<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: 811-6347
---------------------------------------------
Columbia Funds Trust VII
- -------------------------------------------------------------------------------
(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 TIGER 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 Manager's Report 5
Financial Statements 7
Investment Portfolio 8
Statement of Assets and Liabilities 12
Statement of Operations 13
Statement of Changes in Net Assets 14
Notes to Financial Statements 16
Financial Highlights 22
Columbia Funds 27
Important Information
About This Report 29
</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 TIGER FUND
[PHOTO]
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 TIGER 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 5 COUNTRIES AS OF 02/28/05 (%)
<Table>
Hong Kong 21.8
Taiwan 18.4
South Korea 17.8
Singapore 10.1
Thailand 9.8
</Table>
TOP 5 SECTORS AS OF 02/28/05 (%)
<Table>
Financials 36.2
Information technology 24.0
Consumer discretionary 16.5
Telecommunication services 6.7
Industrials 4.7
</Table>
TOP 10 HOLDINGS AS OF 02/28/05 (%)
<Table>
Samsung Electronics 8.2
Sun Hung Kai Properties 4.2
Kookmin Bank 3.9
Taiwan Semiconductor Manufacturing 3.6
China Mobile Hong Kong 3.6
Siam Cement Public 3.4
Li & Fung 2.9
Hong Leong Bank Berhad 2.8
Esprit Holdings 2.6
Hon Hai Precision Industry 2.5
</Table>
Country breakdowns are calculated as a percentage of total investments. Sector
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 22.52% WITHOUT SALES CHARGE.
- - STRONG ECONOMIC GROWTH AND DOMESTIC CONSUMPTION IN CHINA AND OTHER SMALLER
MARKETS HELPED THE FUND, ITS BENCHMARK AND PEER GROUP ACHIEVE STRONG RETURNS
FOR THE PERIOD.
- - THE FUND'S EMPHASIS ON STEADY, LONG-TERM GROWTH STOCKS HURT PERFORMANCE IN
THE LAST SEVERAL MONTHS OF THE PERIOD, DURING WHICH CYCLICAL STOCKS WERE THE
BEST PERFORMERS.
[CHART]
<Table>
CLASS A SHARES 22.52%
MSCI ALL COUNTRY ASIA EX JAPAN INDEX 24.85%
</Table>
OBJECTIVE
Seeks capital appreciation by investing primarily in equity securities of
companies located in the Tiger countries of Asia.
TOTAL NET ASSETS
$349.0 million
MANAGEMENT STYLE
[GRAPHIC]
1
<Page>
PERFORMANCE INFORMATION
COLUMBIA NEWPORT TIGER FUND
[CHART]
VALUE OF A $10,000 INVESTMENT 03/01/95 - 02/28/05
<Table>
<Caption>
CLASS A SHARES WITHOUT SALES CHARGE CLASS A SHARES WITH SALES CHARGE MSCI ALL COUNTRY ASIA EX JAPAN INDEX
03/1/1995 $ 10,000 $ 9,425 $ 10,000
3/31/1995 $ 10,216 $ 9,629 $ 9,994
4/30/1995 $ 10,234 $ 9,646 $ 9,856
5/31/1995 $ 11,438 $ 10,780 $ 10,965
6/30/1995 $ 11,287 $ 10,638 $ 10,794
7/31/1995 $ 11,560 $ 10,895 $ 10,997
8/31/1995 $ 11,174 $ 10,532 $ 10,490
9/30/1995 $ 11,381 $ 10,726 $ 10,615
10/31/1995 $ 11,306 $ 10,656 $ 10,432
11/30/1995 $ 11,334 $ 10,682 $ 10,195
12/31/1995 $ 11,800 $ 11,121 $ 10,699
1/31/1996 $ 12,936 $ 12,192 $ 11,530
2/29/1996 $ 12,936 $ 12,192 $ 11,656
3/31/1996 $ 12,842 $ 12,103 $ 11,741
4/30/1996 $ 12,794 $ 12,058 $ 12,164
5/31/1996 $ 12,728 $ 11,996 $ 12,027
6/30/1996 $ 12,444 $ 11,728 $ 11,848
7/31/1996 $ 11,743 $ 11,068 $ 10,974
8/31/1996 $ 12,169 $ 11,470 $ 11,305
9/30/1996 $ 12,530 $ 11,809 $ 11,500
10/31/1996 $ 12,444 $ 11,729 $ 11,281
11/30/1996 $ 13,098 $ 12,345 $ 11,814
12/31/1996 $ 13,091 $ 12,338 $ 11,772
1/31/1997 $ 13,006 $ 12,258 $ 12,016
2/28/1997 $ 12,987 $ 12,240 $ 12,118
3/31/1997 $ 12,187 $ 11,486 $ 11,433
4/30/1997 $ 11,967 $ 11,279 $ 11,263
5/31/1997 $ 13,034 $ 12,284 $ 11,772
6/30/1997 $ 13,578 $ 12,798 $ 12,203
7/31/1997 $ 13,789 $ 12,996 $ 12,306
8/31/1997 $ 11,430 $ 10,772 $ 10,124
9/30/1997 $ 11,868 $ 11,186 $ 10,078
10/31/1997 $ 8,975 $ 8,459 $ 7,838
11/30/1997 $ 8,736 $ 8,234 $ 7,300
12/31/1997 $ 8,644 $ 8,147 $ 7,028
1/31/1998 $ 7,245 $ 6,828 $ 6,420
2/28/1998 $ 8,788 $ 8,283 $ 7,781
3/31/1998 $ 8,702 $ 8,202 $ 7,667
4/30/1998 $ 7,907 $ 7,452 $ 6,995
5/31/1998 $ 6,709 $ 6,323 $ 5,928
6/30/1998 $ 5,981 $ 5,637 $ 5,262
7/31/1998 $ 5,559 $ 5,239 $ 5,129
8/31/1998 $ 4,685 $ 4,415 $ 4,390
9/30/1998 $ 5,520 $ 5,203 $ 4,826
10/31/1998 $ 7,258 $ 6,840 $ 5,875
11/30/1998 $ 7,603 $ 7,166 $ 6,349
12/31/1998 $ 7,600 $ 7,163 $ 6,481
1/31/1999 $ 7,131 $ 6,721 $ 6,378
2/28/1999 $ 7,102 $ 6,694 $ 6,254
3/31/1999 $ 7,776 $ 7,329 $ 7,003
4/30/1999 $ 9,495 $ 8,949 $ 8,284
5/31/1999 $ 8,928 $ 8,415 $ 8,105
6/30/1999 $ 10,003 $ 9,428 $ 9,372
7/31/1999 $ 9,993 $ 9,419 $ 9,165
8/31/1999 $ 10,052 $ 9,474 $ 9,392
9/30/1999 $ 9,632 $ 9,078 $ 8,734
10/31/1999 $ 10,140 $ 9,557 $ 9,016
11/30/1999 $ 11,537 $ 10,874 $ 9,873
12/31/1999 $ 13,159 $ 12,403 $ 10,673
1/31/2000 $ 12,495 $ 11,776 $ 10,620
2/29/2000 $ 12,915 $ 12,172 $ 10,398
3/31/2000 $ 13,481 $ 12,706 $ 10,643
4/30/2000 $ 12,504 $ 11,785 $ 9,667
5/31/2000 $ 11,654 $ 10,984 $ 8,826
6/30/2000 $ 12,924 $ 12,181 $ 9,292
7/31/2000 $ 12,934 $ 12,191 $ 8,894
8/31/2000 $ 12,934 $ 12,191 $ 8,828
9/30/2000 $ 11,997 $ 11,307 $ 7,817
10/31/2000 $ 11,400 $ 10,745 $ 7,201
11/30/2000 $ 10,814 $ 10,193 $ 6,923
12/31/2000 $ 11,078 $ 10,441 $ 6,912
1/31/2001 $ 11,869 $ 11,187 $ 7,802
2/28/2001 $ 11,165 $ 10,523 $ 7,434
3/31/2001 $ 9,788 $ 9,225 $ 6,592
4/30/2001 $ 10,374 $ 9,777 $ 6,602
5/31/2001 $ 10,130 $ 9,548 $ 6,592
6/30/2001 $ 9,846 $ 9,280 $ 6,434
7/31/2001 $ 9,583 $ 9,032 $ 6,191
8/31/2001 $ 8,947 $ 8,433 $ 6,094
9/30/2001 $ 7,580 $ 7,144 $ 5,136
10/31/2001 $ 7,844 $ 7,393 $ 5,413
11/30/2001 $ 8,782 $ 8,277 $ 6,137
12/31/2001 $ 9,245 $ 8,713 $ 6,647
1/31/2002 $ 9,373 $ 8,834 $ 6,913
2/28/2002 $ 9,324 $ 8,788 $ 6,964
3/31/2002 $ 9,865 $ 9,298 $ 7,430
4/30/2002 $ 9,964 $ 9,391 $ 7,506
5/31/2002 $ 9,708 $ 9,150 $ 7,336
6/30/2002 $ 9,195 $ 8,667 $ 6,972
7/31/2002 $ 8,692 $ 8,193 $ 6,708
8/31/2002 $ 8,486 $ 7,998 $ 6,589
9/30/2002 $ 7,727 $ 7,283 $ 5,863
10/31/2002 $ 8,072 $ 7,607 $ 6,161
11/30/2002 $ 8,545 $ 8,053 $ 6,488
12/31/2002 $ 8,058 $ 7,595 $ 6,093
1/31/2003 $ 8,009 $ 7,549 $ 6,143
2/28/2003 $ 7,742 $ 7,297 $ 5,895
3/31/2003 $ 7,425 $ 6,998 $ 5,619
4/30/2003 $ 7,544 $ 7,110 $ 5,797
5/31/2003 $ 8,118 $ 7,651 $ 6,297
