CORPORATION
             25       325       79       1,032       —       104       1,357  
CHECKPOINT SYSTEMS INCORPORATED (a)
             27       457       86       1,453       —       113       1,911  
COGNEX CORPORATION
             30       744       95       2,364       —       125       3,108  
COHERENT INCORPORATED (a)
             21       702       66       2,232       —       87       2,934  
DAKTRONICS INC (a)
             12       255       38       812       —       49       1,067  

 

Table of Contents

                                                                 
            Columbia Small Company Index     Nations Small Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
DIONEX CORPORATION (a)
             13       730       43       2,333       —       56       3,063  
ELECTRO SCIENTIFIC INDUSTRIES INC (a)
             19       374       62       1,192       —       81       1,567  
FLIR SYSTEMS INC (a)(b)
             47       1,427       150       4,542       —       197       5,969  
GERBER SCIENTIFIC INC. (a)
             14       105       46       333       —       60       438  
Global Imaging Systems Inc (a)
             16       564       51       1,798       —       67       2,362  
ITRON INC (a)
             15       433       47       1,378       —       61       1,811  
KEITHLEY INSTRUMENTS INC
             10       166       33       531       —       43       697  
LITTELFUSE INC (a)
             15       433       48       1,378       —       63       1,811  
MTS SYSTEMS CORPORATION
             14       395       43       1,254       —       57       1,649  
METHODE ELECTRONICS — CLASS A
             25       299       79       952       —       103       1,251  
PARK ELECTROCHEMICAL
             13       261       41       829       —       54       1,090  
PAXAR CORPORATION (a)
             26       546       81       1,737       —       107       2,283  
PHOTON DYNAMICS, INC. (a)(b)
             12       219       37       698       —       48       917  
PLANAR SYSTEMS INC. (a)(b)
             10       90       32       286       —       42       376  
RADISYS CORPORATION (a)
             14       191       43       607       —       56       799  
ROGERS CORPORATION (a)
             11       456       36       1,448       —       48       1,904  
SCANSOURCE INC COM STK NPV (a)
             9       446       27       1,415       —       36       1,861  
TECHNITROL INCORPORATED
             28       410       88       1,306       —       115       1,716  
TRIMBLE NAVIGATION LIMITED (a)
             35       1,190       112       3,790       —       147       4,980  
X-RITE INC
             13       199       42       630       —       55       829  
 
                                                          
Electronic Equipment & Instruments Total
                     14,375               45,745                       60,120  
 
                                                          
 
                                                                
Internet Software & Services
     0.8 %                                                        
DIGITAL INSIGHT CO COM STK USD (a)
             24       397       77       1,266       —       101       1,663  
FINDWHAT.COM USD 0.001 (a)
             19       196       60       624       —       79       820  
j2 Global Communications Inc (a)(b)
             15       504       47       1,602       —       61       2,107  
WEBEX COMMUNICATIONS INC (a)
             26       563       83       1,794       —       109       2,358  
WEBSENSE INC (a)
             16       866       51       2,760       —       67       3,626  
ZIX CORP (a)(b)
             20       75       64       239       —       84       315  
 
                                                          
Internet Software & Services Total
                     2,602               8,286                       10,888  
 
                                                          
 
                                                                
IT Services
     1.6 %                                                        
CACI INTERNATIONAL INC-CL A (a)
             20       1,121       65       3,568       —       85       4,689  
CARREKER CORP (a)
             16       88       50       281       —       66       369  
CIBER INC (a)
             40       290       127       923       —       167       1,213  
EFUNDS CORPORATION (a)
             33       741       106       2,357       —       139       3,098  
GLOBAL PAYMENTS INC-W/I (a)
             24       1,561       77       4,972       —       101       6,533  
INTRADO INC (a)
             12       145       38       462       —       49       608  
MANTECH INTERNATIONAL CORPORATION (a)
             17       390       54       1,243       —       71       1,633  
MAXIMUS INC.
             14       455       43       1,447       —       57       1,902  
PEGASUS SYSTEMS, INC. (a)
             13       155       42       491       —       55       645  
STARTEK, INC.
             9       146       28       464       —       36       610  
TALX CORP
             14       256       45       814       —       59       1,071  
 
                                                          
IT Services Total
                     5,349               17,022                       22,370  
 
                                                          
 
                                                                
Semiconductors & Semiconductor Equipment
     2.8 %                                                        
ATMI INC (a)
             21       533       68       1,700       —       89       2,234  
ACTEL CORPORATION (a)
             17       263       54       837       —       72       1,100  
ADVANCED ENERGY INDUSTRIES (a)
             18       178       59       567       —       77       745  
ALLIANCE SEMICONDUCTOR CORPORATION (a)
             21       51       65       162       —       86       213  
AXCELIS TECHNOLOGIES INC (a)
             68       496       216       1,578       —       284       2,073  
BROOKS AUTOMATION, INC (a)
             31       465       97       1,477       —       128       1,942  
COHU, INC.
             15       234       47       746       —       62       981  
CYMER INC (a)
             25       672       80       2,136       —       105       2,808  
DSP GROUP INC (a)
             19       489       61       1,558       —       80       2,048  

 

Table of Contents

                                                                 
            Columbia Small Company Index     Nations Small Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
DUPONT PHOTOMASKS (a)(b)
             12       312       37       997       —       49       1,309  
ESS TECHNOLGY, INC. (a)
             24       126       76       401       —       100       527  
EXAR CORPORATION (a)
             28       381       90       1,210       —       119       1,591  
FEI COMPANY (a)
             20       458       63       1,458       —       83       1,917  
HELIX TECHNOLOGY CORPORATION
             18       274       56       873       —       74       1,146  
KOPIN CORP (a)
             48       146       151       464       —       199       610  
KULICKE & SOFFA INDUSTRIES INC. (a)(b)
             35       220       111       699       —       146       918  
MICROSEMI CORPORATION (a)
             42       676       132       2,152       —       174       2,828  
PERICOM SEMICONDUCTOR CORP (a)
             18       154       57       491       —       75       645  
PHOTRONICS INC (a)(b)
             22       402       71       1,280       —       93       1,681  
POWER INTEGRATIONS INC (a)(b)
             21       441       67       1,402       —       88       1,842  
RUDOLPH TECHNOLOGIES INC (a)
             10       155       33       492       —       43       648  
SKYWORKS SOLUTIONS INC (a)
             107       677       339       2,154       —       446       2,831  
STANDARD MICROSYSTEMS CORPORATION (a)
             13       220       40       700       —       53       920  
SUPERTEX INC (a)
             9       163       28       516       —       37       679  
ULTRATECH STEPPER INC (a)
             16       237       52       752       —       68       988  
VARIAN SEMICONDUCTOR EQUIPMENT (a)(b)
             25       943       79       3,003       —       104       3,945  
VEECO INSTRUMENTS INC (a)
             19       286       60       909       —       79       1,195  
CEVA INC (a)
             0       0                       —       0       0  
 
                                                          
Semiconductors & Semiconductor Equipment Total
                     9,651               30,715                       40,366  
 
                                                          
 
                                                                
Software
     3.6 %                                                        
ALTIRIS INC (a)
             16       374       50       1,195       —       66       1,569  
ANSYS INC (a)
             21       732       68       2,330       —       90       3,062  
CAPTARIS INC (a)
             21       83       66       266       —       86       349  
CATAPULT COMMUNICATIONS CORPORATION (a)
             8       164       24       521       —       32       685  
CONCORD COMMUNICATIONS INC (a)
             12       125       40       401       —       52       526  
EPIQ SYSTEMS INC (a)
             11       139       34       441       —       45       580  
FACTSET RESEARCH SYSTEMS INC (b)
             26       868       84       2,783       —       111       3,651  
FILENET CORPORATION (a)
             28       640       89       2,034       —       117       2,674  
HYPERION SOLUTION CORP (a)
             27       1,200       87       3,816       —       114       5,015  
INTERNET SECURITY SYSTEMS, INC. (a)
             29       536       93       1,706       —       123       2,242  
JDA SOFTWARE GROUP INC (a)
             20       278       63       883       —       83       1,161  
KRONOS INC (a)
             22       1,104       69       3,516       —       90       4,620  
MRO SOFTWARE INC (a)
             16       219       50       697       —       65       916  
MANHATTAN ASSOCIATES, INC. (a)(b)
             20       416       65       1,324       —       85       1,740  
MAPINFO CORP (a)
             14       167       44       531       —       58       698  
MICROS SYTEMS INCORPORATED (a)
             26       943       82       3,003       —       108       3,946  
NAPSTER, INC (a)(b)
             29       189       92       602       —       121       790  
NYFIX INC (a)(b)
             21       112       67       358       —       87       470  
PHOENIX TECHNOLOGIES LTD. (a)
             17       160       54       509       —       70       669  
PROGRESS SOFTWARE CORPORATION (a)
             25       650       79       2,071       —       104       2,722  
RADIANT SYSTEMS (a)
             16       159       51       504       —       68       662  
SPSS INC (a)
             11       195       36       621       —       47       816  
SERENA SOFTWARE INC (a)(b)
             24       565       75       1,789       —       99       2,355  
SONIC SOLUTIONS COM STK NPV (a)(b)
             15       230       49       736       —       64       966  
THQ INC (a)
             27       751       85       2,386       —       112       3,138  
TAKE-TWO INTERACTIVE SOFTWARE, INC. (a)(b)
             31       1,224       100       3,894       —       131       5,118  
VERITY INC (a)
             26       243       82       771       —       107       1,014  
 
                                                          
Software Total
                     12,469               39,687                       52,156  
 
                                                          
INFORMATION TECHNOLOGY TOTAL
                     51,280               163,198                       214,478  
 
                                                          
 
                                                                
MATERIALS
     6.6 %                                                        
Chemicals
     1.6 %                                                        
ARCH CHEMICALS INC.
             16       453       51       1,443       —       67       1,896  

 

Table of Contents

                                                                 
            Columbia Small Company Index     Nations Small Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
CAMBREX CORPORATION
             18       377       56       1,201       —       74       1,578  
H.B. FULLER COMPANY
             20       566       62       1,795       —       81       2,361  
GEORGIA GULF CORPORATION
             23       1,062       73       3,375       —       97       4,437  
MACDERMID INC
             19       608       60       1,937       —       78       2,545  
MATERIAL SCIENCES CORP. (a)
             9       122       29       390       —       38       512  
OM GROUP INC. (a)
             19       587       61       1,865       —       81       2,452  
OMNOVA SOLUTIONS INC (a)
             28       148       88       473       —       116       621  
PENFORD CORPORATION
             6       98       19       310       —       25       408  
POLYONE CORPORATION (a)
             62       553       198       1,762       —       261       2,315  
QUAKER CHEMICAL CORPORATION
             7       136       21       429       —       28       565  
SCHULMAN (A.) INC
             21       362       66       1,155       —       87       1,517  
WELLMAN INC
             22       314       69       1,001       —       91       1,314  
 
                                                          
Chemicals Total
                     5,385               17,136                       22,521  
 
                                                          
 
                                                                
Construction Materials
     0.9 %                                                        
FLORIDA ROCK INDUSTRIES
             25       1,494       81       4,747       —       106       6,241  
HEADWATERS INC USD.001 (a)
             27       893       86       2,836       —       114       3,728  
TEXAS INDUSTRIES INC
             15       812       48       2,580       —       63       3,392  
 
                                                          
Construction Materials Total
                     3,198               10,162                       13,361  
 
                                                          
 
                                                                
Containers & Packaging
     0.7 %                                                        
APTARGROUP INC
             24       1,258       77       4,002       —       101       5,260  
CARAUSTAR INDUSTRIES, INC (a)
             19       250       62       795       —       81       1,045  
CHESAPEAKE CORPORATION
             13       282       43       895       —       56       1,177  
MYERS INDUSTRIES, INC.
             22       313       71       998       —       93       1,311  
ROCK-TENN COMPANY — CL A
             23       302       72       959       —       95       1,261  
 
                                                          
Containers & Packaging Total
                     2,405               7,649                       10,054  
 
                                                          
 
                                                                
Metals & Mining
     2.8 %                                                        
ALERIS INTERNATIONAL INC (a)
             18       459       59       1,466       —       77       1,925  
AMCOL INTERNATIONAL CORPORATION
             18       328       56       1,049       —       73       1,377  
BRUSH WELLMAN INCORPORATED (a)
             13       247       42       790       —       55       1,037  
CARPENTER TECHNOLOGY CORPORATION
             17       980       53       3,119       —       69       4,099  
CASTLE (A.M) & COMPANY (a)
             9       111       28       353       —       37       464  
CENTURY ALUMINUM COMPANY (a)
             19       566       60       1,804       —       78       2,369  
CLEVELAND-CLIFFS INC.
             15       1,071       47       3,410       —       62       4,482  
COMMERCIAL METALS COMPANY
             40       1,359       128       4,321       —       168       5,680  
MASSEY ENERGY COMPANY
             52       2,070       164       6,583       —       216       8,653  
QUANEX CORPORATION
             17       901       54       2,874       —       71       3,775  
RTI INTERNATIONAL METAL (a)
             15       344       47       1,097       —       62       1,441  
RELIANCE STEEL & ALUMINUM
             20       808       64       2,569       —       84       3,377  
RYERSON TULL INC
             17       215       54       685       —       71       901  
STEEL TECHNOLOGIES INC.
             8       197       26       629       —       34       825  
 
                                                          
Metals & Mining Total
                     9,657               30,748                       40,405  
 
                                                          
 
                                                                
Paper & Forest Products
     0.6 %                                                        
BUCKEYE TECHNOLOGIES INC. (a)
             23       244       72       779       —       95       1,023  
DELTIC LUMBER
             8       325       26       1,032       —       35       1,357  
NEENAH PAPER INC USD 0.01
             10       343       32       1,089       —       43       1,432  
POPE & TALBOT INC
             11       193       35       617       —       46       810  
SCHWEITZER-MANDUIT INTL INC. (SWM.N)
             10       346       33       1,097       —       43       1,443  
WAUSAU-MOSINEE PAPER CORPORATION.
             35       496       112       1,581       —       147       2,077  
 
                                                          
Paper & Forest Products Total
                     1,947               6,195                       8,142  
 
                                                          
MATERIALS TOTAL
                     22,593               71,891                       94,483  
 
                                                          

 

Table of Contents

                                                                 
            Columbia Small Company Index     Nations Small Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
TELECOMMUNICATION SERVICES
     0.3 %                                                        
Diversified Telecommunication Services
     0.3 %                                                        
COMMONWEALTH TELEPHONE ENTERPRISES, INC. (a)
             14       679       46       2,159       —       60       2,838  
GENERAL COMMUNICATION CL A (a)
             36       328       114       1,043       —       150       1,370  
 
                                                          
Diversified Telecommunication Services Total
                     1,007               3,202                       4,208  
 
                                                          
Wireless Telecommunication Services
     0.0 %                                                        
BOSTON COMMUNICATIONS GROUP (a)
             12       85       38       271       —       50       355  
 
                                                          
Wireless Telecommunication Services Total
                     85               271                       355  
 
                                                          
TELECOMMUNICATION SERVICES TOTAL
                     1,091               3,472                       4,564  
 
                                                                
UTILITIES
     4.4 %                                                        
Electric Utilities
     1.2 %                                                        
ALLETE INC
             20       845       64       2,687       —       84       3,532  
CH ENERGY GROUP INC
             11       489       34       1,558       —       45       2,047  
CLECO CORPORATION
             33       707       106       2,254       —       139       2,961  
CENTRAL VERMONT PUB SERV
             8       187       26       591       —       35       778  
EL PASO ELECTRIC COMPANY (a)
             32       612       103       1,948       —       135       2,559  
GREEN MOUNTAIN POWER CORPORATION
             4       103       11       325       —       15       428  
UIL HOLDINGS CORP
             9       471       30       1,494       —       39       1,965  
UNISOURCE ENERGY CORP HLD CO
             23       722       74       2,295       —       97       3,016  
 
                                                          
Electric Utilities Total
                     4,135               13,152                       17,287  
 
                                                          
 
                                                                
Gas Utilities
     3.0 %                                                        
ATMOS ENERGY CORPORATION
             54       1,455       172       4,631       —       225       6,086  
CASCADE NATURAL GAS CORPORATION
             8       154       24       487       —       32       641  
ENERGEN CORPORATION
             25       1,658       79       5,268       —       104       6,926  
THE LACLEDE GROUP INC.
             14       418       46       1,329       —       60       1,746  
NEW JERSEY RESOURCES
             18       788       58       2,507       —       76       3,295  
NORTHWEST NATURAL GAS COMPANY
             19       680       60       2,159       —       79       2,839  
PIEDMONT NATURAL GAS COMPANY, INC. (b)
             52       1,198       166       3,815       —       218       5,014  
SOUTHERN UNION COMPANY (a)
             66       1,655       210       5,269       —       276       6,924  
SOUTHWEST GAS CORPORATION
             25       592       78       1,884       —       103       2,476  
UGI CORPORATION
             35       1,590       111       5,060       —       146       6,649  
 
                                                          
Gas Utilities Total
                     10,187               32,409                       42,597  
 
                                                          
Multi-Utilities
     0.2 %                                                        
AVIST CORP.
             33       576       105       1,834       —       138       2,410  
 
                                                          
Multi-Utilities Total
                     576               1,834                       2,410  
 
                                                          
Water Utilities
     0.1 %                                                        
AMERICAN STATES WATER COMPANY
             11       286       36       913       —       47       1,199  
 
                                                          
Water Utilities Total
                     286               913                       1,199  
 
                                                          
UTILITIES TOTAL
                     15,184               48,308                       63,492  
 
                                                          
TOTAL COMMON STOCKS
                     338,937               1,078,634                       1,417,571  
 
                                                          
(cost of $257,338,770)
                                                               
WARRANTS
     0.0 %                                                        
TIMCO AVIATION WARRANT 2/27/07 (e)(f)
                             2       —               2       —  
 
                                                          
TOTAL WARRANTS
                     —               —                       —  
 
                                                          
(cost of $$0)
                                                                
INVESTMENT COMPANY
     0.7 %                                                        
NATIONS CASH RESERVES (d)
                             5,600       5,600               5,600       5,600  
ISHARES S&P SMALLCAP 600
             26       4,146                       —       26       4,146  

 

Table of Contents

                                                                 
            Columbia Small Company Index     Nations Small Cap Index              
            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
As of 3/31/05           Shares (000)     Market Value ($000)     Shares (000)     Market Value ($000)     Adjustments     Shares (000)     Market Value ($000)  
TOTAL INVESTMENT COMPANY
                     4,146               5,600                       9,746  
 
                                                          
(cost of $4,313,603)
                                                                
SHORT-TERM OBLIGATION
     0.0 %                                                        
Repurchase agreement with State Street Bank & Trust Co., dated 03/31/05, due 04/01/05 at 2.450%, collateralized by a U.S. Treasury Bond maturing 05/15/17 market value of $238,850 (repurchase proceeds $230,016)
                                                               
(cost of $230,000)
             230       230                       —       230       230  
 
                                                                
Repurchase agreement with ABN AMRO, Inc. dated 03/31/05 due 04/01/05 at 2.830%, collateralized by U.S. Government Agency securities with various maturities to 05/15/29, market value $25,180 (repurchase proceeds $24,945)
                             24,943       24,943                       24,943  
 
                                                                
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.840%, collateralized by U.S. Government Agency securities with various maturities to 05/20/33, market value $30,325 (repurchase proceeds $29,934)
                             29,932       29,932                       29,932  
 
                                                                
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.920%, collateralized by U.S. Government Agency securities with various maturities to 03/231/35, market value $39,582 (repurchase proceeds $38,970)
                             38,967       38,967                       38,967  
 
 
                                                          
TOTAL SHORT-TERM OBLIGATION
                     230               93,842                       94,072  
 
                                                          
 
Total Investments
     108.4 %             343,313               1,178,076                       1,521,389  
Other Assets & Liabilities, net
     -8.4 %             275               (91,626 )                     (91,351 )
 
                                                        
Net Assets
     100.0 %           $ 343,587             $ 1,086,450                     $ 1,430,037  
 
                                                        
 
Investments at cost
                     261,022               860,571                       1,121,593  

Notes to Investment Portfolio:

(a)   Non-income producing security
 
(b)   All or a portion of the security was on loan at March 31, 2005. The aggregate cost and market value of securities on loan at March 31, 2005 is $93,843 and $91,163.
 
(c)   Security pledged as collateral for open futures contracts.
 
(d)   Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by Banc of America Capital Management, LLC.
 
    A portion of this amount represents cash collateral received from the securities

 

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    lending activity. The portion that represents cash collateral is $93,916
 
(e)   Rounds to less than $500
 
(f)   Illiquid security.
 
(g)   Represents fair value as determined in good faith under procedures approved by the Board of Trustees.
 
(h)   Cost for federal income tax purposes is $264,664,924 for the Columbia Small Company Index Fund, $906,007 for the Nations Small Cap Index Fund, and $265,570,931 for the funds combined.

     
Acronym   Name
REIT
  Real Estate Investment Trust

At March 31, 2005, the Fund held the following open short futures contracts:

                                 
            Value of contracts     Market value of     Unrealized appreciation/  
      Number of contracts     when opened     contracts     (depreciation)  
RUSSELL 2000 futures (long position) expiring June 2005
     21       6,568       6,488       (80 )

 

Table of Contents

Pro -forma Combining
Statement of Assets & Liabilities
As of March 31, 2005 (unaudited)

                                 
    Columbia     Nations              
    Small Company Index     SmallCap Index              
    Fund     Fund     Pro Forma     Pro Forma  
In Thousands   Target Fund     Acquiring Fund     Adjustments     Combined  
Assets:
                                
Investments, at cost
   $ 261,022     $ 761,129     $ —     $ 1,022,151  
Affiliated Investments, at cost
   $ —     $ 99,516     $ —     $ 99,516  
 
                        
Investments, at value
     343,313       1,078,634       —       1,421,947  
Affiliated Investments, at value
     —       99,516       —       99,516  
Cash
     0   (e)     1       —       1  
Receivable for:
                                
Fund shares sold
    138       2,161       —       2,299  
Interest
     0   (e)     28       —       28  
Income Receivable
     275       844       —       1,119  
Futures variation margin
     —       17       —       17  
Expense reimbursement due from Investment Advisor
     —       42       —       42  
Deferred Trustees’ compensation plan
     4       —       —       4.00  
Prepaid Expense
     —       2       —       2  
 
                        
Total Assets
     343,730       1,181,245       —       1,524,975  
 
                        
 
Liabilities:
                                
Payable for:
                                
Fund shares repurchased
     68       462       —       530  
Collateral on securites loaned
     —       93,916               93,916  
Investment advisory fee
     30       93       —       123  
Administration fee
     29       93       —       122  
Trustees’ fees
     0   (e)     81       —       81  
Sub account service fees
     4       —               4  
Distribution and service fees
     7       3       —       10  
Deferred compensation plan
     4       —       —       4  
Other liabilities
     1       147       —       148  
 
                        
Total Liabilities
     143       94,795       —       94,938  
 
                        
Net Assets
   $ 343,587     $ 1,086,450     $ —     $ 1,430,037  
 
                        
 
Composition of Net Assets:
                                
Paid-in capital
   $ 259,846     $ 808,453             $ 1,068,299  
Overdistributed net investment income
     609       1,575       —     $ 2,184  
Accumulated net realized gain (loss)
     842       (41,003 )     —     $ (40,161 )
Unrealized appreciation on investments & futures
     82,290       317,425       —       399,715  
 
                        
Net Assets
   $ 343,587     $ 1,086,450     $ —     $ 1,430,037  
 
                        

 

Table of Contents

                                 
    Columbia     Nations              
    Small Company Index     SmallCap Index              
    Fund     Fund     Pro Forma     Pro Forma  
In Thousands   Target Fund     Acquiring Fund     Adjustments     Combined  
Investors A: (a)
                                
Net assets
   $ —     $ 14,337     $ 15,016     $ 29,353  
Shares outstanding
     —       748       784   (d)     1,532  
 
                          
Net asset value per share (b)
   $ —     $ 19.16             $ 19.16  
 
                          
 
Primary A: (a)
                                
Net assets
   $ —     $ 1,072,113     $ 328,571     $ 1,400,684  
Shares outstanding
     —       55,731       17,080   (d)     72,811  
 
                          
Net asset value, offering and redemption price per share
   $ —     $ 19.24             $ 19.24  
 
                          
 
Class A: (a)
                                
Net assets
   $ 8,351     $ —     $ (8,351 )   $ —  
Shares outstanding
    400       —       (400 )     —  
 
                          
Net asset value and offering price per share (b)
   $ 20.86     $ —             $ —  
 
                          
Maximum sales charge
     5.75 %                        
Maximum offering price per share ( c)
     22.13                          
 
Class B: (a)
                                
Net assets
   $ 3,387     $ —     $ (3,387 )   $ —  
Shares outstanding
     164       —       (164 )   $ —  
 
                            
Net asset value and offering price per share (b)
   $ 20.59     $ —             $ —  
 
                          
 
Class C: (a)
                                
Net assets
   $ 3,278     $ —     $ (3,278 )   $ —  
Shares outstanding
     159       —       (159 )   $ —  
 
                          
Net asset value per share (b)
   $ 20.62                     $ —  
 
                          
 
Class Z: (a)
                                
Net assets
   $ 328,571     $ —     $ (328,571 )   $ —  
Shares outstanding
     15,729       —       (15,729 )   $ —  
 
                          
Net asset value and offering price per share (b)
   $ 20.89                     $ —  
 
                          

(a)   Class A, B and C shares of Columbia Small Company Index Fund are exchanged for new class A shares of Nations Small Cap Index Fund, Class Z shares of Columbia Small Company Index Fund are exchanged for new Class Z Shares of Nations Small Cap Index Fund, respectively based on the Net Asset Value per shares of Nations Small Cap Index Fund Investor A and Primary A Shares, respectively at the time of the merger
 
(b)   Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
 
(c)   On sales of $50,000 or more the offering price is reduced.
 
(d)   Reflects estimated shares issued to Target fund at the time of the merger.
 
(e)   Amount rounds to less than $1,000

 

Table of Contents

Pro- forma Combining
Statement of Operations
For the Twelve Months Ended March 31, 2005 (Unaudited)

                                 
    Columbia     Nations              
    Small Company Index     SmallCap Index              
    Fund     Fund     Pro Forma     Pro Forma  
In Thousands   Target Fund     Acquiring Fund     Adjustments     Combined  
Investment Income:
                                
Interest
   $ 11     $ 7     $ —     $ 18  
Dividends
     3,489       10,453       —     $ 13,942  
Dividends from affiliates
     —       120       —     $ 120  
Foreign taxes withheld
    (1 )     —       —       (1 )
Security Lending
    —       285       —       285  
 
                        
Total Investment Income
    3,499       10,865       —       14,364  
 
                        
 
                                
Expenses:
                                
Investment advisory fee
     318       1,303       (314 )     1,307  (a)
Administration fee
     670       989       (352 )     1,307  (a)
Distribution fee:
     —       —             —  
Class B
     17       —       (17 )     —  (a)
Class C
     15       —       (15 )     —  (a)
Service fee:
                                
Class A
     12       34       11       57  (a)
Class B
     6       —       (6 )     —  (a)
Class C
     5       —       (5 )     —  (a)
Sub-account services fee — Class Z
     16       —       (16 )     —  (d)
Transfer agent fee
     —       240       (240 )     —  (d)
Trustees’ fees
     12       27       (4 )     35  (b)
Printing fees
     —       30       (30 )     —  (d)
Custody fee
     —       103       (103 )     —  (d)
Registration fees
     —       29       (29 )     —  (d)
Non-Recurring Costs (see Note 5)
    16       269       —       285  
Other expenses
     3       155       (144 )     14  (b)
 
                        
Total Operating Expenses
    1,090       3,179       (1,264 )     3,005  
Interest expense
    —       2       —       2  
 
                        
Total Expenses
    1,090       3,181       (1,264 )     3,007  
Fees and expenses waived or reimbursed by Investment Advisor
     —       (799 )     799       —  (c)
Non-recurring costs assumed by Investment Advisor (see Note 5)
    (16 )     (269 )     —       (285 )
 
                        
Net Expenses
    1,074       2,113       (465 )     2,722  
 
                        
Net Investment Income
    2,425       8,752       465       11,642  
 
                        
 
Net Realized and Unrealized Gain (Loss) on Investments:
                                
Net realized gain on investments & futures
    12,203       22,688       —       34,891  
Net change in unrealized appreciation on investments & futures
    23,766       89,989       —       113,755  
 
                        
Net
    35,969       112,677       —       148,646  
 
                        
                           
Net Increase in Net Assets from Operations
   $ 38,394     $ 121,429     $ 465     $ 160,288  
 
                        

(a)   Based on the contract in effect for Nations SmallCap Index Fund, the surviving fund.
 
(b)   Reflects elimination of duplicate expenses achieved as a result of merging funds.
 
(c)   Based on the expense cap of Nations SmallCap Index Fund, the Surviving Fund.
 
(d)   Proposed Unified fee structure for Surviving Fund

Table of Contents

NATIONS SMALLCAP INDEX FUND
AND
COLUMBIA SMALL COMPANY INDEX FUND

PRO FORMA COMBINING FINANCIAL STATEMENTS

Notes to Financial Statements
March 31, 2005
(unaudited)

Note 1. Organization

Nations SmallCap Index Fund (the “Acquiring Fund”), a series of Nations Funds Trust (the “Trust”), is a Delaware business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Columbia Small Company Index Fund (“Target Fund”), a series of Columbia Funds Trust V, is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

Investment Goal

The Acquiring Fund seeks investment results that (before fees and expenses) correspond to the total return of the S&P SmallCap 600 Index. The Target Fund seeks to provide investment results that match the price and yield performance of the S&P Small Cap 600 Index.

Fund Shares

The Acquiring Fund and the Target Fund each may issue an unlimited number of shares. The Acquiring Fund offers two classes of shares: Primary A, Investor A shares. The Target Fund offers four classes of shares: Class A, Class B, Class C and Class Z shares. Each share class has its own expense structure.

Note 2. Basis of Combination

The accompanying pro-forma financial statements are presented to show the effect of the proposed merger of the Target Fund by the Acquiring Fund as if such merger had occurred on April 1, 2004. The following notes refer to the accompanying pro-forma financial statements of such proposed merger.

Under the terms of the merger, the combination of the Target Fund and Acquiring Fund will be accounted for by the method of accounting for tax-free mergers of investment companies. The merger will be accomplished by a combination of the net assets of the Target Fund into the Acquiring Fund in exchange for new shares of the Acquiring Fund at net asset value.

The Pro Forma Investment Portfolio and Pro Forma Statement of Assets and Liabilities of the Target Fund and Acquiring Fund have been combined to reflect balances as of March 31, 2005. The Pro Forma Statement of Operations of the Target Fund and Acquiring Fund has been combined to reflect twelve months ended March 31, 2005. Banc of America Capital Management, LLC. (“BACAP”) expects that all of the securities held by the Target Fund as of March 31, 2005, would comply with the compliance guidelines and/or investment restrictions of the Acquiring Fund.

Following the merger the Acquiring Fund will be the accounting survivor. In accordance with accounting principles generally accepted in the United States of America, the historical cost of investment securities will be carried forward to the Acquiring Fund and the results of operations for pre-combined periods will not be re-stated.

 

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The accompanying pro-forma financial statements should be read in conjunction with the financial statements of the Acquiring Fund and the Target Fund included within their respective annual shareholder reports dated March 31, 2005, as well as the semi-annual shareholder reports dated September 30, 2004.

Note 3. Significant Accounting Policies

Security Valuation

The Acquiring Fund and the Target Fund use the identical policy for security valuation. Equity securities are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the mean of the latest bid and asked prices 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.

Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.

Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

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.

Securities Lending

Under an agreement with Bank of New York (“BNY”), the Fund may lend its securities to certain approved brokers, dealers and other financial institutions. Each loan is collateralized by cash, in an amount at least equal to the market value of the securities loaned plus accrued income from the investment of the collateral. The cash collateral received is invested in Nations Cash Reserves. A portion of the income generated by the investment of the collateral, net of any rebates paid by BNY to the borrowers, is remitted to BNY as lending agent, and the remainder is paid to the Fund. Generally, in the event of borrower default, the Fund has the right to use the collateral to offset any losses incurred. In the event the Fund is delayed or prevented from exercising its right to dispose of the collateral, there may be a potential loss to the Fund. The Fund bears the risk of loss with respect to the investment of collateral. The income earned by the Fund from securities lending is included in the Statement of Operations.

Futures Contracts

The Fund may invest in municipal and U.S. Treasury futures contracts. The Fund will invest in these instruments to hedge against the effects of changes in the value of portfolio securities due to anticipated changes in interest rates and/or market conditions, for duration management, or when the transactions are economically appropriate to the reduction of risk inherent in the management of the Fund and not for trading purposes. The use of futures contracts involves certain risks, which include: (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the instrument or the underlying securities, or (3) an inaccurate prediction by Columbia Management Advisors, Inc. of the future direction of

 

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interest rates. Any of these risks may involve amounts exceeding the variation margin recorded in the Fund’s Statement of Assets and Liabilities at any given time.

Upon entering into a futures contract, the Fund deposits cash or securities with the broker in an amount sufficient to meet the initial margin requirement. Subsequent payments are made or received by the Fund equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in unrealized gains or losses. The Fund also identifies portfolio securities as segregated with the custodian in a separate account in an amount equal to the futures contract. The Fund recognizes a realized gain or loss when the contract is closed or expires.

Income Recognition

Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities. Corporate actions and dividend income are recorded on the ex-date.

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, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

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 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.

Note 4. Fees and Compensations Paid to Affiliates

Investment Advisory Fee

BACAP, a wholly-owned subsidiary of Bank of America, N.A. (‘‘Bank of America’’), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, is the investment advisor to the Acquiring Fund. BACAP receives a monthly investment advisory fee at the annual rate of 0.10% of the Fund’s average daily net assets.

Prior to December 1, 2004, BACAP received a monthly investment advisory fee at the annual rate of 0.15% of the Fund’s average daily net assets. For the year ended March 31, 2005, the Fund’s effective investment advisory fee rate was 0.13%.

Administration Fee

BACAP Distributors, LLC (‘‘BACAP Distributors’’), a wholly-owned subsidiary of Bank of America, provides administrative and other services to the Fund for a monthly administration fee, computed daily and paid monthly, at the annual rate of 0.10% of the Fund’s average daily net assets.

Transfer Agent Fee

PFPC Inc. serves as the transfer agent for the Fund’s shares. Bank of America serves as the sub-transfer agent for the Primary A Shares of the Fund. Bank of America is entitled to receive from the transfer agent a fee equal to the costs incurred by Bank of America in providing services pursuant to its obligations as sub-transfer agent at the annual rate of up to 0.01% of the net assets attributable to the Primary A shares of the Fund. For the year

 

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ended March 31, 2005, Bank of America earned $27,000 in sub-transfer agent fees from the Fund for providing such services. This amount is included in ‘‘Transfer agent fees’’ in the Fund’s Statement of Operations.

Underwriting Discounts, Service and Distribution Fees

The Fund has adopted a combined shareholder servicing and distribution plan for the Investor A Shares of the Fund. The shareholder servicing plan permits the Fund to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plan, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the class shares. Payments are made at an annual rate and paid monthly, as a percentage of average daily net assets, set from time to time by the Board of Trustees, and are charged as expenses of the Fund directly to the applicable class. A substantial portion of the expense incurred pursuant to these plans is paid to affiliates of Bank of America and BACAP Distributors.

For the year ended March 31, 2005, the annual rates in effect and plan limits, as a percentage of average daily net assets, were as follows:

                 
    Current   Plan
    Rate   Limit
Investor A Combined Distribution and Shareholder Servicing Plan
    0.25 %     0.25 %

Fees Paid to Officers and Trustees

With the exception of one officer, no officer, director or employee of Bank of America, BACAP Distributors or BACAP, or any affiliate thereof, receives any compensation from the Fund for serving as Trustee or Officer of the Trust. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. The Fund’s fee for the Office of the Chief Compliance Officer will not exceed $15,000 per year.

The Fund’s eligible Trustees may participate in a non-qualified deferred compensation plan which may be terminated at any time. All benefits provided under this plan are unfunded and any payments to plan participants are paid solely out of the Fund’s assets. Income earned on the plan participant’s deferral account is based on the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, on the rate of return of Nations Treasury Reserves, another portfolio of the Trust. The expense for the deferred compensation plan is included in ‘‘Trustees’ fees and expenses’’ in the Statement of operations. The liability for the deferred compensation plan is included in ‘‘Accrued Trustees’ fees and expenses’’ in the Statement of assets and liabilities.

Custody Credits

The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses on the Statement of Operations. 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

Other

The Fund has made daily investments of cash balances in Nations Cash Reserves, another portfolio of the Trust, pursuant to an exemptive order received from the Securities and Exchange Commission. The income earned by the Fund from such investments is included in its Statement of Operations as ‘‘Dividend income from affiliated funds.’’ BACAP and BACAP Distributors earn advisory and administration fees on the investments made in the Nations Cash Reserves in addition to the advisory and administration fees earned by BACAP and BACAP Distributors from the Fund. For the year ended March 31, 2005, BACAP and BACAP Distributors earned $9,000 of investment advisory Fees and $5,000 of administration fees, respectively, related to investments in affiliated funds.

 

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A significant portion of the Fund’s Primary A shares represents investments by fiduciary accounts over which Bank of America has either sole or joint investment discretion.

Expense Limits and Fee Reimbursements

BACAP and/or BACAP Distributors have contractually agreed to waive fees and reimburse the Fund through July 31, 2006 for certain expenses to the extent that total expenses (exclusive of distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, if any) exceed 0.14% annually of the Fund’s average daily net assets.

BACAP and/or BACAP Distributors is entitled to recover from the Fund any fees waived or expenses reimbursed by BACAP and/or BACAP Distributors during the three year period following the date of such waiver or reimbursement, to the extent that such recovery would not cause the affected fund to exceed the expense limitations in effect at the time of recovery. There is no guarantee that these expense limitations will continue.

As of March 31, 2005, the amounts potentially recoverable by BACAP and/or BACAP Distributors pursuant to this arrangement within one year, two years and three years are $1,815,000, $1,510,000 and $797,000, respectively.

Note 5. Capital Shares

The pro-forma combining net asset value per share assumes the issuance of Acquiring Fund shares to Target Fund shareholders in connection with the proposed merger. The number of shares assumed to be issued is equal to the net asset value of the Target Fund divided by the net asset value per share of the Acquiring Fund as of March 31, 2005. The pro-forma number of shares outstanding, by class, for the combined entity consists of the following at March 31, 2005.

                         
    Shares of   Additional Shares   Total Shares
    Acquiring Fund   Assumed Issued   Outstanding
Class of Shares   Pre-Combination   with Merger   Post Combination
Investor A
    748       784       1,532  
Primary A
    55,731       17,080       72,811  

Note 6. Contingencies and Other Events

On February 9, 2005, BACAP and BACAP Distributors entered into an Assurance of Discontinuance with the New York Attorney General (the ‘‘NYAG Settlement’’) and consented to the entry of a cease-and-desist order by the U.S. Securities and Exchange Commission (the ‘‘SEC’’) (the ‘‘SEC Order’’). A copy of the NYAG Settlement is available as part of the Bank of America Corporation Form 8-K filing on February 10, 2005 and a copy of the SEC Order is available on the SEC’s website.

Under the terms of the SEC Order, BACAP and its affiliate, Banc of America Securities, LLC (‘‘BAS’’) have agreed, among other things, (1) to pay $250 million in disgorgement and $125 million in civil money penalties; (2) to cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; (3) to undertake various remedial measures to ensure compliance with the federal securities laws related to certain mutual fund trading practices; and (4) to retain an independent consultant to review their applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement also requires, among other things, BACAP along with

 

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Columbia Management Advisors, Inc. and Columbia Funds Distributors, Inc. — the investment advisor to and distributor of the Columbia Funds, respectively, — to reduce Columbia Funds, Nations Funds and other mutual funds management fees collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions. BACAP and BACAP Distributors are currently in the process of implementing the various terms of the NYAG Settlement and SEC Order.

Pursuant to the procedures set forth in the SEC Order, $375 million will be distributed in accordance with a distribution plan to be developed by the independent distribution consultant. The distribution plan must be based on a methodology developed in consultation with the BACAP, BACAP Distributors and the independent trustees of the Nations Funds and not unacceptable to the staff of the SEC. Although the distribution plan has not yet been formulated, it is anticipated that a significant portion of the settlement fund will be paid to shareholders or mutual funds of other mutual fund complexes that may have been harmed by the trading of the third parties referenced in the Settlements through systems provided by BAS. At this time, the distribution plan is still under development. As such, any gain to the Nations Funds or their shareholders cannot currently be determined. More specific information on the distribution plan will be communicated on a later date.

As a result of these matters or any adverse publicity or other developments resulting from them, including lawsuits brought by shareholders of the affected Nations Funds, 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 Nations Funds.

Civil Litigation

In connection with the events that resulted in the NYAG Settlement and SEC Order, various parties filed suits against Bank of America Corporation and certain of its affiliates, including BACAP and BACAP Distributors (collectively ‘‘BAC’’), Nations Funds Trust and its Board of Trustees. On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against several other mutual fund companies based on similar allegations to the United States District Court in Maryland for consolidated or coordinated pretrial proceedings (the ‘‘MDL’’). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Nations Funds Trust, the Trustees, BAC and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of Nations Funds Trust against BAC and others that asserts claims under the federal securities laws and state common law. The MDL is ongoing. Accordingly, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

Separately, a putative class action (Reinke v. Bank of America N.A., et al.) was filed against Nations Funds Trust and others on December 16, 2004 in the United States District Court for the Eastern District of Missouri relating to the conversion of common trust funds and the investment of assets held in fiduciary accounts in the Funds. Nations Funds Trust has filed a motion to dismiss that is pending, and no discovery has been taken. At the present time, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

For the fiscal year ended March 31, 2005, Bank of America Corporation has assumed $6.7 million of legal, shareholder communications, audit related, transfer agent, consulting and Trustee costs and fees incurred by the Funds impacted in connection with the regulatory and civil litigation matters discussed above. These non-recurring costs were allocated to the Funds based on their respective average nets assets for the year ended March 31, 2005. These non-recurring costs on a per Fund basis are shown in that Fund’s respective Statement of operations. Because these costs were borne by Bank of America Corporation and not any Fund, an offsetting waiver of these costs is also presented in each respective Fund’s Statement of operations as, ‘‘Costs assumed by Bank of America Corporation’’. The impact to the expense ratio of each impacted Fund is reflected in the Fund’

 

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Pro Forma Combining Portfolio of Investments (Unaudited)
As of 3/31/05

                                                                                                 
                                                       
                            Columbia Short Term Bond Fund     Nations Short Intermediate Government Fund     Nations Short-Term Income Fund              
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
CORPORATE FIXED-INCOME BONDS & NOTES
                     31.3 %                                                                        
BASIC MATERIALS
                     0.6 %                                                                        
Chemicals
                     0.2 %                                                                        
Equistar Chemicals LP
     6.500       2/15/2006               —       —       —       —       2,500       2,525       —       2,500       2,525  
Lyondell Chemical Co
     9.875       5/1/2007               —       —       —       —       963       987       —       963       987  
 
                                                                                        
Chemicals Total
                                     —               —               3,512                       3,512  
 
                                                                                        
Forest Products and Paper
                     0.4 %                                                                        
International Paper Co
     4.250       1/15/2009               —       —       —       —       4,000       3,946       —       4,000       3,946  
Louisiana-Pacific Corp
     8.500       8/15/2005               —       —       —       —       2,750       2,790       —       2,750       2,790  
 
                                                                                        
Forest Products and Paper Total
                                     —               —               6,736                       6,736  
 
                                                                                        
TOTAL BASIC MATERIALS
                                     —               —               10,248                       10,248  
 
                                                                                        
COMMUNICATIONS
                     3.5 %                                                                        
Media
                     1.5 %                                                                        
Comcast Cable Communications
     6.375       1/30/2006               —       —       —       —       2,510       2,554       —       2,510       2,554  
Gannett Co Inc
     4.950       4/1/2005               2,000       2,000       —       —       —       —       —       2,000       2,000  
Gannett Co Inc
     5.500       4/1/2007               —       —       —       —       5,000       5,124       —       5,000       5,124  
Jones Intercable Inc
     7.625       4/15/2008               1,875       2,020       —       —       —       —       —       1,875       2,020  
Lenfest Communications Inc
     8.375       11/1/2005               —       —       —       —       2,750       2,813       —       2,750       2,813  
Reed Elsevier Capital Inc
     7.000       5/15/2005               —       —       —       —       1,000       1,004       —       1,000       1,004  
TCI Communications
     7.250       8/1/2005               1,125       1,138       —       —       —       —       —       1,125       1,138  
Time Warner Inc
     6.125       4/15/2006               2,460       2,512       —       —       —       —       —       2,460       2,512  
Time Warner Inc
     8.110       8/15/2006               —       —       —       —       4,641       4,862       —       4,641       4,862  
Viacom Inc
     5.625       5/1/2007               —       —       —       —       3,500       3,582       —       3,500       3,582  
 
                                                                                        
Media Total
                                     7,670               —               19,940                       27,610  
 
                                                                                        
Telecommunications
                     1.8 %                                                                        
Cingular Wireless Services Inc
     7.500       5/1/2007               1,970       2,095       —       —       —       —       —       1,970       2,095  
Deutsche Telekom International Finance BV (f)
     8.500       6/15/2010               1,450       1,675       —       —       4,000       4,600       —       5,450       6,276  
GTE Southwest Inc
     6.000       1/15/2006               3,725       3,791       —       —       —       —       —       3,725       3,791  
SBC Communications Inc
     5.750       5/2/2006               1,600       1,629       —       —       3,000       3,055       —       4,600       4,684  
Sprint Capital Corp
     6.375       5/1/2009               1,250       1,321       —       —       2,500       2,641       —       3,750       3,961  
Verizon Global Funding Corp
     7.250       12/1/2010               —       —       —       —       6,000       6,659       —       6,000       6,659  
Verizon Global Funding Corp
     7.600       3/15/2007               600       636       —       —       —       —       —       600       636  
Vodafone Group PLC
     7.750       2/15/2010               2,350       2,649       —       —       4,000       4,518       —       6,350       7,167  
 
                                                                                        
Telecommunications Total
                                     11,702               —               21,472                       33,174  
 
                                                                                        
TOTAL COMMUNICATIONS
                                     21,467               —               41,412                       62,879  
 
                                                                                        
CONSUMER CYCLICAL
                     3.2 %                                                                        
Auto Manufacturers
                     0.5 %                                                                        
DaimlerChrysler NA Holding Corp
     4.750       1/15/2008               1,575       1,573       —       —       3,000       2,986       —       4,575       4,559  
Toyota Motor Credit Corp
     2.800       1/18/2006               —       —       —       —       4,000       3,968       —       4,000       3,968  
 
                                                                                        
Auto Manufacturers Totals
                                     1,573               —               6,954                       8,527  
 
                                                                                        
Auto Parts and Equipment
                     0.1 %                                                                        
Lear Corp
     7.960       5/15/2005               —       —       —       —       1,500       1,507       —       1,500       1,507  
 
                                                                                        
Auto Parts and Equipment Total
                                     —               —               1,507                       1,507  
 
                                                                                        
Home Builders
                     0.3 %                                                                        
DR Horton Inc
     10.500       4/1/2005               —       —       —       —       1,675       1,675       —       1,675       1,675  
KB Home
     9.500       2/15/2011               —       —       —       —       2,000       2,118       —       2,000       2,118  
Toll Corp
     8.000       5/1/2009               —       —       —       —       2,000       2,030       —       2,000       2,030  
 
                                                                                        
Home Builders Totals
                                     —               —               5,823                       5,823  
 
                                                                                        
Housewares
                     0.4 %                                                                        
Newell Rubbermaid Inc
     2.000       5/1/2005               3,725       3,722       —       —       4,000       3,994       —       7,725       7,716  
 
                                                                                        
Housewares Totals
                                     3,722               —               3,994                       7,716  
 
                                                                                        

Table of Contents

                                                                                                 
                                                       
                            Columbia Short Term Bond Fund     Nations Short Intermediate Government Fund     Nations Short-Term Income Fund              
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Lodging
                     0.6 %                                                                        
Ameristar Casinos Inc
     10.750       2/15/2009               —       —       —       —       2,000       2,185       —       2,000       2,185  
Harrah’s Operating Co Inc
     7.875       12/15/2005               —       —       —       —       2,000       2,040       —       2,000       2,040  
HMH Properties Inc
     7.875       8/1/2008               —       —       —       —       702       716       —       702       716  
ITT Corp
     6.750       11/15/2005               —       —       —       —       1,500       1,511       —       1,500       1,511  
MGM Mirage
     7.250       10/15/2006               —       —       —       —       1,500       1,549       —       1,500       1,549  
Park Place Entertainment
     7.875       12/15/2005               —       —       —       —       2,895       2,957       —       2,895       2,957  
 
                                                                                        
Lodging Totals
                                     —               —               10,958                       10,958  
 
                                                                                        
 
Retail
                     1.1 %                                                                        
Costco Wholesale Corp
     5.500       3/15/2007               640       656       —       —       —       —       —       640       656  
Home Depot Inc (a)
     5.375       4/1/2006               —       —       —       —       5,000       5,062       —       5,000       5,062  
Lowe’s Companies Inc
     7.500       12/15/2005               1,675       1,716       —       —       —       —       —       1,675       1,716  
Target Corp
     5.950       5/15/2006               1,000       1,022       —       —       5,000       5,103       —       6,000       6,126  
Wal-Mart Stores Inc
     4.000       1/15/2010               —       —       —       —       7,485       7,285       —       7,485       7,285  
 
                                                                                        
Retail Totals
                                     3,394               —               17,450                       20,844  
 
                                                                                        
 
Toys/Games/Hobbies
                     0.1 %                                                                        
Hasbro Inc
     5.600       11/1/2005               —       —       —       —       2,306       2,325       —       2,306       2,325  
 
                                                                                        
Toys/Games/Hobbies Totals
                                     —               —               2,325                       2,325  
 
                                                                                        
TOTAL CONSUMER CYCLICAL
                                     8,689               —               49,011                       57,700  
 
                                                                                        
 
CONSUMER NON-CYCLICAL
                     3.3 %                                                                        
Beverages
                     0.7 %                                                                        
Bottling Group LLC
     2.450       10/16/2006               4,300       4,202       —       —       —       —       —       4,300       4,202  
Coca-Cola Enterprises Inc
     5.750       11/1/2008               2,275       2,361       —       —       —       —       —       2,275       2,361  
Constellation Brands Inc
     8.625       8/1/2006               —       —       —       —       2,000       2,090       —       2,000       2,090  
Diageo Capital PLC
     3.500       11/19/2007               —       —       —       —       5,000       4,909       —       5,000       4,909  
 
                                                                                        
Beverages Totals
                                     6,563               —               6,999                       13,561  
 
                                                                                        
 
Cosmetics/Personal Care
                     0.4 %                                                                        
Procter & Gamble Co
     4.750       6/15/2007               725       735       —       —       5,950       6,032       —       6,675       6,767  
 
                                                                                        
Cosmetics/Personal Care Totals
                                     735               —               6,032                       6,767  
 
                                                                                        
 
Food
                     1.0 %                                                                        
General Mills Inc
     2.625       10/24/2006               2,800       2,738       —       —       —       —       —       2,800       2,738  
General Mills Inc
     5.125       2/15/2007               —       —       —       —       5,710       5,806       —       5,710       5,806  
Kellogg Co
     6.000       4/1/2006               1,250       1,275       —       —       1,900       1,934       —       3,150       3,209  
Kroger Co
     7.650       4/15/2007               1,585       1,689       —       —       —       —       —       1,585       1,689  
Kroger Co
     7.800       8/15/2007               —       —       —       —       2,860       3,062       —       2,860       3,062  
Safeway Inc
     4.950       8/16/2010               1,900       1,882       —       —       —       —       —       1,900       1,882  
 
                                                                                        
Food Totals
                                     7,584               —               10,802                       18,386  
 
                                                                                        
 
Healthcare Services
                     0.6 %                                                                        
UnitedHealth Group Inc
     3.375       8/15/2007               1,415       1,384       —       —       4,000       3,917       —       5,415       5,301  
WellPoint Inc
     4.875       8/1/2005               2,225       2,235       —       —       —       —       —       2,225       2,235  
WellPoint Health Networks
     6.375       6/15/2006               —       —       —       —       3,000       3,076       —       3,000       3,076  
 
                                                                                        
Healthcare Services Totals
                                     3,619               —               6,993                       10,612  
 
                                                                                        
 
Household Products/Wares
                     0.2 %                                                                        
Fortune Brands Inc
     2.875       12/1/2006               3,275       3,213       —       —       —       —       —       3,275       3,213  
 
                                                                                        
Household Products/Wares Totals
                                     3,213               —               —                       3,213  
 
                                                                                        
 
Pharmaceuticals
                     0.4 %                                                                        
Abbott Laboratories
     5.625       7/1/2006               —       —       —       —       5,000       5,093       —       5,000       5,093  
GlaxoSmithKline Capital PLC
     2.375       4/16/2007               —       —       —       —       3,000       2,903       —       3,000       2,903  
 
                                                                                        
Pharmaceuticals Totals
                                     —               —               7,996                       7,996  
 
                                                                                        
TOTAL CONSUMER NON-CYCLICAL
                                     21,713               —               38,822                       60,535  
 
                                                                                        

Table of Contents

                                                                                                 
                                                       
                            Columbia Short Term Bond Fund     Nations Short Intermediate Government Fund     Nations Short-Term Income Fund              
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
ENERGY
                     1.7 %                                                                        
Oil and Gas
                     1.3 %                                                                        
BP Capital Markets
     4.000       4/29/2005               —       —       —       —       3,000       3,002       —       3,000       3,002  
ChevronTexaco Capital Co
     3.500       9/17/2007               3,350       3,302       —       —       —       —       —       3,350       3,302  
Devon Energy Corp
     2.750       8/1/2006               2,825       2,777       —       —       4,000       3,912       —       6,825       6,690  
Marathon Oil Corp
     5.375       6/1/2007               2,725       2,784       —       —       —       —       —       2,725       2,784  
Parker & Parsley Petroleum Co
     8.875       4/15/2005               —       —       —       —       2,472       2,476       —       2,472       2,476  
USX Corp
     6.850       3/1/2008               —       —       —       —       5,550       5,899       —       5,550       5,899  
 
                                                                                        
Oil and Gas Totals
                                     8,863               —               15,289                       24,152  
 
                                                                                        
Pipelines
                     0.4 %                                                                        
Kinder Morgan Energy Partners LP
     6.750       3/15/2011               2,200       2,384       —       —       4,325       4,692       —       6,525       7,076  
 
                                                                                        
Pipelines Totals
                                     2,384               —               4,692                       7,076  
 
                                                                                        
TOTAL ENERGY
                                     11,248               —               19,981                       31,228  
 
                                                                                        
FINANCIALS
                     15.2 %                                                                        
Banks
                     2.8 %                                                                        
Fifth Third Bank
     2.700       1/30/2007               2,075       2,023       —       —       5,191       5,052       —       7,266       7,075  
Key Bank N.A.
     4.100       6/30/2005               —       —       —       —       1,980       1,985       —       1,980       1,985  
Marshall & Ilsley Corp
     4.375       8/1/2009               2,670       2,635       —       —       —       —       —       2,670       2,635  
Marshall & Ilsley Corp
     5.750       9/1/2006               —       —       —       —       5,000       5,127       —       5,000       5,127  
US Bancorp
     2.750       3/30/2006               —       —       —       —       11,000       10,872       —       11,000       10,872  
US Bancorp
     3.125       3/15/2008               5,750       5,561       —       —       —       —       —       5,750       5,561  
Wachovia Corp
     3.500       8/15/2008               3,720       3,614       —       —       —       —       —       3,720       3,614  
Wachovia Corp
     3.625       2/17/2009               —       —       —       —       10,000       9,678       —       10,000       9,678  
Wells Fargo
     3.000       3/10/2008               5,000       4,963       —       —       —       —       —       5,000       4,963  
 
                                                                                        
Banks Totals
                                     18,797               —               32,714                       51,511  
 
                                                                                        
Capital Markets
                     0.4 %                                                                        
Merrill Lynch & Co.
     4.125       1/15/2009               2,500       2,457       —       —       5,500       5,394       —       8,000       7,851  
 
                                                                                        
Capital Markets Totals
                                     2,457               —               5,394                       7,851  
 
                                                                                        
Diversified Financial Services
                     10.1 %                                                                        
American Express Credit Corp
     3.000       5/16/2008               4,000       3,839       —       —       —       —       —       4,000       3,839  
American General Finance Corp
     3.000       11/15/2006               3,000       2,945       —       —       —       —       —       3,000       2,945  
American General Finance Corp
     5.875       7/14/2006               —       —       —       —       6,125       6,261       —       6,125       6,261  
Bank One N.A.
     5.500       3/26/2007               —       —       —       —       9,500       9,745       —       9,500       9,745  
Bear Stearns Cos Inc.
     3.000       3/30/2006               —       —       —       —       9,500       9,411       —       9,500       9,411  
Bear Stearns Cos Inc.
     6.500       5/1/2006               2,600       2,671       —       —       —       —       —       2,600       2,671  
Capital One Bank
     4.875       5/15/2008               1,625       1,638       —       —       2,500       2,518       —       4,125       4,156  
Caterpillar Financial Services Corp
     3.625       11/15/2007               3,350       3,290       —       —       —       —       —       3,350       3,290  
Caterpillar Financial Services Corp
     5.950       5/1/2006               —       —       —       —       8,000       8,167       —       8,000       8,167  
CIT Group Inc
     4.125       2/21/2006               1,700       1,705       —       —       —       —       —       1,700       1,705  
CIT Group Inc
     5.500       11/30/2007               —       —       —       —       4,000       4,096       —       4,000       4,096  
Citigroup Inc
     5.500       8/9/2006               —       —       —       —       4,000       4,075       —       4,000       4,075  
Citigroup Inc
     6.750       12/1/2005               2,700       2,756       —       —       4,000       4,079       —       6,700       6,835  
Countrywide Home Loans Inc
     2.875       2/15/2007               500       487       —       —       —       —       —       500       487  
Countrywide Home Loans Inc
     4.125       9/15/2009               —       —       —       —       7,000       6,745       —       7,000       6,745  
Diageo Finance BV
     3.000       12/15/2006               —       —       —       —       3,000       2,942       —       3,000       2,942  
Ford Motor Credit Co
     7.375       10/28/2009               4,000       4,033       —       —       7,500       7,533       —       11,500       11,566  
General Electric Capital Corp
     5.000       2/15/2007               —       —       —       —       5,000       5,076       —       5,000       5,076  
General Electric Capital Corp
     6.500       12/10/2007               —       —       —       —       11,000       11,585       —       11,000       11,585  
General Motors Acceptance Corp
     7.750       1/19/2010               2,400       2,323       —       —       5,000       4,802       —       7,400       7,125  
Goldman Sachs Group Inc
     4.125       1/15/2008               2,560       2,547       —       —       6,000       5,949       —       8,560       8,496  
Household Finance Corp
     6.400       6/17/2008               3,225       3,396       —       —       7,500       7,908       —       10,725       11,304  
John Deere Capital Corp
     3.900       1/15/2008               3,000       2,957       —       —       4,000       3,940       —       7,000       6,897  
JPMorgan Chase & Co
     3.800       10/2/2009               4,000       3,856       —       —       —       —       —       4,000       3,856  
Lehman Brothers Holdings Inc
     4.000       1/22/2008               2,500       2,473       —       —       7,000       6,909       —       9,500       9,382  
Midland Funding II
     11.750       7/23/2005               —       —       —       —       635       648       —       635       648  

Table of Contents

                                                                                                 
                                                       
                            Columbia Short Term Bond Fund     Nations Short Intermediate Government Fund     Nations Short-Term Income Fund              
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Morgan Stanley
     3.875       1/15/2009               2,400       2,346       —       —       7,000       6,807       —       9,400       9,153  
National Rural Utilities Cooperative Finance Corp
     6.000       5/15/2006               —       —       —       —       4,000       4,089       —       4,000       4,089  
Pemex Finance Ltd
     6.550       2/15/2008               —       —       —       —       459       473       —       459       473  
Pitney Bowes Credit Corp
     5.750       8/15/2008               1,525       1,585       —       —       —       —       —       1,525       1,585  
Security Capital Group Inc
     7.150       6/15/2007               6,315       6,669       —       —       —       —       —       6,315       6,669  
SLM Corp
     5.625       4/10/2007               4,000       4,104       —       —       —       —       —       4,000       4,104  
Wells Fargo Financial Inc
     4.875       6/12/2007               —       —       —       —       4,000       4,063       —       4,000       4,063  
 
                                                                                        
Diversified Financial Services Totals
                                     55,618               —               127,822                       183,440  
 
                                                                                        
 
Insurance
                     0.7 %                                                                        
Allstate Financial Global Funding (b)
     6.150       2/1/2006               —       —       —       —       1,500       1,528       —       1,500       1,528  
Allstate Financial Global Funding II
     2.625       10/22/2006               2,950       2,882       —       —       —       —       —       2,950       2,882  
Genworth Financial Inc
     4.750       6/15/2009               2,010       2,015       —       —       —       —       —       2,010       2,015  
Hartford Financial Services Group Inc
     2.375       6/1/2006               —       —       —       —       699       683       —       699       683  
Prudential Insurance Co of America (b)
     6.375       7/23/2006               —       —       —       —       5,000       5,163       —       5,000       5,163  
 
                                                                                        
Insurance Totals
                                     4,897               —               7,374                       12,271  
 
                                                                                        
 
Investment Companies
                     0.3 %                                                                        
Credit Suisse First Boston USA Inc
     4.625       1/15/2008               1,630       1,639       —       —       4,000       4,018       —       5,630       5,657  
 
                                                                                        
Investment Companies Totals
                                     1,639               —               4,018                       5,657  
 
                                                                                        
 
Real Estate Investment Trusts
                     0.1 %                                                                        
Health Care Property Investors Inc
     6.875       6/8/2005               2,075       2,087       —       —       —       —       —       2,075       2,087  
 
                                                                                        
Real Estate Investment Trusts Totals
                                     2,087               —               —                       2,087  
 
                                                                                        
 
Savings and Loans
                     0.8 %                                                                        
Washington Mutual Inc
     4.200       1/15/2010               2,855       2,782       —       —       6,000       5,839       —       8,855       8,621  
World Savings Bank
     4.125       3/10/2008               2,000       1,984       —       —       3,750       3,716       —       5,750       5,700  
 
                                                                                        
Savings and Loans Totals
                                     4,766               —               9,555                       14,321  
 
                                                                                        
TOTAL FINANCIALS
                                     90,260               —               186,877                       277,137  
 
                                                                                        
 
INDUSTRIALS
                     1.3 %                                                                        
Aerospace/Defense
                     0.2 %                                                                        
Boeing Co
     8.100       11/15/2006               1,820       1,928       —       —       —       —       —       1,820       1,928  
United Technologies Corp
     4.875       11/1/2006               2,475       2,505       —       —       —       —       —       2,475       2,505  
 
                                                                                        
Aerospace/Defense Totals
                                     4,433               —               —                       4,433  
 
                                                                                        
 
Building Materials
                     0.1 %                                                                        
American Standard Inc
     7.375       4/15/2005               —       —       —       —       750       751       —       750       751  
Hanson Overseas BV
     6.750       9/15/2005               —       —       —       —       1,313       1,331       —       1,313       1,331  
 
                                                                                        
Building Materials Totals
                                     —               —               2,082                       2,082  
 
                                                                                        
 
Environmental Control
                     0.3 %                                                                        
Waste Management Inc
     7.125       10/1/2007               2,430       2,590       —       —       —       —       —       2,430       2,590  
Waste Management Inc
     7.375       8/1/2010               —       —       —       —       3,000       3,343       —       3,000       3,343  
 
                                                                                        
Environmental Control Totals
                                     2,590               —               3,343                       5,933  
 
                                                                                        
 
Miscellaneous - Manufacturing
                     0.1 %                                                                        
Honeywell International Inc
     5.125       11/1/2006               1,620       1,648       —       —       —       —       —       1,620       1,648  
 
                                                                                        
Miscellaneous - Manufacturing Totals
                                     1,648               —               —                       1,648  
 
                                                                                        
 
Packaging and Containers
                     0.3 %                                                                        
Ball Corp
     7.750       8/1/2006               —       —       —       —       2,594       2,675       —       2,594       2,675  
Smurfit-Stone Container Corp.
     9.750       2/1/2011               —       —       —       —       2,000       2,140       —       2,000       2,140  
 
                                                                                        
Packaging and Containers Totals
                                     —               —               4,815                       4,815  
 
                                                                                        
 
Transportation
                     0.3 %                                                                        
CSX Corp
     6.460       6/22/2005               2,250       2,265       —       —       —       —       —       2,250       2,265  
Canadian National Railway Co
     6.450       7/15/2006               910       936       —       —       —       —       —       910       936  

Table of Contents

                                                                                                 
                                                       
                            Columbia Short Term Bond Fund     Nations Short Intermediate Government Fund     Nations Short-Term Income Fund              
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Union Pacific Corp
     3.875       2/15/2009               1,825       1,774       —       —       —       —       —       1,825       1,774  
 
                                                                                        
Transportation Totals
                                     4,975               —               —                       4,975  
 
                                                                                        
TOTAL INDUSTRIALS
                                     13,646               —               10,241                       23,887  
 
                                                                                        
 
TECHNOLOGY
                     1.1 %                                                                        
Computers
                     0.8 %                                                                        
Hewlett-Packard Co
     5.500       7/1/2007               —       —       —       —       5,000       5,131       —       5,000       5,131  
International Business Machines Corp
     2.375       11/1/2006               2,700       2,635       —       —       —       —       —       2,700       2,635  
International Business Machines Corp
     4.875       10/1/2006               —       —       —       —       5,000       5,067       —       5,000       5,067  
Unisys Corp (a)
     7.875       4/1/2008               —       —       —       —       1,500       1,508       —       1,500       1,508  
 
                                                                                        
Computer Totals
                                     2,635               —               11,706                       14,341  
 
                                                                                        
 
Software
                     0.3 %                                                                        
First Data Corp
     4.700       11/1/2006               —       —       —       —       4,775       4,817       —       4,775       4,817  
 
                                                                                        
Software Totals
                                     —               —               4,817                       4,817  
 
                                                                                        
TOTAL TECHNOLOGY
                                     2,635               —               16,522                       19,157  
 
                                                                                        
 
UTILITIES
                     1.5 %                                                                        
Electric
                     1.1 %                                                                        
AES Corp. (a)
     8.500       11/1/2007               —       —       —       —       1,321       1,341       —       1,321       1,341  
Exelon Generation Co.
     6.950       6/15/2011               1,850       2,037       —       —       —       —       —       1,850       2,037  
Kansas Gas & Electric
     6.500       8/1/2005               —       —       —       —       2,425       2,450       —       2,425       2,450  
Scottish Power PLC (a)
     4.910       3/15/2010               2,400       2,403       —       —       4,500       4,501       —       6,900       6,904  
Virginia Electric and Power Co
     5.375       2/1/2007               2,400       2,450       —       —       1,000       1,020       —       3,400       3,470  
Virginia Electric and Power Co
     5.750       3/31/2006               —       —       —       —       3,562       3,622       —       3,562       3,622  
 
                                                                                        
Electric Totals
                                     6,890               —               12,932                       19,823  
 
                                                                                        
 
Electric Utilities
                     0.2 %                                                                        
Centerpoint Energy Bank (g)
   NA     11/11/2005               —       —       —       —       3,000       3,180       —       3,000       3,180  
 
                                                                                        
Electric Utilities Totals
                                     —               —               3,180                       3,180  
 
                                                                                        
 
Gas
                     0.2 %                                                                        
Sempra Energy
     4.750       5/15/2009               1,150       1,144       —       —       2,660       2,645       —       3,810       3,788  
 
                                                                                        
Gas Totals
                                     1,144               —               2,645                       3,788  
 
                                                                                        
TOTAL UTILITIES
                                     8,034               —               18,757                       26,791  
 
                                                                                        
TOTAL CORPORATE FIXED-INCOME BONDS & NOTES
                                     177,692               —               391,871                       569,563  
 
                                                                                        
 
ASSET-BACKED SECURITIES
                     16.7 %                                                                        
Aames Mortgage Investment Trust
     3.360       1/25/2035               —       —       —       —       17,523       17,578       —       17,523       17,578  
ABFS Mortgage Loan Trust
     4.428       12/15/2033               134       126       —       —       —       —       —       134       126  
Advanta Mortgage Loan Trust
     7.750       10/25/2026               62       63       —       —       —       —       —       62       63  
American Express Credit Account Master Trust
     1.690       1/15/2009               —       —       —       —       4,052       3,947       —       4,052       3,947  
AmeriCredit Automobile Receivables Trust
     5.370       6/12/2008               439       443       —       —       1,098       1,107       —       1,537       1,550  
Amresco Residential Securities Mortgage Loan Trust
     3.260       7/25/2028               194       195       —       —       —       —       —       194       195  
Amresco Residential Securities Mortgage Loan Trust
     3.440       6/25/2027               50       50       —       —       —       —       —       50       50  
BMW Vehicle Owner Trust
     1.940       2/25/2007               —       —       —       —       4,254       4,236       —       4,254       4,236  
BMW Vehicle Owner Trust
     2.530       2/25/2008               —       —       —       —       2,000       1,973       —       2,000       1,973  
Capital Auto Receivables Asset Trust
     2.270       1/17/2006               —       —       —       —       688       688       —       688       688  
Capital Auto Receivables Asset Trust
     4.180       10/15/2007               —       —       —       —       221       221       —       221       221  
Chase Credit Card Master Trust
     3.710       7/16/2007               —       —       —       —       3,216       3,217       —       3,216       3,217  
Chase Manhattan Auto Owner Trust
     1.520       5/15/2007               —       —       —       —       2,881       2,861       —       2,881       2,861  
Chase Manhattan Auto Owner Trust
     2.080       5/15/2008               —       —       —       —       10,000       9,837       —       10,000       9,837  
Chase Manhattan Auto Owner Trust
     2.260       11/15/2007               —       —       —       —       1,500       1,484       —       1,500       1,484  
Chase Manhattan Auto Owner Trust
     2.570       2/16/2010               —       —       —       —       3,953       3,843       —       3,953       3,843  
Chase Manhattan Auto Owner Trust
     4.240       9/15/2008               —       —       —       —       741       744       —       741       744  
CIT Equipment Collateral
     2.200       3/20/2008               3,050       3,001       —       —       —       —       —       3,050       3,001  
CIT Equipment Collateral
     3.970       12/21/2009               —       —       —       —       407       402       —       407       402  
CIT Equipment Collateral
     4.670       12/21/2009               —       —       —       —       1,955       1,959       —       1,955       1,959  
Citibank Credit Card Issuance Trust
     2.500       4/7/2008               —       —       —       —       5,000       4,933       —       5,000       4,933  

Table of Contents

                                                                                                 
                                                       
                            Columbia Short Term Bond Fund     Nations Short Intermediate Government Fund     Nations Short-Term Income Fund              
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Citibank Credit Card Issuance Trust
     5.650       6/16/2008               —       —       —       —       5,575       5,686       —       5,575       5,686  
Citibank Credit Card Issuance Trust
     6.900       10/15/2007               —       —       —       —       1,250       1,272       —       1,250       1,272  
Cityscape Home Equity Loan Trust
     7.380       7/25/2028               182       182       —       —       —       —       —       182       182  
Cityscape Home Equity Loan Trust
     7.410       5/25/2028               91       91       —       —       —       —       —       91       91  
Connecticut RRB Special Purpose Trust
     5.360       3/30/2007               —       —       —       —       —       —       —       —       —  
Countrywide Asset-Backed Certificates
     3.110       8/25/2035               —       —       —       —       10,000       10,000       —       10,000       10,000  
Countrywide Asset-Backed Certificates
     3.120       7/25/2035               —       —       —       —       19,000       19,000       —       19,000       19,000  
Countrywide Asset-Backed Certificates
     3.140       8/25/2035               —       —       —       —       17,000       17,000       —       17,000       17,000  
Credit-Based Asset Servicing and Securitization
     4.134       12/25/2035  (f)             —       —       2,365       2,323       —       —       —       2,365       2,323  
Daimler Chrysler Auto Trust
     2.580       4/8/2009               —       —       —       —       5,000       4,849       —       5,000       4,849  
Daimler Chrysler Auto Trust
     4.490       10/6/2008               —       —       —       —       3,881       3,900       —       3,881       3,900  
Daimler Chrysler Auto Trust
     4.630       12/6/2006               —       —       —       —       807       809       —       807       809  
Discover Card Master Trust
     5.750       12/15/2008               —       —       —       —       8,500       8,683       —       8,500       8,683  
Educap Inc
     3.270       9/20/2015               1,151       1,161       —       —       —       —       —       1,151       1,161  
First Alliance Mortgage Loan Trust
     6.680       6/25/2025               240       240       —       —       —       —       —       240       240  
First Alliance Mortgage Loan Trust
     8.225       9/20/2027  (e)             —       —       789       788       —       —       —       789       788  
First Plus Home Loan Trust
     7.720       5/10/2024               —       —       —       —       133       133       —       133       133  
Ford Credit Auto Owner Trust
     3.140       1/15/2007               —       —       —       —       1,179       1,180       —       1,179       1,180  
Ford Credit Auto Owner Trust
     3.790       9/15/2006               —       —       —       —       3,034       3,039       —       3,034       3,039  
Ford Credit Auto Owner Trust
     5.180       10/16/2006               —       —       —       —       1,725       1,736       —       1,725       1,736  
GMAC Mortgage Corp Loan Trust
     3.970       9/25/2034               —       —       1,900       1,872       —       —       —       1,900       1,872  
GSAA Home Equity Trust
     4.220       8/25/2034  (i)             —       —       1,090       1,079       —       —       —       1,090       1,079  
GSAA Home Equity Trust
     4.736       6/25/2034  (i)             —       —       1,900       1,905       —       —       —       1,900       1,905  
Harley Davidson Motorcycle Trust
     3.090       6/15/2010               1,316       1,298       —       —       1,294       1,285       —       2,610       2,583  
Honda Auto Receivables Owner Trust
     1.920       11/20/2006               —       —       —       —       1,478       1,473       —       1,478       1,473  
Honda Auto Receivables Owner Trust
     2.790       3/16/2009               —       —       —       —       4,000       3,909       —       4,000       3,909  
Honda Auto Receivables Owner Trust
     3.000       5/18/2006               230       230       —       —       —       —       —       230       230  
Household Automotive Trust
     2.850       3/19/2007               —       —       —       —       623       623       —       623       623  
IMC Home Equity Loan Trust
     7.080       8/20/2028               124       124       —       —       —       —       —       124       124  
IMC Home Equity Loan Trust
     7.310       11/20/2028               101       101       —       —       —       —       —       101       101  
IMC Home Equity Loan Trust
     7.500       4/25/2026               747       761       —       —       —       —       —       747       761  
IMC Home Equity Loan Trust
     7.520       8/20/2028               525       524       —       —       —       —       —       525       524  
Irwin Home Equity
     3.190       9/25/2017               —       —       —       —       9,995       9,997       —       9,995       9,997  
John Deere Owner Trust
     2.320       12/17/2007               —       —       —       —       5,000       4,906       —       5,000       4,906  
Keycorp Student Loan Trust
     3.471       10/25/2025               12,080       12,173       —       —       —       —       —       12,080       12,173  
Keycorp Student Loan Trust
     3.739       1/27/2023               3,451       3,476       —       —       —       —       —       3,451       3,476  
MBNA Credit Card Master Note Trust
     6.550       12/15/2008               —       —       —       —       5,000       5,155       —       5,000       5,155  
MMCA Automobile Trust
     5.750       6/15/2007               —       —       —       —       181       182       —       181       182  
Morgan Stanley ABS Capital
     3.100       2/25/2035               —       —       —       —       14,000       14,000       —       14,000       14,000  
Morgan Stanley ABS Capital
     3.200       5/25/2034               —       —       —       —       10,249       10,249       —       10,249       10,249  
Morgan Stanley Dean Witter
     3.440       11/25/2032               467       475       —       —       —       —       —       467       475  
Nissan Auto Receivables Owner Trust
     1.510       8/15/2007               —       —       —       —       1,950       1,933       —       1,950       1,933  
Nissan Auto Receivables Owner Trust
     2.610       7/15/2008               —       —       —       —       1,500       1,475       —       1,500       1,475  
Nissan Auto Receivables Owner Trust
     3.330       1/15/2008               —       —       —       —       3,000       2,990       —       3,000       2,990  
Nissan Auto Receivables Owner Trust
     4.280       10/16/2006               —       —       —       —       1,497       1,500       —       1,497       1,500  
Nissan Auto Receivables Owner Trust
     4.600       9/17/2007               1,610       1,617       —       —       —       —       —       1,610       1,617  
Novastar Home Equity Loan
     3.240       5/25/2033               —       —       —       —       10,072       10,118       —       10,072       10,118  
Novastar Home Equity Loan
     3.390       2/25/2034               1,460       1,464       —       —       —       —       —       1,460       1,464  
Oakwood Mortgage Investors Inc
     3.320       5/15/2013  (j)             —       —       257       218       —       —       —       257       218  
Residential Asset Mortgage Products Inc
     3.000       3/25/2035               —       —       —       —       16,000       16,000       —       16,000       16,000  
Residential Asset Mortgage Products Inc
     3.190       3/25/2033               —       —       —       —       3,300       3,309       —       3,300       3,309  
Residential Asset Mortgage Products Inc
     3.360       9/25/2033               1,945       1,953       —       —       —       —       —       1,945       1,953  
Residential Asset Mortgage Products Inc
     3.981       4/25/2029               —       —       930       912       —       —       —       930       912  
Residential Funding Mortgage Securities I
     3.310       8/25/2033               144       144       —       —       —       —       —       144       144  
Residential Funding Mortgage Securities II
     4.760       7/25/2028  (f)             —       —       2,180       2,146       —       —       —       2,180       2,146  
SLM Student Loan Trust
     3.459       1/25/2010               961       962       —       —       —       —       —       961       962  
SLM Student Loan Trust
     3.789       7/25/2011               6,030       6,033       —       —       —       —       —       6,030       6,033  
SLM Student Loan Trust
     3.909       1/25/2013               8,950       9,239       —       —       —       —       —       8,950       9,239  
Terwin Mortgage Trust
     3.300       7/25/2034               —       —       —       —       8,203       8,258       —       8,203       8,258  
Toyota Auto Receivables Owner Trust
     2.200       3/15/2010               —       —       —       —       4,000       3,934       —       4,000       3,934  
Toyota Auto Receivables Owner Trust
     4.000       7/15/2008               —       —       —       —       7,389       7,391       —       7,389       7,391  

Table of Contents

                                                                                                 
                                                       
                            Columbia Short Term Bond Fund     Nations Short Intermediate Government Fund     Nations Short-Term Income Fund              
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
USAA Auto Owner Trust
     3.910       4/16/2007               —       —       —       —       685       685       —       685       685  
 
                                                                                        
TOTAL ASSET-BACKED SECURITIES
                                     46,123               11,244               245,690                       303,057  
 
                                                                                        
 
MORTGAGE-BACKED SECURITIES
                     15.3 %                                                                        
Agency Collateralized Mortgage Obligations
                     2.1 %                                                                        
Federal Home Loan Mortgage Corp.
                                                                                                
 
     4.000       10/15/2026               7,670       7,545       —       —       7,790       7,663       —       15,460       15,209  
 
     5.500       11/15/2021               —       —       —       —       20,046       20,382       —       20,046       20,382  
 
     5.500       1/15/2023               —       —       1,663       130       —       —       —       1,663       130  
 
     5.500       5/15/2027               —       —       1,773       173       —       —       —       1,773       173  
Federal National Mortgage Association
     6.000       4/25/2017               —       —       1,483       1,544       —       —       —       1,483       1,544  
 
                                                                                        
Agency Collateralized Mortgage Obligations Total
                                     7,545               1,847               28,045                       37,438  
 
                                                                                        
 
Mortgage-Backed Obligations
                     13.3 %                                                                        
Federal Home Loan Mortgage Corp.
                                                                                                
 
     3.000       6/15/2009               2,725       2,717       —       —       —       —       —       2,725       2,717  
 
     4.000       5/1/2011               5,906       5,812       —       —       —       —       —       5,906       5,812  
 
     4.000       6/1/2011               —       —       —       —       26,589       26,165       —       26,589       26,165  
 
     4.000       9/15/2015               3,980       3,924       —       —       —       —       —       3,980       3,924  
 
     4.500       10/1/2014               —       —       —       —       22,035       21,726       —       22,035       21,726  
 
     4.500       5/1/2019               766       751       —       —       —       —       —       766       751  
 
     4.500       5/1/2019               25,550       25,037       —       —       —       —       —       25,550       25,037  
 
     4.500       11/1/2019               7,748       7,592       —       —       —       —       —       7,748       7,592  
 
     4.500       12/1/2019               255       250       —       —       —       —       —       255       250  
 
     4.500       1/1/2020               3,754       3,679       —       —       —       —       —       3,754       3,679  
 
     5.000       9/1/2019               5,142       5,148       —       —       —       —       —       5,142       5,148  
 
     5.000       5/1/2034               1,832       1,794       —       —       —       —       —       1,832       1,794  
 
     5.500       5/1/2017               274       280       —       —       —       —       —       274       280  
 
     5.500       9/1/2017               977       998       —       —       —       —       —       977       998  
 
