<Page>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-3009
Columbia Funds Trust II
---------------------------------------------------------
(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
---------------------------------------------------------
(Address of principal executive offices) (Zip code)
Vincent Pietropaolo, Esq.
Columbia Management Group, Inc.
One Financial Center
Boston, MA 02111
---------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-617-772-3698
-----------------
Date of fiscal year end: 08/31/05
------------
Date of reporting period: 02/28/05
------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
<Page>
[GRAPHIC]
COLUMBIA NEWPORT GREATER CHINA FUND
SEMIANNUAL REPORT
FEBRUARY 28, 2005
<Page>
TABLE OF CONTENTS
<Table>
Fund Profile 1
Performance Information 2
Understanding Your Expenses 3
Economic Update 4
Portfolio Managers' Report 5
Financial Statements 7
Investment Portfolio 8
Statement of Assets and Liabilities 12
Statement of Operations 13
Statements of Changes in Net Assets 14
Notes to Financial Statements 15
Financial Highlights 21
Important Information
About This Report 25
</Table>
Economic and market conditions change frequently. There is no assurance that the
trends described in this report will continue or commence.
NOT FDIC MAY LOSE VALUE
INSURED -------------------
NO BANK GUARANTEE
PRESIDENT'S MESSAGE
COLUMBIA NEWPORT GREATER CHINA FUND
[PHOTO OF CHRISTOPHER WILSON]
DEAR SHAREHOLDER:
In 2004, Columbia Funds became part of the Bank of America family, one of the
largest, most respected financial institutions in the United States. As a direct
result of this merger, a number of changes are in the works that we believe may
offer significant benefits for our shareholders. Plans are underway to combine
various Nations Funds and Columbia Funds together to form a single fund family
that covers a wide range of markets, sectors and asset classes under the
management of talented, seasoned investment professionals. As a result, some
funds will be merged in order to eliminate redundancies and fund management
teams will be aligned to maximize performance potential. You will receive more
detailed information about these proposed mergers, and you will be asked to vote
on certain fund changes that may affect you and your account. In this matter,
your timely response will help us to implement the changes in 2005.
The increased efficiencies we expect from a more streamlined offering of funds
may help us reduce fees charged to the funds, because larger funds often benefit
from size and scale of operations. For example, significant savings for the
combined complex may result from the consolidation of certain vendor agreements.
In fact, negotiations are currently underway to consolidate the transfer agency
of all of our funds and to consolidate custodial services, each under a single
vendor. We have reduced management fees for many funds as part of our settlement
agreement (See Note 8 in the Notes to Financial Statements) with the New York
Attorney General.
As a result of these changes, we believe we will offer shareholders an even
stronger lineup of investment options, with management expenses that continue to
be competitive and fair. What will not change as we enter this next phase of
consolidation is our commitment to the highest standards of performance and our
dedication to superior service. Change for the good has another name: it's
called improvement. It helps move us forward, and we believe that it represents
progress for all our shareholders in their quest for long-term financial
success. In the pages that follow, you'll find a discussion of the economic
environment during the period followed by a detailed report from the fund's
manager or managers on key factors that influenced performance. We hope that you
will read the manager reports carefully and discuss any questions you might have
with your financial advisor. As always, we thank you for choosing Columbia
Funds. We appreciate your continued confidence. And, we look forward to helping
you keep your long-term financial goals on target in the years to come.
Sincerely,
/s/ Christopher Wilson
Christopher Wilson
Head of Mutual Funds, Columbia Management
Christopher Wilson is Head of Mutual Funds for Columbia Management, responsible
for the day-to-day delivery of mutual fund services to the firm's investors.
With the exception of distribution, Chris oversees all aspects of the mutual
fund services operation, including treasury, investment accounting and
shareholder and broker services. Chris serves as Columbia Management's liaison
to the mutual fund boards of trustees. Chris joined Bank of America in August
2004.
<Page>
FUND PROFILE
COLUMBIA NEWPORT GREATER CHINA FUND
The information below gives you a snapshot of your fund at the end of the
reporting period. Your fund is actively managed, and the composition of its
portfolio will change over time.
TOP 10 HOLDINGS AS OF 02/28/05 (%)
<Table>
China Mobile Hong Kong 5.8
China Merchants Holdings International 5.6
Taiwan Semiconductor Manufacturing 5.0
PetroChina 4.9
Datang International Power Generation 4.1
Chinatrust Financial Holding 4.0
Sun Hung Kai Properties 3.7
Hon Hai Precision Industry 3.7
Hong Kong & China Gas 3.6
Henderson Land Development 3.4
</Table>
TOP 5 SECTORS AS OF 02/28/05 (%)
<Table>
Financials 23.7
Industrials 17.9
Information technology 15.6
Utilities 10.5
Telecommunication services 10.3
</Table>
Sector breakdown and portfolio holdings are calculated as a percentage of net
assets. Management style is determined by Columbia Management and is based on
the investment strategy and process as outlined in the fund's prospectus.
[SIDENOTE]
SUMMARY
- - FOR THE SIX-MONTH PERIOD ENDED FEBRUARY 28, 2005, THE FUND'S CLASS A SHARES
RETURNED 15.43% WITHOUT SALES CHARGE.
- - THE FUND, ITS BENCHMARK AND PEER GROUP AVERAGE ALL REGISTERED DOUBLE-DIGIT
RETURNS AS ECONOMIC PROGRESS CONTINUED THROUGHOUT THE REGION AND THE ENERGY
SECTOR, IN PARTICULAR, LOGGED STRONG GAINS.
- - THE FUND HAD LESS EXPOSURE TO ENERGY THAN ITS INDEX, WHICH HAMPERED
PERFORMANCE, AS DID OUR EMPHASIS ON HONG KONG STOCKS, WHICH TRAILED OTHER
ASIAN MARKETS.
[CHART]
<Table>
CLASS A SHARES 15.43%
MSCI CHINA INDEX 19.03%
</Table>
OBJECTIVE
Seeks long-term growth of capital by investing primarily in equity securities of
companies located in the greater China Region
TOTAL NET ASSETS
$82.4 million
MANAGEMENT STYLE BOX
[GRAPHIC]
1
<Page>
PERFORMANCE INFORMATION
COLUMBIA NEWPORT GREATER CHINA FUND
[CHART]
VALUE OF A $10,000 INVESTMENT 05/16/97 - 02/28/05
<Table>
<Caption>
CLASS A SHARES CLASS A SHARES
WITHOUT SALES CHARGE WITH SALES CHARGE MSCI CHINA INDEX HANG SENG INDEX
05/16/97 $ 10,000 $ 9,425 $ 10,000 $ 10,000
5/31/97 $ 13,418 $ 12,646 $ 10,000 $ 10,000
6/30/97 $ 14,415 $ 13,586 $ 10,224 $ 10,304
7/31/97 $ 15,104 $ 14,236 $ 11,624 $ 11,105
8/31/97 $ 13,417 $ 12,645 $ 12,309 $ 9,621
9/30/97 $ 13,701 $ 12,913 $ 10,262 $ 10,275
10/31/97 $ 10,149 $ 9,565 $ 8,596 $ 7,271
11/30/97 $ 9,631 $ 9,077 $ 7,040 $ 7,269
12/31/97 $ 9,887 $ 9,319 $ 6,832 $ 7,397
1/31/98 $ 7,778 $ 7,331 $ 5,094 $ 6,392
2/28/98 $ 10,474 $ 9,872 $ 6,901 $ 7,929
3/31/98 $ 10,346 $ 9,751 $ 6,723 $ 8,000
4/30/98 $ 9,352 $ 8,814 $ 6,030 $ 7,241
5/31/98 $ 7,944 $ 7,487 $ 5,239 $ 6,268
6/30/98 $ 6,852 $ 6,458 $ 4,422 $ 6,025
7/31/98 $ 5,963 $ 5,621 $ 3,622 $ 5,597
8/31/98 $ 4,774 $ 4,499 $ 2,641 $ 5,167
9/30/98 $ 6,287 $ 5,926 $ 3,782 $ 5,611
10/31/98 $ 7,770 $ 7,323 $ 4,159 $ 7,245
11/30/98 $ 8,049 $ 7,586 $ 4,291 $ 7,453
12/31/98 $ 7,892 $ 7,438 $ 3,937 $ 7,199
1/31/99 $ 7,097 $ 6,689 $ 3,205 $ 6,814
2/28/99 $ 6,968 $ 6,568 $ 3,069 $ 7,067
3/31/99 $ 7,756 $ 7,310 $ 3,487 $ 7,895
4/30/99 $ 9,000 $ 8,482 $ 4,362 $ 9,644
5/31/99 $ 8,818 $ 8,311 $ 4,372 $ 8,825
6/30/99 $ 10,867 $ 10,242 $ 6,420 $ 9,839