6/30/2003 $ 8,653 $ 8,155 $ 6,694
7/31/2003 $ 9,356 $ 8,818 $ 7,264
8/31/2003 $ 10,138 $ 9,555 $ 7,822
9/30/2003 $ 10,356 $ 9,760 $ 7,881
10/31/2003 $ 11,108 $ 10,470 $ 8,557
11/30/2003 $ 10,950 $ 10,320 $ 8,452
12/31/2003 $ 11,649 $ 10,979 $ 8,957
1/31/2004 $ 12,118 $ 11,421 $ 9,502
2/29/2004 $ 12,387 $ 11,674 $ 9,824
3/31/2004 $ 12,019 $ 11,328 $ 9,660
4/30/2004 $ 11,501 $ 10,839 $ 9,129
5/31/2004 $ 11,282 $ 10,633 $ 8,823
6/30/2004 $ 11,053 $ 10,418 $ 8,746
7/31/2004 $ 10,834 $ 10,211 $ 8,571
8/31/2004 $ 11,283 $ 10,634 $ 8,988
9/30/2004 $ 11,621 $ 10,953 $ 9,334
10/31/2004 $ 11,900 $ 11,216 $ 9,395
11/30/2004 $ 12,996 $ 12,249 $ 10,229
12/31/2004 $ 13,415 $ 12,643 $ 10,543
1/31/2005 $ 13,334 $ 12,568 $ 10,618
02/28/2005 $ 13,825 $ 13,030 $ 11,222
</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) All Country (AC) Asia ex Japan Index is an
unmanaged index that tracks the performance of equity securities in eleven
countries in Asia, excluding Japan and taking into account local market
restrictions on share ownership by foreigners. 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.
AVERAGE ANNUAL TOTAL RETURN AS OF 02/28/05 (%)
<Table>
<Caption>
SHARE CLASS A B C T Z
-------------------- ---------------- ----------------- ----------------- ----------------- --------
INCEPTION 04/01/95 04/01/95 04/01/95 05/31/89 05/31/89
-------------------- ---------------- ----------------- ----------------- ----------------- --------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
-------------------- ---------------- ----------------- ----------------- ----------------- --------
6-month (cumulative) 22.52 15.48 22.34 17.34 22.23 21.23 22.84 15.78 22.81
1-year 11.59 5.17 10.96 5.96 10.87 9.87 11.93 5.50 11.97
5-year 1.37 0.17 0.65 0.26 0.62 0.62 1.63 0.43 1.61
10-year 3.29 2.68 2.54 2.54 2.53 2.53 3.54 2.92 3.51
</Table>
AVERAGE ANNUAL TOTAL RETURN AS OF 12/31/04 (%)
<Table>
<Caption>
SHARE CLASS A B C T Z
-------------------- ---------------- ----------------- ----------------- ----------------- --------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
-------------------- ---------------- ----------------- ----------------- ----------------- --------
6-month (cumulative) 21.35 14.37 20.80 15.80 20.88 19.88 21.40 14.42 21.46
1-year 15.13 8.51 14.20 9.20 14.27 13.27 15.31 8.68 15.35
5-year 0.38 -0.80 -0.37 -0.77 -0.37 -0.37 0.61 -0.57 0.60
10-year 2.83 2.22 2.06 2.06 2.07 2.07 3.05 2.44 3.03
</Table>
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T 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.
The fund was originally introduced on 05/31/89 and became Colonial Newport Tiger
Fund on 04/01/95 when class A, B and D (since designated C) shares were offered.
On 04/30/98, the fund was renamed Newport Tiger Fund. The fund was renamed
Liberty Newport Tiger Fund on July 14, 2000. Please see the fund's prospectus
for additional details. Class A, B and C share performance information includes
returns of the fund's class T shares for periods prior to the inception dates of
those classes. Class T share returns are not restated to reflect any expense
differential, e.g., Rule 12b-1 fees, between class T shares and class A, B and C
shares. Had expense differentials been reflected, returns for the periods prior
to the inception date of the class A, B and C shares would have been lower.
[SIDENOTE]
PERFORMANCE OF A $10,000 INVESTMENT 03/01/95 - 02/28/05 ($)
<Table>
<Caption>
SALES CHARGE: WITHOUT WITH
Class A 13,825 13,030
Class B 12,845 12,845
Class C 12,836 12,836
Class T 14,155 13,341
Class Z 14,116 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 TIGER 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.
[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 $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD,"
LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE
COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR
ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE
PERIOD
09/01/04 - 02/28/05
<Table>
<Caption>
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
-------------------------- --------------------- ----------------------
Class A 1,000.00 1,000.00 1,226.08 1,015.92 9.88 8.95 1.79
Class B 1,000.00 1,000.00 1,223.40 1,012.20 14.00 12.67 2.54
Class C 1,000.00 1,000.00 1,222.31 1,012.20 14.00 12.67 2.54
Class T 1,000.00 1,000.00 1,228.41 1,017.16 8.51 7.70 1.54
Class Z 1,000.00 1,000.00 1,228.11 1,017.16 8.51 7.70 1.54
</Table>
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
365.
Had the Investment Advisor not waived or reimbursed a portion of expenses, total
return would have been reduced.
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.
3
<Page>
ECONOMIC UPDATE
COLUMBIA NEWPORT TIGER 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 a modest
slowdown near the end of 2004. In December, a vicious tsunami, one of the worst
natural disasters in history, ravaged portions of the region and its effects
were felt by local economies. However, 2005 is expected to be another year of
solid growth.
STOCK MARKETS RECORD STRONG GAINS
In general, strong economic growth translated into double-digit gains for the
region's stock markets. The MSCI All Country Asia ex Japan Index rose 24.85% for
the six-month period. The MSCI China Index rose 19.03%. Hong Kong stocks
returned 11.60%, as measured by the Hang Seng Index.
CHINA CONTINUES TO DRIVE ASIA'S FORTUNES
Economic growth in China was a notably strong 9.5% last year. Despite three
quarters of somewhat slower growth, China's GDP surged in the final quarter of
2004. Exports hit record levels, thanks in part to a weaker dollar. Agricultural
output soared and retail sales also helped spur the jump in GDP. And imports of
crude oil jumped nearly 35% to meet rising demand for electricity and fuel for
autos and trucks. Yet, key indicators suggest that the government's attempt to
rein in the pace of growth is still 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 also
expected to lower demand for Chinese imports.