     5.500       12/1/2017               4,684       4,785       —       —       —       —       —       4,684       4,785  
 
     5.500       1/1/2019               22       22       —       —       —       —       —       22       22  
 
     5.500       7/1/2019               843       861       —       —       —       —       —       843       861  
 
     6.000       10/1/2006               83       84       —       —       —       —       —       83       84  
 
     6.000       3/1/2017               143       148       —       —       —       —       —       143       148  
 
     6.000       4/1/2017               147       152       —       —       —       —       —       147       152  
 
     6.000       8/1/2017               432       446       —       —       —       —       —       432       446  
 
     6.000       6/15/2031               1,093       1,116       —       —       —       —       —       1,093       1,116  
 
     6.750       3/15/2031               —       —       750       915       —       —       —       750       915  
 
     7.000       5/1/2019               1       1       —       —       —       —       —       1       1  
 
     7.000       6/15/2022               208       208       —       —       —       —       —       208       208  
 
     7.500       9/1/2015               198       208       —       —       —       —       —       198       208  
 
     8.500       9/15/2006               28       28       —       —       —       —       —       28       28  
 
     8.500       7/1/2030               159       173       —       —       —       —       —       159       173  
Federal National Mortgage Association
                                                                                                
 
     0.000       5/25/2023               1,295       982       —       —       —       —       —       1,295       982  
 
     3.570       9/25/2018               2,828       2,841       —       —       —       —       —       2,828       2,841  
 
     4.500       11/1/2014               —       —       —       —       4,807       4,758       —       4,807       4,758  
 
     5.000       4/25/2031               6,171       6,174       —       —       —       —       —       6,171       6,174  
 
     5.500       8/25/2017               —       —       1,590       1,614       —       —       —       1,590       1,614  
 
     5.500       2/1/2018               3,436       3,506       —       —       —       —       —       3,436       3,506  
 
     5.875       2/2/2006               —       —       —       —       8,959       9,115       —       8,959       9,115  
 
     6.000       3/1/2009               380       386       —       —       —       —       —       380       386  
 
     6.000       5/1/2009               88       89       —       —       —       —       —       88       89  
 
     6.000       1/1/2014               168       173       —       —       —       —       —       168       173  
 
     6.000       1/25/2016               251       252       —       —       —       —       —       251       252  
 
     6.000       2/1/2017               817       845       —       —       —       —       —       817       845  
 
     6.000       5/1/2017               382       395       —       —       —       —       —       382       395  
 
     6.000       12/18/2027               105       105       —       —       —       —       —       105       105  
 
     6.500       3/1/2012               77       81       —       —       —       —       —       77       81  
 
     6.500       7/1/2032               38       40       —       —       —       —       —       38       40  

Table of Contents

                                                                                                 
                                                       
                            Columbia Short Term Bond Fund     Nations Short Intermediate Government Fund     Nations Short-Term Income Fund              
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
 
     7.500       11/1/2009               —       —       —       —       63       64       —       63       64  
 
     7.500       8/1/2015               146       154       —       —       —       —       —       146       154  
 
     8.000       10/25/2006               10       10       —       —       —       —       —       10       10  
 
     8.000       5/1/2015               164       173       —       —       —       —       —       164       173  
 
     8.000       8/1/2030               59       64       —       —       —       —       —       59       64  
 
     8.000       5/1/2031               56       61       —       —       —       —       —       56       61  
 
     8.000       7/1/2031               114       122       —       —       —       —       —       114       122  
 
     9.000       4/1/2016               —       —       889       946       —       —       —       889       946  
Government National Mortgage Association
                                                                                               
 
     6.500       9/15/2013               180       189       —       —       —       —       —       180       189  
 
     6.500       3/15/2032               8       8       —       —       —       —       —       8       8  
 
     6.500       11/15/2033               710       742       —       —       —       —       —       710       742  
 
     7.000       4/15/2029               24       25       —       —       —       —       —       24       25  
 
     7.000       4/15/2029               126       134       —       —       —       —       —       126       134  
 
     7.000       8/15/2029               7       8       —       —       —       —       —       7       8  
 
     7.000       11/15/2013               147       155       —       —       —       —       —       147       155  
 
     3.375       4/20/2022  (j)             —       —       —       —       1,570       1,592       —       1,570       1,592  
 
     3.500       12/20/2026               8,195       8,141       —       —       —       —       —       8,195       8,141  
 
     5.000       5/16/2027               748       752       —       —       —       —       —       748       752  
TBA’s
                                                                                                
Federal Home Loan Mortgage Corp.
                                                                                               
 
     4.500       3/15/2020  (c)             —       —       —       —       18,000       17,618       —       18,000       17,618  
Federal National Mortgage Association
                                                                                               
 
     4.500       4/15/2005               —       —       15,000       14,663       —       —       —       15,000       14,663  
 
     5.000       4/15/2020  (c)             —       —       —       —       30,000       29,972       —       30,000       29,972  
 
     5.500       4/15/2020               —       —       15,000       15,281       —       —       —       15,000       15,281  
Government National Mortgage Association
                                                                                               
 
     3.375       4/20/2022               —       —       2,371       2,398       —       —       —       2,371       2,398  
 
     3.375       6/20/2029               —       —       1,434       1,459       —       —       —       1,434       1,459  
 
                                                                                        
Mortgage-Backed Obligations Total
                                     92,819               37,275               111,009                       241,104  
 
                                                                                        
TOTAL MORTGAGE-BACKED SECURITIES
                                     100,364               39,123               139,054                       278,541  
 
                                                                                        
INVESTMENT MANAGEMENT COMPANY
                     4.5 %                                                                        
Nations Cash Reserves (d)
   NA     NA               —       —       163,539       3,044       103,036       79,684       —       266,575       82,728  
 
                                                                                        
TOTAL INVESTMENT MANAGEMENT COMPANY
                                     —               3,044               79,684                       82,728  
 
                                                                                        
COLLATERALIZED MORTGAGE OBLIGATIONS
                     10.2 %                                                                        
Bank of America Mortgage Securities
     5.250       2/25/2018               1,835       1,838       —       —       —       —       —       1,835       1,838  
Bear Stearns Adjustable Rate Mortgage Trust
     3.515       6/25/2034               3,583       3,662       —       —       —       —       —       3,583       3,662  
Bear Stearns Alternative Trust
     3.370       9/25/2034               0       0       —       —       —       —       —       0       0  
Bear Stearns Asset Backed Securities Inc
     3.420       10/25/2034               —       —       —       —       13,472       13,504       —       13,472       13,504  
Citigroup Commercial Mortgage Trust
     4.733       10/15/2041               —       —       1,820       1,772       —       —       —       1,820       1,772  
Countrywide Alternative Loan Trust
     3.420       3/25/2034               1,438       1,437       —       —       —       —       —       1,438       1,437  
Countrywide Home Loan Mortgage Pass Through Trust
     3.420       8/25/2018               9,793       9,741       —       —       —       —       —       9,793       9,741  
Countrywide Home Loan Mortgage Pass Through Trust
     3.520       3/25/2034               7,003       7,010       —       —       —       —       —       7,003       7,010  
Countrywide Home Loan Mortgage Pass Through Trust
     5.000       1/25/2018               812       812       —       —       —       —       —       812       812  
Countrywide Home Loan Mortgage Pass Through Trust
     5.750       1/25/2033               23       23       —       —       —       —       —       23       23  
First Horizon Asset Securities Inc
     3.470       6/25/2018               2,225       2,234       —       —       —       —       —       2,225       2,234  
First Horizon Asset Securities Inc
     3.520       3/25/2018               6,488       6,521       —       —       —       —       —       6,488       6,521  
GMAC Mortgage Corp Loan Trust
     3.520       5/25/2018               4,418       4,418       —       —       —       —       —       4,418       4,418  
Homebanc Mortgage Trust
     3.390       12/25/2034               —       —       —       —       14,416       14,443       —       14,416       14,443  
IMPAC CMB Trust
     3.340       3/25/2035               —       —       —       —       17,330       17,330       —       17,330       17,330  
IMPAC Secured Assets CMN Owner Trust
     3.290       2/25/2035               —       —       —       —       22,000       21,989       —       22,000       21,989  
Merrill Lynch Mortgage Investors Inc
     0.896       12/15/2030               —       —       15,534       469       —       —       —       15,534       469  
MortgageIT Trust
     3.390       12/25/2034               —       —       —       —       17,438       17,466       —       17,438       17,466  
Nationslink Funding Corp
     6.888       11/10/2030               2,630       2,760       —       —       —       —       —       2,630       2,760  
Ocwen Residential MBS Corp
     7.000       10/25/2040               123       124       —       —       —       —       —       123       124  
PNC Mortgage Acceptance Corp
     5.910       3/12/2034               —       —       3,249       3,359       —       —       —       3,249       3,359  
PNC Mortgage Securities Corp
     0.000       4/28/2027               11       11       —       —       —       —       —       11       11  
Residential Accredit Loans Inc
     3.420       6/25/2034               9,417       9,417       —       —       —       —       —       9,417       9,417  

Table of Contents

                                                                                                 
                                                       
                            Columbia Short Term Bond Fund     Nations Short Intermediate Government Fund     Nations Short-Term Income Fund              
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Residential Accredit Loans Inc
     3.620       7/25/2032               155       155       —       —       —       —       —       155       155  
Residential Asset Securitization Trust
     3.470       2/25/2034               10,207       10,207       —       —       —       —       —       10,207       10,207  
Residential Funding Mortgage Securities I
     3.420       7/25/2018               9,120       9,132       —       —       —       —       —       9,120       9,132  
SACO I Inc
     7.000       8/25/2036               661       663       —       —       —       —       —       661       663  
Sears Corp.
     8.500       4/1/2017               100       100       —       —       —       —       —       100       100  
Small Business Administration
     3.375       6/25/2022               527       527       —       —       —       —       —       527       527  
Small Business Administration Participation Certificates
     4.880       11/1/2024               —       —       5,000       4,944       —       —       —       5,000       4,944  
Structured Asset Securities Corp
     5.500       7/25/2033               347       347       —       —       —       —       —       347       347  
Structured Asset Securities Corp
     5.500       5/25/2033               489       486       —       —       —       —       —       489       486  
Structured Asset Securities Corp
     5.750       4/25/2033               3,970       3,977       —       —       —       —       —       3,970       3,977  
Structured Asset Securities Corp
     6.000       9/25/2032               210       208       —       —       —       —       —       210       208  
Washington Mutual Mortgage Securities Corp.
     3.520       3/25/2018               3,950       3,971       —       —       —       —       —       3,950       3,971  
Washington Mutual Mortgage Securities Corp.
     3.520       6/25/2018               3,453       3,471       —       —       —       —       —       3,453       3,471  
Wells Fargo Mortgage Backed Securities Trust
     5.250       8/25/2033               6,148       6,201       —       —       —       —       —       6,148       6,201  
 
                                                                                        
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
                                     89,456               10,544               84,731                       184,731  
 
                                                                                        
 
GOVERNMENT AGENCIES AND OBLIGATIONS
                     21.8 %                                                                        
Foreign Government Bonds
                     1.5 %                                                                        
A.I.D. Morocco
     3.431       5/1/2023               463       457       —       —       —       —       —       463       457  
Canadian Government Bond
     6.750       8/28/2006               1,000       1,041       —       —       —       —       —       1,000       1,041  
Province of Ontario
     3.500       9/17/2007               3,500       3,445       —       —       —       —       —       3,500       3,445  
Province of Quebec Canada
     5.500       4/11/2006               —       —       —       —       3,368       3,435       —       3,368       3,435  
Province of Quebec Canada
     6.500       1/17/2006               1,100       1,124       —       —       —       —       —       1,100       1,124  
Republic of Italy
     2.500       3/31/2006               1,950       1,929       —       —       —       —       —       1,950       1,929  
Swedish Export Credit
     2.875       1/26/2007               —       —       —       —       5,000       4,897       —       5,000       4,897  
United Mexican States
     4.625       10/8/2008               3,600       3,548       —       —       7,000       6,913       —       10,600       10,460  
 
                                                                                        
Foreign Government Bonds Totals
                                     11,544               —               15,244                       26,788  
 
                                                                                        
 
U.S. Government Agencies and Obligations
                     20.3 %                                                                        
Federal Farm Credit Bank
                                                                                                
 
     2.625       9/17/2007               —       —       700       676       —       —       —       700       676  
 
     4.900       3/21/2006               —       —       8,000       8,088       —       —       —       8,000       8,088  
Federal Home Loan Bank
                                                                                                
 
     1.500       5/13/2005               —       —       1,500       1,497       —       —       —       1,500       1,497  
 
     2.000       2/13/2006               —       —       6,000       5,919       —       —       —       6,000       5,919  
 
     2.250       9/13/2005               5,300       5,278       —       —       —       —       —       5,300       5,278  
 
     2.625       7/15/2008               —       —       1,000       951       —       —       —       1,000       951  
 
     3.000       5/15/2006               500       496       —       —       —       —       —       500       496  
 
     3.625       11/14/2008               —       —       2,500       2,444       —       —       —       2,500       2,444  
 
     3.875       6/14/2013  (a)             —       —       5,050       4,778       —       —       —       5,050       4,778  
 
     4.500       11/15/2012  (a)             —       —       5,500       5,454       —       —       —       5,500       5,454  
 
     4.875       5/15/2007               —       —       2,250       2,288       —       —       —       2,250       2,288  
Federal Home Loan Mortgage Corporation
                                                                                                
 
     1.500       8/15/2005               —       —       2,000       1,989       —       —       —       2,000       1,989  
 
     2.125       11/15/2005               —       —       3,500       3,471       —       —       —       3,500       3,471  
 
     3.875       1/12/2009  (a)             —       —       5,000       4,899       —       —       —       5,000       4,899  
 
     4.375       7/30/2009               —       —       15,000       14,755       —       —       —       15,000       14,755  
 
     4.750       12/8/2010               —       —       17,000       16,928       —       —       —       17,000       16,928  
Federal National Mortgage Association
                                                                                               
 
     2.375       2/15/2007  (a)             —       —       20,400       19,819       —       —       —       20,400       19,819  
 
     4.125       4/15/2014  (a)             —       —       3,000       2,848       —       —       —       3,000       2,848  
 
     4.625       10/15/2013  (a)             —       —       4,000       3,945       —       —       —       4,000       3,945  
 
     5.000       1/15/2007               —       —       5,900       6,007       —       —       —       5,900       6,007  
 
     5.375       11/15/2011               —       —       2,000       2,076       —       —       —       2,000       2,076  
 
     6.125       3/15/2012               —       —       3,000       3,246       —       —       —       3,000       3,246  
 
     6.625       11/15/2010               —       —       3,400       3,739       —       —       —       3,400       3,739  
U.S. Treasury Inflation Index Note
     3.625       1/15/2008  (a)             14,276       15,354       —       —       30,098       32,370       —       44,374       47,724  
U.S. Treasury Bond
                                                                                               
 
     6.250       8/15/2023  (a)             —       —       4,850       5,647       —       —       —       4,850       5,647  
 
     6.875       8/15/2025               —       —       1,025       1,286       —       —       —       1,025       1,286  

Table of Contents

                                                                                                 
                                                       
                            Columbia Short Term Bond Fund     Nations Short Intermediate Government Fund     Nations Short-Term Income Fund              
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
U.S. Treasury Note
                                                                                               
 
     2.000       8/31/2005  (a)             —       —       21,800       21,708       —       —       —       21,800       21,708  
 
     2.875       11/30/2006  (a)             —       —       52,500       51,786       —       —       —       52,500       51,786  
 
     3.000       11/15/2007  (a)             —       —       21,215       20,754       —       —       —       21,215       20,754  
 
     3.125       9/15/2008  (a)             —       —       —       —       18,000       17,477       —       18,000       17,477  
 
     3.375       10/15/2009  (a)             4,000       3,873       —       —       —       —       —       4,000       3,873  
 
     3.500       11/15/2006  (a)             4,140       4,127       —       —       —       —       —       4,140       4,127  
 
     3.625       1/15/2010  (a)             —       —       65,070       63,512       —       —       —       65,070       63,512  
 
     4.250       11/15/2014  (a)             —       —       9,955       9,749       —       —       —       9,955       9,749  
 
                                                                                        
U.S. Government Agencies and Obligations Totals
                                     29,127               290,260               49,847                       369,234  
 
                                                                                        
TOTAL GOVERNMENT AGENCIES AND OBLIGATIONS
                                     40,671               290,260               65,091                       396,022  
 
                                                                                        
 
SHORT-TERM OBLIGATIONS
                     4.6 %                                                                        
U.S. Government Agencies and Obligations
                     3.3 %                                                                        
Federal Home Loan Bank Discount Note
     0.000                       —       —       —       —       30,000       29,985       —       30,000       29,985  
Federal Home Loan Bank Discount Note
     0.000                       —       —       30,000       29,960       —       —       —       30,000       29,960  
 
                                                                                        
U.S. Government Agencies and Obligations Totals
                                     —               29,960               29,985                       59,945  
 
                                                                                        
 
Repurchase Agreements (h)
                     11.4 %                                                                        
 
Repurchase agreement with State Street Bank & Trust Co., dated 03/31/05, due 04/01/05 at 2.45% collateralized by a U.S. Treasury Bond maturing 08/25/22 market value of $22,806 (repurchase proceeds $22,806)
                             22,806       22,806                                               22,806       22,806  
 
Repurchase agreement with ABN AMRO, Inc. dated 03/31/05 due 04/01/05 at 2.830%, collateralized by U.S. Government Agency securities with various maturities to 05/15/29, market value $29,642 (repurchase proceeds $29,365)
                                             29,363       29,365                               29,363       29,365  
 
Repurchase agreement with ABN AMRO, Inc. dated 03/31/05 due 04/01/05 at 2.830%, collateralized by U.S. Government Agency securities with various maturities to 05/15/29, market value $6,264 (repurchase proceeds $6,205)
                                                             6,205       6,205               6,205       6,205  
 
Repurchase agreement with Credit Suisse First Boston Corp. dated 03/31/05, due 04/01/05 at 2.849% collateralized by U.S. Government Agency securities with various maturities to 11/15/30, market value $50,292 (repurchase proceeds $50,015)
                                             50,011       50,015                               50,011        50,015   
 
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.840%, collateralized by U.S. Government Agency securities with various maturities to 05/20/33, market value $7,544 (repurchase proceeds $7,447)
                                                             7,446       7,447               7,446        7,447   
 
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.840%, collateralized by U.S. Government Agency securities with various maturities to 05/20/33, market value $35,699 (repurchase proceeds $35,239)
                                             35,236       35,239                               35,236       35,239  
 
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.920%, collateralized by U.S. Government Agency securities with various maturities to 03/231/35, market value $9,848 (repurchase proceeds $9,696)
                                                             9,695       9,696               9,695       9,696  
 
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.920%, collateralized by U.S. Government Agency securities with various maturities to 03/31/35, market value $46,597 (repurchase proceeds $45,877)
                                             45,873       45,877                               45,873       45,877  
 
                                                                                        
Repurchase Agreement Totals
                                     22,806               160,496               23,348                       206,649  
 
                                                                                        
TOTAL SHORT-TERM OBLIGATIONS
                                     22,806               190,456               53,332                       266,594  
 
                                                                                        
 
Total Investments
                     104.3 %             477,112               544,671               1,059,454                       2,081,237  
Other Assets & Liabilities, net
                     -14.4 %             1,679               (188,830 )             (75,353 )     (120 )             (262,624 )
 
                                                                                    
Net Assets
                     100.0 %             478,791               355,841               984,101       (120 )             1,818,613  
 
                                                                                    
Investments at cost
                                     481,426               548,523               1,072,165                       2,102,114  
 
                                                                                        

Notes to Investment Portfolio:

(a)   All or a portion of this security was on loan at March 31, 2005. The aggregate cost and Market value of securities on loan at March 31, 2005 is $181,527 and $178,957, respectively.
 
(b)   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 March 31, 2005, these securities amounted to $6,691, which represents 0.3% of net assets.
 
(c)   Security, or a portion thereof, purchased on a delayed delivery basis.
 
(d)   Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by Banc of America Capital Management, LLC.
 
(e)   Security pledged as collateral for open futures contracts and TBAs.
 
(f)   Step bond.
 
(g)   Loan participation agreement.
 
(h)   This amount represents cash collateral received from securities lending activity.
 
(i)   Variable rate demand notes. These securities are payable upon demand and are secured by letters of credit or other credit support agreements from banks. The interest rates change periodically and the interest rates shown reflect the rates at March 31, 2005.
 
(j)   Floating rate note. The interest rate shown reflects the rate as of March 31, 2005.
 
(k)   Cost for federal income tax purposes is $458,621 for the Columbia Short Term Bond Fund, $548,566 for the Nations Short Intermediate Government Fund, $1,072,165 for the Nations Short Term Income Fund, and $2,079,352 for the funds combined.

ACRONYM
TBA — To be announced

Futures contracts
At March 31, 2005 the following fund had future contracts open:

                                 
            value of contract     market value     unrealized appreciation  
Short Intermediate Government Fund   number of contracts     when opened     of contracts     (depreciation)  
                                 
U.S. 5 year Treasury Note Futures (long position) expiring June 2005
     10       1,076       1,070       (6 )
U.S. 10 year Treasury Note Futures (long position) expiring June 2005
     183       20,166       19,996       (170 )
U.S. 5 year Treasury Bond Futures (short position) expiring June 2005
     (83 )     (9,396 )     (9,244 )     152  
 
                              
Total net unrealized depreciation
                             (24 )

Table of Contents

Pro Forma Combining Portfolio of Investments (Unaudited)
As of 3/31/05

                                                                                 
                            Columbia Short Term Bond Fund     Nations Short-Term Income Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
CORPORATE FIXED-INCOME BONDS & NOTES
                     39.6 %                                                        
BASIC MATERIALS
                     0.7 %                                                        
Chemicals
                     0.2 %                                                        
Equistar Chemicals LP
     6.500       2/15/2006               —       —       2,500       2,525       —       2,500       2,525  
Lyondell Chemical Co
     9.875       5/1/2007               —       —       963       987       —       963       987  
 
                                                                          
Chemicals Total
                                     —               3,512                       3,512  
 
                                                                          
Forest Products and Paper
                     0.5 %                                                        
International Paper Co
     4.250       1/15/2009               —       —       4,000       3,946       —       4,000       3,946  
Louisiana-Pacific Corp
     8.500       8/15/2005               —       —       2,750       2,790       —       2,750       2,790  
 
                                                                          
Forest Products and Paper Total
                                     —               6,736                       6,736  
 
                                                                          
TOTAL BASIC MATERIALS
                                     —               10,248                       10,248  
 
                                                                          
COMMUNICATIONS
                     4.4 %                                                        
Media
                     2.0 %                                                        
Comcast Cable Communications
     6.375       1/30/2006               —       —       2,510       2,554       —       2,510       2,554  
Gannett Co Inc
     4.950       4/1/2005               2,000       2,000       —       —       —       2,000       2,000  
Gannett Co Inc
     5.500       4/1/2007               —       —       5,000       5,124       —       5,000       5,124  
Jones Intercable Inc
     7.625       4/15/2008               1,875       2,020       —       —       —       1,875       2,020  
Lenfest Communications Inc
     8.375       11/1/2005               —       —       2,750       2,813       —       2,750       2,813  
Reed Elsevier Capital Inc
     7.000       5/15/2005               —       —       1,000       1,004       —       1,000       1,004  
TCI Communications
     7.250       8/1/2005               1,125       1,138       —       —       —       1,125       1,138  
Time Warner Inc
     6.125       4/15/2006               2,460       2,512       —       —       —       2,460       2,512  
Time Warner Inc
     8.110       8/15/2006               —       —       4,641       4,862       —       4,641       4,862  
Viacom Inc
     5.625       5/1/2007               —       —       3,500       3,582       —       3,500       3,582  
 
                                                                          
Media Total
                                     7,670               19,940                       27,610  
 
                                                                          
Telecommunications
                     2.3 %                                                        
Cingular Wireless Services Inc
     7.500       5/1/2007               1,970       2,095       —       —       —       1,970       2,095  
Deutsche Telekom International Finance BV (f)
     8.500       6/15/2010               1,450       1,675       4,000       4,600       —       5,450       6,276  
GTE Southwest Inc
     6.000       1/15/2006               3,725       3,791       —       —       —       3,725       3,791  
SBC Communications Inc
     5.750       5/2/2006               1,600       1,629       3,000       3,055       —       4,600       4,684  
Sprint Capital Corp
     6.375       5/1/2009               1,250       1,321       2,500       2,641       —       3,750       3,961  
Verizon Global Funding Corp
     7.250       12/1/2010               —       —       6,000       6,659       —       6,000       6,659  
Verizon Global Funding Corp
     7.600       3/15/2007               600       636       —       —       —       600       636  
Vodafone Group PLC
     7.750       2/15/2010               2,350       2,649       4,000       4,518       —       6,350       7,167  
 
                                                                          
Telecommunications Total
                                     11,702               21,472                       33,174  
 
                                                                          
TOTAL COMMUNICATIONS
                                     21,467               41,412                       62,879  
 
                                                                          
CONSUMER CYCLICAL
                     4.0 %                                                        
Auto Manufacturers
                     0.6 %                                                        
DaimlerChrysler NA Holding Corp
     4.750       1/15/2008               1,575       1,573       3,000       2,986       —       4,575       4,559  
Toyota Motor Credit Corp
     2.800       1/18/2006               —       —       4,000       3,968       —       4,000       3,968  
 
                                                                          
Auto Manufacturers Totals
                                     1,573               6,954                       8,527  
 
                                                                          
Auto Parts and Equipment
                     0.1 %                                                        
Lear Corp
     7.960       5/15/2005               —       —       1,500       1,507       —       1,500       1,507  
 
                                                                          
Auto Parts and Equipment Total
                                     —               1,507                       1,507  
 
                                                                          

Page 1 of 11

Table of Contents

                                                                                 
                            Columbia Short Term Bond Fund     Nations Short-Term Income Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Home Builders
                     0.4 %                                                        
DR Horton Inc
     10.500       4/1/2005               —       —       1,675       1,675       —       1,675       1,675  
KB Home
     9.500       2/15/2011               —       —       2,000       2,118       —       2,000       2,118  
Toll Corp
     8.000       5/1/2009               —       —       2,000       2,030       —       2,000       2,030  
 
                                                                          
Home Builders Totals
                                     —               5,823                       5,823  
 
                                                                          
Housewares
                     0.5 %                                                        
Newell Rubbermaid Inc
     2.000       5/1/2005               3,725       3,722       4,000       3,994       —       7,725       7,716  
 
                                                                          
Housewares Totals
                                     3,722               3,994                       7,716  
 
                                                                          
Lodging
                     0.8 %                                                        
Ameristar Casinos Inc
     10.750       2/15/2009               —       —       2,000       2,185       —       2,000       2,185  
Harrah’s Operating Co Inc
     7.875       12/15/2005               —       —       2,000       2,040       —       2,000       2,040  
HMH Properties Inc
     7.875       8/1/2008               —       —       702       716       —       702       716  
ITT Corp
     6.750       11/15/2005               —       —       1,500       1,511       —       1,500       1,511  
MGM Mirage
     7.250       10/15/2006               —       —       1,500       1,549       —       1,500       1,549  
Park Place Entertainment
     7.875       12/15/2005               —       —       2,895       2,957       —       2,895       2,957  
 
                                                                          
Lodging Totals
                                     —               10,958                       10,958  
 
                                                                          
Retail
                     1.4 %                                                        
Costco Wholesale Corp
     5.500       3/15/2007               640       656       —       —       —       640       656  
Home Depot Inc (a)
     5.375       4/1/2006               —       —       5,000       5,062       —       5,000       5,062  
Lowe’s Companies Inc
     7.500       12/15/2005               1,675       1,716       —       —       —       1,675       1,716  
Target Corp
     5.950       5/15/2006               1,000       1,022       5,000       5,103       —       6,000       6,126  
Wal-Mart Stores Inc
     4.000       1/15/2010               —       —       7,485       7,285       —       7,485       7,285  
 
                                                                          
Retail Totals
                                     3,394               17,450                       20,844  
 
                                                                          
Toys/Games/Hobbies
                     0.2 %                                                        
Hasbro Inc
     5.600       11/1/2005               —       —       2,306       2,325       —       2,306       2,325  
 
                                                                          
Toys/Games/Hobbies Totals
                                     —               2,325                       2,325  
 
                                                                          
TOTAL CONSUMER CYCLICAL
                                     8,689               49,011                       57,700  
 
                                                                          
CONSUMER NON-CYCLICAL
                     4.2 %                                                        
Beverages
                     0.9 %                                                        
Bottling Group LLC
     2.450       10/16/2006               4,300       4,202       —       —       —       4,300       4,202  
Coca-Cola Enterprises Inc
     5.750       11/1/2008               2,275       2,361       —       —       —       2,275       2,361  
Constellation Brands Inc
     8.625       8/1/2006               —       —       2,000       2,090       —       2,000       2,090  
Diageo Capital PLC
     3.500       11/19/2007               —       —       5,000       4,909       —       5,000       4,909  
 
                                                                          
Beverages Totals
                                     6,563               6,999                       13,561  
 
                                                                          
Cosmetics/Personal Care
                     0.5 %                                                        
Procter & Gamble Co
     4.750       6/15/2007               725       735       5,950       6,032       —       6,675       6,767  
 
                                                                          
Cosmetics/Personal Care Totals
                                     735               6,032                       6,767  
 
                                                                          
Food
                     1.3 %                                                        
General Mills Inc
     2.625       10/24/2006               2,800       2,738       —       —       —       2,800       2,738  
General Mills Inc
     5.125       2/15/2007               —       —       5,710       5,806       —       5,710       5,806  
Kellogg Co
     6.000       4/1/2006               1,250       1,275       1,900       1,934       —       3,150       3,209  

Page 2 of 11

Table of Contents

                                                                                 
                            Columbia Short Term Bond Fund     Nations Short-Term Income Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Kroger Co
     7.650       4/15/2007               1,585       1,689       —       —       —       1,585       1,689  
Kroger Co
     7.800       8/15/2007               —       —       2,860       3,062       —       2,860       3,062  
Safeway Inc
     4.950       8/16/2010               1,900       1,882       —       —       —       1,900       1,882  
 
                                                                          
Food Totals
                                     7,584               10,802                       18,386  
 
                                                                          
Healthcare Services
                     0.7 %                                                        
UnitedHealth Group Inc
     3.375       8/15/2007               1,415       1,384       4,000       3,917       —       5,415       5,301  
WellPoint Inc
     4.875       8/1/2005               2,225       2,235       —       —       —       2,225       2,235  
WellPoint Health Networks
     6.375       6/15/2006               —       —       3,000       3,076       —       3,000       3,076  
 
                                                                          
Healthcare Services Totals
                                     3,619               6,993                       10,612  
 
                                                                          
Household Products/Wares
                     0.2 %                                                        
Fortune Brands Inc
     2.875       12/1/2006               3,275       3,213       —       —       —       3,275       3,213  
 
                                                                          
Household Products/Wares Totals
                                     3,213               —                       3,213  
 
                                                                          
Pharmaceuticals
                     0.6 %                                                        
Abbott Laboratories
     5.625       7/1/2006               —       —       5,000       5,093       —       5,000       5,093  
GlaxoSmithKline Capital PLC
     2.375       4/16/2007               —       —       3,000       2,903       —       3,000       2,903  
 
                                                                          
Pharmaceuticals Totals
                                     —               7,996                       7,996  
 
                                                                          
TOTAL CONSUMER NON-CYCLICAL
                                     21,713               38,822                       60,535  
 
                                                                          
ENERGY
                     2.3 %                                                        
Oil and Gas
                     1.7 %                                                        
BP Capital Markets
     4.000       4/29/2005               —       —       3,000       3,002       —       3,000       3,002  
ChevronTexaco Capital Co
     3.500       9/17/2007               3,350       3,302       —       —       —       3,350       3,302  
Devon Energy Corp
     2.750       8/1/2006               2,825       2,777       4,000       3,912       —       6,825       6,690  
Marathon Oil Corp
     5.375       6/1/2007               2,725       2,784       —       —       —       2,725       2,784  
Parker & Parsley Petroleum Co
     8.875       4/15/2005               —       —       2,472       2,476       —       2,472       2,476  
USX Corp
     6.850       3/1/2008               —       —       5,550       5,899       —       5,550       5,899  
 
                                                                          
Oil and Gas Totals
                                     8,863               15,289                       24,152  
 
                                                                          
Pipelines
                     0.5 %                                                        
Kinder Morgan Energy Partners LP
     6.750       3/15/2011               2,200       2,384       4,325       4,692       —       6,525       7,076  
 
                                                                          
Pipelines Totals
                                     2,384               4,692                       7,076  
 
                                                                          
TOTAL ENERGY
                                     11,248               19,981                       31,228  
 
                                                                          
FINANCIALS
                     19.3 %                                                        
Banks
                     3.6 %                                                        
Fifth Third Bank
     2.700       1/30/2007               2,075       2,023       5,191       5,052       —       7,266       7,075  
Key Bank N.A.
     4.100       6/30/2005               —       —       1,980       1,985       —       1,980       1,985  
Marshall & Ilsley Corp
     4.375       8/1/2009               2,670       2,635       —       —       —       2,670       2,635  
Marshall & Ilsley Corp
     5.750       9/1/2006               —       —       5,000       5,127       —       5,000       5,127  
US Bancorp
     2.750       3/30/2006               —       —       11,000       10,872       —       11,000       10,872  
US Bancorp
     3.125       3/15/2008               5,750       5,561       —       —       —       5,750       5,561  
Wachovia Corp
     3.500       8/15/2008               3,720       3,614       —       —       —       3,720       3,614  
Wachovia Corp
     3.625       2/17/2009               —       —       10,000       9,678       —       10,000       9,678  
Wells Fargo
     3.000       3/10/2008               5,000       4,963       —       —       —       5,000       4,963  
 
                                                                          
Banks Totals
                                     18,797               32,714                       51,511  
 
                                                                          

Page 3 of 11

Table of Contents

                                                                                 
                            Columbia Short Term Bond Fund     Nations Short-Term Income Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Capital Markets
                     0.5 %                                                        
Merrill Lynch & Co.
     4.125       1/15/2009               2,500       2,457       5,500       5,394       —       8,000       7,851  
 
                                                                          
Capital Markets Totals
                                     2,457               5,394                       7,851  
 
                                                                          
Diversified Financial Services
                     12.8 %                                                        
American Express Credit Corp
     3.000       5/16/2008               4,000       3,839       —       —       —       4,000       3,839  
American General Finance Corp
     3.000       11/15/2006               3,000       2,945       —       —       —       3,000       2,945  
American General Finance Corp
     5.875       7/14/2006               —       —       6,125       6,261       —       6,125       6,261  
Bank One N.A.
     5.500       3/26/2007               —       —       9,500       9,745       —       9,500       9,745  
Bear Stearns Cos Inc.
     3.000       3/30/2006               —       —       9,500       9,411       —       9,500       9,411  
Bear Stearns Cos Inc.
     6.500       5/1/2006               2,600       2,671       —       —       —       2,600       2,671  
Capital One Bank
     4.875       5/15/2008               1,625       1,638       2,500       2,518       —       4,125       4,156  
Caterpillar Financial Services Corp
     3.625       11/15/2007               3,350       3,290       —       —       —       3,350       3,290  
Caterpillar Financial Services Corp
     5.950       5/1/2006               —       —       8,000       8,167       —       8,000       8,167  
CIT Group Inc
     4.125       2/21/2006               1,700       1,705       —       —       —       1,700       1,705  
CIT Group Inc
     5.500       11/30/2007               —       —       4,000       4,096       —       4,000       4,096  
Citigroup Inc
     5.500       8/9/2006               —       —       4,000       4,075       —       4,000       4,075  
Citigroup Inc
     6.750       12/1/2005               2,700       2,756       4,000       4,079       —       6,700       6,835  
Countrywide Home Loans Inc
     2.875       2/15/2007               500       487       —       —       —       500       487  
Countrywide Home Loans Inc
     4.125       9/15/2009               —       —       7,000       6,745       —       7,000       6,745  
Diageo Finance BV
     3.000       12/15/2006               —       —       3,000       2,942       —       3,000       2,942  
Ford Motor Credit Co
     7.375       10/28/2009               4,000       4,033       7,500       7,533       —       11,500       11,566  
General Electric Capital Corp
     5.000       2/15/2007               —       —       5,000       5,076       —       5,000       5,076  
General Electric Capital Corp
     6.500       12/10/2007               —       —       11,000       11,585       —       11,000       11,585  
General Motors Acceptance Corp
     7.750       1/19/2010               2,400       2,323       5,000       4,802       —       7,400       7,125  
Goldman Sachs Group Inc
     4.125       1/15/2008               2,560       2,547       6,000       5,949       —       8,560       8,496  
Household Finance Corp
     6.400       6/17/2008               3,225       3,396       7,500       7,908       —       10,725       11,304  
John Deere Capital Corp
     3.900       1/15/2008               3,000       2,957       4,000       3,940       —       7,000       6,897  
JPMorgan Chase & Co
     3.800       10/2/2009               4,000       3,856       —       —       —       4,000       3,856  
Lehman Brothers Holdings Inc
     4.000       1/22/2008               2,500       2,473       7,000       6,909       —       9,500       9,382  
Midland Funding II
     11.750       7/23/2005               —       —       635       648       —       635       648  
Morgan Stanley
     3.875       1/15/2009               2,400       2,346       7,000       6,807       —       9,400       9,153  
National Rural Utilities Cooperative Finance Corp
     6.000       5/15/2006               —       —       4,000       4,089       —       4,000       4,089  
Pemex Finance Ltd
     6.550       2/15/2008               —       —       459       473       —       459       473  
Pitney Bowes Credit Corp
     5.750       8/15/2008               1,525       1,585       —       —       —       1,525       1,585  
Security Capital Group Inc
     7.150       6/15/2007               6,315       6,669       —       —       —       6,315       6,669  
SLM Corp
     5.625       4/10/2007               4,000       4,104       —       —       —       4,000       4,104  
Wells Fargo Financial Inc
     4.875       6/12/2007               —       —       4,000       4,063       —       4,000       4,063  
 
                                                                          
Diversified Financial Services Totals
                                     55,618               127,822                       183,440  
 
                                                                          
Insurance
                     0.9 %                                                        
Allstate Financial Global Funding (b)
     6.150       2/1/2006               —       —       1,500       1,528       —       1,500       1,528  
Allstate Financial Global Funding II
     2.625       10/22/2006               2,950       2,882       —       —       —       2,950       2,882  
Genworth Financial Inc
     4.750       6/15/2009               2,010       2,015       —       —       —       2,010       2,015  
Hartford Financial Services Group Inc
     2.375       6/1/2006               —       —       699       683       —       699       683  
Prudential Insurance Co of America (b)
     6.375       7/23/2006               —       —       5,000       5,163       —       5,000       5,163  
 
                                                                          
Insurance Totals
                                     4,897               7,374                       12,271  
 
                                                                          
Investment Companies
                     0.4 %                                                        
Credit Suisse First Boston USA Inc
     4.625       1/15/2008               1,630       1,639       4,000       4,018       —       5,630       5,657  

Page 4 of 11

Table of Contents

                                                                                 
                            Columbia Short Term Bond Fund     Nations Short-Term Income Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
 
                                                                          
Investment Companies Totals
                                     1,639               4,018                       5,657  
 
                                                                          
Real Estate Investment Trusts
                     0.1 %                                                        
Health Care Property Investors Inc
     6.875       6/8/2005               2,075       2,087       —       —       —       2,075       2,087  
 
                                                                          
Real Estate Investment Trusts Totals
                                     2,087               —                       2,087  
 
                                                                          
Savings and Loans
                     1.0 %                                                        
Washington Mutual Inc
     4.200       1/15/2010               2,855       2,782       6,000       5,839       —       8,855       8,621  
World Savings Bank
     4.125       3/10/2008               2,000       1,984       3,750       3,716       —       5,750       5,700  
 
                                                                          
Savings and Loans Totals
                                     4,766               9,555                       14,321  
 
                                                                          
TOTAL FINANCIALS
                                     90,260               186,877                       277,137  
 
                                                                          
INDUSTRIALS
                     1.7 %                                                        
Aerospace/Defense
                     0.3 %                                                        
Boeing Co
     8.100       11/15/2006               1,820       1,928       —       —       —       1,820       1,928  
United Technologies Corp
     4.875       11/1/2006               2,475       2,505       —       —       —       2,475       2,505  
 
                                                                          
Aerospace/Defense Totals
                                     4,433               —                       4,433  
 
                                                                          
Building Materials
                     0.2 %                                                        
American Standard Inc
     7.375       4/15/2005               —       —       750       751       —       750       751  
Hanson Overseas BV
     6.750       9/15/2005               —       —       1,313       1,331       —       1,313       1,331  
 
                                                                          
Building Materials Totals
                                     —               2,082                       2,082  
 
                                                                          
Environmental Control
                     0.4 %                                                        
Waste Management Inc
     7.125       10/1/2007               2,430       2,590       —       —       —       2,430       2,590  
Waste Management Inc
     7.375       8/1/2010               —       —       3,000       3,343       —       3,000       3,343  
 
                                                                          
Environmental Control Totals
                                     2,590               3,343                       5,933  
 
                                                                          
Miscellaneous — Manufacturing
                     0.1 %                                                        
Honeywell International Inc
     5.125       11/1/2006               1,620       1,648       —       —       —       1,620       1,648  
 
                                                                          
Miscellaneous — Manufacturing Totals
                                     1,648               —                       1,648  
 
                                                                          
Packaging and Containers
                     0.3 %                                                        
Ball Corp
     7.750       8/1/2006               —       —       2,594       2,675       —       2,594       2,675  
Smurfit-Stone Container Corp.
     9.750       2/1/2011               —       —       2,000       2,140       —       2,000       2,140  
 
                                                                          
Packaging and Containers Totals
                                     —               4,815                       4,815  
 
                                                                          
Transportation
                     0.3 %                                                        
CSX Corp
     6.460       6/22/2005               2,250       2,265       —       —       —       2,250       2,265  
Canadian National Railway Co
     6.450       7/15/2006               910       936       —       —       —       910       936  
Union Pacific Corp
     3.875       2/15/2009               1,825       1,774       —       —       —       1,825       1,774  
 
                                                                          
Transportation Totals
                                     4,975               —                       4,975  
 
                                                                          
TOTAL INDUSTRIALS
                                     13,646               10,241                       23,887  
 
                                                                          
TECHNOLOGY
                     1.3 %                                                        
Computers
                     1.0 %                                                        
Hewlett-Packard Co
     5.500       7/1/2007               —       —       5,000       5,131       —       5,000       5,131  
International Business Machines Corp
     2.375       11/1/2006               2,700       2,635       —       —       —       2,700       2,635  
International Business Machines Corp
     4.875       10/1/2006               —       —       5,000       5,067       —       5,000       5,067  

Page 5 of 11

Table of Contents

                                                                                 
                            Columbia Short Term Bond Fund     Nations Short-Term Income Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Unisys Corp (a)
     7.875       4/1/2008               —       —       1,500       1,508       —       1,500       1,508  
 
                                                                          
Computer Totals
                                     2,635               11,706                       14,341  
 
                                                                          
Software
                     0.3 %                                                        
First Data Corp
     4.700       11/1/2006               —       —       4,775       4,817       —       4,775       4,817  
 
                                                                          
Software Totals
                                     —               4,817                       4,817  
 
                                                                          
TOTAL TECHNOLOGY
                                     2,635               16,522                       19,157  
 
                                                                          
UTILITIES
                     2.0 %                                                        
Electric
                     1.4 %                                                        
AES Corp. (a)
     8.500       11/1/2007               —       —       1,321       1,341       —       1,321       1,341  
Exelon Generation Co.
     6.950       6/15/2011               1,850       2,037       —       —       —       1,850       2,037  
Kansas Gas & Electric
     6.500       8/1/2005               —       —       2,425       2,450       —       2,425       2,450  
Scottish Power PLC (a)
     4.910       3/15/2010               2,400       2,403       4,500       4,501       —       6,900       6,904  
Virginia Electric and Power Co
     5.375       2/1/2007               2,400       2,450       1,000       1,020       —       3,400       3,470  
Virginia Electric and Power Co
     5.750       3/31/2006               —       —       3,562       3,622       —       3,562       3,622  
 
                                                                          
Electric Totals
                                     6,890               12,932                       19,823  
 
                                                                          
Electric Utilities
                     0.2 %                                                        
Centerpoint Energy Bank (g)
   NA     11/11/2005               —       —       3,000       3,180       —       3,000       3,180  
 
                                                                          
Electric Utilities Totals
                                     —               3,180                       3,180  
 
                                                                          
Gas
                     0.3 %                                                        
Sempra Energy
     4.750       5/15/2009               1,150       1,144       2,660       2,645       —       3,810       3,788  
 
                                                                          
Gas Totals
                                     1,144               2,645                       3,788  
 
                                                                          
TOTAL UTILITIES
                                     8,034               18,757                       26,791  
 
                                                                          
TOTAL CORPORATE FIXED-INCOME BONDS & NOTES                                     177,692               391,871                       569,563  
 
                                                                          
ASSET-BACKED SECURITIES
                     20.4 %                                                        
Aames Mortgage Investment Trust
     3.360       1/25/2035               —       —       17,523       17,578       —       17,523       17,578  
ABFS Mortgage Loan Trust
     4.428       12/15/2033               134       126       —       —       —       134       126  
Advanta Mortgage Loan Trust
     7.750       10/25/2026               62       63       —       —       —       62       63  
American Express Credit Account Master Trust
     1.690       1/15/2009               —       —       4,052       3,947       —       4,052       3,947  
AmeriCredit Automobile Receivables Trust
     5.370       6/12/2008               439       443       1,098       1,107       —       1,537       1,550  
Amresco Residential Securities Mortgage Loan Trust
     3.260       7/25/2028               194       195       —       —       —       194       195  
Amresco Residential Securities Mortgage Loan Trust
     3.440       6/25/2027               50       50       —       —       —       50       50  
BMW Vehicle Owner Trust
     1.940       2/25/2007               —       —       4,254       4,236       —       4,254       4,236  
BMW Vehicle Owner Trust
     2.530       2/25/2008               —       —       2,000       1,973       —       2,000       1,973  
Capital Auto Receivables Asset Trust
     2.270       1/17/2006               —       —       688       688       —       688       688  
Capital Auto Receivables Asset Trust
     4.180       10/15/2007               —       —       221       221       —       221       221  
Chase Credit Card Master Trust
     3.710       7/16/2007               —       —       3,216       3,217       —       3,216       3,217  
Chase Manhattan Auto Owner Trust
     1.520       5/15/2007               —       —       2,881       2,861       —       2,881       2,861  
Chase Manhattan Auto Owner Trust
     2.080       5/15/2008               —       —       10,000       9,837       —       10,000       9,837  
Chase Manhattan Auto Owner Trust
     2.260       11/15/2007               —       —       1,500       1,484       —       1,500       1,484  
Chase Manhattan Auto Owner Trust
     2.570       2/16/2010               —       —       3,953       3,843       —       3,953       3,843  
Chase Manhattan Auto Owner Trust
     4.240       9/15/2008               —       —       741       744       —       741       744  
CIT Equipment Collateral
     2.200       3/20/2008               3,050       3,001       —       —       —       3,050       3,001  
CIT Equipment Collateral
     3.970       12/21/2009               —       —       407       402       —       407       402  
CIT Equipment Collateral
     4.670       12/21/2009               —       —       1,955       1,959       —       1,955       1,959  

Page 6 of 11

Table of Contents

                                                                                 
                            Columbia Short Term Bond Fund     Nations Short-Term Income Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Citibank Credit Card Issuance Trust
     2.500       4/7/2008               —       —       5,000       4,933       —       5,000       4,933  
Citibank Credit Card Issuance Trust
     5.650       6/16/2008               —       —       5,575       5,686       —       5,575       5,686  
Citibank Credit Card Issuance Trust
     6.900       10/15/2007               —       —       1,250       1,272       —       1,250       1,272  
Cityscape Home Equity Loan Trust
     7.380       7/25/2028               182       182       —       —       —       182       182  
Cityscape Home Equity Loan Trust
     7.410       5/25/2028               91       91       —       —       —       91       91  
Countrywide Asset-Backed Certificates
     3.110       8/25/2035               —       —       10,000       10,000       —       10,000       10,000  
Countrywide Asset-Backed Certificates
     3.120       7/25/2035               —       —       19,000       19,000       —       19,000       19,000  
Countrywide Asset-Backed Certificates
     3.140       8/25/2035               —       —       17,000       17,000       —       17,000       17,000  
Daimler Chrysler Auto Trust
     2.580       4/8/2009               —       —       5,000       4,849       —       5,000       4,849  
Daimler Chrysler Auto Trust
     4.490       10/6/2008               —       —       3,881       3,900       —       3,881       3,900  
Daimler Chrysler Auto Trust
     4.630       12/6/2006               —       —       807       809       —       807       809  
Discover Card Master Trust
     5.750       12/15/2008               —       —       8,500       8,683       —       8,500       8,683  
Educap Inc
     3.270       9/20/2015               1,151       1,161       —       —       —       1,151       1,161  
First Alliance Mortgage Loan Trust
     6.680       6/25/2025               240       240       —       —       —       240       240  
First Plus Home Loan Trust
     7.720       5/10/2024               —       —       133       133       —       133       133  
Ford Credit Auto Owner Trust
     3.140       1/15/2007               —       —       1,179       1,180       —       1,179       1,180  
Ford Credit Auto Owner Trust
     3.790       9/15/2006               —       —       3,034       3,039       —       3,034       3,039  
Ford Credit Auto Owner Trust
     5.180       10/16/2006               —       —       1,725       1,736       —       1,725       1,736  
Harley Davidson Motorcycle Trust
     3.090       6/15/2010               1,316       1,298       1,294       1,285       —       2,610       2,583  
Honda Auto Receivables Owner Trust
     1.920       11/20/2006               —       —       1,478       1,473       —       1,478       1,473  
Honda Auto Receivables Owner Trust
     2.790       3/16/2009               —       —       4,000       3,909       —       4,000       3,909  
Honda Auto Receivables Owner Trust
     3.000       5/18/2006               230       230       —       —       —       230       230  
Household Automotive Trust
     2.850       3/19/2007               —       —       623       623       —       623       623  
IMC Home Equity Loan Trust
     7.080       8/20/2028               124       124       —       —       —       124       124  
IMC Home Equity Loan Trust
     7.310       11/20/2028               101       101       —       —       —       101       101  
IMC Home Equity Loan Trust
     7.500       4/25/2026               747       761       —       —       —       747       761  
IMC Home Equity Loan Trust
     7.520       8/20/2028               525       524       —       —       —       525       524  
Irwin Home Equity
     3.190       9/25/2017               —       —       9,995       9,997       —       9,995       9,997  
John Deere Owner Trust
     2.320       12/17/2007               —       —       5,000       4,906       —       5,000       4,906  
Keycorp Student Loan Trust
     3.471       10/25/2025               12,080       12,173       —       —       —       12,080       12,173  
Keycorp Student Loan Trust
     3.739       1/27/2023               3,451       3,476       —       —       —       3,451       3,476  
MBNA Credit Card Master Note Trust
     6.550       12/15/2008               —       —       5,000       5,155       —       5,000       5,155  
MMCA Automobile Trust
     5.750       6/15/2007               —       —       181       182       —       181       182  
Morgan Stanley ABS Capital
     3.100       2/25/2035               —       —       14,000       14,000       —       14,000       14,000  
Morgan Stanley ABS Capital
     3.200       5/25/2034               —       —       10,249       10,249       —       10,249       10,249  
Morgan Stanley Dean Witter
     3.440       11/25/2032               467       475       —       —       —       467       475  
Nissan Auto Receivables Owner Trust
     1.510       8/15/2007               —       —       1,950       1,933       —       1,950       1,933  
Nissan Auto Receivables Owner Trust
     2.610       7/15/2008               —       —       1,500       1,475       —       1,500       1,475  
Nissan Auto Receivables Owner Trust
     3.330       1/15/2008               —       —       3,000       2,990       —       3,000       2,990  
Nissan Auto Receivables Owner Trust
     4.280       10/16/2006               —       —       1,497       1,500       —       1,497       1,500  
Nissan Auto Receivables Owner Trust
     4.600       9/17/2007               1,610       1,617       —       —       —       1,610       1,617  
Novastar Home Equity Loan
     3.240       5/25/2033               —       —       10,072       10,118       —       10,072       10,118  
Novastar Home Equity Loan
     3.390       2/25/2034               1,460       1,464       —       —       —       1,460       1,464  
Residential Asset Mortgage Products Inc
     3.000       3/25/2035               —       —       16,000       16,000       —       16,000       16,000  
Residential Asset Mortgage Products Inc
     3.190       3/25/2033               —       —       3,300       3,309       —       3,300       3,309  
Residential Asset Mortgage Products Inc
     3.360       9/25/2033               1,945       1,953       —       —       —       1,945       1,953  
Residential Funding Mortgage Securities I
     3.310       8/25/2033               144       144       —       —       —       144       144  
SLM Student Loan Trust
     3.459       1/25/2010               961       962       —       —       —       961       962  
SLM Student Loan Trust
     3.789       7/25/2011               6,030       6,033       —       —       —       6,030       6,033  
SLM Student Loan Trust
     3.909       1/25/2013               8,950       9,239       —       —       —       8,950       9,239  

Page 7 of 11

Table of Contents

                                                                                 
                            Columbia Short Term Bond Fund     Nations Short-Term Income Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Terwin Mortgage Trust
     3.300       7/25/2034               —       —       8,203       8,258       —       8,203       8,258  
Toyota Auto Receivables Owner Trust
     2.200       3/15/2010               —       —       4,000       3,934       —       4,000       3,934  
Toyota Auto Receivables Owner Trust
     4.000       7/15/2008               —       —       7,389       7,391       —       7,389       7,391  
USAA Auto Owner Trust
     3.910       4/16/2007               —       —       685       685       —       685       685  
 
                                                                          
TOTAL ASSET-BACKED SECURITIES
                                     46,123               245,690                       291,813  
 
                                                                          
MORTGAGE-BACKED SECURITIES
                     16.6 %                                                        
Agency Collateralized Mortgage Obligations
                     2.5 %                                                        
Federal Home Loan Mortgage Corp.
    4.000       10/15/2026               7,670       7,545       7,790       7,663       —       15,460       15,209  
 
     5.500       11/15/2021               —       —       20,046       20,382       —       20,046       20,382  
 
                                                                          
Agency Collateralized Mortgage Obligations Total
                                     7,545               28,045                       35,590  
 
                                                                          
Mortgage-Backed Obligations
                     14.3 %                                                        
Federal Home Loan Mortgage Corp.
    3.000       6/15/2009               2,725       2,717       —       —       —       2,725       2,717  
 
     4.000       5/1/2011               5,906       5,812       —       —       —       5,906       5,812  
 
     4.000       6/1/2011               —       —       26,589       26,165       —       26,589       26,165  
 
     4.000       9/15/2015               3,980       3,924       —       —       —       3,980       3,924  
 
     4.500       10/1/2014               —       —       22,035       21,726       —       22,035       21,726  
 
     4.500       5/1/2019               766       751       —       —       —       766       751  
 
     4.500       5/1/2019               25,550       25,037       —       —       —       25,550       25,037  
 
     4.500       11/1/2019               7,748       7,592       —       —       —       7,748       7,592  
 
     4.500       12/1/2019               255       250       —       —       —       255       250  
 
     4.500       1/1/2020               3,754       3,679       —       —       —       3,754       3,679  
 
     5.000       9/1/2019               5,142       5,148       —       —       —       5,142       5,148  
 
     5.000       5/1/2034               1,832       1,794       —       —       —       1,832       1,794  
 
     5.500       5/1/2017               274       280       —       —       —       274       280  
 
     5.500       9/1/2017               977       998       —       —       —       977       998  
 
     5.500       12/1/2017               4,684       4,785       —       —       —       4,684       4,785  
 
     5.500       1/1/2019               22       22       —       —       —       22       22  
 
     5.500       7/1/2019               843       861       —       —       —       843       861  
 
     6.000       10/1/2006               83       84       —       —       —       83       84  
 
     6.000       3/1/2017               143       148       —       —       —       143       148  
 
     6.000       4/1/2017               147       152       —       —       —       147       152  
 
     6.000       8/1/2017               432       446       —       —       —       432       446  
 
     6.000       6/15/2031               1,093       1,116       —       —       —       1,093       1,116  
 
     7.000       5/1/2019               1       1       —       —       —       1       1  
 
     7.000       6/15/2022               208       208       —       —       —       208       208  
 
     7.500       9/1/2015               198       208       —       —       —       198       208  
 
     8.500       9/15/2006               28       28       —       —       —       28       28  
 
     8.500       7/1/2030               159       173       —       —       —       159       173  
Federal National Mortgage Association
                                                                                
 
     0.000       5/25/2023               1,295       982       —       —       —       1,295       982  
 
     3.570       9/25/2018               2,828       2,841       —       —       —       2,828       2,841  
 
     4.500       11/1/2014               —       —       4,807       4,758       —       4,807       4,758  
 
     5.000       4/25/2031               6,171       6,174       —       —       —       6,171       6,174  
 
     5.500       2/1/2018               3,436       3,506       —       —       —       3,436       3,506  
 
     5.875       2/2/2006               —       —       8,959       9,115       —       8,959       9,115  
 
     6.000       3/1/2009               380       386       —       —       —       380       386  

Page 8 of 11

Table of Contents

                                                                                 
                            Columbia Short Term Bond Fund     Nations Short-Term Income Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
 
     6.000       5/1/2009               88       89       —       —       —       88       89  
 
     6.000       1/1/2014               168       173       —       —       —       168       173  
 
     6.000       1/25/2016               251       252       —       —       —       251       252  
 
     6.000       2/1/2017               817       845       —       —       —       817       845  
 
     6.000       5/1/2017               382       395       —       —       —       382       395  
 
     6.000       12/18/2027               105       105       —       —       —       105       105  
 
     6.500       3/1/2012               77       81       —       —       —       77       81  
 
     6.500       7/1/2032               38       40       —       —       —       38       40  
 
     7.500       11/1/2009               —       —       63       64       —       63       64  
 
     7.500       8/1/2015               146       154       —       —       —       146       154  
 
     8.000       10/25/2006               10       10       —       —       —       10       10  
 
     8.000       5/1/2015               164       173       —       —       —       164       173  
 
     8.000       8/1/2030               59       64       —       —       —       59       64  
 
     8.000       5/1/2031               56       61       —       —       —       56       61  
 
     8.000       7/1/2031               114       122       —       —       —       114       122  
Government National Mortgage Association
    6.500       9/15/2013               180       189       —       —       —       180       189  
 
     6.500       3/15/2032               8       8       —       —       —       8       8  
 
     6.500       11/15/2033               710       742       —       —       —       710       742  
 
     7.000       4/15/2029               24       25       —       —       —       24       25  
 
     7.000       4/15/2029               126       134       —       —       —       126       134  
 
     7.000       8/15/2029               7       8       —       —       —       7       8  
 
     7.000       11/15/2013               147       155       —       —       —       147       155  
 
     3.375       4/20/2022 (j)             —       —       1,570       1,592       —       1,570       1,592  
 
     3.500       12/20/2026               8,195       8,141       —       —       —       8,195       8,141  
 
     5.000       5/16/2027               748       752       —       —       —       748       752  
TBA’s Federal Home Loan Mortgage Corp.
    4.500       3/15/2020 (c)             —       —       18,000       17,618       —       18,000       17,618  
Federal National Mortgage Association
    5.000       4/15/2020 (c)             —       —       30,000       29,972       —       30,000       29,972  
 
                                                                          
Mortgage-Backed Obligations Total
                                     92,819               111,009                       203,828  
 
                                                                          
TOTAL MORTGAGE-BACKED SECURITIES
                                     100,364               139,054                       239,418  
 
                                                                          
INVESTMENT MANAGEMENT COMPANY
                     5.5 %                                                        
Nations Cash Reserves (d)
   NA   NA             —       —       103,036       79,684       —       103,036       79,684  
 
                                                                          
TOTAL INVESTMENT MANAGEMENT COMPANY
                                     —               79,684                       79,684  
 
                                                                          
COLLATERALIZED MORTGAGE OBLIGATIONS
                     12.1 %                                                        
Bank of America Mortgage Securities
     5.250       2/25/2018               1,835       1,838       —       —       —       1,835       1,838  
Bear Stearns Adjustable Rate Mortgage Trust
     3.515       6/25/2034               3,583       3,662       —       —       —       3,583       3,662  
Bear Stearns Alternative Trust
     3.370       9/25/2034               0       0       —       —       —       0       0  
Bear Stearns Asset Backed Securities Inc
     3.420       10/25/2034               —       —       13,472       13,504       —       13,472       13,504  
Countrywide Alternative Loan Trust
     3.420       3/25/2034               1,438       1,437       —       —       —       1,438       1,437  
Countrywide Home Loan Mortgage Pass Through Trust
     3.420       8/25/2018               9,793       9,741       —       —       —       9,793       9,741  
Countrywide Home Loan Mortgage Pass Through Trust
     3.520       3/25/2034               7,003       7,010       —       —       —       7,003       7,010  
Countrywide Home Loan Mortgage Pass Through Trust
     5.000       1/25/2018               812       812       —       —       —       812       812  
Countrywide Home Loan Mortgage Pass Through Trust
     5.750       1/25/2033               23       23       —       —       —       23       23  
First Horizon Asset Securities Inc
     3.470       6/25/2018               2,225       2,234       —       —       —       2,225       2,234  
First Horizon Asset Securities Inc
     3.520       3/25/2018               6,488       6,521       —       —       —       6,488       6,521  

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Table of Contents

                                                                                 
                            Columbia Short Term Bond Fund     Nations Short-Term Income Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
GMAC Mortgage Corp Loan Trust
     3.520       5/25/2018               4,418       4,418       —       —       —       4,418       4,418  
Homebanc Mortgage Trust
     3.390       12/25/2034               —       —       14,416       14,443       —       14,416       14,443  
IMPAC CMB Trust
     3.340       3/25/2035               —       —       17,330       17,330       —       17,330       17,330  
IMPAC Secured Assets CMN Owner Trust
     3.290       2/25/2035               —       —       22,000       21,989       —       22,000       21,989  
MortgageIT Trust
     3.390       12/25/2034               —       —       17,438       17,466       —       17,438       17,466  
Nationslink Funding Corp
     6.888       11/10/2030               2,630       2,760       —       —       —       2,630       2,760  
Ocwen Residential MBS Corp
     7.000       10/25/2040               123       124       —       —       —       123       124  
PNC Mortgage Securities Corp
     0.000       4/28/2027               11       11       —       —       —       11       11  
Residential Accredit Loans Inc
     3.420       6/25/2034               9,417       9,417       —       —       —       9,417       9,417  
Residential Accredit Loans Inc
     3.620       7/25/2032               155       155       —       —       —       155       155  
Residential Asset Securitization Trust
     3.470       2/25/2034               10,207       10,207       —       —       —       10,207       10,207  
Residential Funding Mortgage Securities I
     3.420       7/25/2018               9,120       9,132       —       —       —       9,120       9,132  
SACO I Inc
     7.000       8/25/2036               661       663       —       —       —       661       663  
Sears Corp.
     8.500       4/1/2017               100       100       —       —       —       100       100  
Small Business Administration
     3.375       6/25/2022               527       527       —       —       —       527       527  
Structured Asset Securities Corp
     5.500       7/25/2033               347       347       —       —       —       347       347  
Structured Asset Securities Corp
     5.500       5/25/2033               489       486       —       —       —       489       486  
Structured Asset Securities Corp
     5.750       4/25/2033               3,970       3,977       —       —       —       3,970       3,977  
Structured Asset Securities Corp
     6.000       9/25/2032               210       208       —       —       —       210       208  
Washington Mutual Mortgage Securities Corp.
     3.520       3/25/2018               3,950       3,971       —       —       —       3,950       3,971  
Washington Mutual Mortgage Securities Corp.
     3.520       6/25/2018               3,453       3,471       —       —       —       3,453       3,471  
Wells Fargo Mortgage Backed Securities Trust
     5.250       8/25/2033               6,148       6,201       —       —       —       6,148       6,201  
 
                                                                          
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
                                     89,456               84,731                       174,187  
 
                                                                          
GOVERNMENT AGENCIES AND OBLIGATIONS
                     7.3 %                                                        
Foreign Government Bonds
                     1.9 %                                                        
A.I.D. Morocco
     3.431       5/1/2023               463       457       —       —       —       463       457  
Canadian Government Bond
     6.750       8/28/2006               1,000       1,041       —       —       —       1,000       1,041  
Province of Ontario
     3.500       9/17/2007               3,500       3,445       —       —       —       3,500       3,445  
Province of Quebec Canada
     5.500       4/11/2006               —       —       3,368       3,435       —       3,368       3,435  
Province of Quebec Canada
     6.500       1/17/2006               1,100       1,124       —       —       —       1,100       1,124  
Republic of Italy
     2.500       3/31/2006               1,950       1,929       —       —       —       1,950       1,929  
Swedish Export Credit
     2.875       1/26/2007               —       —       5,000       4,897       —       5,000       4,897  
United Mexican States
     4.625       10/8/2008               3,600       3,548       7,000       6,913       —       10,600       10,460  
 
                                                                          
Foreign Government Bonds Totals
                                     11,544               15,244                       26,788  
 
                                                                          
U.S. Government Agencies and Obligations
                     5.5 %                                                        
Federal Home Loan Bank
    1.500       5/13/2005               —       —       —       —       —       —       —  
 
     2.000       2/13/2006               —       —       —       —       —       —       —  
 
     2.250       9/13/2005               5,300       5,278       —       —       —       5,300       5,278  
 
     3.000       5/15/2006               500       496       —       —       —       500       496  
U.S. Treasury Inflation Index Note
     3.625       1/15/2008 (a)             14,276       15,354       30,098       32,370       —       44,374       47,724  
U.S. Treasury Note
    3.125       9/15/2008 (a)             —       —       18,000       17,477       —       18,000       17,477  
 
     3.375       10/15/2009 (a)             4,000       3,873       —       —       —       4,000       3,873  
 
     3.500       11/15/2006 (a)             4,140       4,127       —       —       —       4,140       4,127  
 
                                                                          
U.S. Governement Agencies and Obligations Totals
                                     29,127               49,847                       78,974  
 
                                                                          
TOTAL GOVERNMENT AGENCIES AND OBLIGATIONS
                                     40,671               65,091                       105,762  
 
                                                                          

Page 10 of 11

Table of Contents

                                                                                 
                            Columbia Short Term Bond Fund     Nations Short-Term Income Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
SHORT-TERM OBLIGATIONS
                     5.3 %                                                        
U.S. Government Agencies and Obligations
                     2.1 %                                                        
Federal Home Loan Bank Discount Note
     0.000       4/8/2005 (e)             —       —       30,000       29,985       —       30,000       29,985  
 
                                                                          
U.S. Government Agencies and Obligations Totals
                                     —               29,985                       29,985  
 
                                                                          
Repurchase Agreements (h)
                     3.2 %                                                        
Repurchase agreement with State Street Bank & Trust Co., dated 03/31/05, due 04/01/05 at 2.45% collateralized by a U.S. Treasury Bond maturing 08/25/22 market value of $22,806 (repurchase proceeds $22,806)
                             22,806       22,806       —       —               22,806       22,806  
Repurchase agreement with ABN AMRO, Inc. dated 03/31/05 due 04/01/05 at 2.830%, collateralized by U.S. Government Agency securities with various maturities to 05/15/29, market value $6,264 (repurchase proceeds $6,205)
                             —       —       6,205       6,205               6,205       6,205  
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.840%, collateralized by U.S. Government Agency securities with various maturities to 05/20/33, market value $7,544 (repurchase proceeds $7,447)
                             —       —       7,446       7,447               7,446       7,447  
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.920%, collateralized by U.S. Government Agency securities with various maturities to 03/01/35, market value $9,848 (repurchase proceeds $9,696)
                             —       —       9,695       9,696               9,695       9,696  
 
                                                                          
Repurchase Agreement Totals
                                     22,806               23,348                       46,154  
 
                                                                          
TOTAL SHORT-TERM OBLIGATIONS
                                     22,806               53,333                       76,139  
 
                                                                          
Total Investments
                     106.7 %             477,112               1,059,454                       1,536,566  
Other Assets & Liabilities, net
                     -0.7 %             1,679               (75,353 )     (68 )             (73,742 )
 
                                                                        
Net Assets
                     100.0 %             478,791               984,101       (68 )             1,462,824  
 
                                                                        
Investments at cost
                                     458,620               1,072,165                       1,530,785  
 
                                                                          

Notes to Investment Portfolio:

(a)   All or a portion of this security was on loan at March 31, 2005. The aggregate cost and Market value of securities on loan at March 31, 2005 is $181,527 and $178,957, respectively.
 
(b)   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 March 31, 2005, these securities amounted to $6,691, which represents 0.3% of net assets.
 
(c)   Security, or a portion thereof, purchased on a delayed delivery basis.
 
(d)   Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by Banc of America Capital Management, LLC.
 
(e)   Security pledged as collateral for open futures contracts and TBAs.
 
(f)   Step bond.
 
(g)   Loan participation agreement.
 
(h)   This amount represents cash collateral received from securities lending activity.
 
(i)   Variable rate demand notes. These securities are payable upon demand and are secured by letters of credit or other credit support agreements from banks. The interest rates change periodically and the interest rates shown relect the rates at March 31, 2005.
 
(j)   Floating rate note. The interest rate shown reflects the rate as of March 31, 2005
 
(k)   Cost for federal income tax purposes is $458,621 for the Columbia Short Term Bond Fund, $548,566 for the Nations Short Intermediate Government Fund, $1,072,165 for the Nations Short Term Income Fund, and $2,079,352 for the funds combined.