7/31/99 $ 10,336 $ 9,741 $ 5,619 $ 9,583
8/31/99 $ 10,579 $ 9,970 $ 5,574 $ 9,836
9/30/99 $ 9,986 $ 9,412 $ 5,351 $ 9,298
10/31/99 $ 10,366 $ 9,770 $ 4,919 $ 9,725
11/30/99 $ 12,096 $ 11,400 $ 4,825 $ 11,323
12/31/99 $ 13,241 $ 12,480 $ 4,462 $ 12,490
1/31/2000 $ 13,302 $ 12,537 $ 4,268 $ 11,421
2/29/2000 $ 14,425 $ 13,595 $ 3,484 $ 12,621
3/31/2000 $ 15,760 $ 14,854 $ 3,564 $ 12,853
4/30/2000 $ 14,061 $ 13,253 $ 3,900 $ 11,487
5/31/2000 $ 13,552 $ 12,773 $ 3,970 $ 10,924
6/30/2000 $ 15,009 $ 14,146 $ 4,500 $ 12,014
7/31/2000 $ 15,503 $ 14,612 $ 4,415 $ 12,519
8/31/2000 $ 15,162 $ 14,290 $ 4,236 $ 12,761
9/30/2000 $ 14,114 $ 13,303 $ 3,721 $ 11,694
10/31/2000 $ 13,287 $ 12,523 $ 3,547 $ 11,141
11/30/2000 $ 12,574 $ 11,851 $ 3,075 $ 10,481
12/31/2000 $ 13,121 $ 12,366 $ 3,100 $ 11,317
1/31/2001 $ 14,107 $ 13,296 $ 3,549 $ 12,072
2/28/2001 $ 13,652 $ 12,867 $ 3,226 $ 11,086
3/31/2001 $ 12,445 $ 11,729 $ 2,703 $ 9,645
4/30/2001 $ 13,408 $ 12,637 $ 2,977 $ 10,146
5/31/2001 $ 13,363 $ 12,594 $ 3,058 $ 10,026
6/30/2001 $ 13,074 $ 12,322 $ 3,159 $ 9,929
7/31/2001 $ 12,436 $ 11,721 $ 2,731 $ 9,378
8/31/2001 $ 11,313 $ 10,662 $ 2,140 $ 8,498
9/30/2001 $ 10,175 $ 9,590 $ 2,067 $ 7,637
10/31/2001 $ 10,592 $ 9,983 $ 2,120 $ 7,744
11/30/2001 $ 11,472 $ 10,813 $ 2,327 $ 8,689
12/31/2001 $ 11,737 $ 11,062 $ 2,335 $ 8,782
1/31/2002 $ 11,714 $ 11,040 $ 2,116 $ 8,263
2/28/2002 $ 11,629 $ 10,961 $ 2,133 $ 8,077
3/31/2002 $ 12,342 $ 11,633 $ 2,253 $ 8,584
4/30/2002 $ 12,879 $ 12,139 $ 2,351 $ 8,972
5/31/2002 $ 12,864 $ 12,124 $ 2,387 $ 8,859
6/30/2002 $ 12,236 $ 11,532 $ 2,307 $ 8,308
7/31/2002 $ 11,501 $ 10,839 $ 2,206 $ 8,050
8/31/2002 $ 10,949 $ 10,319 $ 2,163 $ 7,934
9/30/2002 $ 10,220 $ 9,633 $ 1,991 $ 7,186
10/31/2002 $ 10,251 $ 9,662 $ 2,003 $ 7,486
11/30/2002 $ 10,849 $ 10,225 $ 2,085 $ 7,999
12/31/2002 $ 10,272 $ 9,681 $ 2,007 $ 7,408
1/31/2003 $ 10,487 $ 9,884 $ 2,103 $ 7,358
2/28/2003 $ 10,356 $ 9,761 $ 2,050 $ 7,251
3/31/2003 $ 9,902 $ 9,332 $ 1,971 $ 6,955
4/30/2003 $ 9,994 $ 9,419 $ 1,974 $ 7,072
5/31/2003 $ 11,072 $ 10,435 $ 2,226 $ 7,749
6/30/2003 $ 11,519 $ 10,857 $ 2,369 $ 7,825
7/31/2003 $ 12,645 $ 11,918 $ 2,603 $ 8,282
8/31/2003 $ 13,778 $ 12,985 $ 2,777 $ 8,994
9/30/2003 $ 14,125 $ 13,313 $ 2,798 $ 9,352
10/31/2003 $ 15,227 $ 14,351 $ 3,224 $ 10,127
11/30/2003 $ 14,934 $ 14,076 $ 3,256 $ 10,275
12/31/2003 $ 15,905 $ 14,990 $ 3,764 $ 10,504
1/31/2004 $ 16,579 $ 15,626 $ 3,740 $ 11,082
2/29/2004 $ 17,579 $ 16,568 $ 3,973 $ 11,587
3/31/2004 $ 16,611 $ 15,655 $ 3,638 $ 10,632
4/30/2004 $ 15,169 $ 14,297 $ 3,163 $ 10,029
5/31/2004 $ 15,789 $ 14,881 $ 3,380 $ 10,343
6/30/2004 $ 15,680 $ 14,779 $ 3,359 $ 10,423
7/31/2004 $ 15,440 $ 14,552 $ 3,372 $ 10,385
8/31/2004 $ 15,998 $ 15,078 $ 3,386 $ 10,946
9/30/2004 $ 16,431 $ 15,486 $ 3,636 $ 11,233
10/31/2004 $ 16,494 $ 15,545 $ 3,548 $ 11,201
11/30/2004 $ 17,780 $ 16,758 $ 3,905 $ 12,125
12/31/2004 $ 18,200 $ 17,153 $ 3,835 $ 12,285
1/31/2005 $ 17,730 $ 16,711 $ 3,752 $ 11,805
02/28/2005 $ 18,471 $ 17,409 $ 4,028 $ 12,219
</Table>
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. The Morgan
Stanley Capital International (MSCI) China Index is designed to broadly and
fairly represent the full diversity of business activities in China. This index
aims to capture 85% of the free float adjusted market capitalization in each
industry group. The Hang Seng Stock Index is an unmanaged index that tracks the
performance of approximately 70% of the total market capitalization of the stock
exchange of Hong Kong. Unlike the fund, indices are not investments, do not
incur fees or expenses and are not professionally managed. It is not possible to
invest directly in an index. Securities in the fund may not match those in an
index. Shares of the Columbia Newport Greater China Fund were offered during a
subscription period that began June 20, 1997 and ended July 25, 1997. The
subscription proceeds were invested into the fund on July 25, 1997. The fund's
performance returns are calculated from its inception date of May 16, 1997.
Index performance is from May 31, 1997.
AVERAGE ANNUAL TOTAL RETURN AS OF 02/28/05 (%)
<Table>
<Caption>
SHARE CLASS A B C Z
- ------------------------------------------------------------------------------------------------
INCEPTION 05/16/97 05/16/97 05/16/97 05/16/97
- ------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ------------------------------------------------------------------------------------------------
6-MONTH (CUMULATIVE) 15.43 8.79 15.00 10.00 14.95 13.95 15.61
1-YEAR 5.05 -0.99 4.26 -0.74 4.15 3.15 5.31
5-YEAR 5.06 3.83 4.28 3.94 4.24 4.24 5.85
LIFE 8.20 7.38 7.47 7.47 7.65 7.65 8.84
</Table>
AVERAGE ANNUAL TOTAL RETURN AS OF 12/31/04 (%)
<Table>
<Caption>
SHARE CLASS A B C Z
- ------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ------------------------------------------------------------------------------------------------
6-MONTH (CUMULATIVE) 16.07 9.40 15.69 10.69 15.69 14.69 16.24
1-YEAR 14.43 7.85 13.62 8.62 13.48 12.48 14.76
5-YEAR 6.57 5.31 5.79 5.47 5.73 5.73 7.38
LIFE 8.17 7.33 7.45 7.45 7.63 7.63 8.83
</Table>
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR
CLASS B SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR ONLY. THE
"WITHOUT SALES CHARGE" RETURNS DO NOT INCLUDE THE EFFECT OF SALES CHARGES. IF
THEY HAD, RETURNS WOULD BE LOWER. ALL RESULTS SHOWN ASSUME REINVESTMENT OF
DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12b-1
FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN
SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
[SIDENOTE]
PERFORMANCE OF A $10,000 INVESTMENT
05/16/97 - 02/28/05 ($)
<Table>
<Caption>
SALES CHARGE: WITHOUT WITH
- ---------------------------------------
Class A 18,471 17,409
Class B 17,526 17,526
Class C 17,754 17,754
Class Z 19,349 n/a
</Table>
Performance data quoted represents past performance and current performance may
be lower or higher. Past performance is no guarantee of future results. The
investment return and principal value will fluctuate so that shares, when
redeemed, may be worth more or less than the original cost. Please visit
www.columbiafunds.com for daily and most recent month-end performance updates.
2
<Page>
UNDERSTANDING YOUR EXPENSES
COLUMBIA NEWPORT GREATER CHINA FUND
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory, Rule 12b-1 fees, and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
09/01/04 - 02/28/05
<Table>
<Caption>
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) FUND'S ANNUALIZED
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL EXPENSE RATIO (%)
Class A 1,000.00 1,000.00 1,154.32 1,016.07 9.40 8.80 1.76
Class B 1,000.00 1,000.00 1,150.01 1,012.35 13.38 12.52 2.51
Class C 1,000.00 1,000.00 1,149.51 1,012.35 13.38 12.52 2.51
Class Z 1,000.00 1,000.00 1,156.11 1,017.31 8.07 7.55 1.51
</Table>
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
365.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided will not help you determine the
relative total costs of owning shares of different funds. If these transactional
costs were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other fund companies, it is important to note that hypothetical
examples are meant to highlight the continuing cost of investing in a fund and
do not reflect any transactional costs, such as sales charges or redemption or
exchange fees.
[SIDENOTE]
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
- - FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS
SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT
www.columbiafunds.com OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
- - FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD,"
LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE
COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1.
YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING
THE PERIOD
3
<Page>
ECONOMIC UPDATE
COLUMBIA NEWPORT GREATER CHINA FUND
During the six-month period that began September 1, 2004, and ended February 28,
2005, the global economy expanded at an estimated pace of 4.6%. Despite three
quarters of somewhat slower growth, mainland China reported that its gross
domestic product (GDP) grew at an annualized rate of 9.5% in 2004. Hong Kong's
economy bounced back strongly from SARS-related problems that weighed on the
region in 2003 and grew 8.1%. Taiwan reported a solid but less spectacular GDP
gain of approximately 5.0%.
STOCK MARKETS RECORD STRONG GAINS
In general, strong economic growth translated into double-digit gains for the
region's stock markets. The MSCI China Index rose 19.03%. Hong Kong stocks
returned 11.60%, as measured by the Hang Seng Index. The MSCI All Country Asia
ex Japan Index, which measures a wider range of markets, including the smaller
and emerging markets of Southeast Asia, rose 24.85% for the six-month period.
CHINA CONTINUES TO DRIVE ASIA'S FORTUNES
Despite a relatively successful attempt by the People's Bank of China to rein in
the pace of economic growth, Chinese exports hit record levels in 2004, thanks
in part to a weaker dollar. Agricultural output soared and retail sales also
helped spur the sizeable jump in GDP. Imports of crude oil rose nearly 35% to
meet rising demand from electricity producers and to satisfy the need for fuel
for autos and trucks as private ownership of vehicles rapidly expands.
Yet, some key indicators suggest that the government's efforts to slow the
economy are working. Industrial production is growing at a slower pace compared
to 2003 and early 2004, and fixed asset investment has slowed. Slower growth in
the euro zone and the United States in 2005 is expected to lower demand for
Chinese exports going forward.
EMPLOYMENT GAINS FUELED GROWTH IN HONG KONG AND TAIWAN
Hong Kong's economic recovery broadened in 2004, partly to meet strong demand
from mainland China but also in response to improved domestic demand. Although
unemployment remains stubbornly high at around 6.5%, increased economic activity
helped drive Hong Kong's unemployment rate down by more than one percentage
point. Hong Kong's pace of growth is likely to slow in 2005 in response to
slower worldwide growth. Export demand is likely to fall and household income
growth is not expected to be strong, which could restrain domestic demand.
Taiwan's economy expanded in 2004 as declining unemployment and a strong
currency drove stronger domestic demand. Economic growth slowed somewhat during
the first half of this reporting period, and 2005 could bring even slower
growth. The Taiwanese government has lowered its official forecast for growth to
just over 4.0%, citing lower expectations for exports. However, the slowdown in
exports could be offset by a further pick-up in domestic demand.
LOOKING AHEAD
Because both Hong Kong and Taiwan rely heavily on mainland China for economic
activity, they share a common fate. If further measures to cool the Chinese
economy fail, a hard landing would have a significant impact on both economies.
A sharp decline in consumer spending in the United States, Europe and Japan
would also hurt both Hong Kong and Taiwan. As a result, all eyes remain fixed on
China as an indicator of growth for the region in the period ahead.
[SIDENOTE]
SUMMARY:
FOR THE SIX-MONTH PERIOD ENDED FEBRUARY 28, 2005
- - SOLID ECONOMIC GROWTH HELPED THE STOCK MARKETS OF GREATER CHINA GENERATE
DOUBLE-DIGIT GAINS. THE MSCI CHINA INDEX RETURNED 19.03%.
- - HONG KONG STOCKS, AS MEASURED BY THE HANG SENG INDEX, GAINED 11.60%.
- - THE CHINESE GOVERNMENT'S ABILITY TO REIN IN ECONOMIC GROWTH IS EXPECTED TO
BE A KEY FACTOR IN ECONOMIC AND MARKET PERFORMANCE IN 2005.
[CHART]
<Table>
MSCI CHINA INDEX 19.03%
HANG SENG INDEX 11.60%
</Table>
The Morgan Stanley Capital International (MSCI) China Index is designed to
broadly and fairly represent the full diversity of business activities in China.
This index aims to capture 85% of the free float adjusted market capitalization
in each industry group. The Hang Seng Stock Index is an unmanaged index that
tracks the performance of approximately 70% of the total market capitalization
of the stock exchange of Hong Kong.
4
<Page>
PORTFOLIO MANAGER'S REPORT
COLUMBIA NEWPORT GREATER CHINA FUND
For the six-month period ended February 28, 2005, class A shares of Columbia
Newport Greater China Fund returned 15.43% without sales charge. The fund
trailed the MSCI China Index, which returned 19.03%. The fund's return was
higher than the 11.60% return of the Hang Seng Stock Index, an index that tracks
the performance of Hong Kong stocks, which are not included in the MSCI China
Index. The fund underperformed the 16.99% average of its peer group, the Lipper
China Region Funds Category.(1)
An underweight in the energy sector held back the fund's return as the sector
was one of the period's strongest performers. However, the fund benefited from
exposure to two strong performers in the energy sector--China-based PetroChina
and Hong Kong-based CNOOC. A significant overweight in Hong Kong, which did not
perform as well as some other Asian markets, also detracted from results. Hong
Kong stocks pulled back in the second half of 2004 after making strong gains in
the first half of the year.
ECONOMIC GROWTH LINKED TO DOMESTIC TRENDS
For more than a year, we have focused the portfolio on three important trends
that we believe could have long-term influence on economic growth in the Greater
China region--infrastructure development, domestic consumption and
"re-inflation," or an end to the long deflationary period that some Asian
economies have experienced. Because the portfolio was already positioned to take
advantage of these broad themes, we made relatively few changes over the
six-month period. The fund's country allocation remained relatively unchanged;
and financials, industrials and information technology remain its largest sector
weights.
In China we added marginally to a few stocks, such as China Merchants Holdings
International, the country's leading public port operator. After successfully
engineering a modest slowdown in economic growth early in 2004, China's stock
market rallied later in the year, and the fund's investments in the country
contributed substantially to return.
Real estate stocks accounted for the largest part of our position in Hong Kong.
Over the period, economic growth continued to improve and prices for goods and
services rose. Unfortunately, this improving economic backdrop was overshadowed
by concerns about rising US interest rates, and Hong Kong stocks--particularly
in the property sector--turned in mixed results. Henderson Land Development
declined while Swire Pacific produced a double-digit return. Although we were
disappointed in the short-term results of some property stocks, we maintained
the fund's relatively large position in the sector because we continue to
believe that the long-term prospects for Hong Kong real estate are positive.
(1) Lipper Inc., a widely respected data provider in the industry, calculates an
average total return for mutual funds with similar investment objectives as
those of the fund.
[SIDENOTE]
NET ASSET VALUE PER SHARE
AS OF 02/28/05 ($)
<Table>
Class A 23.61
Class B 23.15
Class C 23.45
Class Z 24.45
</Table>
DISTRIBUTIONS DECLARED PER SHARE
09/01/04 - 02/28/05 ($)
<Table>
Class A 0.21
Class B 0.06
Class C 0.06
Class Z 0.26
</Table>
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 02/28/05 (%)
<Table>
PetroChina 4.9
CNOOC 1.9
China Merchants Holdings
International 5.6
Henderson Land Development 3.4
Swire Pacific 1.8
Delta Electronics 1.0
Hon Hai Precision Industry 3.7
Taiwan Semiconductor Manufacturing 5.0
Chinatrust Financial Holding 4.0
Cathay Financial Holding 2.8
Esprit Holdings 2.7
Li & Fung 3.3
</Table>
Your fund is actively managed and the composition of its portfolio will change
over time. Information provided is calculated as a percentage of net assets.
5
<Page>
FINDING VALUE IN TECHNOLOGY IN TAIWAN
We added to the fund's holdings in Taiwan, where we took advantage of
attractively-valued technology stocks. We invested in Delta Electronics which
contributed to return. Two long-term holdings, Hon Hai Precision Industry and
Taiwan Semiconductor Manufacturing, also aided results. Chinatrust Financial
Holding and Cathay Financial Holding--both Taiwan financial companies--generated
double-digit returns.
Investments in consumer discretionary stocks reflected our outlook for a pick-up
in consumer spending. In Hong Kong, retailer Esprit Holdings did well, as did Li
& Fung, a global supplier of consumer products.
A CONTINUED EMPHASIS ON DOMESTIC TRENDS
We continue to believe that companies that rely on internal consumer and
business spending rather than on exports will be the strongest performers. In
China, valuations are high after a nine-month rally, based on historical price
levels, but we do not plan to reduce the fund's exposure to China. Instead, we
will seek buying opportunities during market pullbacks. We plan to add to our
positions in Taiwan and Hong Kong. We believe the Taiwan market is attractively
priced because it has not performed as well as other Asian markets. In Hong
Kong, we believe that re-inflation has the potential to boost corporate profits
and, ultimately, stock prices.
[PHOTO OF ERIC SANDLUND]
Eric Sandlund has managed Columbia Newport Greater China Fund since March 2004
and has been with the advisor and its predecessors or affiliate organizations
since June 2002.
/s/ Eric Sandlund
Equity investments are affected by stock market fluctuations that occur in
response to economic and business developments.
International investing may involve certain risks, including foreign taxation,
currency fluctuations, risks associated with possible differences in financial
standards and other monetary and political risks. A portfolio of stocks from a
single region poses additional risks due to limited diversification.
Some of the countries the fund invests in are considered emerging economies,
which means there may be greater risks associated with investing there than in
more developed countries. In addition, concentration of investments in a single
region may result in greater volatility.