SMALLER TIGER ECONOMIES DELIVER SOLID GROWTH
Though subdued in comparison to China, the smaller Tiger economies delivered
solid growth for the period. In Thailand, industrial output has eased in recent
months, yet the prospects for 2005 remain positive. The industrial sector is
expected to benefit from the reconstruction of businesses affected by the
tsunami. In addition, the government has announced plans to invest heavily in
new infrastructure aimed at keeping domestic employment and spending high and
inflation low.
In Singapore, economic growth took a big leap ahead in 2004 as biomedical firms
helped offset the loss of some electronics-related manufacturing to India and
China, which have undercut Singapore manufacturers on cost. However, growth is
expected to slow in 2005, partly because manufacturing is already running at
full capacity. The longer term outlook appears bright because new manufacturing
facilities are under construction. When capacity expands, Singapore's biomedical
output is expected to climb and thousands of new jobs are expected to be added
to help offset job losses in electronics.
In Malaysia, GDP increased 7.1% in 2004, with slower growth in the fourth
quarter attributed to a glut of supply in the electronics sector--a significant
source of growth for Malaysia and many other economies in Southeast Asia. For
2005, Malaysia's growth is expected to slow to 5.1% as exports to the United
States and China decline.
Economic growth also slowed late in 2004 for Taiwan, India and South Korea.
Strong domestic demand is expected to help support growth in Taiwan in 2005.
However, in South Korea household demand has been lackluster since a credit card
crisis engulfed the country in 2003. In India, one of the region's poorest
economies, a major infrastructure development program is underway. However, with
new leadership in place in India, there is hope that fiscal reforms and programs
designed to improve productivity could lead to higher long-term growth.
[SIDENOTE]
SUMMARY:
FOR THE SIX-MONTH PERIOD ENDED FEBRUARY 28, 2005
- - SOLID ECONOMIC GROWTH HELPED ASIAN STOCK MARKETS OUTSIDE OF JAPAN GENERATE
DOUBLE-DIGIT GAINS. THE MSCI ALL COUNTRY ASIA EX JAPAN INDEX RETURNED 24.85%.
- - HONG KONG STOCKS TRAILED THE REGION'S OTHER MARKETS. THE HANG SENG INDEX
GAINED 11.60%.
- - CHINA LED THE REGION'S ECONOMIC GROWTH, ALTHOUGH THE GOVERNMENT CONTINUES TO
SEEK MEASURES TO KEEP GROWTH FROM OVERHEATING.
[CHART]
<Table>
MSCI ALL COUNTRY ASIA EX JAPAN INDEX 24.85%
HANG SENG INDEX 11.60%
</Table>
The MSCI All Country Asia ex Japan Index is an unmanaged index that tracks the
performance of equity securities in eleven countries in Asia, excluding Japan,
and takes into account local market restrictions on share ownership by
foreigners.
The Hang Seng Stock Index is an unmanaged index that tracks the stock exchange
of Hong Kong.
4
<Page>
PORTFOLIO MANAGER'S REPORT
COLUMBIA NEWPORT TIGER FUND
For the six-month period ended February 28, 2005, Columbia Newport Tiger Fund
class A shares returned 22.52% without sales charge. This was less than the
24.85% return of the MSCI All Country Asia ex Japan Index and the 27.22% average
return of its peer group, the Lipper Pacific ex Japan Category.(1) Strong
economic growth and domestic consumption in China and other smaller markets
helped the fund, its benchmark and peer group achieve strong returns for the
period.
INFRASTRUCTURE DEVELOPMENT AND DOMESTIC CONSUMPTION REMAINED THEMES
We continued to emphasize countries that we believed could benefit from
infrastructure development and domestic consumption. As a result, the fund had
more exposure to Thailand, India and Singapore than the index. All three markets
were solid performers for the fund.
We also focused on financial stocks--particularly banks and real estate
companies. We believe that financial stocks are essential to domestic
development and consumption and that they are poised to profit from these
trends. This view was rewarded by the strong performance of Kookmin Bank in
South Korea, which we added to during the period. Bank Rakyat Indonesia,
Oversea-Chinese Banking in Singapore and Bangkok Bank Public in Thailand also
contributed to the fund's double-digit gain for the period. In India, Housing
Development Finance also gave performance a substantial boost.
SEEKING OPPORTUNITY IN HONG KONG
On the belief that Hong Kong's long bout with deflation appeared to be coming to
an end, we began to build a position in the Hong Kong real estate sector in
2004. In fact, Hong Kong's economy became more inflationary during the period,
which should benefit the real estate sector over the long term. Unfortunately,
our exposure to the sector turned in mixed results during this six-month period.
Shares of Swire Pacific produced a double-digit return while Henderson Land
Development, a long-term holding for the fund, declined. We continued to
maintain our relatively large position because we believe that the long-term
prospects for Hong Kong real estate remain positive.
FINDING VALUE IN TAIWAN TECHNOLOGY, OPPORTUNITY IN CONSUMER SPENDING
We added to our position in Taiwan, where we took advantage of attractively
valued technology stocks. We invested in Optimax Technology and Delta
Electronics, which generated positive returns. Two long-term holdings, Hon Hai
Precision Industry and Taiwan Semiconductor Manufacturing, also outperformed.
A relatively large position in consumer discretionary stocks reflected our
outlook for a pick-up in consumer spending. In Hong Kong, retailer Esprit
Holdings did well. In Indonesia, PT Astra International, a conglomerate with
businesses in the automotive, financial services, agriculture and information
technology industries, was positive. Astro All Asia Networks, a Malaysian media
company, also aided results.
(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 ($)
<Table>
Class A 13.82
Class B 13.36
Class C 13.36
Class T 13.90
Class Z 13.86
</Table>
DISTRIBUTIONS DECLARED PER SHARE 09/01/04 - 02/28/05 ($)
<Table>
Class A 0.06
Class B 0.00
Class C 0.00
Class T 0.09
Class Z 0.09
</Table>
HOLDINGS DISCUSSED IN THIS REPORT AS OF 02/28/05 (%)
<Table>
Kookmin Bank 3.9
Bank Rakyat Indonesia 1.1
Oversea-Chinese Banking 1.0
Bangkok Bank Public 2.2
Housing Development Finance 2.0
Swire Pacific 1.5
Henderson Land Development 1.8
Optimax Technology 1.3
Delta Electronics 1.0
Hon Hai Precision Industry 2.5
Taiwan Semiconductor Manufacturing 3.6
Esprit Holdings 2.6
PT Astra International 1.7
Astro All Asia Networks 1.0
</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>
AVOIDING CYCLICALS DETRACTED FROM PERFORMANCE
The fund lost some ground relative to its benchmark because it had less exposure
to cyclical stocks, which outperformed during the last two months of the period.
Because cyclical stocks are influenced by changes in general economic activity,
they tend to be more volatile than the more steady long-term growth stocks that
we favor. In particular, the fund missed out on the spectacular gains from
energy stocks. However, we will stay with our strategy because we believe in its
long-term potential.
An underweight in South Korea, which was a strong performer, also had a negative
impact on return. South Korea's export-driven economy is one of the most
cyclical in Asia. Its prospects are closely linked to US consumer spending; and
because we are concerned that the high level of consumer spending in the United
States may be unsustainable, we allocated relatively few assets to South Korea.
INTERNAL FACTORS COULD DRIVE PERFORMANCE
We continue to believe that internal catalysts, such as the build-out of the
infrastructure, consumer and business spending and "re-inflation," could drive
Asia's economic growth for a long time. As a result, we have kept our focus on
companies with the potential to benefit from Asia's many building projects and
from the emergence of a consumer society. We will continue to seek opportunity
among these types of companies.
[PHOTO]
Eric Sandlund has managed or co-managed the fund since August 2002. He has been
the sole manager of the fund since March 2004. He joined the advisor and its
predecessors or affiliate organizations in June 2002.
/s/ [ILLEGIBLE]
The Board of Trustees has approved a proposal to reorganize the Columbia Newport
Tiger Fund into the Columbia International Stock Fund, subject to shareholder
approval and the satisfaction of certain other conditions. The effective date of
the reorganization is expected to be in the third quarter of 2005 or on such a
date on which the parties agree.
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.