ACRONYM
TBA — To be announced

Futures contracts

At March 31, 2005 the following fund had future contracts open:

                 
            value of contract  
Short Intermediate Government Fund   number of contracts     when opened  
U.S. 5 year Treasury Note Futures (long position) expiring June 2005
     10       1,076  
U.S. 10 year Treasury Note Futures (long position) expiring June 2005
     183       20,166  
U.S. 5 year Treasury Bond Futures (short position) expiring June 2005
     (83 )     (9,396 )
Total net unrealized appreciation
                

 

Table of Contents

Pro Forma Combining Portfolio of Investments (Unaudited)
As of 3/31/05

                                                                                 
                            Nations Short-Intermediate Government Fund     Nations Short-Term Income Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma              
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
CORPORATE FIXED-INCOME BONDS & NOTES
                     29.2 %                                                        
BASIC MATERIALS
                     0.8 %                                                        
Chemicals
                     0.3 %                                                        
Equistar Chemicals LP
     6.500       2/15/2006               —       —       2,500       2,525       —       2,500       2,525  
Lyondell Chemical Co
     9.875       5/1/2007               —       —       963       987       —       963       987  
 
                                                                          
Chemicals Total
                                     —               3,512                       3,512  
 
                                                                          
Forest Products and Paper
                     0.5 %                                                        
International Paper Co
     4.250       1/15/2009               —       —       4,000       3,946       —       4,000       3,946  
Louisiana-Pacific Corp
     8.500       8/15/2005               —       —       2,750       2,790       —       2,750       2,790  
 
                                                                          
Forest Products and Paper Total
                                     —               6,736                       6,736  
 
                                                                          
TOTAL BASIC MATERIALS
                                     —               10,248                       10,248  
 
                                                                          
COMMUNICATIONS
                     3.1 %                                                        
Media
                     1.5 %                                                        
Comcast Cable Communications
     6.375       1/30/2006               —       —       2,510       2,554       —       2,510       2,554  
Gannett Co Inc
     5.500       4/1/2007               —       —       5,000       5,124       —       5,000       5,124  
Lenfest Communications Inc
     8.375       11/1/2005               —       —       2,750       2,813       —       2,750       2,813  
Reed Elsevier Capital Inc
     7.000       5/15/2005               —       —       1,000       1,004       —       1,000       1,004  
Time Warner Inc
     8.110       8/15/2006               —       —       4,641       4,862       —       4,641       4,862  
Viacom Inc
     5.625       5/1/2007               —       —       3,500       3,582       —       3,500       3,582  
 
                                                                          
Media Total
                                     —               19,940                       19,940  
 
                                                                          
Telecommunications
                     1.3 %                                                        
Deutsche Telekom International Finance BV (f)
     8.500       6/15/2010               —       —       4,000       4,600       —       4,000       4,600  
SBC Communications Inc
     5.750       5/2/2006               —       —       3,000       3,055       —       3,000       3,055  
Sprint Capital Corp
     6.375       5/1/2009               —       —       2,500       2,641       —       2,500       2,641  
Verizon Global Funding Corp
     7.250       12/1/2010               —       —       6,000       6,659       —       6,000       6,659  
Vodafone Group PLC
     7.750       2/15/2010               —       —       4,000       4,518       —       4,000       4,518  
 
                                                                          
Telecommunications Total
                                     —               21,472                       21,472  
 
                                                                          
TOTAL COMMUNICATIONS
                                     —               41,412                       41,412  
 
                                                                          
CONSUMER CYCLICAL
                     3.6 %                                                        
Auto Manufacturers
                     0.5 %                                                        
DaimlerChrysler NA Holding Corp
     4.750       1/15/2008               —       —       3,000       2,986       —       3,000       2,986  
Toyota Motor Credit Corp
     2.800       1/18/2006               —       —       4,000       3,968       —       4,000       3,968  
 
                                                                          
Auto Manufacturers Totals
                                     —               6,954                       6,954  
 
                                                                          
Auto Parts and Equipment
                     0.1 %                                                        
Lear Corp
     7.960       5/15/2005               —       —       1,500       1,507       —       1,500       1,507  
 
                                                                          
Auto Parts and Equipment Total
                                     —               1,507                       1,507  
 
                                                                          

Table of Contents

                                                                                 
                            Nations Short-Intermediate Government Fund     Nations Short-Term Income Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma              
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Home Builders
                     0.4 %                                                        
DR Horton Inc
     10.500       4/1/2005               —       —       1,675       1,675       —       1,675       1,675  
KB Home
     9.500       2/15/2011               —       —       2,000       2,118       —       2,000       2,118  
Toll Corp
     8.000       5/1/2009               —       —       2,000       2,030       —       2,000       2,030  
 
                                                                          
Home Builders Totals
                                     —               5,823                       5,823  
 
                                                                          
Housewares
                     0.3 %                                                        
Newell Rubbermaid Inc
     2.000       5/1/2005               —       —       4,000       3,994       —       4,000       3,994  
 
                                                                          
Housewares Totals
                                     —               3,994                       3,994  
 
                                                                          
Lodging
                     0.8 %                                                        
Ameristar Casinos Inc
     10.750       2/15/2009               —       —       2,000       2,185       —       2,000       2,185  
Harrah’s Operating Co Inc
     7.875       12/15/2005               —       —       2,000       2,040       —       2,000       2,040  
HMH Properties Inc
     7.875       8/1/2008               —       —       702       716       —       702       716  
ITT Corp
     6.750       11/15/2005               —       —       1,500       1,511       —       1,500       1,511  
MGM Mirage
     7.250       10/15/2006               —       —       1,500       1,549       —       1,500       1,549  
Park Place Entertainment
     7.875       12/15/2005               —       —       2,895       2,957       —       2,895       2,957  
 
                                                                          
Lodging Totals
                                     —               10,958                       10,958  
 
                                                                          
Retail
                     1.3 %                                                        
Home Depot Inc (a)
     5.375       4/1/2006               —       —       5,000       5,062       —       5,000       5,062  
Target Corp
     5.950       5/15/2006               —       —       5,000       5,103       —       5,000       5,103  
Wal-Mart Stores Inc
     4.000       1/15/2010               —       —       7,485       7,285       —       7,485       7,285  
 
                                                                          
Retail Totals
                                     —               17,450                       17,450  
 
                                                                          
Toys/Games/Hobbies
                     0.2 %                                                        
Hasbro Inc
     5.600       11/1/2005               —       —       2,306       2,325       —       2,306       2,325  
 
                                                                          
Toys/Games/Hobbies Totals
                                     —               2,325                       2,325  
 
                                                                          
TOTAL CONSUMER CYCLICAL
                                     —               49,011                       49,011  
 
                                                                          
CONSUMER NON-CYCLICAL
                     2.9 %                                                        
Beverages
                     0.5 %                                                        
Constellation Brands Inc
     8.625       8/1/2006               —       —       2,000       2,090       —       2,000       2,090  
Diageo Capital PLC
     3.500       11/19/2007               —       —       5,000       4,909       —       5,000       4,909  
 
                                                                          
Beverages Totals
                                     —               6,999                       6,999  
 
                                                                          
Cosmetics/Personal Care
                     0.5 %                                                        
Procter & Gamble Co
     4.750       6/15/2007               —       —       5,950       6,032       —       5,950       6,032  
 
                                                                          
Cosmetics/Personal Care Totals
                                     —               6,032                       6,032  
 
                                                                          
Food
                     0.8 %                                                        
General Mills Inc
     5.125       2/15/2007               —       —       5,710       5,806       —       5,710       5,806  
Kellogg Co
     6.000       4/1/2006               —       —       1,900       1,934       —       1,900       1,934  

Page 2 of 10

Table of Contents

                                                                                 
                            Nations Short-Intermediate Government Fund     Nations Short-Term Income Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma              
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Kroger Co
     7.800       8/15/2007               —       —       2,860       3,062       —       2,860       3,062  
 
                                                                          
Food Totals
                                     —               10,802                       10,802  
 
                                                                          
Healthcare Services
                     0.5 %                                                        
UnitedHealth Group Inc
     3.375       8/15/2007               —       —       4,000       3,917       —       4,000       3,917  
WellPoint Health Networks
     6.375       6/15/2006               —       —       3,000       3,076       —       3,000       3,076  
 
                                                                          
Healthcare Services Totals
                                     —               6,993                       6,993  
 
                                                                          
Pharmaceuticals
                     0.6 %                                                        
Abbott Laboratories
     5.625       7/1/2006               —       —       5,000       5,093       —       5,000       5,093  
GlaxoSmithKline Capital PLC
     2.375       4/16/2007               —       —       3,000       2,903       —       3,000       2,903  
 
                                                                          
Pharmaceuticals Totals
                                     —               7,996                       7,996  
 
                                                                          
TOTAL CONSUMER NON-CYCLICAL
                                     —               38,822                       38,822  
 
                                                                          
ENERGY
                     1.5 %                                                        
Oil and Gas
                     1.1 %                                                        
BP Capital Markets
     4.000       4/29/2005               —       —       3,000       3,002       —       3,000       3,002  
Devon Energy Corp
     2.750       8/1/2006               —       —       4,000       3,912       —       4,000       3,912  
Parker & Parsley Petroleum Co
     8.875       4/15/2005               —       —       2,472       2,476       —       2,472       2,476  
USX Corp
     6.850       3/1/2008               —       —       5,550       5,899       —       5,550       5,899  
 
                                                                          
Oil and Gas Totals
                                     —               15,289                       15,289  
 
                                                                          
Pipelines
                     0.4 %                                                        
Kinder Morgan Energy Partners LP
     6.750       3/15/2011               —       —       4,325       4,692       —       4,325       4,692  
 
                                                                          
Pipelines Totals
                                     —               4,692                       4,692  
 
                                                                          
TOTAL ENERGY
                                     —               19,981                       19,981  
 
                                                                          
FINANCIALS
                     13.9 %                                                        
Banks
                     2.4 %                                                        
Fifth Third Bank
     2.700       1/30/2007               —       —       5,191       5,052       —       5,191       5,052  
Key Bank N.A.
     4.100       6/30/2005               —       —       1,980       1,985       —       1,980       1,985  
Marshall & Ilsley Corp
     5.750       9/1/2006               —       —       5,000       5,127       —       5,000       5,127  
US Bancorp
     2.750       3/30/2006               —       —       11,000       10,872       —       11,000       10,872  
Wachovia Corp
     3.625       2/17/2009               —       —       10,000       9,678       —       10,000       9,678  
 
                                                                          
Banks Totals
                                     —               32,714                       32,714  
 
                                                                          
Capital Markets
                     0.4 %                                                        
Merrill Lynch & Co.
     4.125       1/15/2009               —       —       5,500       5,394       —       5,500       5,394  
 
                                                                          
Capital Markets Totals
                                     —               5,394                       5,394  
 
                                                                          
Diversified Financial Services
                     9.5 %                                                        
American General Finance Corp
     5.875       7/14/2006               —       —       6,125       6,261       —       6,125       6,261  
Bank One N.A.
     5.500       3/26/2007               —       —       9,500       9,745       —       9,500       9,745  

Page 3 of 10

Table of Contents

                                                                                 
                            Nations Short-Intermediate Government Fund     Nations Short-Term Income Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma              
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Bear Stearns Cos Inc.
     3.000       3/30/2006               —       —       9,500       9,411       —       9,500       9,411  
Capital One Bank
     4.875       5/15/2008               —       —       2,500       2,518       —       2,500       2,518  
Caterpillar Financial Services Corp
     5.950       5/1/2006               —       —       8,000       8,167       —       8,000       8,167  
CIT Group Inc
     5.500       11/30/2007               —       —       4,000       4,096       —       4,000       4,096  
Citigroup Inc
     5.500       8/9/2006               —       —       4,000       4,075       —       4,000       4,075  
Citigroup Inc
     6.750       12/1/2005               —       —       4,000       4,079       —       4,000       4,079  
Countrywide Home Loans Inc
     4.125       9/15/2009               —       —       7,000       6,745       —       7,000       6,745  
Diageo Finance BV
     3.000       12/15/2006               —       —       3,000       2,942       —       3,000       2,942  
Ford Motor Credit Co
     7.375       10/28/2009               —       —       7,500       7,533       —       7,500       7,533  
General Electric Capital Corp
     5.000       2/15/2007               —       —       5,000       5,076       —       5,000       5,076  
General Electric Capital Corp
     6.500       12/10/2007               —       —       11,000       11,585       —       11,000       11,585  
General Motors Acceptance Corp
     7.750       1/19/2010               —       —       5,000       4,802       —       5,000       4,802  
Goldman Sachs Group Inc
     4.125       1/15/2008               —       —       6,000       5,949       —       6,000       5,949  
Household Finance Corp
     6.400       6/17/2008               —       —       7,500       7,908       —       7,500       7,908  
John Deere Capital Corp
     3.900       1/15/2008               —       —       4,000       3,940       —       4,000       3,940  
Lehman Brothers Holdings Inc
     4.000       1/22/2008               —       —       7,000       6,909       —       7,000       6,909  
Midland Funding II
     11.750       7/23/2005               —       —       635       648       —       635       648  
Morgan Stanley
     3.875       1/15/2009               —       —       7,000       6,807       —       7,000       6,807  
National Rural Utilities Cooperative Finance Corp
     6.000       5/15/2006               —       —       4,000       4,089       —       4,000       4,089  
Pemex Finance Ltd
     6.550       2/15/2008               —       —       459       473       —       459       473  
Wells Fargo Financial Inc
     4.875       6/12/2007               —       —       4,000       4,063       —       4,000       4,063  
 
                                                                          
Diversified Financial Services Totals
                                     —               127,822                       127,822  
 
                                                                          
Insurance
                     0.6 %                                                        
Allstate Financial Global Funding (b)
     6.150       2/1/2006               —       —       1,500       1,528       —       1,500       1,528  
Hartford Financial Services Group Inc
     2.375       6/1/2006               —       —       699       683       —       699       683  
Prudential Insurance Co of America (b)
     6.375       7/23/2006               —       —       5,000       5,163       —       5,000       5,163  
 
                                                                          
Insurance Totals
                                     —               7,374                       7,374  
 
                                                                          
Investment Companies
                     0.3 %                                                        
Credit Suisse First Boston USA Inc
     4.625       1/15/2008               —       —       4,000       4,018       —       4,000       4,018  
 
                                                                          
Investment Companies Totals
                                     —               4,018                       4,018  
 
                                                                          
Savings and Loans
                     0.7 %                                                        
Washington Mutual Inc
     4.200       1/15/2010               —       —       6,000       5,839       —       6,000       5,839  
World Savings Bank
     4.125       3/10/2008               —       —       3,750       3,716       —       3,750       3,716  
 
                                                                          
Savings and Loans Totals
                                     —               9,555                       9,555  
 
                                                                          
TOTAL FINANCIALS
                                     —               186,877                       186,877  
 
                                                                          
INDUSTRIALS
                     0.8 %                                                        
Building Materials
                     0.2 %                                                        
American Standard Inc
     7.375       4/15/2005               —       —       750       751       —       750       751  
Hanson Overseas BV
     6.750       9/15/2005               —       —       1,313       1,331       —       1,313       1,331  

Page 4 of 10

Table of Contents

                                                                                 
                            Nations Short-Intermediate Government Fund     Nations Short-Term Income Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma              
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
 
                                                                          
Building Materials Totals
                                     —               2,082                       2,082  
 
                                                                          
Environmental Control
                     0.2 %                                                        
Waste Management Inc
     7.375       8/1/2010               —       —       3,000       3,343       —       3,000       3,343  
 
                                                                          
Environmental Control Totals
                                     —               3,343                       3,343  
 
                                                                          
Packaging and Containers
                     0.4 %                                                        
Ball Corp
     7.750       8/1/2006               —       —       2,594       2,675       —       2,594       2,675  
Smurfit-Stone Container Corp.
     9.750       2/1/2011               —       —       2,000       2,140       —       2,000       2,140  
 
                                                                          
Packaging and Containers Totals
                                     —               4,815                       4,815  
 
                                                                          
TOTAL INDUSTRIALS
                                     —               10,241                       10,241  
 
                                                                          
TECHNOLOGY
                     1.2 %                                                        
Computers
                     0.9 %                                                        
Hewlett-Packard Co
     5.500       7/1/2007               —       —       5,000       5,131       —       5,000       5,131  
International Business Machines Corp
     4.875       10/1/2006               —       —       5,000       5,067       —       5,000       5,067  
Unisys Corp (a)
     7.875       4/1/2008               —       —       1,500       1,508       —       1,500       1,508  
 
                                                                          
Computer Totals
                                     —               11,706                       11,706  
 
                                                                          
Software
                     0.3 %                                                        
First Data Corp
     4.700       11/1/2006               —       —       4,775       4,817       —       4,775       4,817  
 
                                                                          
Software Totals
                                     —               4,817                       4,817  
 
                                                                          
TOTAL TECHNOLOGY
                                     —               16,522                       16,522  
 
                                                                          
UTILITIES
                     1.4 %                                                        
Electric
                     1.0 %                                                        
AES Corp. (a)
     8.500       11/1/2007               —       —       1,321       1,341       —       1,321       1,341  
Kansas Gas & Electric
     6.500       8/1/2005               —       —       2,425       2,450       —       2,425       2,450  
Scottish Power PLC (a)
     4.910       3/15/2010               —       —       4,500       4,501       —       4,500       4,501  
Virginia Electric and Power Co
     5.375       2/1/2007               —       —       1,000       1,020       —       1,000       1,020  
Virginia Electric and Power Co
     5.750       3/31/2006               —       —       3,562       3,622       —       3,562       3,622  
 
                                                                          
Electric Totals
                                     —               12,932                       12,932  
 
                                                                          
Electric Utilities
                     0.2 %                                                        
Centerpoint Energy Bank (g)
   NA     11/11/2005               —       —       3,000       3,180       —       3,000       3,180  
 
                                                                          
Electric Utilities Totals
                                     —               3,180                       3,180  
 
                                                                          
Gas
                     0.2 %                                                        
Sempra Energy
     4.750       5/15/2009               —       —       2,660       2,645       —       2,660       2,645  
 
                                                                          
Gas Totals
                                     —               2,645                       2,645  
 
                                                                          
TOTAL UTILITIES
                                     —               18,757                       18,757  
 
                                                                          
TOTAL CORPORATE FIXED-INCOME BONDS & NOTES
                                     —               391,871                       391,871  
 
                                                                          

Page 5 of 10

Table of Contents

                                                                                 
                            Nations Short-Intermediate Government Fund     Nations Short-Term Income Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma              
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
ASSET-BACKED SECURITIES
                     19.2 %                                                        
Aames Mortgage Investment Trust
     3.360       1/25/2035               —       —       17,523       17,578       —       17,523       17,578  
American Express Credit Account Master Trust
     1.690       1/15/2009               —       —       4,052       3,947       —       4,052       3,947  
AmeriCredit Automobile Receivables Trust
     5.370       6/12/2008               —       —       1,098       1,107       —       1,098       1,107  
BMW Vehicle Owner Trust
     1.940       2/25/2007               —       —       4,254       4,236       —       4,254       4,236  
BMW Vehicle Owner Trust
     2.530       2/25/2008               —       —       2,000       1,973       —       2,000       1,973  
Capital Auto Receivables Asset Trust
     2.270       1/17/2006               —       —       688       688       —       688       688  
Capital Auto Receivables Asset Trust
     4.180       10/15/2007               —       —       221       221       —       221       221  
Chase Credit Card Master Trust
     3.710       7/16/2007               —       —       3,216       3,217       —       3,216       3,217  
Chase Manhattan Auto Owner Trust
     1.520       5/15/2007               —       —       2,881       2,861       —       2,881       2,861  
Chase Manhattan Auto Owner Trust
     2.080       5/15/2008               —       —       10,000       9,837       —       10,000       9,837  
Chase Manhattan Auto Owner Trust
     2.260       11/15/2007               —       —       1,500       1,484       —       1,500       1,484  
Chase Manhattan Auto Owner Trust
     2.570       2/16/2010               —       —       3,953       3,843       —       3,953       3,843  
Chase Manhattan Auto Owner Trust
     4.240       9/15/2008               —       —       741       744       —       741       744  
CIT Equipment Collateral
     3.970       12/21/2009               —       —       407       402       —       407       402  
CIT Equipment Collateral
     4.670       12/21/2009               —       —       1,955       1,959       —       1,955       1,959  
Citibank Credit Card Issuance Trust
     2.500       4/7/2008               —       —       5,000       4,933       —       5,000       4,933  
Citibank Credit Card Issuance Trust
     5.650       6/16/2008               —       —       5,575       5,686       —       5,575       5,686  
Citibank Credit Card Issuance Trust
     6.900       10/15/2007               —       —       1,250       1,272       —       1,250       1,272  
Countrywide Asset-Backed Certificates
     3.110       8/25/2035               —       —       10,000       10,000       —       10,000       10,000  
Countrywide Asset-Backed Certificates
     3.120       7/25/2035               —       —       19,000       19,000       —       19,000       19,000  
Countrywide Asset-Backed Certificates
     3.140       8/25/2035               —       —       17,000       17,000       —       17,000       17,000  
Credit-Based Asset Servicing and Securitization
     4.134       12/25/2035 (f)         2,365       2,323       —       —       —       2,365       2,323  
Daimler Chrysler Auto Trust
     2.580       4/8/2009               —       —       5,000       4,849       —       5,000       4,849  
Daimler Chrysler Auto Trust
     4.490       10/6/2008               —       —       3,881       3,900       —       3,881       3,900  
Daimler Chrysler Auto Trust
     4.630       12/6/2006               —       —       807       809       —       807       809  
Discover Card Master Trust
     5.750       12/15/2008               —       —       8,500       8,683       —       8,500       8,683  
First Alliance Mortgage Loan Trust
     8.225       9/20/2027 (e)             789       788       —       —       —       789       788  
First Plus Home Loan Trust
     7.720       5/10/2024               —       —       133       133       —       133       133  
Ford Credit Auto Owner Trust
     3.140       1/15/2007               —       —       1,179       1,180       —       1,179       1,180  
Ford Credit Auto Owner Trust
     3.790       9/15/2006               —       —       3,034       3,039       —       3,034       3,039  
Ford Credit Auto Owner Trust
     5.180       10/16/2006               —       —       1,725       1,736       —       1,725       1,736  
GMAC Mortgage Corp Loan Trust
     3.970       9/25/2034               1,900       1,872       —       —       —       1,900       1,872  
GSAA Home Equity Trust
     4.220       8/25/2034 (i)             1,090       1,079       —       —       —       1,090       1,079  
GSAA Home Equity Trust
     4.736       6/25/2034 (i)             1,900       1,905       —       —       —       1,900       1,905  
Harley Davidson Motorcycle Trust
     3.090       6/15/2010               —       —       1,294       1,285       —       1,294       1,285  
Honda Auto Receivables Owner Trust
     1.920       11/20/2006               —       —       1,478       1,473       —       1,478       1,473  
Honda Auto Receivables Owner Trust
     2.790       3/16/2009               —       —       4,000       3,909       —       4,000       3,909  
Household Automotive Trust
     2.850       3/19/2007               —       —       623       623       —       623       623  
Irwin Home Equity
     3.190       9/25/2017               —       —       9,995       9,997       —       9,995       9,997  
John Deere Owner Trust
     2.320       12/17/2007               —       —       5,000       4,906       —       5,000       4,906  
MBNA Credit Card Master Note Trust
     6.550       12/15/2008               —       —       5,000       5,155       —       5,000       5,155  
MMCA Automobile Trust
     5.750       6/15/2007               —       —       181       182       —       181       182  

Page 6 of 10

Table of Contents

                                                                                 
                            Nations Short-Intermediate Government Fund     Nations Short-Term Income Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma              
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Morgan Stanley ABS Capital
     3.100       2/25/2035               —       —       14,000       14,000       —       14,000       14,000  
Morgan Stanley ABS Capital
     3.200       5/25/2034               —       —       10,249       10,249       —       10,249       10,249  
Nissan Auto Receivables Owner Trust
     1.510       8/15/2007               —       —       1,950       1,933       —       1,950       1,933  
Nissan Auto Receivables Owner Trust
     2.610       7/15/2008               —       —       1,500       1,475       —       1,500       1,475  
Nissan Auto Receivables Owner Trust
     3.330       1/15/2008               —       —       3,000       2,990       —       3,000       2,990  
Nissan Auto Receivables Owner Trust
     4.280       10/16/2006               —       —       1,497       1,500       —       1,497       1,500  
Novastar Home Equity Loan
     3.240       5/25/2033               —       —       10,072       10,118       —       10,072       10,118  
Oakwood Mortgage Investors Inc
     3.320       5/15/2013 (j)             257       218       —       —       —       257       218  
Residential Asset Mortgage Products Inc
     3.000       3/25/2035               —       —       16,000       16,000       —       16,000       16,000  
Residential Asset Mortgage Products Inc
     3.190       3/25/2033               —       —       3,300       3,309       —       3,300       3,309  
Residential Asset Mortgage Products Inc
     3.981       4/25/2029               930       912       —       —       —       930       912  
Residential Funding Mortgage Securities II
     4.760       7/25/2028 (f)             2,180       2,146       —       —       —       2,180       2,146  
Terwin Mortgage Trust
     3.300       7/25/2034               —       —       8,203       8,258       —       8,203       8,258  
Toyota Auto Receivables Owner Trust
     2.200       3/15/2010               —       —       4,000       3,934       —       4,000       3,934  
Toyota Auto Receivables Owner Trust
     4.000       7/15/2008               —       —       7,389       7,391       —       7,389       7,391  
USAA Auto Owner Trust
     3.910       4/16/2007               —       —       685       685       —       685       685  
 
                                                                          
TOTAL ASSET-BACKED SECURITIES
                                     11,244               245,690                       256,934  
 
                                                                          
MORTGAGE-BACKED SECURITIES
                     13.3 %                                                        
Agency Collateralized Mortgage Obligations
                     2.2 %                                                        
Federal Home Loan Mortgage Corp.
    4.000       10/15/2026               —       —       7,790       7,663       —       7,790       7,663  
 
     5.500       11/15/2021               —       —       20,046       20,382       —       20,046       20,382  
 
     5.500       1/15/2023               1,663       130       —       —       —       1,663       130  
 
     5.500       5/15/2027               1,773       173       —       —       —       1,773       173  
Federal National Mortgage Association
     6.000       4/25/2017               1,483       1,544       —       —       —       1,483       1,544  
 
                                                                          
Agency Collateralized Mortgage Obligations Total
                                     1,847               28,045                       29,892  
 
                                                                          
Mortgage-Backed Obligations
                     11.1 %                                                        
Federal Home Loan Mortgage Corp.
    4.000       6/1/2011               —       —       26,589       26,165       —       26,589       26,165  
 
     4.500       10/1/2014               —       —       22,035       21,726       —       22,035       21,726  
 
     6.750       3/15/2031               750       915       —       —       —       750       915  
Federal National Mortgage Association
    4.500       11/1/2014               —       —       4,807       4,758       —       4,807       4,758  
 
     5.500       8/25/2017               1,590       1,614       —       —       —       1,590       1,614  
 
     5.875       2/2/2006               —       —       8,959       9,115       —       8,959       9,115  
 
     7.500       11/1/2009               —       —       63       64       —       63       64  
 
     9.000       4/1/2016               889       946       —       —       —       889       946  
Government National Mortgage Association
    3.375       4/20/2022 (j)             —       —       1,570       1,592       —       1,570       1,592  
TBA’s Federal Home Loan Mortgage Corp.
    4.500       3/15/2020 (c)             —       —       18,000       17,618       —       18,000       17,618  

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Table of Contents

                                                                                 
                            Nations Short-Intermediate Government Fund     Nations Short-Term Income Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma              
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Federal National Mortgage Association
    4.500       4/15/2005               15,000       14,663       —       —       —       15,000       14,663  
 
     5.000       4/15/2020 (c)             —       —       30,000       29,972       —       30,000       29,972  
 
     5.500       4/15/2020               15,000       15,281       —       —       —       15,000       15,281  
Government National Mortgage Association
    3.375       4/20/2022               2,371       2,398       —       —       —       2,371       2,398  
 
     3.375       6/20/2029               1,434       1,459       —       —       —       1,434       1,459  
 
                                                                          
Mortgage-Backed Obligations Total
                                     37,275               111,009                       148,285  
 
                                                                          
TOTAL MORTGAGE-BACKED SECURITIES
                                     39,123               139,054                       178,177  
 
                                                                          
INVESTMENT MANAGEMENT COMPANY
                     6.2 %                                                        
Nations Cash Reserves (d)
   NA   NA             163,539       3,044       103,036       79,684       —       266,575       82,728  
 
                                                                          
TOTAL INVESTMENT MANAGEMENT COMPANY
                                     3,044               79,684                       82,728  
 
                                                                          
COLLATERALIZED MORTGAGE OBLIGATIONS
                     7.1 %                                                        
Bear Stearns Asset Backed Securities Inc
     3.420       10/25/2034               —       —       13,472       13,504       —       13,472       13,504  
Citigroup Commercial Mortgage Trust
     4.733       10/15/2041               1,820       1,772       —       —       —       1,820       1,772  
Homebanc Mortgage Trust
     3.390       12/25/2034               —       —       14,416       14,443       —       14,416       14,443  
IMPAC CMB Trust
     3.340       3/25/2035               —       —       17,330       17,330       —       17,330       17,330  
IMPAC Secured Assets CMN Owner Trust
     3.290       2/25/2035               —       —       22,000       21,989       —       22,000       21,989  
Merrill Lynch Mortgage Investors Inc
     0.896       12/15/2030               15,534       469       —       —       —       15,534       469  
MortgageIT Trust
     3.390       12/25/2034               —       —       17,438       17,466       —       17,438       17,466  
PNC Mortgage Acceptance Corp
     5.910       3/12/2034               3,249       3,359       —       —       —       3,249       3,359  
Small Business Administration Participation Certificates
     4.880       11/1/2024               5,000       4,944       —       —       —       5,000       4,944  
 
                                                                          
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
                                     10,544               84,731                       95,275  
 
                                                                          
GOVERNMENT AGENCIES AND OBLIGATIONS
                     26.5 %                                                        
Foreign Government Bonds
                     1.1 %                                                        
Province of Quebec Canada
     5.500       4/11/2006               —       —       3,368       3,435       —       3,368       3,435  
Swedish Export Credit
     2.875       1/26/2007               —       —       5,000       4,897       —       5,000       4,897  
United Mexican States
     4.625       10/8/2008               —       —       7,000       6,913       —       7,000       6,913  
 
                                                                          
Foreign Government Bonds Totals
                                     —               15,244                       15,244  
 
                                                                          
U.S. Government Agencies and Obligations
                     25.4 %                                                        
Federal Farm Credit Bank
    2.625       9/17/2007               700       676       —       —       —       700       676  
 
     4.900       3/21/2006               8,000       8,088       —       —       —       8,000       8,088  
Federal Home Loan Bank
    1.500       5/13/2005               1,500       1,497       —       —       —       1,500       1,497  
 
     2.000       2/13/2006               6,000       5,919       —       —       —       6,000       5,919  
 
     2.625       7/15/2008               1,000       951       —       —       —       1,000       951  
 
     3.625       11/14/2008               2,500       2,444       —       —       —       2,500       2,444  

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Table of Contents

                                                                                 
                            Nations Short-Intermediate Government Fund     Nations Short-Term Income Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma              
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
 
     3.875       6/14/2013 (a)             5,050       4,778       —       —       —       5,050       4,778  
 
     4.500       11/15/2012 (a)           5,500       5,454       —       —       —       5,500       5,454  
 
     4.875       5/15/2007               2,250       2,288       —       —       —       2,250       2,288  
Federal Home Loan Mortgage Corporation
    1.500       8/15/2005               2,000       1,989       —       —       —       2,000       1,989  
 
     2.125       11/15/2005               3,500       3,471       —       —       —       3,500       3,471  
 
     3.875       1/12/2009 (a)             5,000       4,899       —       —       —       5,000       4,899  
 
     4.375       7/30/2009               15,000       14,755       —       —       —       15,000       14,755  
 
     4.750       12/8/2010               17,000       16,928       —       —       —       17,000       16,928  
Federal National Mortgage Association
    2.375       2/15/2007 (a)             20,400       19,819       —       —       —       20,400       19,819  
 
     4.125       4/15/2014 (a)             3,000       2,848       —       —       —       3,000       2,848  
 
     4.625       10/15/2013 (a)           4,000       3,945       —       —       —       4,000       3,945  
 
     5.000       1/15/2007               5,900       6,007       —       —       —       5,900       6,007  
 
     5.375       11/15/2011               2,000       2,076       —       —       —       2,000       2,076  
 
     6.125       3/15/2012               3,000       3,246       —       —       —       3,000       3,246  
 
     6.625       11/15/2010               3,400       3,739       —       —       —       3,400       3,739  
U.S. Treasury Inflation Index Note
     3.625       1/15/2008 (a)             —       —       30,098       32,370       —       30,098       32,370  
U.S. Treasury Bond
    6.250       8/15/2023 (a)             4,850       5,647       —       —       —       4,850       5,647  
 
     6.875       8/15/2025               1,025       1,286       —       —       —       1,025       1,286  
U.S. Treasury Note
    2.000       8/31/2005 (a)             21,800       21,708       —       —       —       21,800       21,708  
 
     2.875       11/30/2006 (a)           52,500       51,786       —       —       —       52,500       51,786  
 
     3.000       11/15/2007 (a)           21,215       20,754       —       —       —       21,215       20,754  
 
     3.125       9/15/2008 (a)             —       —       18,000       17,477       —       18,000       17,477  
 
     3.625       1/15/2010 (a)             65,070       63,512       —       —       —       65,070       63,512  
 
     4.250       11/15/2014 (a)           9,955       9,749       —       —       —       9,955       9,749  
 
                                                                          
U.S. Government Agencies and Obligations Totals
                                     290,260               49,847                       340,107  
 
                                                                          
TOTAL GOVERNMENT AGENCIES AND OBLIGATIONS
                                     290,260               65,091                       355,351  
 
                                                                          
SHORT-TERM OBLIGATIONS
                     18.2 %                                                        
U.S. Government Agencies and Obligations
                     4.5 %                                                        
Federal Home Loan Bank Discount Note
     0.000       4/8/2005 (e)             —       —       30,000       29,985       —       30,000       29,985  
Federal Home Loan Bank Discount Note
     0.000       4/19/2005 (e)             30,000       29,960       —       —       —       30,000       29,960  
 
                                                                          
U.S. Government Agencies and Obligations Totals
                                     29,960               29,985                       59,945  
 
                                                                          
Repurchase Agreements (h)
                     13.7 %                                                        
Repurchase agreement with ABN AMRO, Inc. dated 03/31/05 due 04/01/05 at 2.830%, collateralized by U.S. Government Agency securities with various maturities to 05/15/29, market value $29,642 (repurchase proceeds $29,365)
                             29,363       29,365       —       —               29,363       29,365  

Page 9 of 10

Table of Contents

                                                                                 
                            Nations Short-Intermediate Government Fund     Nations Short-Term Income Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma              
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Repurchase agreement with ABN AMRO, Inc. dated 03/31/05 due 04/01/05 at 2.830%, collateralized by U.S. Government Agency securities with various maturities to 05/15/29, market value $6,264 (repurchase proceeds $6,205)
                             —       —       6,205       6,205               6,205       6,205  
Repurchase agreement with Credit Suisse First Boston Corp. dated 03/31/05, due 04/01/05 at 2.849% collateralized by U.S. Government Agency securities with various maturities to 11/15/30, market value $50,292 (repurchase proceeds $50,015)
                             50,011       50,015       —       —               50,011       50,015  
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.840%, collateralized by U.S. Government Agency securities with various maturities to 05/20/33, market value $7,544 (repurchase proceeds $7,447)
                             —       —       7,446       7,447               7,446       7,447  
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.840%, collateralized by U.S. Government Agency securities with various maturities to 05/20/33, market value $35,699 (repurchase proceeds $35,239)
                             35,236       35,239       —       —               35,236       35,239  
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.920%, collateralized by U.S. Government Agency securities with various maturities to 03/01/35, market value $9,848 (repurchase proceeds $9,696)
                             —       —       9,695       9,696               9,695       9,696  
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.920%, collateralized by U.S. Government Agency securities with various maturities to 03/31/35, market value $46,597 (repurchase proceeds $45,877)
                             45,873       45,877       —       —               45,873       45,877  
 
                                                                          
Repurchase Agreement Totals
                                     160,496               23,348                       183,844  
 
                                                                          
TOTAL SHORT-TERM OBLIGATIONS
                                     190,456               53,333                       243,789  
 
                                                                          
Total Investments
                     119.7 %             544,671               1,059,454                       1,604,125  
Other Assets & Liabilities, net
                     -19.7 %             (188,830 )             (75,353 )     (52 )             (264,235 )
 
                                                                        
Net Assets
                     100.0 %             355,841               984,101       (52 )             1,339,890  
 
                                                                        
Investments at cost
                                 160,496               23,348                     183,844  
 
                                                                        

Notes to Investment Portfolio:

(a)   All or a portion of this security was on loan at March 31, 2005. The aggregate cost and Market value of securities on loan at March 31, 2005 is $181,527 and $178,957, respectively.
 
(b)   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 March 31, 2005, these securities amounted to $6,691, which represents 0.3% of net assets.
 
(c)   Security, or a portion thereof, purchased on a delayed delivery basis.
 
(d)   Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by Banc of America Capital Management, LLC.
 
(e)   Security pledged as collateral for open futures contracts and TBAs.
 
(f)   Step bond.
 
(g)   Loan participation agreement.
 
(h)   This amount represents cash collateral received from securities lending activity.
 
(i)   Variable rate demand notes. These securities are payable upon demand and are secured by letters of credit or other credit support agreements from banks. The interest rates change periodically and the interest rates shown relect the rates at March 31, 2005. (j) Floating rate note. The interest rate shown reflects the rate as of March 31, 2005
 
(k)   Cost for federal income tax purposes is $458,621 for the Columbia Short Term Bond Fund, $548,566 for the Nations Short Intermediate Government Fund, $1,072,165 for the Nations Short Term Income Fund, and $2,079,352 for the funds combined.

ACRONYM
TBA — To be announced

Futures contracts
At March 31, 2005 the following fund had future contracts open:

                 
    market value     unrealized appreciation  
Short Intermediate Government Fund   of contracts     (depreciation)  
U.S. 5 year Treasury Note Futures (long position) expiring June 2005
     1,070       (6 )
U.S. 10 year Treasury Note Futures (long position) expiring June 2005
     19,996       (170 )
U.S. 5 year Treasury Bond Futures (short position) expiring June 2005
     (9,244 )     152  
 
              
Total net unrealized appreciation
             (24 )

Table of Contents

Pro -forma Combining
Statement of Assets & Liabilities
As of March 31, 2005 (unaudited)

                                             
    Columbia     Nations Short -     Nations                  
    Short Term Bond     Intermediate Govt     Short Term Income                  
    Fund     Fund     Fund     Pro Forma         Pro Forma  
In Thousands   Target Fund     Target Fund     Acquiring Fund     Adjustments         Combined  
Assets:
                                            
Investments, at cost
   $ 458,620     $ 384,983     $ 969,133     $ —         $ 1,812,736  
Repurchase agreement at cost
   $ 22,806     $ 160,496     $ 23,348                 $ 206,650  
Affiliated Investments, at cost
   $ —     $ 3,044     $ 79,684     $ —         $ 82,728  
 
                                  
Investments, at value
     454,306       381,131       956,422       —           1,791,859  
Affiliated Investments, at value
           3,044       79,684       —           82,728  
Repurchase agreements
     22,806       160,496       23,348                   206,650  
Cash
     1       31       722       —           754  
Receivable for:
                                          
Investments sold
     490       —       2,207       —           2,697  
Expense reimbursement due to investment advisor
     —       41       —                   41  
Fund shares sold
     4       266       372       —           642  
Interest
     3,598       2,946       7,378       —           13,922  
Income Receivable
                     —       —           —  
Expense waiver due from distributor
     89       —       —       —           89  
Deferred Trustees’ compensation plan
     11       —       —       —           11  
Other Assets
     —       1       —       —           1  
 
                                  
Total Assets
     481,305       547,956       1,070,133       —           2,099,394  
 
                                  
 
                                            
Liabilities:
                                            
Payable for:
                                            
Collateral on securities loaned
     —       160,496       23,348       —           183,844  
Income payable
     1,205       852       1,707       —           3,764  
Interest purchased
     505               —       —           505  
Investments purchased
     —       30,004       57,707       —           87,711  
Futures variation margin
     69       —       —       —           69  
Fund shares repurchased
     232       348       2,498       —           3,078  
Investment advisory fee
     174       87       254       —           515  
Administration fee
             44       102       —           146  
Pricing and bookkeeping fees
     18               —       —           18  
Trustees’ fees
     —       88       70       —           158  
Audit fee
     20       —       —       —           20  
Custody fee
     5       —       —       —           5  
Expense reimbursement due to Investment Advisor
     14       —       —       —           14  
Distribution and service fees
     129       27       26       —           182  
Deferred compensation plan
     11       —       —       —           11  
Other liabilities
     132       169       320       120    (d)       741  
 
                                  
Total Liabilities
     2,514       192,115       86,032       120           280,781  
 
                                  
Net Assets
   $ 478,791     $ 355,841     $ 984,101     $ (120 )  (d)     $ 1,818,613  
 
                                  
 
                                            
Composition of Net Assets:
                                            
Paid-in capital
   $ 484,616     $ 361,945     $ 1,002,142       —         $ 1,848,703  
Future contracts
   $ 161     $ (24 )   $ —       —         $ 137  
Undistributed/(Overdistributed) net investment income
     122       106       270       (120 )  (d)     $ 378  
Accumulated net realized gain/(loss)
     (1,794 )     (2,334 )     (5,600 )     —         $ (9,728 )
Unrealized appreciation/(depreciation) on investments
     (4,314 )     (3,852 )     (12,711 )     —           (20,877 )
 
                                  
Net Assets
   $ 478,791     $ 355,841     $ 984,101     $ (120 )  (d)     $ 1,818,613  
 
                                  
 
                                            
Investors A: (a)
                                            
Net assets
   $ —     $ 32,799,029     $ 38,129,671     $ 41,980,090         $ 112,908,790  
Shares outstanding
     —       7,967,291       3,882,123       (352,309 )  (e)     11,497,105  
 
                                    
Net asset value per share (b)
   $ —     $ 4.12     $ 9.82                 $ 9.82  
 
                                    
Maximum sales charge
             3.25 %     1.00 %                 1.00 %
Maximum offering price per
share (c)
             4.26       9.92                   9.92  
 
                                            
Investors B: (a)
                                            
Net assets
   $ —     $ 19,086,312     $ 1,477,081     $ 21,666,985         $ 42,230,378  
Shares outstanding
     —       4,632,685       150,552       (478,424 )  (e)       4,304,813  
 
                                    
Net asset value and offering price per share (b)
   $ —     $ 4.12     $ 9.81                 $ 9.81  
 
                                    
 
                                            
Investor C: (a)
                                            
Net assets
   $ —     $ 4,307,161     $ 17,980,569     $ 9,972,930         $ 32,260,660  
Shares outstanding
     —       1,047,181       1,832,195       408,486    (e)       3,287,862  
 
                                    
Net asset value and offering price per share (b)
   $ —     $ 4.11     $ 9.81                 $ 9.81  
 
                                    
 
                                            

 

Table of Contents

    Columbia     Nations Short -     Nations                  
    Short Term Bond     Intermediate Govt     Short Term Income                  
    Fund     Fund     Fund     Pro Forma         Pro Forma  
In Thousands   Target Fund     Target Fund     Acquiring Fund     Adjustments         Combined  
Primary A: (a)
                                            
Net assets
   $ —     $ 299,648,340     $ 926,514,057     $ 405,051,600         $ 1,631,213,997  
Shares outstanding
     —       72,739,601       94,501,434       (831,444 )(e)         166,409,591  
 
                                    
Net asset value and offering price per share (b)
     —     $ 4.12     $ 9.80                 $ 9.80  
 
                                    
 
                                            
Class A: (a)
                                            
Net assets
   $ 22,778,195     $ —     $ —     $ (22,778,195 )       $ —  
Shares outstanding
     2,665,679       —       —       (2,665,679 )         —  
 
                                    
Net asset value per share (b)
   $ 8.54     $ —     $ —                 $ —  
 
                                    
Maximum sales charge
     4.75 %                                    
Maximum offering price per share ( c)
     8.97                                      
 
                                            
Class B: (a)
                                            
Net assets
   $ 21,672,839     $ —     $ —     $ (21,672,839 )       $ —  
Shares outstanding
     2,536,332       —       —       (2,536,332 )         —  
 
                                    
Net asset value, offering and redemption price per share
   $ 8.54     $ —     $ —                 $ —  
 
                                    
 
                                            
Class C: (a)
                                            
Net assets
   $ 2,983,651     $ —     $ —     $ (2,983,651 )       $ —  
Shares outstanding
     349,171       —       —       (349,171 )         —  
 
                                    
Net asset value, offering and redemption price per share
   $ 8.54     $ —     $ —                 $ —  
 
                                    
 
                                            
Class D: (a)
                                            
Net assets
   $ 6,991,321     $ —     $ —     $ (6,991,321 )       $ —  
Shares outstanding
     818,189       —       —       (818,189 )         —  
 
                                    
Net asset value, offering and redemption price per share
   $ 8.54     $ —     $ —                 $ —  
 
                                    
 
                                            
Class G: (a)
                                            
Net assets
   $ 793,066     $ —     $ —     $ (793,066 )       $ —  
Shares outstanding
     92,811       —       —       (92,811 )         —  
 
                                    
Net asset value, offering and redemption price per share
   $ 8.54     $ —     $ —                 $ —  
 
                                    
 
                                            
Class T: (a)
                                            
Net assets
   $ 19,212,628     $ —     $ —     $ (19,212,628 )       $ —  
Shares outstanding
     2,248,424       —       —       (2,248,424 )         —  
 
                                    
Net asset value, offering and redemption price per share
   $ 8.54     $ —     $ —                 $ —  
 
                                    
 
                                            
Class Z: (a)
                                            
Net assets
   $ 404,359,649     $ —     $ —     $ (404,359,649 )       $ —  
Shares outstanding
     47,322,182       —       —       (47,322,182 )         —  
 
                                    
Net asset value, offering and redemption price per share
   $ 8.54     $ —     $ —                 $ —  
 
                                    

(a)   Class A and T shares of Columbia Short Term Bond Fund will merge into Investor A shares of Nations Short Term Income Fund on the date of the Acquisition.
 
    Class B shares of Columbia Short Term Bond Fund will merge into Investor B shares of Nations Short Term Income Fund on the date of the Acquisition.
 
    Class C and D shares of Columbia Short Term Bond Fund will merge into Investor C shares of Nations Short Term Income Fund on the date of the Acquisition.
 
    Class G and Z shares of Columbia Short Term Bond Fund will merge into Primary A shares of Nations Short Term Income Fund on the date of the Acquisition.
 
(b)   Redemption price per share is equal to net assets value less any applicable contingent deferred sales charge.
 
(c)   On sales of $50,000 or more the offering price is reduced.
 
(d)   Adjustment reflects one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of Trustees of $67,894 and $51,850 to be borne by Columbia Short Term Bond Fund and Nations Short Intermediate Government Fund, respectively.
 
(e)   Reflects estimated shares issued to Target fund at the time of the merger.

Table of Contents

Pro -forma Combining
Statement of Assets & Liabilities
As of March 31, 2005 (unaudited)

                                         
    Columbia             Nations              
    Short Term Bond             Short Term Income              
    Fund             Fund     Pro Forma     Pro Forma  
In Thousands   Target Fund             Acquiring Fund     Adjustments     Combined  
Assets:
                                        
Investments, at cost
   $ 458,620             $ 969,133     $ —     $ 1,427,753  
Repurchase agreement at cost
   $ 22,806             $ 23,348             $ 46,154  
Affiliated Investments, at cost
   $ —             $ 79,684     $ —     $ 79,684  
 
                              
Investments, at value
     454,306               956,422       —       1,410,728  
Affiliated Investments, at value
     —               79,684       —       79,684  
Repurchase agreement
     22,806               23,348               46,154  
Cash
     1               722       —       723  
Receivable for:
                                        
Investments sold
     490               2,207       —       2,697  
Fund shares sold
     4               372       —       376  
Interest
     3,598               7,378       —       10,976  
Expense waiver due from distributor
     89               —       —       89  
Deferred Trustees’ compensation plan
     11               —       —       11  
 
                              
Total Assets
     481,305               1,070,133       —       1,551,438  
 
                              
 
                                        
Liabilities:
                                        
Payable for:
                                        
Collateral on securities loaned
     —               23,348               23,348  
Income payable
     1,205.00               1,707               2,912  
Interest purchased
     505               —               505  
Investments purchased
                     57,707               57,707  
Futures variation margin
     69               —       —       69  
Fund shares repurchased
     232               2,498       —       2,730  
Investment advisory fee
     174               254       —       428  
Administration fee
                     102       —       102  
Pricing and bookkeeping fees
     18               —       —       18  
Trustees’ fees
                     70       —       70  
Audit fee
     20               —       —       20  
Custody fee
     5               —       —       5  
Distribution and service fees
     129               26       —       155  
Expense reimbursement due from Investment Advisor
     14                               14  
Deferred compensation plan
     11               —       —       11  
Other liabilities
     132               320       68 (d)     520  
 
                              
Total Liabilities
     2,514               86,032       68       88,614  
 
                              
Net Assets
   $ 478,791             $ 984,101     $ (68 )(d)   $ 1,462,824  
 
                              

 

Table of Contents

Pro -forma Combining
Statement of Assets & Liabilities
As of March 31, 2005 (unaudited)

                                     
    Columbia     Nations                  
    Short Term Bond     Short Term Income                  
    Fund     Fund     Pro Forma         Pro Forma  
In Thousands   Target Fund     Acquiring Fund     Adjustments         Combined  
Investors A: (a)
                                    
Net assets
   $ —     $ 38,129,671     $ 41,984,869         $ 80,114,540  
Shares outstanding
     —       3,882,123       4,275,445   (e)       8,157,568  
 
                            
Net asset value per share (b)
   $ —     $ 9.82                 $ 9.82  
 
                            
Maximum sales charge
             1.00 %                 1.00 %
Maximum offering price per share ( c)
             9.92                   9.92  
 
                                    
Investors B: (a)
                                    
Net assets
   $ —     $ 1,477,081     $ 21,669,766         $ 23,146,847  
Shares outstanding
     —       150,552       2,208,947   (e)       2,359,499  
 
                            
Net asset value and offering price per share (b)
   $ —     $ 9.81                 $ 9.81  
 
                            
 
                                    
Investor C: (a)
                                    
Net assets
   $ —     $ 17,980,569     $ 9,973,558         $ 27,954,127  
Shares outstanding
     —       1,832,195       1,016,673   (e)       2,848,868  
 
                            
Net asset value and offering price per share (b)
   $ —     $ 9.81                 $ 9.81  
 
                            
 
                                    
Primary A: (a)
                                    
Net assets
   $ —     $ 926,514,057     $ 405,095,262         $ 1,331,609,319  
Shares outstanding
     —       94,501,434       41,336,251   (e)       135,837,685  
 
                            
Net asset value and offering price per share (b)
     —     $ 9.80                 $ 9.80  
 
                            
 
                                    
Class A: (a)
                                    
Net assets
   $ 22,778,195     $ —     $ (22,778,195 )       $ —  
Shares outstanding
     2,665,679       —       (2,665,679 )         —  
 
                            
Net asset value per share (b)
   $ 8.54     $ —                 $ —  
 
                            
Maximum sales charge
     4.75 %                            
Maximum offering price per share ( c)
     8.97                              
 
                                    
Class B: (a)
                                    
Net assets
   $ 21,672,839     $ —     $ (21,672,839 )       $ —  
Shares outstanding
     2,536,332       —       (2,536,332 )         —  
 
                            
Net asset value, offering and redemption price per share
   $ 8.54     $ —                 $ —  
 
                            
 
                                    
Class C: (a)
                                    
Net assets
   $ 2,983,651     $ —     $ (2,983,651 )       $ —  
Shares outstanding
     349,171       —       (349,171 )         —  
 
                            
Net asset value, offering and redemption price per share
   $ 8.54     $ —                 $ —  
 
                            
 
                                    
Class D: (a)
                                    
Net assets
   $ 6,991,321     $ —     $ (6,991,321 )       $ —  
Shares outstanding
     818,189       —       (818,189 )         —  
 
                            
Net asset value, offering and redemption price per share
   $ 8.54     $ —                 $ —  
 
                            
 
                                    
Class G: (a)
                                    
Net assets
   $ 793,066     $ —     $ (793,066 )       $ —  
Shares outstanding
     92,811       —       (92,811 )         —  
 
                            
Net asset value, offering and redemption price per share
   $ 8.54     $ —                 $ —  
 
                            
 
                                    
Class T: (a)
                                    
Net assets
   $ 19,212,628     $ —     $ (19,212,628 )       $ —  
Shares outstanding
     2,248,424       —       (2,248,424 )         —  
 
                            
Net asset value, offering and redemption price per share
   $ 8.54     $ —                 $ —  
 
                            
 
                                    
Class Z: (a)
                                    
Net assets
   $ 404,359,649     $ —     $ (404,359,649 )       $ —  
Shares outstanding
     47,322,182       —       (47,322,182 )         —  
 
                            
Net asset value, offering and redemption price per share
   $ 8.54     $ —                 $ —  
 
                            

(a)   Class A and T shares of Columbia Short Term Bond Fund will merge into Investor A shares of Nations Short Term Income Fund on the date of the Acquisition.
 
    Class B shares of Columbia Short Term Bond Fund will merge into Investor B shares of Nations Short Term Income Fund on the date of the Acquisition.
 
    Class C and D shares of Columbia Short Term Bond Fund will merge into Investor C shares of Nations Short Term Income Fund on the date of the Acquisition.
 
    Class G and Z shares of Columbia Short Term Bond Fund will merge into Primary A shares of Nations Short Term Income Fund on the date of the Acquisition.
 
(b)   Redemption price per share is equal to net assets value less any applicable contingent deferred sales charge.
 
(c)   On sales of $50,000 or more the offering price is reduced.
 
(d)   Adjustment reflects one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of Trustees of $67,894 to be borne by Columbia Short Term Bond Fund, respectively.
 
(e)   Reflects estimated shares issued to Target fund at the time of the merger.

 

Table of Contents

Pro -forma Combining
Statement of Assets & Liabilities
As of March 31, 2005 (unaudited)

                                     
    Nations Short -     Nations                  
    Intermediate Govt     Short Term Income                  
    Fund     Fund     Pro Forma         Pro Forma  
In Thousands   Target Fund     Acquiring Fund     Adjustments         Combined  
Assets:
                                    
Investments, at cost
   $ 384,983     $ 969,133     $ —         $ 1,354,116  
Repurchase agreement at cost
   $ 160,496     $ 23,348                 $ 183,844  
Affiliated Investments, at cost
   $ 3,044     $ 79,684     $ —         $ 82,728  
 
                            
Investments, at value
     381,131       956,422       —           1,337,553  
Affiliated Investments, at value
     3,044       79,684       —           82,728  
Repurchase agreement
     160,496       23,348                   183,844  
Cash
     31       722       —           753  
Receivable for:
                                 —  
Investments sold
     —       2,207       —           2,207  
Investments sold on a delayed delivery basis
     —       —                   —  
Fund shares sold
     266       372       —           638  
Interest
     2,946       7,378       —           10,324  
Income Receivable
             —       —           —  
Futures variation margin
     41       —       —           41  
Dollar roll fee income
             —       —           —  
Expense reimbursement due from Investment Advisor
     —       —       —           —  
Deferred Trustees’ compensation plan
     —       —       —           —  
Other Assets
     1       —       —           1  
 
                            
Total Assets
     547,956       1,070,133       —           1,618,089  
 
                            
 
                                    
Liabilities:
                                    
Payable for:
                                    
Collateral on securities loaned
     160,496       23,348                   183,844  
Income payable
     852       1,707                   2,559  
Interest purchased
             —                   —  
Investments purchased
     30,004       57,707                   87,711  
Investments purchased on a delayed delivery basis
             —       —           —  
Fund shares repurchased
     348       2,498       —           2,846  
Distributions
             —       —           —  
Investment advisory fee
     87       254       —           341  
Administration fee
     44       102       —           146  
Accrued Expenses
             —       —           —  
Pricing and bookkeeping fees
             —       —           —  
Trustees’ fees
     88       70       —           158  
Audit fee
             —       —           —  
Custody fee
     —       —       —           —  
Distribution and service fees
     27       26       —           53  
Deferred compensation plan
     —       —       —           —  
Other liabilities
     169       320       52    (d)       541  
 
                            
Total Liabilities
     192,115       86,032       52           278,199  
 
                            
Net Assets
   $ 355,841     $ 984,101     $ (52 )  (d)     $ 1,339,890  
 
                            
 
                                    
Composition of Net Assets:
                                    
Paid-in capital
   $ 361,945     $ 1,002,142       —         $ 1,364,087  
Future contracts
   $ (24 )   $ —       —         $ (24 )
Undistributed/(Overdistributed) net investment income
     106       270       (52 )  (d)     $ 324  
Accumulated net realized gain/(loss)
     (2,334 )     (5,600 )     —         $ (7,934 )
Unrealized appreciation/(depreciation) on investments
     (3,852 )     (12,711 )     —           (16,563 )
 
                            
Net Assets
   $ 355,841     $ 984,101     $ (52 )  (d)     $ 1,339,890  
 
                            
 
                                    
Investors A: (a)
                                    
Net assets
   $ 32,799,029     $ 38,129,671     $ (4,779 )       $ 70,923,921  
Shares outstanding
     7,967,291       3,882,123       (4,627,754 )  (e)     7,221,660  
 
                              
Net asset value per share (b)
   $ 4.12     $ 9.82                 $ 9.82  
 
                              
Maximum sales charge
     3.25 %     1.00 %                 1.00 %
Maximum offering price per share ( c)
     4.26       9.92                   9.92  
 
                                    
Investors B: (a)
                                    
Net assets
   $ 19,086,312     $ 1,477,081     $ (2,781 )       $ 20,560,612  
Shares outstanding
     4,632,685       150,552       (2,687,371 ) (e)       2,095,866  
 
                              
Net asset value and offering price per share (b)
   $ 4.12     $ 9.81                 $ 9.81  
 
                              
 
                                    
Investor C: (a)
                                    
Net assets
   $ 4,307,161     $ 17,980,569     $ (628 )       $ 22,287,102  
Shares outstanding
     1,047,181       1,832,195       (608,187 ) (e)       2,271,189  
 
                              
Net asset value and offering price per share (b)
   $ 4.11     $ 9.81                 $ 9.81  
 
                              
 
                                    

 

Table of Contents

                                     
    Nations Short –     Nations                  
    Intermediate Govt     Short Term Income                  
    Fund     Fund     Pro Forma         Pro Forma  
In Thousands   Target Fund     Acquiring Fund     Adjustments         Combined  
Primary A: (a)
                                    
Net assets
   $ 299,648,340     $ 926,514,057     $ (43,662 )       $ 1,226,118,735  
Shares outstanding
     72,739,601       94,501,434       (42,167,695 )(e)         125,073,340  
 
                              
Net asset value and offering price per share (b)
   $ 4.12     $ 9.80                 $ 9.80  
 
                              
 
                                    
Class A: (a)
                                    
Net assets
   $ —     $ —     $ —         $ —  
Shares outstanding
     —       —       —           —  
 
                              
Net asset value per share (b)
   $ —     $ —                 $ —  
 
                              
Maximum sales charge
                                   
Maximum offering price per share ( c)
                                    
 
                                    
Class B: (a)
                                    
Net assets
   $ —     $ —     $ —         $ —  
Shares outstanding
     —       —       —           —  
 
                              
Net asset value, offering and redemption price per share
   $ —     $ —                 $ —  
 
                              
 
                                    
Class C: (a)
                                    
Net assets
   $ —     $ —     $ —         $ —  
Shares outstanding
     —       —       —           —  
 
                              
Net asset value, offering and redemption price per share
   $ —     $ —                 $ —  
 
                              
 
                                    
Class D:
                                    
Net assets
   $ —     $ —     $ —         $ —  
Shares outstanding
     —       —       —           —  
 
                              
Net asset value, offering and redemption price per share
   $ —     $ —                 $ —  
 
                              
 
                                    
Class G:
                                    
Net assets
   $ —     $ —     $ —         $ —  
Shares outstanding
     —       —       —           —  
 
                              
Net asset value, offering and redemption price per share
   $ —     $ —                 $ —  
 
                              
 
                                    
Class T:
                                    
Net assets
   $ —     $ —     $ —         $ —  
Shares outstanding
     —       —       —           —  
 
                              
Net asset value, offering and redemption price per share
   $ —     $ —                 $ —  
 
                              
 
                                    
Class Z:
                                    
Net assets
   $ —     $ —     $ —         $ —  
Shares outstanding
     —       —       —           —  
 
                              
Net asset value, offering and redemption price per share
   $ —     $ —                 $ —  
 
                              

(a)   Investors A, B, C and Primary A shares of Nations Short Inter. Gov. Fund are exchanged for new Class A, B, C and Primary A shares of Nations Short Term Income Fund shares, respectively based on the Net Asset Value per share of Nations Short Term Income Fund’s Investors A, B, C and Primary A Shares, respectively at the time of the merger.
 
(b)   Redemption price per share is equal to net assets value less any applicable contingent deferred sales charge.
 
(c)   On sales of $50,000 or more the offering price is reduced.
 
(d)   Adjustment reflects one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of Trustees of a $51,850 to be borne by Nations Short Intermediate Government Fund, respectively.
 
(e)   Reflects estimated shares issued to Target fund at the time of the merger.

 

Table of Contents

Pro- forma Combining
Statement of Operations
For the Twelve Months Ended March 31, 2005 (Unaudited)

                                             
    Columbia     Nations Short -     Nations                  
    Short Term Bond     Intermediate Govt     Short Term Income                  
    Fund     Fund     Fund     Pro Forma     Pro Forma      
    Target Fund     Target Fund     Acquiring Fund     Adjustments     Combined      
Investment Income:
                                            
Interest
   $ 17,782     $ 12,601     $ 31,809     $ —     $ 62,192      
Interest Income from Affiliated Funds
     —       68       880       —     $ 948      
Dollar roll fee income
     —       —                     $ —      
Security lending
             76       38       —     $ 114      
Consent Fee
     2       —       —       —     $ 2      
 
                                  
Total Investment Income
     17,784       12,745       32,727       —       63,256      
 
                                  
 
                                            
Expenses:
                                            
Investment advisory fee
     2,492       1,118       3,445       (931 )     6,124     (c)(g)
Administration fee
             738       2,243       (123 )     2,858     (c)(g)
Distribution fee:
                                     —      
Class B
     180       168       12       —       360     (a)
Class C
     22       40       184       75       321     (a)
Class D
     75                       (75 )     —      
Class G
     7       —               (7 )     —      
Service fee:
                                            
Class A
     67       88       230       53       438     (a)
Class B
     60       56       4               120     (a)
Class C
     7       13       61       25       107     (a)
Class D
     25                       (25 )     —      
Class G
     2                       (2 )     —      
Class T
     32                       (32 )     —      
Transfer agent fee
     523       110       330       (456 )     507     (d)
Pricing and bookkeeping fees
     169       —               (7 )     162     (b)(g)
Trustees’ fees
     16       25       25       (13 )     53     (b)
Printing fees
             29       56       (85 )     —      
Custody fee
     32       29       85       —       146     (b)
Registration fees
     105       34       45       (138 )     46     (b)
Non-Recurring Costs (see Note 5)
     25       101       313       —       439      
Legal and audit fees
     55       112       113       (75 )     205     (b)
Other expenses
     101       31       79       71       282     (b)
 
                                  
Total Operating Expenses
     3,995       2,692       7,225       (1,745 )     12,167      
Interest expense
     —       —       —       —       —      
 
                                  
Total Expenses
     3,995       2,692       7,225       (1,745 )     12,167      
Fees and expenses waived or reimbursed by Investment Advisor
     (147 )     —       (865 )     498       (514 )   (f)
Fees waived by Distributor
                             —       —      
Class C
     (18 )     —       —       (171 )     (189 )   (e)
Class D
     (60 )     —       —       60       —      
Class G
     —       —       —               —      
Class T
     —       —       —               —      
Custody earnings credit
     (1 )     (5 )     (21 )     —       (27 )    
Non-recurring costs assumed by Investment Advisor (see Note 11)
     (25 )     (101 )     (313 )     —       (439 )    
 
                                  
Net Expenses
     3,744       2,586       6,026       (1,358 )     10,998      
 
                                  
Net Investment Income
     14,040       10,159       26,701       1,358       52,258      
 
                                  
 
                                            
Net Realized and Unrealized Gain (Loss) on Investments:
                                            
Net realized gain on investments
     (1,634 )     (1,885 )     (6,274 )     —       (9,793 )    
Net change in unrealized appreciation/depreciation on investments
     (18,953 )     (12,235 )     (21,177 )     —       (52,365 )    
 
                                  
Net
     (20,587 )     (14,120 )     (27,451 )     —       (62,158 )    
 
                                  
 
                                            
Net Increase in Net Assets from Operations
   $ (6,547 )   $ (3,961 )   $ (750 )   $ 1,358     $ (9,900 )    
 
                                  

(a)   Based on the contract in effect for Columbia Short Term Bond Fund, the target fund.
 
(b)   Reflects elimination of duplicate expenses achieved as a result of merging funds.
 
(c)   Reflects current contractual rates for Nations Short Term Income Fund, the surviving Fund in the merger, pursuant to the Assurance of Discontinuous with the NYAG, effective December 1, 2004.
 
(d)   Reflects the impact of changes to the transfer agent fee that is expected to be implemented on the date the merger is consumated.
 
(e)   Based on voluntary fee waiver currently in effect for Columbia Short Term Bond Fund, the target Fund.
 
(f)   Reflects contractual Waiver of Administration fee and contractual expense cap of 0.48%
 
(g)   Adjustment to realign Columbia Short Term Bond Fund’s fee and Nations Short Term Intermediate Govt. Fund’s fee to Nations Short Term Income Fund’s structure.

 

Table of Contents

Pro- forma Combining
Statement of Operations
For the Twelve Months Ended March 31, 2005 (Unaudited)

                                 
    Columbia     Nations              
    Short Term Bond     Short Term Income              
    Fund     Fund     Pro Forma     Pro Forma  
    Target Fund     Acquiring Fund     Adjustments     Combined  
Investment Income:
                                
Interest
   $ 17,782     $ 31,809     $ —     $ 49,591  
Interest Income from Affiliated Funds
     —       880       —     $ 880  
Dollar roll fee income
     —                     $ —  
Security lending
             38       —     $ 38  
Consent Fee
     2       —       —     $ 2  
 
                        
Total Investment Income
     17,784       32,727       —       50,511  
 
                        
 
                                
Expenses:
                                
Investment advisory fee
     2,492       3,445       (931 )     5,006   (c)(g)
Administration fee
             2,243       93       2,336   (c)(g)
Distribution fee:
                             —  
Class B
     180       12       —       192   (a)
Class C
     22       184       75       281   (a)
Class D
     75               (75 )     —  
Class G
     7               (7 )     —  
Service fee:
                                
Class A
     67       230       53       350   (a)
Class B
     60       4               64   (a)
Class C
     7       61       25       93   (a)
Class D
     25               (25 )     —  
Class G
     2               (2 )     —  
Class T
     32               (32 )     —  
Transfer agent fee
     523       330       (419 )     434   (d)
Pricing and bookkeeping fees
     169               (7 )     162   (b)(g)
Trustees’ fees
     16       25       (5 )     36   (b)
Printing fees
             56       (56 )     —  
Custody fee
     32       85       —       117   (b)
Registration fees
     105       45       (104 )     46   (b)
Non-Recurring Costs (see Note 5)
     25       313       —       338  
Legal and audit fees
     55       113       (43 )     125   (b)
Other expenses
     101       79       47       227   (b)
 
                        
Total Operating Expenses
     3,995       7,225       (1,413 )     9,807  
Interest expense
     —       —       —       —  
 
                        
Total Expenses
     3,995       7,225       (1,413 )     9,807  
Fees and expenses waived or reimbursed by Investment Advisor
     (147 )     (865 )     591       (421 ) (f)
Fees waived by Distributor
                     —       —  
Class C
     (18 )     —       (147 )     (165 ) (e)
Class D
     (60 )     —       60       —  
Class G
     —       —       —       —  
Class T
     —       —       —       —  
Custody earnings credit
     (1 )     (21 )     —       (22 )
Non-recurring costs assumed by Investment Advisor (see Note 11)
     (25 )     (313 )     —       (338 )
 
                        
Net Expenses
     3,744       6,026       (909 )     8,861  
 
                        
Net Investment Income
     14,040       26,701       909       41,650  
 
                        
 
                                
Net Realized and Unrealized Gain (Loss) on Investments:
                                
Net realized gain on investments
     (1,634 )     (6,274 )     —       (7,908 )
Net change in unrealized appreciation/depreciation on investments
     (18,953 )     (21,177 )     —       (40,130 )
 
                        
Net
     (20,587 )     (27,451 )     —       (48,038 )
 
                        
 
                                
Net Increase in Net Assets from Operations
   $ (6,547 )   $ (750 )   $ 909     $ (6,388 )
 
                        

(a)   Based on the contract in effect for Columbia Short Term Bond Fund, the target fund.
 
(b)   Reflects elimination of duplicate expenses achieved as a result of merging funds.
 
(c)   Reflects current contractual rates for Nations Short Term Income Fund, the surviving Fund in the merger, pursuant to the Assurance of Discontinuous with the NYAG, effective December 1, 2004.
 
(d)   Reflects the impact of changes to the transfer agent fee that is expected to be implemented on the date the merger is consumated.
 
(e)   Based on voluntary fee waiver currently in effect for Columbia Short Term Bond Fund, the target Fund.
 
(f)   Reflects contractual Waiver of Administration fee and contractual expense cap of 0.48%
 
(g)   Adjustment to realign Columbia Short Term Bond Fund’s fee to Nations Short Term Income Fund’s current fee structure.

 

Table of Contents

Pro- forma Combining
Statement of Operations
For the Twelve Months Ended March 31, 2005 (Unaudited)

                                 
    Nations Short -     Nations              
    Intermediate Govt     Short Term Income              
    Fund     Fund     Pro Forma     Pro Forma  
    Target Fund     Acquiring Fund     Adjustments     Combined  
Investment Income:
                                
Interest
   $ 12,601     $ 31,809     $ —     $ 44,410  
Interest Income from Affiliated Funds
     68       880       —     $ 948  
Dollar roll fee income
     —                     $ —  
Security lending
     76       38       —     $ 114  
Consent Fee
     —       —       —     $ —  
 
                        
Total Investment Income
     12,745       32,727       —       45,472  
 
                        
 
                                
Expenses:
                                
Investment advisory fee
     1,118       3,445       (1 )     4,562   (c)
Administration fee
     738       2,243       (852 )     2,129   (c)
Distribution fee:
                             —  
Class B
     168       12               180   (a)
Class C
     40       184               224   (a)
Class D
                             —  
Class G
     —                       —  
Service fee:
                                
Class A
     88       230               318   (a)
Class B
     56       4               60   (a)
Class C
     13       61               74   (a)
Class D
                             —  
Class G
                             —  
Class T
                             —  
Transfer agent fee
     110       330       (210 )     230   (d)
Pricing and bookkeeping fees
     —               140       140   (b)
Trustees’ fees
     25       25       (8 )     42   (b)
Printing fees
     29       56       (85 )     —  
Custody fee
     29       85               114   (b)
Registration fees
     34       45       (33 )     46   (b)
Non-Recurring Costs (see Note 5)
     101       313               414  
Legal and audit fees
     112       113       (29 )     196   (b)
Other expenses
     31       79       81       191   (b)
 
                        
Total Operating Expenses
     2,692       7,225       (997 )     8,920  
Interest expense
     —       —       —       —  
 
                        
Total Expenses
     2,692       7,225       (997 )     8,920  
Fees and expenses waived or reimbursed by Investment Advisor
     —       (865 )     561       (304 )
Fees waived by Distributor
                             —  
Class C
     —       —               —  
Class D
     —       —               —  
Class G
     —       —               —  
Class T
     —       —               —  
Custody earnings credit
     (5 )     (21 )     —       (26 )
Non-recurring costs assumed by Investment Advisor (see Note 11)
     (101 )     (313 )     —       (414 )
 
                        
Net Expenses
     2,586       6,026       (436 )     8,176  
 
                        
Net Investment Income
     10,159       26,701       436       37,297  
 
                        
 
                                
Net Realized and Unrealized Gain (Loss) on Investments:
                                
Net realized gain on investments
     (1,885 )     (6,274 )     —       (8,159 )
Net change in unrealized appreciation/depreciation on investments
     (12,235 )     (21,177 )     —       (33,412 )
 
                        
Net
     (14,120 )     (27,451 )     —       (41,571 )
 
                        
 
                                
Net Increase in Net Assets from Operations
   $ (3,961 )   $ (750 )   $ 436     $ (4,275 )
 
                        

(a)   Based on the contract in effect for Columbia Short Term Bond Fund, the target fund.
 
(b)   Reflects elimination of duplicate expenses achieved as a result of merging funds.
 
(c)   Reflects current contractual rates for Nations Short Term Income Fund, the surviving Fund in the merger, pursuant to the Assurance of Discontinuous with the NYAG, effective December 1, 2004.
 
(d)   Reflects the impact of changes to the transfer agent fee that is expected to be implemented on the date the merger is consumated.

 

Table of Contents

NATIONS SHORT-TERM INCOME FUND
AND
COLUMBIA SHORT TERM BOND FUND

PRO FORMA COMBINING FINANCIAL STATEMENTS

Notes to Financial Statements
March 31, 2005
(unaudited)

Note 1. Organization

Nations Short-Term Income Fund (the “Acquiring Fund”), a series of Nations Funds Trust (the “Trust”), is a Delaware business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Columbia Short Term Bond Fund (“Target Fund”) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

Investment Goal

The Acquiring Fund seeks high current income consistent with minimal fluctuations in principal. The Target Fund seeks a high level of current income consistent with a high degree of principal stability by investing primarily in short-term, investment-grade, fixed income securities.

Fund Shares

The Acquiring Fund and the Target Fund each may issue an unlimited number of shares. The Acquiring Fund offers four classes of shares: Primary A, Investor A, Investor B and Investor C shares. The Target Fund offers seven classes of shares: Class A, Class B, Class C, Class D, Class G, Class T and Class Z shares. Each share class has its own expense structure.

Note 2. Basis of Combination

The accompanying pro-forma financial statements are presented to show the effect of the proposed merger of the Target Fund by the Acquiring Fund as if such merger had occurred on April 1, 2004. The following notes refer to the accompanying pro-forma financial statements of such proposed merger.

Under the terms of the merger, the combination of the Target Fund and Acquiring Fund will be accounted for by the method of accounting for tax-free mergers of investment companies. The merger will be accomplished by a combination of the net assets of the Target Fund into the Acquiring Fund in exchange for new shares of the Acquiring Fund at net asset value.

The Pro Forma Investment Portfolio and Pro Forma Statement of Assets and Liabilities of the Target Fund and Acquiring Fund have been combined to reflect balances as of March 31, 2005. The Pro Forma Statement of Operations of the Target Fund and Acquiring Fund has been combined to reflect twelve months ended March 31, 2005. Banc of America Capital Management, LLC. (“BACAP”) expects that all of the securities held by the Target Fund as of March 31, 2005, would comply with the compliance guidelines and/or investment restrictions of the Acquiring Fund.

Following the merger the Acquiring Fund will be the accounting survivor. In accordance with accounting principles generally accepted in the United States of America, the historical cost of investment securities will be carried forward to the Acquiring Fund and the results of operations for pre-combined periods will not be restated.

 

Table of Contents

The accompanying pro-forma financial statements should be read in conjunction with the financial statements of the Acquiring Fund and the Target Fund included within their respective annual shareholder reports dated March 31, 2005 and August 31, 2004 for the Acquiring Fund and the Target Fund, respectively, as well as the semi-annual shareholder reports dated September 30, 2004 and February 28, 2005 for the Acquiring Fund and the Target Fund, respectively.

Note 3. Significant Accounting Policies

Security Valuation

The Acquiring Fund and the Target Fund use the identical policy for security valuation. Debt securities generally are valued by pricing services approved by the Fund’s Board of Trustees, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Certain securities may be valued based upon quotes provided by one or more principal market makers.

Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value.

Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.

Options are valued at the last reported sale price, or in the absence of a sale, the mean between the last quoted bid and ask price.

Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

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.

Futures Contracts

The Fund may invest in municipal and U.S. Treasury futures contracts. The Fund will invest in these instruments to hedge against the effects of changes in the value of portfolio securities due to anticipated changes in interest rates and/or market conditions, for duration management, or when the transactions are economically appropriate to the reduction of risk inherent in the management of the Fund and not for trading purposes. The use of futures contracts involves certain risks, which include: (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the instrument or the underlying securities, or (3) an inaccurate prediction by Columbia Management Advisors, Inc. of the future direction of interest rates. Any of these risks may involve amounts exceeding the variation margin recorded in the Fund’s Statement of Assets and Liabilities at any given time.

Upon entering into a futures contract, the Fund deposits cash or securities with the broker in an amount sufficient to meet the initial margin requirement. Subsequent payments are made or received by the Fund equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in unrealized gains or losses. The Fund also identifies portfolio securities as segregated with the custodian in a

 

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separate account in an amount equal to the futures contract. The Fund recognizes a realized gain or loss when the contract is closed or expires.

Options

The Fund may write call and put options on futures it owns or in which it may invest. Writing put options tends to increase the Fund’s exposure to the underlying instrument. Writing call options tends to decrease the Fund’s exposure to the underlying instrument. When the Fund writes a call or put option, an amount equal to the premium received is recorded as a liability and subsequently marked-to-market to reflect the current value of the option written. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against the amounts paid on the underlying future transaction to determine the realized gain or loss. The Fund as a writer of an option has no control over whether the underlying future may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the future underlying the written option. There is the risk the Fund may not be able to enter into a closing transaction because of an illiquid market.

The Fund may also purchase put and call options. Purchasing call options tends to increase the Fund’s exposure to the underlying instrument. Purchasing put options tends to decrease the Fund’s exposure to the underlying instrument. The Fund pays a premium, which is included in the Fund’s Statement of Assets and Liabilities as an investment and subsequently marked-to-market to reflect the current value of the option. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which expire are treated as realized losses. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying future transaction to determine the realized gain or loss. The Fund’s custodian will set aside cash or liquid portfolio securities equal to the amount of the written options contract commitment in a separate account.

Securities Lending

Under an agreement with Bank of New York (“BNY”), the Fund may lend its securities to certain approved brokers, dealers and other financial institutions. Each loan is collateralized by cash, in an amount at least equal to the market value of the securities loaned plus accrued income from the investment of the collateral. The cash collateral received is invested in Nations Cash Reserves. A portion of the income generated by the investment of the collateral, net of any rebates paid by BNY to the borrowers, is remitted to BNY as lending agent, and the remainder is paid to the Fund. Generally, in the event of borrower default, the Fund has the right to use the collateral to offset any losses incurred. In the event the Fund is delayed or prevented from exercising its right to dispose of the collateral, there may be a potential loss to the Fund. The Fund bears the risk of loss with respect to the investment of collateral. The income earned by each Fund from securities lending is included in its Statement of Operations.

Delayed Delivery Securities

The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” basis. This may increase the risk if the other party to the transaction fails to deliver and causes the Fund to subsequently invest at less advantageous prices. The Fund identifies cash or liquid portfolio securities in an amount equal to the delayed delivery commitment.

Loan Participation and Commitments

The Fund may invest in Loan Participations. When the Fund purchases a Loan Participation, the Fund typically enters into a contractual relationship with the lender or third party selling such Participation (“Selling Participant”), but not the Borrower. As a result, the Fund assumes the credit risk of the Borrower, Selling Participant and any other persons interpositioned between the Fund and the Borrower (“Intermediate Participants”). The Fund may not directly benefit from the collateral supporting the Senior Loan in which it has purchased the Loan Participant.

 

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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, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

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 tax-exempt or 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.

Note 4. Fees and Compensations Paid to Affiliates

Investment Advisory Fee

BACAP, a wholly-owned subsidiary of Bank of America, N.A. (“Bank of America”), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, is the investment advisor to the Acquiring Fund. BACAP receives an investment advisory fee, calculated daily and payable monthly, at the annual rate of 0.30% based on the Fund’s average daily net assets. Prior to December 1, 2004, BACAP waived a portion of its investment advisory fee at the annual rate of 0.10% of the Fund’s average daily net assets. For the year ended March 31, 2005, the Fund’s effective investment advisory fee rate was 0.23%.

Administration Fee

BACAP Distributors, LLC (“BACAP Distributors”), a wholly-owned subsidiary of Bank of America, provides administrative and other services to the Fund. Effective December 1, 2004, BACAP Distributors is entitled to receive an administration fee, computed daily and paid monthly, at the annual rate of 0.14% of the Fund’s average daily net assets. Prior to December 1, 2004, BACAP Distributors received a monthly administration fee at the annual rate of 0.22% of the Fund’s average daily net assets.

Effective December 1, 2004, BACAP Distributors has agreed to waive a portion of its administration fee for the Fund at an annual rate of 0.02% of the Fund’s average daily net assets. BACAP Distributors, at its discretion, may revise or discontinue this arrangement any time.

For the year ended March 31, 2005, the Fund’s effective administration fee rate was 0.19%.

Transfer Agent Fee

PFPC Inc. serves as the transfer agent for the Fund’s shares. Bank of America serves as the sub-transfer agent for the Primary A Shares of the Fund. Bank of America is entitled to receive from the transfer agent a fee equal to the costs incurred by Bank of America in providing services pursuant to its obligations as sub-transfer agent at the annual rate of up to 0.01% of the net assets attributable to the Primary A shares of the Fund. For the year ended March 31, 2005, Bank of America earned $26,000 in sub-transfer agent fees from the Fund for providing such services. This amount is included in “Transfer agent fees” in the Fund’s Statement of Operations.

 

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Underwriting Discounts, Service and Distribution Fees

BACAP Distributors serves as the distributor of the Fund’s shares. For the year ended March 31, 2005, the Distributor has retained net underwriting discounts of $5,000 on sales of the Fund’s Investor A shares and received net CDSC fees of $2,000, $0 and $3,000 on Investor A, Investor B and Investor C share redemptions, respectively.

The Fund has adopted shareholder servicing plans and distribution plans for the Investor B and Investor C shares of the Fund and a combined distribution and shareholder servicing plan for Investor A Shares of the Fund. The shareholder servicing plans permit the Fund to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes’ shares. Payments are made at an annual rate and paid monthly, as a percentage of average daily net assets, set from time to time by the Board of Trustees, and are charged as expenses of the Fund directly to the applicable share class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Bank of America and BACAP Distributors.

For the year ended March 31, 2005, the annual rates in effect and plan limits, as a percentage of average daily net assets, were as follows:

                 
    Current     Plan  
    Rate     Limit  
Investor A Combined Distribution and Shareholder Servicing Plan
     0.25 %     0.25 %
Investor B and Investor C Shareholder Servicing Plans
     0.25 %     0.25 %
Investor B and Investor C Distribution Plans
     0.75 %     0.75 %

Fees Paid to Officers and Trustees

With the exception of one officer, no officer, director or employee of Bank of America, BACAP Distributors or BACAP, or any affiliate thereof, receives any compensation from the Fund for serving as Trustee or Officer of the Trust. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. The Fund’s fee for the Office of the Chief Compliance Officer will not exceed $15,000 per year.

The Fund’s eligible Trustees may participate in a non-qualified deferred compensation plan which may be terminated at any time. All benefits provided under this plan are unfunded and any payments to plan participants are paid solely out of the Fund’s assets. Income earned on the plan participant’s deferral account is based on the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, on the rate of return of Nations Treasury Reserves, another portfolio of the Trust. The expense for the deferred compensation plan is included in “Trustees’ fees and expenses” in the Statement of operations. The liability for the deferred compensation plan is included in “Accrued Trustees’ fees and expenses” in the Statement of assets and liabilities.

Custody Credits

The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses on the Statement of Operations. 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.

Other

The Fund has made daily investments of cash balances in Nations Cash Reserves, another portfolio of the Trust, pursuant to an exemptive order received from the Securities and Exchange Commission. The income earned by the Fund from such investments is included in its Statement of operations as “Dividend income from affiliated

 

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funds.” BACAP and BACAP Distributors earn advisory and administration fees on the investments made in the Nations Cash Reserves in addition to the advisory and administration fees earned by BACAP and BACAP Distributors from the Fund. For the year ended March 31, 2005, BACAP and BACAP Distributors earned $59,000 of investment advisory Fees and $31,000 of administration fees, respectively, related to investments in affiliated funds.

A significant portion of the Fund’s Primary A shares represents investments by fiduciary accounts over which Bank of America has either sole or joint investment discretion.

Note 5. Capital Shares

The pro-forma combining net asset value per share assumes the issuance of Acquiring Fund shares to Target Fund shareholders in connection with the proposed merger. The number of shares assumed to be issued is equal to the net asset value of the Target Fund divided by the net asset value per share of the Acquiring Fund as of March 31, 2005. The pro-forma number of shares outstanding, by class, for the combined entity consists of the following at March 31, 2005.

                         
    Shares of     Additional Shares     Total Shares  
    Acquiring Fund     Assumed Issued     Outstanding  
Class of Shares   Pre-Combination     with Merger     Post Combination  
 
Primary A
     94,501,434       41,336,251       135,837,685  
Investor A
     3,882,123       4,275,445       8,157,568  
Investor B
     150,552       2,208,947       2,359,499  
Investor C
     1,832,195       1,016,673       2,848,868  

Note 6. Legal Proceedings

On February 9, 2005, BACAP and BACAP Distributors entered into an Assurance of Discontinuance with the New York Attorney General (the “NYAG Settlement”) and consented to the entry of a cease-and-desist order by the U.S. Securities and Exchange Commission (the “SEC”) (the “SEC Order”). A copy of the NYAG Settlement is available as part of the Bank of America Corporation Form 8-K filing on February 10, 2005 and a copy of the SEC Order is available on the SEC’s website.

Under the terms of the SEC Order, BACAP and its affiliate, Banc of America Securities, LLC (“BAS”) have agreed, among other things, (1) to pay $250 million in disgorgement and $125 million in civil money penalties; (2) to cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; (3) to undertake various remedial measures to ensure compliance with the federal securities laws related to certain mutual fund trading practices; and (4) to retain an independent consultant to review their applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement also requires, among other things, BACAP along with Columbia Management Advisors, Inc. and Columbia Funds Distributors, Inc. — the investment advisor to and distributor of the Columbia Funds, respectively, — to reduce Columbia Funds, Nations Funds and other mutual funds management fees collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions. BACAP and BACAP Distributors are currently in the process of implementing the various terms of the NYAG Settlement and SEC Order.

Pursuant to the procedures set forth in the SEC Order, $375 million will be distributed in accordance with a distribution plan to be developed by the independent distribution consultant. The distribution plan must be based on a methodology developed in consultation with the BACAP, BACAP Distributors and the independent

 

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trustees of the Nations Funds and not unacceptable to the staff of the SEC. Although the distribution plan has not yet been formulated, it is anticipated that a significant portion of the settlement fund will be paid to shareholders or mutual funds of other mutual fund complexes that may have been harmed by the trading of the third parties referenced in the Settlements through systems provided by BAS. At this time, the distribution plan is still under development. As such, any gain to the Nations Funds or their shareholders can not be determined. More specific information on the distribution plan will be communicated on a later date.

As a result of these matters or any adverse publicity or other developments resulting from them, including lawsuits brought by shareholders of the affected Nations Funds, 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 Nations funds.

Civil Litigation

In connection with the events that resulted in the NYAG Settlement and SEC Order, various parties filed suits against Nations Funds Trust, its Board of Trustees, Bank of America Corporation and certain of its affiliates, including BACAP and BACAP Distributors (collectively “BAC”). On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against several other mutual fund companies based on similar allegations to the United States District Court in Maryland for consolidated or coordinated pretrial proceedings (the “MDL”). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Nations Funds Trust, the Trustees, BAC and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of the Nations Funds Trust against BAC and others that asserts claims under federal securities laws and state common law. Nations Funds Trust is a nominal defendant in this action. The MDL is ongoing. Accordingly, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

Separately, a putative class action (Reinke v. Bank of America N.A., et al.) was filed against Nations Funds Trust and others on December 6, 2004 in the United States District Court for the Eastern District of Missouri relating to the conversion of common trust funds and the investment of assets held in fiduciary accounts in the Funds. Nations Funds Trust has filed a motion to dismiss that is pending, and no discovery has been taken. At the present time, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

 

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NATIONS SHORT-TERM INCOME FUND
AND
NATIONS SHORT-INTERMEDIATE GOVERNMENT FUND

PRO FORMA COMBINING FINANCIAL STATEMENTS
(UNAUDITED)
Notes to Financial Statements
March 31, 2005
(unaudited)

Note 1. Organization

Nations Short-Term Income Fund (the “Acquiring Fund”), and Nations Short-Intermediate Government Fund (the “Target Fund”), each a series of Nations Funds Trust (the “Trust”), are each a Delaware business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

Investment Goal

The Acquiring Fund seeks high current income consistent with minimal fluctuations of principal. The Target Fund seeks high current income consistent with modest fluctuations of principal.

Fund Shares

The Acquiring Fund and the Target Fund each may issue an unlimited number of shares and each offers four classes of shares: Primary A, Investor A, Investor B and Investor C shares. Each share class has its own expense structure.

Note 2. Basis of Combination

The accompanying pro-forma financial statements are presented to show the effect of the proposed merger of the Target Fund by the Acquiring Fund as if such merger had occurred on April 1, 2004. The following notes refer to the accompanying pro-forma financial statements of such proposed merger.

Under the terms of the merger, the combination of the Target Fund and Acquiring Fund will be accounted for by the method of accounting for tax-free mergers of investment companies. The merger will be accomplished by a combination of the net assets of the Target Fund into the Acquiring Fund in exchange for new shares of the Acquiring Fund at net asset value.

The Pro Forma Investment Portfolio and Pro Forma Statement of Assets and Liabilities of the Target Fund and Acquiring Fund have been combined to reflect balances as of March 31, 2005. The Pro Forma Statement of Operations of the Target Fund and Acquiring Fund has been combined to reflect twelve months ended March 31, 2005. Banc of America Capital Management, LLC. (“BACAP”) expects that all of the securities held by the Target Fund as of March 31, 2005, would comply with the compliance guidelines and/or investment restrictions of the Acquiring Fund.

Following the merger the Acquiring Fund will be the accounting survivor. In accordance with accounting principles generally accepted in the United States of America, the historical cost of investment securities will be carried forward to the Acquiring Fund and the results of operations for pre-combined periods will not be restated.

 

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The accompanying pro-forma financial statements should be read in conjunction with the financial statements of the Acquiring Fund and the Target Fund included within their respective annual shareholder reports dated March 31, 2005, as well as the semi-annual shareholder reports dated September 30, 2004.

Note 3. Significant Accounting Policies

Security Valuation

The Acquiring Fund and the Target Fund use the identical policy for security valuation. Debt securities generally are valued by pricing services approved by the Fund’s Board of Trustees, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Certain securities may be valued based upon quotes provided by one or more principal market makers.

Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value.

Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.

Options are valued at the last reported sale price, or in the absence of a sale, the mean between the last quoted bid and ask price.

Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

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.

Futures Contracts

The Fund may invest in municipal and U.S. Treasury futures contracts. The Fund will invest in these instruments to hedge against the effects of changes in the value of portfolio securities due to anticipated changes in interest rates and/or market conditions, for duration management, or when the transactions are economically appropriate to the reduction of risk inherent in the management of the Fund and not for trading purposes. The use of futures contracts involves certain risks, which include: (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the instrument or the underlying securities, or (3) an inaccurate prediction by Columbia Management Advisors, Inc. of the future direction of interest rates. Any of these risks may involve amounts exceeding the variation margin recorded in the Fund’s Statement of Assets and Liabilities at any given time.

Upon entering into a futures contract, the Fund deposits cash or securities with the broker in an amount sufficient to meet the initial margin requirement. Subsequent payments are made or received by the Fund equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in unrealized gains or losses. The Fund also identifies portfolio securities as segregated with the custodian in a separate account in an amount equal to the futures contract. The Fund recognizes a realized gain or loss when the contract is closed or expires.

 

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Options

The Fund may write call and put options on futures it owns or in which it may invest. Writing put options tends to increase the Fund’s exposure to the underlying instrument. Writing call options tends to decrease the Fund’s exposure to the underlying instrument. When the Fund writes a call or put option, an amount equal to the premium received is recorded as a liability and subsequently marked-to-market to reflect the current value of the option written. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against the amounts paid on the underlying future transaction to determine the realized gain or loss. The Fund as a writer of an option has no control over whether the underlying future may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the future underlying the written option. There is the risk the Fund may not be able to enter into a closing transaction because of an illiquid market.