[SIDENOTE]
WE PLAN TO ADD TO OUR POSITIONS IN TAIWAN AND HONG KONG.
6
<Page>
FINANCIAL STATEMENTS
FEBRUARY 28, 2005 (UNAUDITED) COLUMBIA NEWPORT GREATER CHINA FUND
A GUIDE TO UNDERSTANDING YOUR FUND'S FINANCIAL STATEMENTS
INVESTMENT PORTFOLIO
The investment portfolio details all of the fund's holdings and their market
value as of the last day of the reporting period. Portfolio holdings are
organized by type of asset, industry, country or geographic region (if
applicable) to demonstrate areas of concentration and diversification.
STATEMENT OF ASSETS AND LIABILITIES
This statement details the fund's assets, liabilities, net assets and share
price for each share class as of the last day of the reporting period. Net
assets are calculated by subtracting all the fund's liabilities (including any
unpaid expenses) from the total of the fund's investment and non-investment
assets. The share price for each class is calculated by dividing net assets for
that class by the number of shares outstanding in that class as of the last day
of the reporting period.
STATEMENT OF OPERATIONS
This statement details income earned by the fund and the expenses accrued by the
fund during the reporting period. The Statement of Operations also shows any net
gain or loss the fund realized on the sales of its holdings during the period,
as well as any unrealized gains or losses recognized over the period. The total
of these results represents the fund's net increase or decrease in net assets
from operations.
STATEMENT OF CHANGES IN NET ASSETS
This statement demonstrates how the fund's net assets were affected by its
operating results, distributions to shareholders and shareholder transactions
(e.g., subscriptions, redemptions and dividend reinvestments) during the
reporting period. The Statement of Changes in Net Assets also details changes in
the number of shares outstanding.
NOTES TO FINANCIAL STATEMENTS
These notes disclose the organizational background of the fund, its significant
accounting policies (including those surrounding security valuation, income
recognition and distributions to shareholders), federal tax information, fees
and compensation paid to affiliates and significant risks and contingencies.
FINANCIAL HIGHLIGHTS
The financial highlights demonstrate how the fund's net asset value per share
was affected by the fund's operating results. The financial highlights table
also discloses the classes' performance and certain key ratios (e.g., class
expenses and net investment income as a percentage of average net assets).
7
<Page>
INVESTMENT PORTFOLIO
FEBRUARY 28, 2005 (UNAUDITED) COLUMBIA NEWPORT GREATER CHINA FUND
<Table>
<Caption>
SHARES VALUE ($)
--------------------------------------------------------------------------------
COMMON STOCKS - 97.9%
CONSUMER DISCRETIONARY - 7.7%
DISTRIBUTORS - 4.4% China Resources Enterprise Ltd. 652,000 926,152
Li & Fung Ltd. 1,580,000 2,703,842
Distributors Total 3,629,994
HOUSEHOLD DURABLES - 0.6% Guangdong Kelon Electrical
Holdings Co., Ltd., Class H (a) 1,576,000 443,927
Household Durables Total 443,927
SPECIALTY RETAIL - 2.7% Esprit Holdings Ltd. 315,000 2,248,882
Specialty Retail Total 2,248,882
--------------
CONSUMER
DISCRETIONARY TOTAL 6,322,803
CONSUMER STAPLES - 2.6%
FOOD & STAPLES RETAILING - 0.5% Convenience Retail Asia Ltd. 1,176,000 435,367
Food & Staples
Retailing Total 435,367
FOOD PRODUCTS - 2.1% China Mengniu Dairy Co., Ltd. (a) 534,000 402,648
People's Food Holdings Ltd. 1,564,000 1,298,519
Food Products Total 1,701,167
--------------
CONSUMER STAPLES TOTAL 2,136,534
ENERGY - 6.8%
OIL & GAS - 6.8% CNOOC Ltd. 2,772,500 1,588,304
PetroChina Co., Ltd., Class H 6,378,000 4,014,370
Oil & Gas Total 5,602,674
--------------
ENERGY TOTAL 5,602,674
FINANCIALS - 23.7%
COMMERCIAL BANKS - 7.0% Chinatrust Financial Holding Co.,
Ltd. 2,769,247 3,310,244
Dah Sing Financial Group 224,800 1,697,857
Hang Seng Bank Ltd. 58,000 793,871
Commercial Banks Total 5,801,972
DIVERSIFIED FINANCIAL SERVICES - 2.0% Aeon Credit Service Co., Ltd. 524,000 352,735
Guoco Group Ltd. 89,000 876,966
JCG Holdings Ltd. 424,000 404,846
Diversified Financial
Services Total 1,634,547
INSURANCE - 3.7% Cathay Financial Holding Co., Ltd. 1,143,000 2,320,311
China Insurance International
Holdings Co., Ltd. 1,726,000 752,454
Insurance Total 3,072,765
REAL ESTATE - 11.0% Cheung Kong Holdings Ltd. 114,000 1,082,337
Henderson Land Development Co., Ltd. 602,000 2,820,525
Shanghai Forte Land Co., Ltd.,
Class H 1,522,000 536,113
Sun Hung Kai Properties Ltd. 332,000 3,082,905
Swire Pacific Ltd., Class A 185,000 1,507,802
Real Estate Total 9,029,682
--------------
FINANCIALS TOTAL 19,538,966
</Table>
See Accompanying Notes to Financial Statements.
8
<Page>
<Table>
<Caption>
SHARES VALUE ($)
--------------------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
HEALTH CARE - 0.6%
HEALTH CARE EQUIPMENT & SUPPLIES - 0.6% Golden Meditech Co., Ltd. 952,000 192,372
Pihsiang Machinery Manufacturing
Co., Ltd. 128,698 307,469
Health Care Equipment &
Supplies Total 499,841
--------------
HEALTH CARE TOTAL 499,841
INDUSTRIALS - 17.9%
ELECTRICAL EQUIPMENT - 1.2% Johnson Electric Holdings Ltd. 1,049,000 994,000
Electrical Equipment Total 994,000
INDUSTRIAL CONGLOMERATES - 8.6% China Merchants Holdings
International Co., Ltd. 2,192,000 4,573,172
Hutchison Whampoa Ltd. 278,200 2,501,759
Industrial Conglomerates
Total 7,074,931
MARINE - 2.6% Cosco Pacific Ltd. 972,000 2,156,091
Marine Total 2,156,091
TRANSPORTATION INFRASTRUCTURE - 5.5% Anhui Expressway Co., Ltd.,
Class H 1,442,000 812,382
Jiangsu Expressway Co., Ltd.,
Class H 2,198,000 1,076,940
Zhejiang Expressway Co., Ltd.,
Class H 3,628,000 2,616,015
Transportation
Infrastructure Total 4,505,337
--------------
INDUSTRIALS TOTAL 14,730,359
INFORMATION TECHNOLOGY - 15.6%
COMPUTERS & PERIPHERALS - 3.4% Acer, Inc. 802,582 1,306,199
Lite-On Technology Corp. 1,348,732 1,464,630
Computers &
Peripherals Total 2,770,829
ELECTRONIC EQUIPMENT & INSTRUMENTS - 6.1% Delta Electronics, Inc., GDR 471,000 827,568
Hon Hai Precision Industry Co., Ltd. 650,226 3,030,159
Synnex Technology International
Corp. 799,700 1,198,180
Electronic Equipment &
Instruments Total 5,055,907
INTERNET SOFTWARE & SERVICES - 0.4% China Finance Online Co., ADR (a) 44,400 313,464
Internet Software &
Services Total 313,464
SEMICONDUCTORS & SEMICONDUCTOR Taiwan Semiconductor Manufacturing
EQUIPMENT - 5.0% Co., Ltd. 2,335,692 4,146,344
Semiconductors &
Semiconductor
Equipment Total 4,146,344
SOFTWARE - 0.7% Ninetowns Digital World Trade
Holdings Ltd., ADS (a) 66,600 577,422
Software Total 577,422
--------------
INFORMATION TECHNOLOGY
TOTAL 12,863,966
MATERIALS - 2.2%
METALS & MINING - 2.2% Yanzhou Coal Mining Co., Ltd.,
Class H 1,126,000 1,777,375
Metals & Mining Total 1,777,375
--------------
MATERIALS TOTAL 1,777,375
TELECOMMUNICATION SERVICES - 10.3%
DIVERSIFIED TELECOMMUNICATION China Telecom Corp., Ltd.,
SERVICES - 2.8% Class H 6,016,000 2,303,418
Diversified
Telecommunication Services
Total 2,303,418
</Table>
See Accompanying Notes to Financial Statements.