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 HAVE KEPT OUR FOCUS ON COMPANIES WITH THE POTENTIAL TO BENEFIT FROM ASIA'S
MANY BUILDING PROJECTS AND FROM THE EMERGENCE OF A CONSUMER SOCIETY.
6
<Page>
FINANCIAL STATEMENTS
FEBRUARY 28, 2005 (UNAUDITED) COLUMBIA NEWPORT TIGER 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 TIGER FUND
<Table>
<Caption>
SHARES VALUE ($)
----------------------------------------------------------------------------------
COMMON STOCKS - 99.8%
CONSUMER DISCRETIONARY - 16.5%
AUTO COMPONENTS - 1.0% Tong Yang Industry Co., Ltd. 2,334,000 3,586,474
Auto Components Total 3,586,474
AUTOMOBILES - 5.7% Bajaj Auto Ltd. 68,396 1,614,855
Hyundai Motor Co. 150,480 8,612,983
Maruti Udyog Ltd. 353,397 3,831,833
PT Astra International 5,168,000 6,021,092
Automobiles Total 20,080,763
DISTRIBUTORS - 2.9% Li & Fung Ltd. 5,980,000 10,233,528
Distributors Total 10,233,528
HOTELS, RESTAURANTS & LEISURE - 1.0% Genting Berhad 686,300 3,538,075
Hotels, Restaurants & Leisure Total 3,538,075
MEDIA - 3.3% Astro All Asia Networks PLC (a) 2,354,100 3,434,257
Singapore Press Holdings Ltd. 2,829,700 7,932,342
Media Total 11,366,599
SPECIALTY RETAIL - 2.6% Esprit Holdings Ltd. 1,249,500 8,920,564
Specialty Retail Total 8,920,564
-----------
CONSUMER DISCRETIONARY TOTAL 57,726,003
CONSUMER STAPLES - 1.5%
FOOD PRODUCTS - 1.5% People's Food Holdings Ltd. 3,134,000 2,602,019
Thai Union Frozen Products
Public Co., Ltd. 3,381,800 2,560,066
Food Products Total 5,162,085
-----------
CONSUMER STAPLES TOTAL 5,162,085
FINANCIALS - 36.2%
COMMERCIAL BANKS - 19.2% Bangkok Bank Public Co.,
Ltd., NVDR 2,689,500 7,800,745
Bank Rakyat Indonesia 11,231,000 3,969,029
Chinatrust Financial Holding Co.,
Ltd. 5,720,111 6,837,586
Dah Sing Financial Group 224,800 1,697,857
Hong Leong Bank Berhad 6,769,600 9,606,258
Kasikornbank Public Co., Ltd., (a) 4,583,600 7,832,395
Kookmin Bank 295,235 13,612,237
Oversea-Chinese Banking Corp.,
Ltd. 410,000 3,422,833
Standard Chartered PLC 240,106 4,399,257
United Overseas Bank Ltd. 913,000 7,623,602
Commercial Banks Total 66,801,799
DIVERSIFIED FINANCIAL SERVICES - 2.0% Housing Development Finance
Corp., Ltd. 389,893 6,942,350
Diversified Financial Services Total 6,942,350
INSURANCE - 3.3% Cathay Financial Holding Co.,
Ltd. 2,787,000 5,657,663
Samsung Fire & Marine Insurance
Co., Ltd. 73,680 5,993,095
Insurance Total 11,650,758
REAL ESTATE - 11.7% City Developments Ltd. 1,591,500 6,593,109
Henderson Land Development Co.,
Ltd. 1,363,000 6,386,007
Land & Houses Public Co., Ltd.,
NVDR 18,493,100 4,614,819
SM Prime Holdings, Inc. 21,422,000 3,366,160
Sun Hung Kai Properties Ltd. 1,597,000 14,829,517
Swire Pacific Ltd., Class A 626,500 5,106,149
Real Estate Total 40,895,761
-----------
FINANCIALS TOTAL 126,290,668
</Table>
See Accompanying Notes to Financial Statements.
8
<Page>
<Table>
<Caption>
SHARES VALUE ($)
----------------------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
HEALTH CARE - 2.5%
HEALTH CARE EQUIPMENT & SUPPLIES - 0.6% Pihsiang Machinery Manufacturing
Co., Ltd. 858,825 2,051,799
Health Care Equipment &
Supplies Total 2,051,799
PHARMACEUTICALS - 1.9% Dr. Reddy's Laboratories Ltd., ADR 193,900 3,416,518
Ranbaxy Laboratories Ltd. 140,732 3,289,524
Pharmaceuticals Total 6,706,042
-----------
HEALTH CARE TOTAL 8,757,841
INDUSTRIALS - 4.7%
ELECTRICAL EQUIPMENT - 1.3% Optimax Technology Corp. 1,604,000 4,533,174
Electrical Equipment Total 4,533,174
INDUSTRIAL CONGLOMERATES - 2.4% China Merchants Holdings
International Co., Ltd. 2,170,000 4,527,273
Hutchison Whampoa Ltd. 420,100 3,777,819
Industrial Conglomerates Total 8,305,092
TRANSPORTATION INFRASTRUCTURE - 1.0% Zhejiang Expressway Co., Ltd.,
Class H 4,932,000 3,556,280
Transportation Infrastructure Total 3,556,280
-----------
INDUSTRIALS TOTAL 16,394,546
INFORMATION TECHNOLOGY - 24.0%
COMPUTERS & PERIPHERALS - 2.3% Acer, Inc. 2,074,836 3,376,787
Lite-On Technology Corp. 4,155,200 4,512,263
Computers & Peripherals Total 7,889,050
ELECTRONIC EQUIPMENT & INSTRUMENTS - 6.8% Delta Electronics, Inc., GDR 2,043,000 3,589,642
Hon Hai Precision Industry Co.,
Ltd. 1,856,206 8,650,221
Interflex Co., Ltd. 104,151 1,993,981
MFS Technology Ltd. 5,518,500 2,709,762
Synnex Technology International
Corp. 1,434,900 2,149,893
Venture Corp., Ltd. 517,000 4,572,138
Electronic Equipment &
Instruments Total 23,665,637
INTERNET SOFTWARE & SERVICES - 1.0% NCSoft Corp. (a) 50,250 3,607,872
Internet Software & Services Total 3,607,872
IT SERVICES - 2.0% Infosys Technologies Ltd. 140,069 7,176,685
IT Services Total 7,176,685
SEMICONDUCTORS &
SEMICONDUCTOR EQUIPMENT - 11.9% Samsung Electronics Co., Ltd. 55,330 28,792,864
Taiwan Semiconductor
Manufacturing Co., Ltd. 7,140,390 12,675,691
Semiconductors & Semiconductor
Equipment Total 41,468,555
-----------
INFORMATION TECHNOLOGY TOTAL 83,807,799
MATERIALS - 3.8%
CONSTRUCTION MATERIALS - 3.4% Siam Cement Public Co., Ltd.,
NVDR 1,668,200 11,769,375
Construction Materials Total 11,769,375
METALS & MINING - 0.4% Semirara Mining Corp. (a) 1,973,006 1,588,659
Metals & Mining Total 1,588,659
-----------
MATERIALS TOTAL 13,358,034
</Table>
See Accompanying Notes to Financial Statements.