The Fund may also purchase put and call options. Purchasing call options tends to increase the Fund’s exposure to the underlying instrument. Purchasing put options tends to decrease the Fund’s exposure to the underlying instrument. The Fund pays a premium, which is included in the Fund’s Statement of Assets and Liabilities as an investment and subsequently marked-to-market to reflect the current value of the option. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which expire are treated as realized losses. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying future transaction to determine the realized gain or loss. The Fund’s custodian will set aside cash or liquid portfolio securities equal to the amount of the written options contract commitment in a separate account.

Securities Lending

Under an agreement with Bank of New York (“BNY”), the Fund may lend its securities to certain approved brokers, dealers and other financial institutions. Each loan is collateralized by cash, in an amount at least equal to the market value of the securities loaned plus accrued income from the investment of the collateral. The cash collateral received is invested in Nations Cash Reserves. A portion of the income generated by the investment of the collateral, net of any rebates paid by BNY to the borrowers, is remitted to BNY as lending agent, and the remainder is paid to the Fund. Generally, in the event of borrower default, the Fund has the right to use the collateral to offset any losses incurred. In the event the Fund is delayed or prevented from exercising its right to dispose of the collateral, there may be a potential loss to the Fund. The Fund bears the risk of loss with respect to the investment of collateral. The income earned by each Fund from securities lending is included in its Statement of Operations.

Delayed Delivery Securities

The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” basis. This may increase the risk if the other party to the transaction fails to deliver and causes the Fund to subsequently invest at less advantageous prices. The Fund identifies cash or liquid portfolio securities in an amount equal to the delayed delivery commitment.

Loan Participation and Commitments

The Fund may invest in Loan Participations. When the Fund purchases a Loan Participation, the Fund typically enters into a contractual relationship with the lender or third party selling such Participation (“Selling Participant”), but not the Borrower. As a result, the Fund assumes the credit risk of the Borrower, Selling Participant and any other persons interpositioned between the Fund and the Borrower (“Intermediate Participants”). The Fund may not directly benefit from the collateral supporting the Senior Loan in which it has purchased the Loan Participant.

 

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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, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

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 tax-exempt or 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.

Note 4. Fees and Compensations Paid to Affiliates

Investment Advisory Fee

BACAP, a wholly-owned subsidiary of Bank of America, N.A. (“Bank of America”), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, is the investment advisor to the Acquiring Fund. BACAP receives an investment advisory fee, calculated daily and payable monthly, at the annual rate of 0.30% based on the Fund’s average daily net assets. Prior to December 1, 2004, BACAP waived a portion of its investment advisory fee at the annual rate of 0.10% of the Fund’s average daily net assets. For the year ended March 31, 2005, the Fund’s effective investment advisory fee rate was 0.23%.

Administration Fee

BACAP Distributors, LLC (“BACAP Distributors”), a wholly-owned subsidiary of Bank of America, provides administrative and other services to the Fund. Effective December 1, 2004, BACAP Distributors is entitled to receive an administration fee, computed daily and paid monthly, at the annual rate of 0.14% of the Fund’s average daily net assets. Prior to December 1, 2004, BACAP Distributors received a monthly administration fee at the annual rate of 0.22% of the Fund’s average daily net assets.

Effective December 1, 2004, BACAP Distributors has agreed to waive a portion of its administration fee for the Fund at an annual rate of 0.02% of the Fund’s average daily net assets. BACAP Distributors, at its discretion, may revise or discontinue this arrangement any time.

For the year ended March 31, 2005, the Fund’s effective administration fee rate was 0.19%.

Transfer Agent Fee

PFPC Inc. serves as the transfer agent for the Fund’s shares. Bank of America serves as the sub-transfer agent for the Primary A Shares of the Fund. Bank of America is entitled to receive from the transfer agent a fee equal to the costs incurred by Bank of America in providing services pursuant to its obligations as sub-transfer agent at the annual rate of up to 0.01% of the net assets attributable to the Primary A shares of the Fund. For the year ended March 31, 2005, Bank of America earned $26,000 in sub-transfer agent fees from the Fund for providing such services. This amount is included in “Transfer agent fees” in the Fund’s Statement of Operations.

 

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Underwriting Discounts, Service and Distribution Fees

BACAP Distributors serves as the distributor of the Fund’s shares. For the year ended March 31, 2005, the Distributor has retained net underwriting discounts of $5,000 on sales of the Fund’s Investor A shares and received net CDSC fees of $2,000, $0 and $3,000 on Investor A, Investor B and Investor C share redemptions, respectively.

The Fund has adopted shareholder servicing plans and distribution plans for the Investor B and Investor C shares of the Fund and a combined distribution and shareholder servicing plan for Investor A Shares of the Fund. The shareholder servicing plans permit the Fund to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes’ shares. Payments are made at an annual rate and paid monthly, as a percentage of average daily net assets, set from time to time by the Board of Trustees, and are charged as expenses of the Fund directly to the applicable share class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Bank of America and BACAP Distributors.

For the year ended March 31, 2005, the annual rates in effect and plan limits, as a percentage of average daily net assets, were as follows:

                 
    Current     Plan  
    Rate     Limit  
Investor A Combined Distribution and Shareholder Servicing Plan
     0.25 %     0.25 %
Investor B and Investor C Shareholder Servicing Plans
     0.25 %     0.25 %
Investor B and Investor C Distribution Plans
     0.75 %     0.75 %

Fees Paid to Officers and Trustees

With the exception of one officer, no officer, director or employee of Bank of America, BACAP Distributors or BACAP, or any affiliate thereof, receives any compensation from the Fund for serving as Trustee or Officer of the Trust. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. The Fund’s fee for the Office of the Chief Compliance Officer will not exceed $15,000 per year.

The Fund’s eligible Trustees may participate in a non-qualified deferred compensation plan which may be terminated at any time. All benefits provided under this plan are unfunded and any payments to plan participants are paid solely out of the Fund’s assets. Income earned on the plan participant’s deferral account is based on the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, on the rate of return of Nations Treasury Reserves, another portfolio of the Trust. The expense for the deferred compensation plan is included in “Trustees’ fees and expenses” in the Statement of operations. The liability for the deferred compensation plan is included in “Accrued Trustees’ fees and expenses” in the Statement of assets and liabilities.

Custody Credits

The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses on the Statement of Operations. 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.

Other

The Fund has made daily investments of cash balances in Nations Cash Reserves, another portfolio of the Trust, pursuant to an exemptive order received from the Securities and Exchange Commission. The income earned by the Fund from such investments is included in its Statement of operations as “Dividend income from affiliated

 

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funds.” BACAP and BACAP Distributors earn advisory and administration fees on the investments made in the Nations Cash Reserves in addition to the advisory and administration fees earned by BACAP and BACAP Distributors from the Fund. For the year ended March 31, 2005, BACAP and BACAP Distributors earned $59,000 of investment advisory Fees and $31,000 of administration fees, respectively, related to investments in affiliated funds.

A significant portion of the Fund’s Primary A shares represents investments by fiduciary accounts over which Bank of America has either sole or joint investment discretion.

Note 5. Capital Shares

The pro-forma combining net asset value per share assumes the issuance of Acquiring Fund shares to Target Fund shareholders in connection with the proposed merger. The number of shares assumed to be issued is equal to the net asset value of the Target Fund divided by the net asset value per share of the Acquiring Fund as of March 31, 2005. The pro-forma number of shares outstanding, by class, for the combined entity consists of the following at March 31, 2005.

                         
    Shares of     Additional Shares     Total Shares  
    Acquiring Fund     Assumed Issued     Outstanding  
Class of Shares   Pre-Combination     with Merger     Post Combination  
 
Primary A
     94,501,434       30,571,906       125,073,340  
Investor A
     3,882,123       3,339,537       7,221,660  
Investor B
     150,552       1,945,314       2,095,866  
Investor C
     1,832,195       438,994       2,271,189  

Note 6. Legal Proceedings

On February 9, 2005, BACAP and BACAP Distributors entered into an Assurance of Discontinuance with the New York Attorney General (the “NYAG Settlement”) and consented to the entry of a cease-and-desist order by the U.S. Securities and Exchange Commission (the “SEC”) (the “SEC Order”). A copy of the NYAG Settlement is available as part of the Bank of America Corporation Form 8-K filing on February 10, 2005 and a copy of the SEC Order is available on the SEC’s website.

Under the terms of the SEC Order, BACAP and its affiliate, Banc of America Securities, LLC (“BAS”) have agreed, among other things, (1) to pay $250 million in disgorgement and $125 million in civil money penalties; (2) to cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; (3) to undertake various remedial measures to ensure compliance with the federal securities laws related to certain mutual fund trading practices; and (4) to retain an independent consultant to review their applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement also requires, among other things, BACAP along with Columbia Management Advisors, Inc. and Columbia Funds Distributors, Inc. — the investment advisor to and distributor of the Columbia Funds, respectively, — to reduce Columbia Funds, Nations Funds and other mutual funds management fees collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions. BACAP and BACAP Distributors are currently in the process of implementing the various terms of the NYAG Settlement and SEC Order.

Pursuant to the procedures set forth in the SEC Order, $375 million will be distributed in accordance with a distribution plan to be developed by the independent distribution consultant. The distribution plan must be based on a methodology developed in consultation with the BACAP, BACAP Distributors and the independent

 

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trustees of the Nations Funds and not unacceptable to the staff of the SEC. Although the distribution plan has not yet been formulated, it is anticipated that a significant portion of the settlement fund will be paid to shareholders or mutual funds of other mutual fund complexes that may have been harmed by the trading of the third parties referenced in the Settlements through systems provided by BAS. At this time, the distribution plan is still under development. As such, any gain to the Nations Funds or their shareholders can not be determined. More specific information on the distribution plan will be communicated on a later date.

As a result of these matters or any adverse publicity or other developments resulting from them, including lawsuits brought by shareholders of the affected Nations Funds, 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 Nations funds.

Civil Litigation

In connection with the events that resulted in the NYAG Settlement and SEC Order, various parties filed suits against Nations Funds Trust, its Board of Trustees, Bank of America Corporation and certain of its affiliates, including BACAP and BACAP Distributors (collectively “BAC”). On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against several other mutual fund companies based on similar allegations to the United States District Court in Maryland for consolidated or coordinated pretrial proceedings (the “MDL”). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Nations Funds Trust, the Trustees, BAC and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of the Nations Funds Trust against BAC and others that asserts claims under federal securities laws and state common law. Nations Funds Trust is a nominal defendant in this action. The MDL is ongoing. Accordingly, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

Separately, a putative class action (Reinke v. Bank of America N.A., et al.) was filed against Nations Funds Trust and others on December 6, 2004 in the United States District Court for the Eastern District of Missouri relating to the conversion of common trust funds and the investment of assets held in fiduciary accounts in the Funds. Nations Funds Trust has filed a motion to dismiss that is pending, and no discovery has been taken. At the present time, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

 

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NATIONS SHORT-TERM INCOME FUND,
COLUMBIA SHORT TERM BOND FUND
AND
NATIONS SHORT-INTERMEDIATE GOVERNMENT FUND

PRO FORMA COMBINING FINANCIAL STATEMENTS
(UNAUDITED)
Notes to Financial Statements
March 31, 2005
(unaudited)

Note 1. Organization

Nations Short-Term Income Fund (the “Acquiring Fund”), a series of Nations Funds Trust (the “Trust”), is a Delaware business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Columbia Short Term Bond Fund and Nations Short-Intermediate Government Fund (collectively the “Target Funds”), are each registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

Investment Goal

The Acquiring Fund seeks high current income consistent with minimal fluctuations in principal. Columbia Short Term Bond Fund seeks a high level of current income consistent with a high degree of principal stability by investing primarily in short-term, investment-grade, fixed income securities. Nations Short-Intermediate Government Fund seeks high current income consistent with modest fluctuations of principal.

Fund Shares

The Acquiring Fund and the Target Funds each may issue an unlimited number of shares. The Acquiring Fund and Nations Short-Intermediate Government Fund each offer four classes of shares: Primary A, Investor A, Investor B and Investor C shares. Columbia Short Term Bond Fund offers seven classes of shares: Class A, Class B, Class C, Class D, Class G, Class T and Class Z shares. Each share class has its own expense structure.

Note 2. Basis of Combination

The accompanying pro-forma financial statements are presented to show the effect of the proposed merger of the Target Funds by the Acquiring Fund as if such merger had occurred on April 1, 2004. The following notes refer to the accompanying pro-forma financial statements of such proposed merger.

Under the terms of the merger, the combination of the Target Funds and Acquiring Fund will be accounted for by the method of accounting for tax-free mergers of investment companies. The merger will be accomplished by a combination of the net assets of the Target Funds into the Acquiring Fund in exchange for new shares of the Acquiring Fund at net asset value.

The Pro Forma Investment Portfolio and Pro Forma Statement of Assets and Liabilities of the Targets Fund and Acquiring Fund have been combined to reflect balances as of March 31, 2005. The Pro Forma Statement of Operations of the Targets Fund and Acquiring Fund has been combined to reflect twelve months ended March 31, 2005. Banc of America Capital Management, LLC. (“BACAP”) expects that all of the securities held by the Target Funds as of March 31, 2005, would comply with the compliance guidelines and/or investment restrictions of the Acquiring Fund.

 

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Following the merger the Acquiring Fund will be the accounting survivor. In accordance with accounting principles generally accepted in the United States of America, the historical cost of investment securities will be carried forward to the Acquiring Fund and the results of operations for pre-combined periods will not be restated.

The accompanying pro-forma financial statements should be read in conjunction with the financial statements of the Acquiring Fund and the Target Funds included within their respective annual and semi-annual shareholder reports. The annual shareholder reports are dated March 31, 2005 for the Acquiring Fund and Nations Short-Intermediate Government Fund and August 31, 2004 for Columbia Short Term Bond Fund. The semi-annual shareholder reports are dated September 30, 2004 for the Acquiring Fund and Nations Short-Intermediate Government Fund and February 28, 2005 for Columbia Short Term Bond Fund.

Note 3. Significant Accounting Policies

Security Valuation

The Acquiring Fund and the Target Fund use the identical policy for security valuation. Debt securities generally are valued by pricing services approved by the Fund’s Board of Trustees, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Certain securities may be valued based upon quotes provided by one or more principal market makers.

Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value.

Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.

Options are valued at the last reported sale price, or in the absence of a sale, the mean between the last quoted bid and ask price.

Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

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.

Futures Contracts

The Fund may invest in municipal and U.S. Treasury futures contracts. The Fund will invest in these instruments to hedge against the effects of changes in the value of portfolio securities due to anticipated changes in interest rates and/or market conditions, for duration management, or when the transactions are economically appropriate to the reduction of risk inherent in the management of the Fund and not for trading purposes. The use of futures contracts involves certain risks, which include: (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the instrument or the underlying securities, or (3) an inaccurate prediction by Columbia Management Advisors, Inc. of the future direction of interest rates. Any of these risks may involve amounts exceeding the variation margin recorded in the Fund’s Statement of Assets and Liabilities at any given time.

 

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Upon entering into a futures contract, the Fund deposits cash or securities with the broker in an amount sufficient to meet the initial margin requirement. Subsequent payments are made or received by the Fund equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in unrealized gains or losses. The Fund also identifies portfolio securities as segregated with the custodian in a separate account in an amount equal to the futures contract. The Fund recognizes a realized gain or loss when the contract is closed or expires.

Options

The Fund may write call and put options on futures it owns or in which it may invest. Writing put options tends to increase the Fund’s exposure to the underlying instrument. Writing call options tends to decrease the Fund’s exposure to the underlying instrument. When the Fund writes a call or put option, an amount equal to the premium received is recorded as a liability and subsequently marked-to-market to reflect the current value of the option written. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against the amounts paid on the underlying future transaction to determine the realized gain or loss. The Fund as a writer of an option has no control over whether the underlying future may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the future underlying the written option. There is the risk the Fund may not be able to enter into a closing transaction because of an illiquid market.

The Fund may also purchase put and call options. Purchasing call options tends to increase the Fund’s exposure to the underlying instrument. Purchasing put options tends to decrease the Fund’s exposure to the underlying instrument. The Fund pays a premium, which is included in the Fund’s Statement of Assets and Liabilities as an investment and subsequently marked-to-market to reflect the current value of the option. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which expire are treated as realized losses. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying future transaction to determine the realized gain or loss. The Fund’s custodian will set aside cash or liquid portfolio securities equal to the amount of the written options contract commitment in a separate account.

Securities Lending

Under an agreement with Bank of New York (“BNY”), the Fund may lend its securities to certain approved brokers, dealers and other financial institutions. Each loan is collateralized by cash, in an amount at least equal to the market value of the securities loaned plus accrued income from the investment of the collateral. The cash collateral received is invested in Nations Cash Reserves. A portion of the income generated by the investment of the collateral, net of any rebates paid by BNY to the borrowers, is remitted to BNY as lending agent, and the remainder is paid to the Fund. Generally, in the event of borrower default, the Fund has the right to use the collateral to offset any losses incurred. In the event the Fund is delayed or prevented from exercising its right to dispose of the collateral, there may be a potential loss to the Fund. The Fund bears the risk of loss with respect to the investment of collateral. The income earned by each Fund from securities lending is included in its Statement of Operations.

Delayed Delivery Securities

The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” basis. This may increase the risk if the other party to the transaction fails to deliver and causes the Fund to subsequently invest at less advantageous prices. The Fund identifies cash or liquid portfolio securities in an amount equal to the delayed delivery commitment.

 

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Loan Participation and Commitments

The Fund may invest in Loan Participations. When the Fund purchases a Loan Participation, the Fund typically enters into a contractual relationship with the lender or third party selling such Participation (“Selling Participant”), but not the Borrower. As a result, the Fund assumes the credit risk of the Borrower, Selling Participant and any other persons interpositioned between the Fund and the Borrower (“Intermediate Participants”). The Fund may not directly benefit from the collateral supporting the Senior Loan in which it has purchased the Loan Participant.

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, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

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 tax-exempt or 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.

Note 4. Fees and Compensations Paid to Affiliates

Investment Advisory Fee

BACAP, a wholly-owned subsidiary of Bank of America, N.A. (“Bank of America”), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, is the investment advisor to the Acquiring Fund. BACAP receives an investment advisory fee, calculated daily and payable monthly, at the annual rate of 0.30% based on the Fund’s average daily net assets. Prior to December 1, 2004, BACAP waived a portion of its investment advisory fee at the annual rate of 0.10% of the Fund’s average daily net assets. For the year ended March 31, 2005, the Fund’s effective investment advisory fee rate was 0.23%.

Administration Fee

BACAP Distributors, LLC (“BACAP Distributors”), a wholly-owned subsidiary of Bank of America, provides administrative and other services to the Fund. Effective December 1, 2004, BACAP Distributors is entitled to receive an administration fee, computed daily and paid monthly, at the annual rate of 0.14% of the Fund’s average daily net assets. Prior to December 1, 2004, BACAP Distributors received a monthly administration fee at the annual rate of 0.22% of the Fund’s average daily net assets.

Effective December 1, 2004, BACAP Distributors has agreed to waive a portion of its administration fee for the Fund at an annual rate of 0.02% of the Fund’s average daily net assets. BACAP Distributors, at its discretion, may revise or discontinue this arrangement any time.

For the year ended March 31, 2005, the Fund’s effective administration fee rate was 0.19%.

 

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Transfer Agent Fee

PFPC Inc. serves as the transfer agent for the Fund’s shares. Bank of America serves as the sub-transfer agent for the Primary A Shares of the Fund. Bank of America is entitled to receive from the transfer agent a fee equal to the costs incurred by Bank of America in providing services pursuant to its obligations as sub-transfer agent at the annual rate of up to 0.01% of the net assets attributable to the Primary A shares of the Fund. For the year ended March 31, 2005, Bank of America earned $26,000 in sub-transfer agent fees from the Fund for providing such services. This amount is included in “Transfer agent fees” in the Fund’s Statement of Operations.

Underwriting Discounts, Service and Distribution Fees

BACAP Distributors serves as the distributor of the Fund’s shares. For the year ended March 31, 2005, the Distributor has retained net underwriting discounts of $5,000 on sales of the Fund’s Investor A shares and received net CDSC fees of $2,000, $0 and $3,000 on Investor A, Investor B and Investor C share redemptions, respectively.

The Fund has adopted shareholder servicing plans and distribution plans for the Investor B and Investor C shares of the Fund and a combined distribution and shareholder servicing plan for Investor A Shares of the Fund. The shareholder servicing plans permit the Fund to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes’ shares. Payments are made at an annual rate and paid monthly, as a percentage of average daily net assets, set from time to time by the Board of Trustees, and are charged as expenses of the Fund directly to the applicable share class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Bank of America and BACAP Distributors.

For the year ended March 31, 2005, the annual rates in effect and plan limits, as a percentage of average daily net assets, were as follows:

                 
    Current     Plan  
    Rate     Limit  
Investor A Combined Distribution and Shareholder Servicing Plan
     0.25 %     0.25 %
Investor B and Investor C Shareholder Servicing Plans
     0.25 %     0.25 %
Investor B and Investor C Distribution Plans
     0.75 %     0.75 %

Fees Paid to Officers and Trustees

With the exception of one officer, no officer, director or employee of Bank of America, BACAP Distributors or BACAP, or any affiliate thereof, receives any compensation from the Fund for serving as Trustee or Officer of the Trust. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. The Fund’s fee for the Office of the Chief Compliance Officer will not exceed $15,000 per year.

The Fund’s eligible Trustees may participate in a non-qualified deferred compensation plan which may be terminated at any time. All benefits provided under this plan are unfunded and any payments to plan participants are paid solely out of the Fund’s assets. Income earned on the plan participant’s deferral account is based on the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, on the rate of return of Nations Treasury Reserves, another portfolio of the Trust. The expense for the deferred compensation plan is included in “Trustees’ fees and expenses” in the Statement of operations. The liability for the deferred compensation plan is included in “Accrued Trustees’ fees and expenses” in the Statement of assets and liabilities.

 

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Custody Credits

The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses on the Statement of Operations. 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.

Other

The Fund has made daily investments of cash balances in Nations Cash Reserves, another portfolio of the Trust, pursuant to an exemptive order received from the Securities and Exchange Commission. The income earned by the Fund from such investments is included in its Statement of operations as “Dividend income from affiliated funds.” BACAP and BACAP Distributors earn advisory and administration fees on the investments made in the Nations Cash Reserves in addition to the advisory and administration fees earned by BACAP and BACAP Distributors from the Fund. For the year ended March 31, 2005, BACAP and BACAP Distributors earned $59,000 of investment advisory Fees and $31,000 of administration fees, respectively, related to investments in affiliated funds.

A significant portion of the Fund’s Primary A shares represents investments by fiduciary accounts over which Bank of America has either sole or joint investment discretion.

Note 5. Capital Shares

The pro-forma combining net asset value per share assumes the issuance of Acquiring Fund shares to Target Fund shareholders in connection with the proposed merger. The number of shares assumed to be issued is equal to the net asset value of the Target Fund divided by the net asset value per share of the Acquiring Fund as of March 31, 2005. The pro-forma number of shares outstanding, by class, for the combined entity consists of the following at March 31, 2005.

                         
    Shares of     Additional Shares     Total Shares  
    Acquiring Fund     Assumed Issued     Outstanding  
Class of Shares   Pre-Combination     with Merger     Post Combination  
 
Primary A
     94,501,434       71,908,157       166,409,591  
Investor A
     3,882,123       7,614,982       11,497,105  
Investor B
     150,552       4,154,261       4,304,813  
Investor C
     1,832,195       1,455,667       3,287,862  

Note 6. Legal Proceedings

On February 9, 2005, BACAP and BACAP Distributors entered into an Assurance of Discontinuance with the New York Attorney General (the “NYAG Settlement”) and consented to the entry of a cease-and-desist order by the U.S. Securities and Exchange Commission (the “SEC”) (the “SEC Order”). A copy of the NYAG Settlement is available as part of the Bank of America Corporation Form 8-K filing on February 10, 2005 and a copy of the SEC Order is available on the SEC’s website.

Under the terms of the SEC Order, BACAP and its affiliate, Banc of America Securities, LLC (“BAS”) have agreed, among other things, (1) to pay $250 million in disgorgement and $125 million in civil money penalties; (2) to cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; (3) to undertake various remedial measures to ensure compliance with the federal securities laws related to certain mutual fund trading practices; and (4) to retain an independent consultant to review their applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement also

 

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requires, among other things, BACAP along with Columbia Management Advisors, Inc. and Columbia Funds Distributors, Inc. — the investment advisor to and distributor of the Columbia Funds, respectively, — to reduce Columbia Funds, Nations Funds and other mutual funds management fees collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions. BACAP and BACAP Distributors are currently in the process of implementing the various terms of the NYAG Settlement and SEC Order.

Pursuant to the procedures set forth in the SEC Order, $375 million will be distributed in accordance with a distribution plan to be developed by the independent distribution consultant. The distribution plan must be based on a methodology developed in consultation with the BACAP, BACAP Distributors and the independent trustees of the Nations Funds and not unacceptable to the staff of the SEC. Although the distribution plan has not yet been formulated, it is anticipated that a significant portion of the settlement fund will be paid to shareholders or mutual funds of other mutual fund complexes that may have been harmed by the trading of the third parties referenced in the Settlements through systems provided by BAS. At this time, the distribution plan is still under development. As such, any gain to the Nations Funds or their shareholders can not be determined. More specific information on the distribution plan will be communicated on a later date.

As a result of these matters or any adverse publicity or other developments resulting from them, including lawsuits brought by shareholders of the affected Nations Funds, 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 Nations funds.

Civil Litigation

In connection with the events that resulted in the NYAG Settlement and SEC Order, various parties filed suits against Nations Funds Trust, its Board of Trustees, Bank of America Corporation and certain of its affiliates, including BACAP and BACAP Distributors (collectively “BAC”). On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against several other mutual fund companies based on similar allegations to the United States District Court in Maryland for consolidated or coordinated pretrial proceedings (the “MDL”). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Nations Funds Trust, the Trustees, BAC and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of the Nations Funds Trust against BAC and others that asserts claims under federal securities laws and state common law. Nations Funds Trust is a nominal defendant in this action. The MDL is ongoing. Accordingly, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

Separately, a putative class action (Reinke v. Bank of America N.A., et al.) was filed against Nations Funds Trust and others on December 6, 2004 in the United States District Court for the Eastern District of Missouri relating to the conversion of common trust funds and the investment of assets held in fiduciary accounts in the Funds. Nations Funds Trust has filed a motion to dismiss that is pending, and no discovery has been taken. At the present time, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

 

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Pro Forma Combining Portfolio of Investments (unaudited)                   Columbia Intermediate Gov't Income Fund                    
As of 3/31/05                   Target Fund     Intermediate Bond Master Portfolio*     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
CORPORATE NOTES AND BONDS
             34.8 %                                                        
BASIC MATERIALS
             1.6 %                                                        
Chemicals
             0.8 %                                                        
Dow Chemical Co.
   6.000   10/1/2012             340       361       —       —       —       340       361  
Dow Chemical Co.
   6.125   2/1/2011             —       —       1,622       1,736       —       1,622       1,736  
Eastman Chemical Co
   3.250   6/15/2008             —       —       409       392       —       409       392  
EI Du Pont de Nemours & Co
   3.375   11/15/2007             —       —       1,298       1,268       —       1,298       1,268  
Potash Corp of Saskatchewan
   4.875   3/1/2013             —       —       435       427       —       435       427  
Praxair Inc
   4.750   7/15/2007             —       —       705       710       —       705       710  
Praxair Inc
   6.500   3/1/2008             —       —       1,192       1,252       —       1,192       1,252  
Praxair Inc
   6.625   10/15/2007             —       —       1,394       1,459       —       1,394       1,459  
Praxair Inc
   6.900   11/1/2006             —       —       489       511       —       489       511  
 
                                                                  
Chemicals Total
                             361               7,756                       8,117  
 
                                                                  
Forest Products and Paper
             0.4 %                                                        
International Paper Co
   4.250   1/15/2009             —       —       577       569       —       577       569  
International Paper Co
   5.850   10/30/2012             —       —       1,973       2,056       —       1,973       2,056  
MeadWestvaco Corp
   6.850   4/1/2012             —       —       1,501       1,674       —       1,501       1,674  
 
                                                                  
Forest Products and Paper Total
                             —               4,299                       4,299  
 
                                                                  
Metals and Mining
             0.3 %                                                        
Alcan Inc
   6.450   3/15/2011             —       —       29       32       —       29       32  
Alcoa Inc
   7.375   8/1/2010             —       —       1,570       1,765       —       1,570       1,765  
BHP Billiton Finance USA Ltd
   4.800   4/15/2013             —       —       641       633       —       641       633  
CODELCO, Inc. (a)
   5.500   10/15/2013             —       —       701       708       —       701       708  
 
                                                                  
Metals and Mining Total
                             —               3,139                       3,139  
 
                                                                  
TOTAL BASIC MATERIALS
                             361               15,194                       15,555  
 
                                                                  
COMMUNICATIONS
             5.5 %                                                        
Media
             2.2 %                                                        
Clear Channel Communications Inc
   6.000   11/1/2006             —       —       1,607       1,638       —       1,607       1,638  
Comcast Cable Communications
   6.375   1/30/2006             —       —       1,104       1,123       —       1,104       1,123  
Comcast Cable Communications
   7.125   6/15/2013             —       —       1,620       1,802       —       1,620       1,802  
Gannett Co Inc
   5.500   4/1/2007             —       —       3,094       3,171       —       3,094       3,171  
Liberty Media Corp
   3.500   9/25/2006             —       —       2,269       2,236       —       2,269       2,236  
News America Holdings (b)
   6.625   1/9/2008             —       —       1,247       1,310       —       1,247       1,310  
News America Holdings
   9.250   2/1/2013             —       —       967       1,207       —       967       1,207  
Thomson Corp/The
   5.250   8/15/2013             —       —       1,159       1,175       —       1,159       1,175  
Time Warner, Inc.
   7.250   9/1/2008             —       —       1,785       1,920       —       1,785       1,920  
Time Warner, Inc.
   8.110   8/15/2006             —       —       10       10       —       10       10  
Time Warner, Inc.
   9.125   1/15/2013             —       —       1,727       2,134       —       1,727       2,134  
Viacom Inc
   5.625   5/1/2007             —       —       584       598       —       584       598  
Viacom Inc
   7.700   7/30/2010             —       —       12       13       —       12       13  
Viacom Inc
   5.625   8/15/2012             1,610       1,634       —       —       —       1,610       1,634  
Walt Disney Co
   5.500   12/29/2006             —       —       336       343       —       336       343  
Walt Disney Co
   6.750   3/30/2006             —       —       1,073       1,102       —       1,073       1,102  
 
                                                                  
Media Total
                             1,634               19,781                       21,415  
 
                                                                  
Telecommunications
             3.3 %                                                        
Alltel Corp
   7.500   3/1/2006             —       —       2,016       2,083       —       2,016       2,083  
BellSouth Corp
   5.000   10/15/2006             —       —       1,398       1,417       —       1,398       1,417  
British Telecommunications PLC
   8.375   12/15/2010             —       —       943       1,096       —       943       1,096  
British Telecommunications PLC
   8.875   12/15/2030             500       664       —       —       —       500       664  
Deutsche Telekom International Finance BV
   5.250   7/22/2013             —       —       3,980       3,991       —       3,980       3,991  

 

Table of Contents

     

                                                                         
Pro Forma Combining Portfolio of Investments                   Columbia Intermediate Gov't Income Fund                    
As of 3/31/05                   Target Fund     Intermediate Bond Master Portfolio*     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
France Telecom SA (b)
   8.000   3/1/2011             —       —       4,091       4,681       —       4,091       4,681  
New Cingular Wireless Services Inc
   8.125   5/1/2012             —       —       636       743       —       636       743  
SBC Communications Inc
   4.125   9/15/2009             1,610       1,564       —       —       —       1,610       1,564  
SBC Communications Inc
   5.750   5/2/2006             —       —       1,727       1,759       —       1,727       1,759  
Sprint Capital Corp
   6.125   11/15/2008             —       —       697       729       —       697       729  
Sprint Capital Corp
   8.375   3/15/2012             —       —       3,121       3,648       —       3,121       3,648  
Telefonos de Mexico SA de CV
   4.500   11/19/2008             —       —       11       11       —       11       11  
TELUS Corp
   7.500   6/1/2007             —       —       3,625       3,859       —       3,625       3,859  
Verizon Global Funding Corp
   7.750   12/1/2030             1,000       1,203       —       —       —       1,000       1,203  
Verizon Pennsylvania Inc
   5.650   11/15/2011             —       —       2,533       2,601       —       2,533       2,601  
Verizon/New England
   6.500   9/15/2011             —       —       2,577       2,759       —       2,577       2,759  
 
                                                                  
Telecommunications Total
                             3,431               29,374                       32,805  
 
                                                                  
TOTAL COMMUNICATIONS
                             5,065               49,155                       54,220  
 
                                                                  
CONSUMER CYCLICAL
             1.5 %                                                        
Apparel
             0.3 %                                                        
Jones Apparel Group Inc (b)(c)
   5.125   11/15/2014             —       —       3,500       3,318       —       3,500       3,318  
 
                                                                  
Apparel Total
                             —               3,318                       3,318  
 
                                                                  
Auto Manufacturers
             0.4 %                                                        
DaimlerChrysler NA Holding Corp
   4.050   6/4/2008             —       —       3,842       3,731       —       3,842       3,731  
 
                                                                  
Auto Manufacturers Total
                             —               3,731                       3,731  
 
                                                                  
Home Builders
             0.4 %                                                        
Centex Corp
   4.550   11/1/2010             —       —       4,000       3,866       —       4,000       3,866  
 
                                                                  
Home Builders Total
                             —               3,866                       3,866  
 
                                                                  
Retail
             0.4 %                                                        
Costco Wholesale Corp
   5.500   3/15/2007             —       —       4       4       —       4       4  
Target Corp
   3.375   3/1/2008             —       —       10       10       —       10       10  
Target Corp
   5.375   6/15/2009             —       —       802       827       —       802       827  
Target Corp
   5.400   10/1/2008             —       —       957       987       —       957       987  
Target Corp
   5.875   3/1/2012             —       —       802       847       —       802       847  
Wal-Mart Stores Inc
   4.375   7/12/2007             —       —       40       40       —       40       40  
Wal-Mart Stores Inc (b)
   4.550   5/1/2013             —       —       850       836       —       850       836  
 
                                                                  
Retail Total
                             —               3,551                       3,551  
 
                                                                  
TOTAL CONSUMER CYCLICAL
                             —               14,465                       14,465  
 
                                                                  
CONSUMER NON-CYCLICAL
             2.1 %                                                        
Agriculture
             0.0 %                                                        
Monsanto Co
   4.000   5/15/2008             —       —       328       323       —       328       323  
 
                                                                  
Agriculture Total
                             —               323                       323  
 
                                                                  
Beverages
             0.1 %                                                        
Anheuser-Busch Cos Inc
   6.000   4/15/2011             —       —       1,142       1,216       —       1,142       1,216  
Coca-Cola Co.
   5.750   3/15/2011             —       —       3       3       —       3       3  
 
                                                                  
Beverages Total
                             —               1,220                       1,220  
 
                                                                  
Commercial Services
             0.0 %                                                        
RR Donnelley & Sons Co
   4.950   4/1/2014             —       —       147       144       —       147       144  
 
                                                                  
Commercial Services Total
                             —               144                       144  
 
                                                                  
Cosmetics/Personal Care
             0.2 %                                                        
Procter & Gamble Co
   4.750   6/15/2007             —       —       1,847       1,873       —       1,847       1,873  
 
                                                                  
Cosmetics/Personal Care Total
                             —               1,873                       1,873  
 
                                                                  
Food
             1.0 %                                                        
Cadbury Schweppes US Finance LLC (a)
   5.125   10/1/2013             —       —       2,016       2,003       —       2,016       2,003  

 

Table of Contents

     

                                                                         
Pro Forma Combining Portfolio of Investments                   Columbia Intermediate Gov't Income Fund                    
As of 3/31/05                   Target Fund     Intermediate Bond Master Portfolio*     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Campbell Soup Co
   5.500   3/15/2007             —       —       2,357       2,402       —       2,357       2,402  
Fred Meyer Inc
   7.450   3/1/2008             —       —       2,444       2,619       —       2,444       2,619  
General Mills Inc
   2.625   10/24/2006             —       —       1,919       1,876       —       1,919       1,876  
Kroger Co/The
   6.750   4/15/2012             —       —       633       690       —       633       690  
Unilever Capital Corp
   6.875   11/1/2005             —       —       745       764       —       745       764  
 
                                                                  
Food Total
                             —               10,353                       10,353  
 
                                                                  
Healthcare Services
             0.3 %                                                        
WellPoint Health Networks
   6.375   6/15/2006             —       —       1,728       1,772       —       1,728       1,772  
WellPoint Health Networks
   6.375   1/15/2012             —       —       1,258       1,358       —       1,258       1,358  
 
                                                                  
Healthcare Services Total
                             —               3,129                       3,129  
 
                                                                  
Household Products/Wares
             0.1 %                                                        
Avery Dennison Corp
   4.875   1/15/2013             —       —       3       3       —       3       3  
Fortune Brands Inc
   2.875   12/1/2006             —       —       621       610       —       621       610  
 
                                                                  
Household Products/Wares Total
                             —               613                       613  
 
                                                                  
Pharmaceuticals
             0.4 %                                                        
Abbott Laboratories
   5.625   7/1/2006             —       —       12       12       —       12       12  
Bristol-Myers Squibb Co
   4.750   10/1/2006             —       —       1,445       1,464       —       1,445       1,464  
GlaxoSmithKline Capital PLC
   2.375   4/16/2007             —       —       2,112       2,044       —       2,112       2,044  
 
                                                                  
Pharmaceuticals Total
                             —               3,520                       3,520  
 
                                                                  
TOTAL CONSUMER NON-CYCLICAL
                             —               21,174                       21,174  
 
                                                                  
ENERGY
             2.1 %                                                        
Oil and Gas
             1.2 %                                                        
BP Capital Markets Plc
   2.750   12/29/2006             —       —       1,293       1,267       —       1,293       1,267  
Burlington Resources Finance Co
   5.600   12/1/2006             —       —       2,421       2,469       —       2,421       2,469  
Conoco Funding Co
   5.450   10/15/2006             —       —       1,062       1,085       —       1,062       1,085  
Conoco Funding Co
   6.350   10/15/2011             —       —       1,427       1,555       —       1,427       1,555  
Devon Financing Corp ULC
   6.875   9/30/2011             —       —       530       584       —       530       584  
Pemex Project Funding Master Trust
   7.875   2/1/2009             —       —       1,939       2,096       —       1,939       2,096  
USX Corp/Consolidated
   6.650   2/1/2006             —       —       2,237       2,285       —       2,237       2,285  
Valero Energy Corp
   6.875   4/15/2012             —       —       827       918       —       827       918  
 
                                                                  
Oil and Gas Total
                             —               12,260                       12,260  
 
                                                                  
Pipelines
             0.8 %                                                        
CenterPoint Energy Resources Corp
   7.875   4/1/2013             —       —       1,219       1,413       —       1,219       1,413  
Consolidated Edison Co of New York
   7.150   12/1/2009             1,600       1,771       —       —       —       1,600       1,771  
Consolidated Natural Gas Co
   5.375   11/1/2006             —       —       1,065       1,084       —       1,065       1,084  
Duke Capital LLC
   4.370   3/1/2009             —       —       1,415       1,391       —       1,415       1,391  
Kinder Morgan Inc (b)
   5.150   3/1/2015             —       —       1,125       1,096       —       1,125       1,096  
TEPPCO Partners LP
   7.625   2/15/2012             —       —       1,311       1,484       —       1,311       1,484  
 
                                                                  
Pipelines Total
                             1,771               6,469                       8,239  
 
                                                                  
TOTAL ENERGY
                             1,771               18,728                       20,499  
 
                                                                  
FINANCIALS
             17.6 %                                                        
Banks
             4.3 %                                                        
Bank of New York Co Inc
   3.900   9/1/2007             —       —       660       654       —       660       654  
Bank One Corp
   6.000   8/1/2008             —       —       4,000       4,185       —       4,000       4,185  
Barclays Bank PLC
   7.400   12/15/2009             —       —       2       2       —       2       2  
City National Corp.
   5.125   2/15/2013             —       —       597       593       —       597       593  
Comerica Inc
   7.250   8/1/2007             2,000       2,120       —       —       —       2,000       2,120  
Deutsche Bank Financial Inc
   6.700   12/13/2006             —       —       6       6       —       6       6  
HSBC Bank USA NA
   3.020   12/14/2006             —       —       3,000       3,001       —       3,000       3,001  
Huntington National Bank
   2.750   10/16/2006             —       —       923       906       —       923       906  
Key Bank National Association
   7.000   2/1/2011             —       —       964       1,070       —       964       1,070  
Korea Development Bank
   5.250   11/16/2006             —       —       5       5       —       5       5  

 

Table of Contents

     

                                                                         
Pro Forma Combining Portfolio of Investments                   Columbia Intermediate Gov't Income Fund                    
As of 3/31/05                   Target Fund     Intermediate Bond Master Portfolio*     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Korea Development Bank
   7.250   5/15/2006             —       —       1,225       1,267       —       1,225       1,267  
Mellon Funding Corp
   4.875   6/15/2007             —       —       1,028       1,042       —       1,028       1,042  
Mellon Funding Corp (b)
   6.400   5/14/2011             —       —       8       9       —       8       9  
Mellon Funding Corp
   6.700   3/1/2008             —       —       900       957       —       900       957  
National City Bank
   4.625   5/1/2013             —       —       1,968       1,914       —       1,968       1,914  
PNC Funding Corp
   5.750   8/1/2006             —       —       1,892       1,934       —       1,892       1,934  
Popular North America Inc
   6.125   10/15/2006             —       —       3,286       3,375       —       3,286       3,375  
Regions Financial Corp.
   6.375   5/15/2012             —       —       1,223       1,319       —       1,223       1,319  
Scotland International Finance BV (a)
   4.250   5/23/2013             —       —       1,700       1,621       —       1,700       1,621  
SouthTrust Bank (b)
   4.750   3/1/2013             —       —       738       721       —       738       721  
Union Planters Corp
   4.375   12/1/2010             —       —       2,366       2,301       —       2,366       2,301  
US Bank NA
   2.850   11/15/2006             —       —       502       493       —       502       493  
US Bank NA
   6.375   8/1/2011             —       —       3,308       3,583       —       3,308       3,583  
Wachovia Corp
   3.500   8/15/2008             —       —       3,609       3,503       —       3,609       3,503  
Wachovia Corp
   4.850   7/30/2007             —       —       2,116       2,152       —       2,116       2,152  
Wells Fargo & Co.
   2.810   3/10/2008             —       —       4,200       4,198       —       4,200       4,198  
 
                                                                  
Banks Total
                             2,120               40,811                       42,931  
 
                                                                  
Diversified Financial Services
             11.5 %                                                        
AIG SunAmerica Global Financing VII (a)
   5.850   8/1/2008             —       —       645       672       —       645       672  
American Express Co
   3.750   11/20/2007             —       —       1,120       1,103       —       1,120       1,103  
American Express Co
   4.750   6/17/2009             —       —       907       913       —       907       913  
American Express Co
   5.500   9/12/2006             —       —       1,286       1,312       —       1,286       1,312  
American General Finance Corp
   2.750   6/15/2008             —       —       1,022       967       —       1,022       967  
American General Finance Corp
   3.270   1/18/2008             —       —       3,000       2,998       —       3,000       2,998  
Bear Stearns Companies, Inc.
   5.700   1/15/2007             —       —       910       933       —       910       933  
Bear Stearns Companies, Inc.
   4.500   10/28/2010             —       —       1,829       1,798       —       1,829       1,798  
Capital One Bank
   5.000   6/15/2009             —       —       1,031       1,036       —       1,031       1,036  
Caterpillar Financial Services Corp
   5.950   5/1/2006             —       —       1,898       1,938       —       1,898       1,938  
Caterpillar Financial Services Corp
   4.500   6/15/2009             —       —       582       578       —       582       578  
Caterpillar Financial Services Corp
   2.350   9/15/2006             —       —       1,001       978       —       1,001       978  
Caterpillar Financial Services Corp
   2.625   1/30/2007             —       —       806       785       —       806       785  
CIT Group Inc
   7.375   4/2/2007             —       —       1,845       1,951       —       1,845       1,951  
Citigroup Inc
   5.000   9/15/2014             —       —       4,320       4,241       —       4,320       4,241  
Citigroup Inc
   6.000   2/21/2012             —       —       3,073       3,271       —       3,073       3,271  
Citigroup Inc
   4.125   2/22/2010             —       —       1,900       1,847       —       1,900       1,847  
Countrywide Home Loans Inc
   4.125   9/15/2009             1,905       1,836       —       —       —       1,905       1,836  
Countrywide Home Loans Inc
   5.500   8/1/2006             —       —       4,692       4,770       —       4,692       4,770  
Diageo Finance BV
   3.000   12/15/2006             —       —       2,439       2,392       —       2,439       2,392  
Ford Motor Credit Co
   5.700   1/15/2010             —       —       1,010       951       —       1,010       951  
Ford Motor Credit Co
   7.375   10/28/2009             —       —       6,242       6,269       —       6,242       6,269  
Ford Motor Credit Co
   7.375   2/1/2011             2,440       2,430       —       —       —       2,440       2,430  
General Electric Capital Corp
   3.130   12/15/2009             2,565       2,570       —       —       —       2,565       2,570  
General Electric Capital Corp (b)
   3.190   6/22/2009             —       —       7,250       7,270       —       7,250       7,270  
General Electric Capital Corp
   3.750   12/15/2009             —       —       1,000       961       —       1,000       961  
General Electric Capital Corp
   5.875   2/15/2012             —       —       3,343       3,529       —       3,343       3,529  
General Motors Acceptance Corp
   6.150   4/5/2007             —       —       988       969       —       988       969  
General Motors Acceptance Corp
   6.875   9/15/2011             —       —       2,966       2,684       —       2,966       2,684  
Goldman Sachs Group Inc
   5.700   9/1/2012             —       —       347       357       —       347       357  
Goldman Sachs Group Inc
   6.600   1/15/2012             —       —       2,503       2,709       —       2,503       2,709  
Goldman Sachs Group Inc
   4.125   1/15/2008             —       —       315       312       —       315       312  
Household Fin Corp
   5.750   1/30/2007             —       —       2,176       2,233       —       2,176       2,233  
HSBC Finance Corp
   3.548   11/16/2009             1,650       1,657       —       —       —       1,650       1,657  
HSBC Finance Corp
   6.375   11/27/2012             —       —       3,072       3,322       —       3,072       3,322  
HSBC Finance Corp
   7.200   7/15/2006             —       —       1,118       1,161       —       1,118       1,161  
International Lease Finance Corp
   4.500   5/1/2008             —       —       847       842       —       847       842  
John Deere Capital Corp
   3.625   5/25/2007             —       —       2,074       2,046       —       2,074       2,046  
John Deere Capital Corp
   3.125   12/15/2005             —       —       1,403       1,397       —       1,403       1,397  
JPMorgan Chase & Co
   5.250   5/30/2007             —       —       3,382       3,449       —       3,382       3,449  

 

Table of Contents

     

                                                                         
Pro Forma Combining Portfolio of Investments                   Columbia Intermediate Gov't Income Fund                    
As of 3/31/05                   Target Fund     Intermediate Bond Master Portfolio*     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
JP Morgan Chase & Co
   7.250   6/1/2007             —       —       3,836       4,061       —       3,836       4,061  
Lehman Brothers Holdings Inc
   4.000   1/22/2008             —       —       742       732       —       742       732  
Lehman Brothers Holdings Inc
   7.000   2/1/2008             —       —       4,513       4,815       —       4,513       4,815  
Lehman Brothers Holdings Inc
   7.875   8/15/2010             —       —       336       383       —       336       383  
MassMutual Global Funding II
   2.550   7/15/2008             —       —       1,020       962       —       1,020       962  
Merrill Lynch & Co Inc
   2.070   6/12/2006             —       —       1,591       1,559       —       1,591       1,559  
Merrill Lynch & Co Inc
   3.700   4/21/2008             —       —       1,360       1,333       —       1,360       1,333  
Merrill Lynch & Co Inc
   6.000   2/17/2009             —       —       2,596       2,715       —       2,596       2,715  
Morgan Stanley
   5.300   3/1/2013             —       —       295       297       —       295       297  
Morgan Stanley
   6.600   4/1/2012             —       —       1,050       1,146       —       1,050       1,146  
National Rural Utilities Cooperative Finance Corp
   3.250   10/1/2007             —       —       1,023       994       —       1,023       994  
National Rural Utilities Cooperative Finance Corp
   5.750   8/28/2009             —       —       1,824       1,900       —       1,824       1,900  
Principal Life Global (a)
   6.250   2/15/2012             —       —       1,853       1,990       —       1,853       1,990  
Private Export Funding Corp
   5.340   3/15/2006             2,000       2,030       —       —       —       2,000       2,030  
Prudential Funding LLC (a)
   6.600   5/15/2008             —       —       2,860       3,032       —       2,860       3,032  
Rio Tinto Finance USA Ltd
   2.625   9/30/2008             —       —       769       724       —       769       724  
Toyota Motor Credit Corp
   2.700   1/30/2007             —       —       2,674       2,609       —       2,674       2,609  
 
                                                                  
Diversified Financial Services Total
                             10,523               104,201                       114,724  
 
                                                                  
Insurance
             0.4 %                                                        
Hartford Financial Services Group Inc
   2.375   6/1/2006             —       —       590       577       —       590       577  
Hartford Financial Services Group Inc
   4.625   7/15/2013             —       —       1,120       1,075       —       1,120       1,075  
Marsh & McLennan Cos Inc
   3.625   2/15/2008             —       —       510       495       —       510       495  
Metlife Inc
   5.375   12/15/2012             —       —       1,524       1,557       —       1,524       1,557  
Nationwide Financial Services
   5.900   7/1/2012             —       —       256       269       —       256       269  
The Allstate Corp
   6.125   2/15/2012             —       —       16       17       —       16       17  
Unitrin Inc
   4.875   11/1/2010             —       —       398       387       —       398       387  
 
                                                                  
Insurance Total
                             —               4,376                       4,376  
 
                                                                  
Investment Companies
             0.3 %                                                        
Credit Suisse First Boston USA Inc
   5.875   8/1/2006             —       —       1,210       1,239       —       1,210       1,239  
Credit Suisse First Boston USA Inc
   6.125   11/15/2011             —       —       1,597       1,694       —       1,597       1,694  
 
                                                                  
Investment Companies Total
                             —               2,933                       2,933  
 
                                                                  
Real Estate
             0.0 %                                                        
ERP Operating LP
   5.200   4/1/2013             —       —       356       355       —       356       355  
 
                                                                  
Real Estate Total
                             —               355                       355  
 
                                                                  
Real Estate Investment Trust (REIT’s)
             0.4 %                                                        
Camden Property Trust
   5.375   12/15/2013             —       —       1,744       1,749       —       1,744       1,749  
Health Care Property Investors Inc
   6.450   6/25/2012             —       —       612       657       —       612       657  
Simon Property Group LP
   4.875   8/15/2010             —       —       1,750       1,730       —       1,750       1,730  
 
                                                                  
Real Estate Investment Trust (REIT’s) Total
                             —               4,137                       4,137  
 
                                                                  
Savings and Loans
             0.6 %                                                        
Amsouth Bank NA/Birmingham AL
   4.850   4/1/2013             —       —       1,712       1,675       —       1,712       1,675  
Golden West Financial Corp
   4.125   8/15/2007             —       —       406       405       —       406       405  
Golden West Financial Corp
   4.750   10/1/2012             —       —       1,283       1,271       —       1,283       1,271  
Washington Mutual Inc
   4.625   4/1/2014             —       —       2,008       1,897       —       2,008       1,897  
Washington Mutual Inc
   5.625   1/15/2007             —       —       335       343       —       335       343  
 
                                                                  
Savings and Loans Total
                             —               5,591                       5,591  
 
                                                                  
TOTAL FINANCIALS
                             12,643               162,405                       175,047  
 
                                                                  
INDUSTRIALS
             0.8 %                                                        
Aerospace and Defense
             0.3 %                                                        
General Dynamics Corp (b)
   4.500   8/15/2010             —       —       252       250       —       252       250  
Goodrich Corp
   7.625   12/15/2012             —       —       483       560       —       483       560  
Northrop Grumman Corp
   7.125   2/15/2011             —       —       1,106       1,233       —       1,106       1,233  

 

Table of Contents

     

                                                                         
Pro Forma Combining Portfolio of Investments                   Columbia Intermediate Gov't Income Fund                    
As of 3/31/05                   Target Fund     Intermediate Bond Master Portfolio*     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Raytheon Co (b)
   5.375   4/1/2013             —       —       700       710       —       700       710  
 
                                                                  
Aerospace and Defense Total
                             —               2,754                       2,754  
 
                                                                  
Building Materials
             0.1 %                                                        
Hanson Overseas BV
   6.750   9/15/2005             —       —       1,151       1,167       —       1,151       1,167  
 
                                                                  
Building Materials Total
                             —               1,167                       1,167  
 
                                                                  
Environmental Control
             0.1 %                                                        
Waste Management Inc
   7.375   8/1/2010             —       —       1,195       1,332       —       1,195       1,332  
 
                                                                  
Environmental Control Total
                             —               1,332                       1,332  
 
                                                                  
Machinery — Construction and Mining
             0.0 %                                                        
Caterpillar Inc
   6.550   5/1/2011             —       —       7       8       —       7       8  
 
                                                                  
Machinery — Construction and Mining Total
                             —               8                       8  
 
                                                                  
Miscellaneous Manufacturing
             0.0 %                                                        
General Electric Co
   5.000   2/1/2013             —       —       7       7       —       7       7  
 
                                                                  
Miscellaneous Manufacturing Total
                             —               7                       7  
 
                                                                  
Transportation
             0.3 %                                                        
Burlington Northern Santa Fe Corp
   4.875   1/15/2015             —       —       1,250       1,215       —       1,250       1,215  
Burlington Northern Santa Fe Corp
   6.750   7/15/2011             —       —       1,139       1,250       —       1,139       1,250  
Canadian National Railway Co
   6.375   10/15/2011             —       —       397       430       —       397       430  
 
                                                                  
Transportation Total
                             —               2,895                       2,895  
 
                                                                  
TOTAL INDUSTRIALS
                             —               8,162                       8,162  
 
                                                                  
TECHNOLOGY
             0.3 %                                                        
Computers
             0.3 %                                                        
Hewlett-Packard Co
   5.750   12/15/2006             —       —       1,942       1,991       —       1,942       1,991  
International Business Machines Corp
   3.800   2/1/2008             —       —       1,500       1,482       —       1,500       1,482  
 
                                                                  
Computers Total
                             —               3,473                       3,473  
 
                                                                  
TOTAL TECHNOLOGY
                             —               3,473                       3,473  
 
                                                                  
UTILITIES
             3.3 %                                                        
Electric
             3.0 %                                                        
American Electric Power Co Inc
   5.375   3/15/2010             —       —       1,800       1,837       —       1,800       1,837  
Appalachian Power Co
   3.600   5/15/2008             —       —       780       757       —       780       757  
Carolina Power & Light Co
   5.125   9/15/2013             1,100       1,098       —       —       —       1,100       1,098  
Consolidated Edison Co of New York
   6.625   12/15/2005             —       —       1,034       1,056       —       1,034       1,056  
Dominion Resources Inc.
   5.000   3/15/2013             —       —       571       563       —       571       563  
Duke Energy Corp
   5.300   10/1/2015             2,400       2,429       —       —       —       2,400       2,429  
Duquesne Light Co
   6.700   4/15/2012             —       —       525       577       —       525       577  
FirstEnergy Corp
   6.450   11/15/2011             —       —       3,782       3,990       —       3,782       3,990  
Florida Power & Light Co
   4.850   2/1/2013             —       —       4       4       —       4       4  
FPL Energy National Wind (a)
   5.608   3/10/2024             —       —       1,000       989       —       1,000       989  
Midamerican Energy Holdings Co
   5.000   2/15/2014             —       —       1,483       1,447       —       1,483       1,447  
Nisource Finance Corp
   5.400   7/15/2014             —       —       491       495       —       491       495  
Ohio Edison Co
   4.000   5/1/2008             —       —       348       341       —       348       341  
Pacific Gas & Electric Co
   4.200   3/1/2011             —       —       908       875       —       908       875  
Pepco Holdings Inc
   5.500   8/15/2007             —       —       571       584       —       571       584  
Progress Energy Inc
   6.050   4/15/2007             —       —       3,330       3,435       —       3,330       3,435  
Public Service Electric & Gas
   4.000   11/1/2008             —       —       629       617       —       629       617  
Scottish Power Plc (b)
   4.910   3/15/2010             —       —       3,000       3,000       —       3,000       3,000  
Southern California Edison Co
   8.000   2/15/2007             —       —       616       656       —       616       656  
Southern Co Capital Funding Inc
   5.300   2/1/2007             —       —       1,078       1,109       —       1,078       1,109  
TransAlta Corp
   5.750   12/15/2013             —       —       589       599       —       589       599  
TXU Energy Co LLC
   7.000   3/15/2013             —       —       2,373       2,597       —       2,373       2,597  
Virginia Electric and Power Co
   5.375   2/1/2007             —       —       1,032       1,052       —       1,032       1,052  

 

Table of Contents

     

                                                                         
Pro Forma Combining Portfolio of Investments                   Columbia Intermediate Gov't Income Fund                    
As of 3/31/05                   Target Fund     Intermediate Bond Master Portfolio*     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
 
                                                                  
Electric Total
                             3,528               26,580                       30,107  
 
                                                                  
Gas
             0.3 %                                                        
Atmos Energy Corp
   4.000   10/15/2009             —       —       3,000       2,888       —       3,000       2,888  
 
                                                                  
Gas Total
                             —               2,888                       2,888  
 
                                                                  
TOTAL UTILITIES
                             3,528               29,468                       32,996  
 
                                                                  
TOTAL CORPORATE NOTES AND BONDS
                             23,367               322,225                       345,593  
 
                                                                  
(Cost $321,629)
                                                                        
GOVERNMENT AGENCIES AND OBLIGATIONS
             37.0 %                                                        
Foreign Government Bonds
             1.5 %                                                        
Quebec Province
   6.125   1/22/2011             —       —       3,188       3,413       —       3,188       3,413  
Republic of Chile
   5.500   1/15/2013             —       —       872       891       —       872       891  
Republic of Greece
   6.950   3/4/2008             —       —       2,023       2,168       —       2,023       2,168  
Republic of Italy
   2.750   12/15/2006             —       —       1,163       1,142       —       1,163       1,142  
Republic of South Africa
   6.500   6/2/2014             —       —       969       1,017       —       969       1,017  
United Mexican States (b)
   6.625   3/3/2015             —       —       5,925       6,174       —       5,925       6,174  
 
                                                                  
Total Foreign Government Bonds
                             —               14,806                       14,806  
 
                                                                  
U.S. Government Agencies and Obligations
             35.5 %                                                        
Federal Farm Credit Bank
                                                                        
 
   2.500   3/15/2006             —       —       3,624       3,583       —       3,624       3,583  
Federal Home Loan Bank
                                                                        
 
   3.250   8/15/2005             —       —       5,500       5,504       —       5,500       5,504  
 
   3.625   11/14/2008             —       —       1,800       1,760       —       1,800       1,760  
 
   3.875   6/14/2013             —       —       3,500       3,311       —       3,500       3,311  
Federal Home Loan Mortgage Corp.
                                                                        
 
   2.375   4/15/2006             —       —       1,437       1,417       —       1,437       1,417  
 
   2.875   9/15/2005             635       634       —       —       —       635       634  
 
   3.600   7/7/2010             3,550       3,386       —       —       —       3,550       3,386  
 
   3.875   1/12/2009             28,500       27,925       —       —       —       28,500       27,925  
 
   4.000   9/22/2009             2,000       1,947       —       —       —       2,000       1,947  
 
   4.500   1/15/2013 (b)             —       —       700       688       —       700       688  
 
   5.000   1/30/2014             7,825       7,722       —       —       —       7,825       7,722  
 
   5.750   3/15/2009             —       —       1,750       1,837       —       1,750       1,837  
 
   6.625   9/15/2009             —       —       2,136       2,322       —       2,136       2,322  
Federal National Mortgage Association
                                                                        
 
   2.000   1/15/2006             11,500       11,358       —       —       —       11,500       11,358  
 
   2.375   2/15/2007             19,000       18,459       —       —       —       19,000       18,459  
 
   2.500   1/30/2007             5,000       4,869       —       —       —       5,000       4,869  
 
   2.625   11/15/2006             —       —       2,082       2,041       —       2,082       2,041  
 
   2.875   10/15/2005             —       —       3,949       3,938       —       3,949       3,938  
 
   3.250   11/15/2007             3,000       2,935       —       —       —       3,000       2,935  
 
   3.375   12/15/2008             3,000       2,901       —       —       —       3,000       2,901  
 
   4.125   4/15/2014 (b)             —       —       1,500       1,424       —       1,500       1,424  
 
   4.375   10/15/2006             1,700       1,713       —       —       —       1,700       1,713  
 
   4.375   9/15/2012 (b)             —       —       2,095       2,046       —       2,095       2,046  
 
   5.250   1/15/2009             —       —       15,386       15,858       —       15,386       15,858  
 
   5.250   6/15/2006 (h)             —       —       5,389       5,479       —       5,389       5,479  
 
   5.500   2/15/2006             4,000       4,062       —       —       —       4,000       4,062  
 
   5.500   8/25/2017             —       —       2,818       2,862       —       2,818       2,862  
U.S. Treasury Bonds
                                                                        
 
   3.125   4/15/2009 (b)             —       —       7,850       7,570       —       7,850       7,570  
 
   5.375   2/15/2031             13,880       15,128       —       —       —       13,880       15,128  
 
   7.250   5/15/2016             —       —       6,500       7,971       —       6,500       7,971  
 
   12.000   8/15/2013             600       749       —       —       —       600       749  
U.S. Treasury Notes
                                                                        
 
   1.875   11/30/2005 (b)             —       —       15,000       14,866       —       15,000       14,866  

 

Table of Contents

     

                                                                         
Pro Forma Combining Portfolio of Investments                   Columbia Intermediate Gov't Income Fund                    
As of 3/31/05                   Target Fund     Intermediate Bond Master Portfolio*     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
 
   2.000   8/31/2005             1,030       1,026       —       —       —       1,030       1,026  
 
   2.000   5/15/2006             —       —       3,500       3,442       —       3,500       3,442  
 
   2.375   8/15/2006 (b)             —       —       2,500       2,458       —       2,500       2,458  
 
   2.750   6/30/2006             —       —       2,000       1,980       —       2,000       1,980  
 
   2.875   11/30/2006             30,715       30,297       —       —       —       30,715       30,297  
 
   3.000   11/15/2007             850       832       —       —       —       850       832  
 
   3.000   2/15/2009 (b)             —       —       5,500       5,289       —       5,500       5,289  
 
   3.125   5/15/2007 (b)             —       —       4,210       4,151       —       4,210       4,151  
 
   3.250   1/15/2009 (b)             —       —       5,100       4,956       —       5,100       4,956  
 
   3.375   10/15/2009 (b)             —       —       6,200       6,003       —       6,200       6,003  
 
   3.625   1/15/2010             5,475       5,344       6,000       5,856       —       11,475       11,200  
 
   3.875   5/15/2009 (b)             —       —       5,200       5,156       —       5,200       5,156  
 
   4.000   3/15/2010 (b)             —       —       1,000       992       —       1,000       992  
 
   4.250   8/15/2013 (b)             —       —       7,000       6,903       —       7,000       6,903  
 
   4.250   11/15/2014 (b)             7,250       7,100       19,979       19,566       —       27,229       26,666  
 
   4.625   5/15/2006             —       —       7,000       7,084       —       7,000       7,084  
 
   5.000   8/15/2011 (b)             —       —       900       935       —       900       935  
 
   5.750   8/15/2010             7,025       7,539       —       —       —       7,025       7,539  
 
   6.500   2/15/2010 (b)             —       —       17,000       18,719       —       17,000       18,719  
U.S. Treasury Strips
                                                                        
 
   0.000   11/15/2008 (c)             —       —       10,000       8,645       —       10,000       8,645  
 
   0.000   5/15/2006 (c)             —       —       4,000       3,849       —       4,000       3,849  
 
   0.000   5/15/2005 (c)             —       —       7,000       6,979       —       7,000       6,979  
 
                                                                  
U.S. Government Agencies and Obligations Total
                             155,924               197,438                       353,362  
 
                                                                  
TOTAL GOVERNMENT AGENCIES AND OBLIGATIONS
                             155,924               212,244                       368,168  
 
                                                                  
(Cost $126,556)
                                                                        
ASSET-BACKED SECURITIES
             5.9 %                                                        
AmeriCredit Automobile Receivables Trust
   3.930   10/6/2011             —       —       3,500       3,445       —       3,500       3,445  
BMW Vehicle Owner Trust
   3.320   2/25/2009             —       —       5,811       5,713       —       5,811       5,713  
Bombardier Capital Mortgage Securitization Corp
   6.230   4/15/2028             —       —       5       5       —       5       5  
Capital Auto Receivables Asset Trust
   4.180   10/15/2007             —       —       124       124       —       124       124  
Chase Manhattan Auto Owner Trust
   2.830   9/15/2010             1,725       1,662       —       —       —       1,725       1,662  
Chase Credit Card Master Trust
   3.710   7/16/2007             —       —       3,552       3,553       —       3,552       3,553  
CIT Equipment Collateral
   4.670   12/21/2009             —       —       2,346       2,351       —       2,346       2,351  
Citibank Credit Card Issuance Trust
   2.500   4/7/2008             —       —       6,401       6,315       —       6,401       6,315  
Citibank Credit Card Issuance Trust
   5.650   6/16/2008             —       —       4,500       4,590       —       4,500       4,590  
Credit-Based Asset Servicing and Securitization
   5.497   5/25/2035             —       —       1,500       1,531       —       1,500       1,531  
Discover Card Master Trust I
   5.750   12/15/2008             —       —       5,000       5,108       —       5,000       5,108  
First Plus Home Loan Trust
   7.720   5/10/2024             —       —       72       72       —       72       72  
Ford Credit Auto Owner Trust
   4.080   6/15/2010             —       —       3,500       3,453       —       3,500       3,453  
Ford Credit Auto Owner Trust
   5.180   10/16/2006             —       —       1,015       1,021       —       1,015       1,021  
Green Tree Financial Corp
   8.250   7/15/2027             —       —       1,022       1,106       —       1,022       1,106  
GSAA Trust
   4.220   8/25/2034             —       —       1,400       1,386       —       1,400       1,386  
GSAA Trust
   4.316   11/25/2034             —       —       2,000       1,972       —       2,000       1,972  
MBNA Master Credit Card Trust USA
   3.110   2/15/2008             —       —       3,000       3,002       —       3,000       3,002  
Residential Asset Mortgage Products Inc
   3.981   4/25/2029             —       —       1,100       1,079       —       1,100       1,079  
Residential Funding Mortgage Securities II
   4.160   8/25/2034             —       —       3,500       3,448       —       3,500       3,448  
Volkswagen Auto Loan Enhanced Trust
   2.270   10/22/2007             —       —       4,012       3,972       —       4,012       3,972  
WFS Financial Owner Trust
   4.620   11/19/2012             —       —       3,500       3,487       —       3,500       3,487  
 
                                                                  
TOTAL ASSET-BACKED SECURITIES
                             1,662               56,731                       58,393  
 
                                                                  
(Cost $57,566)
                                                                        
MORTGAGE-BACKED SECURITIES
             12.2 %                                                        
Agency Collateralized Mortgage Obligations
             0.3 %                                                        
Federal Home Loan Mortgage Corp.
                                                                        
 
   5.500   1/15/2023             —       —       2,847       223       —       2,847       223  
 
   5.500   5/15/2027             —       —       3,112       304       —       3,112       304  
Federal National Mortgage Association
   6.000   4/25/2017             —       —       2,624       2,732       —       2,624       2,732  

 

Table of Contents

     

                                                                         
Pro Forma Combining Portfolio of Investments                   Columbia Intermediate Gov't Income Fund                    
As of 3/31/05                   Target Fund     Intermediate Bond Master Portfolio*     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
 
                                                                  
Agency Collateralized Mortgage Obligations Total
                             —               3,259                       3,259  
 
                                                                  
Mortgage-Backed Obligations
             11.8 %                                                        
Federal National Mortgage Association
                                                                        
 
   4.324   8/1/2036             —       —       236       240       —       236       240  
 
   4.717   8/25/2012             5,000       4,933       —       —       —       5,000       4,933  
 
   5.000   7/25/2016             2,429       2,448       —       —       —       2,429       2,448  
 
   5.000   5/1/2009             494       494       —       —       —       494       494  
 
   5.240   9/1/2012             2,511       2,562       —       —       —       2,511       2,562  
 
   6.000   4/1/2011             136       139       —       —       —       136       139  
 
   6.000   4/1/2013             1,273       1,316       —       —       —       1,273       1,316  
 
   6.000   6/1/2014             496       512       —       —       —       496       512  
 
   6.000   12/1/2031             1,473       1,522       —       —       —       1,473       1,522  
 
   6.324   10/1/2008             1,382       1,362       —       —       —       1,382       1,362  
 
   6.500   5/1/2011             177       184       —       —       —       177       184  
 
   6.500   6/1/2013             176       184       —       —       —       176       184  
 
   6.500   7/1/2031             75       78       —       —       —       75       78  
 
   6.500   8/1/2031             999       1,039       —       —       —       999       1,039  
 
   6.500   9/1/2031             642       668       —       —       —       642       668  
 
   6.565   12/1/2007             857       892       —       —       —       857       892  
 
   6.600   11/1/2007             758       789       —       —       —       758       789  
 
   7.500   10/1/2015             83       88       —       —       —       83       88  
 
   7.785   2/1/2019             2,923       3,184       —       —       —       2,923       3,184  
 
   8.000   7/1/2007             15       15       —       —       —       15       15  
 
   8.000   12/1/2029             520       560       —       —       —       520       560  
 
   8.000   2/1/2030             32       34       —       —       —       32       34  
 
   8.000   3/1/2030             21       23       —       —       —       21       23  
 
   8.000   4/1/2030             80       86       —       —       —       80       86  
 
   8.000   5/1/2030             26       28       —       —       —       26       28  
 
   10.000   10/1/2020             323       363       —       —       —       323       363  
 
   10.000   12/1/2020             262       296       —       —       —       262       296  
Federal Home Loan Mortgage Corp.
                                                                        
 
   4.000   5/15/2014             5,000       4,941       —       —       —       5,000       4,941  
 
   5.000   8/15/2016             2,808       2,837       —       —       —       2,808       2,837  
 
   5.000   12/1/2013             2,141       2,145       —       —       —       2,141       2,145  
 
   5.500   2/1/2018             1,947       1,989       —       —       —       1,947       1,989  
 
   5.500   3/1/2018             188       192       —       —       —       188       192  
 
   5.500   3/1/2033             112       113       —       —       —       112       113  
 
   6.000   4/1/2031             176       180       —       —       —       176       180  
 
   6.000   10/1/2034             4,338       4,441       —       —       —       4,338       4,441  
 
   6.500   4/1/2032             691       718       —       —       —       691       718  
 
   7.000   12/1/2010             108       113       —       —       —       108       113  
 
   7.500   10/1/2029             257       275       —       —       —       257       275  
Government National Mortgage Association
                                                                        
 
   3.375   4/20/2022             532       539       —       —       —       532       539  
 
   3.750   7/20/2021             122       123       —       —       —       122       123  
 
   4.374   4/16/2033             3,000       2,920       —       —       —       3,000       2,920  
 
   4.486   10/16/2025             1,500       1,478       —       —       —       1,500       1,478  
 
   4.763   1/16/2025             4,550       4,546       —       —       —       4,550       4,546  
 
   5.500   12/15/2013             18       19       —       —       —       18       19  
 
   5.500   1/15/2014             86       89       —       —       —       86       89  
 
   5.500   2/15/2014             126       130       —       —       —       126       130  
 
   5.500   3/15/2014             278       286       —       —       —       278       286  
 
   5.500   4/15/2014             296       305       —       —       —       296       305  
 
   5.500   5/15/2014             354       365       —       —       —       354       365  
 
   5.500   6/15/2014             319       328       —       —       —       319       328  
 
   6.500   6/15/2011             66       69       —       —       —       66       69  
 
   6.500   8/15/2012             23       24       —       —       —       23       24  
 
   6.500   6/15/2013             2       2       —       —       —       2       2  

 

Table of Contents

     

                                                                         
Pro Forma Combining Portfolio of Investments                   Columbia Intermediate Gov't Income Fund                    
As of 3/31/05                   Target Fund     Intermediate Bond Master Portfolio*     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
 
   6.500   7/15/2013             51       53       —       —       —       51       53  
 
   6.500   9/15/2013             319       334       —       —       —       319       334  
 
   6.500   10/15/2013             381       400       —       —       —       381       400  
 
   6.500   11/15/2013             5       6       —       —       —       5       6  
 
   6.500   7/15/2014             143       151       —       —       —       143       151  
 
   7.000   5/15/2012             —       —       170       179       —       170       179  
 
   7.000   9/15/2013             68       72       —       —       —       68       72  
 
   7.000   10/15/2023             51       54       —       —       —       51       54  
 
   7.000   12/15/2028             471       498       —       —       —       471       498  
 
   7.500   2/15/2027             16       17       —       —       —       16       17  
 
   7.500   9/15/2029             907       973       —       —       —       907       973  
 
   8.500   1/15/2006             2       2       —       —       —       2       2  
 
   9.000   11/15/2017             115       125       —       —       —       115       125  
 
   9.500   9/15/2016             —       —       10       11       —       10       11  
 
   9.500   8/15/2020             —       —       2       2       —       2       2  
 
   9.500   12/15/2020             —       —       4       5       —       4       5  
 
   10.000   5/15/2016             —       —       4       5       —       4       5  
 
   10.000   7/15/2017             —       —       18       21       —       18       21  
 
   10.000   8/15/2017             —       —       15       17       —       15       17  
 
   10.000   8/15/2018             —       —       1       1       —       1       1  
 
   11.500   6/15/2013             —       —       71       79       —       71       79  
TBA’s:
                                                                        
FGCI 15YR
   5.000                 3,000       3,000       —       —       —       3,000       3,000  
FGLMC 30YR
   5.000                 2,000       1,956       —       —       —       2,000       1,956  
FNCI 15YR
   4.500                 2,750       2,688       —       —       —       2,750       2,688  
FNCI 15YR
   5.000                 750       749       —       —       —       750       749  
FNCI 15YR
   6.000                 1,100       1,136       —       —       —       1,100       1,136  
FNCL 30YR
   5.000                 8,650       8,455       —       —       —       8,650       8,455  
FNCL 30YR
   6.000                 6,160       6,281       —       —       —       6,160       6,281  
FNCL 30YR
   6.500                 5,650       5,862       —       —       —       5,650       5,862  
FNMA 30YR
   5.500                 21,400       21,427       —       —       —       21,400       21,427  
FNMA 15YR
   4.500   5/15/2020 (f)             —       —       6,500       6,320       —       6,500       6,320  
FNMA 15YR
   5.500   4/15/2020 (f)             —       —       3,500       3,566       —       3,500       3,566  
 
                                                                  
Mortgage-Backed Obligations Total
                             107,206               10,445                       117,650  
 
                                                                  
TOTAL MORTGAGE-BACKED SECURITIES
                             107,206               13,704                       120,909  
 
                                                                  
(Cost $18,988)
                                                                        
COLATERALIZED MORTGAGE OBLIGATIONS
             8.7 %                                                        
Collateralized Mortgage Obligations
             6.5 %                                                        
Centex Home Equity
   2.293   11/25/2027             2,693       2,646       —       —       —       2,693       2,646  
Chaseflex Trust
   5.500   2/25/2035             —       —       3,325       3,278       —       3,325       3,278  
Citifinancial Mortgage Securities Inc
   2.645   4/25/2034             2,500       2,380       —       —       —       2,500       2,380  
Citigroup Commercial Mortgage Trust
   4.733   10/15/2041             —       —       3,765       3,665       —       3,765       3,665  
Countrywide Home Equity Loan Trust
   3.310   1/15/2034 (k)             2,086       2,088       —       —       —       2,086       2,088  
Equity One ABS Inc
   3.360   7/25/2034 (k)             2,051       2,058       —       —       —       2,051       2,058  
First Horizon Alternative Mortgage Securities
   6.000   1/25/2035             1,740       1,768       2,822       2,853       —       4,563       4,622  
Nomura Asset Acceptance Corp
   4.386   2/25/2035             —       —       4,000       3,939       —       4,000       3,939  
Residential Asset Mortgage Products Inc
   2.870   8/25/2030 (k)             2,575       2,500       —       —       —       2,575       2,500  
Small Business Administration Participation Certificates
   4.500   3/1/2023             2,578       2,508       —       —       —       2,578       2,508  
Small Business Administration Participation Certificates
   4.340   3/1/2024             9,594       9,192       —       —       —       9,594       9,192  
Small Business Administration Participation Certificates
   5.180   5/1/2024             3,923       3,953       —       —       —       3,923       3,953  
Small Business Administration Participation Certificates
   5.660   7/1/2022             3,651       3,766       —       —       —       3,651       3,766  
Small Business Administration Participation Certificates
   5.310   8/1/2022             4,249       4,320       —       —       —       4,249       4,320  
Small Business Administration Participation Certificates
   5.240   8/1/2023             3,909       3,956       —       —       —       3,909       3,956  
Small Business Administration Participation Certificates
   6.000   9/1/2018             3,059       3,170       —       —       —       3,059       3,170  
Small Business Administration Participation Certificates
   4.890   9/1/2022             3,632       3,621       —       —       —       3,632       3,621  
Vendee Mortgage Trust
   0.304   3/15/2029 (e)             —       —       15,672       122       —       15,672       122  
Vendee Mortgage Trust
   0.446   9/15/2027 (e)             —       —       12,886       141       —       12,886       141  
Washington Mutual Inc
   4.684   4/25/2035             —       —       2,500       2,500       —       2,500       2,500  

 

Table of Contents

     

                                                                         
Pro Forma Combining Portfolio of Investments                   Columbia Intermediate Gov’t Income Fund                    
As of 3/31/05                   Target Fund     Intermediate Bond Master Portfolio*     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
 
                                                                  
Collateralized Mortgage Obligations Total
                             47,924               16,498                       64,423  
 
                                                                  
Commercial Mortgage-Backed Securities
             2.2 %                                                        
Bear Stearns Commercial Mortgage Securities
   4.680   8/13/2039 (b)             —       —       3,730       3,646       —       3,730       3,646  
JP Morgan Chase Commercial Mortgage Securities Corp
   4.134   10/15/2037             3,311       3,219       —       —       —       3,311       3,219  
JP Morgan Chase Commercial Mortgage Securities Corp
   4.878   1/15/2042             —       —       2,000       1,962       —       2,000       1,962  
JP Morgan Mortgage Trust
   5.001   7/25/2034             1,824       1,795       —       —       —       1,824       1,795  
LB-UBS Commercial Mortgage Trust
   5.124   11/15/2032             2,315       2,313       —       —       —       2,315       2,313  
Merrill Lynch Mortgage Investors Inc
   0.896   12/15/2030             —       —       12,072       364       —       12,072       364  
Morgan Stanley Capital I
   4.970   12/15/2041             —       —       7,949       7,916       —       7,949       7,916  
Rural Housing Trust 1987-1
   6.330   4/1/2026             568       566       —       —       —       568       566  
 
                                                                  
Commercial Mortgage-Backed Securities Total
                             7,893               13,889                       21,782  
 
                                                                  
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
                             55,817               30,387                       86,205  
 
                                                                  
(Cost $31,269)
                                                                        
INVESTMENT COMPANY
             0.5 %                                                        
Nations Cash Reserves Fund
                     —       —       4,816       4,816       —       4,816       4,816  
 
                                                                  
TOTAL INVESTMENT COMPANY
                             —               4,816                       4,816  
 
                                                                  
(Cost $126,556)
                                                                        
SHORT-TERM OBLIGATIONS
             19.0 %                                                        
U.S. Government Agencies and Obligations
             6.7 %                                                        
Federal Home Loan Bank Discount Notes
   0.000   4/1/2005 (g)             —       —       6,500       6,500       —       6,500       6,500  
Federal Home Loan Mortgage Corp. Discount Notes
   0.000   4/12/2005             37,700       37,669       —       —       —       37,700       37,669  
Federal Home Loan Mortgage Corp. Discount Notes
   0.000   4/19/2005             7,600       7,590       —       —       —       7,600       7,590  
Federal National Mortgage Association Discount Notes
   0.000   4/18/2005 (g)             —       —       3,500       3,496       —       3,500       3,496  
Federal National Mortgage Association Discount Notes
   0.000   5/17/2005 (g)             —       —       6,500       6,477       —       6,500       6,477  
United States Treasury Notes
   2.750   8/15/2007 (b)             —       —       4,544       4,431       —       4,544       4,431  
 
                                                                  
U.S. Government Agencies and Obligations Total
                             45,259               20,904                       66,163  
 
                                                                  
Repurchase Agreement (i)
             12.3 %                                                        
Repurchase agreement with State Street Bank & Trust Co., dated 03/31/05, due 04/01/05 at 2.45% collateralized by a U.S. Treasury Bond maturing 08/25/22 market value of $903 (repurchase proceeds $903)
                     903       903                                       903  
Repurchase agreement with ABN AMRO, Inc. dated 03/31/05 due 04/01/05 at 2.830%, collateralized by U.S. Government Agency securities with various maturities to 05/15/29, market value $32,647 (repurchase proceeds $32,342)
                                     32,339       32,342                       32,342  
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.840%, collateralized by U.S. Government Agency securities with various maturities to 05/20/33, market value $39,317 (repurchase proceeds $38,810)
                                     38,807       38,810                       38,810  
Repurchase agreement with Wachovia Capital Markets dated 03/31/05 due 04/01/05 at 2.920%, collateralized by U.S. Government Agency securities with various maturities to 03/231/35, market value $51,317 (repurchase proceeds $50,524)
                                     50,520       50,524                       50,524  
 
                                                                  
Repurchase Agreement Total
                             903               121,676                       122,579  
 
                                                                  
TOTAL SHORT-TERM OBLIGATIONS
                             46,162               142,580                       188,742  
 
                                                                  
Total Investments
             120.6 %             390,138               782,687                       1,172,826  

 

Table of Contents

     

                                                                         
Pro Forma Combining Portfolio of Investments                   Columbia Intermediate Gov't Income Fund                    
As of 3/31/05                   Target Fund     Intermediate Bond Master Portfolio*     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
Other Assets & Liabilities, net
             -20.6 %             (44,978 )             (133,508 )                     (178,486 )
 
                                                                
Net Assets
             100.0 %             345,160               649,179                       994,340  
 
                                                                
Investments at cost (j)
                             392,874               786,975                       1,179,849  
 
                                                                  

* Nations Intermediate Bond Fund, the acquiring fund, invests only in Intermediate Bond Master Portfolio. At March 31, 2005, Nations Intermediate Bond Fund owned 96.7% of Intermediate Bond Master Portfolio.

