<PAGE>
Dear Centennial Government Trust Shareholder:
We are pleased to provide you with the annual report for Centennial Government
Trust.
During the 12-month period ended June 30, 1994, the Trust's compounded
annualized yield was 2.83%. The corresponding yield without compounding was
2.79%. The seven-day annualized yields with and without compounding at June 30,
1994 were 3.65% and 3.59%, respectively.1
Centennial Government Trust is managed to seek current income consistent with
the preservation of capital and maintenance of liquidity, by investing in
short-term U.S. government securities.
Over the last six months, short-term interest rates rose dramatically,
reflecting the Federal Reserve Board's preemptive strike against inflation in a
strengthening U.S. economy.
Your managers took several steps to capitalize on this rising rate environment.
Most important, they adjusted the Trust's average maturity to provide it with
maximum flexibility.
On one hand, your managers increased the Trust's positions in short-maturity
investments, allowing the Trust to take advantage of possible additional
interest rate increases.2 ON the other hand, as short-term interest rates
appeared to peak in May, your managers also extended the maturities of some of
the portfolio's holdings to approximately five months.
This 'barbell' approach, with very short-term investments at one end of the
portfolio bar and longer-maturity investments at the other, is how the Trust
seeks the balance needed to provide attractive returns in any interest rate
environment.
It is important to emphasize that Centennial Government Trust generates its
return from a portfolio of high-quality short-term instruments. While your
managers are always alert to opportunities to enhance portfolio income,
principal stability is their top priority.
Looking ahead, the outlook for the Trust is positive. There are few signs of
inflation on the horizon and the Federal Reserve has announced its intent to
maintain interest rates at their current ranges at least for the near term.
The recent weakness in the U.S. dollar relative to other major currencies may
prompt the Fed to raise interest rates faster and higher than economic
fundamentals alone might warrant. But with the adjustments your managers have
made over the past six months, Centennial Government Trust is ready to respond
to whatever opportunities the future holds in store.
<PAGE>
We appreciate the confidence you have placed in Centennial Government Trust, and
we look forward to continuing to help you meet your financial goals in the
future.
JAMES C. SWAIN
James C. Swain
Chairman -- Centennial Government Trust
JON S. FOSSEL
Jon S. Fossel
President -- Centennial Government Trust
July 22, 1994
1. Compounded yields assume reinvestment of dividends.
2. The Trust's portfolio is subject to change.
Past performance is not indicative of future results.
<PAGE>
STATEMENT OF INVESTMENTS June 30, 1994
Centennial Government Trust
<TABLE>
<CAPTION>
Face Market Value
REPURCHASE AGREEMENTS -- 19.4% Amount See Note 1
------------- ------------
<S> <C> <C>
Repurchase agreement with Morgan Guaranty Trust Co., 4.30%, dated 6/30/94, to be repurchased
at $105,212,566 on 7/1/94, collateralized by Federal National Mortgage Assn. Participation
Certificates, 6.50%, 12/1/23-4/1/24, with a value of $39,067,805 and Government National
Mortgage Assn., 6.50%-7%, 9/15/23-6/15/24, with a value of $69,683,743.................... $ 105,200,000 $105,200,000
Repurchase agreement with First Chicago Capital Markets, 4.22%, dated 6/30/94, to be
repurchased at $14,001,641 on 7/1/94, collateralized by U.S. Treasury Notes., 5.125%,
11/30/98, with a value of $14,291,213..................................................... 14,000,000 14,000,000
------------
Total Repurchase Agreements (Cost $119,200,000)............................................. 119,200,000
------------
U.S. GOVERNMENT OBLIGATIONS -- 80.1%
Federal Farm Credit Bank, 4.34%-4.67%, 7/18/94-11/28/94..................................... 38,000,000 37,906,055
Federal Home Loan Bank:
3.44%-4.58%, 7/5/94-11/18/94.............................................................. 72,500,000 71,961,222
3.322%-4.65%, 7/7/94-8/18/94(1)........................................................... 46,000,000 45,974,124
Federal Home Loan Mortgage Corp.:
4.37%, 8/19/94............................................................................ 14,500,000 14,413,753
4.50%, 9/3/94(1).......................................................................... 50,000,000 49,902,089
Federal National Mortgage Assn., 3.60%-4.64%, 7/7/94-11/18/94............................... 107,040,000 106,297,666
Small Business Administration, 4.25%-8.875%, 7/1/94(1)...................................... 75,085,960 79,181,895
Student Loan Marketing Assn.:
4.61%-4.70%, 7/1/94-7/5/94(1)............................................................. 65,500,000 65,411,114
5.48%, 6/30/95............................................................................ 20,000,000 20,003,125
------------
Total U.S. Government Obligations (Cost $491,051,043)....................................... 491,051,043
------------
</TABLE>
<TABLE>
<S> <C> <C>
Total Investments, at Value (Cost $610,251,043)................................................. 99.5% 610,251,043
Other Assets Net of Liabilities................................................................. .5 3,191,459
----- --------------
Net Assets...................................................................................... 100.0% $ 613,442,502
----- --------------
----- --------------
</TABLE>
- ------------
1. Variable rate security. The interest rate, which is based on specific, or an
index of, market interest rates, is subject to change periodically and is the
effective rate on June 30, 1994.