9
<Page>
<Table>
<Caption>
SHARES VALUE ($)
----------------------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
TELECOMMUNICATION SERVICES - 6.7%
DIVERSIFIED TELECOMMUNICATION
SERVICES - 1.1% PT Telekomunikasi Indonesia 8,010,000 3,833,757
Diversified Telecommunication
Services Total 3,833,757
WIRELESS TELECOMMUNICATION SERVICES - 5.6% China Mobile Hong Kong Ltd. 3,877,500 12,570,478
Taiwan Cellular Corp. 6,519,000 7,030,345
Wireless Telecommunication
Services Total 19,600,823
-----------
TELECOMMUNICATION SERVICES TOTAL 23,434,580
UTILITIES - 3.9%
ELECTRIC UTILITIES - 1.4% Datang International Power
Generation Co., Ltd., Class H 2,742,000 2,120,018
Huaneng Power International,
Inc., Class H 3,492,000 2,700,636
Electric Utilities Total 4,820,654
GAS UTILITIES - 2.4% Hong Kong & China Gas Co., Ltd. 2,800,908 5,939,967
Xinao Gas Holdings Ltd. (a) 4,552,000 2,520,012
Gas Utilities Total 8,459,979
WATER UTILITIES - 0.1% Manila Water Co. (a) 977,200 116,237
Water Utilities Total 116,237
-----------
UTILITIES TOTAL 13,396,870
TOTAL COMMON STOCKS
(COST OF $266,623,522) 348,328,426
<Caption>
PAR ($)
----------------------------------------------------------------------------------
SHORT-TERM OBLIGATION - 1.0%
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 11/15/24, market
value of $3,597,833 (repurchase
proceeds $3,523,247) 3,523,000 3,523,000
TOTAL SHORT-TERM OBLIGATION
(COST OF $3,523,000) 3,523,000
TOTAL INVESTMENTS - 100.8%
(COST OF $270,146,522) (b) 351,851,426
Other Assets & Liabilities,
Net - (0.8)% (2,814,639)
Net Assets - 100.0% 349,036,787
</Table>
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for federal income tax
purposes is $270,146,522.
See Accompanying Notes to Financial Statements.
10
<Page>
<Table>
<Caption>
ACRONYM NAME
ADR American Depositary Receipt
GDR Global Depositary Receipt
NVDR Non-voting Depositary Receipt
<Caption>
SUMMARY OF SECURITIES % OF TOTAL
BY COUNTRY VALUE ($) INVESTMENTS
- --------------------------------------------------------------
Hong Kong 76,509,171 21.8%
Taiwan 64,651,537 18.4
South Korea 62,613,032 17.8
Singapore 35,455,805 10.1
Thailand 34,577,400 9.8
India 26,271,765 7.5
Indonesia 13,823,878 3.9
Malaysia 13,144,333 3.7
China 8,376,934 2.4
United Kingdom 7,833,514 2.2
Philippines 5,071,057 1.4
United States* 3,523,000 1.0
------------- -----
$ 351,851,426 100.0%
============= =====
</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 36.2%
Information Technology 24.0
Consumer Discretionary 16.5
Telecommunication Services 6.7
Industrials 4.7
Utilities 3.9
Materials 3.8
Health Care 2.5
Consumer Staples 1.5
Short-Term Obligation 1.0
Other Assets & Liabilities, Net (0.8)
-----
100.0%
=====
</Table>
See Accompanying Notes to Financial Statements.
11
<Page>
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 2005 (UNAUDITED) COLUMBIA NEWPORT TIGER FUND
<Table>
<Caption>
($)
-------------------------------------------------------------------------------------
ASSETS Investments, at cost 270,146,522
------------
Investments, at value 351,851,426
Cash 680
Foreign currency (cost of $889,027) 897,120
Receivable for:
Fund shares sold 437,414
Interest 247
Dividends 590,216
Deferred Trustees' compensation plan 26,216
Receivable from advisor 266,581
------------
Total Assets 354,069,900
LIABILITIES Expense reimbursement due to Investment Advisor 14,272
Payable for:
Investments purchased 366,442
Fund shares repurchased 742,227
Investment advisory fee 195,262
Administration fee 71,464
Transfer agent fee 188,821
Pricing and bookkeeping fees 12,745
Custody fee 43,205
Distribution and service fees 93,907
Deferred Trustees' fees 26,216
Foreign capital gains tax payable 3,226,023
Other liabilities 52,529
------------
Total Liabilities 5,033,113
NET ASSETS 349,036,787
COMPOSITION OF NET ASSETS Paid-in capital 417,768,258
Overdistributed net investment income (889,564)
Accumulated net realized loss (146,345,983)
Net unrealized appreciation (depreciation) on:
Investments 81,704,904
Foreign currency translations 25,195
Foreign capital gains tax (3,226,023)
------------
NET ASSETS 349,036,787
CLASS A Net assets 196,705,493
Shares outstanding 14,229,632
Net asset value per share 13.82(a)(b)
Maximum offering price per share ($13.82/0.9425) 14.66(c)
CLASS B Net assets 66,451,365
Shares outstanding 4,973,059
Net asset value and offering price per share 13.36(a)(b)
CLASS C Net assets 28,642,347
Shares outstanding 2,144,456
Net asset value and offering price per share 13.36(a)(b)
CLASS T Net assets 29,007,867
Shares outstanding 2,087,460
Net asset value per share 13.90(a)(b)
Maximum offering price per share ($13.90/0.9425) 14.75(c)
CLASS Z Net assets 28,229,715
Shares outstanding 2,037,019
Net asset value, offering and redemption
price per share 13.86(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 $50,000 or more the offering price is reduced.
See Accompanying Notes to Financial Statements.
12
<Page>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED COLUMBIA NEWPORT TIGER FUND
FEBRUARY 28, 2005 (UNAUDITED)
<Table>
<Caption>
($)
------------------------------------------------------------------------------------
INVESTMENT INCOME Dividends 2,424,745
Interest 25,141
------------
Total Investment Income (net of foreign taxes
withheld of $373,751) 2,449,886
EXPENSES Investment advisory fee 1,229,117
Administration fee 414,477
Distribution fee:
Class B 268,543
Class C 100,796
Service fee:
Class A 221,597
Class B 89,514
Class C 33,599
Transfer agent fee 589,750
Pricing and bookkeeping fees 49,688
Trustees' fees 6,339
Custody fee 253,105
Non-recurring costs (See Note 8) 2,925
Other expenses 138,421
------------
Total Expenses 3,397,871
Fees and expenses waived or reimbursed by
Investment Advisor (121,673)
Non-recurring costs assumed by Investment
Advisor (See Note 8) (2,925)
Custody earnings credit (215)
------------
Net Expenses 3,273,058
------------
Net Investment Loss (823,172)
NET REALIZED AND UNREALIZED GAIN Net realized gain (loss) on:
(LOSS) ON INVESTMENTS, FOREIGN Investments 20,451,511
CURRENCY AND FOREIGN CAPITAL GAINS Foreign currency transactions 65,615
TAX Foreign capital gains tax (869,607)
------------
Net realized gain 19,647,519
Net change in unrealized appreciation/depreciation on:
Investments 48,715,125
Foreign currency translations 29,869
Foreign capital gains tax (263,979)
------------
Net change in unrealized appreciation/depreciation 48,481,015
------------
Net Gain 68,128,534
------------
Net Increase in Net Assets from Operations 67,305,362
</Table>
See Accompanying Notes to Financial Statements.
13
<Page>
STATEMENT OF CHANGES IN NET ASSETS
COLUMBIA NEWPORT TIGER FUND
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED
FEBRUARY 28, AUGUST 31,
INCREASE (DECREASE) IN NET ASSETS: 2005 ($) 2004 ($)
- ----------------------------------- ------------------------------------------------------------------------------------------
OPERATIONS Net investment income (loss) (823,172) 2,724,097
Net realized gain on investments, foreign currency
transactions and foreign capital gains tax 19,647,519 52,456,071
Net change in unrealized appreciation/depreciation
on investments, foreign currency translations and
foreign capital gains tax 48,481,015 (13,682,184)
---------------------------
Net Increase from Operations 67,305,362 41,497,984
DISTRIBUTIONS DECLARED TO
SHAREHOLDERS From net investment income:
Class A (832,260) (831,594)
Class B -- (88,934)
Class C -- (19,088)
Class T (192,228) (212,355)
Class Z (196,654) (507,109)
---------------------------
Total Distributions Declared to Shareholders (1,221,142) (1,659,080)
SHARE TRANSACTIONS Class A:
Subscriptions 22,674,084 76,583,422
Distributions reinvested 746,684 736,922
Redemptions (21,305,115) (63,211,242)
---------------------------
Net Increase 2,115,653 14,109,102
Class B:
Subscriptions 1,761,380 7,826,538
Distributions reinvested -- 73,423
Redemptions (25,351,964) (64,347,868)
---------------------------
Net Decrease (23,590,584) (56,447,907)
Class C:
Subscriptions 1,079,596 8,349,434
Distributions reinvested -- 14,267
Redemptions (3,056,755) (8,061,406)
---------------------------
Net Increase (Decrease) (1,977,159) 302,295
Class T:
Subscriptions 49,937 278,751
Distributions reinvested 170,264 188,281
Redemptions (3,367,902) (4,334,649)
---------------------------
Net Decrease (3,147,701) (3,867,617)
Class Z:
Subscriptions 1,063,243 5,844,590
Distributions reinvested 152,477 470,180
Redemptions (4,860,784) (52,802,123)
---------------------------
Net Decrease (3,645,064) (46,487,353)
Net Decrease from Share Transactions (30,244,855) (92,391,480)
Redemption fees 1,635 1,780
---------------------------
Total Increase (Decrease) in Net Assets 35,841,000 (52,550,796)
NET ASSETS Beginning of period 313,195,787 365,746,583
End of period (including (overdistributed)
undistributed net investment income of
$(889,564) and $1,154,750, respectively) 349,036,787 313,195,787
</Table>
See Accompanying Notes to Financial Statements.