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 March 31, 2005, these securities amounted to $15,294, which represents 2.4% of net assets.

(b) All or a portion of this security was on loan at March 31, 2005. The aggregate cost and market value of securities on loan at March 31, 2005 is $111,965 and $109,999, respectively.

(c) Zero coupon bond.

(d) Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by Banc of America Capital Management, LLC. A portion of this amount represents cash collateral received from securities lending activity (see Note 9). The portion that represents cash collateral is $121,740.

(e) Restricted and illiquid security.

(f) Security, or a portion thereof, purchased on a delayed delivery basis.

(g) Fair valued security.

(h) Security pledged as collateral for open futures contracts and TBA’s.

(i) This amount represents cash collateral received from securities lending activity.

(j) Cost for federal income tax purposes is $392,934 or the Columbia Intermediate Government Income Fund, $787,044 for the Nations Intermediate Bond Fund and $1,179,978 for the funds combined.

(k) Floating rate note. The interest rate shown reflects the rate as of March 31, 2005.

ABBREVIATIONS:

STRIPS — Separate Trading of Registered Interest and Principal of

Securities

TBA — To Be Announced

 

Table of Contents

Pro-forma Combining
Statement of Assets & Liabilities (unaudited)
As of March 31, 2005
    Columbia     Nations              
    Intermediate Government     Intermediate Bond              
    Income Fund     Fund     Pro Forma     Pro Forma  
(In thousands)   Target Fund     Acquiring Fund     Adjustments     Combined  
Assets:
                                
Investments, at cost
   $ 392,874     $ —     $ (392,874 )   $ —  
Investment in master, at cost
     —       632,489       392,874       1,025,363  
 
                        
Investments, at value
     390,138       —       (390,138 )     —  
Investment in master, at value
     —       628,297       390,138       1,018,435  
Investments sold
     6,293       —       —       6,293  
Fund shares sold
     10       511       —       521  
Income Receivable
     2,135       —       —       2,135  
Deferred Trustees’ compensation plan
     20       —       —       20  
Prepaid Expense
     88       —       —       88  
 
                        
Total Assets
     398,684       628,808       —       1,027,492  
 
                        
 
                                
Liabilities:
                                
Payable for:
                                
Investments purchased
     51,803       —               51,803  
Fund shares repurchased
     272       592       —       864  
Distributions
     1,140       15       —       1,155  
Investment advisory fee
     140       —       —       140  
Administration fee
     20       69       —       89  
Transfer agent fee
     52       —       —       52  
Pricing and bookkeeping fees
     8       —       —       8  
Trustees’ fees
     1       43       —       44  
Audit fee
     24       —       —       24  
Custody fee
     3       —       —       3  
Distribution and service fees
     10       —       —       10  
Deferred compensation plan
     20       —       —       20  
Other liabilities
     31       115       101       247  
 
                        
Total Liabilities
     53,524       834       101       54,459  
 
                        
Net Assets
   $ 345,160     $ 627,974     $ (101 )   $ 973,033  
 
                        
 
                                
Composition of Net Assets:
                                
Paid-in capital
   $ 360,217     $ 634,550       —     $ 994,767  
Undistributed net investment income
     82       316       (101 )     297  
Accumulated net realized gain (loss)
     (12,403 )     (2,700 )     —       (15,103 )
Unrealized appreciation on investments
     (2,736 )     (4,192 )     —       (6,928 )
 
                        
Net Assets
   $ 345,160     $ 627,974     $ (101 )   $ 973,033  
 
                        
 
                                
Investors A:
                                
Net assets
   $ —     $ 21,279,319     $ 35,957,368 (d)   $ 57,236,687  
Shares outstanding
     —       2,240,454       3,786,040 (d)     6,026,494  
 
                          
Net asset value per share (b)
   $ —     $ 9.50             $ 9.50  
 
                          
Maximum sales charge
             3.25 %                
Maximum offering price per share (c)
             9.82                  
 
                                
Investors B: (a)
                                
Net assets
   $ —     $ 8,564,661     $ 2,377,296 (d)   $ 10,941,957  
Shares outstanding
     —       906,349       251,643 (d)     1,157,992  
 
                          
Net asset value, offering and redemption price per share
   $ —     $ 9.45             $ 9.45  
 
                          
 
                                
Investors C: (a)
                                
Net assets
   $ —     $ 3,472,709     $ 1,371,088 (d)   $ 4,843,797  
Shares outstanding
     —       328,309       129,647 (d)     457,956  
 
                          
Net asset value, offering and redemption price per share
   $ —     $ 10.58             $ 10.58  
 
                          
 
                                
Primary A: (a)
                                
Net assets
   $ —     $ 594,656,897     $ 305,353,050 (d)   $ 900,009,947  
Shares outstanding
     —       62,821,914       32,263,365 (d)     95,085,279  
 
                          
Net asset value, offering and redemption price per share
   $ —     $ 9.47             $ 9.47  
 
                          

Table of Contents

                                 
Class A: (a)
                                
Net assets
   $ 2,894,973     $ —     $ (2,894,973 )   $ —  
Shares outstanding
     280,719       —       (280,719 )     —  
 
                          
Net asset value per share (b)
   $ 10.31     $ —             $ —  
 
                          
Maximum sales charge
                                
Maximum offering price per share ( c)
                                
 
                                
Class B: (a)
                                
Net assets
   $ 2,378,305     $ —     $ (2,378,305 )   $ —  
Shares outstanding
     230,618       —       (230,618 )     —  
 
                          
Net asset value and offering price per share (b)
   $ 10.31     $ —             $ —  
 
                          
 
                                
Class C: (a)
                                
Net assets
   $ 1,371,561     $ —     $ (1,371,561 )   $ —  
Shares outstanding
     132,995       —       (132,995 )     —  
 
                          
Net asset value and offering price per share (b)
   $ 10.31     $ —             $ —  
 
                          
 
                                
Class G: (a)
                                
Net assets
   $ 2,671,069     $ —     $ (2,671,069 )   $ —  
Shares outstanding
     259,008       —       (259,008 )     —  
 
                          
Net asset value and offering price per share (b)
   $ 10.31     $ —             $ —  
 
                          
 
                                
Class T: (a)
                                
Net assets
   $ 33,069,632     $ —     $ (33,069,632 )   $ —  
Shares outstanding
     3,206,694       —       (3,206,694 )     —  
 
                          
Net asset value and offering price per share (b)
   $ 10.31     $ —             $ —  
 
                          
 
                                
Class Z: (a)
                                
Net assets
   $ 302,774,131     $ —     $ (302,774,131 )   $ —  
Shares outstanding
     29,359,232       —       (29,359,232 )     —  
 
                          
Net asset value and offering price per share (b)
   $ 10.31     $ —             $ —  
 
                          

(a)   Class A, B, C, G, T and Z shares of Columbia Intermediate Government Income Fund are exchanged for Investor A, B, C Primary A, Investor A and Primary A shares of Nations Intermediate Bond Fund based on the net asset value per share of Nations Intermediate Bond Fund’s Investor A, B, C Primary A, Investor A and Primary A shares, respectively, at the time of the merger.
 
(b)   Redemption price per share is equal to net assets value less any applicable contingent deferred sales charge.
 
(c)   On sales of $50,000 or more the offering price is reduced.
 
(d)   Adjustment reflects one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of Trustees of $54,319 and $46,550 to be borne by Columbia Intermediate Government Income Fund and Nations Intermediate Bond Fund, respectively.
 
(e)   Reflects estimated shares issued to Target fund at the time of the merger.

 

Table of Contents

Pro-forma Combining
Statement of Operations
For the Twelve Months Ended March 31, 2005 (Unaudited)

                                 
    Columbia     Nations              
    Intermediate Government     Intermediate Bond              
    Income Fund     Fund     Pro Forma     Pro Forma  
(In thousands)   Target Fund     Acquiring Fund     Adjustments     Combined  
Investment Income:
                                
Interest
   $ 13,740     $ —     $ (13,740 )   $ —  
Interest — allocated from master portfolio
     —       25,142       13,740       38,882  
Dividend income from affiliated funds — allocated from master portfolio
     —       227       —       227  
Security lending — allocated from master portfolio
     —       69       —       69  
Expenses — allocated from master portfolio
     —       (2,750 )     (1,273 )     (4,023) (a)(c)
 
                        
Total Investment Income
     13,740       22,688       (1,273 )     35,155  
 
                        
 
                                
Expenses:
                                
Investment advisory fee
     1,954       —       (1,954 )     — (a) (c)
Administration fee
     254       1,110       (34 )     1,330 (e)
Distribution fee:
                                
Class B/Investor B
     19       75       —       94 (a)
Class C/Investor C
     8       30       —       38 (a)
Class G
     20       —       (20 )     — (e)
Service fee:
                                
Class A/Investor A
     7       60       93       160 (a) (e)
Class B/Investor B
     6       25       —       31 (a)
Class C/Investor C
     3       10       —       13 (a)
Class G
     5       —       (5 )     — (e)
Class T
     55       —       (55 )     — (e)
Transfer agent fee
     241       193       (172 )     262 (f)
Pricing and bookkeeping fees
     78       —       82       160 (d)
Trustees’ fees
     15       6       (5 )     16 (b)
Registration fees
     71       73       (99 )     45 (b)
Legal and audit
     44       77       (23 )     98 (b)
Non-Recurring Costs (see Note 5)
     7       30       —       37  
Other expenses
     114       37       (4 )     147 (b)
 
                        
Total Expenses
     2,901       1,726       (2,196 )     2,431  
Fees waived by Distributor — Class C / Investor C
     (1 )     —       (2 )     (3 )(g)
Fees waived by Advisor — Investor A
     —       —       (6 )     (6 )(g)
Custody earnings credit
     —       —       —       —  
Non-recurring costs assumed by Investment Advisor (see Note 5)
     (7 )     (30 )     —       (37 )
 
                        
Net Expenses
     2,893       1,696       (2,204 )     2,385  
 
                        
Net Investment Income
     10,847       20,992       931       32,770  
 
                        
 
                                
Net Realized and Unrealized Gain (Loss) on Investments:
                                
Security transactions
     7       —       (7 )     —  
Security transactions — allocated from master portfolio
     —       (2,038 )     7       (2,031 )
Swap contracts — allocated from master portfolio
     —       57               57  
Net change in unrealized appreciation/depreciation on:
                                
Investments
     (10,626 )     —       10,626       —  
Investments — allocated from master portfolio
     —       (24,946 )     (10,626 )     (35,572 )
 
                        
Net
     (10,619 )     (26,927 )     —       (37,546 )
 
                        
 
                                
Net Increase in Net Assets from Operations
   $ 228     $ (5,935 )   $ 931     $ (12,578 )
 
                        

(a)   Based on the contract in effect for Nations Intermediate Bond Fund Fund, the surviving fund.
 
(b)   Reflects elimination of duplicate expenses achieved as a result of merging funds.
 
(c)   Includes all expenses from Nations Intermediate Bond Fund Master, including investment advisory fee.
 
(d)   Based on new pricing and bookkeeping agreement.
 
(e)   Adjustment to realign Columbia Intermediate Government Income Fund’s fees to Nations Intermediate Bond Fund’s fee structure.
 
(f)   Based on new Transfer Agent agreement
 
(g)   Based on contractual expense waivers expected post merger

 

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NATIONS INTERMEDIATE BOND FUND
AND
COLUMBIA INTERMEDIATE GOVERNMENT INCOME FUND

PRO FORMA COMBINING FINANCIAL STATEMENTS

Notes to Financial Statements
March 31, 2005
(unaudited)

Note 1. Organization

Nations Intermediate Bond Fund (the “Acquiring Fund”), a series of Nations Funds Trust (the “Trust”), is a Delaware business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Columbia Intermediate Government Income Fund (“Target Fund”), a series of Columbia Funds Trust III, is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

Investment Goal

The Acquiring Fund seeks to obtain interest income and capital appreciation. The Acquiring Fund invests substantially all of its assets in Intermediate Bond Master Portfolio (the “Master Portfolio”), a series of Nations Master Investment Trust. The Master Portfolio has the same investment objective as the Acquiring Fund. The value of the Acquiring Fund’s investments included in the Statement of assets and liabilities reflects its proportionate beneficial interest in the net assets of the Master Portfolio (96.7% at March 31, 2005). The Target Fund seeks a high level of current income consistent with prudent risk of capital.

Fund Shares

The Acquiring Fund and the Target Fund each may issue an unlimited number of shares. The Acquiring Fund offers four classes of shares: Primary A, Investor A, Investor B and Investor C shares. The Target Fund offers six classes of shares: Class A, Class B, Class C, Class G, Class T and Class Z. Each share class has its own expense structure.

Note 2. Basis of Combination

The accompanying pro-forma financial statements are presented to show the effect of the proposed merger of the Target Fund by the Acquiring Fund as if such merger had occurred on April 1, 2004. The following notes refer to the accompanying pro-forma financial statements of such proposed merger.

Under the terms of the merger, the combination of the Target Fund and Acquiring Fund will be accounted for by the method of accounting for tax-free mergers of investment companies. The merger will be accomplished by a combination of the net assets of the Target Fund into the Acquiring Fund in exchange for new shares of the Acquiring Fund at net asset value.

The Pro Forma Investment Portfolio and Pro Forma Statement of Assets and Liabilities of the Target Fund and Acquiring Fund have been combined to reflect balances as of March 31, 2005. The Pro Forma Statement of Operations of the Target Fund and Acquiring Fund has been combined to reflect twelve months ended March 31, 2005. Banc of America Capital Management, LLC. (“BACAP”) expects that all of the securities held by the Target Fund as of March 31, 2005, would comply with the compliance guidelines and/or investment restrictions of the Acquiring Fund.

Following the merger the Acquiring Fund will be the accounting survivor. In accordance with accounting principles generally accepted in the United States of America, the historical cost of investment securities will be

 

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carried forward to the Acquiring Fund and the results of operations for pre-combined periods will not be re-stated.

The accompanying pro-forma financial statements should be read in conjunction with the financial statements of the Acquiring Fund, the Master Portfolio and the Target Fund included within their respective annual shareholder reports. The annual shareholder reports are dated March 31, 2005 for the Acquiring Fund and the Master Portfolio, and April 30, 2004 for the Target Fund. The semi-annual shareholder reports are dated September 30, 2004 for the Acquiring Fund and the Master Portfolio, and October 31, 2004 for the Target Fund.

Note 3. Significant Accounting Policies

Security Valuation

The valuation of the Acquiring Fund’s investment in the Master Portfolio is based on the reported net asset value of the Master Portfolio. The Master Portfolio and the Target Fund use the identical policy for security valuation.

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.

Income Recognition

The Acquiring Fund records its share of the investment income and realized and unrealized gains and losses reported by the Master Portfolio on a daily basis. The investment income and realized and unrealized gains and losses are allocated daily to investors in the Master Portfolio based upon the relative value of their investments in the Master Portfolio

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 Acquiring Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

 

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Federal Income Tax Status

The Acquiring 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 Acquiring 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 it should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.

Note 4. Fees and Compensations Paid to Affiliates

Investment Advisory Fee

BACAP, a wholly-owned subsidiary of Bank of America, N.A. (‘‘Bank of America’’), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, is the investment advisor to the Master Portfolio. The Acquiring Fund indirectly pays for investment advisory services through its investments in the Master Portfolio (see Notes to financial statements of the Master Portfolio).

Administration Fee

BACAP Distributors, LLC (‘‘BACAP Distributors’’), a wholly-owned subsidiary of Bank of America, provides administrative and other services to the Acquiring Fund. Effective December 1, 2004, BACAP Distributors is entitled to receive an administration fee, computed daily and paid monthly, at the annual rate of 0.15% of the Fund’s average daily net assets. Prior to December 1, 2004, BACAP Distributors received a monthly administration fee at the annual rate of 0.17% of the Fund’s average daily net assets. For the year ended March 31, 2005, the Acquiring Fund’s effective administration fee rate was 0.17%.

Transfer Agent Fee

PFPC Inc. serves as the transfer agent for the Acquiring Fund’s shares. Bank of America serves as the sub-transfer agent for the Primary A Shares of the Acquiring Fund. Bank of America is entitled to receive from the transfer agent a fee equal to the costs incurred by Bank of America in providing services pursuant to its obligations as sub-transfer agent at the annual rate of up to 0.01% of the net assets attributable to the Primary A shares of the Acquiring Fund. For the year ended March 31, 2005, Bank of America earned $21,000 in sub-transfer agent fees from the Acquiring Fund for providing such services. This amount is included in ‘‘Transfer agent fees’’ in the Statement of operations.

Underwriting Discounts, Service and Distribution Fees

BACAP Distributors serves as the distributor of the Acquiring Fund’s shares. For the year ended March 31, 2005, the Distributor has retained net underwriting discounts of $8,000 on sales of Investor A shares and received net CDSC fees of $0, $23,000 and $500 on Investor A, Investor B and Investor C share redemptions, respectively.

The Acquiring Fund has adopted shareholder servicing plans and distribution plans for the Investor B and Investor C shares and a combined distribution and shareholder servicing plan for Investor A Shares. The shareholder servicing plans permit the Acquiring Fund to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Acquiring Fund to compensate or reimburse the distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes’ shares. Payments are made at an annual rate and paid monthly, as a percentage of average daily net assets, set from time to time by the Board of Trustees, and are charged as expenses directly to the applicable share class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Bank of America and BACAP Distributors.

 

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For the year ended March 31, 2005, the annual rates in effect and plan limits, as a percentage of average daily net assets, were as follows:

                 
    Current     Plan  
    Rate     Limit  
Investor A Combined Distribution and Shareholder Servicing Plan
     0.25 %     0.25 %
Investor B and Investor C Shareholder Servicing Plans
     0.25 %     0.25 %
Investor B and Investor C Distribution Plans
     0.75 %     0.75 %

Fees Paid to Officers and Trustees

With the exception of one officer, no officer, director or employee of Bank of America, BACAP Distributors or BACAP, or any affiliate thereof, receives any compensation from the Acquiring Fund for serving as Trustee or Officer of the Trust. The Board of Trustees has appointed a Chief Compliance Officer to the Acquiring Fund in accordance with federal securities regulations. The Acquiring Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. The Acquiring Fund’s fee for the Office of the Chief Compliance Officer will not exceed $15,000 per year.

The Acquiring Fund’s eligible Trustees may participate in a non-qualified deferred compensation plan which may be terminated at any time. All benefits provided under this plan are unfunded and any payments to plan participants are paid solely out of the Acquiring Fund’s assets. Income earned on the plan participant’s deferral account is based on the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, on the rate of return of Nations Treasury Reserves, another portfolio of the Trust. The expense for the deferred compensation plan is included in ‘‘Trustees’ fees and expenses’’ in the Statement of operations. The liability for the deferred compensation plan is included in ‘‘Accrued Trustees’ fees and expenses’’ in the Statement of assets and liabilities.

Expense Limits and Fee Reimbursements

BACAP and/or BACAP Distributors have agreed to waive fees and reimburse the Acquiring Fund through July 31, 2005 for certain expenses to the extent that total expenses (exclusive of interest expense, shareholder servicing and distribution fees) exceed 0.81% annually of the Acquiring Fund’s average daily net assets.

BACAP and/or BACAP Distributors is entitled to recover from the Acquiring Fund any fees waived or expenses reimbursed by BACAP and/or BACAP Distributors during the three year period following the date of such waiver or reimbursement, to the extent that such recovery would not cause Acquiring Fund to exceed the expense limitations in effect at the time of recovery. There is no guarantee that these expense limitations will continue. As of March 31, 2005, $0 was recoverable by BACAP and/or BACAP Distributors pursuant to this arrangement.

Note 5. Capital Shares

The pro-forma combining net asset value per share assumes the issuance of Acquiring Fund shares to Target Fund shareholders in connection with the proposed merger. The number of shares assumed to be issued is equal to the net asset value of the Target Fund divided by the net asset value per share of the Acquiring Fund as of March 31, 2005. The pro-forma number of shares outstanding, by class, for the combined entity consists of the following at March 31, 2005.

 

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    Shares of     Additional Shares     Total Shares  
    Acquiring Fund     Assumed Issued     Outstanding  
Class of Shares   Pre-Combination     with Merger     Post Combination  
 
Investor A
     2,240,454       3,786,040       6,026,494  
Investor B
     906,349       251,643       1,157,992  
Investor C
     328,309       129,647       457,956  
Primary A
     62,821,914       32,263,365       95,085,279  

Note 6. Contingencies and Other Events

On February 9, 2005, BACAP and BACAP Distributors entered into an Assurance of Discontinuance with the New York Attorney General (the ‘‘NYAG Settlement’’) and consented to the entry of a cease-and-desist order by the U.S. Securities and Exchange Commission (the ‘‘SEC’’) (the ‘‘SEC Order’’). A copy of the NYAG Settlement is available as part of the Bank of America Corporation Form 8-K filing on February 10, 2005 and a copy of the SEC Order is available on the SEC’s website.

Under the terms of the SEC Order, BACAP and its affiliate, Banc of America Securities, LLC (‘‘BAS’’) have agreed, among other things, (1) to pay $250 million in disgorgement and $125 million in civil money penalties; (2) to cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; (3) to undertake various remedial measures to ensure compliance with the federal securities laws related to certain mutual fund trading practices; and (4) to retain an independent consultant to review their applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement also requires, among other things, BACAP along with Columbia Management Advisors, Inc. and Columbia Funds Distributors, Inc. — the investment advisor to and distributor of the Columbia Funds, respectively, — to reduce Columbia Funds, Nations Funds and other mutual funds management fees collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions. BACAP and BACAP Distributors are currently in the process of implementing the various terms of the NYAG Settlement and SEC Order.

Pursuant to the procedures set forth in the SEC Order, $375 million will be distributed in accordance with a distribution plan to be developed by the independent distribution consultant. The distribution plan must be based on a methodology developed in consultation with the BACAP, BACAP Distributors and the independent trustees of the Nations Funds and not unacceptable to the staff of the SEC. Although the distribution plan has not yet been formulated, it is anticipated that a significant portion of the settlement fund will be paid to shareholders or mutual funds of other mutual fund complexes that may have been harmed by the trading of the third parties referenced in the Settlements through systems provided by BAS. At this time, the distribution plan is still under development. As such, any gain to the Nations Funds or their shareholders cannot currently be determined. More specific information on the distribution plan will be communicated on a later date.

As a result of these matters or any adverse publicity or other developments resulting from them, including lawsuits brought by shareholders of the affected Nations Funds, 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 Nations Funds.

Civil Litigation

In connection with the events that resulted in the NYAG Settlement and SEC Order, various parties filed suits against Bank of America Corporation and certain of its affiliates, including BACAP and BACAP Distributors (collectively ‘‘BAC’’), Nations Funds Trust and its Board of Trustees. On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against several other mutual fund companies based on similar allegations to the United States District Court in Maryland for consolidated or coordinated pretrial proceedings (the ‘‘MDL’’). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Nations Funds Trust, the Trustees, BAC and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of Nations

 

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Funds Trust against BAC and others that asserts claims under the federal securities laws and state common law. The MDL is ongoing. Accordingly, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

Separately, a putative class action (Reinke v. Bank of America N.A., et al.) was filed against Nations Funds Trust and others on December 16, 2004 in the United States District Court for the Eastern District of Missouri relating to the conversion of common trust funds and the investment of assets held in fiduciary accounts in the Funds. Nations Funds Trust has filed a motion to dismiss that is pending, and no discovery has been taken. At the present time, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

For the fiscal year ended March 31, 2005, Bank of America Corporation has assumed $6.7 million of legal, shareholder communications, audit related, transfer agent, consulting and Trustee costs and fees incurred by the Funds impacted in connection with the regulatory and civil litigation matters discussed above. These non-recurring costs were allocated to the Funds based on their respective average nets assets for the year ended March 31, 2005. These non-recurring costs on a per Fund basis are shown in that Fund’s respective Statement of operations. Because these costs were borne by Bank of America Corporation and not any Fund, an offsetting waiver of these costs is also presented in each respective Fund’s Statement of operations as, ‘‘Costs assumed by Bank of America Corporation’’. The impact to the expense ratio of each impacted Fund is reflected in the Fund’s Financial highlights.

 

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Pro Forma Combining Portfolio of Investments (unaudited)
As of 3/31/05

                                                                                                         
                                       
                            Columbia Fl Intermediate Muni Fund     Nations FL Muni Fund     Nations FL Intermediate Muni Fund                      
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined          
As of 3/31/05                           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)          
MUNICIPAL BONDS
                     98.2 %                                                                                
EDUCATION
                     2.9 %                                                                                
Education
                     2.9 %                                                                                
FL BROWARD COUNTY EDL FACILITIES AUTHORITY
     5.250       4/1/2017               610       630       —       —       —       —       —       610       630          
FL MIAMI-DADE COUNTY EDL FACILITIES AUTHORITY
     5.000       4/1/2014               —       —       1,465       1,582       —       —       —       1,465       1,582          
FL MIAMI-DADE COUNTY EDL FACILITIES AUTHORITY
     5.000       4/1/2015               1,000       1,073       —       —       —       —       —       1,000       1,073          
FL UNIVERSITY ATHLETIC ASSOCIATION INC
     2.200       10/1/2031               —       —       —       —       3,000       2,997       —       3,000       2,997          
FL VOLUSIA COUNTY EDUCATIONAL FAC AUTHORITY
     5.750       10/15/2029               —       —       2,380       2,402       —       —       —       2,380       2,402          
FL VOLUSIA COUNTY EDUCATIONAL FAC AUTHORITY
     6.125       10/15/2026               —       —       —       —       1,000       1,056       —       1,000       1,056          
 
                                                                                                
Education Totals
                                     1,702               3,984               4,053                       9,739       2.87 %
 
                                                                                                
TOTAL EDUCATION
                                     1,702               3,984               4,053                       9,739       2.87 %
 
                                                                                                
 
                                                                                                        
HEALTH CARE
                     12.7 %                                                                                
Hospitals
                     11.2 %                                                                                
FL BAY MEDICAL CENTER HOSPITAL REVENUE
     5.000       10/1/2005               —       —       —       —       1,000       1,012       —       1,000       1,012          
FL BAY MEDICAL CENTER HOSPITAL REVENUE
     5.450       10/1/2012               —       —       —       —       2,000       2,107       —       2,000       2,107          
FL ESCAMBIA COUNTY HEALTH FACILITIES
     5.250       11/15/2011               —       —       —       —       2,125       2,297       —       2,125       2,297          
FL ESCAMBIA COUNTY HEALTH FACILITIES
     5.250       11/15/2014               1,000       1,083       —       —       —       —       —       1,000       1,083          
FL HILLSBOROUGH COUNTY INDUSTRIAL DEV
     5.000       10/1/2018               1,000       1,018       —       —       —       —       —       1,000       1,018          
FL LEE MEM HLTH SYS HOSPITAL REVENUE
     5.750       4/1/2015               1,000       1,112       —       —       —       —       —       1,000       1,112          
FL MARION COUNTY HOSP DISTRICT REVENUE
     5.250       10/1/2011               —       —       —       —       2,025       2,153       —       2,025       2,153          
FL NORTH BROWARD HOSP DIST REVENUE
     5.250       1/15/2017               —       —       2,000       2,083       —       —       —       2,000       2,083          
FL ORANGE COUNTY HEALTH FACILITIES AUTHORITY
     6.250       10/1/2016               —       —       1,260       1,483       555       653       —       1,815       2,136          
FL SARASOTA COUNTY PUBLIC HOSPITAL BOARD
     5.000       10/1/2007               —       —       —       —       1,650       1,727       —       1,650       1,727          
FL SARASOTA COUNTY PUBLIC HOSPITAL BOARD
     5.250       7/1/2011               —       —       —       —       1,750       1,897       —       1,750       1,897          
FL SOUTH BROWARD HOSPITAL DISTRICT REVENUE
     5.250       5/1/2012               —       —       —       —       3,955       4,302       —       3,955       4,302          
FL SOUTH BROWARD HOSPITAL DISTRICT REVENUE
     5.250       5/1/2013               1,500       1,632       —       —       —       —       —       1,500       1,632          
FL SOUTH BROWARD HOSPITAL DISTRICT REVENUE
     5.500       5/1/2022               —       —       —       —       1,000       1,064       —       1,000       1,064          
FL SOUTH BROWARD HOSPITAL DISTRICT REVENUE
     5.600       5/1/2027               —       —       1,000       1,067       3,000       3,200       —       4,000       4,267          
FL ST PETERSBURG HEALTH FACILITIES
     5.500       11/15/2014               1,720       1,876       —       —       —       —       —       1,720       1,876          
FL ST PETERSBURG HEALTH FACILITIES
     5.500       11/15/2015               —       —       —       —       1,995       2,164       —       1,995       2,164          
FL ST PETERSBURG HEALTH FACILITIES
     5.500       11/15/2016               —       —       —       —       1,980       2,144       —       1,980       2,144          
FL TAMPA HEALTH SYSTEMS REVENUE
     4.875       11/15/2015               —       —       —       —       2,000       2,070       —       2,000       2,070          
VA ARLINGTON COUNTY INDUSTRIAL DEV AUTHORITY
     5.500       7/1/2014               —       —       —       —       4,180       4,498       —       4,180       4,498          
 
                                                                                                
Hospitals Totals
                                     6,721               4,633               26,790                       38,145       11.23 %
 
                                                                                                
 
                                                                                                        
Intermediate Care Facilities
                     0.1 %                                                                                
FL ORANGE COUNTY HEALTH FACILITIES AUTHORITY
     6.250       7/1/2005               —       —       —       —       375       376       —       375       376          
 
                                                                                                
Intermediate Care Facilities Totals
                                     —               —               376                       376       0.11 %
 
                                                                                                
TOTAL HEALTH CARE
                                     6,721               4,633               31,665                       43,020       12.67 %
 
                                                                                                
 
                                                                                                        
HOUSING
                     4.6 %                                                                                
Multi-Family
                     3.0 %                                                                                
FL CAPITAL TRUST AGENCY MULTIFAMILY
     5.150       11/1/2030               —       —       1,000       1,053       3,300       3,473       —       4,300       4,526          
FL COLLIER COUNTY HOUSING FINANCE AUTHORITY
     4.900       2/15/2032               —       —       1,000       1,020       2,250       2,294       —       3,250       3,314          
FL HOUSING FINANCE AGENCY
     5.875       11/1/2005               —       —       —       —       195       196       —       195       196          
FL HOUSING FINANCE AGENCY
     6.350       5/1/2026               —       —       —       —       1,000       1,023       —       1,000       1,023          
FL HOUSING FINANCE AGENCY
     6.400       11/1/2015               —       —       —       —       1,000       1,035       —       1,000       1,035          
 
                                                                                                
Multi-Family Totals
                                     —               2,073               8,020                       10,093       2.97 %
 
                                                                                                
 
                                                                                                        
Single Family
                     1.6 %                                                                                
FL ESCAMBIA COUNTY HOUSING FINANCE AUTHORITY
     6.300       10/1/2020               —       —       365       370       420       426       —       785       796          
FL HOUSING FINANCE AGENCY
     5.750       7/1/2014               —       —       1,805       1,881       —       —       —       1,805       1,881          
FL HOUSING FINANCE CORP REVENUE
     4.950       1/1/2011               —       —       1,105       1,148       —       —       —       1,105       1,148          
FL HOUSING FINANCE CORP REVENUE
     4.950       7/1/2011               —       —       —       —       1,515       1,573       —       1,515       1,573          
 
                                                                                                
Single Family Totals
                                     —               3,399               1,999                       5,398       1.59 %
 
                                                                                                
TOTAL HOUSING
                                     —               5,472               10,019                       15,491       4.56 %
 
                                                                                                

 

Table of Contents

                                                                                                         
                                       
                            Columbia Fl Intermediate Muni Fund     Nations FL Muni Fund     Nations FL Intermediate Muni Fund                      
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined          
As of 3/31/05                           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)          
INDUSTRIALS
                     0.9 %                                                                                
Forest Products & Paper
                     0.9 %                                                                                
FL BAY COUNTY POLLUTN CONTROL REVENUE
     5.100       9/1/2012               —       —       1,375       1,455       1,000       1,058       —       2,375       2,513          
FL ESCAMBIA COUNTY POLLUTION CONTROL
     4.700       4/1/2015               500       505       —       —       —       —       —       500       505          
 
                                                                                                
Forest Products & Paper Totals
                                     505               1,455               1,058                       3,018       0.89 %
 
                                                                                                
 
                                                                                                  
TOTAL INDUSTRIALS
                                     505               1,455               1,058                       3,018       0.89 %
 
                                                                                                
 
                                                                                                        
OTHER
                     11.0 %                                                                                
Pool/Bond Bank
                     1.3 %                                                                                
FL MUNICIPAL LOAN COUNCIL REVENUE
     5.000       2/1/2019               —       —       1,015       1,071       —       —       —       1,015       1,071          
FL MUNICIPAL LOAN COUNCIL REVENUE
     5.250       12/1/2013               —       —       —       —       1,125       1,232       —       1,125       1,232          
FL MUNICIPAL LOAN COUNCIL REVENUE
     5.500       5/1/2013               1,000       1,106       —       —       —       —       —       1,000       1,106          
FL GULF BREEZE REVENUE
     5.000       12/1/2015               1,000       1,062       —       —       —       —       —       1,000       1,062          
 
                                                                                                
Pool/Bond Bank Totals
                                     2,168               1,071               1,232                       4,471       1.32 %
 
                                                                                                
 
                                                                                                        
Refunded/Escrowed (a)
                     9.6 %                                                                                
FL BOCA RATON G.O.
     5.000       7/1/2013               —       —       —       —       1,470       1,587       —       1,470       1,587          
FL BREVARD COUNTY
     6.000       8/1/2014               1,195       1,344       —       —       —       —       —       1,195       1,344          
FL STATE BOARD OF EDUCATION CAPITAL OUTLAY
     5.250       6/1/2016               —       —       1,250       1,300       —       —       —       1,250       1,300          
FL GAINESVILLE UTILITIES SYSTEM REVENUE
     5.750       10/1/2007               —       —       —       —       315       336       —       315       336          
FL HILLSBOROUGH COUNTY SCHOOL DISTRICT
     5.375       10/1/2013               1,060       1,165       —       —       —       —       —       1,060       1,165          
FL LAKELAND ELECTRICITY & WATER REVENUE (b)
     0.000       10/1/2009               —       —       —       —       1,000       860       —       1,000       860          
FL LEON COUNTY CAPITAL IMPROVEMENT REVENUE
     5.250       10/1/2017               —       —       2,430       2,568       —       —       —       2,430       2,568          
FL MIAMI-DADE COUNTY SCHOOL BOARD
     5.500       5/1/2010               2,000       2,192       —       —       —       —       —       2,000       2,192          
FL ORANGE COUNTY HEALTH FACILITIES AUTHORITY
     6.250       10/1/2008               —       —       —       —       4,640       5,125       —       4,640       5,125          
FL ORANGE COUNTY HEALTH FACILITIES AUTHORITY
     6.250       10/1/2016               —       —       3,260       3,916       1,445       1,736       —       4,705       5,652          
FL ORLANDO UTILITIES COMMISION WATER & SEWER
     6.750       10/1/2017               —       —       1,800       2,192       —       —       —       1,800       2,192          
FL PEMBROKE PINES CONSOLIDATED UTILITIES
     6.250       9/1/2007               —       —       —       —       2,070       2,165       —       2,070       2,165          
FL PORT ST LUCIE UTILITY REVENUE
     5.000       9/1/2016               —       —       —       —       510       554       —       510       554          
FL TAMPA TAX ALLOCATION
     5.000       3/1/2007               —       —       —       —       3,000       3,119       —       3,000       3,119          
IL CHAMPAIGN COUNTY COMMUNITY UNIT (b)
     0.000       1/1/2010               —       —       —       —       1,620       1,367       —       1,620       1,367          
SC CALHOUN COUNTY SOLID WASTE DISPOSAL
     6.750       5/1/2017               —       —       —       —       1,000       1,217       —       1,000       1,217          
 
                                                                                                
Refunded/Escrowed Totals
                                     4,701               9,976               18,066                       32,743       9.64 %
 
                                                                                                
TOTAL OTHER
                                     6,870               11,047               19,298                       37,214       10.96 %
 
                                                                                                
 
                                                                                                        
OTHER REVENUE
                     1.1 %                                                                                
Recreation
                     1.1 %                                                                                
FL STATE BOARD OF EDUCATION LOTTERY REVENUE
     5.250       7/1/2017               —       —       1,000       1,077       —       —       —       1,000       1,077          
FL STATE BOARD OF EDUCATION LOTTERY REVENUE
     5.375       7/1/2017               —       —       —       —       1,450       1,580       —       1,450       1,580          
FL STATE BOARD OF EDUCATION LOTTERY REVENUE
     5.500       7/1/2012               1,000       1,114       —       —       —       —       —       1,000       1,114          
 
                                                                                                
Recreation Totals
                                     1,114               1,077               1,580                       3,771       1.11 %
 
                                                                                                
TOTAL OTHER REVENUE
                                     1,114               1,077               1,580                       3,771       1.11 %
 
                                                                                                
 
                                                                                                        
RESOURCE RECOVERY
                     2.2 %                                                                                
Disposal
                     2.2 %                                                                                
FL OKEECHOBEE COUNTY SOLID WASTE REVENUE
     4.200       7/1/2039               —       —       —       —       1,750       1,759       —       1,750       1,759          
FL PALM BEACH COUNTY SOLID WASTE REVENUE
     6.000       10/1/2010               —       —       5,000       5,587       —       —       —       5,000       5,587          
 
                                                                                                
Disposal Totals
                                     —               5,587               1,759                       7,346       2.16 %
 
                                                                                                
TOTAL RESOURCE RECOVERY
                                     —               5,587               1,759                       7,346       2.16 %
 
                                                                                                
 
                                                                                                        
TAX-BACKED
                     35.9 %                                                                                
Local Appropriated
                     4.2 %                                                                                
FL BREVARD COUNTY SCHOOL BOARD CERTIFICATES
     5.000       7/1/2017               —       —       1,470       1,564       —       —       —       1,470       1,564          
FL BROWARD COUNTY CERTIFICATES OF PARTICIPATION
     5.000       6/1/2013               1,000       1,082       —       —       —       —       —       1,000       1,082          
FL COLLIER COUNTY SCHOOL BOARD CERTIFICATES
     5.000       2/15/2013               1,500       1,607       —       —       —       —       —       1,500       1,607          
FL LEE COUNTY SCHOOL BOARD CERTIFICATES OF PARTICIPATION
     5.000       8/1/2016               1,000       1,068       —       —       —       —       —       1,000       1,068          
FL MIAMI-DADE COUNTY SPECIAL OBLIGATION
     5.000       4/1/2011               —       —       —       —       1,000       1,079       —       1,000       1,079          

 

Table of Contents

                                                                                                         
                                       
                            Columbia Fl Intermediate Muni Fund     Nations FL Muni Fund     Nations FL Intermediate Muni Fund                      
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined          
As of 3/31/05                           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)          
FL ORANGE COUNTY SCHOOL BOARD CERTIFICATES OF PARTICIPATION
     5.000       8/1/2018               1,000       1,060       —       —       —       —       —       1,000       1,060          
FL OSCEOLA COUNTY SCHOOL BOARD CERTIFICATES OF PARTICIPATION
     5.000       6/1/2016               —       —       2,240       2,399       —       —       —       2,240       2,399          
FL OSCEOLA COUNTY SCHOOL BOARD CERTIFICATES OF PARTICIPATION
     5.000       6/1/2017               1,000       1,065       —       —       —       —       —       1,000       1,065          
FL PALM BEACH COUNTY SCHOOL BOARD CERTIFICATES OF PARTICIPATION
     5.375       8/1/2014               —       —       —       —       3,000       3,296       —       3,000       3,296          
 
                                                                                                
Local Appropriated Totals
                                     5,881               3,963               4,375                       14,219       4.19 %
 
                                                                                                
 
                                                                                                        
State Appropriated
                     0.5 %                                                                                
FL STATE DEPARTMENT OF GENERAL SERVICES
     5.250       9/1/2015               1,515       1,675       —       —       —       —       —       1,515       1,675          
 
                                                                                                
State Appropriated Totals
                                     1,675               —               —                       1,675       0.49 %
 
                                                                                                
 
                                                                                                        
Local General Obligations
                     1.9 %                                                                                
FL BROWARD COUNTY G.O.
     5.000       1/1/2007               1,000       1,037       —       —       —       —       —       1,000       1,037          
FL BROWARD COUNTY G.O.
     5.250       1/1/2014               1,025       1,113       —       —       —       —       —       1,025       1,113          
FL PALM BEACH COUNTY G.O.
     5.500       12/1/2011               —       —       —       —       2,000       2,231       —       2,000       2,231          
FL REEDY CREEK IMPROVEMENT DISTRICT G.O.
     5.000       6/1/2017               1,000       1,063       —       —       —       —       —       1,000       1,063          
FL ST LUCIE COUNTY SCHOOL DISTRICT G.O.
     5.875       2/1/2007               —       —       —       —       1,000       1,053       —       1,000       1,053          
PUERTO RICO MUNICIPAL FINANCE AGENCY
     5.500       8/1/2009               1,000       1,093       —       —       —       —       —       1,000       1,093          
 
                                                                                                
Local General Obligations
                                     3,213               —               3,284                       6,497       1.91 %
 
                                                                                                
 
                                                                                                        
Special Non-Property Tax
                     22.3 %                                                                                
FL COLLIER COUNTY GAS TAX REVENUE
     5.250       6/1/2013               —       —       —       —       3,660       4,023       —       3,660       4,023          
FL COLLIER COUNTY GAS TAX REVENUE
     5.250       6/1/2015               —       —       —       —       3,285       3,583       —       3,285       3,583          
FL STATE DEPT OF ENVIRONMENTAL PROTECTION
     5.000       7/1/2009               —       —       —       —       5,000       5,347       —       5,000       5,347          
FL STATE DIVISION OF BOND FINANCE — ENVIRONMENT
     5.500       7/1/2008               2,000       2,151       —       —       3,000       3,227       —       5,000       5,378          
FL HIALEAH CAPITAL IMPROVEMENT REVENUE
     5.500       10/1/2018               —       —       —       —       1,375       1,381       —       1,375       1,381          
FL HILLSBOROUGH COUNTY CAPITAL IMPROVEMENT
     5.000       8/1/2012               —       —       —       —       1,000       1,079       —       1,000       1,079          
FL HILLSBOROUGH COUNTY CAPITAL IMPROVEMENT
     5.000       7/1/2011               —       —       —       —       1,000       1,046       —       1,000       1,046          
FL JACKSONVILLE EXCISE TAXES
     5.000       10/1/2009               —       —       —       —       1,000       1,072       —       1,000       1,072          
FL JACKSONVILLE GUARANTEED ENTITLEMENT
     5.375       10/1/2018               —       —       —       —       3,450       3,750       —       3,450       3,750          
FL JACKSONVILLE GUARANTEED ENTITLEMENT
     5.375       10/1/2019               —       —       3,720       4,039       —       —       —       3,720       4,039          
FL JACKSONVILLE SALES TAX REVENUE
     5.250       10/1/2019               —       —       —       —       1,080       1,166       —       1,080       1,166          
FL JACKSONVILLE SALES TAX REVENUE
     5.375       10/1/2018               —       —       —       —       1,000       1,087       —       1,000       1,087          
FL JACKSONVILLE SALES TAX REVENUE
     5.500       10/1/2012               1,000       1,117       —       —       1,000       1,117       —       2,000       2,233          
FL LEE COUNTY CAPITAL IMPROVEMENT REVENUE
     5.750       10/1/2011               1,000       1,125       —       —       —       —       —       1,000       1,125          
FL MANATEE COUNTY SCHOOL DISTRICT SALES TAX
     5.000       10/1/2012               —       —       —       —       4,285       4,640       —       4,285       4,640          
FL OCALA CAPITAL IMPROVEMENTS REVENUE
     5.375       10/1/2016               —       —       —       —       1,530       1,681       —       1,530       1,681          
FL ORANGE COUNTY TOURIST DEVELOPMENT TAX
     5.000       10/1/2015               —       —       —       —       4,000       4,221       —       4,000       4,221          
FL OSCEOLA COUNTY TOURIST DEVELOPMENT TAX
     5.500       10/1/2014               1,555       1,725       —       —       —       —       —       1,555       1,725          
FL PALM BEACH COUNTY CRIMINAL JUSTICE
     5.375       6/1/2009               1,500       1,625       —       —       —       —       —       1,500       1,625          
FL PALM BEACH COUNTY CRIMINAL JUSTICE
     5.750       6/1/2013               —       —       —       —       3,500       3,967       —       3,500       3,967          
FL PALM BEACH COUNTY PUBLIC IMPROVEMENT
     5.000       8/1/2017               —       —       —       —       1,000       1,067       —       1,000       1,067          
FL PALM BEACH COUNTY STADIUM FACILITIES
     5.250       12/1/2016               —       —       —       —       2,000       2,139       —       2,000       2,139          
FL PASCO COUNTY SALES TAX REVENUE
     5.000       12/1/2016               1,240       1,326       —       —       —       —       —       1,240       1,326          
FL POLK COUNTY TRANSPORTATION IMPROVEMENT REVENUE
     5.000       12/1/2025               1,000       1,083       —       —       —       —       —       1,000       1,083          
FL PORT ST LUCIE SALES TAX REVENUE
     5.000       9/1/2019               —       —       —       —       1,000       1,054       —       1,000       1,054          
FL SEMINOLE COUNTY SALES TAX REVENUE
     5.375       10/1/2013               1,295       1,423       —       —       —       —       —       1,295       1,423          
FL TALLAHASSEE BLUEPRINT 2000
     5.000       10/1/2013               —       —       —       —       3,775       4,050       —       3,775       4,050          
FL TAMPA SPORTS AUTHORITY REVENUE
     5.250       1/1/2017               —       —       2,000       2,088       —       —       —       2,000       2,088          
FL TAMPA SPORTS AUTHORITY REVENUE
     5.750       10/1/2015               —       —       2,500       2,825       —       —       —       2,500       2,825          
FL TAMPA SPORTS AUTHORITY REVENUE
     5.750       10/1/2020               —       —       —       —       1,000       1,164       —       1,000       1,164          
FL TAMPA SPORTS AUTHORITY REVENUE
     6.000       1/1/2007               —       —       —       —       3,170       3,339       —       3,170       3,339          
 
                                                                                                
Special Non-Property Tax Totals
                                     11,573               8,952               55,198                       75,723       22.30 %
 
                                                                                                
 
                                                                                                        
Special Property Tax
                     0.8 %                                                                                
FL HILLSBOROUGH COUNTY INDUSTRIAL DEVELOPMENT
     5.500       9/1/2015               —       —       —       —       2,335       2,566       —       2,335       2,566          
 
                                                                                                
Special Property Tax Totals
                                     —               —               2,566                       2,566       0.76 %
 
                                                                                                
 
                                                                                                        
State General Obligations
                     5.9 %                                                                                
FL STATE DEPARTMENT OF TRANSPORTATION G.O.
     5.000       7/1/2030               —       —       1,000       1,036       —       —       —       1,000       1,036          

 

Table of Contents

                                                                                                         
                                       
                            Columbia Fl Intermediate Muni Fund     Nations FL Muni Fund     Nations FL Intermediate Muni Fund                      
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined          
As of 3/31/05                           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)          
FL STATE DEPARTMENT OF TRANSPORTATION REV
     5.375       7/1/2015               —       —       1,000       1,095       —       —       —       1,000       1,095          
FL STATE JACKSONVILLE TRANSPORTATION G.O.
     6.000       7/1/2008               1,100       1,181       —       —       —       —       —       1,100       1,181          
FL STATE BOARD OF EDUCATION CAPITAL OUTLAY
     5.000       6/1/2008               —       —       —       —       1,000       1,058       —       1,000       1,058          
FL STATE BOARD OF EDUCATION CAPITAL OUTLAY
     5.000       1/1/2017               —       —       3,000       3,109       —       —       —       3,000       3,109          
FL STATE BOARD OF EDUCATION CAPITAL OUTLAY
     5.250       6/1/2008               1,500       1,600       —       —       —       —       —       1,500       1,600          
FL STATE BOARD OF EDUCATION CAPITAL OUTLAY
     5.500       1/1/2008               —       —       —       —       3,525       3,707       —       3,525       3,707          
FL STATE BOARD OF EDUCATION CAPITAL OUTLAY
     5.750       6/1/2013               1,000       1,110       —       —       —       —       —       1,000       1,110          
PUERTO RICO COMMONWEALTH G.O.
     6.500       7/1/2015               —       —       4,190       5,103       —       —       —       4,190       5,103          
PUERTO RICO PUBLIC FINANCE CORP
     5.250       8/1/2030               1,000       1,087       —       —       —       —       —       1,000       1,087          
 
                                                                                                
State General Obligations Totals
                                     4,978               10,343               4,766                       20,086       5.92 %
 
                                                                                                
TOTAL TAX-BACKED
                                     28,412               23,258               70,189                       121,859       35.89 %
 
                                                                                                
 
                                                                                                        
TRANSPORTATION
                     4.6 %                                                                                
Airports
                     3.6 %                                                                                
FL DADE COUNTY AVIATION REVENUE
     5.750       10/1/2012               —       —       2,500       2,635       —       —       —       2,500       2,635          
FL DADE COUNTY AVIATION REVENUE
     6.300       10/1/2005               —       —       —       —       1,000       1,019       —       1,000       1,019          
FL GREATER ORLANDO AVIATION AUTHORITY
     5.000       10/1/2013               1,500       1,613       —       —       —       —       —       1,500       1,613          
FL GREATER ORLANDO AVIATION AUTHORITY
     5.125       10/1/2012               —       —       —       —       1,000       1,044       —       1,000       1,044          
FL MIAMI-DADE COUNTY AVIATION
     5.250       10/1/2015               —       —       3,500       3,677       —       —       —       3,500       3,677          
FL PENSACOLA AIRPORT REVENUE
     5.625       10/1/2014               —       —       2,000       2,130       —       —       —       2,000       2,130          
 
                                                                                                
Airports Totals
                                     1,613               8,442               2,062                       12,117       3.57 %
 
                                                                                                
 
                                                                                                        
Toll Facilities
                     1.0 %                                                                                
FL ORLANDO & ORANGE COUNTY EXPWY AUTHORITY
     6.500       7/1/2010               —       —       —       —       2,000       2,291       —       2,000       2,291          
FL OSCEOLA COUNTY TRANSPORTATION REVENUE
     5.000       4/1/2018               1,000       1,061       —       —       —       —       —       1,000       1,061          
 
                                                                                                
Toll Facilities Totals
                                     1,061               —               2,291                       3,351       0.99 %
 
                                                                                                
TOTAL TRANSPORTATION
                                     2,674               8,442               4,353                       15,469       4.56 %
 
                                                                                                
 
                                                                                                        
UTILITIES
                     22.5 %                                                                                
Joint Power
                     1.7 %                                                                                
FL STATE MUNICIPAL POWER AGENCY REVENUE
     5.000       10/1/2013               —       —       —       —       3,420       3,703       —       3,420       3,703          
FL STATE MUNICIPAL POWER AGENCY REVENUE
     5.500       10/1/2021               —       —       —       —       1,850       2,025       —       1,850       2,025          
 
                                                                                                
Joint Power Totals
                                     —               —               5,727                       5,727       1.69 %
 
                                                                                                
 
                                                                                                        
Municipal Electric
                     9.8 %                                                                                
FL CHARLOTTE COUNTY UTILITY REVENUE
     5.625       10/1/2016               —       —       2,250       2,380       —       —       —       2,250       2,380          
FL GAINESVILLE UTILITIES SYSTEM REVENUE
     5.750       10/1/2007               —       —       —       —       685       731       —       685       731          
FL GAINESVILLE UTILITIES SYSTEM REVENUE
     6.500       10/1/2011               —       —       3,000       3,492       —       —       —       3,000       3,492          
FL JACKSONVILLE ELECTRIC AUTHORITY REVENUE
     5.375       10/1/2015               —       —       —       —       2,000       2,014       —       2,000       2,014          
FL JEA ST JOHNS RIVER POWER PARKWAY SYSTEMS
     5.250       10/1/2013               —       —       2,000       2,160       2,500       2,700       —       4,500       4,860          
FL KISSIMMEE UTILITY AUTHORITY ELECTRIC
     5.250       10/1/2015               —       —       —       —       2,235       2,445       —       2,235       2,445          
FL ORLANDO UTILS COMMN WATER & ELECTRIC
     5.000       10/1/2009               —       —       —       —       5,865       6,284       —       5,865       6,284          
FL ORLANDO UTILS COMMN WATER & ELECTRIC
     5.250       10/1/2016               1,500       1,622       —       —       —       —       —       1,500       1,622          
FL ORLANDO UTILS COMMN WATER & ELECTRIC
     5.250       10/1/2018               —       —       1,425       1,534       5,000       5,382       —       6,425       6,916          
FL PORT ST LUCIE UTILITY REVENUE
     5.000       9/1/2017               920       977       —       —       —       —       —       920       977          
FL REEDY CREEK IMPROVEMENT DISTRICT
     5.250       10/1/2015               1,490       1,630       —       —       —       —       —       1,490       1,630          
PUERTO RICO ELECTRIC POWER AUTHORITY
     5.250       7/1/2019               500       562       —       —       —       —       —       500       562          
 
                                                                                                
Municipal Electric Totals
                                     4,229               9,566               19,555                       33,350       9.82 %
 
                                                                                                
 
                                                                                                        
Water & Sewer
                     10.8 %                                                                                
FL BOCA RATON WATER & SEWER REVENUE
     5.000       10/1/2008               1,000       1,066       —       —       —       —       —       1,000       1,066          
FL BREVENUEARD COUNTY UTILITY REVENUE
     5.250       3/1/2014               —       —       —       —       2,000       2,173       —       2,000       2,173          
FL DAYTONA BEACH UTILITY SYSTEMS REVENUE
     5.250       11/15/2016               —       —       —       —       1,200       1,299       —       1,200       1,299          
FL WATER POLLUTION CONTROL FINANCING
     5.000       1/15/2008               1,000       1,054       —       —       —       —       —       1,000       1,054          
FL WATER POLLUTION CONTROL FINANCING
     5.500       1/15/2013               1,390       1,525       —       —       —       —       —       1,390       1,525          
FL MUNINCIPAL LOAN COUNCIL REVENUE
     5.375       8/1/2016               —       —       1,485       1,621       —       —       —       1,485       1,621          
FL STATE GOVERNMENT UTILITIES AUTHORITY
     5.000       10/1/2017               1,180       1,254       —       —       —       —       —       1,180       1,254          
FL HILLSBOROUGH COUNTY UTILITIES LIEN
     5.250       8/1/2007               1,000       1,053       —       —       —       —       —       1,000       1,053          

 

Table of Contents

                                                                                                         
                                       
                            Columbia Fl Intermediate Muni Fund     Nations FL Muni Fund     Nations FL Intermediate Muni Fund                      
                            Target Fund     Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined          
As of 3/31/05                           Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)          
FL HOLLY HILL WATER & SEWER REVENUE
     5.000       10/1/2015               745       794       —       —       —       —       —       745       794          
FL HOLLYWOOD WATER & SEWER REVENUE
     5.000       10/1/2017               —       —       —       —       1,070       1,137       —       1,070       1,137          
FL MANATEE COUNTY PUBLIC UTILITIES REVENUE
     5.000       10/1/2012               —       —       —       —       2,000       2,168       —       2,000       2,168          
FL MIAMI BEACH WATER & SEWER REVENUE
     5.375       9/1/2015               —       —       —       —       1,810       1,864       —       1,810       1,864          
FL MIAMI-DADE COUNTY STORMWATER UTILITY REVENUE
     5.000       4/1/2024               —       —       2,445       2,557       —       —       —       2,445       2,557          
FL MIAMI-DADE COUNTY WATER & SEWER
     5.000       10/1/2007               —       —       —       —       3,500       3,675       —       3,500       3,675          
FL OCALA UTILITES SYSTEM REVENUE
     5.250       10/1/2020               —       —       1,000       1,085       —       —       —       1,000       1,085          
FL PORT ST LUCIE UTILITIES REVENUE
     5.000       9/1/2016               —       —       —       —       490       523       —       490       523          
FL PORT ST LUCIE UTILITIES REVENUE
     5.000       9/1/2019               —       —       2,115       2,229       —       —       —       2,115       2,229          
FL SARASOTA COUNTY UTILITIES SYSTEM REVENUE
     5.250       10/1/2016               —       —       1,000       1,082       —       —       —       1,000       1,082          
FL SEACOAST UTILITY AUTHORITY WATER & SEWER
     5.000       3/1/2008               1,000       1,056       —       —       —       —       —       1,000       1,056          
FL SEBRING WATER & WASTEWATER REVENUE
     5.250       1/1/2014               —       —       1,030       1,123       —       —       —       1,030       1,123          
FL TALLAHASSEE CONSERVATIVE UTILITY SYSTEM
     5.500       10/1/2014               —       —       1,330       1,495       —       —       —       1,330       1,495          
FL TALLAHASSEE CONSERVATIVE UTILITY SYSTEM
     5.500       10/1/2018               —       —       —       —       1,000       1,136       —       1,000       1,136          
FL TAMPA WATER & SEWER REVENUE
     5.000       7/1/2010               1,000       1,077       —       —       —       —       —       1,000       1,077          
FL TOHOPEKALIGA WATER AUTHORITY UTILITY
     5.250       10/1/2017               —       —       —       —       1,110       1,204       —       1,110       1,204          
FL WINTER PARK WATER & SEWER REVENUE
     5.250       12/1/2014               1,405       1,533       —       —       —       —       —       1,405       1,533          
 
                                                                                                
Water & Sewer Totals
                                     10,412               11,192               15,181                       36,784       10.83 %
 
                                                                                                
TOTAL UTILITIES
                                     15,203               20,758               40,463                       76,424       22.51 %
 
                                                                                                
TOTAL MUNICIPAL BONDS
                                     63,201               85,713               184,437                       333,351       98.17 %
 
                                                                                                
 
                                                                                                        
INVESTMENT COMPANY
                     0.4 %                                                                                
NATIONS TAX-EXEMPT RESERVES FUND (c)
                             —       —       725       725       725       725       —       1,450       1,450          
 
                                                                                                
TOTAL INVESTMENT COMPANY
                                     —               725               725                       1,450       0.43 %
 
                                                                                                
 
                                                                                                        
SHORT-TERM INVESTMENTS
                     0.1 %                                                                                
FL ALACHUA COUNTY HEALTH FACILITIES
     2.880       10/1/2032               100       100       —       —       —       —       —       100       100          
FL COLLIER COUNTY HEALTH FACILITIES
     2.910       1/1/2035               100       100       —       —       —       —       —       100       100          
FL ORANGE COUNTY SCHOOL BOARD CERTIFICATES OF PARTICIPATION
     2.880       8/1/2027               100       100       —       —       —       —       —       100       100          
 
                                                                                                
TOTAL SHORT-TERM INVESTMENTS
                                     300               —               —                       300       0.09 %
 
                                                                                                
 
                                                                                                        
Total Investments (d)
                     98.7 %             63,501               86,438               185,162                       335,101          
Other Assets & Liabilities, net
                     1.3 %             839               1,314               2,295                       4,448          
 
                                                                                              
Net Assets
                     100.0 %             64,340               87,752               187,457                       339,549       100.00 %
 
                                                                                              
 
                                                                                                        
Investments at cost
                                     61,680               81,587               181,989                       325,256          

Notes to Investment Portfolio:

(a)   The Fund has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, soley for the payment of principal and interest.
 
(b)   Zero coupon bond.
 
(c)   Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by Banc of America Capital Management, LLC.
 
(d)   Cost for federal income tax purposes is $181,910 for Nations FL Intermediate Municipal Bond Fund,. 81,463 for Nations FL Municipal Bond Fund, $61,680 for the Columbia FL Intermediate Muni Fund and $325,053 for the funds combined.

 

Table of Contents

                                                                                 
Pro forma Combining                                                  
Investment Portfolio                                                  
As of 3/31/05                           Nations FL Muni Fund     Nations FL Intermediate Muni Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma              
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
MUNICIPAL BONDS
                     97.4 %                                                        
EDUCATION
                     2.9 %                                                        
Education
                     2.9 %                                                        
FL MIAMI-DADE COUNTY EDL FACILITIES AUTHORITY
     5.000       4/1/2014               1,465       1,582       —       —       —       1,465       1,582  
FL UNIVERSITY ATHLETIC ASSOCIATION INC
     2.200       10/1/2031               —       —       3,000       2,997       —       3,000       2,997  
FL VOLUSIA COUNTY EDUCATIONAL FAC AUTHORITY
     5.750       10/15/2029               2,380       2,402       —       —       —       2,380       2,402  
FL VOLUSIA COUNTY EDUCATIONAL FAC AUTHORITY
     6.125       10/15/2026               —       —       1,000       1,056       —       1,000       1,056  
 
                                                                          
Education Totals
                                     3,984               4,053                       8,037  
 
                                                                          
TOTAL EDUCATION
                                     3,984               4,053                       8,037  
 
                                                                          
HEALTH CARE
                     13.2 %                                                        
Hospitals
                     13.1 %                                                        
FL BAY MEDICAL CENTER HOSPITAL REVENUE
     5.000       10/1/2005               —       —       1,000       1,012       —       1,000       1,012  
FL BAY MEDICAL CENTER HOSPITAL REVENUE
     5.450       10/1/2012               —       —       2,000       2,107       —       2,000       2,107  
FL ESCAMBIA COUNTY HEALTH FACILITIES
     5.250       11/15/2011               —       —       2,125       2,297       —       2,125       2,297  
FL MARION COUNTY HOSP DISTRICT REVENUE
     5.250       10/1/2011               —       —       2,025       2,153       —       2,025       2,153  
FL NORTH BROWARD HOSP DIST REVENUE
     5.250       1/15/2017               2,000       2,083       —       —       —       2,000       2,083  
FL ORANGE COUNTY HEALTH FACILITIES AUTHORITY
     6.250       10/1/2016               1,260       1,483       555       653       —       1,815       2,136  
FL SARASOTA COUNTY PUBLIC HOSPITAL BOARD
     5.000       10/1/2007               —       —       1,650       1,727       —       1,650       1,727  
FL SARASOTA COUNTY PUBLIC HOSPITAL BOARD
     5.250       7/1/2011               —       —       1,750       1,897       —       1,750       1,897  
FL SOUTH BROWARD HOSPITAL DISTRICT REVENUE
     5.250       5/1/2012               —       —       3,955       4,302       —       3,955       4,302  
FL SOUTH BROWARD HOSPITAL DISTRICT REVENUE
     5.500       5/1/2022               —       —       1,000       1,064       —       1,000       1,064  
FL SOUTH BROWARD HOSPITAL DISTRICT REVENUE
     5.600       5/1/2027               1,000       1,067       3,000       3,200       —       4,000       4,267  
FL ST PETERSBURG HEALTH FACILITIES
     5.500       11/15/2015               —       —       1,995       2,164       —       1,995       2,164  
FL ST PETERSBURG HEALTH FACILITIES
     5.500       11/15/2016               —       —       1,980       2,144       —       1,980       2,144  
FL TAMPA HEALTH SYSTEMS REVENUE
     4.875       11/15/2015               —       —       2,000       2,070       —       2,000       2,070  
VA ARLINGTON COUNTY INDUSTRIAL DEV AUTHORITY
     5.500       7/1/2014               —       —       4,180       4,498       —       4,180       4,498  
 
                                                                          
Hospitals Totals
                                     4,633               31,289                       35,922  
 
                                                                          
Intermediate Care Facilities
                     0.1 %                                                        
FL ORANGE COUNTY HEALTH FACILITIES AUTHORITY
     6.250       7/1/2005               —       —       375       376       —       375       376  
 
                                                                          
Intermediate Care Facilities Totals
                                     —               376                       376  
 
                                                                          
TOTAL HEALTH CARE
                                     4,633               31,665                       36,298  
 
                                                                          
 
                                                                                
HOUSING
                     5.6 %                                                        
Multi-Family
                     3.7 %                                                        
FL CAPITAL TRUST AGENCY MULTIFAMILY
     5.150       11/1/2030               1,000       1,053       3,300       3,473       —       4,300       4,526  
FL COLLIER COUNTY HOUSING FINANCE AUTHORITY
     4.900       2/15/2032               1,000       1,020       2,250       2,294       —       3,250       3,314  
FL HOUSING FINANCE AGENCY
     5.875       11/1/2005               —       —       195       196       —       195       196  
FL HOUSING FINANCE AGENCY
     6.350       5/1/2026               —       —       1,000       1,023       —       1,000       1,023  
FL HOUSING FINANCE AGENCY
     6.400       11/1/2015               —       —       1,000       1,035       —       1,000       1,035  
 
                                                                          
Multi-Family Totals
                                     2,073               8,020                       10,093  
 
                                                                          
Single Family
                     2.0 %                                                        
FL ESCAMBIA COUNTY HOUSING FINANCE AUTHORITY
     6.300       10/1/2020               365       370       420       426       —       785       796  
FL HOUSING FINANCE AGENCY
     5.750       7/1/2014               1,805       1,881       —       —       —       1,805       1,881  

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Table of Contents

                                                                                 
Pro forma Combining                                                  
Investment Portfolio                                                  
As of 3/31/05                           Nations FL Muni Fund     Nations FL Intermediate Muni Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma              
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
FL HOUSING FINANCE CORP REVENUE
     4.950       1/1/2011               1,105       1,148       —       —       —       1,105       1,148  
FL HOUSING FINANCE CORP REVENUE
     4.950       7/1/2011               —       —       1,515       1,573       —       1,515       1,573  
 
                                                                          
Single Family Totals
                                     3,399               1,999                       5,398  
 
                                                                          
TOTAL HOUSING
                                     5,472               10,019                       15,491  
 
                                                                          
INDUSTRIALS
                     0.9 %                                                        
Forest Products & Paper
                     0.9 %                                                        
FL BAY COUNTY POLLUTN CONTROL REVENUE
     5.100       9/1/2012               1,375       1,455       1,000       1,058       —       2,375       2,513  
 
                                                                          
Forest Products & Paper Totals
                                     1,455               1,058                       2,513  
 
                                                                          
TOTAL INDUSTRIALS
                                     1,455               1,058                       2,513  
 
                                                                          
OTHER
                     11.0 %                                                        
Pool/Bond Bank
                     0.8 %                                                        
FL MUNICIPAL LOAN COUNCIL REVENUE
     5.000       2/1/2019               1,015       1,071       —       —       —       1,015       1,071  
FL MUNICIPAL LOAN COUNCIL REVENUE
     5.250       12/1/2013               —       —       1,125       1,232       —       1,125       1,232  
 
                                                                          
Pool/Bond Bank Totals
                                     1,071               1,232                       2,303  
 
                                                                          
Refunded/Escrowed (a)
                     10.2 %                                                        
FL BOCA RATON G.O.
     5.000       7/1/2013               —       —       1,470       1,587       —       1,470       1,587  
FL STATE BOARD OF EDUCATION CAPITAL OUTLAY
     5.250       6/1/2016               1,250       1,300       —       —       —       1,250       1,300  
FL GAINESVILLE UTILITIES SYSTEM REVENUE
     5.750       10/1/2007               —       —       315       336       —       315       336  
FL LAKELAND ELECTRICITY & WATER REVENUE (b)
     0.000       10/1/2009               —       —       1,000       860       —       1,000       860  
FL LEON COUNTY CAPITAL IMPROVEMENT REVENUE
     5.250       10/1/2017               2,430       2,568       —       —       —       2,430       2,568  
FL ORANGE COUNTY HEALTH FACILITIES AUTHORITY
     6.250       10/1/2008               —       —       4,640       5,125       —       4,640       5,125  
FL ORANGE COUNTY HEALTH FACILITIES AUTHORITY
     6.250       10/1/2016               3,260       3,916       1,445       1,736       —       4,705       5,652  
FL ORLANDO UTILITIES COMMISION WATER & SEWER
     6.750       10/1/2017               1,800       2,192       —       —       —       1,800       2,192  
FL PEMBROKE PINES CONSOLIDATED UTILITIES
     6.250       9/1/2007               —       —       2,070       2,165       —       2,070       2,165  
FL PORT ST LUCIE UTILITY REVENUE
     5.000       9/1/2016               —       —       510       554       —       510       554  
FL TAMPA TAX ALLOCATION
     5.000       3/1/2007               —       —       3,000       3,119       —       3,000       3,119  
IL CHAMPAIGN COUNTY COMMUNITY UNIT (b)
     0.000       1/1/2010               —       —       1,620       1,367       —       1,620       1,367  
SC CALHOUN COUNTY SOLID WASTE DISPOSAL
     6.750       5/1/2017               —       —       1,000       1,217       —       1,000       1,217  
 
                                                                          
Refunded/Escrowed Totals
                                     9,976               18,066                       28,042  
 
                                                                          
TOTAL OTHER
                                     11,047               19,298                       30,345  
 
                                                                          
OTHER REVENUE
                     1.0 %                                                        
Recreation
                     1.0 %                                                        
FL STATE BOARD OF EDUCATION LOTTERY REVENUE
     5.250       7/1/2017               1,000       1,077       —       —       —       1,000       1,077  
FL STATE BOARD OF EDUCATION LOTTERY REVENUE
     5.375       7/1/2017               —       —       1,450       1,580       —       1,450       1,580  
 
                                                                          
Recreation Totals
                                     1,077               1,580                       2,657  
 
                                                                          
TOTAL OTHER REVENUE
                                     1,077               1,580                       2,657  
 
                                                                          
RESOURCE RECOVERY
                     2.7 %                                                        
Disposal
                     2.7 %                                                        
FL OKEECHOBEE COUNTY SOLID WASTE REVENUE
     4.200       7/1/2039               —       —       1,750       1,759       —       1,750       1,759  
FL PALM BEACH COUNTY SOLID WASTE REVENUE
     6.000       10/1/2010               5,000       5,587       —       —       —       5,000       5,587  
 
                                                                          
Disposal Totals
                                     5,587               1,759                       7,346  
 
                                                                          

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Table of Contents

                                                                                 
As of 3/31/05                           Nations FL Muni Fund     Nations FL Intermediate Muni Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma              
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
TOTAL RESOURCE RECOVERY
                                     5,587               1,759                       7,346  
 
                                                                                
TAX-BACKED
                     33.2 %                                                        
Local Appropriated
                     3.0 %                                                        
FL BREVARD COUNTY SCHOOL BOARD CERTIFICATES
     5.000       7/1/2017               1,470       1,564       —       —       —       1,470       1,564  
FL MIAMI-DADE COUNTY SPECIAL OBLIGATION
     5.000       4/1/2011               —       —       1,000       1,079       —       1,000       1,079  
FL OSCEOLA COUNTY SCHOOL BOARD CERTIFICATES OF PARTICIPATION
     5.000       6/1/2016               2,240       2,399       —       —       —       2,240       2,399  
FL PALM BEACH COUNTY SCHOOL BOARD CERTIFICATES OF PARTICIPATION
     5.375       8/1/2014               —       —       3,000       3,296       —       3,000       3,296  
 
                                                                          
Local Appropriated Totals
                                     3,963               4,375                       8,338  
 
                                                                          
 
                                                                                
Local General Obligations
                     1.2 %                                                        
FL PALM BEACH COUNTY G.O.
     5.500       12/1/2011               —       —       2,000       2,231       —       2,000       2,231  
FL ST LUCIE COUNTY SCHOOL DISTRICT G.O.
     5.875       2/1/2007               —       —       1,000       1,053       —       1,000       1,053  
 
                                                                          
Local General Obligations
                                     —               3,284                       3,284  
 
                                                                          
 
                                                                                
Special Non-Property Tax
                     22.5 %                                                        
FL COLLIER COUNTY GAS TAX REVENUE
     5.250       6/1/2013               —       —       3,660       4,023       —       3,660       4,023  
FL COLLIER COUNTY GAS TAX REVENUE
     5.250       6/1/2015               —       —       3,285       3,583       —       3,285       3,583  
FL STATE DEPT OF ENVIRONMENTAL PROTECTION
     5.000       7/1/2009               —       —       5,000       5,347       —       5,000       5,347  
FL STATE DIVISION OF BOND FINANCE — ENVIRONMENT
     5.500       7/1/2008               —       —       3,000       3,227       —       3,000       3,227  
FL HIALEAH CAPITAL IMPROVEMENT REVENUE
     5.500       10/1/2018               —       —       1,375       1,381       —       1,375       1,381  
FL HILLSBOROUGH COUNTY CAPITAL IMPROVEMENT
     5.000       8/1/2012               —       —       1,000       1,079       —       1,000       1,079  
FL HILLSBOROUGH COUNTY CAPITAL IMPROVEMENT
     5.000       7/1/2011               —       —       1,000       1,046       —       1,000       1,046  
FL JACKSONVILLE EXCISE TAXES
     5.000       10/1/2009               —       —       1,000       1,072       —       1,000       1,072  
FL JACKSONVILLE GUARANTEED ENTITLEMENT
     5.375       10/1/2018               —       —       3,450       3,750       —       3,450       3,750  
FL JACKSONVILLE GUARANTEED ENTITLEMENT
     5.375       10/1/2019               3,720       4,039       —       —       —       3,720       4,039  
FL JACKSONVILLE SALES TAX REVENUE
     5.250       10/1/2019               —       —       1,080       1,166       —       1,080       1,166  
FL JACKSONVILLE SALES TAX REVENUE
     5.375       10/1/2018               —       —       1,000       1,087       —       1,000       1,087  
FL JACKSONVILLE SALES TAX REVENUE
     5.500       10/1/2012               —       —       1,000       1,117       —       1,000       1,117  
FL MANATEE COUNTY SCHOOL DISTRICT SALES TAX
     5.000       10/1/2012               —       —       4,285       4,640       —       4,285       4,640  
FL OCALA CAPITAL IMPROVEMENTS REVENUE
     5.375       10/1/2016               —       —       1,530       1,681       —       1,530       1,681  
FL ORANGE COUNTY TOURIST DEVELOPMENT TAX
     5.000       10/1/2015               —       —       4,000       4,221       —       4,000       4,221  
FL PALM BEACH COUNTY CRIMINAL JUSTICE
     5.750       6/1/2013               —       —       3,500       3,967       —       3,500       3,967  
FL PALM BEACH COUNTY PUBLIC IMPROVEMENT
     5.000       8/1/2017               —       —       1,000       1,067       —       1,000       1,067  
FL PALM BEACH COUNTY STADIUM FACILITIES
     5.250       12/1/2016               —       —       2,000       2,139                          
FL PORT ST LUCIE SALES TAX REVENUE
     5.000       9/1/2019               —       —       1,000       1,054       —       1,000       1,054  
FL TALLAHASSEE BLUEPRINT 2000
     5.000       10/1/2013               —       —       3,775       4,050       —       3,775       4,050  
FL TAMPA SPORTS AUTHORITY REVENUE
     5.250       1/1/2017               2,000       2,088       —       —       —       2,000       2,088  
FL TAMPA SPORTS AUTHORITY REVENUE
     5.750       10/1/2015               2,500       2,825       —       —       —       2,500       2,825  
FL TAMPA SPORTS AUTHORITY REVENUE
     5.750       10/1/2020               —       —       1,000       1,164       —       1,000       1,164  
FL TAMPA SPORTS AUTHORITY REVENUE
     6.000       1/1/2007               —       —       3,170       3,339       —       3,170       3,339  
 
                                                                          
Special Non-Property Tax Totals
                                     8,952               55,198                       62,011  
 
                                                                          
 
                                                                                
Special Property Tax
                     0.9 %                                                        
FL HILLSBOROUGH COUNTY INDUSTRIAL DEVELOPMENT
     5.500       9/1/2015               —       —       2,335       2,566       —       2,335       2,566  
 
                                                                          
Special Property Tax Totals
                                     —               2,566                       2,566  
 
                                                                          

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Table of Contents

                                                                                 
As of 3/31/05                           Nations FL Muni Fund     Nations FL Intermediate Muni Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma              
                            Par (000)     Market Value ($000)     Par (000)     Market Value ($000)     Adjustments     Par (000)     Market Value ($000)  
State General Obligations
                     5.5 %                                                        
FL STATE DEPARTMENT OF TRANSPORTATION G.O.
     5.000       7/1/2030               1,000       1,036       —       —       —       1,000       1,036  
FL STATE DEPARTMENT OF TRANSPORTATION REV
     5.375       7/1/2015               1,000       1,095       —       —       —       1,000       1,095  
FL STATE BOARD OF EDUCATION CAPITAL OUTLAY
     5.000       6/1/2008               —       —       1,000       1,058       —       1,000       1,058  
FL STATE BOARD OF EDUCATION CAPITAL OUTLAY
     5.000       1/1/2017               3,000       3,109       —       —       —       3,000       3,109  
FL STATE BOARD OF EDUCATION CAPITAL OUTLAY
     5.500       1/1/2008               —       —       3,525       3,707       —       3,525       3,707  
PUERTO RICO COMMONWEALTH G.O.
     6.500       7/1/2015               4,190       5,103       —       —       —       4,190       5,103  
 
                                                                          
State General Obligations Totals
                                     10,343              
4,766
                       15,109  
 
                                                                          
TOTAL TAX-BACKED
                                     23,258              
70,189
                       91,308  
 
                                                                          
 
                                                                                
TRANSPORTATION
                     4.7 %                                                        
Airports
                     3.9 %                                                        
FL DADE COUNTY AVIATION REVENUE
     5.750       10/1/2012               2,500       2,635       —       —       —       2,500       2,635  
FL DADE COUNTY AVIATION REVENUE
     6.300       10/1/2005               —       —       1,000       1,019       —       1,000       1,019  
FL GREATER ORLANDO AVIATION AUTHORITY
     5.125       10/1/2012               —       —       1,000       1,044       —       1,000       1,044  
FL MIAMI-DADE COUNTY AVIATION
     5.250       10/1/2015               3,500       3,677       —       —       —       3,500       3,677  
FL PENSACOLA AIRPORT REVENUE
     5.625       10/1/2014               2,000       2,130       —       —       —       2,000       2,130  
 
                                                                          
Airports Totals
                                     8,442              
2,062
                       10,504  
 
                                                                          
 
                                                                                
Toll Facilities
                     0.8 %                                                        
FL ORLANDO & ORANGE COUNTY EXPWY AUTHORITY
     6.500       7/1/2010               —       —       2,000       2,291       —       2,000       2,291  
 
                                                                          
Toll Facilities Totals
                                     —              
2,291
                       2,291  
 
                                                                          
TOTAL TRANSPORTATION
                                     8,442              
4,353
                       12,795  
 
                                                                          
 
                                                                                
UTILITIES
                     22.3 %                                                        
Joint Power
                     2.1 %                                                        
FL STATE MUNICIPAL POWER AGENCY REVENUE
     5.000       10/1/2013               —       —       3,420       3,703       —       3,420       3,703  
FL STATE MUNICIPAL POWER AGENCY REVENUE
     5.500       10/1/2021               —       —       1,850       2,025       —       1,850       2,025  
 
                                                                          
Joint Power Totals
                                     —              
5,727
                       5,727  
 
                                                                          
 
                                                                                
Municipal Electric
                     10.6 %                                                        
FL CHARLOTTE COUNTY UTILITY REVENUE
     5.625       10/1/2016               2,250       2,380       —       —       —       2,250       2,380  
FL GAINESVILLE UTILITIES SYSTEM REVENUE
     5.750       10/1/2007               —       —       685       731       —       685       731  
FL GAINESVILLE UTILITIES SYSTEM REVENUE
     6.500       10/1/2011               3,000       3,492       —       —       —       3,000       3,492  
FL JACKSONVILLE ELECTRIC AUTHORITY REVENUE
     5.375       10/1/2015               —       —       2,000       2,014       —       2,000       2,014  
FL JEA ST JOHNS RIVER POWER PARKWAY SYSTEMS
     5.250       10/1/2013               2,000       2,160       2,500       2,700       —       4,500       4,860  
FL KISSIMMEE UTILITY AUTHORITY ELECTRIC
     5.250       10/1/2015               —       —       2,235       2,445       —       2,235       2,445  
FL ORLANDO UTILS COMMN WATER & ELECTRIC
     5.000       10/1/2009               —       —       5,865       6,284       —       5,865       6,284  
FL ORLANDO UTILS COMMN WATER & ELECTRIC
     5.250       10/1/2018               1,425       1,534       5,000       5,382       —       6,425       6,916  
 
                                                                          
Municipal Electric Totals
                                     9,566              
19,555
                       29,121  
 
                                                                          
 
                                                                                
Water & Sewer
                     9.6 %                                                        
FL BREVENUEARD COUNTY UTILITY REVENUE
     5.250       3/1/2014               —       —       2,000       2,173       —       2,000       2,173  
FL DAYTONA BEACH UTILITY SYSTEMS REVENUE
     5.250       11/15/2016               —       —       1,200       1,299       —       1,200       1,299  
FL MUNINCIPAL LOAN COUNCIL REVENUE
     5.375       8/1/2016               1,485       1,621       —       —       —       1,485       1,621  
FL HOLLYWOOD WATER & SEWER REVENUE
     5.000       10/1/2017               —       —       1,070       1,137       —       1,070       1,137  
FL MANATEE COUNTY PUBLIC UTILITIES REVENUE
     5.000       10/1/2012               —       —       2,000       2,168       —       2,000       2,168  

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As of 3/31/05

                                                                         
                                    Nations FL                
                    Nations FL Muni Fund     Intermediate Muni Fund             Pro Forma Combined  
                    Target Fund     Acquiring Fund     Pro forma                
                            Market             Market                     Market  
                    Par (000)     Value ($000)     Par(000)     Value ($000)     Adjustments     Par (000)     Value ($000)  
FL MIAMI BEACH WATER & SEWER REVENUE
     5.375       9/1/2015       —       —       1,810       1,864       —       1,810       1,864  
FL MIAMI-DADE COUNTY STORMWATER UTILITY REVENUE
     5.000       4/1/2024       2,445       2,557       —       —       —       2,445       2,557  
FL MIAMI-DADE COUNTY WATER & SEWER
     5.000       10/1/2007       —       —       3,500       3,675       —       3,500       3,675  
FL OCALA UTILITIES SYSTEM REVENUE
     5.250       10/1/2020       1,000       1,085       —       —       —       1,000       1,085  
FL PORT ST LUCIE UTILITIES REVENUE
     5.000       9/1/2016       —       —       490       523       —       490       523  
FL PORT ST LUCIE UTILITIES REVENUE
     5.000       9/1/2019       2,115       2,229       —       —       —       2,115       2,229  
FL SARASOTA COUNTY UTILITIES SYSTEM REVENUE
     5.250       10/1/2016       1,000       1,082       —       —       —       1,000       1,082  
FL SEBRING WATER & WASTEWATER REVENUE
     5.250       1/1/2014       1,030       1,123       —       —       —       1,030       1,123  
FL TALLAHASSEE CONSERVATIVE UTILITY SYSTEM
     5.500       10/1/2014       1,330       1,495       —       —       —       1,330       1,495  
FL TALLAHASSEE CONSERVATIVE UTILITY SYSTEM
     5.500       10/1/2018       —       —       1,000       1,136       —       1,000       1,136  
FL TOHOPEKALIGA WATER AUTHORITY UTILITY
     5.250       10/1/2017       —       —       1,110       1,204       —       1,110       1,204  
 
                                                                  
Water & Sewer Totals
                             11,192               15,181                       26,373  
 
                                                                  
TOTAL UTILITIES
                             20,758               40,463                       61,221  
 
                                                                  
TOTAL MUNICIPAL BONDS
                             85,713               184,437                       268,011  
 
                                                                  
INVESTMENT COMPANY
             0.5 %                                                        
NATIONS TAX-EXEMPT RESERVES FUND (c)
                     725       725       725       725       —       1,450       1,450  
 
                                                                  
TOTAL INVESTMENT COMPANY
                             725               725                       1,450  
 
                                                                  
Total Investments (d)
             97.9 %             86,438               185,162                       271,600  
Other Assets & Liabilities, net
             1.3 %             1,313               2,295       (48 )             3,560  
 
                                                                
Net Assets
             99.2 %             87,751               187,457       (48 )             275,160  
 
                                                                
Investments at cost
                             81,587               181,989                       63,576  

Notes to Investment Portfolio:

(a)   The Fund has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, soley for the payment of principal and interest.
 