See accompanying Notes to Financial Statements.
3
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES June 30, 1994
Centennial Government Trust
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments, at value (cost $610,251,043) -- see accompanying statement.................................... $610,251,043
Cash....................................................................................................... 1,047,353
Receivables:
Shares of beneficial interest sold....................................................................... 6,107,522
Interest and principal paydowns.......................................................................... 3,449,444
Other...................................................................................................... 108,468
------------
Total assets.......................................................................................... 620,963,830
------------
LIABILITIES:
Payables and other liabilities:
Shares of beneficial interest redeemed................................................................... 6,502,429
Dividends................................................................................................ 877,960
Service plan fees -- Note 3.............................................................................. 48,537
Other.................................................................................................... 92,402
------------
Total liabilities..................................................................................... 7,521,328
------------
NET ASSETS................................................................................................. $613,442,502
------------
------------
COMPOSITION OF NET ASSETS:
Paid-in capital............................................................................................ $613,281,725
Accumulated net realized gain from investment transactions................................................. 160,777
------------
NET ASSETS -- Applicable to 613,281,725 shares of beneficial interest outstanding.......................... $613,442,502
------------
------------
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE............................................. $1.00
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended June 30, 1994
Centennial Government Trust
<TABLE>
<S> <C>
INVESTMENT INCOME -- Interest............................................................................... $23,830,047
-----------
EXPENSES:
Management fees -- Note 3................................................................................... 3,182,956
Service plan fees -- Note 3................................................................................. 1,328,950
Transfer and shareholder servicing agent fees -- Note 3..................................................... 417,466
Custodian fees and expenses................................................................................. 82,795
Registration and filing fees................................................................................ 79,295
Shareholder reports......................................................................................... 61,247
Legal and auditing fees..................................................................................... 23,841
Trustees' fees and expenses................................................................................. 10,387
Other....................................................................................................... 69,752
-----------
Total expenses......................................................................................... 5,256,689
-----------
NET INVESTMENT INCOME....................................................................................... 18,573,358
-----------
NET REALIZED GAIN ON INVESTMENTS............................................................................ 166,504
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................................................ $18,739,862
-----------
-----------
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Centennial Government Trust
<TABLE>
<CAPTION>
Year Ended June 30,
----------------------------
1994 1993
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income...................................................................... $ 18,573,358 $ 17,796,282
Net realized gain on investments........................................................... 166,504 89,483
------------ ------------
Net increase in net assets resulting from operations.................................. 18,739,862 17,885,765
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS................................................ (18,663,114) (17,796,282)
BENEFICIAL INTEREST TRANSACTIONS:
Net increase (decrease) in net assets resulting from beneficial interest
transactions -- Note 2................................................................... (23,735,954) 62,295,251
------------ ------------
NET ASSETS:
Total increase (decrease).................................................................. (23,659,206) 62,384,734
Beginning of year.......................................................................... 637,101,708 574,716,974
------------ ------------
End of year................................................................................ $613,442,502 $637,101,708
------------ ------------
------------ ------------
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
FINANCIAL HIGHLIGHTS
Centennial Government Trust
<TABLE>
<CAPTION>
Year Ended June 30,
------------------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
DATA:
Net asset value,
beginning of year.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
operations -- net
investment income and
net realized gain on
investments.......... .03 .04 .04 .07 .08 .08 .06 .05 .07 .08
Dividends and
distributions to
shareholders......... (.03) (.04) (.04) (.07) (.08) (.08) (.06) (.05) (.07) (.08)
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Net asset value, end of
year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of year
(in thousands)....... $ 613,443 $ 637,102 $ 574,717 $ 533,154 $ 219,003 $ 151,898 $ 90,035 $ 67,042 $ 78,550 $ 53,690
Average net assets (in
thousands)........... $ 665,494 $ 633,017 $ 581,563 $ 418,268 $ 200,570 $ 121,909 $ 82,815 $ 74,084 $ 68,515 $ 65,241
Number of shares
outstanding at end of
year (in
thousands)........... 613,282 637,018 574,722 533,125 218,986 151,901 90,036 67,042 78,550 53,690
Ratios to average net
assets:
Net investment
income............. 2.79% 2.81% 4.38% 6.44% 7.75% 8.11% 5.94% 5.17% 6.59% 8.53%
Expenses............. .79% .79% .78% .79% .84% .85% .90% .96% .93% .86%
</TABLE>
See accompanying Notes to Financial Statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Centennial Government Trust
1. SIGNIFICANT ACCOUNTING POLICIES
Centennial Government Trust (the Trust) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Trust's investment advisor is Centennial Asset
Management Corporation (the Manager), a subsidiary of Oppenheimer Management
Corporation (OMC). The following is a summary of significant accounting policies
consistently followed by the Trust.
Investment Valuation -- Portfolio securities are valued on the basis of
amortized cost, which approximates market value.
Repurchase Agreements -- The Trust requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. If the seller of the agreement defaults and the value of
the collateral declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Trust may be delayed or
limited.
