<PAGE>
Dear Shareholder:
We are pleased to send you the semiannual report for Centennial Government
Trust. The past year was a good one for short-term investors. During the 6
months ended December 31, 1994, the Trust's compounded annualized yield was
4.41%. The corresponding yield without compounding was 4.31%. The seven-day
annualized yields with and without compounding on December 31, 1994 were 5.26%
and 5.13%, respectively.1
During 1994, the U.S. Federal Reserve undertook one of the most aggressive
efforts to raise interest rates in its history, and although the Fed's efforts
brought significant uncertainty to the nation's stock and bond markets, the
short-term money markets benefited throughout the year from rising yields.
In this environment, your Trust met its objectives well, combining an attractive
short-term yield and share-price stability with daily liquidity and investment
convenience.2
At this writing, the outlook for the money markets remains positive. Inflation
remains low, and short-term money market investments are providing attractive
inflation-adjusted yields. Given the uncertainties still surrounding the
longer-term investment outlook, many investors are seeking stable, liquid,
short-term vehicles that provide dependable returns, and our money market funds
offer some of the best vehicles conservative investors can find for their
short-term funds.
The reason has to do with our approach to short-term investing, a disciplined
one designed to identify money market instruments issued or guaranteed by the
U.S. Government and its agencies and instrumentalities that seem especially
attractive when compared to others in the market, and to avoid those that seem
to carry unnecessary risks.
This conservative approach is especially noteworthy in light of the widely
publicized problems some aggressively managed money funds encountered during the
year. Although your managers are always looking for opportunities to enhance
portfolio income by monitoring yield differentials in the nation's money
markets, principal stability is their top priority.
In closing, we want to welcome new investors to the Trust and to thank those
who have been with us for some time. We appreciate your trust in Centennial
Government Trust, and we look forward to helping you meet your investment
objectives in the future.
Sincerely,
JON S. FOSSEL
Jon S. Fossel
President, Centennial Government Trust
JAMES C. SWAIN
James C. Swain
Chairman, Centennial Government Trust
January 23, 1995
1. Compounded yields assume reinvestment of dividends. Past performance is not
indicative of future results.
2. The Trust is neither insured nor guaranteed by the U.S. Government. There is
no assurance that the Trust will maintain a stable $1 share price in the future.
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1994 (Unaudited)
Centennial Government Trust
<TABLE>
<CAPTION>
Face Market Value
REPURCHASE AGREEMENTS - 15.7% Amount See Note 1
------ ----------
<S> <C> <C>
Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be
repurchased at $57,038,000 on 1/3/95, collateralized by U.S. Treasury Nts., 4.125%,
5/31/95, with a value of $58,159,849....................................................... $ 57,000,000 $ 57,000,000
Repurchase agreement with Morgan Guaranty Trust Co., 6.15%, dated 12/30/94, to be repurchased
at $50,034,167 on 1/3/95, collateralized by FHLMC, 6%-7.50%, 11/1/98-11/1/24, with a value
of $56,493,165............................................................................. 50,000,000 50,000,000
------------
Total Repurchase Agreements (Cost $107,000,000)............................................................ 107,000,000
------------
U.S. GOVERNMENT OBLIGATIONS - 84.9%
AGRICULTURAL - 3.5%
Federal Farm Credit Bank, 5%, 1/3/95......................................................... 5,845,000 5,844,705
Federal Farm Credit Bank, 5.57%, 1/17/95..................................................... 10,000,000 9,975,244
Federal Farm Credit Bank, 5.64%, 2/6/95...................................................... 4,000,000 3,977,440