9
<Page>
<Table>
<Caption>
SHARES VALUE ($)
--------------------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
TELECOMMUNICATION SERVICES - (CONTINUED)
WIRELESS TELECOMMUNICATION SERVICES - 7.5% China Mobile Hong Kong Ltd. 1,476,500 4,786,670
Taiwan Cellular Corp. 1,330,000 1,434,324
Wireless Telecommunication
Services Total 6,220,994
--------------
TELECOMMUNICATION SERVICES
TOTAL 8,524,412
UTILITIES - 10.5%
ELECTRIC UTILITIES - 5.4% Datang International Power
Generation Co., Ltd., Class H 4,402,000 3,403,471
Huaneng Power International,
Inc., Class H 1,352,000 1,045,607
Electric Utilities Total 4,449,078
GAS UTILITIES - 5.1% Hong Kong & China Gas Co., Ltd. 1,390,304 2,948,458
Xinao Gas Holdings Ltd. (a) 2,292,000 1,268,864
Gas Utilities Total 4,217,322
--------------
UTILITIES TOTAL 8,666,400
Total Common Stocks
(cost of $56,440,276) 80,663,330
<Caption>
PAR ($)
--------------------------------------------------------------------------------
SHORT-TERM OBLIGATION - 1.4%
Repurchase agreement with State
Street Bank & Trust Co., dated
02/28/05, due 03/01/05 at 2.520%,
collateralized by a U.S. Treasury
Bond maturing 02/15/25, market value
of $1,130,642 (repurchase proceeds
$1,106,077) 1,106,000 1,106,000
Total Short-Term Obligation
(cost of $1,106,000) 1,106,000
TOTAL INVESTMENTS - 99.3%
(COST OF $57,546,276) (b) 81,769,330
OTHER ASSETS & LIABILITIES, NET - 0.7% 593,598
NET ASSETS - 100.0% 82,362,928
</Table>
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for federal tax purposes is $57,546,276.
ACRONYM NAME
ADR American Depositary Receipt
ADS American Depositary Shares
GDR Global Depositary Receipt
See Accompanying Notes to Financial Statements.
10
<Page>
<Table>
<Caption>
SUMMARY OF SECURITIES % OF TOTAL
BY COUNTRY VALUE ($) INVESTMENTS
- -------------------------------------------------------
Hong Kong 41,098,877 50.3%
Taiwan 19,345,429 23.7
China 18,920,505 23.0
Singapore 1,298,519 1.6
United States* 1,106,000 1.4
------------ -----
$ 81,769,330 100.0%
============ =====
</Table>
* Represents short-term obligation.
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
At February 28, 2005, the Fund held investments in the following sectors:
<Table>
<Caption>
SECTOR % OF NET ASSETS
- ---------------------------------------------------------
Financials 23.7%
Industrials 17.9
Information Technology 15.6
Utilities 10.5
Telecommunication Services 10.3
Consumer Discretionary 7.7
Energy 6.8
Consumer Staples 2.6
Materials 2.2
Health Care 0.6
Short-Term Obligation 1.4
Other Assets & Liabilities, Net 0.7
-----
100.0%
=====
</Table>
See Accompanying Notes to Financial Statements.
11
<Page>
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 2005 (UNAUDITED) COLUMBIA NEWPORT GREATER CHINA FUND
<Table>
<Caption>
($)
---------------------------------------------------------------------------------------
ASSETS Investments, at cost 57,546,276
----------------
Investments, at value 81,769,330
Cash 366
Foreign currency (cost of $74,364) 75,204
Receivable for:
Fund shares sold 762,560
Interest 77
Deferred Trustees' compensation plan 6,401
----------------
Total Assets 82,613,938
LIABILITIES Payable for:
Fund shares repurchased 100,264
Investment advisory fee 58,190
Transfer agent fee 22,049
Pricing and bookkeeping fees 6,907
Custody fee 7,433
Distribution and service fees 27,251
Deferred Trustees' fees 6,401
Other liabilities 22,515
----------------
Total Liabilities 251,010
NET ASSETS 82,362,928
COMPOSITION OF NET ASSETS Paid-in capital 92,888,199
Overdistributed net investment income (243,635)
Accumulated net realized loss (34,505,419)
Net unrealized appreciation on:
Investments 24,223,054
Foreign currency translations 729
----------------
NET ASSETS 82,362,928
CLASS A Net assets 50,441,709
Shares outstanding 2,136,792
Net asset value per share 23.61(a)(b)
Maximum offering price per share ($23.61/0.9425) 25.05(c)
CLASS B Net assets 11,952,990
Shares outstanding 516,312
Net asset value and offering price per share 23.15(a)(b)
CLASS C Net assets 11,968,805
Shares outstanding 510,304
Net asset value and offering price per share 23.45(a)(b)
CLASS Z Net assets 7,999,424
Shares outstanding 327,221
Net asset value, offering and redemption price per share 24.45(b)
</Table>
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) Redemption price per share is equal to net asset value less any applicable
redemption fee.
(c) On sales of $50,000 or more the offering price is reduced.
See Accompanying Notes to Financial Statements.
12
<Page>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2005 (UNAUDITED)
COLUMBIA NEWPORT GREATER CHINA FUND
<Table>
<Caption>
($)
-------------------------------------------------------------------------------------
INVESTMENT INCOME Dividends 634,539
Interest 7,767
----------------
Total Investment Income 642,306
EXPENSES Investment advisory fee 365,159
Distribution fee:
Class B 41,914
Class C 39,311
Service fee:
Class A 61,078
Class B 13,971
Class C 13,104
Transfer agent fee 96,161
Pricing and bookkeeping fees 17,092
Trustees' fees 3,133
Custody fee 37,300
Non-recurring costs (See Note 8) 676
Other expenses 63,625
----------------
Total Expenses 752,524
Non-recurring costs assumed by Investment Advisor (See Note 8) (676)
Custody earnings credit (187)
----------------
Net Expenses 751,661
----------------
Net Investment Loss (109,355)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON Net realized gain on:
INVESTMENTS AND FOREIGN CURRENCY Investments 852,415
Foreign currency transactions 21,343
----------------
Net realized gain 873,758
Net change in unrealized appreciation/depreciation on:
Investments 10,208,614
Foreign currency translations 503
----------------
Net change in unrealized appreciation/depreciation 10,209,117
----------------
Net Gain 11,082,875
----------------
Net Increase in Net Assets from Operations 10,973,520
</Table>
See Accompanying Notes to Financial Statements.
13
<Page>
STATEMENT OF CHANGES IN NET ASSETS
COLUMBIA NEWPORT GREATER CHINA FUND
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, AUGUST 31,
INCREASE (DECREASE) IN NET ASSETS: 2005 ($) 2004 ($)
- ------------------------------------------ -----------------------------------------------------------------------------------
OPERATIONS Net investment income (loss) (109,355) 490,889
Net realized gain on investments and
foreign currency transactions 873,758 3,011,456
Net change in unrealized appreciation/depreciation
on investments and foreign currency translations 10,209,117 4,744,596
-------------------------------
Net Increase from Operations 10,973,520 8,246,941
DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income:
Class A (470,125) (271,209)
Class B (28,877) --
Class C (26,795) --
Class Z (73,253) (33,006)
-------------------------------
Total Distributions Declared to Shareholders (599,050) (304,215)
SHARE TRANSACTIONS Class A:
Subscriptions 4,772,091 11,934,006
Distributions reinvested 375,691 202,579
Redemptions (8,549,658) (13,899,730)
-------------------------------
Net Decrease (3,401,876) (1,763,145)
Class B:
Subscriptions 1,212,093 8,194,945
Distributions reinvested 20,937 --
Redemptions (1,290,886) (3,513,395)
-------------------------------
Net Increase (Decrease) (57,856) 4,681,550
Class C:
Subscriptions 1,930,492 10,274,672
Distributions reinvested 21,479 --
Redemptions (853,722) (4,715,322)
-------------------------------
Net Increase 1,098,249 5,559,350
Class Z:
Subscriptions 2,469,207 6,509,751
Distributions reinvested 60,968 19,453
Redemptions (551,428) (3,704,101)
-------------------------------
Net Increase 1,978,747 2,825,103
Net Increase (Decrease) from Share Transactions (382,736) 11,302,858
Redemption fees 961 7,435
-------------------------------
Total Increase in Net Assets 9,992,695 19,253,019
NET ASSETS Beginning of period 72,370,233 53,117,214
End of period (including (overdistributed)
undistributed net investment income
of $(243,635) and $464,770, respectively) 82,362,928 72,370,233
CHANGES IN SHARES Class A:
Subscriptions 213,372 587,185
Issued for distributions reinvested 16,263 10,373
Redemptions (383,987) (693,251)
-------------------------------
Net Decrease (154,352) (95,693)
Class B:
Subscriptions 55,566 402,492
Issued for distributions reinvested 922 --
Redemptions (59,019) (176,010)
-------------------------------
Net Increase (Decrease) (2,531) 226,482
Class C:
Subscriptions 86,335 507,747
Issued for distributions reinvested 934 --
Redemptions (38,453) (232,916)
-------------------------------
Net Increase 48,816 274,831
Class Z:
Subscriptions 106,282 308,478
Issued for distributions reinvested 2,550 963
Redemptions (23,928) (174,971)
-------------------------------
Net Increase 84,904 134,470
</Table>
See Accompanying Notes to Financial Statements.
14
<Page>
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2005 (UNAUDITED) COLUMBIA NEWPORT GREATER CHINA FUND
NOTE 1. ORGANIZATION
Columbia Newport Greater China Fund (the "Fund"), a series of Columbia Funds
Trust II (the "Trust"), is a non-diversified portfolio. The Trust 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 Fund seeks long-term growth of capital by investing primarily in equity
securities of companies located in the Greater China Region.
FUND SHARES
The Fund may issue an unlimited number of shares and offers four classes of
shares: Class A, Class B, Class C and Class Z. Each share class has its own
sales charge and expense structure.
