<PAGE>
<PAGE>
Dear Shareholder:
We are pleased to send you the semiannual report for Centennial Government
Trust. During the 6 month period ended December 31, 1995, the Trust's compounded
annualized yield was 5.16%. The corresponding yield without compounding was
5.03%. The seven-day annualized yields with and without compounding on December
31, 1995 were 4.95% and 4.83% respectively.(1)
Government money market funds have always been a highly liquid place for cash
'on the sidelines' -- earning a steady income while protecting principal.(2) In
1995, money market funds turned out to be a good investment choice for the
income-oriented investor.
While the 30-year U.S. Treasury yield from nearly 8% to 6% during the year, and
rates on intermediate-term bonds fell by nearly as much, money market yields
stayed about the same throughout the year. This made the yield on money market
funds very attractive relative to intermediate-term bonds.
Normally, long-terms bonds pay anywhere from three to five percentage points
more than a money market fund. One reason for this situation is the relationship
between money market funds and the inflation rate. Typically, money market
yields are roughly one percentage point above inflation. Assuming that the
annual inflation rate is 2.5%, money market yields would normally be about 3.5%,
while longer-term rates might be as high as 5.5%. However, the current
difference between money market yields and inflation is three times its normal
level. Part of the reason for this anomaly is the successful way in which the
Federal Reserve Board has fought inflation.
By the spring of 1995, the economy stabilized and began to decelerate. And
economists began to speculate that the Fed would lower short-term rates to keep
the economy from going into a recession. Meanwhile, longer-term interest rates
had already begun to decline in anticipation of the Fed action. And although the
Fed reduced short-term interest rates slightly in July, it didn't lower rates
nearly as much as the decline in long-term rate, which are market driven.
With the economy continuing to slow, we believe that additional cuts by the Fed
are likely. And since longer-term rates will probably come down further, we
expect that the relationship between short-term yields and longer-term yields
will remain similar for the time being.
As a result, money market funds continue to offer relatively high yields in
relation to longer-term investments -- and in relation to inflation. Thank you
for your confidence in Centennial Money Market Trust. We look forward to helping
you continue to reach your investment goals in the future.
Sincerely,
BRIDGET A. MACASKILL
Bridget A. Macaskill
President, Centennial Government Trust
January 22, 1996
(1) Compounded yields assume reinvestment of dividends. Past performance is not
indicative of future results.
(2) The Fund is neither insured nor guaranteed by the U.S. government, and there
is no assurance that the Fund will maintain a stable $1
share price in the future.
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1995 (Unaudited)
Centennial Government Trust
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
----------- ------------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS - 68.1%
Federal Farm Credit Bank, 5.40%, 1/11/96..................................................... $10,000,000 $ 9,985,000
Federal Farm Credit Bank, 5.41%, 2/28/96..................................................... 10,000,000 9,912,839
Federal Farm Credit Bank, 5.57%, 2/23/96..................................................... 6,880,000 6,878,698
Federal Farm Credit Bank, 5.66%, 2/1/96...................................................... 14,420,000 14,418,738
Federal Home Loan Bank, 5.42%, 1/19/96....................................................... 10,000,000 9,972,900
Federal Home Loan Bank, 5.43%, 3/26/96....................................................... 10,000,000 9,871,792
Federal Home Loan Bank, 5.45%, 4/5/96........................................................ 4,240,000 4,179,021
Federal Home Loan Bank, 5.50%, 3/25/96....................................................... 15,000,000 14,809,250
Federal Home Loan Bank, 5.57%, 2/1/96........................................................ 10,000,000 9,952,036
Federal Home Loan Bank, 5.59%, 3/14/96(1).................................................... 25,000,000 24,993,414
Federal Home Loan Bank, 5.613%, 9/23/96(1)................................................... 10,000,000 9,993,657
Federal Home Loan Bank, 5.68%, 1/24/96....................................................... 13,000,000 12,998,331
Federal Home Loan Bank, 5.75%, 2/15/96....................................................... 5,735,000 5,695,285
Federal Home Loan Bank, 5.76%, 2/5/96........................................................ 6,150,000 6,116,696
Federal Home Loan Bank, 5.868%, 2/9/96....................................................... 25,000,000 25,005,055
Federal Home Loan Bank, 5.90%, 7/8/96(1)..................................................... 10,000,000 9,998,382