(b)   Zero coupon bond.
 
(c)   Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by Banc of America Capital Management, LLC.
 
(d)   Cost for federal income tax purposes is $181,910 for Nations FL Intermediate Municipal Bond Fund,. $81,463 for Nations FL Municipal Bond Fund, and $263,373 for the funds combined.

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Pro Forma Combining Portfolio of Investments (unaudited)
As of 3/31/05

                                                                                 
                            Columbia FL     Nations FL                
                            Intermediate Muni Fund     Intermediate Muni Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma                
                                    Market             Market                     Market  
                            Par (000)     Value $000)     Par (000)     Value ($000)     Adjustments     Par (000)     Value ($000)  
MUNICIPAL BONDS
                     98.5 %                                                        
EDUCATION
                     2.3 %                                                        
Education
                     2.3 %                                                        
FL BROWARD COUNTY EDL FACILITIES AUTHORITY
     5.250       4/1/2017               610       630       —       —       —       610       630  
FL MIAMI-DADE COUNTY EDL FACILITIES AUTHORITY
     5.000       4/1/2015               1,000       1,073       —       —       —       1,000       1,073  
FL UNIVERSITY ATHLETIC ASSOCIATION INC
     2.200       10/1/2031               —       —       3,000       2,997       —       3,000       2,997  
FL VOLUSIA COUNTY EDUCATIONAL FAC AUTHORITY
     6.125       10/15/2026               —       —       1,000       1,056       —       1,000       1,056  
 
                                                                          
Education Totals
                                     1,702               4,053                       5,755  
 
                                                                          
TOTAL EDUCATION
                                     1,702               4,053                       5,755  
 
                                                                          
HEALTH CARE
                     15.2 %                                                        
Hospitals
                     15.1 %                                                        
FL BAY MEDICAL CENTER HOSPITAL REVENUE
     5.000       10/1/2005               —       —       1,000       1,012       —       1,000       1,012  
FL BAY MEDICAL CENTER HOSPITAL REVENUE
     5.450       10/1/2012               —       —       2,000       2,107       —       2,000       2,107  
FL ESCAMBIA COUNTY HEALTH FACILITIES
     5.250       11/15/2011               —       —       2,125       2,297       —       2,125       2,297  
FL ESCAMBIA COUNTY HEALTH FACILITIES
     5.250       11/15/2014               1,000       1,083       —       —       —       1,000       1,083  
FL HILLSBOROUGH COUNTY INDUSTRIAL DEV
     5.000       10/1/2018               1,000       1,018       —       —       —       1,000       1,018  
FL LEE MEM HLTH SYS HOSPITAL REVENUE
     5.750       4/1/2015               1,000       1,112       —       —       —       1,000       1,112  
FL MARION COUNTY HOSP DISTRICT REVENUE
     5.250       10/1/2011               —       —       2,025       2,153       —       2,025       2,153  
FL ORANGE COUNTY HEALTH FACILITIES AUTHORITY
     6.250       10/1/2016               —       —       555       653       —       555       653  
FL SARASOTA COUNTY PUBLIC HOSPITAL BOARD
     5.000       10/1/2007               —       —       1,650       1,727       —       1,650       1,727  
FL SARASOTA COUNTY PUBLIC HOSPITAL BOARD
     5.250       7/1/2011               —       —       1,750       1,897       —       1,750       1,897  
FL SOUTH BROWARD HOSPITAL DISTRICT REVENUE
     5.250       5/1/2012               —       —       3,955       4,302       —       3,955       4,302  
FL SOUTH BROWARD HOSPITAL DISTRICT REVENUE
     5.250       5/1/2013               1,500       1,632       —       —       —       1,500       1,632  
FL SOUTH BROWARD HOSPITAL DISTRICT REVENUE
     5.500       5/1/2022               —       —       1,000       1,064       —       1,000       1,064  
FL SOUTH BROWARD HOSPITAL DISTRICT REVENUE
     5.600       5/1/2027               —       —       3,000       3,200       —       3,000       3,200  
FL ST PETERSBURG HEALTH FACILITIES
     5.500       11/15/2014               1,720       1,876       —       —       —       1,720       1,876  
FL ST PETERSBURG HEALTH FACILITIES
     5.500       11/15/2015               —       —       1,995       2,164       —       1,995       2,164  
FL ST PETERSBURG HEALTH FACILITIES
     5.500       11/15/2016               —       —       1,980       2,144       —       1,980       2,144  
FL TAMPA HEALTH SYSTEMS REVENUE
     4.875       11/15/2015               —       —       2,000       2,070       —       2,000       2,070  
VA ARLINGTON COUNTY INDUSTRIAL DEV AUTHORITY
     5.500       7/1/2014               —       —       4,180       4,498       —       4,180       4,498  
 
                                                                          
Hospitals Totals
                                     6,721               31,289                       38,010  
 
                                                                          
Intermediate Care Facilities
                     0.1 %                                                        
FL ORANGE COUNTY HEALTH FACILITIES AUTHORITY
     6.250       7/1/2005               —       —       375       376       —       375       376  
 
                                                                          
Intermediate Care Facilities Totals
                                     —               376                       376          
 
                                                                          
TOTAL HEALTH CARE
                                     6,721               31,665                       38,387  
 
                                                                          
HOUSING
                     4.0 %                                                        
Multi-Family
                     3.2 %                                                        
FL CAPITAL TRUST AGENCY MULTIFAMILY
     5.150       11/1/2030               —       —       3,300       3,473       —       3,300       3,473  
FL COLLIER COUNTY HOUSING FINANCE AUTHORITY
     4.900       2/15/2032               —       —       2,250       2,294       —       2,250       2,294  
FL HOUSING FINANCE AGENCY
     5.875       11/1/2005               —       —       195       196       —       195       196  
FL HOUSING FINANCE AGENCY
     6.350       5/1/2026               —       —       1,000       1,023       —       1,000       1,023  
FL HOUSING FINANCE AGENCY
     6.400       11/1/2015               —       —       1,000       1,035       —       1,000       1,035  
 
                                                                          
Multi-Family Totals
                                     —               8,020                       8,020          
 
                                                                          
Single Family
                     0.8 %                                                        
FL ESCAMBIA COUNTY HOUSING FINANCE AUTHORITY
     6.300       10/1/2020               —       —       420       426       —       420       426  
FL HOUSING FINANCE CORP REVENUE
     4.950       7/1/2011               —       —       1,515       1,573       —       1,515       1,573  
 
                                                                          
Single Family Totals
                                     —               1,999                       1,999  
 
                                                                          
TOTAL HOUSING
                                     —               10,019                       10,019  
 
                                                                          

Page 1 of 5

Table of Contents

As of 3/31/05

                                                                                 
                            Columbia FL     Nations FL                
                            Intermediate Muni Fund     Intermediate Muni Fund             Pro Forma Combined  
                            Target Fund     Acquiring Fund     Pro forma                
                                    Market             Market                     Market  
                            Par (000)     Value $000)     Par (000)     Value ($000)     Adjustments     Par (000)     Value ($000)  
INDUSTRIALS
                     0.6 %                                                        
Forest Products & Paper
                     0.6 %                                                        
FL BAY COUNTY POLLUTN CONTROL REVENUE
     5.100       9/1/2012               —       —       1,000       1,058       —       1,000       1,058  
FL ESCAMBIA COUNTY POLLUTION CONTROL
     4.700       4/1/2015               500       505       —       —       —       500       505  
 
                                                                          
Forest Products & Paper Totals
                                     505               1,058                       1,563  
 
                                                                          
TOTAL INDUSTRIALS
                                     505               1,058                       1,563  
 
                                                                          
OTHER
                     10.4 %                                                        
Pool/Bond Bank
                     1.4 %                                                        
FL MUNICIPAL LOAN COUNCIL REVENUE
     5.250       12/1/2013               —       —       1,125       1,232       —       1,125       1,232  
FL MUNICIPAL LOAN COUNCIL REVENUE
     5.500       5/1/2013               1,000       1,106       —       —       —       1,000       1,106  
FL GULF BREEZE REVENUE
     5.000       12/1/2015               1,000       1,062       —       —       —       1,000       1,062  
 
                                                                          
Pool/Bond Bank Totals
                                     2,168               1,232                       3,400  
 
                                                                          
Refunded/Escrowed (a)
                     9.0 %                                                        
FL BOCA RATON G.O.
     5.000       7/1/2013               —       —       1,470       1,587       —       1,470       1,587  
FL BREVARD COUNTY
     6.000       8/1/2014               1,195       1,344       —       —       —       1,195       1,344  
FL GAINESVILLE UTILITIES SYSTEM REVENUE
     5.750       10/1/2007               —       —       315       336       —       315       336  
FL HILLSBOROUGH COUNTY SCHOOL DISTRICT
     5.375       10/1/2013               1,060       1,165       —       —       —       1,060       1,165  
FL LAKELAND ELECTRICITY & WATER REVENUE (b)
     0.000       10/1/2009               —       —       1,000       860       —       1,000       860  
FL MIAMI-DADE COUNTY SCHOOL BOARD
     5.500       5/1/2010               2,000       2,192       —       —       —       2,000       2,192  
FL ORANGE COUNTY HEALTH FACILITIES AUTHORITY
     6.250       10/1/2008               —       —       4,640       5,125       —       4,640       5,125  
FL ORANGE COUNTY HEALTH FACILITIES AUTHORITY
     6.250       10/1/2016               —       —       1,445       1,736       —       1,445       1,736  
FL PEMBROKE PINES CONSOLIDATED UTILITIES
     6.250       9/1/2007               —       —       2,070       2,165       —       2,070       2,165  
FL PORT ST LUCIE UTILITY REVENUE
     5.000       9/1/2016               —       —       510       554       —       510       554  
FL TAMPA TAX ALLOCATION
     5.000       3/1/2007               —       —       3,000       3,119       —       3,000       3,119  
IL CHAMPAIGN COUNTY COMMUNITY UNIT (b)
     0.000       1/1/2010               —       —       1,620       1,367       —       1,620       1,367  
SC CALHOUN COUNTY SOLID WASTE DISPOSAL
     6.750       5/1/2017               —       —       1,000       1,217       —       1,000       1,217  
 
                                                                          
Refunded/Escrowed Totals
                                     4,701               18,066                       22,767  
 
                                                                          
TOTAL OTHER
                                     6,870               19,298                       26,167  
 
                                                                          
OTHER REVENUE
                     1.1 %                                                        
Recreation
                     1.1 %                                                        
FL STATE BOARD OF EDUCATION LOTTERY REVENUE
     5.375       7/1/2017               —       —       1,450       1,580       —       1,450       1,580  
FL STATE BOARD OF EDUCATION LOTTERY REVENUE
     5.500       7/1/2012               1,000       1,114       —       —       —       1,000       1,114  
 
                                                                          
Recreation Totals
                                     1,114               1,580                       2,694  
 
                                                                          
TOTAL OTHER REVENUE
                                     1,114               1,580                       2,694  
 
                                                                          
RESOURCE RECOVERY
                     0.7 %                                                        
Disposal
                     0.7 %                                                        
FL OKEECHOBEE COUNTY SOLID WASTE REVENUE
     4.200       7/1/2039               —       —       1,750       1,759       —       1,750       1,759  
 
                                                                          
Disposal Totals
                                     —               1,759                       1,759  
 
                                                                          
TOTAL RESOURCE RECOVERY
                                     —               1,759                       1,759  
 
                                                                          
TAX-BACKED
                     39.2 %                                                        
Local Appropriated
                     4.1 %                                                        
FL BROWARD COUNTY CERTIFICATES OF PARTICIPATION
     5.000       6/1/2013               1,000       1,082       —       —       —       1,000       1,082  
FL COLLIER COUNTY SCHOOL BOARD CERTIFICATES
     5.000       2/15/2013               1,500       1,607       —       —       —       1,500       1,607  
FL LEE COUNTY SCHOOL BOARD CERTIFICATES OF PARTICIPATION
     5.000       8/1/2016               1,000       1,068       —       —       —       1,000       1,068  
FL MIAMI-DADE COUNTY SPECIAL OBLIGATION
     5.000       4/1/2011               —       —       1,000       1,079       —       1,000       1,079  
FL ORANGE COUNTY SCHOOL BOARD CERTIFICATES OF PARTICIPATION
     5.000       8/1/2018               1,000       1,060       —       —       —       1,000       1,060  
FL OSCEOLA COUNTY SCHOOL BOARD CERTIFICATES OF PARTICIPATION
     5.000       6/1/2017               1,000       1,065       —       —       —       1,000       1,065  
FL PALM BEACH COUNTY SCHOOL BOARD CERTIFICATES OF PARTICIPATION
     5.375       8/1/2014               —       —       3,000       3,296       —       3,000       3,296  
 
                                                                          
Local Appropriated Totals
                                     5,881               4,375                       10,256  
 
                                                                          

Page 2 of 5

Table of Contents

As of 3/31/05

                                                                                 
                            Columbia FL     Nations FL                
                            Intermediate Muni Fund     Intermediate Muni Fund
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                                    Market             Market                     Market  
                            Par (000)     Value $000)     Par (000)     Value ($000)     Adjustments     Par (000)     Value ($000)  
State Appropriated
                     0.7 %                                                        
FL STATE DEPARTMENT OF GENERAL SERVICES
     5.250       9/1/2015               1,515       1,675       —       —       —       1,515       1,675  
 
                                                                          
State Appropriated Totals
                                     1,675               —                       1,675  
 
                                                                          
Local General Obligations
                     3.0 %                                                        
FL BROWARD COUNTY G.O.
     5.000       1/1/2007               1,000       1,037       —       —       —       1,000       1,037  
FL BROWARD COUNTY G.O.
     5.250       1/1/2014               1,025       1,113       —       —       —       1,025       1,113  
FL PALM BEACH COUNTY G.O.
     5.500       12/1/2011               —       —       2,000       2,231       —       2,000       2,231  
FL REEDY CREEK IMPROVEMENT DISTRICT G.O.
     5.000       6/1/2017               1,000       1,063       —       —       —       1,000       1,063  
FL ST LUCIE COUNTY SCHOOL DISTRICT G.O.
     5.875       2/1/2007               —       —       1,000       1,053       —       1,000       1,053  
PUERTO RICO MUNICIPAL FINANCE AGENCY
     5.500       8/1/2009               1,000       1,093       —       —       —       1,000       1,093  
 
                                                                          
Local General Obligations
                                     4,306               3,284                       7,590  
 
                                                                          
Special Non-Property Tax
                     26.5 %                                                        
FL COLLIER COUNTY GAS TAX REVENUE
     5.250       6/1/2013               —       —       3,660       4,023       —       3,660       4,023  
FL COLLIER COUNTY GAS TAX REVENUE
     5.250       6/1/2015               —       —       3,285       3,583       —       3,285       3,583  
FL STATE DEPT OF ENVIRONMENTAL PROTECTION
     5.000       7/1/2009               —       —       5,000       5,347       —       5,000       5,347  
FL STATE DIVISION OF BOND FINANCE — ENVIRONMENT
     5.500       7/1/2008               2,000       2,151       3,000       3,227       —       5,000       5,378  
FL HIALEAH CAPITAL IMPROVEMENT REVENUE
     5.500       10/1/2018               —       —       1,375       1,381       —       1,375       1,381  
FL HILLSBOROUGH COUNTY CAPITAL IMPROVEMENT
     5.000       8/1/2012               —       —       1,000       1,079       —       1,000       1,079  
FL HILLSBOROUGH COUNTY CAPITAL IMPROVEMENT
     5.000       7/1/2011               —       —       1,000       1,046       —       1,000       1,046  
FL JACKSONVILLE EXCISE TAXES
     5.000       10/1/2009               —       —       1,000       1,072       —       1,000       1,072  
FL JACKSONVILLE GUARANTEED ENTITLEMENT
     5.375       10/1/2018               —       —       3,450       3,750       —       3,450       3,750  
FL JACKSONVILLE SALES TAX REVENUE
     5.250       10/1/2019               —       —       1,080       1,166       —       1,080       1,166  
FL JACKSONVILLE SALES TAX REVENUE
     5.375       10/1/2018               —       —       1,000       1,087       —       1,000       1,087  
FL JACKSONVILLE SALES TAX REVENUE
     5.500       10/1/2012               1,000       1,117       1,000       1,117       —       2,000       2,233  
FL LEE COUNTY CAPITAL IMPROVEMENT REVENUE
     5.750       10/1/2011               1,000       1,125       —       —       —       1,000       1,125  
FL MANATEE COUNTY SCHOOL DISTRICT SALES TAX
     5.000       10/1/2012               —       —       4,285       4,640       —       4,285       4,640  
FL OCALA CAPITAL IMPROVEMENTS REVENUE
     5.375       10/1/2016               —       —       1,530       1,681       —       1,530       1,681  
FL ORANGE COUNTY TOURIST DEVELOPMENT TAX
     5.000       10/1/2015               —       —       4,000       4,221       —       4,000       4,221  
FL OSCEOLA COUNTY TOURIST DEVELOPMENT TAX
     5.500       10/1/2014               1,555       1,725       —       —       —       1,555       1,725  
FL PALM BEACH COUNTY CRIMINAL JUSTICE
     5.375       6/1/2009               1,500       1,625       —       —       —       1,500       1,625  
FL PALM BEACH COUNTY CRIMINAL JUSTICE
     5.750       6/1/2013               —       —       3,500       3,967       —       3,500       3,967  
FL PALM BEACH COUNTY PUBLIC IMPROVEMENT
     5.000       8/1/2017               —       —       1,000       1,067       —       1,000       1,067  
FL PALM BEACH COUNTY STADIUM FACILITIES
     5.250       12/1/2016               —       —       2,000       2,139       —       2,000       2,139  
FL PASCO COUNTY SALES TAX REVENUE
     5.000       12/1/2016               1,240       1,326       —       —       —       1,240       1,326  
FL POLK COUNTY TRANSPORTATION IMPROVEMENT REVENUE
     5.000       12/1/2025               1,000       1,083       —       —       —       1,000       1,083  
FL PORT ST LUCIE SALES TAX REVENUE
     5.000       9/1/2019               —       —       1,000       1,054       —       1,000       1,054  
FL SEMINOLE COUNTY SALES TAX REVENUE
     5.375       10/1/2013               1,295       1,423       —       —       —       1,295       1,423  
FL TALLAHASSEE BLUEPRINT 2000
     5.000       10/1/2013               —       —       3,775       4,050       —       3,775       4,050  
FL TAMPA SPORTS AUTHORITY REVENUE
     5.750       10/1/2020               —       —       1,000       1,164       —       1,000       1,164  
FL TAMPA SPORTS AUTHORITY REVENUE
     6.000       1/1/2007               —       —       3,170       3,339       —       3,170       3,339  
 
                                                                          
Special Non-Property Tax Totals
                                     11,573               55,198                       66,771  
 
                                                                          
Special Property Tax
                     1.0 %                                                        
FL HILLSBOROUGH COUNTY INDUSTRIAL DEVELOPMENT
     5.500       9/1/2015               —       —       2,335       2,566       —       2,335       2,566  
 
                                                                          
Special Property Tax Totals
                                     —               2,566                       2,566  
 
                                                                          
State General Obligations
                     3.9 %                                                        
FL STATE JACKSONVILLE TRANSPORTATION G.O.
     6.000       7/1/2008               1,100       1,181       —       —       —       1,100       1,181  
FL STATE BOARD OF EDUCATION CAPITAL OUTLAY
     5.000       6/1/2008               —       —       1,000       1,058       —       1,000       1,058  
FL STATE BOARD OF EDUCATION CAPITAL OUTLAY
     5.250       6/1/2008               1,500       1,600       —       —       —       1,500       1,600  
FL STATE BOARD OF EDUCATION CAPITAL OUTLAY
     5.500       1/1/2008               —       —       3,525       3,707       —       3,525       3,707  
FL STATE BOARD OF EDUCATION CAPITAL OUTLAY
     5.750       6/1/2013               1,000       1,110       —       —       —       1,000       1,110  

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Table of Contents

As of 3/31/05

                                                                                 
                            Columbia FL     Nations FL                
                            Intermediate Muni Fund     Intermediate Muni Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                                    Market             Market                     Market  
                            Par (000)     Value $000)     Par (000)     Value ($000)     Adjustments     Par (000)     Value ($000)  
PUERTO RICO PUBLIC FINANCE CORP
     5.250       8/1/2030               1,000       1,087       —       —       —       1,000       1,087  
 
                                                                          
State General Obligations Totals
                                     4,978               4,766                       9,743  
 
                                                                          
TOTAL TAX-BACKED
                                     28,412               70,189                       98,601  
 
                                                                          
 
TRANSPORTATION
                     2.8 %                                                        
Airports
                     1.5 %                                                        
FL DADE COUNTY AVIATION REVENUE
     6.300       10/1/2005               —       —       1,000       1,019       —       1,000       1,019  
FL GREATER ORLANDO AVIATION AUTHORITY
     5.000       10/1/2013               1,500       1,613       —       —       —       1,500       1,613  
FL GREATER ORLANDO AVIATION AUTHORITY
     5.125       10/1/2012               —       —       1,000       1,044       —       1,000       1,044  
 
                                                                          
Airports Totals
                                     1,613               2,062                       3,675  
 
                                                                          
 
Toll Facilities
                     1.3 %                                                        
FL ORLANDO & ORANGE COUNTY EXPWY AUTHORITY
     6.500       7/1/2010               —       —       2,000       2,291       —       2,000       2,291  
FL OSCEOLA COUNTY TRANSPORTATION REVENUE
     5.000       4/1/2018               1,000       1,061       —       —       —       1,000       1,061  
 
                                                                          
Toll Facilities Totals
                                     1,061               2,291                       3,351  
 
                                                                          
TOTAL TRANSPORTATION
                                     2,674               4,353                       7,027  
 
                                                                          
UTILITIES
                     22.1 %                                                        
Joint Power
                     2.3 %                                                        
FL STATE MUNICIPAL POWER AGENCY REVENUE
     5.000       10/1/2013               —       —       3,420       3,703       —       3,420       3,703  
FL STATE MUNICIPAL POWER AGENCY REVENUE
     5.500       10/1/2021               —       —       1,850       2,025       —       1,850       2,025  
 
                                                                          
Joint Power Totals
                                     —               5,727                       5,727  
 
                                                                          
Municipal Electric
                     9.7 %                                                        
FL GAINESVILLE UTILITIES SYSTEM REVENUE
     5.750       10/1/2007               —       —       685       731       —       685       731  
FL JACKSONVILLE ELECTRIC AUTHORITY REVENUE
     5.375       10/1/2015               —       —       2,000       2,014       —       2,000       2,014  
FL JEA ST JOHNS RIVER POWER PARKWAY SYSTEMS
     5.250       10/1/2013               —       —       2,500       2,700       —       2,500       2,700  
FL KISSIMMEE UTILITY AUTHORITY ELECTRIC
     5.250       10/1/2015               —       —       2,235       2,445       —       2,235       2,445  
FL ORLANDO UTILS COMMN WATER & ELECTRIC
     5.000       10/1/2009               —       —       5,865       6,284       —       5,865       6,284  
FL ORLANDO UTILS COMMN WATER & ELECTRIC
     5.250       10/1/2016               1,500       1,622       —       —       —       1,500       1,622  
FL ORLANDO UTILS COMMN WATER & ELECTRIC
     5.250       10/1/2018               —       —       5,000       5,382       —       5,000       5,382  
FL PORT ST LUCIE UTILITY REVENUE
     5.000       9/1/2017               920       977       —       —       —       920       977  
FL REEDY CREEK IMPROVEMENT DISTRICT
     5.250       10/1/2015               1,490       1,630       —       —       —       1,490       1,630  
PUERTO RICO ELECTRIC POWER AUTHORITY
     5.250       7/1/2019               500       562       —       —       —       500       562  
 
                                                                          
Municipal Electric Totals
                                     4,791               19,555                       24,346  
 
                                                                          
 
Water & Sewer
                     10.2 %                                                        
FL BOCA RATON WATER & SEWER REVENUE
     5.000       10/1/2008               1,000       1,066       —       —       —       1,000       1,066  
FL BREVENUEARD COUNTY UTILITY REVENUE
     5.250       3/1/2014               —       —       2,000       2,173       —       2,000       2,173  
FL DAYTONA BEACH UTILITY SYSTEMS REVENUE
     5.250       11/15/2016               —       —       1,200       1,299       —       1,200       1,299  
FL WATER POLLUTION CONTROL FINANCING
     5.000       1/15/2008               1,000       1,054       —       —       —       1,000       1,054  
FL WATER POLLUTION CONTROL FINANCING
     5.500       1/15/2013               1,390       1,525       —       —       —       1,390       1,525  
FL STATE GOVERNMENT UTILITIES AUTHORITY
     5.000       10/1/2017               1,180       1,254       —       —       —       1,180       1,254  
FL HILLSBOROUGH COUNTY UTILITIES LIEN
     5.250       8/1/2007               1,000       1,053       —       —       —       1,000       1,053  
FL HOLLY HILL WATER & SEWER REVENUE
     5.000       10/1/2015               745       794       —       —       —       745       794  
FL HOLLYWOOD WATER & SEWER REVENUE
     5.000       10/1/2017               —       —       1,070       1,137       —       1,070       1,137  
FL MANATEE COUNTY PUBLIC UTILITIES REVENUE
     5.000       10/1/2012               —       —       2,000       2,168       —       2,000       2,168  
FL MIAMI BEACH WATER & SEWER REVENUE
     5.375       9/1/2015               —       —       1,810       1,864       —       1,810       1,864  
FL MIAMI-DADE COUNTY WATER & SEWER
     5.000       10/1/2007               —       —       3,500       3,675       —       3,500       3,675  
FL PORT ST LUCIE UTILITIES REVENUE
     5.000       9/1/2016               —       —       490       523       —       490       523  
FL SEACOAST UTILITY AUTHORITY WATER & SEWER
     5.000       3/1/2008               1,000       1,056       —       —       —       1,000       1,056  
FL TALLAHASSEE CONSERVATIVE UTILITY SYSTEM
     5.500       10/1/2018               —       —       1,000       1,136       —       1,000       1,136  
FL TAMPA WATER & SEWER REVENUE
     5.000       7/1/2010               1,000       1,077       —       —       —       1,000       1,077  
FL TOHOPEKALIGA WATER AUTHORITY UTILITY
     5.250       10/1/2017               —       —       1,110       1,204       —       1,110       1,204  

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Table of Contents

As of 3/31/05

                                                                                 
                            Columbia FL     Nations FL                
                            Intermediate Muni Fund     Intermediate Muni Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
                                    Market             Market                     Market  
                            Par (000)     Value $000)     Par (000)     Value ($000)     Adjustments     Par (000)     Value ($000)  
FL WINTER PARK WATER & SEWER REVENUE
     5.250       12/1/2014               1,405       1,533       —       —       —       1,405       1,533  
 
                                                                          
Water & Sewer Totals
                                     10,412               15,181                       25,592  
 
                                                                          
TOTAL UTILITIES
                                     15,203               40,463                       55,666  
 
                                                                          
TOTAL MUNICIPAL BONDS
                                     63,201               184,437                       247,638  
 
                                                                          
 
INVESTMENT COMPANY
                     0.3 %                                                        
NATIONS TAX-EXEMPT RESERVES FUND (c)
                             —       —       725       725       —       725       725  
 
                                                                          
TOTAL INVESTMENT COMPANY
                                     —               725                       725  
 
                                                                          
 
SHORT-TERM INVESTMENTS
                     0.1 %                                                        
FL ALACHUA COUNTY HEALTH FACILITIES
     2.880       10/1/2032               100       100       —       —       —       100       100  
FL COLLIER COUNTY HEALTH FACILITIES
     2.910       1/1/2035               100       100       —       —       —       100       100  
FL ORANGE COUNTY SCHOOL BOARD CERTIFICATES OF PARTICIPATION
     2.880       8/1/2027               100       100       —       —       —       100       100  
 
                                                                          
TOTAL SHORT-TERM INVESTMENTS
                                     300               —                       300  
 
                                                                          
 
Total Investments (d)
                     98.8 %             63,501               185,162                       248,663  
Other Assets & Liabilities, net
                     1.2 %             839               2,295               (43 )     3,091  
 
                                                                        
Net Assets
                     100.0 %             64,340               187,457               (43 )     251,754  
 
                                                                        
 
Investments at cost
                                     61,680               181,989                       243,669  

Notes to Investment Portfolio:

(a)   The Fund has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, soley for the payment of principal and interest.
 
(b)   Zero coupon bond.
 
(c)   Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by Banc of America Capital Management, LLC.
 
(d)   Cost for federal income tax purposes is $181,910 for Nations FL Intermediate Municipal Bond Fund, $61,680 for the Columbia FL Intermediate Muni Fund and $243,590 for the funds combined.

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Table of Contents

Pro -forma Combining
Statement of Assets & Liabilities
As of March 31, 2005 (unaudited)

 
                                         
    Columbia     Nations     Nations              
    FL Interm. Muni Bond     FL Muni     FL Inter. Muni              
    Fund     Fund     Fund              
                            Pro Forma     Pro Forma  
In Thousands   Target Fund     Target Fund     Acquiring Fund     Adjustments     Combined  
Assets:
                                        
Investments, at cost
   $ 61,680     $ 80,862     $ 181,264     $ —     $ 323,806  
Affiliated Investments, at cost
   $ —     $ 725     $ 725     $ —     $ 1,450  
                       
Investments, at value
     63,200       85,713       184,437       —       333,350  
Affiliated Investments, at value
     300       725       725       —       1,750  
Cash
     42       1       1       —       44  
Receivable for:
                                     —  
Fund shares sold
     —       1       62       —       63  
Interest
     1,046       1,701       3,342       —       6,089  
Income Receivable
     —       1       1       —       2  
Expense reimbursement due from Investment Advisor
     —       26       24       —       50  
Deferred Trustees’ compensation plan
     4       —       —       —       4  
Other Assets
     —       0  (f)     —       —       —  
                       
Total Assets
     64,592       88,168       188,592       —       341,352  
                       
 
                                        
Liabilities:
                                        
Payable for:
                                        
Fund shares repurchased
     —       30       403       —       433  
Distributions Payable
     181       218       503       —       902  
Investment advisory fee
     27       30       65       —       122  
Administration fee
     4       11       24       —       39  
Transfer agent fee
     3       —       —       —       3  
Shareholder servicing and distribution fees payable
     1       15       16       —       32  
Trustees’ fees
     1       65       66       —       132  
Expense reimbursement due to Investment Advisor
     4       —       —       —       4  
Deferred compensation plan
     4       —       —       —       4  
Other liabilities
     27       48       58       89   (d)     222  
                         
Total Liabilities
     252       417       1,135       89       1,893  
                         
Net Assets
   $ 64,340     $ 87,751       187,457     $ (89 ) (d)   $ 339,459  
                         
 
                                        
Composition of Net Assets:
                                        
Paid-in capital
   $ 62,836     $ 81,577     $ 184,343       —     $ 328,756  
Undistributed net investment income
     0  (f)     403       239       (89 ) (d)   $ 553  
Accumulated net realized gain (loss)
     (17 )     921       (298 )     —     $ 606  
Unrealized appreciation on investments
     1,521       4,850       3,173       —     $ 9,544  
                         
Net Assets
   $ 64,340     $ 87,751     $ 187,457     $ (89 ) (d)   $ 339,459  
                         
 
                                        
Investor A
                                        
Net assets
   $ —     $ 35,175,106     $ 16,980,266     $ 686,611     $ 52,841,983  
Shares outstanding
     —       3,683,285       1,622,982       (255,605 ) (e)     5,050,662  
 
                                
Net asset value per share (b)
   $ —     $ 9.55     $ 10.46             $ 10.46  
 
                                
Maximum sales charge
             4.75 %     3.25 %             3.25 %
Maximum offering price per share (c)
             10.03       10.81               10.98  
 
                                        
Investor B
                                        
Net assets
   $ —     $ 7,784,754     $ 6,763,651     $ 478,159     $ 15,026,564  
Shares outstanding
     —       815,437       645,942       (26,238 ) (e)     1,435,141  
 
                                
Net asset value and offering price per share (b)
   $ —     $ 9.55     $ 10.47             $ 10.47  
 
                                
 
                                        
Investor C
                                        
Net assets
   $ —     $ 482,848     $ 8,243,245     $ 1,136,484     $ 9,862,577  
Shares outstanding
     —       50,633       786,301       103,883  (e)     940,817  
 
                                
Net asset value and offering price per share (b)
   $ —     $ 9.54     $ 10.48             $ 10.48  
 
                                
 
                                        
Primary A
                                        
Net assets
   $ —     $ 44,308,745     $ 155,469,793     $ 61,949,418     $ 261,727,956  
Shares outstanding
     —       4,639,679       14,849,405       5,509,143   (e)     24,998,227  
 
                                
Net asset value and offering price per share (b)
     —     $ 9.55     $ 10.47             $ 10.47  
 
                                
 
                                        
Class A
                                        
Net assets
   $ 705,642     $ —     $ —     $ (705,642 )   $ —  
Shares outstanding
     69,090       —       —       (69,090 )     —  
 
                                
Net asset value per share (b)
   $ 10.21     $ —     $ —             $ —  
 
                                
Maximum sales charge
     4.75 %                                
Maximum offering price per share (c)
     10.72                                  
 
                                        
Class B
                                        
Net assets
   $ 482,587     $ —     $ —     $ (482,587 )   $ —  
Shares outstanding
     47,253       —       —       (47,253 )     —  
 
                                
Net asset value, offering and redemption price per share
   $ 10.21     $ —     $ —             $ —  
 
                                
 
                                        
Class C
                                        
Net assets
   $ 1,137,494     $ —     $ —     $ (1,137,494 )   $ —  
Shares outstanding
     111,372       —       —       (111,372 )     —  
 
                                
Net asset value, offering and redemption price per share
   $ 10.21     $ —     $ —             $ —  
 
                                
 
                                        
Class Z
                                        
Net assets
   $ 62,013,961     $ —     $ —     $ (62,013,961 )   $ —  
Shares outstanding
     6,071,772       —       —       (6,071,772 )     —  
 
                                
Net asset value, offering and redemption price per share
   $ 10.21     $ —     $ —             $ —  
 
                                
 
(a)   Class A, B, C and Z shares of Columbia FL Intermediate Fund and Investor A, B, C and Primary A shares of Nations FL Muni Fund are exchanged for new Class A, B, C and Z shares of Nations FL Intermediate Muni Fund, respectively based on the Net Asset Value per share of Nations FL Intermediate Muni Investor A,B,C and Primary Z shares, respectively at the time of the merger
 
(b)   Redemption price per share is equal to net assets value less any applicable contingent deferred sales charge.
 
(c)   On sales of $50,000 or more the offering price is reduced.
 
(d)   Adjustment reflects one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of Trustees of $42,704 and $46,308 to be borne by Columbia FL Intermediate Fund and Nations FL Muni Fund, respectively.
 
(e)   Reflects estimated shares issued to Target fund at the time of the merger.
 
(f)   Amount rounds to less than $500

 

Table of Contents

Pro -forma Combining
Statement of Assets & Liabilities
As of March 31, 2005 (unaudited)

 
                                         
                               
            Nations     Nations              
            FL Muni     FL Inter. Muni              
            Fund     Fund              
                            Pro Forma     Pro Forma  
In Thousands           Target Fund     Acquiring Fund     Adjustments     Combined  
Assets:
                                        
Investments, at cost
           $ 80,862     $ 181,264     $ —     $ 262,126  
Affiliated Investments, at cost
           $ 725     $ 725     $ —     $ 1,450  
                           
Investments, at value
             85,713       184,437       —       270,150  
Affiliated Investments, at value
             725       725       —       1,450  
Cash
             1       1       —       2  
Receivable for:
                                     —  
Fund shares sold
             1       62       —       63  
Interest
             1,701       3,342       —       5,043  
Income Receivable
             1       1       —       2  
Futures variation margin
             —               —       —  
Dollar roll fee income
             —       —       —       —  
Expense reimbursement due from Investment Advisor
             26       24       —       50  
Deferred Trustees’ compensation plan
             —       —       —       —  
Other Assets
             0  (f)     —       —       —  
                           
Total Assets
             88,168       188,592       —       276,760  
                           
Liabilities:
                                        
Payable for:
                                        
Fund shares repurchased
             30       403       —       433  
Distributions Payable
             218       503       —       721  
Investment advisory fee
             30       65       —       95  
Administration fee
             11       24       —       35  
Transfer agent fee
             —       —       —       —  
Shareholder servicing and distribution fees payable
             15       16       —       31  
Trustees’ fees
             65       66       —       131  
Deferred compensation plan
             —       —       —       —  
Other liabilities
             48       58       46   (d)     152  
                           
Total Liabilities
             417       1,135       46       1,598  
                           
Net Assets
           $ 87,751       187,457     $ (46 ) (d)   $ 275,162  
 
                          
Composition of Net Assets:
                                        
Paid-in capital
           $ 81,577     $ 184,343       —     $ 265,920  
Undistributed net investment income
             403       239       (46 ) (d)   $ 596  
Accumulated net realized gain (loss)
             921       (298 )     —     $ 623  
Unrealized appreciation on investments
             4,850       3,173       —     $ 8,023  
                         
Net Assets
           $ 87,751     $ 187,457     $ (46 ) (d)   $ 275,162  
                           
 
                                        
Investor A
                                        
Net assets
           $ 35,175,106     $ 16,980,266     $ (18,563 )   $ 52,136,809  
Shares outstanding
             3,683,285       1,622,982       (322,239 ) (e)     4,984,028  
                           
Net asset value per share (b)
           $ 9.55     $ 10.46             $ 10.46  
 
                                  
Maximum sales charge
             4.75 %     3.25 %             3.25 %
Maximum offering price per share (c)
             10.03       10.81               10.98  
 
                                        
Investor B
                                        
Net assets
           $ 7,784,754     $ 6,763,651     $ (4,108 )   $ 14,544,297  
Shares outstanding
             815,437       645,942       (72,300 ) (e)     1,389,079  
 
                                  
Net asset value and offering price per share (b)
           $ 9.55     $ 10.47             $ 10.47  
 
                                  
 
                                        
Investor C
                                        
Net assets
           $ 482,848     $ 8,243,245     $ (255 )   $ 8,725,838  
Shares outstanding
             50,633       786,301       (4,584 ) (e)     832,350  
 
                                  
Net asset value and offering price per share (b)
           $ 9.54     $ 10.48             $ 10.48  
 
                                  
 
                                        
Primary A
                                        
Net assets
           $ 44,308,745     $ 155,469,793     $ (23,382 )   $ 199,755,156  
Shares outstanding
             4,639,679       14,849,405       (409,940 ) (e)     19,079,144  
 
                                  
Net asset value and offering price per share (b)
           $ 9.55     $ 10.47             $ 10.47  
 
                                  
 
                                        
Class A
                                        
Net assets
           $ —     $ —     $ —     $ —  
Shares outstanding
             —       —       —       —  
 
                                  
Net asset value per share (b)
           $ —     $ —             $ —  
 
                                  
Maximum sales charge Maximum offering price per share (c)
                                        
 
                                        
Class B
                                        
Net assets
           $ —     $ —     $ —     $ —  
Shares outstanding
             —       —       —       —  
 
                                  
Net asset value, offering and redemption price per share
           $ —     $ —             $ —  
 
                                  
 
                                        
Class C
                                        
Net assets
           $ —     $ —     $ —     $ —  
Shares outstanding
             —       —       —       —  
 
                                  
Net asset value, offering and redemption price per share
           $ —     $ —             $ —  
 
                                  
 
                                        
Class Z
                                        
Net assets
           $ —     $ —     $ —     $ —  
Shares outstanding
             —       —       —       —  
 
                                  
Net asset value, offering and redemption price per share
           $ —     $ —             $ —  
 
                                  
 
(a)   Investor A, B, C and Primary A shares of Nations FL Muni Fund are exchanged for new Class A, B, C and Z shares of Nations FL Intermediate Muni Fund, respectively based on the Net Asset Value per share of Nations FL Intermediate Muni Investor A,B,C and Primary Z shares, respectively at the time of the merger
 
(b)   Redemption price per share is equal to net assets value less any applicable contingent deferred sales charge.
 
(c)   On sales of $50,000 or more the offering price is reduced.
 
(d)   Adjustment reflects one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of Trustees of $46,308 to be borne by Nations FL Muni Fund, respectively.
 
(e)   Reflects estimated shares issued to Target fund at the time of the merger.
 
(f)   Amount rounds to less than $500

 

Table of Contents

Pro -forma Combining
Statement of Assets & Liabilities
As of March 31, 2005 (unaudited)

 
                                 
    Columbia     Nations              
    FL Interm. Muni Bond     FL Inter. Muni              
    Fund     Fund              
                    Pro Forma     Pro Forma  
In Thousands   Target Fund     Acquiring Fund     Adjustments     Combined  
Assets:
                                
Investments, at cost
   $ 61,680     $ 181,264     $ —     $ 242,944  
Affiliated Investments, at cost
   $ —     $ 725     $ —     $ 725  
                 
Investments, at value
     63,200       184,437       —       247,637  
Affiliated Investments, at value
     300       725       —       1,025  
Cash
     42       1       —       43  
Receivable for:
                             —  
Fund shares sold
     —       62       —       62  
Interest
     1,046       3,342       —       4,388  
Income Receivable
     —       1       —       1  
Futures variation margin
     —               —       —  
Dollar roll fee income
     —       —       —       —  
Expense reimbursement due from Investment Advisor
     —       24       —       24  
Deferred Trustees’ compensation plan
     4       —       —       4  
Other Assets
     —       —       —       —  
                 
Total Assets
     64,592       188,592       —       253,184  
                 
Liabilities:
                                
Payable for:
                                
Fund shares repurchased
     —       403       —       403  
Distributions Payable
     181       503       —       684  
Investment advisory fee
     27       65       —       92  
Administration fee
     4       24       —       28  
Transfer agent fee
     3       —       —       3  
Shareholder servicing and distribution fees payable
     1       16       —       17  
Trustees’ fees
     1       66       —       67  
Deferred compensation plan
     4       —       —       4  
Other liabilities
     31       58       43  (d)     132  
                   
Total Liabilities
     252       1,135       43       1,430  
                   
Net Assets
   $ 64,340       187,457     $ (43)  (d)   $ 251,754  
                   
 
                                
Composition of Net Assets:
                                
Paid-in capital
   $ 62,836     $ 184,343       —     $ 247,179  
Undistributed net investment income
     0   (f)     239       (43)  (d)   $ 196  
Accumulated net realized gain (loss)
     (17 )     (298 )     —     $ (315 )
Unrealized appreciation on investments
     1,521       3,173       —     $ 4,694  
                   
Net Assets
   $ 64,340     $ 187,457     $ (43)  (d)   $ 251,754  
                   
 
                                
Investor A
                                
Net assets
   $ —     $ 16,980,266     $ 705,174     $ 17,685,440  
Shares outstanding
     —       1,622,982       67,416  (e)     1,690,398  
 
                          
Net asset value per share (b)
   $ —     $ 10.46             $ 10.46  
 
                          
Maximum sales charge
             3.25 %             3.25 %
Maximum offering price per share (c)
             10.81               10.98  
 
                                
Investor B
                                
Net assets
   $ —     $ 6,763,651     $ 482,267     $ 7,245,918  
Shares outstanding
     —       645,942       46,062  (e)     692,004  
 
                          
Net asset value and offering price per share (b)
   $ —     $ 10.47             $ 10.47  
 
                          
 
                                
Investor C
                                
Net assets
   $ —     $ 8,243,245     $ 1,136,739     $ 9,379,984  
Shares outstanding
     —       786,301       108,467  (e)     894,768  
 
                          
Net asset value and offering price per share (b)
   $ —     $ 10.48             $ 10.48  
 
                          
 
                                
Primary A
                                
Net assets
   $ —     $ 155,469,793     $ 61,972,800     $ 217,442,593  
Shares outstanding
     —       14,849,405       5,919,083  (e)     20,768,488  
 
                          
Net asset value and offering price per share (b)
     —     $ 10.47             $ 10.47  
 
                          
 
                                
Class A
                                
Net assets
   $ 705,642     $ —     $ (705,642 )   $ —  
Shares outstanding
     69,090       —       (69,090 )     —  
 
                          
Net asset value per share (b)
   $ 10.21     $ —             $ —  
 
                          
Maximum sales charge
     4.75 %                        
Maximum offering price per share (c)
     10.72                          
 
                                
Class B
                                
Net assets
   $ 482,587     $ —     $ (482,587 )   $ —  
Shares outstanding
     47,253       —       (47,253 )     —  
 
                          
Net asset value, offering and redemption price per share
   $ 10.21     $ —             $ —  
 
                          
 
                                
Class C
                                
Net assets
   $ 1,137,494     $ —     $ (1,137,494 )   $ —  
Shares outstanding
     111,372       —       (111,372 )     —  
 
                          
Net asset value, offering and redemption price per share
   $ 10.21     $ —             $ —  
 
                          
 
                                
Class Z
                                
Net assets
   $ 62,013,961     $ —     $ (62,013,961 )   $ —  
Shares outstanding
     6,071,772       —       (6,071,772 )     —  
 
                          
Net asset value, offering and redemption price per share
   $ 10.21     $ —             $ —  
 
                          
 
(a)   Class A, B, C and Z shares of Columbia FL Intermediate Fund are exchanged for new Class A, B, C and Z shares of Nations FL Intermediate Muni Fund, respectively based on the Net Asset Value per share of Nations FL Intermediate Muni Investor A,B,C and Primary Z shares, respectively at the time of the merger
 
(b)   Redemption price per share is equal to net assets value less any applicable contingent deferred sales charge.
 
(c)   On sales of $50,000 or more the offering price is reduced.
 
(d)   Adjustment reflects one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of Trustees of $42,704 to be borne by Columbia FL Intermediate Fund, respectively.
 
(e)   Reflects estimated shares issued to Target fund at the time of the merger.
 
(f)   Amount rounds to less than $500

 

Table of Contents

Pro- forma Combining
Statement of Operations
For the Twelve Months Ended March 31, 2005 (Unaudited)

 
                                                 
    Columbia     Nations     Nations                      
    FL Interm. Muni Bond     FL Muni     FL Inter. Muni                      
    Fund     Fund     Fund                      
                          Pro Forma     Pro Forma      
In Thousands   Target Fund     Target Fund Acquiring Fund         Adjustments     Combined      
Investment Income:
                                                
Interest
   $ 2,795     $ 4,634     $ 8,482         $ —     $ 15,911      
Dividend
     13       10       47           —     $ 70      
Dollar roll fee income
     —       —       —                 $ —      
Foreign taxes withheld
     —       —       —           —     $ —      
Other income
     (4 )                               $ (4 )    
                               
Total Investment Income
     2,804       4,644       8,529           —       15,977      
                               
 
                                                
Expenses:
                                                
Investment advisory fee
     358       449       838           (149 )     1,496     (f)
Administration fee
     46       190       415           (90 )     561     (f)
Distribution fee:
                                         —      
Class B
     4       68       56           —       128     (a)
Class C
     12       4       67           —       83     (a)
Service fee:
                                                
Class A
     6       92       41           —       139     (a)
Class B
     1       23       19           —       43     (a)
Class C
     4       2       23           —       29     (a)
Transfer agent fee:
     10       22       48           (26 )     54     (g)
Pricing and bookkeeping fees
     37       —       —           66       103     (e)
Trustees’ fees
     8       28       28           (12 )     52     (b)
Printing fees
     2       14       16           (2 )     30     (b)
Custody fee
     7       7       13           —       27      
Legal and Audit Fees
     27       127       119           (40 )     233     (b)
Registration fees
     49       4       —     (c)     (50 )     3     (b)
Non-Recurring Costs (see Note 6)
     3       —       —           —       3      
Other expenses
     13       18       28           —       59      
                               
Total Operating Expenses
     587       1,048       1,711           (303 )     3,043      
Interest expense
     —       1       1                   2      
                               
Total Expenses
     587       1,049       1,712           (303 )     3,045      
Fees and expenses waived or reimbursed by Investment Advisor
     —       (283 )     (456 )         (7 )     (746 )   (h)
Fees waived by Distributor — Class C
     (6 )     —       —           —       (6 )   (d)
Non-recurring costs assumed by Investment Advisor (see Note 6)
     (3 )     —       —           —       (3 )    
                               
Net Expenses
     578       766       1,256           (310 )     2,290      
                               
Net Investment Income
     2,226       3,878       7,273           310       13,687      
 
                                                
Net Realized and Unrealized Gain (Loss) on Investments:
                                                
Net realized gain on investments
     71       1,254       (209 )         —       1,116      
Net change in unrealized appreciation/depreciation on investments
     (2,308 )     (4,916 )     (7,566 )         —       (14,790 )    
                               
Net
     (2,237 )     (3,662 )     (7,775 )                 (13,674 )    
                               
 
                                                
Net Increase in Net Assets from Operations
   $ (11 )   $ 216     $ (502 )       $ 310       13      
                               
 
(a)   Based on the contract in effect for Nations FL Intermediate Muni Fund, the surviving fund.
 
(b)   Reflects elimination of duplicate expenses achieved as a result of merging funds.
 
(c)   Amount rounds to less than $500.
 
(d)   Based on voluntary fee waiver currently in effect for Columbia FL Intermediate Fund, the Target Fund.
 
(e)   Based on new pricing and bookkeeping agreement
 
(f)   Certain fees have been reduced based on the terms of the New York Attorney General Settlement. See Note 6 of the notes to the financial statements.
 
(g)   Reflects the reduction of fees due to the consolidation of transfer agency services with one vendor.
 
(h)   Based on contractual expense cap for the Nations FL Intermediate Muni Fund, the surviving fund.

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Pro- forma Combining
Statement of Operations
For the Twelve Months Ended March 31, 2005 (Unaudited)

 
                                         
    Nations     Nations                      
    FL Muni     FL Inter. Muni                      
    Fund     Fund                      
                    Pro Forma     Pro Forma      
In Thousands   Target Fund     Acquiring Fund         Adjustments     Combined      
Investment Income:
                                        
Interest
   $ 4,634     $ 8,482         $ —     $ 13,116      
Dividend from affiliates
     10       47           —     $ 57      
Dollar roll fee income
     —       —                 $ —      
Dividend
     —       —           —     $ —      
Foreign taxes withheld
     —       —           —     $ —      
Other income
                               $ —      
                         
Total Investment Income
     4,644       8,529           —       13,173      
                         
 
                                        
Expenses:
                                        
Investment advisory fee
     449       838           (66 )     1,221     (e)
Administration fee
     190       415           (147 )     458     (e)
Distribution fee:
                                 —      
Class B
     68       56           —       124     (a)
Class C
     4       67           —       71     (a)
Service fee:
                                        
Class A
     92       41           —       133     (a)
Class B
     23       19           —       42     (a)
Class C
     2       23           —       25     (a)
Transfer agent fee:
     22       48           (25 )     45     (f)
Pricing and bookkeeping fees
     —       —           84       84     (d)
Trustees’ fees
     28       28           (10 )     46     (b)
Printing fees
     14       16           (3 )     27     (b)
Custody fee
     7       13           —       20      
Legal and Audit Fees
     127       119           (12 )     234     (b)
Registration fees
     4       —     (c)     (1 )     3     (b)
Non-Recurring Costs (see Note 6)
     —       —           —       —      
Other expenses
     18       28           —       46      
                         
Total Operating Expenses
     1,048       1,711           (180 )     2,579      
Interest expense
     1       1                   2      
                         
Total Expenses
     1,049       1,712           (180 )     2,581      
Fees and expenses waived or reimbursed by Investment Advisor
     (283 )     (456 )         82       (657 )   (g)
Fees waived by Distributor — Class C
     —       —           —       —      
Non-recurring costs assumed by Investment Advisor (see Note 6)
     —       —           —       —      
                         
Net Expenses
     766       1,256           (98 )     1,924      
                         
Net Investment Income
     3,878       7,273           98       11,249      
 
                                        
Net Realized and Unrealized Gain (Loss) on Investments:
                                        
Net realized gain on investments
     1,254       (209 )         —       1,045      
Net change in unrealized appreciation/depreciation on investments
     (4,916 )     (7,566 )         —       (12,482 )    
                         
Net
     (3,662 )     (7,775 )                 (11,437 )    
                         
 
                                        
Net Increase in Net Assets from Operations
   $ 216     $ (502 )       $ 98       (188 )    
                         
 
(a)   Based on the contract in effect for Nations FL Intermediate Muni Fund, the surviving fund.
 
(b)   Reflects elimination of duplicate expenses achieved as a result of merging funds.
 
(c)   Amount rounds to less than $500.
 
(d)   Based on new pricing and bookkeeping agreement
 
(e)   Certain fees have been reduced based on the terms of the New York Attorney General Settlement. See Note 6 of the notes to the financial statements.
 
(f)   Reflects the reduction of fees due to the consolidation of transfer agency services with one vendor.
 
(g)   Based on contractual expense cap for the Nations FL Intermediate Muni Fund, the surviving fund.

 

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Pro- forma Combining
Statement of Operations
For the Twelve Months Ended March 31, 2005 (Unaudited)

 
                                         
    Columbia     Nations                      
    FL Interm. Muni Bond     FL Inter. Muni                      
    Fund     Fund                      
                    Pro Forma     Pro Forma      
In Thousands   Target Fund     Acquiring Fund         Adjustments     Combined      
Investment Income:
                                        
Interest
   $ 2,795     $ 8,482         $ —     $ 11,277      
Dividend
     13       47           —     $ 60      
Dollar roll fee income
     —       —                 $ —      
Foreign taxes withheld
     —       —           —     $ —      
Other income
     (4 )                       $ (4 )    
 
                                
Total Investment Income
     2,804       8,529           —       11,333      
 
                                
 
                                        
Expenses:
                                        
Investment advisory fee
     358       838           (84 )     1,112     (f)
Administration fee
     46       415           (44 )     417     (f)
Distribution fee:
                                 —      
Class B
     4       56           —       60     (a)
Class C
     12       67           —       79     (a)
Service fee:
                                        
Class A
     6       41           —       47     (a)
Class B
     1       19           —       20     (a)
Class C
     4       23           —       27     (a)
Transfer agent fee:
     10       48           (27 )     31     (g)
Pricing and bookkeeping fees
     37       —           51       88     (e)
Trustees’ fees
     8       28           (3 )     33     (b)
Printing fees
     2       16           (1 )     17     (b)
Custody fee
     7       13           —       20      
Legal and Audit Fees
     27       119           (9 )     137     (b)
Registration fees
     49       —     (c)     (46 )     3     (b)
Non-Recurring Costs (see Note 6)
     3       —           —       3      
Other expenses
     13       28           —       41      
 
                                
Total Operating Expenses
     587       1,711           (163 )     2,135      
Interest expense
     —       1                   1      
 
                                
Total Expenses
     587       1,712           (163 )     2,136      
Fees and expenses waived or reimbursed by Investment Advisor
     —       (456 )         (53 )     (509 )   (h)
Fees waived by Distributor — Class C
     (6 )     —           1       (5 )   (d)
Non-recurring costs assumed by Investment Advisor (see Note 6)
     (3 )     —           —       (3 )    
 
                                
Net Expenses
     578       1,256           (215 )     1,619      
 
                                
Net Investment Income
     2,226       7,273           215       9,714      
 
                                        
Net Realized and Unrealized Gain (Loss) on Investments:
                                        
Net realized gain on investments
     71       (209 )         —       (138 )    
Net change in unrealized appreciation/depreciation on investments
     (2,308 )     (7,566 )         —       (9,874 )    
 
                                
Net
     (2,237 )     (7,775 )                 (10,012 )    
 
                                
 
                                        
Net Increase in Net Assets from Operations
   $ (11 )   $ (502 )       $ 215       (298 )    
 
                                
 
(a)   Based on the contract in effect for Nations FL Intermediate Muni Fund, the surviving fund.
 
(b)   Reflects elimination of duplicate expenses achieved as a result of merging funds.
 
(c)   Amount rounds to less than $500.
 
(d)   Based on voluntary fee waiver currently in effect for Columbia FL Intermediate Fund, the Target Fund.
 
(e)   Based on new pricing and bookkeeping agreement
 
(f)   Certain fees have been reduced based on the terms of the New York Attorney General Settlement. See Note 6 of the notes to the financial statements.
 
(g)   Reflects the reduction of fees due to the consolidation of transfer agency services with one vendor.
 
(h)   Based on contractual expense cap for the Nations FL Intermediate Muni Fund, the surviving fund.

 

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NATIONS FLORIDA INTERMEDIATE MUNICIPAL BOND FUND
AND
COLUMBIA FLORIDA INTERMEDIATE MUNICIPAL BOND FUND

PRO FORMA COMBINING FINANCIAL STATEMENTS

Notes to Financial Statements
March 31, 2005
(unaudited)

Note 1. Organization

Nations Florida Intermediate Municipal Bond Fund (the “Acquiring Fund”), a series of Nations Funds Trust (the “Trust”), is a Delaware business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Columbia Florida Intermediate Municipal Bond Fund (“Target Fund”), a series of Columbia Funds Trust V, is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

Investment Goal

The Acquiring Fund seeks high current income exempt from federal income and Florida state intangibles taxes consistent with moderate fluctuations in principal. The Target Fund seeks as high a level of current interest income exempt from federal income tax and, to the extent possible, from the personal income tax of Florida, as is consistent with relative stability of principal.

Fund Shares

The Acquiring Fund and the Target Fund each may issue an unlimited number of shares. The Acquiring Fund offers four classes of shares: Primary A, Investor A, Investor B and Investor C shares. The Target Fund also offers four classes of shares: Class A, Class B, Class C, and Class Z shares. Each share class has its own expense structure.

Note 2. Basis of Combination

The accompanying pro-forma financial statements are presented to show the effect of the proposed merger of the Target Fund by the Acquiring Fund as if such merger had occurred on April 1, 2004. The following notes refer to the accompanying pro-forma financial statements of such proposed merger.

Under the terms of the merger, the combination of the Target Fund and Acquiring Fund will be accounted for by the method of accounting for tax-free mergers of investment companies. The merger will be accomplished by a combination of the net assets of the Target Fund into the Acquiring Fund in exchange for new shares of the Acquiring Fund at net asset value.

The Pro Forma Investment Portfolio and Pro Forma Statement of Assets and Liabilities of the Target Fund and Acquiring Fund have been combined to reflect balances as of March 31, 2005. The Pro Forma Statement of Operations of the Target Fund and Acquiring Fund has been combined to reflect twelve months ended March 31, 2005. Banc of America Capital Management, LLC. (“BACAP”) expects that all of the securities held by the Target Fund as of March 31, 2005, would comply with the compliance guidelines and/or investment restrictions of the Acquiring Fund.

Following the merger the Acquiring Fund will be the accounting survivor. In accordance with accounting principles generally accepted in the United States of America, the historical cost of investment securities will be

 

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carried forward to the Acquiring Fund and the results of operations for pre-combined periods will not be re-stated.

The accompanying pro-forma financial statements should be read in conjunction with the financial statements of the Acquiring Fund and the Target Fund included within their respective annual shareholder reports dated March 31, 2005 and October 31, 2004 for the Acquiring Fund and the Target Fund, respectively, as well as the semi-annual shareholder reports dated September 30, 2004 and April 30, 2004 for the Acquiring Fund and the Target Fund, respectively.

Note 3. Significant Accounting Policies

Security Valuation

The Acquiring Fund and the Target Fund use the identical policy for security valuation. Debt securities generally are valued by pricing services approved by the Fund’s Board of Trustees, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Certain securities may be valued based upon quotes provided by one or more principal market makers.

Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value.

Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

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.

Delayed Delivery Securities

The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” basis. This may increase the risk if the other party to the transaction fails to deliver and causes the Fund to subsequently invest at less advantageous prices. The Fund identifies cash or liquid portfolio securities in an amount equal to the delayed delivery commitment.

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, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

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 tax-exempt or 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

 

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any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.

Note 4. Fees and Compensations Paid to Affiliates

Investment Advisory Fee

BACAP, a wholly-owned subsidiary of Bank of America, N.A. (‘‘Bank of America’’), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, is the investment advisor to the Acquiring Fund. Effective December 1, 2004, BACAP is entitled to receive an investment advisory fee, calculated daily and payable monthly, based on the Fund’s average daily net assets at the following annual rates:

         
Average Daily Net Assets   Annual Fee Rate
First $500 million
    0.40 %
$500 million to $1 billion
    0.35 %
$1 billion to $1.5 billion
    0.32 %
$1.5 billion to $3 billion
    0.29 %
$3 billion to $6 million
    0.28 %
Over $6 billion
    0.27 %

Prior to December 1, 2004, BACAP received a monthly investment advisory fee at the annual rate of 0.40% of the Fund’s average daily net assets. For the year ended March 31, 2005, the Fund’s effective investment advisory fee rate was 0.40%.

Administration Fee

BACAP Distributors, LLC (‘‘BACAP Distributors’’), a wholly-owned subsidiary of Bank of America, provides administrative and other services to the Fund. Effective December 1, 2004, BACAP Distributors is entitled to receive an administration fee, computed daily and paid monthly, at the annual rate of 0.15% of the Fund’s average daily net assets. Prior to December 1, 2004, BACAP Distributors received a monthly administration fee at the annual rate of 0.22% of the Fund’s average daily net assets. For the year ended March 31, 2005, the Fund’s effective administration fee rate was 0.20%.

Transfer Agent Fee

PFPC Inc. serves as the transfer agent for the Fund’s shares. Bank of America serves as the sub-transfer agent for the Primary A Shares of the Fund. Bank of America is entitled to receive from the transfer agent a fee equal to the costs incurred by Bank of America in providing services pursuant to its obligations as sub-transfer agent at the annual rate of up to 0.01% of the net assets attributable to the Primary A shares of the Fund. For the year ended March 31, 2005, Bank of America earned $6,000 in sub-transfer agent fees from the Fund for providing such services. This amount is included in ‘‘Transfer agent fees’’ in the Fund’s Statement of Operations.

Underwriting Discounts, Service and Distribution Fees

BACAP Distributors serves as the distributor of the Fund’s shares. For the year ended March 31, 2005, the Distributor has retained net underwriting discounts of $7,000 on sales of the Fund’s Investor A shares and received net CDSC fees of $1,000, $11,000 and $500 on Investor A, Investor B and Investor C share redemptions, respectively.

The Fund has adopted shareholder servicing plans and distribution plans for the Investor B and Investor C shares of the Fund and a combined distribution and shareholder servicing plan for Investor A Shares of the Fund. The shareholder servicing plans permit the Fund to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1

 

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under the 1940 Act, permit the Fund to compensate or reimburse the distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes’ shares. Payments are made at an annual rate and paid monthly, as a percentage of average daily net assets, set from time to time by the Board of Trustees, and are charged as expenses of the Fund directly to the applicable share class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Bank of America and BACAP Distributors.

For the year ended March 31, 2005, the annual rates in effect and plan limits, as a percentage of average daily net assets, were as follows:

                 
    Current   Plan
    Rate   Limit
Investor A Combined Distribution and Shareholder Servicing Plan
    0.25 %     0.25 %
Investor B and Investor C Shareholder Servicing Plans
    0.25 %     0.25 %
Investor B and Investor C Distribution Plans
    0.75 %     0.75 %

Fees Paid to Officers and Trustees

With the exception of one officer, director or employee of Bank of America, BACAP Distributors or BACAP, or any affiliate thereof, receives any compensation from the Fund for serving as Trustee or Officer of the Trust. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. The Fund’s fee for the Office of the Chief Compliance Officer will not exceed $15,000 per year.

The Fund’s eligible Trustees may participate in a non-qualified deferred compensation plan which may be terminated at any time. All benefits provided under this plan are unfunded and any payments to plan participants are paid solely out of the Fund’s assets. Income earned on the plan participant’s deferral account is based on the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, on the rate of return of Nations Treasury Reserves, another portfolio of the Trust. The expense for the deferred compensation plan is included in ‘‘Trustees’ fees and expenses’’ in the Statement of operations. The liability for the deferred compensation plan is included in ‘‘Accrued Trustees’ fees and expenses’’ in the Statement of assets and liabilities.

Other

The Fund has made daily investments of cash balances in Nations Tax-Exempt Reserves, another portfolio of the Trust, pursuant to an exemptive order received from the Securities and Exchange Commission. The income earned by the Fund from such investments is included in its Statement of Operations as ‘‘Dividend income from affiliated funds.’’ BACAP and BACAP Distributors earn advisory and administration fees on the investments made in the Nations Tax-Exempt Reserves in addition to the advisory and administration fees earned by BACAP and BACAP Distributors from the Fund. For the year ended March 31, 2005, BACAP and BACAP Distributors earned $4,000 of investment advisory Fees and $2,000 of administration fees, respectively, related to investments in affiliated funds.

A significant portion of the Fund’s Primary A shares represents investments by fiduciary accounts over which Bank of America has either sole or joint investment discretion.

Expense Limits and Fee Reimbursements

BACAP and/or its affiliates have agreed to waive fees and reimburse the Fund through July 31, 2005 for certain expenses to the extent that total expenses (exclusive of interest expense, shareholder servicing and distribution fees) exceed 0.50% annually of the Fund’s average daily net assets.

BACAP is entitled to recover from the Fund any fees waived or expenses reimbursed by BACAP during the three year period following the date of such waiver or reimbursement, to the extent that such recovery would

 

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not cause the affected fund to exceed the expense limitations in effect at the time of recovery. There is no guarantee that these expense limitations will continue.

As of March 31, 2005, the amounts potentially recoverable by BACAP and/or BACAP Distributors pursuant to this arrangement within one year, two years and three years are $494,942, $486,395 and $456,315, respectively.

Note 5. Capital Shares

The pro-forma combining net asset value per share assumes the issuance of Acquiring Fund shares to Target Fund shareholders in connection with the proposed merger. The number of shares assumed to be issued is equal to the net asset value of the Target Fund divided by the net asset value per share of the Acquiring Fund as of March 31, 2005. The pro-forma number of shares outstanding, by class, for the combined entity consists of the following at March 31, 2005.

                         
      Shares of     Additional Shares     Total Shares
      Acquiring Fund     Assumed Issued     Outstanding
Class of Shares     Pre-Combination     with Merger     Post Combination
 
Primary A
    14,849,405       5,919,083       20,768,488  
Investor A
    1,622,982       67,416       1,690,398  
Investor B
    645,942       46,062       692,004  
Investor C
    786,301       108,467       894,768  

Note 6. Contingencies and Other Events

On February 9, 2005, BACAP and BACAP Distributors entered into an Assurance of Discontinuance with the New York Attorney General (the ‘‘NYAG Settlement’’) and consented to the entry of a cease-and-desist order by the U.S. Securities and Exchange Commission (the ‘‘SEC’’) (the ‘‘SEC Order’’). A copy of the NYAG Settlement is available as part of the Bank of America Corporation Form 8-K filing on February 10, 2005 and a copy of the SEC Order is available on the SEC’s website.

Under the terms of the SEC Order, BACAP and its affiliate, Banc of America Securities, LLC (‘‘BAS’’) have agreed, among other things, (1) to pay $250 million in disgorgement and $125 million in civil money penalties; (2) to cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; (3) to undertake various remedial measures to ensure compliance with the federal securities laws related to certain mutual fund trading practices; and (4) to retain an independent consultant to review their applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement also requires, among other things, BACAP along with Columbia Management Advisors, Inc. and Columbia Funds Distributors, Inc. — the investment advisor to and distributor of the Columbia Funds, respectively, — to reduce Columbia Funds, Nations Funds and other mutual funds management fees collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions. BACAP and BACAP Distributors are currently in the process of implementing the various terms of the NYAG Settlement and SEC Order.

Pursuant to the procedures set forth in the SEC Order, $375 million will be distributed in accordance with a distribution plan to be developed by the independent distribution consultant. The distribution plan must be based on a methodology developed in consultation with the BACAP, BACAP Distributors and the independent trustees of the Nations Funds and not unacceptable to the staff of the SEC. Although the distribution plan has not yet been formulated, it is anticipated that a significant portion of the settlement fund will be paid to shareholders or mutual funds of other mutual fund complexes that may have been harmed by the trading of the third parties referenced in the Settlements through systems provided by BAS. At this time, the distribution plan is still under development. As such, any gain to the Nations Funds or their shareholders cannot currently be determined. More specific information on the distribution plan will be communicated on a later date.

As a result of these matters or any adverse publicity or other developments resulting from them, including lawsuits

 

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brought by shareholders of the affected Nations Funds, 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 Nations Funds.

Civil Litigation

In connection with the events that resulted in the NYAG Settlement and SEC Order, various parties filed suits against Bank of America Corporation and certain of its affiliates, including BACAP and BACAP Distributors (collectively ‘‘BAC’’), Nations Funds Trust and its Board of Trustees. On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against several other mutual fund companies based on similar allegations to the United States District Court in Maryland for consolidated or coordinated pretrial proceedings (the ‘‘MDL’’). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Nations Funds Trust, the Trustees, BAC and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of Nations Funds Trust against BAC and others that asserts claims under the federal securities laws and state common law. The MDL is ongoing. Accordingly, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

Separately, a putative class action (Reinke v. Bank of America N.A., et al.) was filed against Nations Funds Trust and others on December 16, 2004 in the United States District Court for the Eastern District of Missouri relating to the conversion of common trust funds and the investment of assets held in fiduciary accounts in the Funds. Nations Funds Trust has filed a motion to dismiss that is pending, and no discovery has been taken. At the present time, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

For the fiscal year ended March 31, 2005, Bank of America Corporation has assumed $6.7 million of legal, shareholder communications, audit related, transfer agent, consulting and Trustee costs and fees incurred by the Funds impacted in connection with the regulatory and civil litigation matters discussed above. These non-recurring costs were allocated to the Funds based on their respective average nets assets for the year ended March 31, 2005. These non-recurring costs on a per Fund basis are shown in that Fund’s respective Statement of operations. Because these costs were borne by Bank of America Corporation and not any Fund, an offsetting waiver of these costs is also presented in each respective Fund’s Statement of operations as, ‘‘Costs assumed by Bank of America Corporation’’. The impact to the expense ratio of each impacted Fund is reflected in the Fund’s Financial highlights.

 

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NATIONS FLORIDA INTERMEDIATE MUNICIPAL BOND FUND
AND
NATIONS FLORIDA MUNICIPAL BOND FUND

PRO FORMA COMBINING FINANCIAL STATEMENTS
Notes to Financial Statements
March 31, 2005
(unaudited)

Note 1. Organization

Nations Florida Intermediate Municipal Bond Fund (the “Acquiring Fund”) and Nations Florida Municipal Bond Fund (the “Target Fund”), each a series of Nations Funds Trust (the “Trust”), are each a Delaware business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

Investment Goal

The Acquiring Fund seeks high current income exempt from federal income and Florida state intangibles taxes consistent with moderate fluctuations in principal. The Target Fund seeks as high current income exempt from federal income tax and the Florida state intangibles taxes with the potential for principal fluctuation associated with investments in long-term municipal securities.

Fund Shares

The Acquiring Fund and the Target Fund each may issue an unlimited number of shares and each offers four classes of shares: Primary A, Investor A, Investor B and Investor C shares. Each share class has its own expense structure.

Note 2. Basis of Combination

The accompanying pro-forma financial statements are presented to show the effect of the proposed merger of the Target Fund by the Acquiring Fund as if such merger had occurred on April 1, 2004. The following notes refer to the accompanying pro-forma financial statements of such proposed merger.

Under the terms of the merger, the combination of the Target Fund and Acquiring Fund will be accounted for by the method of accounting for tax-free mergers of investment companies. The merger will be accomplished by a combination of the net assets of the Target Fund into the Acquiring Fund in exchange for new shares of the Acquiring Fund at net asset value.

The Pro Forma Investment Portfolio and Pro Forma Statement of Assets and Liabilities of the Target Fund and Acquiring Fund have been combined to reflect balances as of March 31, 2005. The Pro Forma Statement of Operations of the Target Fund and Acquiring Fund has been combined to reflect twelve months ended March 31, 2005. Banc of America Capital Management, LLC. (“BACAP”) expects that all of the securities held by the Target Fund as of March 31, 2005, would comply with the compliance guidelines and/or investment restrictions of the Acquiring Fund.

Following the merger the Acquiring Fund will be the accounting survivor. In accordance with accounting principles generally accepted in the United States of America, the historical cost of investment securities will be

 

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carried forward to the Acquiring Fund and the results of operations for pre-combined periods will not be re-stated.

The accompanying pro-forma financial statements should be read in conjunction with the financial statements of the Acquiring Fund and the Target Fund included within their respective annual shareholder reports dated March 31, 2005, as well as the semi-annual shareholder reports dated September 30, 2004.

Note 3. Significant Accounting Policies

Security Valuation

The Acquiring Fund and the Target Fund use the identical policy for security valuation. Debt securities generally are valued by pricing services approved by the Fund’s Board of Trustees, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Certain securities may be valued based upon quotes provided by one or more principal market makers.

Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value.

Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

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.

Delayed Delivery Securities

The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” basis. This may increase the risk if the other party to the transaction fails to deliver and causes the Fund to subsequently invest at less advantageous prices. The Fund identifies cash or liquid portfolio securities in an amount equal to the delayed delivery commitment.

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, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

 

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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 tax-exempt or 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.

Note 4. Fees and Compensations Paid to Affiliates

Investment Advisory Fee

BACAP, a wholly-owned subsidiary of Bank of America, N.A. (‘‘Bank of America’’), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, is the investment advisor to the Acquiring Fund. Effective December 1, 2004, BACAP is entitled to receive an investment advisory fee, calculated daily and payable monthly, based on the Fund’s average daily net assets at the following annual rates:

         
Average Daily Net Assets   Annual Fee Rate
First $500 million
    0.40 %
$500 million to $1 billion
    0.35 %
$1 billion to $1.5 billion
    0.32 %
$1.5 billion to $3 billion
    0.29 %
$3 billion to $6 million
    0.28 %
Over $6 billion
    0.27 %

Prior to December 1, 2004, BACAP received a monthly investment advisory fee at the annual rate of 0.40% of the Fund’s average daily net assets. For the year ended March 31, 2005, the Fund’s effective investment advisory fee rate was 0.40%.

Administration Fee

BACAP Distributors, LLC (‘‘BACAP Distributors’’), a wholly-owned subsidiary of Bank of America, provides administrative and other services to the Fund. Effective December 1, 2004, BACAP Distributors is entitled to receive an administration fee, computed daily and paid monthly, at the annual rate of 0.15% of the Fund’s average daily net assets. Prior to December 1, 2004, BACAP Distributors received a monthly administration fee at the annual rate of 0.22% of the Fund’s average daily net assets. For the year ended March 31, 2005, the Fund’s effective administration fee rate was 0.20%.

Transfer Agent Fee

PFPC Inc. serves as the transfer agent for the Fund’s shares. Bank of America serves as the sub-transfer agent for the Primary A Shares of the Fund. Bank of America is entitled to receive from the transfer agent a fee equal to the costs incurred by Bank of America in providing services pursuant to its obligations as sub-transfer agent at the annual rate of up to 0.01% of the net assets attributable to the Primary A shares of the Fund. For the year ended March 31, 2005, Bank of America earned $6,000 in sub-transfer agent fees from the Fund for providing such services. This amount is included in ‘‘Transfer agent fees’’ in the Fund’s Statement of Operations.

Underwriting Discounts, Service and Distribution Fees

BACAP Distributors serves as the distributor of the Fund’s shares. For the year ended March 31, 2005, the Distributor has retained net underwriting discounts of $7,000 on sales of the Fund’s Investor A shares and received net CDSC fees of $1,000, $11,000 and $500 on Investor A, Investor B and Investor C share redemptions, respectively.

 

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The Fund has adopted shareholder servicing plans and distribution plans for the Investor B and Investor C shares of the Fund and a combined distribution and shareholder servicing plan for Investor A Shares of the Fund. The shareholder servicing plans permit the Fund to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes’ shares. Payments are made at an annual rate and paid monthly, as a percentage of average daily net assets, set from time to time by the Board of Trustees, and are charged as expenses of the Fund directly to the applicable share class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Bank of America and BACAP Distributors.

For the year ended March 31, 2005, the annual rates in effect and plan limits, as a percentage of average daily net assets, were as follows:

                 
    Current   Plan
    Rate   Limit
Investor A Combined Distribution and Shareholder Servicing Plan
    0.25 %     0.25 %
Investor B and Investor C Shareholder Servicing Plans
    0.25 %     0.25 %
Investor B and Investor C Distribution Plans
    0.75 %     0.75 %

Fees Paid to Officers and Trustees

With the exception of one officer, no officer, director or employee of Bank of America, BACAP Distributors or BACAP, or any affiliate thereof, receives any compensation from the Fund for serving as Trustee or Officer of the Trust. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. The Fund’s fee for the Office of the Chief Compliance Officer will not exceed $15,000 per year.

The Fund’s eligible Trustees may participate in a non-qualified deferred compensation plan which may be terminated at any time. All benefits provided under this plan are unfunded and any payments to plan participants are paid solely out of the Fund’s assets. Income earned on the plan participant’s deferral account is based on the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, on the rate of return of Nations Treasury Reserves, another portfolio of the Trust. The expense for the deferred compensation plan is included in ‘‘Trustees’ fees and expenses’’ in the Statement of operations. The liability for the deferred compensation plan is included in ‘‘Accrued Trustees’ fees and expenses’’ in the Statement of assets and liabilities.