Class A shares are subject to a maximum front-end sales charge of 5.75% based on
the amount of initial investment. Class A shares purchased without an initial
sales charge are subject to a 1.00% contingent deferred sales charge ("CDSC") on
shares sold within eighteen months on an original purchase of $1 million to $25
million. Class B shares are subject to a maximum CDSC of 5.00% based upon the
holding period after purchase. Class B shares will convert to Class A shares in
a certain number of years after purchase, depending on the program under which
shares were purchased. Class C shares are subject to a 1.00% CDSC on shares sold
within one year after purchase. Class Z shares are offered continuously at net
asset value. There are certain restrictions on the purchase of Class Z shares,
as described in the Fund's prospectus.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements.
SECURITY VALUATION
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 closing bid price on
such exchanges or over-the-counter markets.
Short-term debt obligations maturing within 60 days are valued at amortized
cost, which approximates market value.
Foreign securities are generally valued at the last sale price on the foreign
exchange or market on which they trade. If any foreign share prices are not
readily available as a result of limited share activity, the securities are
valued at the last sale price of the local shares in the principal market in
which such securities are normally traded.
Generally, trading in foreign securities is substantially completed each day at
various times prior to the close of the New York Stock Exchange ("NYSE"). The
values of such securities used in computing the net asset value of the Fund's
shares are determined as of such times. Foreign currency exchange rates are
generally determined at 2:00 p.m. Eastern (U.S.) time. Events affecting the
values of such foreign securities and such exchange rates may occur between the
times at which they are determined and the close of the customary trading
session of the NYSE, which would not be reflected in the computation of the
Fund's net asset value. If events materially affecting the values of such
foreign securities occur and it is determined that market quotations are not
reliable, then these foreign securities will be valued at their fair value using
procedures approved by the Board of Trustees. The Fund may use a systematic fair
valuation model provided by an independent third party to value securities
principally traded in foreign markets in order to adjust for possible stale
pricing that may occur between the close of the foreign exchanges and the time
for valuation. If a security is valued at a "fair value", such value is likely
to be different from the last quoted market price for the security.
Investments for which market quotations are not readily available, or quotations
which management
15
<Page>
believes are not appropriate, are valued at fair value under procedures approved
by 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.
REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions with institutions that
the Fund's investment advisor has determined are creditworthy. The Fund, through
its custodian, receives delivery of underlying securities collateralizing a
repurchase agreement. Collateral is at least equal, at all times, to the value
of the repurchase obligation including interest. A repurchase agreement
transaction involves certain risks in the event of default or insolvency of the
counterparty. These risks include possible delays or restrictions upon the
Fund's ability to dispose of the underlying securities and a possible decline in
the value of the underlying securities during the period while the Fund seeks to
assert its rights.
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Corporate actions and dividend
income are recorded on the ex-date, except for certain foreign securities which
are recorded as soon after ex-date as the Fund becomes aware of such, net of
non-reclaimable tax withholdings.
FOREIGN CURRENCY TRANSACTIONS
The values of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates. Net realized and
unrealized gains (losses) on foreign currency transactions include gains
(losses) arising from the fluctuation in exchange rates between trade and
settlement dates on securities transactions, gains (losses) arising from the
disposition of foreign currency and currency gains (losses) between the accrual
and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes, the Fund does not distinguish that portion of
gains (losses) on investments which is due to changes in foreign exchange rates
from that which is due to changes in market prices of the investments. Such
fluctuations are included with the net realized and unrealized gains (losses) on
investments.
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 taxable income, if any, for its tax year, and as such
will not be subject to federal income taxes. In addition, the Fund intends to
distribute in each calendar year substantially all of its net investment income,
capital gains and certain other amounts, if any, such that the Fund should not
be subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on ex-date. Net realized capital
gains, if any, are distributed at least annually.
NOTE 3. FEDERAL TAX INFORMATION
The tax character of distributions paid during the years ended August 31, 2004
was as follows:
<Table>
<Caption>
AUGUST 31, 2004
- --------------------------------------------------------------------------------
Distributionss paid from:
Ordinary income $ 304,215
</Table>
Unrealized appreciation and depreciation at February 28, 2005, based on cost of
investments for federal income tax purposes and excluding any unrealized
appreciation and depreciation from changes in the value of other assets and
liabilities resulting from changes in exchange rates, was:
<Table>
Unrealized appreciation $ 27,315,065
Unrealized depreciation (3,092,011)
-------------
Net unrealized appreciation $ 24,223,054
</Table>
16
<Page>
The following capital loss carryforwards, determined as of August 31, 2004, may
be available to reduce taxable income arising from future net realized gains on
investments, if any, to the extent permitted by the Internal Revenue Code:
<Table>
<Caption>
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
- -----------------------------------------------------------------
2007 $ 29,627,550
2008 703,958
2010 5,047,669
$ 35,379,177
</Table>
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
INVESTMENT ADVISORY FEE
Columbia Management Advisors, Inc. ("Columbia"), an indirect wholly owned
subsidiary of Bank of America Corporation ("BOA"), is the investment advisor to
the Fund and receives a monthly investment advisory fee based on the Fund's
average daily net assets at the following annual rates:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
- -----------------------------------------------------------------
First $1 billion 0.95%
Next $500 million 0.87%
Next $1.5 billion 0.82%
Next $3 billion 0.77%
Over $6 billion 0.72%
</Table>
Prior to November 1, 2004, Columbia received a monthly investment advisory fee
based on the Fund's average daily net assets as follows:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
- -----------------------------------------------------------------
First $1 billion 0.95%
Next $500 million 0.90%
Over $1.5 billion 0.85%
</Table>
For the six months ended February 28, 2005, the Fund's annualized effective
investment advisory fee rate was 0.95%.
ADMINISTRATION FEES
Columbia provides administrative and other services to the Fund. The Fund is not
charged a fee for these services.
PRICING AND BOOKKEEPING FEES
Columbia is responsible for providing pricing and bookkeeping services to the
Fund under a pricing and bookkeeping agreement. Under a separate agreement (the
"Outsourcing Agreement"), Columbia has delegated those functions to State Street
Corporation ("State Street"). As a result, Columbia pays the total fees
collected to State Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual flat fee of $10,000 paid monthly, and in any month that
the Fund's average daily net assets exceed $50 million, an additional monthly
fee. The additional fee rate is calculated by taking into account the fees
payable to State Street under the Outsourcing Agreement. This rate is applied to
the average daily net assets of the Fund for that month The Fund also pays
additional fees for pricing services based on the number of securities held by
the Fund. For the six months ended February 28, 2005, the Fund's annualized
effective pricing and bookkeeping fee rate, inclusive of out-of-pocket expenses,
was 0.044%.
TRANSFER AGENT FEES
Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia,
provides shareholder services to the Fund and has subcontracted with Boston
Financial Data Services ("BFDS") to serve as sub-transfer agent. For such
services, the Transfer Agent receives a fee, paid monthly, at the annual rate of
$28.00 per open account. The Transfer Agent also receives reimbursement for
certain out-of-pocket expenses.
For the six months ended February 28, 2005, the Fund's annualized effective
transfer agent fee rate, inclusive of out-of-pocket expenses, was 0.25%.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Columbia Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia,
is the principal underwriter of the Fund. For the six months ended February 28,
2005, the Distributor has retained net underwriting discounts of $14,477 on
sales of the Fund's Class A shares and received CDSC fees of $9,651 and $2,399
on Class B and Class C share redemptions, respectively for the period.
The Fund has adopted a 12b-1 plan (the "Plan") which requires the payment of a
monthly service fee to the Distributor at the annual rate of 0.25% of the
average daily net assets attributable to Class A, Class B and Class C shares of
the Fund. The Plan also requires the
17
<Page>
payment of a monthly distribution fee to the Distributor at the annual rate of
0.75% of the average daily net assets attributable to Class B and Class C shares
only.
The CDSC and the fees received from the Plan are used principally as repayment
to the Distributor for amounts paid by the Distributor to dealers who sold such
shares.
EXPENSE LIMITS AND FEE REIMBURSEMENTS
Columbia has voluntarily agreed to waive fees and reimburse certain expenses to
the extent that total expenses (exclusive of distribution and service fees,
brokerage commissions, interest, taxes and extraordinary expenses, if any)
exceed 1.90% annually of the Fund's average daily net assets. This arrangement
may be revised or discontinued by Columbia at any time.
CUSTODY CREDITS
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. The Fund could have invested a portion of the
assets utilized in connection with the expense offset arrangement in an
income-producing asset if it had not entered into such an agreement.
FEES PAID TO OFFICERS AND TRUSTEES
With the exception of one officer, all officers of the Fund are employees of
Columbia or its affiliates and receive no compensation from the Fund. Effective
August 23, 2004, the Board of Trustees appointed a Chief Compliance Officer to
the Fund in accordance with federal securities regulations. The Fund, along with
other affiliated funds, will pay its pro-rata share of the expenses associated
with the Office of the Chief Compliance Officer. The Fund's fee will not exceed
$15,000 per year.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
OTHER
Columbia provides certain services to the Fund related to Sarbanes-Oxley
compliance. For the six months ended February 28, 2005, the Fund paid $791 to
Columbia for such services. This amount is included in "Other expenses" on the
Statement of Operations.
NOTE 5. PORTFOLIO INFORMATION
For the six months ended February 28, 2005, the cost of purchases and proceeds
from sales of securities, excluding short-term obligations, were $2,803,676 and
$4,445,507, respectively.