Federal Home Loan Bank, 9.75%, 2/9/96........................................................ 3,000,000 3,011,883
Federal Home Loan Mortgage Assn., 5.34%, 3/29/96............................................. 5,500,000 5,428,207
Federal Home Loan Mortgage Assn., 5.40%, 1/5/96.............................................. 10,000,000 9,994,000
Federal Home Loan Mortgage Assn., 5.43%, 4/1/96.............................................. 10,000,000 9,862,742
Federal Home Loan Mortgage Assn., 5.51%, 1/30/96............................................. 10,000,000 9,955,614
Federal Home Loan Mortgage Assn., 5.55%, 1/22/96............................................. 15,000,000 14,951,394
Federal Home Loan Mortgage Assn., 5.65%, 2/20/96............................................. 30,000,000 29,768,958
Federal National Mortgage Assn., 5.15%, 2/16/96(1)........................................... 20,900,000 20,897,141
Federal National Mortgage Assn., 5.42%, 1/26/96(1)........................................... 20,000,000 19,999,589
Federal National Mortgage Assn., 5.43%, 5/2/96............................................... 3,500,000 3,435,594
Federal National Mortgage Assn., 5.44%, 5/24/96.............................................. 15,000,000 14,677,800
Federal National Mortgage Assn., 5.44%, 5/30/96.............................................. 5,000,000 4,888,333
Federal National Mortgage Assn., 5.48%, 3/19/96.............................................. 25,000,000 24,703,167
Federal National Mortgage Assn., 5.49%, 3/28/96.............................................. 11,350,000 11,200,511
Federal National Mortgage Assn., 5.62%, 7/2/96............................................... 25,000,000 25,007,309
Federal National Mortgage Assn., 5.64%, 2/23/96.............................................. 15,000,000 14,878,542
Federal National Mortgage Assn., 5.65%, 2/21/96.............................................. 15,000,000 14,882,487
Federal National Mortgage Assn., 5.65%, 2/28/96.............................................. 44,805,000 44,404,369
Federal National Mortgage Assn., 5.75%, 1/11/96.............................................. 25,000,000 24,961,180
Federal National Mortgage Assn., 6.46%, 3/27/96.............................................. 10,000,000 10,020,296
Federal National Mortgage Assn., 9.50%, 1/2/96............................................... 9,585,000 10,224,286
Small Business Administration, 6.875%-10.375%,1/2/96(2)...................................... 3,156,216 3,325,293
Student Loan Marketing Assn., 5.20%, 7/19/96(1).............................................. 20,115,000 20,100,166
Student Loan Marketing Assn., 5.22%, 2/8/96(1)............................................... 35,000,000 35,000,000
</TABLE>
2
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS (Unaudited)(Continued)
Centennial Government Trust
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
----------- -----------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (Continued)
Student Loan Marketing Assn., guaranteeing commercial paper of New
Hampshire Higher Education Loan Corp., Commercial Paper Nts., Series
1995A, 5.72%, 1/12/96.................................................... $11,602,000 $ 11,581,774
Student Loan Marketing Assn., guaranteeing commercial paper of New
Hampshire Higher Education Loan Corp., Commercial Paper Nts., Series
1995A, 5.75%, 1/19/96.................................................... 13,300,000 13,261,762
Student Loan Marketing Assn., guaranteeing commercial paper of Secondary
Market Services, Inc., Education Loan Revenue Nts., Series-1995A,
5.72%-5.75%, 1/12/96..................................................... 5,993,000 5,982,379
Student Loan Marketing Assn., guaranteeing commercial paper of Secondary
Market Services, Inc., Education Loan Revenue Nts., Series-1995A, 5.75%,
1/18/96.................................................................. 10,669,000 10,640,031
Student Loan Marketing Assn., guaranteeing commercial paper of Secondary
Market Services, Inc., Education Loan Revenue Nts., Series-1995A, 5.77%,
1/18/96.................................................................. 8,250,000 8,227,521
Student Loan Marketing Assn., guaranteeing commercial paper of Secondary
Market Services, Inc., Education Loan Revenue Nts., Series-1995A, 5.78%,
1/22/96.................................................................. 24,310,000 24,228,177
-----------
Total U.S. Government Obligations (Cost $644,281,599)...................... 644,281,599
-----------
Repurchase Agreements - 32.1%
Repurchase agreement with First Chicago Capital Markets, 5.90%, dated
12/29/95, to be repurchased at $115,075,389 on 1/2/96, collateralized by
U.S. Treasury Bills maturing 11/14/96, with a value of $117,367,240...... 115,000,000 115,000,000
Repurchase agreement with PaineWebber, Inc., 5.93%, dated 12/29/95, to be
repurchased at $189,324,662 on 1/2/96, collateralized by Government
National Mortgage Assn. Participation Nts., 7%-8%, 8/15/23-11/15/25, with
a value of $130,209,380, and Federal National Mortgage Assn.