Other

The Fund has made daily investments of cash balances in Nations Tax-Exempt Reserves, another portfolio of the Trust, pursuant to an exemptive order received from the Securities and Exchange Commission. The income earned by the Fund from such investments is included in its Statement of Operations as ‘‘Dividend income from affiliated funds.’’ BACAP and BACAP Distributors earn advisory and administration fees on the investments made in the Nations Tax-Exempt Reserves in addition to the advisory and administration fees earned by BACAP and BACAP Distributors from the Fund. For the year ended March 31, 2005, BACAP and BACAP Distributors earned $4,000 of investment advisory Fees and $2,000 of administration fees, respectively, related to investments in affiliated funds.

A significant portion of the Fund’s Primary A shares represents investments by fiduciary accounts over which Bank of America has either sole or joint investment discretion.

 

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Expense Limits and Fee Reimbursements

BACAP and/or its affiliates have agreed to waive fees and reimburse the Fund through July 31, 2005 for certain expenses to the extent that total expenses (exclusive of interest expense, shareholder servicing and distribution fees) exceed 0.50% annually of the Fund’s average daily net assets.

BACAP is entitled to recover from the Fund any fees waived or expenses reimbursed by BACAP during the three year period following the date of such waiver or reimbursement, to the extent that such recovery would not cause the affected fund to exceed the expense limitations in effect at the time of recovery. There is no guarantee that these expense limitations will continue.

As of March 31, 2005, the amounts potentially recoverable by BACAP and/or BACAP Distributors pursuant to this arrangement within one year, two years and three years are $494,942, $486,395 and $456,315, respectively.

Note 5. Capital Shares

The pro-forma combining net asset value per share assumes the issuance of Acquiring Fund shares to Target Fund shareholders in connection with the proposed merger. The number of shares assumed to be issued is equal to the net asset value of the Target Fund divided by the net asset value per share of the Acquiring Fund as of March 31, 2005. The pro-forma number of shares outstanding, by class, for the combined entity consists of the following at March 31, 2005.

                         
      Shares of     Additional Shares     Total Shares
      Acquiring Fund     Assumed Issued     Outstanding
Class of Shares     Pre-Combination     with Merger     Post Combination
 
Primary A
    14,849,405       4,229,739       19,079,144  
Investor A
    1,622,982       3,361,046       4,984,028  
Investor B
    645,942       743,137       1,389,079  
Investor C
    786,301       46,049       832,350  

Note 6. Contingencies and Other Events

On February 9, 2005, BACAP and BACAP Distributors entered into an Assurance of Discontinuance with the New York Attorney General (the ‘‘NYAG Settlement’’) and consented to the entry of a cease-and-desist order by the U.S. Securities and Exchange Commission (the ‘‘SEC’’) (the ‘‘SEC Order’’). A copy of the NYAG Settlement is available as part of the Bank of America Corporation Form 8-K filing on February 10, 2005 and a copy of the SEC Order is available on the SEC’s website.

Under the terms of the SEC Order, BACAP and its affiliate, Banc of America Securities, LLC (‘‘BAS’’) have agreed, among other things, (1) to pay $250 million in disgorgement and $125 million in civil money penalties; (2) to cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; (3) to undertake various remedial measures to ensure compliance with the federal securities laws related to certain mutual fund trading practices; and (4) to retain an independent consultant to review their applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement also requires, among other things, BACAP along with Columbia Management Advisors, Inc. and Columbia Funds Distributors, Inc. — the investment advisor to and distributor of the Columbia Funds, respectively, — to reduce Columbia Funds, Nations Funds and other mutual funds management fees collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions. BACAP and BACAP Distributors are currently in the process of implementing the various terms of the NYAG Settlement and SEC Order.

Pursuant to the procedures set forth in the SEC Order, $375 million will be distributed in accordance with a distribution plan to be developed by the independent distribution consultant. The distribution plan must be based on a methodology developed in consultation with the BACAP, BACAP Distributors and the independent trustees of the Nations Funds and not unacceptable to the staff of the SEC. Although the distribution plan has not yet been formulated, it is anticipated that

 

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a significant portion of the settlement fund will be paid to shareholders or mutual funds of other mutual fund complexes that may have been harmed by the trading of the third parties referenced in the Settlements through systems provided by BAS. At this time, the distribution plan is still under development. As such, any gain to the Nations Funds or their shareholders cannot currently be determined. More specific information on the distribution plan will be communicated on a later date.

As a result of these matters or any adverse publicity or other developments resulting from them, including lawsuits brought by shareholders of the affected Nations Funds, 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 Nations Funds.

Civil Litigation

In connection with the events that resulted in the NYAG Settlement and SEC Order, various parties filed suits against Bank of America Corporation and certain of its affiliates, including BACAP and BACAP Distributors (collectively ‘‘BAC’’), Nations Funds Trust and its Board of Trustees. On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against several other mutual fund companies based on similar allegations to the United States District Court in Maryland for consolidated or coordinated pretrial proceedings (the ‘‘MDL’’). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Nations Funds Trust, the Trustees, BAC and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of Nations Funds Trust against BAC and others that asserts claims under the federal securities laws and state common law. The MDL is ongoing. Accordingly, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

Separately, a putative class action (Reinke v. Bank of America N.A., et al.) was filed against Nations Funds Trust and others on December 16, 2004 in the United States District Court for the Eastern District of Missouri relating to the conversion of common trust funds and the investment of assets held in fiduciary accounts in the Funds. Nations Funds Trust has filed a motion to dismiss that is pending, and no discovery has been taken. At the present time, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

For the fiscal year ended March 31, 2005, Bank of America Corporation has assumed $6.7 million of legal, shareholder communications, audit related, transfer agent, consulting and Trustee costs and fees incurred by the Funds impacted in connection with the regulatory and civil litigation matters discussed above. These non-recurring costs were allocated to the Funds based on their respective average nets assets for the year ended March 31, 2005. These non-recurring costs on a per Fund basis are shown in that Fund’s respective Statement of operations. Because these costs were borne by Bank of America Corporation and not any Fund, an offsetting waiver of these costs is also presented in each respective Fund’s Statement of operations as, ‘‘Costs assumed by Bank of America Corporation’’. The impact to the expense ratio of each impacted Fund is reflected in the Fund’s Financial highlights.

 

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NATIONS FLORIDA INTERMEDIATE MUNICIPAL BOND FUND,
COLUMBIA FLORIDA INTERMEDIATE MUNICIPAL BOND FUND
AND
NATIONS FLORIDA MUNICIPAL BOND FUND

PRO FORMA COMBINING FINANCIAL STATEMENTS
Notes to Financial Statements
March 31, 2005
(unaudited)

Note 1. Organization

Nations Florida Intermediate Municipal Bond Fund (the “Acquiring Fund”), a series of Nations Funds Trust (the “Trust”), is a Delaware business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Columbia Florida Intermediate Municipal Bond Fund and Nations Florida Municipal Bond Fund (collectively the “Target Funds”), are each registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

Investment Goal

The Acquiring Fund seeks high current income exempt from federal income and Florida state intangibles taxes consistent with moderate fluctuations in principal. Columbia Florida Intermediate Municipal Bond Fund seeks as high a level of current interest income exempt from federal income tax and, to the extent possible, from the personal income tax of Florida, as is consistent with relative stability of principal. Nations Florida Municipal Bond Fund seeks as high current income exempt from federal income tax and the Florida state intangibles taxes with the potential for principal fluctuation associated with investments in long-term municipal securities.

Fund Shares

The Acquiring Fund and the Target Funds each may issue an unlimited number of shares. The Acquiring Fund and Nations Florida Municipal Bond Fund each offer four classes of shares: Primary A, Investor A, Investor B and Investor C shares. Columbia Florida Intermediate Municipal Bond Fund also offers four classes of shares: Class A, Class B, Class C, and Class Z shares. Each share class has its own expense structure.

Note 2. Basis of Combination

The accompanying pro-forma financial statements are presented to show the effect of the proposed merger of the Target Funds by the Acquiring Fund as if such merger had occurred on April 1, 2004. The following notes refer to the accompanying pro-forma financial statements of such proposed merger.

Under the terms of the merger, the combination of the Target Funds and Acquiring Fund will be accounted for by the method of accounting for tax-free mergers of investment companies. The merger will be accomplished by a combination of the net assets of the Target Funds into the Acquiring Fund in exchange for new shares of the Acquiring Fund at net asset value.

The Pro Forma Investment Portfolio and Pro Forma Statement of Assets and Liabilities of the Targets Fund and Acquiring Fund have been combined to reflect balances as of March 31, 2005. The Pro Forma Statement of Operations of the Targets Fund and Acquiring Fund has been combined to reflect twelve months ended March 31, 2005. Banc of America Capital Management, LLC. (“BACAP”) expects that all of the securities held by the

 

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Target Funds as of March 31, 2005, would comply with the compliance guidelines and/or investment restrictions of the Acquiring Fund.

Following the merger the Acquiring Fund will be the accounting survivor. In accordance with accounting principles generally accepted in the United States of America, the historical cost of investment securities will be carried forward to the Acquiring Fund and the results of operations for pre-combined periods will not be re-stated.

The accompanying pro-forma financial statements should be read in conjunction with the financial statements of the Acquiring Fund and the Target Funds included within their respective annual and semi-annual shareholder reports. The annual shareholder reports are dated March 31, 2005 for the Acquiring Fund and Nations Florida Municipal Bond Fund and October 31, 2004 for Columbia Florida Intermediate Municipal Bond Fund. The semi-annual shareholder reports are dated September 30, 2004 for the Acquiring Fund and Nations Florida Municipal Bond Fund and April 30, 2004 for Columbia Florida Intermediate Municipal Bond Fund.

Note 3. Significant Accounting Policies

Security Valuation

The Acquiring Fund and the Target Fund use the identical policy for security valuation. Debt securities generally are valued by pricing services approved by the Fund’s Board of Trustees, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Certain securities may be valued based upon quotes provided by one or more principal market makers.

Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value.

Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

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.

Delayed Delivery Securities

The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” basis. This may increase the risk if the other party to the transaction fails to deliver and causes the Fund to subsequently invest at less advantageous prices. The Fund identifies cash or liquid portfolio securities in an amount equal to the delayed delivery commitment.

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, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

 

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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 tax-exempt or 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.

Note 4. Fees and Compensations Paid to Affiliates

Investment Advisory Fee

BACAP, a wholly-owned subsidiary of Bank of America, N.A. (‘‘Bank of America’’), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, is the investment advisor to the Acquiring Fund. Effective December 1, 2004, BACAP is entitled to receive an investment advisory fee, calculated daily and payable monthly, based on the Fund’s average daily net assets at the following annual rates:

         
Average Daily Net Assets   Annual Fee Rate
First $500 million
    0.40 %
$500 million to $1 billion
    0.35 %
$1 billion to $1.5 billion
    0.32 %
$1.5 billion to $3 billion
    0.29 %
$3 billion to $6 million
    0.28 %
Over $6 billion
    0.27 %

Prior to December 1, 2004, BACAP received a monthly investment advisory fee at the annual rate of 0.40% of the Fund’s average daily net assets. For the year ended March 31, 2005, the Fund’s effective investment advisory fee rate was 0.40%.

Administration Fee

BACAP Distributors, LLC (‘‘BACAP Distributors’’), a wholly-owned subsidiary of Bank of America, provides administrative and other services to the Fund. Effective December 1, 2004, BACAP Distributors is entitled to receive an administration fee, computed daily and paid monthly, at the annual rate of 0.15% of the Fund’s average daily net assets. Prior to December 1, 2004, BACAP Distributors received a monthly administration fee at the annual rate of 0.22% of the Fund’s average daily net assets. For the year ended March 31, 2005, the Fund’s effective administration fee rate was 0.20%.

Transfer Agent Fee

PFPC Inc. serves as the transfer agent for the Fund’s shares. Bank of America serves as the sub-transfer agent for the Primary A Shares of the Fund. Bank of America is entitled to receive from the transfer agent a fee equal to the costs incurred by Bank of America in providing services pursuant to its obligations as sub-transfer agent at the annual rate of up to 0.01% of the net assets attributable to the Primary A shares of the Fund. For the year ended March 31, 2005, Bank of America earned $6,000 in sub-transfer agent fees from the Fund for providing such services. This amount is included in ‘‘Transfer agent fees’’ in the Fund’s Statement of Operations.

Underwriting Discounts, Service and Distribution Fees

BACAP Distributors serves as the distributor of the Fund’s shares. For the year ended March 31, 2005, the Distributor has retained net underwriting discounts of $7,000 on sales of the Fund’s Investor A shares and

 

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received net CDSC fees of $1,000, $11,000 and $500 on Investor A, Investor B and Investor C share redemptions, respectively.

The Fund has adopted shareholder servicing plans and distribution plans for the Investor B and Investor C shares of the Fund and a combined distribution and shareholder servicing plan for Investor A Shares of the Fund. The shareholder servicing plans permit the Fund to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes’ shares. Payments are made at an annual rate and paid monthly, as a percentage of average daily net assets, set from time to time by the Board of Trustees, and are charged as expenses of the Fund directly to the applicable share class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Bank of America and BACAP Distributors.

For the year ended March 31, 2005, the annual rates in effect and plan limits, as a percentage of average daily net assets, were as follows:

                 
    Current   Plan
    Rate   Limit
Investor A Combined Distribution and Shareholder Servicing Plan
    0.25 %     0.25 %
Investor B and Investor C Shareholder Servicing Plans
    0.25 %     0.25 %
Investor B and Investor C Distribution Plans
    0.75 %     0.75 %

Fees Paid to Officers and Trustees

With the exception of one officer, no officer, director or employee of Bank of America, BACAP Distributors or BACAP, or any affiliate thereof, receives any compensation from the Fund for serving as Trustee or Officer of the Trust. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. The Fund’s fee for the Office of the Chief Compliance Officer will not exceed $15,000 per year.

The Fund’s eligible Trustees may participate in a non-qualified deferred compensation plan which may be terminated at any time. All benefits provided under this plan are unfunded and any payments to plan participants are paid solely out of the Fund’s assets. Income earned on the plan participant’s deferral account is based on the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, on the rate of return of Nations Treasury Reserves, another portfolio of the Trust. The expense for the deferred compensation plan is included in ‘‘Trustees’ fees and expenses’’ in the Statement of operations. The liability for the deferred compensation plan is included in ‘‘Accrued Trustees’ fees and expenses’’ in the Statement of assets and liabilities.

Other

The Fund has made daily investments of cash balances in Nations Tax-Exempt Reserves, another portfolio of the Trust, pursuant to an exemptive order received from the Securities and Exchange Commission. The income earned by the Fund from such investments is included in its Statement of Operations as ‘‘Dividend income from affiliated funds.’’ BACAP and BACAP Distributors earn advisory and administration fees on the investments made in the Nations Tax Exempt Reserves in addition to the advisory and administration fees earned by BACAP and BACAP Distributors from the Fund. For the year ended March 31, 2005, BACAP and BACAP Distributors earned $4,000 of investment advisory Fees and $2,000 of administration fees, respectively, related to investments in affiliated funds.

A significant portion of the Fund’s Primary A shares represents investments by fiduciary accounts over which Bank of America has either sole or joint investment discretion.

 

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Expense Limits and Fee Reimbursements

BACAP and/or its affiliates have agreed to waive fees and reimburse the Fund through July 31, 2005 for certain expenses to the extent that total expenses (exclusive of interest expense, shareholder servicing and distribution fees) exceed 0.50% annually of the Fund’s average daily net assets.

BACAP is entitled to recover from the Fund any fees waived or expenses reimbursed by BACAP during the three year period following the date of such waiver or reimbursement, to the extent that such recovery would not cause the affected fund to exceed the expense limitations in effect at the time of recovery. There is no guarantee that these expense limitations will continue.

As of March 31, 2005, the amounts potentially recoverable by BACAP and/or BACAP Distributors pursuant to this arrangement within one year, two years and three years are $494,942, $486,395 and $456,315, respectively.

Note 5. Capital Shares

The pro-forma combining net asset value per share assumes the issuance of Acquiring Fund shares to Target Fund shareholders in connection with the proposed merger. The number of shares assumed to be issued is equal to the net asset value of the Target Fund divided by the net asset value per share of the Acquiring Fund as of March 31, 2005. The pro-forma number of shares outstanding, by class, for the combined entity consists of the following at March 31, 2005.

                         
      Shares of     Additional Shares     Total Shares
      Acquiring Fund     Assumed Issued     Outstanding
Class of Shares     Pre-Combination     with Merger     Post Combination
 
Primary A
    14,849,405       10,156,684       25,006,089  
Investor A
    1,622,982       3,427,680       5,050,662  
Investor B
    645,942       789,199       1,435,141  
Investor C
    786,301       154,516       940,817  

Note 6. Contingencies and Other Events

On February 9, 2005, BACAP and BACAP Distributors entered into an Assurance of Discontinuance with the New York Attorney General (the ‘‘NYAG Settlement’’) and consented to the entry of a cease-and-desist order by the U.S. Securities and Exchange Commission (the ‘‘SEC’’) (the ‘‘SEC Order’’). A copy of the NYAG Settlement is available as part of the Bank of America Corporation Form 8-K filing on February 10, 2005 and a copy of the SEC Order is available on the SEC’s website.

Under the terms of the SEC Order, BACAP and its affiliate, Banc of America Securities, LLC (‘‘BAS’’) have agreed, among other things, (1) to pay $250 million in disgorgement and $125 million in civil money penalties; (2) to cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; (3) to undertake various remedial measures to ensure compliance with the federal securities laws related to certain mutual fund trading practices; and (4) to retain an independent consultant to review their applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement also requires, among other things, BACAP along with Columbia Management Advisors, Inc. and Columbia Funds Distributors, Inc. — the investment advisor to and distributor of the Columbia Funds, respectively, — to reduce Columbia Funds, Nations Funds and other mutual funds management fees collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions. BACAP and BACAP Distributors are currently in the process of implementing the various terms of the NYAG Settlement and SEC Order.

Pursuant to the procedures set forth in the SEC Order, $375 million will be distributed in accordance with a distribution plan to be developed by the independent distribution consultant. The distribution plan must be based on a methodology developed in consultation with the BACAP, BACAP Distributors and the independent trustees of the Nations Funds and

 

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not unacceptable to the staff of the SEC. Although the distribution plan has not yet been formulated, it is anticipated that a significant portion of the settlement fund will be paid to shareholders or mutual funds of other mutual fund complexes that may have been harmed by the trading of the third parties referenced in the Settlements through systems provided by BAS. At this time, the distribution plan is still under development. As such, any gain to the Nations Funds or their shareholders cannot currently be determined. More specific information on the distribution plan will be communicated on a later date.

As a result of these matters or any adverse publicity or other developments resulting from them, including lawsuits brought by shareholders of the affected Nations Funds, 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 Nations Funds.

Civil Litigation

In connection with the events that resulted in the NYAG Settlement and SEC Order, various parties filed suits against Bank of America Corporation and certain of its affiliates, including BACAP and BACAP Distributors (collectively ‘‘BAC’’), Nations Funds Trust and its Board of Trustees. On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against several other mutual fund companies based on similar allegations to the United States District Court in Maryland for consolidated or coordinated pretrial proceedings (the ‘‘MDL’’). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Nations Funds Trust, the Trustees, BAC and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of Nations Funds Trust against BAC and others that asserts claims under the federal securities laws and state common law. The MDL is ongoing. Accordingly, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

Separately, a putative class action (Reinke v. Bank of America N.A., et al.) was filed against Nations Funds Trust and others on December 16, 2004 in the United States District Court for the Eastern District of Missouri relating to the conversion of common trust funds and the investment of assets held in fiduciary accounts in the Funds. Nations Funds Trust has filed a motion to dismiss that is pending, and no discovery has been taken. At the present time, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

For the fiscal year ended March 31, 2005, Bank of America Corporation has assumed $6.7 million of legal, shareholder communications, audit related, transfer agent, consulting and Trustee costs and fees incurred by the Funds impacted in connection with the regulatory and civil litigation matters discussed above. These non-recurring costs were allocated to the Funds based on their respective average nets assets for the year ended March 31, 2005. These non-recurring costs on a per Fund basis are shown in that Fund’s respective Statement of operations. Because these costs were borne by Bank of America Corporation and not any Fund, an offsetting waiver of these costs is also presented in each respective Fund’s Statement of operations as, ‘‘Costs assumed by Bank of America Corporation’’. The impact to the expense ratio of each impacted Fund is reflected in the Fund’s Financial highlights.

 

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Pro forma Combining
Portfolio of Investments
As of 3/31/05

                                                                                         
                                    Columbia Fixed Income Securities Fund     Nations Bond Fund              
                                    Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
            Rate (%)     Maturity             Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
CORPORATE NOTES AND BONDS
                             26.2 %                                                        
BASIC MATERIALS
                             1.2 %                                                        
Chemicals
                             0.6 %                                                        
Airgas, Inc.
             9.125       10/01/2011             $ 140,000     $ 152,250     $ —     $ —       —     $ 140,000     $ 152,250  
Dow Chemical Co.
             6.125       2/1/2011               —       —       1,994,000       2,134,096       —       1,994,000       2,134,096  
Dow Chemical Co.
             7.375       11/1/2029               —       —       2,716,000       3,309,231       —       2,716,000       3,309,231  
Eastman Chemical Co
             3.250       6/15/2008               —       —       1,218,000       1,167,018       —       1,218,000       1,167,018  
Eastman Chemical Co
             6.300       11/15/2018               —       —       2,428,000       2,592,987       —       2,428,000       2,592,987  
EI Du Pont de Nemours & Co
             3.375       11/15/2007               —       —       2,108,000       2,060,001       —       2,108,000       2,060,001  
Equistar Chemicals LP
             10.125       9/1/2008               25,000       27,500       —       —       —       25,000       27,500  
Equistar Chemicals LP
             10.625       5/1/2011               100,000       112,750       700,000       785,750       —       800,000       898,500  
Ethyl Corp.
             8.875       5/1/2010               50,000       53,500       —       —       —       50,000       53,500  
Huntsman International LLC
     (a )(b)     7.375       1/1/2015               —       —       190,000       189,050       —       190,000       189,050  
MacDermid, Inc.
             9.125       7/15/2011               115,000       124,631       —       —       —       115,000       124,631  
Nalco Co.
             7.750       11/15/2011               75,000       78,375       —       —       —       75,000       78,375  
Praxair Inc
             4.750       7/15/2007               —       —       1,989,000       2,004,341       —       1,989,000       2,004,341  
Praxair Inc
             6.500       3/1/2008               —       —       2,325,000       2,442,015       —       2,325,000       2,442,015  
Rhodia SA
     (b )     8.875       6/1/2011               —       —       410,000       398,725       —       410,000       398,725  
 
                                                                                  
Chemicals Total
                                             549,006               17,083,215                       17,632,222  
 
                                                                                  
 
Forest Products and Paper
                             0.4 %                                                        
Abitibi-Consolidated, Inc.
             8.375       4/1/2015               —       —       210,000       204,225       —       210,000       204,225  
Boise Cascade LLC
             7.125       10/15/2014               200,000       203,500       —       —       —       200,000       203,500  
Fraser Papers, Inc.
             8.750       3/15/2015               —       —       230,000       216,200       —       230,000       216,200  
International Paper Co
             4.250       1/15/2009               510,000       500,738       2,317,000       2,285,537       —       2,827,000       2,786,276  
JSG Holdings PLC
     (a )(b)     11.500       10/1/2015     EUR      —       —       865,000       1,045,503       —       865,000       1,045,503  
MeadWestvaco Corp
             6.850       4/1/2012     $       —       —       1,705,000       1,901,593       —       1,705,000       1,901,593  
Newark Group, Inc.
             9.750       3/15/2014               —       —       320,000       324,800       —       320,000       324,800  
Norske Skog Canada
             8.625       6/15/2011               —       —       245,000       253,575       —       245,000       253,575  
Tembec Industries, Inc.
             8.500       2/1/2011               —       —       200,000       189,500       —       200,000       189,500  
Westvaco Corp
             8.200       1/15/2030               —       —       2,710,000       3,423,814       —       2,710,000       3,423,814  
 
                                                                                  
Forest Products and Paper Total
                                             704,238               9,844,748                       10,548,987  
 
                                                                                  
 
Iron/Steel
                             0.0 %                                                        
Russel Metals, Inc.
             6.375       3/1/2014               135,000       131,625       —       —       —       135,000       131,625  
Wise Metals Group LLC
     (b )     10.250       5/15/2012               —       —       500,000       505,000       —       500,000       505,000  
 
                                                                                  
Iron/Steel Total
                                             131,625               505,000                       636,625  
 
                                                                                  
 
Metals and Mining
                             0.2 %                                                        
Alcan, Inc.
             7.250       3/15/2031               1,000,000       1,215,520       —       —       —       1,000,000       1,215,520  
Alcoa, Inc.
             7.375       8/1/2010               —       —       3,385,000       3,806,094       —       3,385,000       3,806,094  
CODELCO, Inc.
     (a )     5.500       10/15/2013               —       —       1,683,000       1,700,533       —       1,683,000       1,700,533  
Hudson Bay Mining and Smelting Co., Ltd.
     (a )     9.625       1/15/2012               —       —       130,000       130,000       —       130,000       130,000  
 
                                                                                  
Metals and Mining Total
                                             1,215,520               5,636,627                       6,852,147  
 
                                                                                  
TOTAL BASIC MATERIALS
                                             2,600,390               33,069,591                       35,669,981  
 
                                                                                  
 
COMMUNICATIONS
                             3.7 %                                                        
Advertising
                             0.1 %                                                        
Advanstar Communications, Inc.
             12.000       2/15/2011               —       —       1,200,000       1,287,000       —       1,200,000       1,287,000  
WDAC Subsidiary Corp.
     (a )(b)     8.375       12/1/2014               —       —       500,000       465,000       —       500,000       465,000  

 

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                                    Columbia Fixed Income Securities Fund     Nations Bond Fund              
                                    Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
            Rate (%)     Maturity             Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
Advertising Total
                                             —               1,752,000                       1,752,000  
 
                                                                                  
Media
                             1.7 %                                                        
CBD Media Holdings LLC, Inc.
             9.250       7/15/2012               —       —       400,000       408,000       —       400,000       408,000  
Charter Communications LLC
     (c )     9.920       4/1/2011               —       —       1,275,000       978,563       —       1,275,000       978,563  
Comcast Cable Communications
             7.125       6/15/2013               —       —       1,550,000       1,724,350       —       1,550,000       1,724,350  
Comcast Corp.
             7.050       3/15/2033               870,000       973,130       4,000,000       4,473,960       —       4,870,000       5,447,090  
CSC Holdings, Inc.
     (a )     6.750       4/15/2012               —       —       1,600,000       1,588,000       —       1,600,000       1,588,000  
Dex Media East LLC/Dex Media East Finance Co.
             9.875       11/15/2009               —       —       1,000,000       1,100,000       —       1,000,000       1,100,000  
Dex Media West
             5.875       11/15/2011               170,000       163,200       —       —       —       170,000       163,200  
Dex Media, Inc.
     (c )             11/15/2013               —       —       600,000       456,000       —       600,000       456,000  
DirecTV Holdings LLC/DirecTV Financing Co.
             8.375       3/15/2013               245,000       263,988       240,000       259,800       —       485,000       523,788  
EchoStar DBS Corp.
             5.750       10/1/2008               320,000       316,000       —       —       —       320,000       316,000  
EchoStar DBS Corp.
             6.625       10/1/2014               105,000       101,325       —       —       —       105,000       101,325  
Emmis Operating Co.
             6.875       5/15/2012               75,000       73,125       —       —       —       75,000       73,125  
Fisher Communications, Inc.
             8.625       9/15/2014               —       —       215,000       230,050       —       215,000       230,050  
Granite Broadcasting Corp.
     (b )     9.750       12/1/2010               —       —       280,000       260,400       —       280,000       260,400  
Hollinger, Inc.
     (a )     12.875       3/1/2011               —       —       460,000       507,150       —       460,000       507,150  
Lamar Media Corp.
             7.250       1/1/2013               225,000       235,406       —       —       —       225,000       235,406  
LIN Television Corp.
             6.500       5/15/2013               200,000       195,000       —       —       —       200,000       195,000  
Liberty Media Corp
             3.500       9/25/2006               —       —       6,456,000       6,362,879       —       6,456,000       6,362,879  
News America Holdings, Inc.
             6.625       1/9/2008               —       —       166,000       174,396       —       166,000       174,396  
News America Holdings, Inc.
             8.150       10/17/1936               —       —       3,650,000       4,514,203       —       3,650,000       4,514,203  
News America Holdings, Inc.
             9.250       2/1/2013               —       —       647,000       807,483       —       647,000       807,483  
News America, Inc.
             6.550       3/15/2033               —       —       840,000       875,284       —       840,000       875,284  
Paxson Communications
                     1/15/2009               —       —       175,000       162,750       —       175,000       162,750  
Paxson Communications
     (b )     10.750       7/15/2006               —       —       390,000       387,075       —       390,000       387,075  
Primedia, Inc.
             8.875       5/15/2011               —       —       500,000       521,250       —       500,000       521,250  
Quebecor Media, Inc.
             11.125       7/15/2011               —       —       500,000       552,500       —       500,000       552,500  
R.H. Donnelley Finance Corp.
             10.875       12/15/2012               75,000       86,250       —       —       —       75,000       86,250  
R.H. Donnelley Finance Corp.
             10.875       12/15/2012               160,000       184,000       —       —       —       160,000       184,000  
Rogers Cable, Inc.
             7.875       5/1/2012               255,000       269,663       —       —       —       255,000       269,663  
Sinclair Broadcast Group, Inc.
             8.750       12/15/2011               —       —       500,000       525,000       —       500,000       525,000  
Spanish Broadcasting System, Inc.
             9.625       11/1/2009               —       —       1,000,000       1,047,500       —       1,000,000       1,047,500  
TCI Communications, Inc.
             7.250       8/1/2005               500,000       505,810       —       —       —       500,000       505,810  
TCI Communications, Inc.
             9.875       6/15/2022               —       —       2,159,000       3,039,622       —       2,159,000       3,039,622  
Time Warner, Inc.
             6.150       5/1/2007               —       —       3,000,000       3,096,594       —       3,000,000       3,096,594  
Time Warner, Inc.
             6.625       5/15/2029               1,310,000       1,405,565       —       —       —       1,310,000       1,405,565  
Time Warner, Inc.
             8.110       8/15/2006               —       —       1,740,000       1,822,988       —       1,740,000       1,822,988  
Time Warner, Inc.
             9.125       1/15/2013               —       —       2,472,000       3,054,438       —       2,472,000       3,054,438  
Viacom Inc
             5.625       5/1/2007               —       —       1,852,000       1,895,533       —       1,852,000       1,895,533  
Walt Disney Co
             5.500       12/29/2006               —       —       2,179,000       2,221,752       —       2,179,000       2,221,752  
XM Satellite Radio, Inc.
     (d )     8.243       5/1/2009               —       —       355,000       360,325       —       355,000       360,325  
 
                                                                                  
Media Total
                                             4,772,461               43,407,844                       48,180,304  
 
                                                                                  
 
Telecommunications
                             2.0 %                                                        
American Towers, Inc.
             7.250       12/1/2011               —       —       250,000       258,125       —       250,000       258,125  
AT&T Wireless Services, Inc.
             8.750       3/1/2031               1,200,000       1,575,660       —       —       —       1,200,000       1,575,660  
BellSouth Corp
             5.000       10/15/2006               —       —       3,803,000       3,854,097       —       3,803,000       3,854,097  
Cincinnati Bell, Inc.
     (b )     8.375       1/15/2014               —       —       500,000       492,500       —       500,000       492,500  
Deutsche Telekom International Finance BV
             8.500       6/15/2010               1,390,000       1,605,909       —       —       —       1,390,000       1,605,909  
Dobson Communications Corp.
     (b )     8.875       10/1/2013               —       —       445,000       349,325       —       445,000       349,325  
Inmarsat Finance PLC
     (c )             11/15/2012               —       —       350,000       246,750       —       350,000       246,750  
Intelsat Bermuda Ltd.
     (a )     8.250       1/15/2013               —       —       360,000       363,600       —       360,000       363,600  

 

Table of Contents

                                                                                         
                                    Columbia Fixed Income Securities Fund     Nations Bond Fund              
                                    Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
              Rate (%)       Maturity             Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
Nextel Communications, Inc.
             6.875       10/31/2013               40,000       41,700       —       —       —       40,000       41,700  
Nextel Communications, Inc.
             7.375       8/1/2015               350,000       369,250       1,000,000       1,056,250       —       1,350,000       1,425,500  
Nextel Partners, Inc.
             8.125       7/1/2011               —       —       500,000       531,250       —       500,000       531,250  
Qwest Capital Funding, Inc.
     (b )     7.250       2/15/2011               —       —       870,000       811,275       —       870,000       811,275  
Qwest Services Corp.
     (a )     14.000       12/15/2010               —       —       1,000,000       1,157,500       —       1,000,000       1,157,500  
Rogers Wireless, Inc.
             7.500       3/15/2015               30,000       30,900       —       —       —       30,000       30,900  
Rogers Wireless, Inc.
             8.000       12/15/2012               140,000       143,850       —       —       —       140,000       143,850  
Rogers Wireless, Inc.
             9.750       6/1/2016               —       —       315,000       371,700       —       315,000       371,700  
SBC Communications Inc
             5.750       5/2/2006               —       —       7,197,000       7,328,511       —       7,197,000       7,328,511  
Sprint Capital Corp
             6.125       11/15/2008               —       —       1,009,000       1,054,618       —       1,009,000       1,054,618  
Sprint Capital Corp
             6.875       11/15/2028               950,000       1,013,451       —       —       —       950,000       1,013,451  
Sprint Capital Corp
             8.375       3/15/2012               —       —       5,223,000       6,104,110       —       5,223,000       6,104,110  
Sprint Capital Corp
             8.750       3/15/2032               —       —       2,977,000       3,862,244       —       2,977,000       3,862,244  
Telcordia Technologies
     (a )     10.000       3/15/2013               —       —       95,000       94,288       —       95,000       94,288  
Telus Corp
             7.500       6/1/2007               —       —       7,873,000       8,380,218       —       7,873,000       8,380,218  
Time Warner Telecom, Inc.
     (b )     9.750       7/15/2008               —       —       350,000       341,250       —       350,000       341,250  
Time Warner Telecom, Inc.
     (b )     10.125       2/1/2011               —       —       205,000       197,825       —       205,000       197,825  
US LEC Corp.
     (d )     10.670       10/1/2009               —       —       175,000       179,375       —       175,000       179,375  
US Unwired, Inc.
             10.000       6/15/2012               —       —       500,000       553,750       —       500,000       553,750  
Verizon Global Funding Corp
             7.750       12/1/2030               1,700,000       2,044,624       159,000       192,167       —       1,859,000       2,236,791  
Verizon Pennsylvania, Inc
             5.650       11/15/2011               —       —       9,157,000       9,401,986       —       9,157,000       9,401,986  
Vodafone Group PLC
             7.750       2/15/2010               1,500,000       1,691,130       —       —       —       1,500,000       1,691,130  
Western Wireless Corp.
             9.250       7/15/2013               —       —       500,000       570,000       —       500,000       570,000  
Zeus Special Subsidiary Ltd.
     (a)( c )             2/1/2015               —       —       270,000       170,775       —       270,000       170,775  
 
                                                                                  
Telecommunications Total
                                             8,516,473               47,923,488                       56,439,961  
 
                                                                                  
TOTAL COMMUNICATIONS
                                             13,288,934               93,083,332                       106,372,265  
 
                                                                                  
 
CONSUMER CYCLICAL
                             2.1 %                                                        
Airlines
                             0.1 %                                                        
Continental Airlines, Inc.
             7.461       4/1/2015               —       —       2,956,565       2,777,937       —       2,956,565       2,777,937  
Continental Airlines, Inc.
             7.568       12/1/2006               —       —       500,000       398,054       —       500,000       398,054  
Northwest Airlines, Inc.
     (b )     9.875       3/15/2007               —       —       760,000       566,200       —       760,000       566,200  
 
                                                                                  
Airlines Total
                                             —               3,742,191                       3,742,191  
 
                                                                                  
 
Apparel
                             0.1 %                                                        
Jones Apparel Group, Inc.
     (a )     6.125       11/15/2034               —       —       3,300,000       3,076,762       —       3,300,000       3,076,762  
Levi Strauss & Co.
     (a )(b)     9.750       1/15/2015               —       —       650,000       638,625       —       650,000       638,625  
Philips-Van Heusen Corp.
             8.125       5/1/2013               —       —       300,000       314,250       —       300,000       314,250  
 
                                                                                  
Apparel Total
                                             —               4,029,637                       4,029,637  
 
                                                                                  
 
Auto Manufacturers
                             0.5 %                                                        
DaimlerChrysler NA Holding Corp
             4.050       6/4/2008               —       —       6,697,000       6,503,725       —       6,697,000       6,503,725  
DaimlerChrysler NA Holding Corp
             8.500       1/18/2031               675,000       809,244       —       —       —       675,000       809,244  
Ford Motor Co.
     (b )     7.450       7/16/2031               —       —       7,734,000       6,996,060       —       7,734,000       6,996,060  
Navistar International Corp.
             7.500       6/15/2011               —       —       215,000       216,613       —       215,000       216,613  
 
                                                                                  
Auto Manufacturers Total
                                             809,244               13,716,397                       14,525,641  
 
                                                                                  
 
Auto Parts and Equipment
                             0.1 %                                                        
Cooper-Standard Automotive, Inc.
     (a )     8.375       12/15/2014               —       —       400,000       325,000       —       400,000       325,000  
Delco Remy International, Inc.
     (b )     9.375       4/15/2012               —       —       250,000       210,000       —       250,000       210,000  
Dura Operating Corp.
             8.625       4/15/2012               —       —       350,000       322,875       —       350,000       322,875  
Goodyear Tire & Rubber Co.
     (b )     7.857       8/15/2011               —       —       700,000       675,500       —       700,000       675,500  
 
                                                                                  
Auto Parts and Equipment Total
                                             —               1,533,375                       1,533,375  
 
                                                                                  

 

Table of Contents

                                                                                         
                                    Columbia Fixed Income Securities Fund     Nations Bond Fund              
                                    Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
              Rate (%)       Maturity             Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
Distribution/wholesale
                             0.0 %                                                        
Buhrmann US, Inc.
     (a )(b)     7.875       3/1/2015               —       —       130,000       130,000       —       130,000       130,000  
 
                                                                                  
Distribution/wholesale Total
                                             —               130,000                       130,000  
 
                                                                                  
Entertainment
                             0.2 %                                                        
AMC Entertainment, Inc.
     (b )     9.875       2/1/2012               —       —       605,000       638,275       —       605,000       638,275  
Cinemark USA, Inc.
             9.000       2/1/2013               185,000       200,725       —       —       —       185,000       200,725  
LCE Acquisition Corp.
     (a )     9.000       8/1/2014               —       —       600,000       597,000       —       600,000       597,000  
Mohegan Tribal Gaming Authority
     (a )     6.125       2/15/2013               —       —       170,000       166,600       —       170,000       166,600  
Penn National Gaming, Inc.
     (a )(b)     6.750       3/1/2015               —       —       310,000       305,350       —       310,000       305,350  
River Rock Entertainment Authority
             9.750       11/1/2011               —       —       370,000       405,150       —       370,000       405,150  
Seneca Gaming Corp.
             7.250       5/1/2012               —       —       280,000       278,600       —       280,000       278,600  
Six Flags, Inc.
             9.625       6/1/2014               —       —       665,000       613,463       —       665,000       613,463  
Speedway Motor Sports, Inc.
             6.750       6/1/2013               190,000       192,375       —       —       —       190,000       192,375  
Warner Music Group
             7.375       4/15/2014               110,000       114,125       600,000       618,000       —       710,000       732,125  
WMG Holdings Corp.
     (a )     9.760       12/15/2014               —       —       230,000       231,150       —       230,000       231,150  
 
                                                                                  
Entertainment Total
                                             507,225               3,853,588                       4,360,813  
 
                                                                                  
 
Home Builders
                             0.3 %                                                        
Beazer Homes USA, Inc.
             6.500       11/15/2013               —       —       3,662,000       3,579,605       —       3,662,000       3,579,605  
K. Hovnanian Enterprises, Inc.
             6.500       1/15/2014               —       —       1,820,000       1,779,050       —       1,820,000       1,779,050  
KB Home
             5.750       2/1/2014               —       —       2,455,000       2,351,463       —       2,455,000       2,351,463  
KB Home
             8.625       12/15/2008               350,000       382,375       —       —       —       350,000       382,375  
Toll Corp.
             8.250       12/1/2011               350,000       375,375       —       —       —       350,000       375,375  
 
                                                                                  
Home Builders Total
                                             757,750               7,710,118                       8,467,868  
 
                                                                                  
 
Home Furnishings
                             0.0 %                                                        
ALH Finance LLC
     (b )     8.500       1/15/2013               —       —       280,000       273,000       —       280,000       273,000  
WII Components, Inc.
             10.000       2/15/2012               —       —       300,000       307,500       —       300,000       307,500  
 
                                                                                  
Home Furnishings Total
                                             —               580,500                       580,500  
 
                                                                                  
 
Leisure Time
                             0.1 %                                                        
AMF Bowling Worldwide, Inc.
             10.000       3/1/2010               —       —       500,000       512,500       —       500,000       512,500  
Equinox Holdings, Inc.
     (b )     9.000       12/15/2009               —       —       330,000       346,500       —       330,000       346,500  
Hard Rock Hotel, Inc.
             8.875       6/1/2013               —       —       300,000       323,250       —       300,000       323,250  
K2, Inc.
             7.375       7/1/2014               125,000       129,375       195,000       201,825       —       320,000       331,200  
Royal Caribbean Cruises Ltd.
             6.750       3/15/2008               80,000       83,300       —       —       —       80,000       83,300  
Royal Caribbean Cruises Ltd.
             6.875       12/1/2013               100,000       105,000       —       —       —       100,000       105,000  
Royal Caribbean Cruises Ltd.
             8.750       2/2/2011               155,000       176,119       —       —       —       155,000       176,119  
Town Sports International, Inc.
                     2/1/2014               —       —       475,000       279,063       —       475,000       279,063  
 
                                                                                  
Leisure Time Total
                                             493,794               1,663,138                       2,156,931  
 
                                                                                  
 
Lodging
                             0.1 %                                                        
Circus & Eldorado/Silver Legacy Capital Corp.
             10.125       3/1/2012               —       —       270,000       289,575       —       270,000       289,575  
Inn of the Mountain Gods Resort & Casino
             12.000       11/15/2010               —       —       285,000       334,875       —       285,000       334,875  
ITT Corp.
             6.750       11/15/2005               70,000       70,700       —       —       —       70,000       70,700  
Kerzner International, Ltd.
             8.875       8/15/2011               150,000       161,250       —       —       —       150,000       161,250  
MGM Mirage
             6.000       10/1/2009               285,000       282,150       —       —       —       285,000       282,150  
MGM Mirage
             6.750       9/1/2012               —       —       500,000       503,750       —       500,000       503,750  
MGM Mirage
             9.750       6/1/2007               15,000       16,163       —       —       —       15,000       16,163  
Park Place Entertainment Corp.
             7.875       3/15/2010               90,000       97,875       —       —       —       90,000       97,875  
Park Place Entertainment Corp.
             8.875       9/15/2008               25,000       27,500       —       —       —       25,000       27,500  
Park Place Entertainment Corp.
             9.375       2/15/2007               70,000       74,725       —       —       —       70,000       74,725  
Pinnacle Entertainment, Inc.
     (b )     8.250       3/15/2012               —       —       145,000       145,000       —       145,000       145,000  

 

Table of Contents

                                                                                         
                                    Columbia Fixed Income Securities Fund     Nations Bond Fund              
                                    Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
            Rate (%)     Maturity             Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
Starwood Hotels & Resorts Worldwide, Inc.
             7.875       5/1/2012               105,000       115,763       —       —       —       105,000       115,763  
Station Casinos, Inc.
             6.875       3/1/2016               375,000       374,063       —       —       —       375,000       374,063  
Wynn Las Vegas LLC
     (a )     6.625       12/1/2014               145,000       137,750       500,000       475,000       —       645,000       612,750  
 
                                                                                  
Lodging Total
                                             1,357,938               1,748,200                       3,106,138  
 
                                                                                  
 
Retail
                             0.6 %                                                        
Asbury Automotive Group, Inc.
             8.000       3/15/2014               —       —       500,000       485,000       —       500,000       485,000  
AutoNation, Inc.
             9.000       8/1/2008               200,000       220,000       —       —       —       200,000       220,000  
Costco Wholesale Corp.
             5.500       3/15/2007               1,900,000       1,948,944       —       —       —       1,900,000       1,948,944  
Couche-Tard
             7.500       12/15/2013               170,000       178,075       —       —       —       170,000       178,075  
Domino’s, Inc.
             8.250       7/1/2011               50,000       52,250       —       —       —       50,000       52,250  
CVS Corp.
     (a )     5.298       1/11/2027               —       —       2,028,143       2,028,873       —       2,028,143       2,028,873  
Finlay Fine Jewelry Corp.
             8.375       6/1/2012               —       —       250,000       236,250       —       250,000       236,250  
Group 1 Automotive, Inc.
             8.250       8/15/2013               80,000       80,800       —       —       —       80,000       80,800  
Kohl’s Corp.
             6.700       2/1/2006               —       —       240,000       245,082       —       240,000       245,082  
Landry’s Restaurants, Inc.
     (a )     7.500       12/15/2014               —       —       240,000       232,800       —       240,000       232,800  
Lowe’s Companies, Inc.
             6.500       3/15/2029               1,510,000       1,712,733       —       —       —       1,510,000       1,712,733  
Rite Aid Corp.
     (a )     7.500       1/15/2015               —       —       90,000       86,400       —       90,000       86,400  
Rite Aid Corp.
     (b )     9.250       6/1/2013               —       —       270,000       268,650       —       270,000       268,650  
Saks, Inc.
             7.000       12/1/2013               —       —       310,000       280,550       —       310,000       280,550  
Suburban Propane Partners
     (a )     6.875       12/15/2013               100,000       98,375       140,000       137,900       —       240,000       236,275  
Target Corp
     (b )     5.375       6/15/2009               —       —       1,320,000       1,361,894       —       1,320,000       1,361,894  
Target Corp
             5.400       10/1/2008               —       —       2,876,000       2,966,174       —       2,876,000       2,966,174  
Wal-Mart Stores, Inc.
             5.450       8/1/2006               —       —       4,057,000       4,136,043       —       4,057,000       4,136,043  
 
                                                                                  
Retail Total
                                             4,291,177               12,465,616                       16,756,792  
 
                                                                                  
TOTAL CONSUMER CYCLICAL
                                             8,217,127               51,172,759                       59,389,885  
 
                                                                                  
 
CONSUMER NON-CYCLICAL
                             1.9 %                                                        
Agriculture
                             0.0 %                                                        
North Atlantic Trading Co., Inc.
     (b )     9.250       3/1/2012               —       —       295,000       221,250       —       295,000       221,250  
 
                                                                                  
Agriculture Total
                                             —               221,250                       221,250  
 
                                                                                  
 
Beverages
                             0.2 %                                                        
Anheuser-Busch Companies, Inc.
             5.750       4/1/2010               530,000       555,944       —       —       —       530,000       555,944  
Anheuser-Busch Companies, Inc.
             5.950       1/15/2033               —       —       2,856,000       3,050,359       —       2,856,000       3,050,359  
Constellation Brands, Inc.
             8.000       2/15/2008               350,000       371,875       —       —       —       350,000       371,875  
Constellation Brands, Inc.
             8.125       1/15/2012               —       —       240,000       256,800       —       240,000       256,800  
Cott Beverages, Inc.
             8.000       12/15/2011               345,000       364,838       —       —       —       345,000       364,838  
 
                                                                                  
Beverages Total
                                             1,292,656               3,307,159                       4,599,815  
 
                                                                                  
 
Commercial Services
                             0.1 %                                                        
Corrections Corp. of America
     (a )     6.250       3/15/2013               —       —       265,000       254,400       —       265,000       254,400  
Corrections Corp. of America
             7.500       5/1/2011               275,000       273,525       —       —       —       275,000       273,525  
Dollar Financial Group, Inc.
             9.750       11/15/2011               —       —       300,000       319,500       —       300,000       319,500  
GEO Group, Inc.
             8.250       7/15/2013               —       —       310,000       316,200       —       310,000       316,200  
Iron Mountain, Inc.
             8.625       4/1/2013               255,000       257,550       —       —       —       255,000       257,550  
Language Line, Inc.
             11.125       6/15/2012               —       —       1,000,000       1,042,500       —       1,000,000       1,042,500  
NationsRent Companies, Inc.
             9.500       10/15/2010               —       —       500,000       535,000       —       500,000       535,000  
Service Corp. International
             7.700       4/15/2009               —       —       345,000       355,350       —       345,000       355,350  
United Rentals NA, Inc.
             7.750       11/15/2013               125,000       120,938       —       —       —       125,000       120,938  
Vertis, Inc.
     (b )     10.875       6/15/2009               —       —       500,000       482,500       —       500,000       482,500  
 
                                                                                  
Commercial Services Total
                                             652,013               3,305,450                       3,957,463  
 
                                                                                  
 
Cosmetics/Personal Care
                             0.1 %                                                        

 

Table of Contents

                                                                                         
                                    Columbia Fixed Income Securities Fund     Nations Bond Fund              
                                    Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
            Rate (%)     Maturity             Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
DEL Laboratories, Inc.
     (a )     8.000       2/1/2012               —       —       295,000       283,200       —       295,000       283,200  
Elizabeth Arden, Inc.
             7.750       1/15/2014               —       —       250,000       257,500       —       250,000       257,500  
Procter & Gamble Co.
             4.750       6/15/2007               —       —       1,926,000       1,952,662       —       1,926,000       1,952,662  
Revlon Consumer Products
     (b )     8.625       2/1/2008               —       —       190,000       175,275       —       190,000       175,275  
Revlon Consumer Products
     (a )     9.500       4/1/2011               —       —       230,000       225,975       —       230,000       225,975  
 
                                                                                  
Cosmetics/Personal Care Total
                                             —               2,894,612                       2,894,612  
 
                                                                                  
 
Food
                             0.7 %                                                        
Cadbury Schweppes US Finance LLC
     (a )     5.125       10/1/2013               —       —       5,772,000       5,734,742       —       5,772,000       5,734,742  
Dole Food Co., Inc.
             8.625       5/1/2009               —       —       70,000       73,500       —       70,000       73,500  
Fred Myer, Inc.
             7.450       3/1/2008               —       —       6,630,000       7,105,112       —       6,630,000       7,105,112  
General Mills, Inc.
             2.625       10/24/2006               915,000       894,660       —       —       —       915,000       894,660  
Kroger Co.
             7.650       4/15/2007               1,450,000       1,545,352       —       —       —       1,450,000       1,545,352  
Merisant Co.
     (a )     10.250       7/15/2013               —       —       700,000       602,000       —       700,000       602,000  
Pepsi Bottling Holdings, Inc.
             5.625       2/17/2009               2,050,000       2,128,720       —       —       —       2,050,000       2,128,720  
Pinnacle Foods Holding corp.
     (b )     8.250       12/1/2013               —       —       600,000       513,000       —       600,000       513,000  
Safeway, Inc.
             4.950       8/16/2010               1,145,000       1,134,077       —       —       —       1,145,000       1,134,077  
Stater Brothers Holdings, Inc.
             8.125       6/15/2012               —       —       600,000       579,000       —       600,000       579,000  
United Agri Products
             8.250       12/15/2011               —       —       440,000       457,600       —       440,000       457,600  
 
                                                                                  
Food Total
                                             5,702,808               15,064,954                       20,767,762  
 
                                                                                  
 
Healthcare Products
 (b)(c)                   0.0 %                                                      
MQ Associates, Inc.
                     8/15/2012               —       —       1,300,000       741,000       —       1,300,000       741,000  
 
                                                                                  
Healthcare Products Total
                                             —               741,000                       741,000  
 
                                                                                  
 
Healthcare Services
                             0.4 %                                                        
DaVita, Inc.
     (a )     7.250       3/15/2015               —       —       115,000       112,700       —       115,000       112,700  
Extendicare Health Services
             6.875       5/1/2014               65,000       64,025       —       —       —       65,000       64,025  
Extendicare Health Services
             9.500       7/1/2010               15,000       16,369       —       —       —       15,000       16,369  
Fisher Scientific International
             6.750       8/15/2014               115,000       117,588       —       —       —       115,000       117,588  
HCA, Inc.
             6.950       5/1/2012               235,000       243,897       —       —       —       235,000       243,897  
InSight Health Services Corp.
             9.875       11/1/2011               —       —       500,000       490,000       —       500,000       490,000  
Province Healthcare Co.
             7.500       6/1/2013               250,000       278,125       —       —       —       250,000       278,125  
Select Medical Corp.
     (a )     7.625       2/1/2015               —       —       170,000       170,000       —       170,000       170,000  
Tenet Healthcare Corp.
             9.875       7/1/2014               —       —       750,000       780,000       —       750,000       780,000  
Triad Hospitals, Inc.
             7.000       5/15/2012               250,000       253,750       —       —       —       250,000       253,750  
Triad Hospitals, Inc.
             7.000       11/15/2013               15,000       14,738       —       —       —       15,000       14,738  
UnitedHealth Group, Inc.
             3.375       8/15/2007               1,000,000       978,170       —       —       —       1,000,000       978,170  
US Oncology Holdings, Inc.
             8.620       3/15/2015               —       —       145,000       136,663       —       145,000       136,663  
US Oncology, Inc.
     (a )     9.000       8/15/2012               —       —       500,000       527,500       —       500,000       527,500  
WellPoint Health Networks, Inc.
     (a )     6.375       6/15/2006               —       —       6,769,000       6,941,068       —       6,769,000       6,941,068  
WellPoint, Inc.
             6.800       8/1/2012               1,550,000       1,711,417       —       —       —       1,550,000       1,711,417  
 
                                                                                  
Healthcare Services Total
                                             3,678,078               9,157,930                       12,836,008  
 
                                                                                  
 
Household Products/Wares
                             0.1 %                                                        
Amscan Holdings, Inc.
             8.750       5/1/2014               —       —       600,000       582,000       —       600,000       582,000  
Fortune Brands, Inc.
             2.875       12/1/2006               —       —       1,926,000       1,890,825       —       1,926,000       1,890,825  
Playtex Products, Inc.
     (b )     9.375       6/1/2011               —       —       475,000       494,000       —       475,000       494,000  
Scotts Co.
             6.625       11/15/2013               175,000       173,250       —       —       —       175,000       173,250  
 
                                                                                  
Household Products/Wares Total
                                             173,250               2,966,825                       3,140,075  
 
                                                                                  
 
Pharmaceuticals
                             0.1 %                                                        
AmerisourceBergen Corp.
             8.125       9/1/2008               115,000       123,338       —       —       —       115,000       123,338  
Bristol-Myers Squibb Co.
             4.750       10/1/2006               —       —       1,818,500       1,842,191       —       1,818,500       1,842,191  

 

Table of Contents

                                                                                         
                                    Columbia Fixed Income Securities Fund     Nations Bond Fund              
                                    Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
            Rate (%)     Maturity             Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
Elan Finance PLC
     (a )(b)     7.750       11/15/2011               —       —       435,000       325,163       —       435,000       325,163  
Omnicare, Inc.
             8.125       3/15/2011               290,000       305,225       —       —       —       290,000       305,225  
Warner Chilcott Corp.
     (a )     8.750       2/1/2015               —       —       160,000       160,800       —       160,000       160,800  
 
                                                                                  
Pharmaceuticals Total
                                             428,563               2,328,154                       2,756,716  
 
                                                                                  
 
Telecommunications
                             0.1 %                                                        
American Cellular Corp.
             10.000       8/1/2011               —       —       500,000       460,000       —       500,000       460,000  
Axtel SA
             11.000       12/15/2013               —       —       400,000       423,000       —       400,000       423,000  
Horizon PCS, Inc.
     (a )     11.375       7/15/2012               —       —       410,000       465,350       —       410,000       465,350  
Rural Cellular Corp.
             8.250       3/15/2012               —       —       500,000       510,000       —       500,000       510,000  
 
                                                                                  
Telecommunications Total
                                             —               1,858,350                       1,858,350  
 
                                                                                  
TOTAL CONSUMER NON-CYCLICAL
                                             11,927,367               41,845,685                       53,773,052  
 
                                                                                  
 
DIVERSIFIED
                             0.3 %                                                        
Holding Companies Diversified
                             0.3 %                                                        
Atlantic Broadband Finance LLC
     (a )(b)     9.375       1/15/2014               —       —       500,000       480,000       —       500,000       480,000  
Hutchison Whampoa International Ltd.
     (a )     6.250       1/24/2014               —       —       6,000,000       6,239,628       —       6,000,000       6,239,628  
Hutchison Whampoa International Ltd.
     (a )     7.450       11/24/2033               —       —       1,000,000       1,100,876       —       1,000,000       1,100,876  
 
                                                                                  
TOTAL DIVERSIFIED
                                             —               7,820,504                       7,820,504  
 
                                                                                  
 
ENERGY
                             2.4 %                                                        
Coal
                             0.0 %                                                        
Arch Western Finance
             12.000       2/15/2011               210,000       209,475       —       —       —       210,000       209,475  
Peabody Energy Corp.
             8.375       12/1/2014               340,000       348,500       —       —       —       340,000       348,500  
 
                                                                                  
Coal Total
                                             557,975               —                       557,975  
 
                                                                                  
 
Oil and Gas
                             1.7 %                                                        
Amerada Hess Corp.
             7.300       8/15/2031               —       —       3,500,000       3,946,863       —       3,500,000       3,946,863  
Chesapeake Energy Corp.
             6.375       6/15/2015               65,000       65,000       —       —               65,000       65,000  
Chesapeake Energy Corp.
             7.500       9/15/2013               320,000       341,600       —       —               320,000       341,600  
Chesapeake Energy Corp.
             7.500       6/15/2014               —       —       230,000       243,225       —       230,000       243,225  
Compton Petroleum Corp.
             9.900       5/15/2009               —       —       500,000       542,500       —       500,000       542,500  
Conoco Funding Co
             5.450       10/15/2006               —       —       3,495,000       3,569,688       —       3,495,000       3,569,688  
Conoco Funding Co
             6.350       10/15/2011               —       —       4,830,000       5,264,053       —       4,830,000       5,264,053  
Delta Petroleum Corp.
     (a )     7.000       4/1/2015               —       —       220,000       212,300       —       220,000       212,300  
Devon Energy Corp.
             7.950       4/15/2032               1,150,000       1,469,217       —       —       —       1,150,000       1,469,217  
Gazprom International SA
     (a )     7.201       2/1/2020               —       —       3,225,000       3,289,500       —       3,225,000       3,289,500  
Marathon Oil Corp.
             6.800       3/15/2032               1,000,000       1,119,820       —       —       —       1,000,000       1,119,820  
Newfield Exploration Corp.
             6.625       9/1/2014               240,000       251,400       —       —       —       240,000       251,400  
Nexen, Inc.
             7.875       3/15/2032               —       —       1,040,000       1,268,898       —       1,040,000       1,268,898  
Occidental Petroleum Corp.
             4.250       3/15/2010               1,825,000       1,783,646       —       —       —       1,825,000       1,783,646  
Ocean Rig Norway AS
             10.250       6/1/2008               —       —       600,000       614,250       —       600,000       614,250  
Pemex Project Funding Master Trust
     (b )     7.375       12/15/2014               —       —       3,075,000       3,290,250       —       3,075,000       3,290,250  
Pioneer Natural Resources Co.
             6.500       1/15/2008               —       —       6,526,000       6,834,601       —       6,526,000       6,834,601  
Plains Exploration & Production Co.
             7.125       6/15/2014               170,000       179,350       —       —       —       170,000       179,350  
Premcor Refining Group, Inc.
             7.500       6/15/2015               —       —       240,000       246,600       —       240,000       246,600  
Pride International, Inc.
             7.375       7/15/2014               205,000       219,350       200,000       212,000       —       405,000       431,350  
USX Corp.
             6.650       2/1/2006               —       —       7,032,000       7,184,306       —       7,032,000       7,184,306  
Vintage Petroleum, Inc.
             7.875       5/15/2011               150,000       157,500       —       —       —       150,000       157,500  
Vintage Petroleum, Inc.
             8.250       5/1/2012               25,000       26,750       —       —       —       25,000       26,750  
XTO Energy, Inc.
             7.500       4/15/2012               —       —       5,520,000       6,323,204       —       5,520,000       6,323,204  
 
                                                                                  
Oil and Gas Total
                                             5,613,633               43,042,238                       48,655,870  
 
Oil and Gas Services
                             0.0 %                                                        

 

Table of Contents

                                                                                 
                            Columbia Fixed Income Securities Fund     Nations Bond Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
            Rate (%)   Maturity     Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
Grant Prideco, Inc.
             9.000       12/15/2009       360,000       388,800       —       —       —       360,000       388,800  
Grant Prideco, Inc.
             9.625       12/1/2007       40,000       43,600       —       —       —       40,000       43,600  
Hornbeck Offshore Services, Inc.
             6.125       12/1/2014       100,000       99,000       —       —       —       100,000       99,000  
Universal Compression, Inc.
             7.250       5/15/2010       190,000       193,800       —       —       —       190,000       193,800  
 
                                                                          
Oil and Gas Services Total
                                     725,200               —                       725,200  
 
                                                                          
 
                                                                                
Pipelines
                       0.6%                                                        
CenterPoint Energy Resources Corp.
             7.875       4/1/2013       —       —       1,674,000       1,940,437       —       1,674,000       1,940,437  
Coastal Corp.
             7.750       6/15/2010       —       —       1,000,000       1,000,000       —       1,000,000       1,000,000  
Consolidated Natural Gas Co.
             5.375       11/1/2006       —       —       3,144,000       3,201,309       —       3,144,000       3,201,309  
Duke Capital LLC
             4.370       3/1/2009       —       —       4,046,000       3,977,489       —       4,046,000       3,977,489  
Dynegy Holdings, Inc.
     (b )     6.875       4/1/2011       —       —       750,000       665,625       —       750,000       665,625  
Kinder Morgan Energy Partners LP
             6.875       11/1/2014       90,000       91,350       —       —       —       90,000       91,350  
Kinder Morgan Energy Partners LP
             7.300       8/15/2033       1,200,000       1,381,188       —       —       —       1,200,000       1,381,188  
Sonat, Inc.
             7.625       7/15/2011       —       —       900,000       888,750       —       900,000       888,750  
Teppco Partners LP
             7.625       2/15/2012       —       —       3,991,000       4,518,514       —       3,991,000       4,518,514  
Williams Companies, Inc.
             7.125       9/1/2011       30,000       31,200       —       —       —       30,000       31,200  
Williams Companies, Inc.
             8.125       3/15/2012       195,000       212,550       500,000       547,500       —       695,000       760,050  
 
                                                                          
Pipelines Total
                                     1,716,288               16,739,625                       18,455,913  
 
                                                                          
TOTAL ENERGY
                                     8,613,096               59,781,862                       68,394,958  
 
                                                                          
 
                                                                                
FINANCIALS
                       10.2%                                                        
Banks
                       2.5%                                                        
Bank of New York Co., Inc.
             3.900       9/1/2007       —       —       2,100,000       2,082,005       —       2,100,000       2,082,005  
Bank One Corp.
             6.000       8/1/2008       —       —       10,455,000       10,937,666       —       10,455,000       10,937,666  
Chinatrust Commercial Bank
     (a )(b)(i)     5.625       12/17/2049       —       —       1,220,000       1,192,635       —       1,220,000       1,192,635  
First Union National Bank
             5.800       12/1/2008       —       —       7,489,000       7,809,926       —       7,489,000       7,809,926  
Korea Development Bank
             7.250       5/15/2006       —       —       479,000       495,482       —       479,000       495,482  
Marshall & Ilsley Corp.
             4.375       8/1/2009       1,330,000       1,312,777       —       —       —       1,330,000       1,312,777  
Mellon Funding Corp.
             4.875       6/15/2007       —       —       2,861,000       2,901,103       —       2,861,000       2,901,103  
National City Bank
             4.625       5/1/2013       —       —       5,096,000       4,955,860       —       5,096,000       4,955,860  
PNC Funding Corp.
             5.750       8/1/2006       —       —       5,628,000       5,752,469       —       5,628,000       5,752,469  
Popular North America, Inc.
             6.125       10/15/2006       —       —       5,292,000       5,435,096       —       5,292,000       5,435,096  
Rabobank Capital Funding II
     (a )(i)     5.260       12/29/2049       —       —       6,000,000       6,026,754       —       6,000,000       6,026,754  
Union Planters Corp
             4.375       12/1/2010       —       —       6,846,000       6,657,550       —       6,846,000       6,657,550  
US Bank NA
             2.850       11/15/2006       —       —       3,654,000       3,586,160       —       3,654,000       3,586,160  
US Bank NA
             6.375       8/1/2011       2,350,000       2,556,565       6,752,000       7,313,800       —       9,102,000       9,870,365  
Wachovia Corp.
             4.875       2/15/2014       2,145,000       2,111,152       —       —       —       2,145,000       2,111,152  
Wells Fargo & Co.
             5.900       5/21/2006       2,400,000       2,382,384       —       —       —       2,400,000       2,382,384  
 
                                                                          
Banks Total
                                     8,362,877               65,146,505                       73,509,383  
 
                                                                          
 
                                                                                
Diversified Financial Services
                       6.1%                                                        
Altra Industrial Motion, Inc.
     (a )     9.000       12/1/2011       —       —       120,000       118,800       —       120,000       118,800  
American Express Co
             3.750       11/20/2007       —       —       1,887,000       1,858,150       —       1,887,000       1,858,150  
American Express Co
             4.750       6/17/2009       —       —       2,746,000       2,764,692       —       2,746,000       2,764,692  
American Express Co
             5.500       9/12/2006       —       —       4,535,000       4,627,092       —       4,535,000       4,627,092  
American General Finance Corp
             2.750       6/15/2008       —       —       2,090,000       1,978,089       —       2,090,000       1,978,089  
American General Finance Corp
             5.375       9/1/2009       850,000       866,813       —       —       —       850,000       866,813  
Bear Stearns Companies, Inc.
             4.500       10/28/2010       —       —       6,256,000       6,149,341       —       6,256,000       6,149,341  
Bear Stearns Companies, Inc.
             5.700       1/15/2007       —       —       1,944,000       1,993,170       —       1,944,000       1,993,170  
Capital One Bank
             4.875       5/15/2008       1,025,000       1,033,139       —       —       —       1,025,000       1,033,139  
Capital One Bank
             5.000       6/15/2009       —       —       2,415,000       2,425,817       —       2,415,000       2,425,817  
Caterpillar Financial Services Corp
             2.350       9/15/2006       —       —       3,142,000       3,070,366       —       3,142,000       3,070,366  
Caterpillar Financial Services Corp
             5.950       5/1/2006       —       —       4,968,000       5,071,573       —       4,968,000       5,071,573  

 

Table of Contents

                                                                                 
                            Columbia Fixed Income Securities Fund     Nations Bond Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
            Rate (%)     Maturity     Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
CIT Group Inc
             4.125       2/21/2006       1,060,000       1,062,862       —       —       —       1,060,000       1,062,862  
CIT Group Inc
             7.375       4/2/2007       —       —       2,752,000       2,910,199       —       2,752,000       2,910,199  
Citicorp
     (a)       8.040       12/15/2019       —       —       6,000,000       7,127,268       —       6,000,000       7,127,268  
Citigroup, Inc.
             5.000       9/15/2014       2,655,000       2,620,034       —       —       —       2,655,000       2,620,034  
Citigroup Global Markets Holdings, Inc.
             6.500       2/15/2008       —       —       2,557,000       2,706,597       —       2,557,000       2,706,597  
Countrywide Home Loans, Inc.
             2.875       2/15/2007       1,000,000       974,970       —       —       —       1,000,000       974,970  
Countrywide Home Loans, Inc.
             5.500       8/1/2006       —       —       10,093,000       10,261,533       —       10,093,000       10,261,533  
Credit Suisse First Boston USA, Inc.
     (b)       4.625       1/15/2008       —       —       700,000       703,151       —       700,000       703,151  
Credit Suisse First Boston USA, Inc.
             6.125       11/15/2011       —       —       3,452,000       3,662,389       —       3,452,000       3,662,389  
E*Trade Financial Corp.
             8.000       6/15/2011       —       —       265,000       272,950       —       265,000       272,950  
Ford Motor Credit Co
             7.375       10/28/2009       2,375,000       2,394,475       —       —       —       2,375,000       2,394,475  
Ford Motor Credit Co
             7.375       2/1/2011       —       —       1,600,000       1,589,656       —       1,600,000       1,589,656  
Fund American Companies, Inc.
             5.875       5/15/2013       —       —       3,225,000       3,274,368       —       3,225,000       3,274,368  
General Electric Capital Corp
             6.750       3/15/2032       —       —       8,000,000       9,234,584       —       8,000,000       9,234,584  
General Motors Acceptance Corp
             6.150       4/5/2007       —       —       4,263,000       4,181,734       —       4,263,000       4,181,734  
General Motors Acceptance Corp
             6.875       9/15/2011       —       —       2,782,000       2,517,268       —       2,782,000       2,517,268  
General Motors Acceptance Corp
             7.750       1/19/2010       1,230,000       1,190,369       —       —       —       1,230,000       1,190,369  
Global Cash Access LLC/Global Cash Finance Corp.
             8.750       3/15/2012       —       —       295,000       312,700       —       295,000       312,700  
Goldman Sachs Group, Inc.
             4.125       1/15/2008       —       —       1,200,000       1,189,886       —       1,200,000       1,189,886  
Goldman Sachs Group, Inc.
             6.345       2/15/2034       1,550,000       1,604,188       —       —       —       1,550,000       1,604,188  
Goldman Sachs Group, Inc.
             6.600       1/15/2012       —       —       5,858,000       6,339,188       —       5,858,000       6,339,188  
Household Finance Corp.
             6.400       6/17/2008       1,850,000       1,948,087       —       —       —       1,850,000       1,948,087  
HSBC Finance Corp.
             5.875       2/1/2009       —       —       4,336,000       4,511,877       —       4,336,000       4,511,877  
HSBC Finance Corp.
             6.375       11/27/2012       —       —       1,907,000       2,061,904       —       1,907,000       2,061,904  
HSBC Finance Corp.
             7.200       7/15/2006       —       —       3,546,000       3,683,283       —       3,546,000       3,683,283  
HSBC Finance Corp.
             7.875       3/1/2007       —       —       2,000,000       2,130,428       —       2,000,000       2,130,428  
Innophos Investments
     (a)(d)       10.771       2/15/2015       —       —       150,000       148,500       —       150,000       148,500  
International Lease Finance Corp
             3.500       4/1/2009       —       —       6,760,000       6,470,124       —       6,760,000       6,470,124  
International Lease Finance Corp
             4.500       5/1/2008       —       —       1,743,000       1,731,745       —       1,743,000       1,731,745  
JPMorgan Chase & Co
             5.750       1/2/2013       2,525,000       2,448,644       —       —       —       2,525,000       2,448,644  
JPMorgan Chase & Co
             7.250       6/1/2007       —       —       7,008,000       7,419,776       —       7,008,000       7,419,776  
LaBranche & Co., Inc.
             11.000       5/15/2012       —       —       600,000       636,000       —       600,000       636,000  
Lehman Brothers Holdings, Inc.
             4.000       1/22/2008       1,000,000       989,100       —       —       —       1,000,000       989,100  
Lehman Brothers Holdings, Inc.
             7.000       2/1/2008       —       —       4,530,000       4,833,619       —       4,530,000       4,833,619  
MassMutual Global Funding II
     (a)       2.550       7/15/2008       —       —       2,213,000       2,088,089       —       2,213,000       2,088,089  
Merrill Lynch & Co., Inc.
             2.070       6/12/2006       —       —       2,538,000       2,486,435       —       2,538,000       2,486,435  
Merrill Lynch & Co., Inc.
             3.700       4/21/2008       —       —       2,717,000       2,663,698       —       2,717,000       2,663,698  
Merrill Lynch & Co., Inc.
             4.125       1/15/2009       1,885,000       1,852,559       —       —       —       1,885,000       1,852,559  
Merrill Lynch & Co., Inc.
             6.000       2/17/2009       —       —       5,640,000       5,899,542       —       5,640,000       5,899,542  
Morgan Stanley
             4.750       4/1/2014       1,530,000       1,461,196       —       —       —       1,530,000       1,461,196  
Morgan Stanley
             6.750       4/15/2011       —       —       4,509,000       4,914,458       —       4,509,000       4,914,458  
National Rural Utilities Cooperative Finance Corp.
             3.250       10/1/2007       —       —       2,226,000       2,162,537       —       2,226,000       2,162,537  
National Rural Utilities Cooperative Finance Corp.
             5.750       8/28/2009       —       —       2,700,000       2,811,869       —       2,700,000       2,811,869  
Nycomed SA
     (a)       11.750       9/15/2013 EUR     —       —       120,000       147,380       —       120,000       147,380  
Prudential Funding LLC
     (a)       6.600       5/15/2008 $     —       —       6,773,000       7,181,297       —       6,773,000       7,181,297  
SLM Corp.
             5.125       8/27/2012       2,000,000       2,010,360       —       —       —       2,000,000       2,010,360  
UFJ Finance Aruba AEC
             6.750       7/15/2013       —       —       3,000,000       3,229,830       —       3,000,000       3,229,830  
Virgin River Casino Corp./RBG LLC/B&BB, Inc.
     (a)(c)               1/15/2013       —       —       175,000       112,875       —       175,000       112,875  
Virgin River Casino Corp./RBG LLC/B&BB, Inc.
     (a)       9.000       1/15/2012       —       —       104,000       108,680       —       104,000       108,680  
Visant Corp.
             7.625       10/1/2012       —       —       350,000       346,500       —       350,000       346,500  
 
                                                                          
Diversified Financial Services Total
                                     22,456,796               154,121,007                       176,577,803  
 
                                                                          
 
                                                                                
Insurance
                       0.2%                                                        
Allstate Financial Global Funding II
             2.625       10/22/2006       2,500,000       2,442,075       —       —       —       2,500,000       2,442,075  
Genworth Financial, Inc.
             4.750       6/15/2009       1,500,000       1,503,900       —       —       —       1,500,000       1,503,900  

 

Table of Contents

                                                                                 
                            Columbia Fixed Income Securities Fund     Nations Bond Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
            Rate (%)     Maturity     Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
Metlife, Inc.
             5.375       12/15/2012       —       —       938,000       958,130       —       938,000       958,130  
 
                                                                          
Insurance Total
                                     3,945,975               958,130                       4,904,105  
 
                                                                          
 
                                                                                
Real Estate
                       0.2%                                                        
EOP Operating LP
             4.750       3/15/2014       —       —       3,822,000       3,584,069       —       3,822,000       3,584,069  
EOP Operating LP
     (b)       7.000       7/15/2011       —       —       3,136,000       3,453,671       —       3,136,000       3,453,671  
 
                                                                          
Real Estate Total
                                     —               7,037,740                       7,037,740  
 
                                                                          
 
                                                                                
Real Estate Investment Trust (REIT’s)
                       0.7%                                                        
Camden Property Trust
             5.375       12/15/2013       —       —       5,483,000       5,500,151       —       5,483,000       5,500,151  
Health Care Property Investors, Inc.
             6.450       6/25/2012       1,410,000       1,495,037       2,311,000       2,482,381       —       3,721,000       3,977,419  
iStar Financial, Inc.
             4.875       1/15/2009       —       —       5,439,000       5,370,349       —       5,439,000       5,370,349  
iStar Financial, Inc.
             5.125       4/1/2011       175,000       171,869       —       —       —       175,000       171,869  
iStar Financial, Inc.
             7.000       3/15/2008       150,000       157,292       —       —       —       150,000       157,292  
Simon Property Group LP
             3.750       1/30/2009       —       —       5,283,000       5,070,396       —       5,283,000       5,070,396  
Thornburg Mortgage, Inc.
             8.000       5/15/2013       —       —       680,000       707,200       —       680,000       707,200  
 
                                                                          
Real Estate Investment Trust (REIT’s) Total
                                     1,824,198               19,130,477                       20,954,675  
 
                                                                          
 
                                                                                
Savings and Loans
                       0.4%                                                        
Washington Mutual, Inc.
             4.625       4/1/2014       —       —       6,200,000       5,857,097       —       6,200,000       5,857,097  
Washington Mutual, Inc.
             5.625       1/15/2007       —       —       6,302,000       6,443,776       —       6,302,000       6,443,776  
 
                                                                          
Savings and Loans Total
                                     —               12,300,873                       12,300,873  
 
                                                                          
TOTAL FINANCIALS
                                     36,589,846               258,694,733                       295,284,579  
 
                                                                          
 
                                                                                
INDUSTRIALS
                       1.7%                                                        
Aerospace and Defense
                       0.4%                                                        
Argo-Tech Corp.
             9.250       6/1/2011       —       —       205,000       220,375       —       205,000       220,375  
BE Aerospace, Inc.
             8.875       5/1/2011       —       —       1,050,000       1,063,125       —       1,050,000       1,063,125  
L-3 Communications Corp.
             6.125       7/15/2013       5,000       4,913       —       —       —       5,000       4,913  
L-3 Communications Corp.
             7.625       6/15/2012       330,000       351,450       —       —       —       330,000       351,450  
Lockheed Martin Corp.
             8.500       12/1/2029       675,000       915,091       —       —       —       675,000       915,091  
Northrop Grumman Corp.
             7.125       2/15/2011       —       —       3,782,000       4,217,633       —       3,782,000       4,217,633  
Raytheon Co.
     (b)       5.375       4/1/2013       —       —       2,200,000       2,232,111       —       2,200,000       2,232,111  
Sequa Corp.
             9.000       8/1/2009       —       —       65,000       69,550       —       65,000       69,550  
TransDigm, Inc.
             8.375       7/15/2011       175,000       179,375       295,000       302,744       —       470,000       482,119  
United Technologies Corp.
             7.125       11/15/2010       1,900,000       2,119,431       —       —       —       1,900,000       2,119,431  
 
                                                                          
Aerospace and Defense Total
                                     3,570,259               8,105,538                       11,675,798  
 
                                                                          
 
                                                                                
Building Materials
                       0.0%                                                        
ACIH, Inc.
     (a)(c)               12/15/2012       —       —       360,000       253,800       —       360,000       253,800  
Associated Materials, Inc.
     (b)(c)               3/1/2014       —       —       220,000       152,900       —       220,000       152,900  
Nortek, Inc.
             8.500       9/1/2014       —       —       150,000       144,750       —       150,000       144,750  
RMCC Acquisition Co.
     (a)       9.500       11/1/2012       —       —       180,000       176,400       —       180,000       176,400  
US Concrete, Inc.
             8.375       4/1/2014       —       —       240,000       238,800       —       240,000       238,800  
 
                                                                          
Building Materials Total
                                     —               966,650                       966,650  
 
                                                                          
 
                                                                                
Electrical Components and Equipment
                       0.0%                                                        
Coleman Cable, Inc.
     (a)       9.875       10/1/2012       —       —       500,000       510,000       —       500,000       510,000  
 
                                                                          
Electrical Components and Equipment Total
                                     —               510,000                       510,000  
 
                                                                          
 
                                                                                
Electronics
                       0.0%                                                        
Flextronics International Ltd.
             6.250       11/15/2014       —       —       500,000       475,000       —       500,000       475,000  
Sanmina-SCI Corp.
     (a)       6.750       3/1/2013       —       —       160,000       150,000       —       160,000       150,000  
 
                                                                          
Electronics Total
                                     —               625,000                       625,000  
 
                                                                          

 

Table of Contents

                                                                                 
                            Columbia Fixed Income Securities Fund     Nations Bond Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
            Rate (%)     Maturity     Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
Engineering and Construction
                       0.0%                                                        
J. Ray McDermott SA
     (a)       11.000       12/15/2013       —       —       500,000       560,000       —       500,000       560,000  
 
                                                                          
Engineering and Construction Total
                                     —               560,000                       560,000  
 
                                                                          
 
                                                                                
Environmental Control
                       0.3%                                                        
Allied Waste NA, Inc.
             6.375       4/15/2011       180,000       166,950       —       —       —       180,000       166,950  
Allied Waste NA, Inc.
     (a)       7.250       3/15/2015       —       —       175,000       166,250       —       175,000       166,250  
Allied Waste NA, Inc.
             7.875       4/15/2013       —       —       1,000,000       997,500       —       1,000,000       997,500  
Synagro Technologies, Inc.
             9.500       4/1/2009       100,000       108,750       —       —       —       100,000       108,750  
Waste Management, Inc.
             7.375       8/1/2010       1,330,000       1,478,215       5,056,000       5,634,649       —       6,386,000       7,112,864  
Waste Services, Inc.
     (a)(b)       9.500       4/15/2014       —       —       500,000       505,000       —       500,000       505,000  
 
                                                                          
Environmental Control Total
                                     1,753,915               7,303,399                       9,057,314  
 
                                                                          
 
                                                                                
Hand/Machine Tools
                       0.0%                                                        
Kennametal, Inc.
             7.200       6/15/2012       165,000       182,002       —       —       —       165,000       182,002  
 
                                                                          
Hand/Machine Tools Total
                                     182,002               —                       182,002  
 
                                                                          
 
                                                                                
Machinery - Diversified
                       0.0%                                                        
Douglas Dynamics LLC
     (a)(b)       7.750       1/15/2012       —       —       335,000       328,300       —       335,000       328,300  
Manitowoc Co., Inc.
             7.125       11/1/2013       10,000       10,450       —       —       —       10,000       10,450  
Westinghouse Air Brake Technologies Corp.
             6.875       7/31/2013       200,000       199,000       —       —       —       200,000       199,000  
 