NOTE 6. REDEMPTION FEES
The Fund imposes a 2.00% redemption fee to shareholders of Class Z shares who
redeem shares held for 60 days or less. Effective January 3, 2005, the Fund also
began imposing a 2.00% redemption fee to shareholders of Class A, Class B and
Class C shares who redeem shares held for 60 days or less. Redemption fees,
which are retained by the Fund, are accounted for as an addition to paid-in
capital and are allocated to each class proportionately for purposes of
determining the net asset value of each class. For the six months ended February
28, 2005, the redemption fees for Class A, Class B, Class C and Class Z shares
of the Fund amounted to $600, $140, $135 and $86, respectively.
NOTE 7. LINE OF CREDIT
The Fund and other affiliated funds participate in a $350,000,000 committed
unsecured revolving line of credit provided by State Street Bank and Trust
Company. Borrowings are used for temporary or emergency purposes to facilitate
portfolio liquidity. Interest is charged to each participating fund based on its
borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In
addition, a commitment fee of 0.10% per annum is accrued and apportioned among
the participating funds based on their pro-rata portion of the unutilized line
of credit. The commitment fee is included in "Other expenses" on the Statement
of Operations.
For the six months ended February 28, 2005, the Fund did not borrow under this
arrangement.
NOTE 8. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES
FOREIGN SECURITIES
There are certain additional risks involved when investing in foreign securities
that are not inherent
18
<Page>
with investments in domestic securities. These risks may involve foreign
currency exchange rate fluctuations, adverse political and economic developments
and the possible prevention of currency exchange or other foreign governmental
laws or restrictions. In addition, the liquidity of foreign securities may be
more limited than that of domestic securities.
Investments in emerging market countries are subject to additional risk. The
risk of foreign investments is typically increased in less developed countries.
These countries are also more likely to experience high levels of inflation,
deflation or currency devaluation which could hurt their economies and
securities markets.
GEOGRAPHIC CONCENTRATION
Because the Fund's investments are concentrated in the Greater China Region,
events within the region will have a greater effect on the Fund than if the Fund
were more geographically diversified. In addition, events in any one country
within the region may impact the other countries or the region as a whole.
Markets in the region can experience significant volatility due to social,
regulatory and political uncertainties.
INDUSTRY FOCUS
As a non-diversified fund, the Fund may invest a greater percentage of its total
assets in the securities of fewer issuers than a diversified fund. The Fund may,
therefore, have a greater risk of loss from a few issuers than a similar fund
that invests more broadly.
LEGAL PROCEEDINGS
On February 9, 2005, Columbia and Columbia Funds Distributor, Inc. (collectively
the "Columbia Group") entered into an Assurance of Discontinuance with the New
York Attorney General ("NYAG") (the "NYAG Settlement") and consented to the
entry of a cease-and-desist order by the Securities and Exchange Commission
("SEC") (the "SEC Order"). The SEC Order and the NYAG Settlement are referred to
February 28, 2005 (Unaudited) Columbia Newport Greater China Fundcollectively as
the "Settlements". The Settlements contain substantially the same terms and
conditions as outlined in the agreements in principle which Columbia Group
entered into with the SEC and NYAG in March 2004.
Under the terms of the SEC Order, the Columbia Group has agreed, among other
things, to: pay $70 million in disgorgement and $70 million in civil money
penalties; cease and desist from violations of the antifraud provisions and
certain other provisions of the federal securities laws; maintain certain
compliance and ethics oversight structures; retain an independent consultant to
review the Columbia Group's applicable supervisory, compliance, control and
other policies and procedures; and retain an independent distribution consultant
(see below). The Columbia Funds have also voluntarily undertaken to implement
certain governance measures designed to maintain the independence of their
boards of trustees. The NYAG Settlement also, among other things, requires
Columbia and its affiliates, Banc of America Capital Management, LLC and BACAP
Distributors LLC to reduce certain Columbia Funds, Nations Funds and other
mutual fund management fees collectively by $32 million per year for five years,
for a projected total of $160 million in management fee reductions.
Pursuant to the procedures set forth in the SEC Order, the $140 million in
settlement amounts described above will be distributed in accordance with a
distribution plan to be developed by an independent distribution consultant, who
is acceptable to the SEC staff and the Columbia Funds' independent trustees. The
distribution plan must be based on a methodology developed in consultation with
the Columbia Group and the Fund's independent trustees and not unacceptable to
the staff of the SEC.
As a result of these matters or any adverse publicity or other developments
resulting from them, there may be increased redemptions or reduced sales of fund
shares, which could increase transaction costs or operating expenses, or have
other adverse consequences for the funds.
A copy of the SEC Order is available on the SEC website at http://www.sec.gov. A
copy of the NYAG Settlement is available as part of the Bank of America
Corporation Form 8-K filing on February 10, 2005.
In connection with the events described in detail above, various parties have
filed suit against certain funds, their Boards and/or Bank of America (and
affiliated entities). More than 300 cases (including those filed against
entities unaffiliated with the funds, their Boards and/or FleetBoston and its
affiliated entities) have been consolidated in a multi-district proceeding and
transferred to the Federal District Court in Maryland. Recently, certain
Columbia funds and affiliated entities have been named as defendants
19
<Page>
in several direct and derivative actions under various sections of the
Investment Company Act of 1940, as amended, alleging, among other things, that
the fees and expenses paid by those funds are excessive.
On January 11, 2005 a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the Funds
and Columbia. The lawsuit alleges that defendants violated common law duties to
fund shareholders as well as sections of the Investment Company Act of 1940, by
failing to ensure that the Fund and other affiliated funds participated in
securities class action settlements for which the funds were eligible.
Specifically, plaintiffs allege that defendants failed to submit proof of claims
in connection with settlements of securities class action lawsuits filed against
companies in which the funds held positions.
On March 2, 2005, four civil revenue sharing actions alleging, among other
things, that various mutual funds advised by Columbia Management and certain
other affiliates inappropriately used fund assets to pay brokers to promote the
funds by directing fund brokerage transactions to such brokers and did not
February 28, 2005 (Unaudited) Columbia Newport Greater China Fund fully disclose
such arrangements to shareholders, and charged excessive 12b-1 fees, were
consolidated into a single action in the United States District Court for
Massachusetts (In re Columbia Entities Litigation, Civil Action No.
04-11704-REK). The consolidated complaint has not yet been filed.
The funds and the other defendants to these actions, including Columbia and
various of its affiliates, certain other mutual funds advised by Columbia and
its affiliates, and various directors of such funds, have denied these
allegations and are contesting the plaintiffs' claims. These proceedings are
ongoing, however, based on currently available information, Columbia believes
that these lawsuits are without merit, that the likelihood they will have a
material adverse impact on any fund is remote, and that the lawsuits are not
likely to materially affect its ability to provide investment management
services to its clients, including the funds.
For the six months ended February 28, 2005, Columbia has assumed $676 of legal,
consulting services and Trustees' fees incurred by the Fund in connection with
these matters.
20
<Page>
FINANCIAL HIGHLIGHTS
COLUMBIA NEWPORT GREATER CHINA FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, --------------------------------------------------------------------
CLASS A SHARES 2005 2004 2003(a) 2002(a) 2001(a) 2000(a)
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 20.64 $ 17.88 $ 14.29 $ 14.91 $ 19.98 $ 13.94
INCOME FROM INVESTMENT
OPERATIONS:
Net investment
income (loss) (b) (0.01) 0.17 0.14 0.10 0.12 0.05
Net realized and unrealized
gain (loss) on investments
and foreign currency 3.19 2.70 3.53 (0.57) (5.19) 5.99
---------------- ---------- -------- -------- --------- ---------
Total from Investment
Operations 3.18 2.87 3.67 (0.47) (5.07) 6.04
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income (0.21) (0.11) (0.08) (0.15) -- --
REDEMPTION FEES:
Redemption fees added
to paid-in-capital --(b)(c) --(b)(c) -- -- -- --
NET ASSET VALUE, END OF PERIOD $ 23.61 $ 20.64 $ 17.88 $ 14.29 $ 14.91 $ 19.98
Total return (d) 15.43%(e) 16.11% 25.84%(f) (3.22)%(f) (25.38)%(f) 43.33%(f)
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (g) 1.76%(h) 1.89% 2.15% 2.15% 2.15% 2.15%
Interest expense -- -- --%(i) --%(i) -- --
Expenses (g) 1.76%(h) 1.89% 2.15% 2.15% 2.15% 2.15%
Net investment income (loss) (g) (0.06)%(h) 0.84% 0.97% 0.65% 0.68% 0.26%
Waiver/reimbursement -- -- 0.37% 0.29% 0.21% 0.10%
Portfolio turnover rate 4%(e) 25% 33% 16% 14% 28%
Net assets, end of period (000's) $ 50,442 $ 47,282 $ 42,685 $ 33,201 $ 37,652 $ 64,722
</Table>
(a) For the years ended August 31, 2003, 2002, 2001 and 2000, the Fund was
audited by Ernst & Young LLP.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Rounds to less than $0.01 per share.
(d) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(e) Not annualized.