Participation Nts., 7.50%, 3/1/24, with a value of $76,045,323........... 189,200,000 189,200,000
-----------
Total Repurchase Agreements (Cost $304,200,000)............................ 304,200,000
-----------
Total Investments, at Value................................................ 100.2% 948,481,599
Liabilities in Excess of Other Assets...................................... (0.2) (1,900,556)
Net Assets................................................................. 100.0% $946,581,043
----- ------------
----- ------------
</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, 1995.
2. Floating or variable rate obligation maturing in more than one year. 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, 1995. This instrument may also have a demand feature which
allows the recovery of principal at any time, or at specified intervals not
exceeding one year, on up to 30 days' notice. Maturity date shown
represents effective maturity based on variable rate and, if applicable,
demand feature.
See accompanying Notes to Financial Statements.
3
<PAGE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES December 31, 1995 (Unaudited)
Centennial Government Trust
<TABLE>
<S> <C>
ASSETS:
Investments, at value (including repurchase agreements of $304,200,000) - see accompanying
statement........................................................................................ $948,481,599
Cash............................................................................................... 1,596,902
Receivables:
Shares of beneficial interest sold............................................................... 7,181,014
Interest and principal paydowns.................................................................. 3,464,116
Other............................................................................................ 43,235
------------
Total assets.................................................................................. 960,766,866
------------
LIABILITIES:
Payables and other liabilities:
Shares of beneficial interest redeemed........................................................... 14,008,161
Service plan fees................................................................................ 67,452
Shareholder reports.............................................................................. 62,914
Transfer and shareholder servicing agent fees.................................................... 19,973
Dividends........................................................................................ 9,070
Other............................................................................................ 18,253
------------
Total liabilities............................................................................. 14,185,823
------------
NET ASSETS......................................................................................... $946,581,043
------------
------------
COMPOSITION OF NET ASSETS:
Paid-in capital.................................................................................... $947,305,887
Accumulated net realized loss on investment transactions........................................... (724,844)
------------
NET ASSETS - Applicable to 947,305,887 shares of beneficial interest outstanding................... $946,581,043
------------
------------
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE..................................... $1.00
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
<PAGE>
STATEMENT OF OPERATIONS For the Six Months Ended December 31, 1995 (Unaudited)
Centennial Government Trust
<TABLE>
<S> <C>
INVESTMENT INCOME - Interest......................................................................... $27,175,448
-----------
EXPENSES:
Management fees - Note 3............................................................................. 2,175,228
Service plan fees - Note 3........................................................................... 938,897
Transfer and shareholder servicing agent fees - Note 3............................................... 242,630
Registration and filing fees......................................................................... 148,528
Custodian fees and expenses.......................................................................... 85,425
Shareholder reports.................................................................................. 25,349
Legal and auditing fees.............................................................................. 15,929
Other................................................................................................ 4,901
-----------
Total expenses.................................................................................. 3,636,887
-----------
NET INVESTMENT INCOME................................................................................ 23,538,561
NET REALIZED GAIN ON INVESTMENTS..................................................................... 37,828
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................................. $23,576,389
-----------
-----------
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Centennial Government Trust