Federal Farm Credit Bank, 8.30%, 1/20/95..................................................... 4,360,000 4,363,971
------------
24,161,360
------------
FHLMC/FNMA/SPONSORED - 67.5%
Federal Home Loan Bank, 4.86%, 1/23/95....................................................... 10,000,000 9,970,300
Federal Home Loan Bank, 5.04%, 1/19/95....................................................... 10,000,000 9,974,800
Federal Home Loan Bank, 5.45%, 1/25/95....................................................... 5,000,000 4,997,027
Federal Home Loan Bank, 5.77%, 2/21/95(1).................................................... 25,000,000 25,000,000
Federal Home Loan Bank, 5.85%, 1/11/95....................................................... 4,155,000 4,148,248
Federal Home Loan Bank, 5.90%, 1/5/95 (1).................................................... 10,000,000 9,995,257
Federal Home Loan Bank, 5.925%, 1/9/95....................................................... 20,000,000 19,973,667
Federal Home Loan Bank, 6.01%, 2/10/95....................................................... 10,000,000 9,933,222
Federal Home Loan Mortgage Corp., 5.35%, 1/26/95............................................. 11,375,000 11,332,739
Federal Home Loan Mortgage Corp., 5.64%, 2/6/95.............................................. 8,500,000 8,452,060
Federal Home Loan Mortgage Corp., 5.64%-6%, 2/2/95........................................... 39,455,000 39,252,731
Federal Home Loan Mortgage Corp., 5.65%-5.655%, 2/9/95....................................... 20,000,000 19,877,529
Federal Home Loan Mortgage Corp., 5.75%, 1/3/95(1)........................................... 50,000,000 49,927,716
Federal Home Loan Mortgage Corp., 5.75%, 2/10/95............................................. 3,500,000 3,477,639
Federal Home Loan Mortgage Corp., 5.85%, 1/3/95.............................................. 14,520,000 14,515,281
Federal National Mortgage Assn., 5.53%, 1/3/95(1)............................................ 17,000,000 17,000,000
Federal National Mortgage Assn., 5.77%, 1/3/95............................................... 24,500,000 24,492,146
Federal National Mortgage Assn., 5.86%, 1/26/95.............................................. 31,920,000 31,790,103
Federal National Mortgage Assn., 5.91%-5.95%, 1/4/95......................................... 11,900,000 11,894,115
Federal National Mortgage Assn., 5.95%, 1/13/95.............................................. 50,000,000 49,900,833
Student Loan Marketing Assn., 5.86%, 1/3/95(1)............................................... 25,000,000 24,997,888
Student Loan Marketing Assn., 5.92%, 1/4/95(1)............................................... 20,000,000 19,998,596
Student Loan Marketing Assn., 5.95%, 1/3/95(1)............................................... 5,000,000 4,995,162
Student Loan Marketing Assn., 6.07%, 1/4/95(1)............................................... 35,500,000 35,431,802
------------
461,328,861
------------
</TABLE>
2
<PAGE>
STATEMENT OF INVESTMENTS (Unaudited)(Continued)
Centennial Government Trust
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
------ ----------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (Continued)
GOVERNMENT AGENCY/FULL FAITH - 11.1%
Small Business Administration, 5.75%-10.125%, 1/1/95(1)........................................ $72,234,115 $ 75,652,059
INSTRUMENTALITY - 2.8% ------------
Tennessee Valley Authority, 5.50%, 1/13/95..................................................... 19,000,000 18,965,167
------------
Total U.S. Government Obligations (Cost $580,107,447).......................................... 580,107,447
------------
Total Investments, at Value (Cost $687,107,447)................................................ 100.6% 687,107,447
Liabilities in Excess of Other Assets.......................................................... (0.6) (3,443,772)
------ ------------
Net Assets..................................................................................... 100.0% $683,663,675
------ ------------
------ ------------
</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 December 31, 1994.
See accompanying Notes to Financial Statements.