(f) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
(i) Rounds to less than 0.01%
21
<Page>
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, --------------------------------------------------------------------
CLASS B SHARES 2005 2004 2003(a) 2002(a) 2001(a) 2000(a)
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 20.18 $ 17.51 $ 14.02 $ 14.63 $ 19.75 $ 13.88
INCOME FROM INVESTMENT
OPERATIONS:
Net investment
income (loss) (b) (0.09) 0.05 0.04 (0.02) (0.01) (0.09)
Net realized and unrealized
gain (loss) on investments
and foreign currency 3.12 2.62 3.45 (0.55) (5.11) 5.96
---------------- ---------- -------- -------- --------- ---------
Total from Investment
Operations 3.03 2.67 3.49 (0.57) (5.12) 5.87
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income (0.06) -- -- (0.04) -- --
REDEMPTION FEES:
Redemption fees added
to paid-in-capital --(b)(c) --(b)(c) -- -- -- --
NET ASSET VALUE, END OF PERIOD $ 23.15 $ 20.18 $ 17.51 $ 14.02 $ 14.63 $ 19.75
Total return (d) 15.00%(e) 15.25% 24.89%(f) (3.93)%(f) (25.92)%(f) 42.29%(f)
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (g) 2.51%(h) 2.64% 2.90% 2.90% 2.90% 2.90%
Interest expense -- -- --%(i) --%(i) -- --
Expenses (g) 2.51%(h) 2.64% 2.90% 2.90% 2.90% 2.90%
Net investment income (loss) (g) (0.85)%(h) 0.23% 0.30% (0.10)% (0.07)% (0.49)%
Waiver/reimbursement -- -- 0.37% 0.29% 0.21% 0.10%
Portfolio turnover rate 4%(e) 25% 33% 16% 14% 28%
Net assets, end of period (000's) $ 11,953 $ 10,471 $ 5,121 $ 3,850 $ 4,151 $ 6,335
</Table>
(a) For the years ended August 31, 2003, 2002, 2001 and 2000, the Fund was
audited by Ernst & Young LLP.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Rounds to less than $0.01 per share.
(d) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(e) Not annualized.
(f) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
(i) Rounds to less than 0.01%
22
<Page>
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, --------------------------------------------------------------------
CLASS C SHARES 2005 2004 2003(a) 2002(a) 2001(a) 2000(a)
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 20.45 $ 17.76 $ 14.22 $ 14.84 $ 20.03 $ 14.10
INCOME FROM INVESTMENT
OPERATIONS:
Net investment
income (loss) (b) (0.10) 0.04 0.05 (0.02) (0.01) (0.09)
Net realized and unrealized
gain (loss) on investments
and foreign currency 3.16 2.65 3.49 (0.56) (5.18) 6.02
---------------- ---------- -------- -------- --------- ---------
Total from Investment
Operations 3.06 2.69 3.54 (0.58) (5.19) 5.93
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income (0.06) -- -- (0.04) -- --
REDEMPTION FEES:
Redemption fees added
to paid-in-capital --(b)(c) --(b)(c) -- -- -- --
NET ASSET VALUE, END OF PERIOD $ 23.45 $ 20.45 $ 17.76 $ 14.22 $ 14.84 $ 20.03
Total return (d) 14.95%(e) 15.15% 24.89%(f) (3.94)%(f) (25.91)%(f) 42.06%(f)
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (g) 2.51%(h) 2.64% 2.90% 2.90% 2.90% 2.90%
Interest expense -- -- --%(i) --%(i) -- --
Expenses (g) 2.51%(h) 2.64% 2.90% 2.90% 2.90% 2.90%
Net investment income (loss) (g) (0.89)%(h) 0.20% 0.35% (0.10)% (0.07)% (0.49)%
Waiver/reimbursement -- -- 0.37% 0.29% 0.21% 0.10%
Portfolio turnover rate 4%(e) 25% 33% 16% 14% 28%
Net assets, end of period (000's) $ 11,969 $ 9,436 $ 3,316 $ 1,812 $ 1,352 $ 1,296
</Table>
(a) For the years ended August 31, 2003, 2002, 2001 and 2000, the Fund was
audited by Ernst & Young LLP.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Rounds to less than $0.01 per share.
(d) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(e) Not annualized.
(f) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
(i) Rounds to less than 0.01%
23
<Page>
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, --------------------------------------------------------------------
CLASS Z SHARES 2005 2004 2003(a) 2002(a) 2001(a) 2000(a)
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 21.38 $ 18.51 $ 14.41 $ 15.05 $ 20.11 $ 14.01
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (b) --(c) 0.22 0.11 0.14 0.16 0.09
Net realized and unrealized
gain (loss) on investments
and foreign currency 3.33 2.81 4.10 (0.59) (5.22) 6.01
---------------- ---------- -------- -------- --------- ---------
Total from Investment
Operations 3.33 3.03 4.21 (0.45) (5.06) 6.10
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income (0.26) (0.16) (0.12) (0.19) -- --
REDEMPTION FEES:
Redemption fees added
to paid-in-capital --(b)(c) --(b)(c) 0.01 -- -- --
NET ASSET VALUE, END OF PERIOD $ 24.45 $ 21.38 $ 18.51 $ 14.41 $ 15.05 $ 20.11
Total return (d) 15.61%(e) 16.44% 29.51%(f) (3.10)%(f) (25.16)%(f) 43.54%(f)
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (g) 1.51%(h) 1.64% 1.90% 1.90% 1.90% 1.90%
Interest expense -- -- --%(i) --%(i) -- --
Expenses (g) 1.51%(h) 1.64% 1.90% 1.90% 1.90% 1.90%
Net investment income (g) 0.01%(h) 1.06% 0.70% 0.90% 0.93% 0.51%
Waiver/reimbursement -- -- 0.37% 0.29% 0.21% 0.10%
Portfolio turnover rate 4%(e) 25% 33% 16% 14% 28%
Net assets, end of period (000's) $ 7,999 $ 5,182 $ 1,996 $ 138 $ 145 $ 164
</Table>
(a) For the years ended August 31, 2003, 2002, 2001 and 2000, the Fund was
audited by Ernst & Young LLP.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Rounds to less than $0.01 per share.
(d) Total return at net asset value assuming all distributions reinvested.
(e) Not annualized
(f) Had the Investment Advisor/Administrator not waived or reimbursed a portion
of expenses, total return would have been reduced.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
(i) Rounds to less than 0.01%
24
<Page>
IMPORTANT INFORMATION ABOUT THIS REPORT
COLUMBIA NEWPORT GREATER CHINA FUND
TRANSFER AGENT
Columbia Funds Services, Inc.
P.O. Box 8081
Boston MA 02266-8081
800.345.6611
DISTRIBUTOR
Columbia Funds Distributor, Inc.
One Financial Center
Boston MA 02111
INVESTMENT ADVISOR
Columbia Management Advisors, Inc.
100 Federal Street
Boston MA 02110
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
125 High Street
Boston, MA 02110
The fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call shareholder services at 800-345-6611 and
additional reports will be sent to you.
This report has been prepared for shareholders of Columbia Newport Greater China
Fund. This report may also be used as sales literature when preceded or
accompanied by the current prospectus which provides details of sales charges,
investment objectives and operating policies of the fund and with the most
recent copy of the Columbia Funds Performance Update.
A description of the fund's proxy voting policies and procedures is available
(i) on the fund's website, www.columbiamanagement.com; (ii) on the Securities
and Exchange Commission's website at www.sec.gov, and (iii) without charge, upon
request, by calling 800-368-0346. Information regarding how the fund voted
proxies relating to portfolio securities during the 12-month period ended June
30, 2004 is available from the SEC's website. Information regarding how the fund
voted proxies relating to portfolio securities is also available from the fund's
website.
The fund files a complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q is
available on the SEC's website at www.sec.gov and may be reviewed and copied at
the SEC's Public Reference Room in Washington, DC. Information on the operation
of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Columbia Management is the primary investment management division of Bank of
America Corporation. Columbia Management entities furnish investment management
services and advise institutional and mutual fund portfolios.
25
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[GRAPHIC]
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by eletronic delivery. With Columbia's eDelivery program, you receive an
e-mail message when your shareholder report becomes available online. If your
fund account is registered with Columbia Funds, you can sign up quickly and
easily on our website at www.columbiafunds.com.
Please note -- if you own your fund shares through a financial institution,
contact the institution to see if it offers electronic delivery. If you own your
fund shares through a retirement plan, electronic delivery may not be available
to you.
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COLUMBIA NEWPORT GREATER CHINA FUND SEMIANNUAL REPORT, FEBRUARY 28, 2005 PRSRT STD
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
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[COLUMBIA MANAGEMENT(R) LOGO]
(C)2005 COLUMBIA FUNDS DISTRIBUTOR, INC.
ONE FINANCIAL CENTER, BOSTON, MA 02111-2621
800.345.6611 www.columbiafunds.com
736-03/729U-0205 (04/05) 05/5131
ITEM 2. CODE OF ETHICS.
Not applicable at this time.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
The registrant's "Schedule I - Investments in securities of unaffiliated
issuers" (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form
N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have not been any material changes to the procedures by which shareholders
may recommend nominees to the registrant's board of directors, since those
procedures were last disclosed in response to the requirements of Item
7(d)(2)(ii)(G) of Schedule 14A or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officers, based on their evaluation of the registrant's disclosure
controls and procedures as of a date within 90 days of the filing of
this report, have concluded that such controls and procedures are
adequately designed to ensure that information required to be disclosed
by the registrant in Form N-CSR is accumulated and communicated to the
registrant's management, including the principal executive officer and
principal financial officer, or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes in the registrant's internal control over
financial reporting that occurred during the registrant's second fiscal
quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not
applicable at this time.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Columbia Funds Trust II
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By (Signature and Title) /S/ Christopher L. Wilson
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Christopher L. Wilson, President
Date April 27, 2005
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /S/ Christopher L. Wilson
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Christopher L. Wilson, President
Date April 27, 2005
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By (Signature and Title) /S/ J. Kevin Connaughton
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J. Kevin Connaughton, Treasurer
Date April 27, 2005
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