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1995 Year Ended
(Unaudited) June 30, 1995
----------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income................................................... $ 23,538,561 $ 34,584,382
Net realized gain (loss)................................................ 37,828 (757,217)
----------------- -------------
Net increase in net assets resulting from operations.................... 23,576,389 33,827,165
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS............................. (23,538,561) (34,750,614)
BENEFICIAL INTEREST TRANSACTIONS:
Net increase in net assets resulting from beneficial interest
transactions - Note 2................................................. 53,358,970 280,665,192
----------------- -------------
NET ASSETS
Total increase.......................................................... 53,396,798 279,741,743
Beginning of period..................................................... 893,184,245 613,442,502
----------------- -------------
End of period........................................................... $ 946,581,043 $ 893,184,245
----------------- -------------
----------------- -------------
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
<PAGE>
FINANCIAL HIGHLIGHTS
Centennial Government Trust
<TABLE>
<CAPTION>
Six Months Ended
December 31, Year Ended June 30,
1995 ------------------------------------------------------------
(Unaudited) 1995 1994 1993 1992 1991
---------------- -------- -------- -------- -------- --------
<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............... .03 .05 .03 .04 .04 .07
Dividends and distributions to
shareholders........................ (.03) (.05) (.03) (.04) (.04) (.07)
----- ----- ----- ----- ----- -----
Net asset value, end of period........ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
TOTAL RETURN, AT NET ASSET VALUE(1)... 2.55% 4.93% 2.84% 2.98% 4.75% 6.86%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands).......................... $946,581 $893,184 $613,443 $637,102 $574,717 $533,154
Average net assets (in thousands)..... $927,523 $718,681 $665,494 $633,017 $581,563 $418,268
RATIOS TO AVERAGE NET ASSETS:
Net investment income................. 5.81%(2) 4.81% 2.79% 2.81% 4.38% 6.44%
Expenses.............................. 0.78%(2) 0.80% 0.79% 0.79% 0.78% 0.79%
</TABLE>
1. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are
not annualized for periods of less than one full year. Total returns reflect
changes in net investment income only.
2. Annualized.
See accompanying Notes to Financial Statements.
7
<PAGE>
<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 objective is to seek a high current
level of income consistent with preservation of capital and the maintenance of
liquidity, through investment in a diversified portfolio of short-term debt
instruments issued or guaranteed by the U.S. Government or its agencies or
instrumentalities and maturing in, or having been called for redemption in, one
year or less. The Trust's investment advisor is Centennial Asset Management
Corporation (the Manager), a subsidiary of OppenheimerFunds, Inc. (OFI). 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 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 or excise 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.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
8
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
Centennial Government Trust
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, 1995 June 30, 1995
--------------------------------- ---------------------------------
Shares Amount Shares Amount
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold.......................... 1,363,428,129 $ 1,363,428,129 2,655,164,842 $ 2,655,164,842
Dividends and distributions
reinvested.................. 24,962,081 24,962,081 33,137,329 33,137,329
Redeemed...................... (1,335,031,240) (1,335,031,240) (2,407,636,979) (2,407,636,979)
-------------- --------------- -------------- ---------------
Net increase................ 53,358,970 $ 53,358,970 280,665,192 $ 280,665,192
-------------- --------------- -------------- ---------------
-------------- --------------- -------------- ---------------
</TABLE>
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 a fee of .50% on the first
$250 million of average annual 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 OFI, 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, 1995 the Trust paid $13,640 to a
broker/ dealer affiliated with the Manager as reimbursement for
distribution-related expenses.
9
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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
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Bridget A. Macaskill, Trustee and
President
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 & Wolf, 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:
1-800-525-9310 (in U.S.)
303-671-3200 (outside U.S.)
Or write:
Shareholder Services, Inc.
P.O. Box 5143
Denver, CO 80217-5143
RS0170.001.0196 [Logo] Printed on recycled paper.
1995 SEMIANNUAL REPORT
CENTENNIAL
GOVERNMENT
TRUST
DECEMBER 31, 1995
