Breakdown of Čitao je knjigu, ali nije pročitao izvještaj.
biti
to be (sam, si, je)
knjiga
book
ne
no, not
ali
but (strong contrast)
Questions & Answers about Čitao je knjigu, ali nije pročitao izvještaj.
Why is it čitao in the first half but pročitao in the second?
This highlights the difference in verbal aspect! Čitao is imperfective, focusing on the ongoing process of the action ("was reading"). Pročitao is perfective, formed by adding the prefix pro-, and it focuses on the completion of the action. The sentence contrasts spending time reading a book with failing to finish reading the report.
How do we know it means "he" was reading if the word on (he) isn't in the sentence?
Croatian frequently drops subject pronouns like on. We know the subject is masculine because of the endings on the past tense verbs. Čitao and pročitao both end in -o, which is the masculine singular ending. If a woman were reading, the verbs would end in -a (čitala je... ali nije pročitala).
Why does the word for book change to knjigu, but the word for report stays as izvještaj?
Both words are in the accusative case because they are the direct objects being read. Feminine nouns ending in -a (like knjiga) change to -u in the accusative. However, izvještaj is a masculine inanimate noun (a thing, not a living being), and the accusative form of inanimate masculine nouns looks exactly the same as their dictionary form.
In the second part, why is it just nije pročitao without the helping verb je?