14
<Page>
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED
FEBRUARY 28, AUGUST 31,
INCREASE (DECREASE) IN NET ASSETS: 2005 ($) 2004 ($)
- ----------------------------------- ------------------------------------------------------------------------------------------
CHANGES IN SHARES Class A:
Subscriptions 1,772,824 6,737,793
Capital contribution 6,364
Issued for distributions reinvested 56,567 65,914
Redemptions (1,682,335) (5,611,266)
---------------------------
Net Increase 153,420 1,192,441
Class B:
Subscriptions 141,491 703,687
Capital contribution 543
Issued for distributions reinvested -- 6,780
Redemptions (2,080,353) (5,805,997)
---------------------------
Net Decrease (1,938,319) (5,095,530)
Class C:
Subscriptions 88,019 763,277
Capital contribution 393
Issued for distributions reinvested -- 1,315
Redemptions (251,670) (739,255)
---------------------------
Net Increase (Decrease) (163,258) 25,337
Class T:
Subscriptions 3,910 24,700
Capital contribution 8
Issued for distributions reinvested 12,840 16,780
Redemptions (265,431) (377,383)
---------------------------
Net Decrease (248,673) (335,903)
Class Z:
Subscriptions 81,368 501,244
Capital contribution 247
Issued for distributions reinvested 11,534 42,018
Redemptions (378,022) (4,535,587)
---------------------------
Net Decrease (284,873) (3,992,325)
</Table>
See Accompanying Notes to Financial Statements.
15
<Page>
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2005 (UNAUDITED) COLUMBIA NEWPORT TIGER FUND
NOTE 1. ORGANIZATION
Columbia Newport Tiger Fund (the "Fund"), a series of Columbia Funds Trust VII
(the "Trust"), is a 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 capital appreciation by investing primarily in equity securities
of companies located in the Tiger countries of Asia. The countries or regions in
which the Fund invests include Hong Kong, Singapore, South Korea, Taiwan,
Malaysia, Thailand, India, Indonesia, China and the Philippines.
FUND SHARES
The Fund may issue an unlimited number of shares and offers five classes of
shares: Class A, Class B, Class C, Class T and Class Z. Each share class has its
own sales charge and expense structure.
Class A and Class T shares are subject to a maximum front-end sales charge of
5.75% based on the amount of initial investment. Class A and Class T shares
purchased without an initial sales charge in accounts aggregating $1 million to
$25 million at the time of purchase are subject to a 1.00% contingent deferred
sales charge ("CDSC") on shares sold within eighteen months of the time of
purchase. 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.
16
<Page>
Investments for which market quotations are not readily available, or quotations
which management 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.
FOREIGN CAPITAL GAINS TAXES
Realized gains in certain countries may be subject to foreign taxes at the fund
level, at rates ranging from approximately 10% to 15%. The Fund accrues for such
foreign taxes on net realized and unrealized gains at the appropriate rate for
each jurisdiction.
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 year ended August 31, 2004
was as follows:
<Table>
<Caption>
AUGUST 31, 2004
---------------
Distributions paid from:
Ordinary income $ 1,659,080
</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
17
<Page>
depreciation from changes in the value of other assets and liabilities resulting
from changes in exchange rates, was:
<Table>
Unrealized appreciation $ 96,211,760
Unrealized depreciation (14,506,856)
-------------
Net unrealized appreciation $ 81,704,904
</Table>
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
---------- -------------
2006 $ 143,826,658
2007 22,164,746
$ 165,991,404
</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 0.70%
Next $500 million 0.62%
Next $1.5 billion 0.57%
Next $3 billion 0.52%
Over $6 billion 0.47%
</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 $100 million 1.00%
Next $1.4 billion 0.75%
Next $1.0 billion 0.70%
Over $2.5 billion 0.65%
</Table>
For the six months ended February 28, 2005, the Fund's annualized effective
investment advisory fee rate was 0.74%.
In connection with the Fund's investments in India, Columbia adopted a more
conservative interpretation of tax regulations governing certain corporate
actions. As a result, Columbia elected to reimburse the Fund $266,581 or $0.01,
$0.03, $0.01, $0.01 and $0.01 per share for Class A, B, C, T and Z,
respectively, and the Fund issued additional Class A, B, C, T and Z shares of
6,364,543, 393, 8 and 247 shares, respectively, to shareholders purchasing
shares during the period prior to this change in interpretation.
ADMINISTRATION FEES
Columbia provides administrative and other services to the Fund for a monthly
administration fee at the annual rate of 0.25% of the Fund's average daily net
assets.
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 0.030%
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.
18
<Page>
For the six-months ended February 28, 2005, the Fund's annualized effective
transfer agent fee rate, inclusive of out-of-pocket expenses, was 0.36%.
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 $8,542 and $282
on sales of the Fund's Class A and Class T shares, respectively. The Distributor
has also received CDSC fees of $33,535 and $1,883 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 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 1.55% 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 $924 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 $36,455,379 and
$65,226,899, 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, Class
C and Class T 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, Class T and Class Z
shares of the Fund amounted to $901, $332, $134, $137 and $131.
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
19
<Page>
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 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 Tiger countries of Asia,
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
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
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
collectively 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
20
<Page>
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 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 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 $2,925 of
legal, consulting services and Trustees' fees incurred by the Fund in connection
with these matters.
NOTE 9. PROPOSED REORGANIZATION
On February 10, 2005, the Board of Trustees approved a proposal to merge the
Columbia Newport Tiger Fund into the Columbia International Stock Fund, subject
to shareholder approval and the satisfaction of certain other conditions. The
merger is expected to be completed in September 2005.
21
<Page>
FINANCIAL HIGHLIGHTS
COLUMBIA NEWPORT TIGER FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
FEBRUARY 28, AUGUST 31, AUGUST 31,
CLASS A SHARES 2005 2004 2003(a)
- -----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 11.33 $ 10.24 $ 8.14
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) (0.02) 0.13 0.07
Net realized and unrealized
gain (loss) on investments and
foreign currency and foreign
capital gains tax 2.57 1.02 2.03
------------ ---------- ----------
Total from Investment
Operations 2.55 1.15 2.10
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income (0.06) (0.06) --
REDEMPTION FEES:
Redemption fees added to
paid in capital --(b)(c) --(b)(c) --
NET ASSET VALUE, END OF PERIOD $ 13.82 $ 11.33 $ 10.24
Total return (d) 22.52%(e)(f) 11.27%(e) 25.80%(e)(f)
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (g) 1.79%(h) 1.80% 1.80%(h)
Interest expense -- --%(i) --%(h)(i)
Expenses (g) 1.79%(h) 1.80% 1.80%(h)
Net investment income (loss) (g) (0.32)%(h) 1.18% 1.21%(h)
Waiver/reimbursement 0.07%(h) 0.13% 0.20%(h)
Portfolio turnover rate 11%(f) 32% 18%(f)
Net assets, end of period (000's) $ 196,705 $ 159,489 $ 131,974
<Caption>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
CLASS A SHARES 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 9.38 $ 11.34 $ 13.47 $ 7.78
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) 0.05 0.08 0.01 0.09
Net realized and unrealized
gain (loss) on investments and
foreign currency and foreign
capital gains tax (1.25) (1.95) (2.14) 5.60
--------- --------- --------- ---------
Total from Investment
Operations (1.20) (1.87) (2.13) 5.69
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income (0.04) (0.09) -- --
REDEMPTION FEES:
Redemption fees added to
paid in capital -- -- -- --
NET ASSET VALUE, END OF PERIOD $ 8.14 $ 9.38 $ 11.34 $ 13.47
Total return (d) (12.83)%(e) (16.55)%(e) (15.81)% 73.14%
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (g) 1.80% 1.80% 1.71% 1.77%
Interest expense 0.01% --%(i) -- --
Expenses (g) 1.81% 1.80% 1.71% 1.77%
Net investment income (loss) (g) 0.54% 0.75% 0.07% 0.97%
Waiver/reimbursement 0.07% --%(i) -- --
Portfolio turnover rate 25% 12% 25% 14%
Net assets, end of period (000's) $ 108,240 $ 178,145 $ 321,671 $ 403,082
</Table>
(a) The Fund has changed its fiscal year end from December 31 to August 31.