Federal Income Taxes -- The Trust intends to continue to comply with provisions
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no federal
income tax provision is required.
Distributions to Shareholders -- The Trust intends to declare dividends from net
investment income each day the New York Stock Exchange is open for business and
pay such dividends monthly. To effect its policy of maintaining a net asset
value of $1.00 per share, the Trust may withhold dividends or make distributions
of net realized gains.
Other -- Investment transactions are accounted for on the date the investments
are purchased or sold (trade date). Realized gains and losses on investments are
determined on an identified cost basis, which is the same basis used for federal
income tax purposes.
2. SHARES OF BENEFICIAL INTEREST
The Trust has authorized an unlimited number of no par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Year Ended June 30,
-------------------------------------------------------------------
1994 1993
-------------------------------- --------------------------------
Shares Amount Shares Amount
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold.............................. 2,133,375,320 $ 2,133,375,320 1,995,315,893 $ 1,995,315,893
Dividends and distributions
reinvested...................... 18,030,062 18,030,062 17,570,813 17,570,813
Redeemed.......................... (2,175,141,336) (2,175,141,336) (1,950,591,455) (1,950,591,455)
-------------- --------------- -------------- ---------------
Net increase (decrease)......... (23,735,954) $ (23,735,954) 62,295,251 $ 62,295,251
-------------- --------------- -------------- ---------------
-------------- --------------- -------------- ---------------
</TABLE>
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
Centennial Government Trust
3. MANAGEMENT FEES AND OTHER
TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Trust which provides for an annual fee of .50% on
the first $250 million of net assets with a reduction of .025% on each $250
million thereafter, to .40% on net assets in excess of $1 billion. The Manager
has agreed to reimburse the Trust if aggregate expenses (with specified
exceptions) exceed the lesser of 1.50% of the first $30 million of average
annual net assets of the Trust, plus 1% of average annual net assets in excess
of $30 million; or 25% of the total annual investment income of the Trust.
Shareholder Services, Inc. (SSI), a subsidiary of OMC, is the transfer and
shareholder servicing agent for the Trust, and for other registered investment
companies. SSI's total costs of providing such services are allocated ratably to
these companies.
Under an approved service plan, the Trust may expend up to .20% of its net
assets annually to reimburse certain securities dealers and other financial
institutions and organizations for costs incurred in distributing Trust shares.
During the year ended June 30, 1994, the Trust paid $22,331 to a broker/dealer
affiliated with the Manager as reimbursement for distribution-related expenses.
9
<PAGE>
INDEPENDENT AUDITORS' REPORT
Centennial Government Trust
The Board of Trustees and Shareholders of Centennial Government Trust:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Centennial Government Trust as of June 30,
1994, the related statement of operations for the year then ended, the
statements of changes in net assets for the years ended June 30, 1994 and 1993,
and the financial highlights for the period July 1, 1984 to June 30, 1994. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
at June 30, 1994 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Centennial
Government Trust at June 30, 1994, the results of its operations, the changes in
its net assets, and the financial highlights for the respective stated periods,
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE
Denver, Colorado
July 22, 1994
10
<PAGE>
FEDERAL INCOME TAX INFORMATION (Unaudited)
Centennial Government Trust
In early 1995, shareholders will receive information regarding all dividends and
distributions paid to them by the Trust during calendar year 1994. Regulations
of the U.S. Treasury Department require the Trust to report this information to
the Internal Revenue Service.
None of the dividends paid by the Trust during the fiscal year ended June 30,
1994 are eligible for the corporate dividend-received deduction.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Trust to the Internal Revenue Service. Because
of the complexity of the federal regulations which may affect your individual
tax return and the many variations in state and local tax regulations, we
recommend that you consult your tax advisor for specific guidance.
11
<PAGE>
CENTENNIAL GOVERNMENT TRUST
Officers and Trustees
James C. Swain, Chairman and
Chief Executive Officer
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee and President
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
Andrew J. Donohue, Vice President
Dorothy G. Warmack, Vice President
Carol E. Wolf, Vice President
Arthur J. Zimmer, Vice President
George C. Bowen, Vice President,
Secretary and Treasurer
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
Investment Advisor and Distributor
Centennial Asset Management
Corporation
Transfer and Shareholder Servicing Agent
Shareholder Services, Inc.
Custodian of Portfolio Securities
Citibank, N.A.
Independent Auditors
Deloitte & Touche
Legal Counsel
Myer, Swanson & Adams, P.C.
This is a copy of a report to shareholders of
Centennial Government Trust. This report must be
preceded or accompanied by a Prospectus of Centennial
Government Trust. For material information concerning
the Trust, see the Prospectus.
For shareholder servicing, call:
1-800-525-7048 (in U.S.)
303-671-3200 (outside U.S.)
Or write:
Shareholder Services, Inc.
P.O. Box 5270
Denver, CO 80217-5270
RA170.0894.N [Logo] Printed on recycled paper.
<PAGE>
1994 ANNUAL REPORT
CENTENNIAL
GOVERNMENT
TRUST
JUNE 30, 1994