                                                                          
Machinery - Diversified Total
                                     209,450               328,300                       537,750  
 
                                                                          
 
                                                                                
Metal Fabricate/Hardware
                       0.1%                                                        
FastenTech, Inc.
     (a)       11.500       5/1/2011       —       —       750,000       806,250       —       750,000       806,250  
Mueller Holdings, Inc.
     (c)               4/15/2014       —       —       750,000       517,500       —       750,000       517,500  
TriMas Corp.
             9.875       6/15/2012       —       —       385,000       392,700       —       385,000       392,700  
 
                                                                          
Metal Fabricate/Hardware Total
                                     —               1,716,450                       1,716,450  
 
                                                                          
 
                                                                                
Miscellaneous Manufacturing
                       0.2%                                                        
Bombardier, Inc.
     (a)(b)       6.300       5/1/2014       —       —       355,000       298,200       —       355,000       298,200  
General Electric Co.
             5.000       2/1/2013       2,875,000       2,869,710       2,108,000       2,104,937       —       4,983,000       4,974,647  
JB Poindexter & Co., Inc.
     (a)       8.750       3/15/2014       —       —       275,000       273,625       —       275,000       273,625  
Koppers, Inc.
             9.875       10/15/2013       —       —       500,000       557,500       —       500,000       557,500  
Reddy Ice Holdings, Inc.
     (a)(c)               11/1/2012       —       —       180,000       128,700       —       180,000       128,700  
Samsonite Corp.
             8.875       6/1/2011       —       —       220,000       230,450       —       220,000       230,450  
 
                                                                          
Miscellaneous Manufacturing Total
                                     2,869,710               3,593,412                       6,463,122  
 
                                                                          
 
                                                                                
Packaging and Containers
                       0.1%                                                        
Ball Corp.
             7.750       8/1/2006       375,000       384,375       —       —       —       375,000       384,375  
Crown European Holdings SA
             10.875       3/1/2013       —       —       500,000       580,000       —       500,000       580,000  
Jefferson Smurfit Corp.
             8.250       10/1/2012       —       —       280,000       287,700       —       280,000       287,700  
Owens-Brockway Glass Container
     (a)       6.750       12/1/2014       25,000       24,625       400,000       392,000       —       425,000       416,625  
Owens-Illinois, Inc.
             7.500       5/15/2010       185,000       190,088       —       —       —       185,000       190,088  
Silgan Holdings, Inc.
             6.750       11/15/2013       285,000       287,850       —       —       —       285,000       287,850  
Smurfit-Stone Container Corp.
             9.750       2/1/2011       140,000       149,800       —       —       —       140,000       149,800  
Stone Container Finance
             7.375       7/15/2014       95,000       93,575       —       —       —       95,000       93,575  
 
                                                                          
Packaging and Containers Total
                                     1,130,313               1,259,700                       2,390,013  
 
                                                                          
 
                                                                                
Transportation
                       0.5%                                                        
Burlington Northern Santa Fe Corp.
             6.750       7/15/2011       —       —       4,184,000       4,592,091       —       4,184,000       4,592,091  
Canadian National Railway Co.
             6.900       7/15/2028       —       —       3,339,000       3,891,711       —       3,339,000       3,891,711  
Canadian National Railway Co.
             7.195       1/2/2016       1,906,913       2,211,065       —       —       —       1,906,913       2,211,065  

 

Table of Contents

                                                                                 
                            Columbia Fixed Income Securities Fund     Nations Bond Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
            Rate (%)   Maturity     Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
CHC Helicopter Corp.
     (a )     7.375       5/1/2014       —       —       500,000       486,875       —       500,000       486,875  
CHC Helicopter Corp.
             7.375       5/1/2014       —       —       185,000       180,144       —       185,000       180,144  
Offshore Logistics, Inc.
             6.125       6/15/2013       205,000       199,875       —       —       —       205,000       199,875  
QDI Capital Corp.
             9.000       11/15/2010       —       —       385,000       377,300       —       385,000       377,300  
Ship Finance International Ltd.
             8.500       12/15/2013       —       —       800,000       792,000       —       800,000       792,000  
Stena AB
             7.000       12/1/2016       —       —       1,000,000       925,000       —       1,000,000       925,000  
Teekay Shipping Corp.
             8.875       7/15/2011       325,000       368,063       —       —       —       325,000       368,063  
TFM SA de CV
             10.250       6/15/2007       —       —       210,000       222,600       —       210,000       222,600  
Union Pacific Corp.
             3.875       2/15/2009       790,000       767,754       —       —       —       790,000       767,754  
 
                                                                          
Transportation Total
                                     3,546,756               11,467,721                       15,014,477  
 
                                                                          
TOTAL INDUSTRIALS
                                     13,262,405               36,436,170                       49,698,575  
 
                                                                          
 
                                                                                
TECHNOLOGY
                       0.4%                                                        
Computers
                       0.4%                                                        
Hewlett-Packard Co.
             5.750       12/15/2006       —       —       6,394,000       6,556,478       —       6,394,000       6,556,478  
International Business Machines Corp.
             4.875       10/1/2006       —       —       3,173,000       3,215,436       —       3,173,000       3,215,436  
International Business Machines Corp.
             5.875       11/29/2032       1,000,000       1,043,310       —       —       —       1,000,000       1,043,310  
 
                                                                          
Computers Total
                                     1,043,310               9,771,914                       10,815,224  
 
                                                                          
 
                                                                                
Semiconductors
                       0.0%                                                        
Amkor Technology, Inc.
     (b )     9.250       2/15/2008       —       —       365,000       348,575       —       365,000       348,575  
Freescale Semiconductor, Inc.
             6.875       7/15/2011       175,000       179,813       —       —       —       175,000       179,813  
 
                                                                          
Semiconductors Total
                                     179,813               348,575                       528,388  
 
                                                                          
TOTAL TECHNOLOGY
                                     1,223,123               10,120,489                       11,343,611  
 
                                                                          
 
                                                                                
UTILITIES
                       2.3%                                                        
Electric
                       2.3%                                                        
AEP Texas Central Co.
             6.650       2/15/1933       —       —       5,830,000       6,496,206       —       5,830,000       6,496,206  
AES Corp.
             7.750       3/1/2014       110,000       113,575       —       —       —       110,000       113,575  
Appalachian Power Co.
             3.600       5/15/2008       —       —       1,804,000       1,750,618       —       1,804,000       1,750,618  
Calpine Corp.
     (a )(b)     12.290       7/15/2010       —       —       600,000       471,000       —       600,000       471,000  
Calpine Generating Co. LLC
     (b )(d)     11.050       4/1/2011       —       —       510,000       487,050       —       510,000       487,050  
CenterPoint Energy Houston Electric LLC
             5.750       1/15/2014       1,400,000       1,453,830       —       —       —       1,400,000       1,453,830  
Con Edison Co.
             4.700       6/15/2009       —       —       2,980,000       2,996,029       —       2,980,000       2,996,029  
Dominion Resources, Inc.
             5.000       3/15/2013       —       —       912,000       898,709       —       912,000       898,709  
Edison Mission Energy
             9.875       4/15/2011       —       —       500,000       577,500       —       500,000       577,500  
Exelon Generation Co. LLC
             5.350       1/15/2014       —       —       2,125,000       2,132,790       —       2,125,000       2,132,790  
Exelon Generation Co. LLC
             6.950       6/15/2011       1,300,000       1,431,352       —       —       —       1,300,000       1,431,352  
FirstEnergy Corp.
             6.450       11/15/2011       —       —       2,626,000       2,770,548       —       2,626,000       2,770,548  
FirstEnergy Corp.
             7.375       11/15/2031       —       —       1,341,000       1,518,953       —       1,341,000       1,518,953  
FPL Energy National Wind
     (a )     5.608       3/10/2024       —       —       636,000       628,692       —       636,000       628,692  
Kiowa Power Partners LLC
     (a )     5.737       3/30/2021       —       —       2,190,000       2,143,068       —       2,190,000       2,143,068  
Midamerican Energy Holdings Co.
             5.000       2/15/2014       —       —       4,302,000       4,197,741       —       4,302,000       4,197,741  
Nevada Power Co.
             5.875       1/15/2015       50,000       48,750       —       —       —       50,000       48,750  
Nevada Power Co.
             6.500       4/15/2012       40,000       41,100       —       —       —       40,000       41,100  
NiSource Finance Corp.
             5.400       7/15/2014       —       —       3,631,000       3,657,027       —       3,631,000       3,657,027  
NorthWestern Corp.
             5.875       11/1/2014       10,000       9,938       —       —       —       10,000       9,938  
Orion Power Holdings, Inc.
             12.000       5/1/2010       —       —       700,000       850,500       —       700,000       850,500  
Pacific Gas & Electric Co.
             4.200       3/1/2011       —       —       976,000       940,372       —       976,000       940,372  
Pacific Gas & Electric Co.
             6.050       3/1/2034       —       —       1,377,000       1,413,924       —       1,377,000       1,413,924  
Pepco Holdings, Inc.
             5.500       8/15/2007       —       —       1,416,000       1,448,796       —       1,416,000       1,448,796  
Progress Energy, Inc.
             6.050       4/15/2007       —       —       7,344,000       7,574,638       —       7,344,000       7,574,638  
PSEG Energy Holdings LLC
             8.625       2/15/2008       —       —       500,000       527,500       —       500,000       527,500  
Public Service Electric & Gas Co.
             4.000       11/1/2008       —       —       1,701,000       1,669,822       —       1,701,000       1,669,822  

 

Table of Contents

                                                                                 
                            Columbia Fixed Income Securities Fund     Nations Bond Fund              
                            Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
            Rate (%)     Maturity     Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
Scottish Power PLC
             4.910       3/15/2010       1,300,000       1,301,716       —       —       —       1,300,000       1,301,716  
Southern Co. Capital Funding, Inc.
             5.300       2/1/2007       —       —       3,248,000       3,340,484       —       3,248,000       3,340,484  
Southern Power Co.
             6.250       7/15/2012       —       —       1,753,000       1,883,378       —       1,753,000       1,883,378  
Texas Genco LLC
     (a )     6.875       12/15/2014       —       —       245,000       245,613       —       245,000       245,613  
TXU Energy Co. LLC
     (a )     5.550       11/15/2014       —       —       3,450,000       3,273,398       —       3,450,000       3,273,398  
TXU Energy Co. LLC
     (a )     6.550       11/15/2034       —       —       5,000,000       4,740,230       —       5,000,000       4,740,230  
Virginia Electric & Power Co.
             5.375       2/1/2007       —       —       3,516,000       3,584,864       —       3,516,000       3,584,864  
 
                                                                          
Electric Total
                                     4,400,261               62,219,452                       66,619,712  
 
                                                                          
 
                                                                                
Gas
                       0.0%                                                        
Sempra Energy
             4.750       5/15/2009       750,000       745,838       —       —       —       750,000       745,838  
 
                                                                          
Gas Total
                                     745,838               —                       745,838  
 
                                                                          
TOTAL UTILITIES
                                     5,146,098               62,219,452                       67,365,550  
 
                                                                          
TOTAL CORPORATE NOTES AND BONDS
                                     100,868,384               654,244,577                       755,112,961  
 
                                                                          
 
                                                                                
MORTGAGE-BACKED SECURITIES
                       26.0%                                                        
Agency Collateralized Mortgage Obligations
                       1.3%                                                        
Federal Home Loan Mortgage Corp.
            4.000       11/15/2016       —       —       10,000,000       9,615,422       —       10,000,000       9,615,422  
Interest Only
             5.500       1/25/2023       —       —       9,220,671       722,919       —       9,220,671       722,919  
Interest Only
             5.500       5/15/2027       —       —       9,714,152       948,160       —       9,714,152       948,160  
Federal National Mortgage Association
                                             —       —       —       —       —  
 
             4.500       4/25/2017       —       —       10,000,000       9,838,712       —       10,000,000       9,838,712  
 
             5.500       8/25/2017       —       —       8,781,320       8,916,313       —       8,781,320       8,916,313  
 
             6.000       4/25/2017       —       —       8,178,200       8,514,861       —       8,178,200       8,514,861  
 
             8.250       3/25/2006       —       —       15,553       15,705       —       15,553       15,705  
 
                                                                          
Agency Collateralized Mortgage Obligations Total
                                     —               38,572,093                       38,572,093  
 
                                                                          
 
                                                                                
Mortgage-Backed Obligations
                       24.7%                                                        
Federal Home Loan Mortgage Corp.
            3.500       10/1/2018       4,729,791       4,393,169       —       —       —       4,729,791       4,393,169  
 
             4.000       9/15/2015       6,775,000       6,651,183       —       —       —       6,775,000       6,651,183  
 
             4.000       10/15/2018       9,300,000       8,530,243       —       —       —       9,300,000       8,530,243  
 
             4.000       10/15/2026       7,720,000       7,594,431       —       —       —       7,720,000       7,594,431  
 
             4.500       10/15/2018       3,166,000       3,166,009       —       —       —       3,166,000       3,166,009  
 
             4.500       5/1/2019       22,346,715       21,898,766       —       —       —       22,346,715       21,898,766  
 
             4.500       2/15/2027       2,050,000       2,023,422       —       —       —       2,050,000       2,023,422  
 
             4.500       7/15/2027       6,880,000       6,790,905       —       —       —       6,880,000       6,790,905  
 
             4.500       8/15/2028       2,430,000       2,370,310       —       —       —       2,430,000       2,370,310  
 
             5.000       5/1/2034       2,495,055       2,442,832       —       —       —       2,495,055       2,442,832  
 
             5.500       12/1/2017       376,370       384,445       —       —       —       376,370       384,445  
 
             5.500       12/1/2018       2,373,225       2,424,689       —       —       —       2,373,225       2,424,689  
 
             5.500       7/1/2019       1,778,934       1,816,589       —       —       —       1,778,934       1,816,589  
 
             5.500       9/1/2034       4,836,929       4,852,716       —       —       —       4,836,929       4,852,716  
 
             6.000       5/1/2017       156,610       161,840       —       —       —       156,610       161,840  
 
             6.000       7/1/2017       3,838,844       3,967,044       —       —       —       3,838,844       3,967,044  
 
             6.000       6/15/2031       4,303,510       4,393,422       —       —       —       4,303,510       4,393,422  
 
             6.500       10/15/2023       510,000       537,647       —       —       —       510,000       537,647  
 
             6.500       11/15/2030       1,750,833       1,795,831       —       —       —       1,750,833       1,795,831  
 
             6.500       8/1/2032       210,281       218,544       —       —       —       210,281       218,544  
 
             6.500       11/1/2032       —       —       21,034,241       21,860,866       —       21,034,241       21,860,866  
 
             6.750       3/15/2031       —       —       2,000,000       2,438,800       —       2,000,000       2,438,800  
 
             8.000       11/1/2009       —       —       31,984       33,664       —       31,984       33,664  
 
             8.000       4/1/2010       —       —       24,134       25,515       —       24,134       25,515  

 

Table of Contents

                                                                     
                Columbia Fixed Income Securities Fund     Nations Bond Fund              
                Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity       Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
 
   8.500   11/1/2026         —       —       298,512       325,856       —       298,512       325,856  
TBA (e)
   4.500   3/15/2020         —       —       37,000,000       36,213,750       —       37,000,000       36,213,750  
TBA (e)
   4.500   3/15/2035         —       —       30,000,000       28,481,250       —       30,000,000       28,481,250  
TBA (e)
   5.500   3/15/2035         —       —       15,000,000       15,037,500       —       15,000,000       15,037,500  
TBA (e)
   6.000   3/15/2035         —       —       20,000,000       20,462,500       —       20,000,000       20,462,500  
Federal Housing Administration
   8.500   5/1/2023         2,086,225       2,086,225       —       —       —       2,086,225       2,086,225  
Federal National Mortgage Association                                                                    
(d)
   4.185   8/1/2036         —       —       70,632       71,973       —       70,632       71,973  
 
   4.500   11/25/2014         2,050,000       2,041,195       —       —       —       2,050,000       2,041,195  
 
   5.000   6/1/2018         4,611,118       4,613,632       —       —       —       4,611,118       4,613,632  
 
   5.000   7/1/2018         2,790,750       2,792,271       —       —       —       2,790,750       2,792,271  
 
   5.000   8/1/2018         1,847,041       1,848,048       —       —       —       1,847,041       1,848,048  
 
   5.948   6/1/2032         71,171       71,900       —       —       —       71,171       71,900  
 
   6.000   3/1/2009         800,829       813,594       —       —       —       800,829       813,594  
 
   6.000   9/1/2016         —       —       197,701       204,278       —       197,701       204,278  
 
   6.000   8/1/2034         291,200       297,724       —       —       —       291,200       297,724  
 
   6.089   7/1/2032         903,032       907,009       —       —       —       903,032       907,009  
 
   6.500   7/25/2030         301,431       301,384       —       —       —       301,431       301,384  
 
   6.500   5/1/2032         —       —       284,772       296,075       —       284,772       296,075  
 
   6.500   7/1/2032         82,202       85,465       146,523       152,339       —       228,725       237,804  
 
   6.500   8/1/2032         —       —       894,989       930,754       —       894,989       930,754  
 
   6.500   11/1/2032         —       —       250,382       260,321       —       250,382       260,321  
 
   6.500   1/1/2033         —       —       8,474,528       8,814,201       —       8,474,528       8,814,201  
 
   6.500   5/1/2033         —       —       2,164,428       2,251,182       —       2,164,428       2,251,182  
 
   7.000   10/1/2011         —       —       357,052       374,139       —       357,052       374,139  
 
   8.000   12/1/2009         —       —       643,978       657,271       —       643,978       657,271  
 
   10.000   9/1/2018         —       —       109,963       123,133       —       109,963       123,133  
TBA (e)
   5.000   4/15/2020         —       —       141,476,000       141,343,296       —       141,476,000       141,343,296  
TBA (e)
   5.000   4/15/2035         —       —       112,610,000       110,076,275       —       112,610,000       110,076,275  
TBA (e)
   5.500   3/15/2035         —       —       39,000,000       39,048,750       —       39,000,000       39,048,750  
TBA (e)
   6.500   4/15/2035         —       —       105,500,000       109,456,250       —       105,500,000       109,456,250  
Government National Mortgage Association                                                                    
 
   4.500   4/16/2028         2,090,000       2,068,274       —       —       —       2,090,000       2,068,274  
 
   5.000   5/15/2033         1,997,557       1,972,480       —       —       —       1,997,557       1,972,480  
 
   5.000   2/15/2035         621,970       614,701       —       —       —       621,970       614,701  
 
   5.500   3/15/2035         —       —       59,559,000       60,080,141       —       59,559,000       60,080,141  
 
   6.000   5/15/2033         999,512       1,027,818       —       —       —       999,512       1,027,818  
 
   7.000   1/15/2030         —       —       2,303,398       2,438,621       —       2,303,398       2,438,621  
 
   7.500   12/15/2023         —       —       1,898,420       2,049,948       —       1,898,420       2,049,948  
 
   7.500   7/20/2028         —       —       860,066       919,878       —       860,066       919,878  
 
   8.000   11/15/2007         —       —       15,648       16,139       —       15,648       16,139  
 
   8.000   5/15/2017         —       —       18,869       20,411       —       18,869       20,411  
 
   8.500   12/15/2005         —       —       1,379       1,393       —       1,379       1,393  
 
   8.500   4/15/2006         —       —       808       828       —       808       828  
 
   8.500   2/15/2025         —       —       206,805       227,613       —       206,805       227,613  
 
   9.500   6/15/2009         —       —       9,054       9,684       —       9,054       9,684  
 
   9.500   9/15/2009         —       —       2,731       2,921       —       2,731       2,921  
 
   13.000   1/15/2011         —       —       9,208       10,354       —       9,208       10,354  
 
   13.000   2/15/2011         —       —       3,727       4,191       —       3,727       4,191  
 
                                                              
Mortgage-Backed Obligations Total
                         107,955,755               604,722,059                       712,677,815  
 
                                                              
TOTAL MORTGAGE-BACKED SECURITIES
                         107,955,755               643,294,152                       751,249,907  
 
                                                              
 
                                                              
GOVERNMENT AGENCIES AND OBLIGATIONS
           15.8%                                                        
Foreign Government Bonds
           4.4%                                                        
African Development Bank
   1.950   3/23/2010   JPY     —       —       475,000,000       4,742,819       —       475,000,000       4,742,819  

 

Table of Contents

                                                                     
                Columbia Fixed Income Securities Fund     Nations Bond Fund              
                Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity       Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
Aries Vermoegensverwaltungs GmbH   9.600   10/25/2014   USD     —       —       1,000,000       1,203,200       —       1,000,000       1,203,200  
Corp. Andina de Fomento
   6.375   6/18/2009   EUR     —       —       870,000       1,257,452       —       870,000       1,257,452  
Eksportfinans A/S
   1.800   6/21/2010   JPY     —       —       300,000,000       2,975,966       —       300,000,000       2,975,966  
European Investment Bank
   3.625   10/15/2013   EUR     —       —       860,000       1,126,820       —       860,000       1,126,820  
European Investment Bank
   7.625   12/7/2007   GBP     —       —       190,000       383,238       —       190,000       383,238  
Export-Import Bank of Korea
   4.625   3/16/2010   USD     —       —       2,425,000       2,388,011       —       2,425,000       2,388,011  
Federal Republic of Brazil
   3.125   4/15/2012         —       —       1,804,426       1,693,995       —       1,804,426       1,693,995  
Federal Republic of Brazil
   10.250   6/17/2013         —       —       1,925,000       2,093,438       —       1,925,000       2,093,438  
Federal Republic of Brazil
   14.500   10/15/2009         —       —       1,715,000       2,154,040       —       1,715,000       2,154,040  
Federal Republic of Germany
   4.250   7/4/2014   EUR     —       —       3,110,000       4,253,376       —       3,110,000       4,253,376  
Federal Republic of Germany
   5.250   7/4/2010   EUR     —       —       2,575,000       3,693,654       —       2,575,000       3,693,654  
Government of Canada
   5.250   6/1/2013   CAD     —       —       2,240,000       1,977,277       —       2,240,000       1,977,277  
Government of Canada
   5.500   6/1/2010   CAD     —       —       400,000       355,165       —       400,000       355,165  
Government of Finland
   5.375   7/4/2013   EUR     —       —       725,000       1,069,211       —       725,000       1,069,211  
Inter-American Development Bank   1.900   7/8/2009   JPY     —       —       120,000,000       1,195,767       —       120,000,000       1,195,767  
International Bank for Reconstruction & Development
   2.000   2/18/2008   JPY     —       —       315,000,000       3,095,485       —       315,000,000       3,095,485  
Irish Treasury Bond
   5.000   4/18/2013   EUR     —       —       1,570,000       2,262,937       —       1,570,000       2,262,937  
Kingdom of Norway
   6.000   5/16/2011   NOK     —       —       3,975,000       707,786       —       3,975,000       707,786  
Kingdom of Spain
   5.000   7/30/2012   EUR     —       —       2,765,000       3,966,447       —       2,765,000       3,966,447  
Kingdom of Sweden
   4.000   12/1/2009   SEK     —       —       2,110,000       310,814       —       2,110,000       310,814  
Kingdom of Sweden
   5.500   10/8/2012   SEK     —       —       4,730,000       759,142       —       4,730,000       759,142  
New South Wales Treasury Corp.
   7.000   12/1/2010   AUD     —       —       620,000       504,374       —       620,000       504,374  
New Zealand Government
   6.000   11/15/2011   NZD     —       —       1,325,000       932,177       —       1,325,000       932,177  
New Zealand Government
   6.500   2/15/2006   NZD     —       —       250,000       178,243       —       250,000       178,243  
Peoples Republic of China
   4.750   10/29/2013   USD     —       —       600,000       591,437       —       600,000       591,437  
Province of Ontario
   1.875   1/25/2010   JPY     —       —       515,000,000       5,127,866       —       515,000,000       5,127,866  
Province of Quebec
   7.000   1/30/2007   USD     1,490,000       1,567,659       —       —       —       1,490,000       1,567,659  
Republic of Bulgaria
   7.500   1/15/2013   EUR     —       —       590,000       948,677       —       590,000       948,677  
Republic of Bulgaria
   8.250   1/15/2015   USD     —       —       250,000       304,000       —       250,000       304,000  
Republic of Chile
   5.500   1/15/2013         —       —       1,649,000       1,685,443       —       1,649,000       1,685,443  
Republic of Colombia
   9.750   4/9/2011         —       —       1,578,026       1,735,828       —       1,578,026       1,735,828  
Republic of Colombia
   11.500   5/31/2011   EUR     —       —       665,000       1,048,788       —       665,000       1,048,788  
Republic of France
   4.750   10/25/2012         —       —       2,640,000       3,736,280       —       2,640,000       3,736,280  
Republic of France
   5.500   10/25/2010         —       —       2,330,000       3,389,180       —       2,330,000       3,389,180  
Republic of Greece
   5.350   5/18/2011         —       —       730,000       1,052,646       —       730,000       1,052,646  
Republic of Italy
   0.375   10/10/2006   JPY     —       —       330,000,000       3,099,917       —       330,000,000       3,099,917  
Republic of Italy
   2.500   3/31/2006   USD     2,750,000       2,721,043       —       —       —       2,750,000       2,721,043  
Republic of Italy
   4.250   11/1/2009   EUR     —       —       2,350,000       3,217,725       —       2,350,000       3,217,725  
Republic of Italy
   4.250   2/1/2015         —       —       3,270,000       4,434,639       —       3,270,000       4,434,639  
Republic of Panama
   8.875   9/30/2027   USD     —       —       660,000       709,500       —       660,000       709,500  
Republic of Panama
   9.375   7/23/2012         —       —       825,000       932,250       —       825,000       932,250  
Republic of Peru
   7.500   10/14/2014   EUR     —       —       170,000       228,673       —       170,000       228,673  
Republic of Peru
   9.125   2/21/2012   USD     —       —       1,490,000       1,676,250       —       1,490,000       1,676,250  
Republic of Philippines
   10.625   3/16/2025         —       —       1,580,000       1,690,600       —       1,580,000       1,690,600  
Republic of Poland
   5.250   1/15/2014         —       —       580,000       589,280       —       580,000       589,280  
Republic of Poland
   6.000   5/24/2009   PLN     —       —       2,700,000       875,023       —       2,700,000       875,023  
Republic of Poland
   6.250   7/3/2012   USD     —       —       450,000       486,900       —       450,000       486,900  
Republic of South Africa
   6.500   6/2/2014         —       —       2,768,000       2,906,400       —       2,768,000       2,906,400  
Republic of Venezuela
   9.250   9/15/2027         —       —       2,000,000       1,986,000       —       2,000,000       1,986,000  
Russian Federation
       3/31/2030         —       —       2,470,000       2,530,515       —       2,470,000       2,530,515  
Russian Federation
   8.750   7/24/2005         —       —       580,000       588,758       —       580,000       588,758  
Russian Federation
   10.000   6/26/2007         —       —       1,200,000       1,319,760       —       1,200,000       1,319,760  
United Kingdom Treasury
   5.000   9/7/2014   GBP     —       —       1,810,000       3,500,547       —       1,810,000       3,500,547  
United Kingdom Treasury
   6.250   11/25/2010   GBP     —       —       255,000       519,977       —       255,000       519,977  
United Mexican States
   6.375   1/16/2013   USD     —       —       3,056,000       3,170,600       —       3,056,000       3,170,600  

 

Table of Contents

                                                                     
                Columbia Fixed Income Securities Fund     Nations Bond Fund              
                Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity       Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
United Mexican States
   7.375   3/13/2008   EUR     —       —       840,000       1,210,156       —       840,000       1,210,156  
United Mexican States
   7.500   4/8/2033   USD     1,890,000       2,003,400       8,141,000       8,629,460       —       10,031,000       10,632,860  
United Mexican States
   8.375   1/14/2011         —       —       8,545,000       9,724,210       —       8,545,000       9,724,210  
Victoria Treasury Corp.
   7.500   8/15/2008   AUD     —       —       755,000       612,740       —       755,000       612,740  
 
                                                              
Total Foreign Government Bonds
                         6,292,101               119,540,860                       125,832,961  
 
                                                              
 
                                                              
U.S. Government Agencies and Obligations
           11.4%                                                        
Federal Home Loan Bank
                                                                    
 
       4/13/2005         —       —       54,000,000       53,951,400       —       54,000,000       53,951,400  
 
       4/22/2005         —       —       25,000,000       24,960,625       —       25,000,000       24,960,625  
 
   2.250   9/13/2005         3,060,000       3,047,341       —       —       —       3,060,000       3,047,341  
 
   3.000   5/15/2006         350,000       346,983       —       —       —       350,000       346,983  
 
   3.625   11/14/2008         —       —       2,300,000       2,248,581       —       2,300,000       2,248,581  
 
   3.875   6/14/2013         —       —       2,500,000       2,365,243       —       2,500,000       2,365,243  
Federal Home Loan Mortgage Corp.
                                                                    
 
   2.875   5/15/2007         —       —       4,000,000       3,910,444       —       4,000,000       3,910,444  
 
   4.500   1/15/2013         —       —       4,078,000       4,009,473       —       4,078,000       4,009,473  
 
   4.875   11/15/2013         —       —       7,510,000       7,541,677       —       7,510,000       7,541,677  
 
   5.125   1/15/2012         —       —       1,620,000       2,315,016       —       1,620,000       2,315,016  
 
   5.750   3/15/2009         —       —       3,634,000       3,813,996       —       3,634,000       3,813,996  
 
   6.000   6/15/2011         —       —       5,250,000       5,631,161       —       5,250,000       5,631,161  
Federal National Mortgage Association
                                                                    
 
   2.125   10/9/2007         —       —       320,000,000       3,134,405       —       320,000,000       3,134,405  
 
   3.250   2/15/2009         —       —       4,000,000       3,841,420       —       4,000,000       3,841,420  
 
   4.125   4/15/2014         —       —       7,000,000       6,645,198       —       7,000,000       6,645,198  
 
   4.375   7/17/2013         —       —       40,000,000       38,315,120       —       40,000,000       38,315,120  
 
   5.250   1/15/2009         —       —       5,249,000       5,409,950       —       5,249,000       5,409,950  
 
   7.250   5/15/1930         —       —       2,567,000       3,308,732       —       2,567,000       3,308,732  
U.S. Treasury Bonds
                                                                    
 
   5.375   2/15/2031         —       —       5,300,000       5,776,380       —       5,300,000       5,776,380  
 
   6.250   8/15/2023         3,000,000       3,493,008       18,500,000       21,540,216       —       21,500,000       25,033,224  
 
   6.250   5/15/2030         —       —       14,000,000       16,820,776       —       14,000,000       16,820,776  
U.S. Treasury Inflation Index Notes
                                                                    
 
   3.625   1/15/2008         7,778,309       8,365,423       —       —       —       7,778,309       8,365,423  
 
   3.875   1/15/2009         —       —       2,674,279       2,949,198       —       2,674,279       2,949,198  
U.S. Treasury Notes
                                                                    
 
   1.625   1/15/2015         —       —       2,995,950       2,951,712       —       2,995,950       2,951,712  
 
   2.000   8/31/2005         —       —       2,500,000       2,489,453       —       2,500,000       2,489,453  
 
   3.000   11/15/2007         —       —       21,500,000       21,033,042       —       21,500,000       21,033,042  
 
   3.125   1/31/2007         —       —       3,000,000       2,966,016       —       3,000,000       2,966,016  
 
   3.500   11/15/2006         3,000,000       2,953,710       —       —       —       3,000,000       2,953,710  
 
   3.625   1/15/2010         —       —       20,000,000       19,521,100       —       20,000,000       19,521,100  
 
   4.000   2/15/2015         —       —       10,600,000       10,184,279       —       10,600,000       10,184,279  
 
   4.250   11/15/2013         160,000       159,500       —       —       —       160,000       159,500  
U.S. Treasury STRIPS
       11/15/2013         —       —       20,650,000       13,951,470       —       20,650,000       13,951,470  
 
       5/15/2023         —       —       50,000,000       20,179,750       —       50,000,000       20,179,750  
 
                                                              
U.S. Government Agencies and Obligations Total
                         18,365,965               311,765,831                       330,131,796  
 
                                                              
TOTAL GOVERNMENT AGENCIES AND OBLIGATIONS
                         24,658,066               431,306,691                       455,964,757  
 
                                                              
 
                                                              
ASSET-BACKED SECURITIES
           14.7%                                                        
American Express Credit Account Master Trust
   3.160   11/15/2007         —       —       15,000,000       15,000,548       —       15,000,000       15,000,548  
AmeriCredit Automobile Receivables Trust
   1.490   5/7/2007         —       —       1,771,257       1,766,536       —       1,771,257       1,766,536  
AmeriCredit Automobile Receivables Trust
   5.370   6/12/2008         —       —       1,100,409       1,109,159       —       1,100,409       1,109,159  
AQ Finance NIM Trust
   3.110   8/25/2008         —       —       700,423       700,726       —       700,423       700,726  

 

Table of Contents

                                                                     
                Columbia Fixed Income Securities Fund     Nations Bond Fund              
                Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity       Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
Argent NIM Trust
   4.550   4/25/2034         —       —       393,879       393,954       —       393,879       393,954  
Bank One Issuance Trust
   2.930   6/15/2010         —       —       9,000,000       9,022,127       —       9,000,000       9,022,127  
Bank One Issuance Trust
   2.940   6/16/2008         —       —       2,089,428       2,082,964       —       2,089,428       2,082,964  
Bank One Issuance Trust
   3.040   2/17/2009         —       —       4,250,000       4,255,522       —       4,250,000       4,255,522  
Bear Stearns Asset Backed Security, Inc.
   2.960   2/25/2035         —       —       9,709,686       9,709,606       —       9,709,686       9,709,606  
Bear Stearns Asset Backed Security, Inc.   3.200   3/25/2035         —       —       10,037,510       10,044,075       —       10,037,510       10,044,075  
Bear Stearns Asset Backed Security, Inc.   3.350   8/25/2034         —       —       1,563,596       1,572,404       —       1,563,596       1,572,404  
Bear Stearns Commercial Mortgage Securities, Inc.
   3.869   2/11/2041         —       —       10,000,000       9,694,779       —       10,000,000       9,694,779  
BMW Vehicle Owner Trust
   1.940   2/25/2007         —       —       1,890,638       1,882,846       —       1,890,638       1,882,846  
Bombardier Capital Mortgage Securitization Corp.
   6.230   4/15/2028         —       —       188,864       191,757       —       188,864       191,757  
Capital Auto Receivables Asset Trust   2.860   1/16/2006         —       —       1,108,215       1,108,269       —       1,108,215       1,108,269  
Capital Auto Receivables Asset Trust   3.090   1/15/2009         —       —       1,236,343       1,238,527       —       1,236,343       1,238,527  
Capital Auto Receivables Asset Trust   4.180   10/15/2007         —       —       795,769       797,629       —       795,769       797,629  
Capital One Master Trust   4.550   2/15/2008         —       —       3,500,000       3,501,704       —       3,500,000       3,501,704  
Capital One Multi-Asset Execution Trust   3.490   7/15/2008         —       —       10,000,000       10,014,579       —       10,000,000       10,014,579  
Capital One Prime Auto Receivables Trust   1.470   6/15/2006         —       —       376,603       376,165       —       376,603       376,165  
CDC Mortgage Capital Trust
   3.080   3/25/2034         —       —       1,003,018       1,003,322       —       1,003,018       1,003,322  
Chase Credit Card Master Trust
   3.710   7/16/2007         —       —       2,630,000       2,630,642       —       2,630,000       2,630,642  
Chase Funding Mortgage Loan
   2.960   11/25/2018         —       —       1,561,443       1,561,431       —       1,561,443       1,561,431  
Chase Funding Net Interest Margin   5.000   1/27/2035         —       —       68,394       68,394       —       68,394       68,394  
Chase Manhattan Auto Owner Trust   1.520   5/15/2007         —       —       2,880,839       2,861,199       —       2,880,839       2,861,199  
Chase Manhattan Auto Owner Trust
   2.040   12/15/2009         —       —       1,719,590       1,683,371       —       1,719,590       1,683,371  
Chase Manhattan Auto Owner Trust
   2.260   1/15/2007         —       —       2,000,000       1,978,760       —       2,000,000       1,978,760  
Chase Manhattan Auto Owner Trust
   2.780   6/15/2010         —       —       1,500,000       1,475,041       —       1,500,000       1,475,041  
CIT Equipment Collateral
   4.670   12/21/2009         —       —       14,547,647       14,576,932       —       14,547,647       14,576,932  
Citibank Credit Card Issuance Trust
   4.400   5/15/2007         —       —       4,100,000       4,106,521       —       4,100,000       4,106,521  
Citiscape Home Equity Loan Trust
   7.940   10/25/2018         415,527       415,203       —       —       —       415,527       415,203  
ContiMortgage Home Equity Trust
   6.880   1/15/2028         —       —       488,145       493,288       —       488,145       493,288  
ContiMortgage Home Equity Trust
   7.680   12/25/2029         1,302,577       1,317,140       —       —       —       1,302,577       1,317,140  
Countrywide Asset-Backed Certificates
   2.890   5/25/2035         —       —       10,000,000       10,000,000       —       10,000,000       10,000,000  
Countrywide Asset-Backed Certificates
   2.940   10/25/2026         —       —       12,184,000       12,184,000       —       12,184,000       12,184,000  
Countrywide Asset-Backed Certificates
   2.970   3/25/2035         —       —       13,000,000       13,000,000       —       13,000,000       13,000,000  
Fannie Mae Whole Loan
   7.800   6/25/2026         450,696       477,862       —       —       —       450,696       477,862  
First Alliance Mortgage Loan Trust
   7.625   7/25/2025         —       —       1,964,487       1,960,184       —       1,964,487       1,960,184  
First Plus Home Loan Trust
   7.720   5/10/2024         —       —       468,441       468,021       —       468,441       468,021  
Ford Credit Auto Owner Trust
   2.860   1/15/2007         —       —       4,717,810       4,718,978       —       4,717,810       4,718,978  
Ford Credit Auto Owner Trust
   3.160   8/15/2007         —       —       5,000,000       4,933,260       —       5,000,000       4,933,260  
Ford Credit Auto Owner Trust
   5.180   10/16/2006         —       —       6,610,000       6,652,263       —       6,610,000       6,652,263  
GMAC Commercial Mortgage Securities, Inc. I/O
   1.519   7/15/2029         —       —       50,160,003       1,962,029       —       50,160,003       1,962,029  
GMAC Mortgage Loan Corp. Trust
   2.930   6/25/2034         —       —       5,000,000       5,001,686       —       5,000,000       5,001,686  
Gracechurch Card Funding PLC
   3.000   2/17/2009         —       —       3,500,000       3,503,805       —       3,500,000       3,503,805  
Harley-Davidson Motorcycle Trust
   1.340   1/15/2008         —       —       532,862       530,662       —       532,862       530,662  
Harley-Davidson Motorcycle Trust
   1.890   2/15/2011         —       —       488,756       474,481       —       488,756       474,481  
Harley-Davidson Motorcycle Trust
   2.180   1/15/2009         —       —       3,171,498       3,143,708       —       3,171,498       3,143,708  
Harley-Davidson Motorcycle Trust
   2.960   2/15/2012         —       —       2,660,503       2,622,260       —       2,660,503       2,622,260  
Honda Auto Receivables Owner Trust
   1.690   2/21/2007         —       —       2,947,471       2,928,449       —       2,947,471       2,928,449  
Honda Auto Receivables Owner Trust
   1.920   11/20/2006         —       —       1,477,596       1,472,995       —       1,477,596       1,472,995  
Honda Auto Receivables Owner Trust
   3.000   5/18/2006         —       —       144,300       144,283       —       144,300       144,283  
Household Automotive Trust
   2.310   4/17/2008         —       —       2,944,400       2,919,182       —       2,944,400       2,919,182  
IMC Home Equity Loan Trust
   7.310   11/20/2028         3,611,005       3,613,028       —       —       —       3,611,005       3,613,028  
IMC Home Equity Loan Trust
   7.500   4/25/2026         1,101,477       1,123,087       —       —       —       1,101,477       1,123,087  
IMC Home Equity Loan Trust
   7.520   8/20/2028         1,459,258       1,458,937       —       —       —       1,459,258       1,458,937  
Irwin Home Equity
   3.020   9/25/2017         —       —       7,672,667       7,673,998       —       7,672,667       7,673,998  
Keycorp Student Loan Trust
   3.010   7/25/2029         —       —       15,326,528       15,443,460       —       15,326,528       15,443,460  
Long Beach Mortgage Loan Trust
   2.930   3/25/2035         —       —       8,340,000       8,340,000       —       8,340,000       8,340,000  

 

Table of Contents

                                                                     
                Columbia Fixed Income Securities Fund     Nations Bond Fund              
                Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity       Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
MBNA Credit Card Master Note Trust
   2.920   8/17/2009         —       —       12,920,000       12,944,588       —       12,920,000       12,944,588  
MBNA Master Credit Card Trust USA
   3.110   2/15/2008         —       —       7,000,000       7,003,835       —       7,000,000       7,003,835  
MMCA Automobile Trust
   5.750   6/15/2007         —       —       124,975       125,526       —       124,975       125,526  
Morgan Stanley ABS Capital
   2.910   2/25/2035         —       —       10,000,000       10,000,000       —       10,000,000       10,000,000  
Morgan Stanley ABS Capital
   3.030   5/25/2034         —       —       11,973,845       11,973,745       —       11,973,845       11,973,745  
New Century Home Equity Loan Trust
   7.320   7/25/2029         196,750       199,519       —       —       —       196,750       199,519  
Oakwood Mortgage Investors, Inc.
   3.040   5/15/2013         —       —       1,320,721       1,122,914       —       1,320,721       1,122,914  
Oncor Electric Delivery Transition Bond Co.
   2.260   2/15/2009         —       —       5,819,634       5,724,268       —       5,819,634       5,724,268  
Onyx Acceptance Auto Trust
   3.380   1/15/2008         —       —       10,750,000       10,714,942       —       10,750,000       10,714,942  
Popular ABS Mortgage Pass-Through Trust
   2.940   4/25/2035         —       —       17,000,000       17,000,000       —       17,000,000       17,000,000  
Renaissance Home Equity Loan Trust
   2.870   5/25/2035         —       —       9,000,000       9,000,000       —       9,000,000       9,000,000  
Residential Asset Mortgage Products, Inc.
   3.020   8/25/2022         —       —       5,989,272       5,990,137       —       5,989,272       5,990,137  
Salomon Brothers Mortgage Securities VII, Inc.
   7.150   6/25/2028         460,628       457,988       —       —       —       460,628       457,988  
Securitized Asset Backed Receivables LLC Trust
   3.100   2/25/2034         —       —       2,652,092       2,652,071       —       2,652,092       2,652,071  
SLM Student Loan Trust
   2.730   10/25/2012         —       —       4,500,000       4,500,578       —       4,500,000       4,500,578  
SLM Student Loan Trust
   2.730   4/25/2014         —       —       11,500,000       11,509,558       —       11,500,000       11,509,558  
SLM Student Loan Trust
   2.740   1/25/2013         —       —       4,500,000       4,504,659       —       4,500,000       4,504,659  
SLM Student Loan Trust
   2.740   1/25/2013         —       —       9,000,000       8,982,451       —       9,000,000       8,982,451  
SLM Student Loan Trust
   2.810   4/25/2017         —       —       15,280,937       15,315,013       —       15,280,937       15,315,013  
SLM Student Loan Trust
   2.860   1/25/2012         —       —       12,529,237       12,574,913       —       12,529,237       12,574,913  
Structured Asset Investment Loan Trust
   2.970   3/25/2035         —       —       5,922,000       5,922,000       —       5,922,000       5,922,000  
The Money Store Home Equity Trust
   2.960   8/15/2029         —       —       10,732,497       10,731,802       —       10,732,497       10,731,802  
Volkswagen Auto Lease Trust
   3.940   10/20/2010         —       —       9,585,000       9,488,192       —       9,585,000       9,488,192  
WFS Financial Owner Trust
   1.510   7/20/2007         —       —       1,993,225       1,982,943       —       1,993,225       1,982,943  
WFS Financial Owner Trust
   2.340   8/22/2011         —       —       3,465,339       3,395,763       —       3,465,339       3,395,763  
World Omni Auto Receivables
   4.490   8/20/2008         —       —       6,149,046       6,170,382       —       6,149,046       6,170,382  
 
                                                              
TOTAL ASSET-BACKED SECURITIES
                         9,062,764               416,310,761                       425,373,525  
 
                                                              
 
                                                              
INVESTMENT MANAGEMENT COMPANY
           4.3%                                                        
Nations Cash Reserves Fund, Capital Class Shares
                 —       —       125,216,000       125,216,000       —       125,216,000       125,216,000  
 
                                                              
TOTAL INVESTMENT MANAGEMENT COMPANY
                         —               125,216,000                       125,216,000  
 
                                                              
 
                                                              
COLATERALIZED MORTGAGE OBLIGATIONS
           2.7%                                                        
Collateralized Mortgage Obligations
           2.5%                                                        
Bear Stearns Alt-A Trust
   3.200   10/25/2033         —       —       6,345,247       6,352,260       —       6,345,247       6,352,260  
Bear Stearns Alt-A Trust
   3.130   1/25/2035         —       —       9,724,258       9,724,258       —       9,724,258       9,724,258  
Bear Stearns Asset-Backed Securities, Inc.
   5.000   1/25/2034         4,810,993       4,755,426       —       —       —       4,810,993       4,755,426  
Countrywide Alternative Loan Trust
   3.050   3/25/2034         3,538,055       3,535,313       —       —       —       3,538,055       3,535,313  
Countrywide Home Loan Mortgage Pass Through Trust
   4.612   12/19/2033         3,874,379       3,760,240       —       —       —       3,874,379       3,760,240  
Homebanc Mortgage Trust
   3.100   3/25/2035         —       —       8,931,712       8,931,712       —       8,931,712       8,931,712  
IMPAC CMB Trust
   3.110   4/25/2035         —       —       9,904,341       9,907,436       —       9,904,341       9,907,436  
IMPAC Secured Assets Common Owner Trust
   3.120   12/25/2031                         7,000,000       6,996,450       —       7,000,000       6,996,450  
MLCC Mortgage Investors, Inc.
   3.080   2/25/2030         —       —       8,943,616       8,943,616       —       8,943,616       8,943,616  
Residential Accredit Loans
   3.150   3/25/2034         —       —       5,904,059       5,909,996       —       5,904,059       5,909,996  
Structured Asset Securities Corp.
   5.500   7/25/2033         3,969,509       3,970,600       —       —       —       3,969,509       3,970,600  
 
                                                              
Collateralized Mortgage Obligations Total
                         16,021,580               56,765,727                       72,787,307  
 
                                                              
 
                                                              
Commercial Mortgage-Backed Securities
           0.2%                                                        
Merrill Lynch Mortgage Investors, Inc.
   1.017   12/15/2030         —       —       78,953,267       2,384,049       —       78,953,267       2,384,049  
Nationslink Funding Corp.
   6.888   11/10/2030         3,120,000       3,274,596       —       —       —       3,120,000       3,274,596  
 
                                                              
Commercial Mortgage-Backed Securities Total
                         3,274,596               2,384,049                       5,658,645  
 
                                                              
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
                         19,296,176               59,149,777                       78,445,952  
 
                                                              
 
                                                              
MUNICIPAL BONDS
           0.4%                                                        

 

Table of Contents

                                                                     
                Columbia Fixed Income Securities Fund     Nations Bond Fund              
                Target Fund     Acquiring Fund     Pro forma     Pro Forma Combined  
    Rate (%)   Maturity       Par     Market Value     Par     Market Value     Adjustments     Par     Market Value  
Education
           0.4%                                                        
Revenue Bond
           0.4%                                                        
Arizona Educational Loan Marketing Corp.
   3.010   12/1/2013         —       —       10,266,667       10,266,667       —       10,266,667       10,266,667  
 
                                                              
TOTAL MUNICIPAL BONDS
                         —               10,266,667                       10,266,667  
 
                                                              
 
                                                              
SHORT-TERM OBLIGATIONS
           5.1%                                                        
U.S. Government Agencies and Obligations
           5.1%                                                        
Federal Home Loan Bank Discount Notes
       4/8/2005         —       —       90,000,000       89,952,750       —       90,000,000       89,952,750  
Federal Home Loan Mortgage Corp. Discount Notes
       4/8/2005         —       —       51,000,000       50,957,925       —       51,000,000       50,957,925  
U.S. Treasury Bill
   2.480   5/12/2005         5,880,000       5,863,393       —       —       —       5,880,000       5,863,393  
 
                                                              
TOTAL SHORT-TERM OBLIGATIONS
                         5,863,393               140,910,675                       146,774,068  
 
                                                              
 
                                                              
REPURCHASE AGREEMENTS
           4.8%                                                        
ABN AMRO, Inc.
                 —       —       35,131,000       35,134,000       —       35,131,000       35,134,000  
State Street Bank & Trust Co.
                 5,412,000       5,412,000       —       —       —       5,412,000       5,412,000  
Wachovia Capital Markets
                 —       —       42,156,000       42,161,000       —       42,156,000       42,161,000  
Wachovia Capital Markets
                 —       —       54,882,000       54,887,000       —       54,882,000       54,887,000  
 
                                                              
TOTAL REPURCHASE AGREEMENTS
                         5,412,000               132,182,000                       137,594,000  
 
                                                              
 
                                                              
Total Investments
           100.0%             273,116,538               2,612,881,299                       2,885,997,837  
Other Assets & Liabilities, net
           0.0%             823,000               (709,848,000 )                        
 
                                                            
Net Assets
           100.0%             273,939,538               1,903,033,299                       2,885,997,837  
 
                                                            
 
                                                              
Investments at cost
                         272,468,000               2,614,195,000                       2,886,663,000  

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 March 31, 2005, these securities amounted to $78,109, which represents % of net assets.

(b) All or a portion of this security was on loan at March 31, 2005. The aggregate cost and market value of securities on loan at March 31, 2005 is $127,988 and $126,690, respectively.

(c) Step bond.

(d) Floating rate note. The interest rate shown reflects the rate as of March 31, 2005.

(e) Security, or a portion thereof, purchased on a delayed delivery basis.

(f) Zero coupon bond.

(g) Security pledged as collateral for open futures contracts and TBA’s.

(h) Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by Banc of America Capital Management, LLC.

(i) Variable rate security. The interest rate shown reflects the rate as of March 31, 2005.

(j) This amount represents cash collateral received from securities lending activity.

(k) Cost for federal income tax purposes is $273,353,000 for the Columbia Fixed Income Securities Fund, $2,614,634,000 for the Nations Bond Fund and $2,887,987,000 for the funds combined.

 

Table of Contents

At March 31, 2005, the fund had futures contracts open:

                                 
                            Unrealized  
            Value of contract     Market value of     appreciation/  
    Number of     when opened     contracts     (depreciation)  
Description   contracts     (000)     (000)     (000)  
 
U.S. 5 year Treasury Note Futures (long position) expiring June 2005(a)
     80     $ 8,612     $ 8,568     $ (44 )
U.S. 2 year Treasury Note Futures (long position) expiring June 2005(a)
     95       19,718       19,654       (64 )
U.S. 20 year Treasury Bond Futures (long position) expiring June 2005(a)
     375       42,136       41,765       (371 )
U.S. 10 year Treasury Note Futures (short position) expiring June 2005(a)
     (161 )     (17,733 )     (17,591 )     142  
 
                              
Total net unrealized appreciation
                           $ (337 )
 
                              

(a)   Securities have been segregated as collateral for the Funds’ open futures contracts.

Written options for the year ended March 31, 2005, aggregated the following:

                 
            Premium  
    Number of     received  
Summary of written options (Fund)   Contracts*     (000)  
 
Outstanding at March 31, 2004
     —     $ —  
Contracts opened
     4       23  
Contracts closed
     —       —  
Contracts expired
     (4 )     (23 )
 
            
Outstanding at March 31, 2005
     —     $ —  
 
            

*   1 contract = $1,000,000 notional amount.

At March 31, 2005, the Fund had forward foreign currency contracts outstanding:

                                         
                              Unrealized  
            Value of contract     Value of contract     Market value of     appreciation/  
            when opened     when opened     contract     (depreciation)  
    Local     (local currency)     (US dollars)     (US dollars)     (US dollars)  
Description   Currency     (000)     (000)     (000)     (000)  
 
Bond:
                                        
Contracts to Sell
                                        
Expiring April 19, 2005
   Euro     (330 )   $ (433 )   $ (430 )   $ 3  
Expiring April 19, 2005
   Euro     (540 )     (714 )     (701 )     13  
Expiring June 1, 2005
   Euro     (114 )     (147 )     (148 )     (1 )
 
                                      
Total not unrealized depreciation
                                   $ 15  
 
                                      
         
ACRONYMS:
        
AUD
      - Australian Dollar
CAD
      - Canadian Dollar
EUR
      - Euro Currency
GBP
      - Great Britain Pund
JPY
      - Japanese Yen
NOK
      - Norwegian Krone
NZD
      - New Zealand Dollar
PLN
      - Polish Zloty
SEK
      - Swedish Krona
STRIPS
      - Separate Trading of Registered Interest and Principal of Securities
TBA
      - To Be Anounced
USD
      - U.S. Dollar

 

Table of Contents

     
Pro -forma Combining
    
Statement of Assets & Liabilities
    
As of March 31, 2005 (unaudited)
    
 
                                     
                             
    Columbia     Nations                  
    Fixed Income Securities     Bond                  
    Income Fund     Fund     Pro Forma         Pro Forma  
(In thousands)   Target Fund     Acquiring Fund     Adjustments         Combined  
Assets:
                                    
Investments, at cost
   $ 273,477     $ 2,488,979     $ —         $ 2,761,447  
Affiliated Investments, at cost
   $ —     $ 125,216     $ —         $ 125,216  
 
                            
Investments, at value
     273,116       2,487,666       —           2,760,782  
Affiliated Investments, at value
     —       125,216       —           125,216  
Cash
     1       439       —           440  
Foreign Currency
             702                   702  
Unrealized appreciation on forward contracts
             16                   16  
Receivable for:
                                 —  
Investments sold
     152       9,481       —           9,633  
Fund shares sold
     53       1,486       —           1,539  
Interest
     2,131       17,822       —           19,953  
Futures variation margin
     —       234       —           234  
Expense reimbursement due from Investment Advisor
     —       31       —           31  
Deferred Trustees’ compensation plan
     4       —       —           4.00  
 
                            
Total Assets
     275,457       2,643,093       —           2,918,550  
 
                            
 
                                    
Liabilities:
                                    
Collateral on securities loaned
             132,182                   132,182  
Payable for:
                                 —  
Investments purchased
     161       599,033                   599,194  
Fund shares repurchased
     85       2,183       —           2,268  
Distributions
     891       5,378       —           6,268  
Investment advisory fee
     121       558       —           679  
Administration fee
             245       —           245  
Unrealized appreciation on forward contracts
             1                   1  
Transfer agent fee
     138               —           138  
Pricing and bookkeeping fees
     16               —           16  
Trustees’ fees
     —       108       —           108  
Audit fee
     20               —           20  
Custody fee
     3               —           3  
Distribution and service fees
     9       16       —           25  
Deferred compensation plan
     4               —           4  
Other liabilities
     71       355       82           508  
 
                            
Total Liabilities
     1,519       740,059       82           741,659  
 
                            
Net Assets
   $ 273,938     $ 1,903,034     $ (82 )       $ 2,176,891  
 
                            
 
                                    
Composition of Net Assets:
                                    
Paid-in capital
   $ 272,860     $ 1,896,231       —         $ 2,169,091  
Overdistributed net investment income
     (51 )     3,094       (82 )       $ (287 )
Accumulated net realized gain (loss)
     (1,490 )     5,348       —         $ 9,078  
Unrealized appreciation on investments
     (361 )     (1,313 )               $ (665 )
Unrealized appreciation on futures and foreign currency
     —       (326 )     —           (326 )
 
                            
Net Assets
   $ 273,938     $ 1,903,034     $ (82 )       $ 2,176,891  
 
                            
 
                                    
Investors A:
                                    
Net assets
   $ —     $ 30,409,001     $ 12,309,775     (d)   $ 42,718,776  
Shares outstanding
     —       3,101,461       1,255,493     (d)     4,356,954  
 
                              
Net asset value per share (b)
   $ —     $ 9.80                 $ 9.80  
 
                              
Maximum sales charge
             3.25 %                    
Maximum offering price per share (c)
             10.13                      
 
                                    
Investors B: (a)
                                    
Net assets
   $ —     $ 9,706,887     $ 3,924,553     (d)   $ 13,631,440  
Shares outstanding
     —       989,641       400,118     (d)     1,389,759  
 
                              
Net asset value, offering and redemption price per share
   $ —     $ 9.81                 $ 9.81  
 
                              
 
                                    
Investors C: (a)
                                    
Net assets
   $ —     $ 1,470,218     $ 1,708,031     (d)   $ 3,178,249  
Shares outstanding
     —       149,967       174,225     (d)     324,192  
 
                              
Net asset value, offering and redemption price per share
   $ —     $ 9.80                 $ 9.80  
 
                              
 
                                    
Primary A: (a)
                                    
Net assets
   $ —     $ 1,861,447,560     $ 255,914,508     (d)   $ 2,117,362,068  
Shares outstanding
     —       189,711,109       26,232,094     (d)     215,943,203  
 
                              
Net asset value, offering and redemption price per share
   $ —     $ 9.81                 $ 9.81  
 
                              
 
                                    
Class A: (a)
                                    
Net assets
   $ 12,313,475     $ —     $ (12,313,475 )       $ —  
Shares outstanding
     937,543       —       (937,543 )         —  
 
                              
Net asset value per share (b)
   $ 13.13     $ —                 $ —  
 
                              
Maximum sales charge
                                    
Maximum offering price per share (c)
                                    
 
                                    
Class B: (a)
                                    
Net assets
   $ 3,925,733     $ —     $ (3,925,733 )       $ —  
Shares outstanding
     298,895       —       (298,895 )         —  
 
                              
Net asset value and offering price per share (b)
   $ 13.13     $ —                 $ —  
 
                              
 
                                    
Class C: (a)
                                    
Net assets
   $ 233,003     $ —     $ (233,003 )       $ —  
Shares outstanding
     17,741       —       (17,741 )         —  
 
                              
Net asset value and offering price per share (b)
   $ 13.13     $ —                 $ —  
 
                              
 
                                    
Class D: (a)
                                    
Net assets
   $ 1,475,540     $ —     $ (1,475,540 )       $ —  
Shares outstanding
     112,348       —       (112,348 )         —  
 
                              
Net asset value and offering price per share (b)
   $ 13.13     $ —                 $ —  
 
                              
 
                                    
Class Z: (a)
                                    
Net assets
   $ 255,991,426     $ —     $ (255,991,426 )       $ —  
Shares outstanding
     19,491,168       —       (19,491,168 )         —  
 
                              
Net asset value and offering price per share (b)
   $ 13.13     $ —                 $ —  
 
                              

(a) Class A, B, C, D and Z shares of Columbia Fixed Income Securities Fund are exchanged for Investor A, B, C, C and Primary A shares of Nations Bond Fund based on the net asset value per share of Nations Bond Fund’s Investor A, B, C, C and Primary A shares, respectively, at the time of the merger.

(b) Redemption price per share is equal to net assets value less any applicable contingent deferred sales charge.

(c) On sales of $50,000 or more the offering price is reduced.

(d) Adjustment reflects one time proxy, accounting, legal and other costs of the reorganization as approved by the Board of Trustees of $82,310 and $0 to be borne by Columbia Fixed Income Securities Fund and Nations Bond Fund, respectively.

(e) Reflects estimated shares issued to Target fund at the time of the merger.

 

Table of Contents

     
Pro- forma Combining
    
Statement of Operations
    
For the Twelve Months Ended March 31, 2005 (unaudited)
    
 
                                             
                                     
    Columbia         Nations                      
    Fixed Income         Bond                      
    Securities Fund         Fund     Pro Forma         Pro Forma      
(In thousands)   Target Fund         Acquiring Fund     Adjustments         Combined      
Investment Income:
                                            
Interest (Net of foreign withholding taxes of $-, $18, respectively)
   $ 12,229         $ 77,954     $ —         $ 90,183      
Dividend income from affiliated funds
                 2,560                          
Security lending
     —           147       —         $ 147      
 
                                    
Total Investment Income
     12,229           80,661       —           90,330      
 
                                    
 
                                            
Expenses:
                                            
Investment advisory fee
     1,649           7,919       (1,596 )         7,972     (e)
Administration fee
                 4,112       (506 )         3,606     (e)(g)
Distribution fee:
                                            
Class B / Investor B
     32           84       —           116     (a)
Class C / Investor C
     1           12       14           27     (g)
Class D
     13           —       (13 )         —     (g)
Service fee:
                                            
Class A / Investor A
     27           84       —           111     (a)
Class B / Investor B
     11           28       —           39     (a)
Class C / Investor C
           (c)     4       4           8     (g)
Class D
     4           —       (4 )         —     (g)
Transfer agent fee:
     711           588       (772 )         527     (f)(g)
Pricing and bookkeeping fees
     133           —       34           167     (e)
Trustees’ fees
     11           27       (4 )         34     (b)
Printing fees
     128           36       (19 )         145     (b)
Custody fee
     23           188       —           211      
Registration fees
     60           44       (56 )         48     (b)
Legal and audit
     50           118       (40 )         128     (b)
Non-Recurring Costs (see Note 5)
     17           565       —           582      
Other expenses
     14           152       —           166      
 
                                    
Total Expenses
     2,884           13,961       (2,958 )         13,887      
Fees and expenses waived or reimbursed by Investment Advisor
                 (1,057 )     1,057           —     (b)
Fees waived by Distributor - Class C
     —     (c)     —       —     (c)     —     (g)
Fees waived by Distributor - Class D
     (3 )         —       3           —     (g)
Custody earnings credit
     —           (23 )     —           (23 )    
Non-recurring costs assumed by Investment Advisor (see Note 5)
     (17 )         (565 )     —           (582 )    
 
                                    
Net Expenses
     2,864           12,316       (1,898 )         13,282      
 
                                    
Net Investment Income
     9,365           68,345       1,898           77,048      
 
                                    
 
                                            
Net Realized and Unrealized Gain (Loss) on Investments:
                                            
Net realized gain/(loss) on investments
     —           —       —           —      
Security transactions
     1,753           23,914                   25,667      
Swap contracts, Options and Futures
                 4,124                   4,124      
Foreign currency and net other assets
                 (2,586 )                 (2,586 )    
Net change in unrealized appreciation/depreciation on
                                     —      
Securities
     (14,489 )         (66,932 )                 (81,421 )    
Swap contracts and Futures
     10           641                   651      
Foreign currency and net other assets
     —           988       —           988      
 
                                    
Net
     (12,726 )         (39,851 )     —           (52,577 )    
 
                                    
 
                                            
Net Increase in Net Assets from Operations
   $ (3,361 )       $ 28,494     $ 1,898         $ 24,471      
 
                                    

(a) Based on the contract in effect for Nations Bond Fund, the surviving fund.

(b) Reflects elimination of duplicate expenses achieved as a result of merging funds.

(c) Amount rounds to less than $1,000.

(d) Based on new pricing and bookkeeping agreement

(e) Certain fees have been reduced based on the terms of the New York Attorney General Settlement. See Note 6 of the notes to the financial statements.

(f) Reflects the reduction of fees due to the consolidation of transfer agency services with one vendor.

(g) Adjustment to realign Columbia Fixed Income Securities Fund’s fees to Nations Bond Fund’s current fee structure.

 

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NATIONS BOND FUND
AND
COLUMBIA FIXED INCOME SECURITIES FUND

PRO FORMA COMBINING FINANCIAL STATEMENTS

Notes to Financial Statements
March 31, 2005
(unaudited)

Note 1. Organization

Nations Bond Fund (the “Acquiring Fund”), a series of Nations Funds Trust (the “Trust”), is a Delaware business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Columbia Fixed Income Securities Fund (“Target Fund”) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

Investment Goal

The Acquiring Fund seeks total return by investing in investment grade fixed income securities. The Target Fund seeks a high level of income by investing in a broad range of debt securities with intermediate to long-term maturities.

Fund Shares

The Acquiring Fund and the Target Fund each may issue an unlimited number of shares. The Acquiring Fund offers four classes of shares: Primary A, Investor A, Investor B and Investor C shares. The Target Fund offers five classes of shares: Class A, Class B, Class C, Class D and Class Z. As a result of the merger, Class A, Class B, Class C, Class D and Class Z shares of the Target Fund are exchanged for new Primary A, Investor A, Investor B and Investor C shares of the Aquiring Fund. Each share class has its own expense structure.

Note 2. Basis of Combination

The accompanying pro-forma financial statements are presented to show the effect of the proposed merger of the Target Fund by the Acquiring Fund as if such merger had occurred on April 1, 2004. The following notes refer to the accompanying pro-forma financial statements of such proposed merger.

Under the terms of the merger, the combination of the Target Fund and Acquiring Fund will be accounted for by the method of accounting for tax-free mergers of investment companies. The merger will be accomplished by a combination of the net assets of the Target Fund into the Acquiring Fund in exchange for new shares of the Acquiring Fund at net asset value.

The Pro Forma Investment Portfolio and Pro Forma Statement of Assets and Liabilities of the Target Fund and Acquiring Fund have been combined to reflect balances as of March 31, 2005. The Pro Forma Statement of Operations of the Target Fund and Acquiring Fund has been combined to reflect twelve months ended March 31, 2005. Banc of America Capital Management, LLC. (“BACAP”) expects that all of the securities held by the Target Fund as of March 31, 2005, would comply with the compliance guidelines and/or investment restrictions of the Acquiring Fund.

Following the merger the Acquiring Fund will be the accounting survivor. In accordance with accounting principles generally accepted in the United States of America, the historical cost of investment securities will be

 

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carried forward to the Acquiring Fund and the results of operations for pre-combined periods will not be re-stated.

The accompanying pro-forma financial statements should be read in conjunction with the financial statements of the Acquiring Fund and the Target Fund included within their respective annual shareholder reports dated March 31, 2005 and December 31, 2004 for the Acquiring Fund and the Target Fund, respectively, as well as the semi-annual shareholder reports dated September 30, 2004 and June 30, 2004 for the Acquiring Fund and the Target Fund, respectively.

Note 3. Significant Accounting Policies

The Acquiring Fund and the Target Fund use the identical policy for security valuation. Debt securities generally are valued by pricing services approved by the Fund’s Board of Trustees, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Certain securities may be valued based upon quotes provided by one or more principal market makers.

Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value.

Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.

Options are valued at the last reported sale price, or in the absence of a sale, the mean between the last quoted bid and ask price.

Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

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.

Futures Contracts

The Fund may invest in municipal and U.S. Treasury futures contracts. The Fund will invest in these instruments to hedge against the effects of changes in the value of portfolio securities due to anticipated changes in interest rates and/or market conditions, for duration management, or when the transactions are economically appropriate to the reduction of risk inherent in the management of the Fund and not for trading purposes. The use of futures contracts involves certain risks, which include: (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the instrument or the underlying securities, or (3) an inaccurate prediction by Columbia Management Advisors, Inc. of the future direction of interest rates. Any of these risks may involve amounts exceeding the variation margin recorded in the Fund’s Statement of Assets and Liabilities at any given time.

Upon entering into a futures contract, the Fund deposits cash or securities with the broker in an amount sufficient to meet the initial margin requirement. Subsequent payments are made or received by the Fund equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in

 

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unrealized gains or losses. The Fund also identifies portfolio securities as segregated with the custodian in a separate account in an amount equal to the futures contract. The Fund recognizes a realized gain or loss when the contract is closed or expires.

Options

The Fund may write call and put options on futures it owns or in which it may invest. Writing put options tends to increase the Fund’s exposure to the underlying instrument. Writing call options tends to decrease the Fund’s exposure to the underlying instrument. When the Fund writes a call or put option, an amount equal to the premium received is recorded as a liability and subsequently marked-to-market to reflect the current value of the option written. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against the amounts paid on the underlying future transaction to determine the realized gain or loss. The Fund as a writer of an option has no control over whether the underlying future may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the future underlying the written option. There is the risk the Fund may not be able to enter into a closing transaction because of an illiquid market.

The Fund may also purchase put and call options. Purchasing call options tends to increase the Fund’s exposure to the underlying instrument. Purchasing put options tends to decrease the Fund’s exposure to the underlying instrument. The Fund pays a premium, which is included in the Fund’s Statement of Assets and Liabilities as an investment and subsequently marked-to-market to reflect the current value of the option. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which expire are treated as realized losses. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying future transaction to determine the realized gain or loss. The Fund’s custodian will set aside cash or liquid portfolio securities equal to the amount of the written options contract commitment in a separate account.

Forward foreign currency transactions

The Fund may enter into forward currency exchange contracts only under two circumstances: (i) when the Fund enters into a contract for the purchase or sale of a security denominated in a foreign currency to ‘‘lock in’’ the U.S. exchange rate of the transaction, with such period being a short-dated contract covering the period between transaction date and settlement date; or (ii) when the investment advisor or sub-advisor believes that the currency of a particular foreign country may experience a substantial movement against the U.S. dollar. Forward foreign currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Fund as an unrealized gain or loss. When the contract is closed or offset with the same counterparty, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed or offset.

Forward foreign currency contracts will be used primarily to protect the Fund from adverse currency movements and will generally not be entered into for terms greater than one year. The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the Fund’s investment securities; however, it does establish a rate of exchange that can be achieved in the future. The use of forward foreign currency contracts involves the risk that anticipated currency movements will not be accurately predicted. A forward foreign currency contract would limit the risk of loss due to a decline in the value of a particular currency; however, it also would limit any potential gain that might result should the value of the currency increase instead of decrease. These contracts may involve market risk in excess of the unrealized gain or loss reflected in the Statement of assets and liabilities. In addition, the Fund could be exposed to risks if counterparties to the contracts are unable to meet the terms of their contracts. The counterparty risk exposure is, therefore, closely monitored and contracts are only executed with high credit quality financial institutions.

 

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Securities Lending

Under an agreement with Bank of New York (“BNY”), the Fund may lend its securities to certain approved brokers, dealers and other financial institutions. Each loan is collateralized by cash, in an amount at least equal to the market value of the securities loaned plus accrued income from the investment of the collateral. The cash collateral received is invested in repurchase agreements. A portion of the income generated by the investment of the collateral, net of any rebates paid by BNY to the borrowers, is remitted to BNY as lending agent, and the remainder is paid to the Fund. Generally, in the event of borrower default, the Fund has the right to use the collateral to offset any losses incurred. In the event the Fund is delayed or prevented from exercising its right to dispose of the collateral, there may be a potential loss to the Fund. The Fund bears the risk of loss with respect to the investment of collateral. The income earned by each Fund from securities lending is included in its Statement of Operations.

Delayed Delivery Securities

The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” basis. This may increase the risk if the other party to the transaction fails to deliver and causes the Fund to subsequently invest at less advantageous prices. The Fund identifies cash or liquid portfolio securities in an amount equal to the delayed delivery commitment.

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, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

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 tax-exempt or 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.

Note 4. Fees and Compensations Paid to Affiliates

Investment Advisory Fee

BACAP, a wholly-owned subsidiary of Bank of America, N.A. (‘‘Bank of America’’), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, is the investment advisor to the Acquiring Fund. Effective December 1, 2004, BACAP is entitled to receive an investment advisory fee, calculated daily and payable monthly, based on the Fund’s average daily net assets at the following annual rates:

         
Average Daily Net Assets   Annual Fee Rate
First $500 million
    0.40 %
$500 million to $1 billion
    0.35 %
$1 billion to $1.5 billion
    0.32 %
$1.5 billion to $3 billion
    0.29 %
$3 billion to $6 million
    0.28 %
Over $6 billion
    0.27 %

 

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Prior to December 1, 2004, BACAP received a monthly investment advisory fee at the annual rate of 0.40% of the Fund’s average daily net assets. For the year ended March 31, 2005, the Fund’s effective investment advisory fee rate was 0.40%.

Administration Fee

BACAP Distributors, LLC (‘‘BACAP Distributors’’), a wholly-owned subsidiary of Bank of America, provides administrative and other services to the Fund. Effective December 1, 2004, BACAP Distributors is entitled to receive an administration fee, computed daily and paid monthly, at the annual rate of 0.15% of the Fund’s average daily net assets. Prior to December 1, 2004, BACAP Distributors received a monthly administration fee at the annual rate of 0.05% of the Fund’s average daily net assets. For the year ended March 31, 2005, the Fund’s effective administration fee rate was 0.04%.

Transfer Agent Fee

PFPC Inc. serves as the transfer agent for the Fund’s shares. Bank of America serves as the sub-transfer agent for the Primary A Shares of the Fund. Bank of America is entitled to receive from the transfer agent a fee equal to the costs incurred by Bank of America in providing services pursuant to its obligations as sub-transfer agent at the annual rate of up to 0.01% of the net assets attributable to the Primary A shares of the Fund. For the year ended March 31, 2005, Bank of America earned $61,000 in sub-transfer agent fees from the Fund for providing such services. This amount is included in ‘‘Transfer agent fees’’ in the Fund’s Statement of Operations.

Underwriting Discounts, Service and Distribution Fees

BACAP Distributors serves as the distributor of the Fund’s shares. For the year ended March 31, 2005, the Distributor has retained net underwriting discounts of $8,000 on sales of the Fund’s Investor A shares and received net CDSC fees of $0, $26,000 and less than $500 on Investor A, Investor B and Investor C share redemptions, respectively.

The Fund has adopted shareholder servicing plans and distribution plans for the Investor B and Investor C shares of the Fund and a combined distribution and shareholder servicing plan for Investor A Shares of the Fund. The shareholder servicing plans permit the Fund to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes’ shares. Payments are made at an annual rate and paid monthly, as a percentage of average daily net assets, set from time to time by the Board of Trustees, and are charged as expenses of the Fund directly to the applicable share class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Bank of America and BACAP Distributors.

For the year ended March 31, 2005, the annual rates in effect and plan limits, as a percentage of average daily net assets, were as follows:

                 
    Current   Plan
    Rate   Limit
Investor A Combined Distribution and Shareholder Servicing Plan
    0.25 %     0.25 %
Investor B and Investor C Shareholder Servicing Plans
    0.25 %     0.25 %
Investor B and Investor C Distribution Plans
    0.75 %     0.75 %

Fees Paid to Officers and Trustees

With the exception of one officer, no officer, director or employee of Bank of America, BACAP Distributors or BACAP, or any affiliate thereof, receives any compensation from the Fund for serving as Trustee or Officer of the Trust. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the

 

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expenses associated with the Office of the Chief Compliance Officer. The Fund’s fee for the Office of the Chief Compliance Officer will not exceed $15,000 per year.

The Fund’s eligible Trustees may participate in a non-qualified deferred compensation plan which may be terminated at any time. All benefits provided under this plan are unfunded and any payments to plan participants are paid solely out of the Fund’s assets. Income earned on the plan participant’s deferral account is based on the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, on the rate of return of Nations Treasury Reserves, another portfolio of the Trust. The expense for the deferred compensation plan is included in ‘‘Trustees’ fees and expenses’’ in the Statement of operations. The liability for the deferred compensation plan is included in ‘‘Accrued Trustees’ fees and expenses’’ in the Statement of assets and liabilities.

Custody Credits

The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses on the Statement of Operations. 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.

Other

The Fund has made daily investments of cash balances in Nations Cash Reserves, another portfolio of the Trust, pursuant to an exemptive order received from the Securities and Exchange Commission. The income earned by the Fund from such investments is included in its Statement of operations as ‘‘Dividend income from affiliated funds.’’ BACAP and BACAP Distributors earn advisory and administration fees on the investments made in the Nations Cash Reserves in addition to the advisory and administration fees earned by BACAP and BACAP Distributors from the Fund. For the year ended March 31, 2005, BACAP and BACAP Distributors earned $380,000 of investment advisory Fees and $196,000 of administration fees, respectively, related to investments in affiliated funds.

A significant portion of the Fund’s Primary A shares represents investments by fiduciary accounts over which Bank of America has either sole or joint investment discretion.

Expense Limits and Fee Reimbursements

BACAP and/or BACAP Distributors have agreed to waive fees and reimburse the Fund through July 31, 2005 for certain expenses to the extent that total expenses (exclusive of interest expense, shareholder servicing and distribution fees) exceed 0.60% annually of the Fund’s average daily net assets.

BACAP and/or BACAP Distributors is entitled to recover from the Fund any fees waived or expenses reimbursed by BACAP and/or BACAP Distributors during the three year period following the date of such waiver or reimbursement, to the extent that such recovery would not cause the affected fund to exceed the expense limitations in effect at the time of recovery. There is no guarantee that these expense limitations will continue.

As of March 31, 2005, the amounts potentially recoverable by BACAP and/or BACAP Distributors pursuant to this arrangement within two years and three years are $1,044 and $100, respectively.

Note 5. Capital Shares

The pro-forma combining net asset value per share assumes the issuance of Acquiring Fund shares to Target Fund shareholders in connection with the proposed merger. The number of shares assumed to be issued is equal to the net asset value of the Target Fund divided by the net asset value per share of the Acquiring Fund as

 

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of March 31, 2005. The pro-forma number of shares outstanding, by class, for the combined entity consists of the following at March 31, 2005.

                         
      Shares of     Additional Shares     Total Shares
      Acquiring Fund     Assumed Issued     Outstanding
Class of Shares     Pre-Combination     with Merger     Post Combination
 
Investor A
    3,101,461       1,255,493       4,356,954  
Investor B
    989,641       400,118       1,389,759  
Investor C
    149,967       174,225       324,192  
Primary A
    189,711,109       26,232,094       215,943,203  

Note 6. Contingencies and Other Events

On February 9, 2005, BACAP and BACAP Distributors entered into an Assurance of Discontinuance with the New York Attorney General (the ‘‘NYAG Settlement’’) and consented to the entry of a cease-and-desist order by the U.S. Securities and Exchange Commission (the ‘‘SEC’’) (the ‘‘SEC Order’’). A copy of the NYAG Settlement is available as part of the Bank of America Corporation Form 8-K filing on February 10, 2005 and a copy of the SEC Order is available on the SEC’s website.

Under the terms of the SEC Order, BACAP and its affiliate, Banc of America Securities, LLC (‘‘BAS’’) have agreed, among other things, (1) to pay $250 million in disgorgement and $125 million in civil money penalties; (2) to cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; (3) to undertake various remedial measures to ensure compliance with the federal securities laws related to certain mutual fund trading practices; and (4) to retain an independent consultant to review their applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement also requires, among other things, BACAP along with Columbia Management Advisors, Inc. and Columbia Funds Distributors, Inc. — the investment advisor to and distributor of the Columbia Funds, respectively, — to reduce Columbia Funds, Nations Funds and other mutual funds management fees collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions. BACAP and BACAP Distributors are currently in the process of implementing the various terms of the NYAG Settlement and SEC Order.

Pursuant to the procedures set forth in the SEC Order, $375 million will be distributed in accordance with a distribution plan to be developed by the independent distribution consultant. The distribution plan must be based on a methodology developed in consultation with the BACAP, BACAP Distributors and the independent trustees of the Nations Funds and not unacceptable to the staff of the SEC. Although the distribution plan has not yet been formulated, it is anticipated that a significant portion of the settlement fund will be paid to shareholders or mutual funds of other mutual fund complexes that may have been harmed by the trading of the third parties referenced in the Settlements through systems provided by BAS. At this time, the distribution plan is still under development. As such, any gain to the Nations Funds or their shareholders cannot currently be determined. More specific information on the distribution plan will be communicated on a later date.

As a result of these matters or any adverse publicity or other developments resulting from them, including lawsuits brought by shareholders of the affected Nations Funds, 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 Nations Funds.

Civil Litigation

In connection with the events that resulted in the NYAG Settlement and SEC Order, various parties filed suits against Bank of America Corporation and certain of its affiliates, including BACAP and BACAP Distributors (collectively ‘‘BAC’’), Nations Funds Trust and its Board of Trustees. On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against several other mutual fund companies based on similar allegations to the United States District Court in Maryland for consolidated or coordinated pretrial proceedings (the ‘‘MDL’’). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL

 

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filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Nations Funds Trust, the Trustees, BAC and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of Nations Funds Trust against BAC and others that asserts claims under the federal securities laws and state common law. The MDL is ongoing. Accordingly, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

Separately, a putative class action (Reinke v. Bank of America N.A., et al.) was filed against Nations Funds Trust and others on December 16, 2004 in the United States District Court for the Eastern District of Missouri relating to the conversion of common trust funds and the investment of assets held in fiduciary accounts in the Funds. Nations Funds Trust has filed a motion to dismiss that is pending, and no discovery has been taken. At the present time, an estimate of the financial impact of this litigation on any Fund, if any, cannot currently be made.

For the fiscal year ended March 31, 2005, Bank of America Corporation has assumed $6.7 million of legal, shareholder communications, audit related, transfer agent, consulting and Trustee costs and fees incurred by the Funds impacted in connection with the regulatory and civil litigation matters discussed above. These non-recurring costs were allocated to the Funds based on their respective average nets assets for the year ended March 31, 2005. These non-recurring costs on a per Fund basis are shown in that Fund’s respective Statement of operations. Because these costs were borne by Bank of America Corporation and not any Fund, an offsetting waiver of these costs is also presented in each respective Fund’s Statement of operations as, ‘‘Costs assumed by Bank of America Corporation’’. The impact to the expense ratio of each impacted Fund is reflected in the Fund’s Financial highlights.