3
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES December 31, 1994 (Unaudited)
Centennial Government Trust
<TABLE>
<S> <C>
ASSETS:
Investments, at value (including repurchase agreements of $107,000,000) (cost $687,107,447) - see
accompanying statement........................................................................... $687,107,447
Cash............................................................................................... 1,097,653
Receivables:
Shares of beneficial interest sold............................................................... 6,079,421
Interest and principal paydowns.................................................................. 3,401,864
Other............................................................................................ 5,161
------------
Total assets.................................................................................. 697,691,546
------------
LIABILITIES:
Payables and other liabilities:
Shares of beneficial interest redeemed........................................................... 13,917,250
Service plan fees - Note 3....................................................................... 59,962
Other............................................................................................ 50,659
------------
Total liabilities............................................................................. 14,027,871
------------
NET ASSETS......................................................................................... $683,663,675
------------
------------
COMPOSITION OF NET ASSETS:
Paid-in capital.................................................................................... $684,110,845
Accumulated net realized gain (loss) from investment transactions.................................. (447,170)
------------
NET ASSETS - Applicable to 684,110,845 shares of beneficial interest outstanding................... $683,663,675
------------
------------
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 Six Months Ended December 31, 1994 (Unaudited)
Centennial Government Trust
<TABLE>
<S> <C>
INVESTMENT INCOME - Interest......................................................................... $17,008,979
-----------
EXPENSES
Management fees - Note 3............................................................................. 1,603,772
Service plan fees - Note 3........................................................................... 659,317
Transfer and shareholder servicing agent fees - Note 3............................................... 224,658
Custodian fees and expenses.......................................................................... 50,538
Shareholder reports.................................................................................. 10,547
Legal and auditing fees.............................................................................. 7,438
Trustees' fees and expenses.......................................................................... 5,969
Registration and filing fees......................................................................... 93,949
Other................................................................................................ 36,184
-----------
Total expenses.................................................................................. 2,692,372
-----------
NET INVESTMENT INCOME (LOSS)......................................................................... 14,316,607
NET REALIZED GAIN (LOSS) ON INVESTMENTS.............................................................. (441,715)
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................................... $13,874,892
-----------
-----------
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Centennial Government Trust
<TABLE>
<CAPTION>
Six Months Ended Year Ended
December 31, 1994 June 30,
(Unaudited) 1994
----------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............................................ $ 14,316,607 $ 18,573,358
Net realized gain (loss) on investments................................. (441,715) 166,504
----------------- ------------
Net increase (decrease) in net assets resulting from operations......... 13,874,892 18,739,862
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS............................. (14,482,839) (18,663,114)
BENEFICIAL INTEREST TRANSACTIONS:
Net increase (decrease) in net assets resulting from beneficial interest
transactions - Note 2................................................. 70,829,120 (23,735,954)
----------------- ------------
NET ASSETS:
Total increase (decrease)............................................... 70,221,173 (23,659,206)
Beginning of period..................................................... 613,442,502 637,101,708
----------------- ------------
End of period........................................................... $ 683,663,675 $613,442,502
----------------- ------------
----------------- ------------
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
FINANCIAL HIGHLIGHTS
Centennial Government Trust
<TABLE>
<CAPTION>
Six Months Ended
December 31, Year Ended June 30,
1994 ------------------------------------------------------------
(Unaudited) 1994 1993 1992 1991 1990
---------------- -------- -------- -------- -------- --------
<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......................... .02 .03 .04 .04 .07 .08
Dividends and distributions to
shareholders........................ (.02) (.03) (.04) (.04) (.07) (.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).......................... $683,664 $613,443 $637,102 $574,717 $533,154 $219,003
Average net assets (in thousands)..... $665,692 $665,494 $633,017 $581,563 $418,268 $200,570
Number of shares outstanding at end of
period (in thousands)............... 684,111 613,282 637,018 574,722 533,125 218,986
Ratios to average net assets:
Net investment income............... 4.27%(1) 2.79% 2.81% 4.38% 6.44% 7.75%
Expenses............................ .80%(1) .79% .79% .78% .79% .84%
</TABLE>
1. Annualized.
See accompanying Notes to Financial Statements
7
<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 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. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. 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>
Six Months Ended Year Ended
December 31, 1994 June 30, 1994
--------------------------------- ---------------------------------
Shares Amount Shares Amount
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold.......................... 1,231,660,813 $ 1,231,660,813 2,133,375,320 $ 2,133,375,320
Dividends and distributions
reinvested.................. 15,105,556 15,105,556 18,030,062 18,030,062
Redeemed...................... (1,175,937,249) (1,175,937,249) (2,175,141,336) (2,175,141,336)
-------------- --------------- -------------- ---------------
Net increase (decrease)..... 70,829,120 $ 70,829,120 (23,735,954) $ (23,735,954)
-------------- --------------- -------------- ---------------
-------------- --------------- -------------- ---------------
</TABLE>
8
<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, 1994, the Trust paid $12,237 to a
broker/dealer affiliated with the Manager as reimbursement for
distribution-related expenses.
9
<PAGE>
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<PAGE>
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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
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 LLP
Legal Counsel
Myer, Swanson & Adams, P.C.
The financial statements included herein have been
taken from the records of the Trust without 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
RS0170.001.0295 ['Recycled' Logo]
Printed on recycled paper.
1994 SEMI-ANNUAL REPORT
CENTENNIAL
GOVERNMENT
TRUST
DECEMBER 31, 1994
