Dear Centennial Government Trust Shareholder:
We are pleased to provide you with the 1993 semi-annual report for Centennial
Government Trust.
During the six-month period ended December 31, 1993, the Trust's compounded
annualized yield was 2.70%. The corresponding yield without compounding was
2.67%. The seven-day annualized yields with and without compounding at December
31, 1993 were 2.66% and 2.63%, respectively.
Centennial Government Trust is managed to seek current income consistent with
the preservation of capital and maintenance of liquidity. It invests primarily
in short-term government securities.
During the past six months, the market for government securities was
characterized by stable short-term interest rates. The U.S. economy experienced
moderate growth throughout most of the last six months and interest rates
generally remained low. Inflation remained under control which led to a neutral
stance by the Federal Reserve regarding interest rate adjustments. The net
result is that current short-term interest rates are at essentially the same
level as at the beginning of 1993.
In this low short-term interest rate environment, the Trust continues to invest
all of its assets in high quality short-term instruments.
In selecting securities for the portfolio, the Trust's managers diversify the
portfolio's holdings by market sector and issuer. Each security is carefully
analyzed to ensure that it meets the high quality standards of the Trust and
can provide a competitive return.
Going forward, Centennial Government Trust will continue to seek attractive
yield opportunities, while closely monitoring economic factors in order to
anticipate interest rate movements. Although we do not believe that short-term
rates will increase dramatically in 1994, we intend to adjust the average
maturity of our holdings to take advantage of new opportunities if rates rise
slightly later in the coming year.
We appreciate your confidence in the Trust's management. We will continue to
do our best to help you reach your investment goals in the years to come.
(James C. Swain signature)
James C. Swain
Chairman--Centennial Government Trust
(Jon S. Fossel signature)
Jon S. Fossel
President--Centennial Government Trust
January 21, 1994
<PAGE>
Statement of Investments December 31, 1993 (Unaudited)
Centennial Government Trust
<TABLE>
<CAPTION>
Face Market
Amount Value-Note 1
<C> <S> <C>
Repurchase Agreements - 11.4%
$73,675,000 Repurchase agreement with J.P. Morgan Securities, Inc., 3.23%, dated
12/31/93 and maturing on 1/3/94, collateralized by Federal National
Mortgage Assn. Participation Certificates, 5.50%-7.50%, 10/1/99-12/1/22,
with a value of $75,513,372
(Cost $73,675,000)........................................................ $73,675,000
U.S. Government Obligations - 88.3%
U.S. Government Agencies - 82.1%
62,000,000 Federal Farm Credit Bank, 3.15%-3.36%, 2/1/94-4/4/94........................ 61,911,504
Federal Home Loan Bank:
50,000,000 3.12%-3.17%, 1/18/94-3/2/94................................................. 49,841,571
46,000,000 3.27%-3.531%, 1/6/94-2/18/94(1)............................................. 45,969,417
Federal Home Loan Mortgage Corp.:
50,000,000 3.35%, 3/3/94(1)............................................................ 49,876,876
99,600,000 3.12%-3.18%, 1/10/94-2/1/94................................................. 99,414,533
65,000,000 Federal National Mortgage Assn., 3.13%-3.405%, 2/8/94-6/7/94................ 64,900,278
71,294,417 Small Business Administration, 4%-7.625%, 1/1/94(1)......................... 75,423,088
85,500,000 Student Loan Marketing Assn., 3.36%-3.74%, 1/3/94-6/30/94(1)................ 85,409,462
532,746,729
U.S. Treasuries - 6.2%
30,000,000 U.S. Treasury Bills, 3.165%-3.20%, 1/6/94-4/7/94............................ 29,906,753
10,000,000 U.S. Treasury Notes, 5.375%, 2/28/94........................................ 10,031,757
39,938,510
Total U.S. Government Obligations (Cost $572,685,239)....................... 572,685,239
Total Investments, at Value (Cost $646,360,239)................................ 99.7% 646,360,239
Other Assets Net of Liabilities................................................ .3 2,532,243
Net Assets..................................................................... 100.0% $648,892,482
<FN>
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 December 31, 1993.
</TABLE>
See accompanying Notes to Financial Statements.