(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) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
(i) Rounds to less than 0.01%.
22
<Page>
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
FEBRUARY 28, AUGUST 31, AUGUST 31,
CLASS B SHARES 2005 2004 2003(a)
- -----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 10.92 $ 9.90 $ 7.90
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) (0.06) 0.01 0.03
Net realized and unrealized
gain (loss) on investments,
foreign currency and foreign
capital gains tax 2.50 1.02 1.97
------------ ---------- ----------
Total from Investment
Operations 2.44 1.03 2.00
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income -- (0.01) --
REDEMPTION FEES:
Redemption fees added to
paid in capital --(b)(c) --(b)(c) --
NET ASSET VALUE, END OF PERIOD $ 13.36 $ 10.92 $ 9.90
Total return (d) 22.34%(e)(f) 10.38%(e) 25.32%(e)(f)
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (g) 2.54%(h) 2.55% 2.55%(h)
Interest expense -- --%(i) --%(h)(i)
Expenses (g) 2.54%(h) 2.55% 2.55%(h)
Net investment income (loss) (g) (1.07)%(h) 0.07% 0.49%(h)
Waiver/reimbursement 0.07%(h) 0.13% 0.20%(h)
Portfolio turnover rate 11%(f) 32% 18%(f)
Net assets, end of period (000's) $ 66,451 $ 75,473 $ 118,849
<Caption>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
CLASS B SHARES 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 9.14 $ 11.05 $ 13.23 $ 7.70
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) (0.02) --(c) (0.08) 0.02
Net realized and unrealized
gain (loss) on investments,
foreign currency and foreign
capital gains tax (1.22) (1.89) (2.10) 5.51
--------- --------- --------- ---------
Total from Investment
Operations (1.24) (1.89) (2.18) 5.53
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income -- (0.02) -- --
REDEMPTION FEES:
Redemption fees added to
paid in capital -- -- -- --
NET ASSET VALUE, END OF PERIOD $ 7.90 $ 9.14 $ 11.05 $ 13.23
Total return (d) (13.57)%(e) (17.12)%(e) (16.48)% 71.82%
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (g) 2.55% 2.55% 2.46% 2.52%
Interest expense 0.01% --%(i) -- --
Expenses (g) 2.56% 2.55% 2.46% 2.52%
Net investment income (loss) (g) (0.21)% --%(i) (0.68)% 0.22%
Waiver/reimbursement 0.07% --%(i) -- --
Portfolio turnover rate 25% 12% 25% 14%
Net assets, end of period (000's) $ 112,942 $ 164,354 $ 265,219 $ 407,179
</Table>
(a) The Fund has changed its fiscal year end from December 31 to August 31.
(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) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
(i) Rounds to less than 0.01%.
23
<Page>
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
FEBRUARY 28, AUGUST 31, AUGUST 31,
CLASS C SHARES 2005 2004 2003(a)
- -----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 10.93 $ 9.91 $ 7.91
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) (0.06) 0.04 0.03
Net realized and unrealized
gain (loss) on investments,
foreign currency and foreign
capital gain tax 2.49 0.99 1.97
------------ ---------- ----------
Total from Investment
Operations 2.43 1.03 2.00
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income -- (0.01) --
REDEMPTION FEES:
Redemption fees added to
paid in capital --(b)(c) --(b)(c) --
NET ASSET VALUE, END OF PERIOD $ 13.36 $ 10.93 $ 9.91
Total return (d) 22.23%(e)(f) 10.37%(e) 25.28%(e)(f)
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (g) 2.54%(h) 2.55% 2.55%(h)
Interest expense -- --%(i) --%(h)(i)
Expenses (g) 2.54%(h) 2.55% 2.55%(h)
Net investment income (loss) (g) (1.07)%(h) 0.36% 0.49%(h)
Waiver/reimbursement 0.07%(h) 0.13% 0.20%(h)
Portfolio turnover rate 11%(f) 32% 18%(f)
Net assets, end of period (000's) $ 28,642 $ 25,234 $ 22,619
<Caption>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
CLASS C SHARES 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 9.15 $ 11.07 $ 13.25 $ 7.71
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) (0.02) --(c) (0.08) 0.02
Net realized and unrealized
gain (loss) on investments,
foreign currency and foreign
capital gain tax (1.22) (1.90) (2.10) 5.52
--------- --------- --------- ---------
Total from Investment
Operations (1.24) (1.90) (2.18) 5.54
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income -- (0.02) -- --
REDEMPTION FEES:
Redemption fees added to
paid in capital -- -- -- --
NET ASSET VALUE, END OF PERIOD $ 7.91 $ 9.15 $ 11.07 $ 13.25
Total return (d) (13.55)%(e) (17.18)%(e) (16.45)% 71.85%
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (g) 2.55% 2.55% 2.46% 2.52%
Interest expense 0.01% --%(i) -- --
Expenses (g) 2.56% 2.55% 2.46% 2.52%
Net investment income (loss) (g) (0.21)% --%(i) (0.68)% 0.22%
Waiver/reimbursement 0.07% --%(i) -- --
Portfolio turnover rate 25% 12% 25% 14%
Net assets, end of period (000's) $ 19,866 $ 28,036 $ 42,897 $ 73,038
</Table>
(a) The Fund has changed its fiscal year end from December 31 to August 31.
(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) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
(i) Rounds to less than 0.01%.
24
<Page>
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
FEBRUARY 28, AUGUST 31, AUGUST 31,
CLASS T SHARES 2005 2004 2003(a)
- -----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 11.39 $ 10.29 $ 8.16
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) --(c) 0.15 0.08
Net realized and unrealized
gain (loss) on investments and
foreign currency and foreign
captial gains tax 2.60 1.03 2.05
------------ ---------- ----------
Total from Investment
Operations 2.60 1.18 2.13
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income (0.09) (0.08) --
REDEMPTION FEES:
Redemption fees added to
paid in capital --(b)(c) --(b)(c) --
NET ASSET VALUE, END OF PERIOD $ 13.90 $ 11.39 $ 10.29
Total return (d) 22.84%(e)(f) 11.50%(e) 26.10%(e)(f)
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (g) 1.54%(h) 1.55% 1.55%(h)
Interest expense -- --%(i) --%(h)(i)
Expenses (g) 1.54%(h) 1.55% 1.55%(h)
Net investment income (loss) (g) (0.07)%(h) 1.30% 1.50%(h)
Waiver/reimbursement 0.07%(h) 0.13% 0.20%(h)
Portfolio turnover rate 11%(f) 32% 18%(f)
Net assets, end of period (000's) $ 29,008 $ 26,615 $ 27,501
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------------------------------
CLASS T SHARES 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 9.41 $ 11.38 $ 13.48 $ 7.77
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) 0.08 0.10 0.04 0.12
Net realized and unrealized
gain (loss) on investments and
foreign currency and foreign
captial gains tax (1.27) (1.96) (2.14) 5.59
---------- --------- --------- ---------
Total from Investment
Operations (1.19) (1.86) (2.10) 5.71
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income (0.06) (0.11) -- --
REDEMPTION FEES:
Redemption fees added to
paid in capital -- -- -- --
NET ASSET VALUE, END OF PERIOD $ 8.16 $ 9.41 $ 11.38 $ 13.48
Total return (d) (12.68)%(e) (16.39)%(e) (15.58)% 73.49%
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (g) 1.55% 1.55% 1.46% 1.52%
Interest expense 0.01% --%(i) -- --
Expenses (g) 1.56% 1.55% 1.46% 1.52%
Net investment income (loss) (g) 0.79% 1.00% 0.32% 1.22%
Waiver/reimbursement 0.07% --%(i) -- --
Portfolio turnover rate 25% 12% 25% 14%
Net assets, end of period (000's) $ 24,180 $ 31,782 $ 46,733 $ 69,503
</Table>
(a) The Fund has changed its fiscal year end from December 31 to August 31.
(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) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
(i) Rounds to less than 0.01%.
25
<Page>
<Table>
<Caption>
(UNAUDITED)
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
FEBRUARY 28, AUGUST 31, AUGUST 31,
CLASS Z SHARES 2005 2004 2003(a)
- -----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 11.36 $ 10.26 $ 8.14
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) --(c) 0.09 0.07
Net realized and unrealized
gain (loss) on investments and
foreign currency and foreign
capital gain tax 2.59 1.09 2.05
------------ ---------- ----------
Total from Investment
Operations 2.59 1.18 2.12
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income (0.09) (0.08) --
REDEMPTION FEES:
Redemption fees added to
paid in capital --(b)(c) --(b)(c) --(b)(c)
NET ASSET VALUE, END OF PERIOD $ 13.86 $ 11.36 $ 10.26
Total return (d) 22.81%(e)(f) 11.53%(e) 26.04%(e)(f)
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (g) 1.54%(h) 1.55% 1.55%(h)
Interest expense -- --%(i) --%(h)(i)
Expenses (g) 1.54%(h) 1.55% 1.55%(h)
Net investment income (loss) (g) (0.07)%(h) 0.82% 1.31%(h)
Waiver/reimbursement 0.07%(h) 0.13% 0.20%(h)
Portfolio turnover rate 11%(f) 32% 18%(f)
Net assets, end of period (000's) $ 28,230 $ 26,385 $ 64,803
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------------------------------
CLASS Z SHARES 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 9.38 $ 11.35 $ 13.46 $ 7.75
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) 0.08 0.10 0.04 0.12
Net realized and unrealized
gain (loss) on investments and
foreign currency and foreign
capital gain tax (1.26) (1.96) (2.15) 5.59
---------- --------- --------- ---------
Total from Investment
Operations (1.18) (1.86) (2.11) 5.71
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net investment income (0.06) (0.11) -- --
REDEMPTION FEES:
Redemption fees added to
paid in capital -- -- -- --
NET ASSET VALUE, END OF PERIOD $ 8.14 $ 9.38 $ 11.35 $ 13.46
Total return (d) (12.61)%(e) (16.43)%(e) (15.68)% 73.68%
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (g) 1.55% 1.55% 1.46% 1.52%
Interest expense 0.01% --%(i) -- --
Expenses (g) 1.56% 1.55% 1.46% 1.52%
Net investment income (loss) (g) 0.79% 1.00% 0.32% 1.22%
Waiver/reimbursement 0.07% --%(i) -- --
Portfolio turnover rate 25% 12% 25% 14%
Net assets, end of period (000's) $ 77,225 $ 122,255 $ 157,606 $ 214,498
</Table>
(a) The Fund has changed its fiscal year end from December 31 to August 31.
(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) Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
(i) Rounds to less than 0.01%.
26
<Page>
COLUMBIA FUNDS
COLUMBIA NEWPORT TIGER FUND
<Table>
LARGE GROWTH Columbia Growth Stock
Columbia Large Cap Growth
Columbia Tax-Managed Growth
Columbia Tax-Managed Growth II*
Columbia Young Investor
LARGE VALUE Columbia Disciplined Value
Columbia Growth & Income
Columbia Large Cap Core
Columbia Tax-Managed Value*
MIDCAP GROWTH Columbia Acorn Select
Columbia Mid Cap Growth
Columbia Tax-Managed Aggressive Growth
MIDCAP VALUE Columbia Dividend Income
Columbia Mid Cap Value*
Columbia Strategic Investor
SMALL GROWTH Columbia Acorn
Columbia Acorn USA
Columbia Small Company Equity
SMALL VALUE Columbia Small Cap
Columbia Small Cap Value
BALANCED Columbia Asset Allocation
Columbia Balanced
Columbia Liberty Fund
SPECIALTY Columbia Real Estate Equity
Columbia Technology
Columbia Utilities
TAXABLE FIXED-INCOME Columbia Corporate Bond
Columbia Federal Securities
Columbia Fixed Income Securities
Columbia High Yield
Columbia High Yield Opportunities
Columbia Income*
Columbia Intermediate Bond
Columbia Intermediate Government Income*
Columbia Quality Plus Bond
Columbia Short Term Bond*
Columbia Strategic Income
TAX EXEMPT Columbia High Yield Municipal
Columbia Intermediate Tax-Exempt Bond
Columbia Managed Municipals*
Columbia National Municipal Bond**
Columbia Tax-Exempt
Columbia Tax-Exempt Insured
</Table>
27
<Page>
<Table>
SINGLE STATE TAX EXEMPT Columbia California Tax-Exempt
Columbia Connecticut Intermediate Municipal Bond
Columbia Connecticut Tax-Exempt
Columbia Florida Intermediate Municipal Bond*
Columbia Massachusetts Intermediate Municipal Bond
Columbia Massachusetts Tax-Exempt
Columbia New Jersey Intermediate Municipal Bond
Columbia New York Intermediate Municipal Bond
Columbia New York Tax-Exempt
Columbia Oregon Municipal Bond
Columbia Pennsylvania Intermediate Municipal Bond*
Columbia Rhode Island Intermediate Municipal Bond
MONEY MARKET Columbia Money Market
Columbia Municipal Money Market
INTERNATIONAL/GLOBAL Columbia Acorn International
Columbia Acorn International Select
Columbia Global Equity
Columbia International Stock
Columbia Newport Greater China
Columbia Newport Tiger*
INDEX Columbia Large Company Index*
Columbia Small Company Index*
Columbia U.S. Treasury Index*
</Table>
* The fund will be closed to new investments after the close of business on
April 29, 2005. The fund's trustees have approved the merger, which is
scheduled to occur during September and October, pending shareholder
approval
** The fund will be closed to new investments after the close of business on
April 29, 2005. The fund's trustees have approved the liquidation, which is
scheduled to occur during September, pending shareholder approval
Please consider the investment objectives, risks, charges and expenses of a
mutual fund carefully before investing. Contact us at 800-345-6611 for a
prospectus which contains this and other important information about the fund.
Read it carefully before you invest.
For complete product information on any Columbia fund, visit our website at
www.columbiafunds.com.
Columbia Management Group and Columbia Management refer collectively to the
various investment advisory subsidiaries of Columbia Management Group, including
Columbia Management Advisors, Inc., the registered investment advisor, and
Columbia Funds Distributor, Inc.
28
<Page>
IMPORTANT INFORMATION ABOUT THIS REPORT
Columbia Newport Tiger 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 Tiger 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.
29
<Page>
[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.
COLUMBIA NEWPORT TIGER FUND SEMIANNUAL REPORT, FEBRUARY 28, 2005 PRSRT STD
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
COLUMBIA MANAGEMENT(R)
(C) 2005 Columbia Funds Distributor, Inc.
One Financial Center, Boston,MA 02111-2621
800.345.6611 www.columbiafunds.com
732-03/730U-0205 (04/05) 05/5132
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.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Columbia Funds Trust VII
---------------------------------------------------------------------
By (Signature and Title) /S/ Christopher L. Wilson
---------------------------------------------------------
Christopher L. Wilson, President
Date April 27, 2005
----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /S/ Christopher L. Wilson
---------------------------------------------------------
Christopher L. Wilson, President
Date April 27, 2005
----------------------------------------------------------------------------
By (Signature and Title) /S/ J. Kevin Connaughton
---------------------------------------------------------
J. Kevin Connaughton, Treasurer
Date April 27, 2005
----------------------------------------------------------------------------