2
<PAGE>
Statement of Assets and Liabilities December 31, 1993 (Unaudited)
Centennial Government Trust
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $646,360,239) - see accompanying statement......... $646,360,239
Cash............................................................................ 1,210,170
Receivables:
Shares of beneficial interest sold............................................ 5,644,510
Interest and principal paydowns............................................... 3,217,791
Other........................................................................... 54,291
Total assets................................................................ 656,487,001
LIABILITIES:
Payables and other liabilities:
Shares of beneficial interest redeemed........................................ 6,534,485
Investments purchased......................................................... 997,639
Distribution assistance - Note 3.............................................. 48,549
Dividends..................................................................... 3,513
Other......................................................................... 10,333
Total liabilities........................................................... 7,594,519
NET ASSETS...................................................................... $648,892,482
COMPOSITION OF NET ASSETS:
Paid-in capital................................................................. $648,878,213
Accumulated net realized gain from investment transactions...................... 14,269
NET ASSETS - Applicable to 648,878,213 shares of beneficial interest
outstanding................................................................... $648,892,482
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE.................. $1.00
</TABLE>
See accompanying Notes to Financial Statements.
3
<PAGE>
Statement of Operations For the Six Months Ended December 31, 1993 (Unaudited)
Centennial Government Trust
<TABLE>
<S> <C>
INVESTMENT INCOME - Interest..................................................... $11,584,354
EXPENSES:
Management fees - Note 3......................................................... 1,614,447
Distribution assistance - Note 3................................................. 668,791
Transfer and shareholder servicing agent fees - Note 3........................... 202,540
Registration and filing fees..................................................... 63,177
Shareholder reports.............................................................. 41,850
Custodian fees and expenses...................................................... 33,898
Legal and auditing fees.......................................................... 10,004
Trustees' fees and expenses...................................................... 6,231
Other............................................................................ 17,177
Total expenses............................................................... 2,658,115
NET INVESTMENT INCOME............................................................ 8,926,239
NET REALIZED GAIN ON INVESTMENTS................................................. 19,996
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................. $8,946,235
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
Statements of Changes in Net Assets
Centennial Government Trust
<TABLE>
<CAPTION>
Six Months
Ended
December 31, Year Ended
1993 June 30,
(Unaudited) 1993
<S> <C> <C>
OPERATIONS:
Net investment income..................................... $ 8,926,239 $ 17,796,282
Net realized gain on investments.......................... 19,996 89,483
Net increase in net assets resulting from operations...... 8,946,235 17,885,765
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS............... (9,015,995) (17,796,282)
BENEFICIAL INTEREST TRANSACTIONS:
Net increase in net assets resulting from beneficial
interest transactions - Note 2.......................... 11,860,534 62,295,251
NET ASSETS:
Total increase............................................ 11,790,774 62,384,734
Beginning of period....................................... 637,101,708 574,716,974
End of period............................................. $648,892,482 $637,101,708
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE>
Financial Highlights
Centennial Government Trust
<TABLE>
<CAPTION>
Six Months
Ended
December 31,
1993 Year Ended June 30,
(Unaudited) 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of
period....................... $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............... .01 .04 .04 .07 .08 .08
Dividends and distributions to
shareholders................. (.01) (.04) (.04) (.07) (.08) (.08)
Net asset value, end of
period....................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)................... $648,892 $637,102 $574,717 $533,154 $219,003 $151,898
Average net assets (in
thousands)................... $669,939 $633,017 $581,563 $418,268 $200,570 $121,909
Number of shares outstanding at
end of period (in
thousands)................... 648,878 637,018 574,722 533,125 218,986 151,901
Ratios to average net assets:
Net investment income........ 2.64%(1) 2.81% 4.38% 6.44% 7.75% 8.11%
Expenses..................... .79%(1) .79% .78% .79% .84% .85%
<FN>
1. Annualized.
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
Notes to Financial Statements (Unaudited)
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 adviser 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 regular business day 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>
Six Months Ended
December 31, 1993 Year Ended
(Unaudited) June 30, 1993
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Sold.................... 1,105,651,569 $1,105,651,569 1,995,315,893 $1,995,315,893
Dividends and
distributions
reinvested............ 9,414,842 9,414,842 17,570,813 17,570,813
Redeemed................ (1,103,205,877) (1,103,205,877)(1,950,591,455) (1,950,591,455)
Net increase.......... 11,860,534 $ 11,860,534 62,295,251 $ 62,295,251
</TABLE>
7
<PAGE>
Notes to Financial Statements (Unaudited)(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 plan of distribution, 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 six months ended December 31, 1993, the Trust paid
$12,121 to a broker-dealer affiliated with the Manager as reimbursement for
distribution-related expenses.
8
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<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
Lynn M. Coluccy, Assistant Treasurer
Robert G. Zack, Assistant Secretary
Investment Adviser 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.
The financial statements included herein have been
taken from the records of the Trust without the
examination by the independent auditors.
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
RS170.0294.N (Recycled logo) Printed on recycled paper
1993 Semi-Annual Report
Centennial
Government
Trust
December 31, 1993
