{Cover Page}
1997 ANNUAL REPORT
CENTENNIAL
AMERICA FUND, L.P.
December 31, 1997
RA0870.001.1297
<PAGE>
JAMES C. SWAIN
Chairman
Centennial America Fund L.P.
BRIDGET A. MACASKILL
President
Centennial America Fund L.P.
DEAR SHAREHOLDER,
Compared to the volatility in world stock markets during the past few months,
short-term interest rates have remained relatively calm. As is often the case,
U.S. money market instruments became a safe haven in times of stress.
In addition to safety and liquidity, money market fund investors also enjoyed a
modest increase in yields during the six-month period which ended December 31,
1997. One reason: the Federal Reserve Board raised short-term interest rates by
0.25 percentage points in late March of 1997. This new interest rate was in
place for the period covered by this report. It's important to remember that an
investment in the Fund is neither insured nor guaranteed by the U.S.
government, and there is no assurance that the Fund will maintain a stable
$1.00 share price in the future.
For the year ended December 31, 1997, the Centennial America Fund's compounded
annual yield was 4.64%. Without compounding, the corresponding yield was 4.53%.
The seven-day annualized yields with and without compounding on December 31,
1997 were 4.91% and 4.80%, respectively.(1)
Typically, long-term and short-term interest rates move in the same direction.
During the past few months, long-term rates have fallen sharply. That's because
investors worldwide increasingly invested in U.S. Treasury bonds of all
maturities when they liquidated their Asia equity positions. Generally, when the
demand for bonds rises, bond prices increase, and issuers can pay lower yields
to attract the same number of investors.
However, while long-term interest rates have been falling, U.S. money market
yields have actually been rising in recent weeks. The main reason is that Japan,
the world's second largest issuer of short-term debt, continues to have
financial difficulties. Japan's economic plight was worsened by the financial
crisis in Southeast Asia, since Japan's banks are major lenders to those
countries. Because investors perceive a lowered credit quality in the region,
Japanese issuers have been required to pay higher interest rates to compensate
for the additional risk. To compete, American issuers have been forced to also
raise their short-term rates.
All things considered, the U.S. economy is the envy of the world. Inflation is
virtually nonexistent, long-term interest rates have fallen below 6%, the
federal budget is nearly balanced, unemployment is under 5% and economic growth
continues strong. True, Asia's devalued currencies and uncertain business
environment will slow our economy somewhat, because our exports to the Far East
will be curtailed. However, our economy was beginning to overheat in 1997 and
had the events in Asia not taken place, the Federal Reserve Board might have
intervened by raising short-term interest rates to slow down the economy.
As we have seen, world events can have a dramatic impact on interest rates as
well as the investment markets. However, we don't try to predict the future
course of interest rates and use those predictions to set our investment
strategy. Instead, we "ladder" the portfolio with some securities maturing in a
few days, some maturing in a month, some maturing in two months and so on. With
a relatively broad maturity spectrum, the portfolio is widely diversified and
able to take advantage of a variety of market conditions.
2 Centennial America Fund L.P.
<PAGE>
Money market yields are often compared with the rate of inflation to determine a
"real" rate of return. The real rate of return equals the stated money market
yield minus the rate of inflation. With inflation currently negligible, the real
rate of return from money market funds continues to be quite high. At the same
time, money market funds provide a strong combination of liquidity and safety of
principal during times of volatility in other markets.
Thank you for your confidence in Centennial America Fund. We look forward to
helping you reach your investment goals in the future.
Sincerely,
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
January 23, 1998
1. Compounded yields assume reinvestment of dividends. Past performance is not
indicative of future results.
3 Centennial America Fund L.P.
<PAGE>
<TABLE>
<CAPTION>
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STATEMENT OF INVESTMENTS December 31, 1997
Centennial America Fund, L.P.
FACE VALUE
AMOUNT SEE NOTE 1
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U.S. GOVERNMENT OBLIGATIONS - 76.0%
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Federal Home Loan Mortgage Corp.:
<S> <C> <C>
5.42%, 1/6/98 $ 609,000 $ 608,541
5.52%, 1/23/98 210,000 209,292
5.52%, 2/17/98 925,000 918,334
5.73%, 1/21/98 535,000 533,297
5.74%, 1/12/98 346,000 345,393
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Federal National Mortgage Assn.:
5.48%, 2/5/98 500,000 497,336
5.48%, 2/6/98 450,000 447,534
5.54%, 1/21/98 1,300,000 1,295,956
5.72%, 1/5/98 350,000 349,777
5.73%, 1/15/98 301,000 300,329
6.05%, 1/12/98 1,000,000 1,000,084
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Student Loan Marketing Assn., guaranteeing commercial paper of:
Nebraska Higher Education Loan Program, 6.10%, 1/23/98 750,000 747,227
New Hampshire Higher Education Loan Corp.:
5.75%, 1/29/98 490,000 487,809
5.79%, 1/26/98 719,000 716,109
USA Group Secondary Market Services, Inc.:
5.65%, 1/22/98 549,000 547,191
5.70%, 1/29/98 1,000,000 995,567
5.75%, 1/26/98 581,000 578,680
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Tennessee Valley Authority, 5.48%, 2/10/98 500,000 496,955
--------------
Total U.S. Government Obligations 11,075,411
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REPURCHASE AGREEMENTS - 23.3%
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Repurchase agreement with PaineWebber, Inc., 6.80%, dated 12/31/97,
to be repurchased at $3,401,284 on 1/2/98, collateralized by Government
National Mortgage Assn. Participation Nts., 7.50%, 10/15/27, with a value
of $1,587,542, and Federal Home Loan Mortgage Corp. Participation Nts.,
7%, 8/1/27, with a value of $1,910,147 3,400,000 3,400,000
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TOTAL INVESTMENTS, AT VALUE 99.3% 14,475,411
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OTHER ASSETS NET OF LIABILITIES 0.7 104,704
------------ ----------------
NET ASSETS 100.0% $ 14,580,115
============ ================
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
<TABLE>
<CAPTION>
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STATEMENT OF ASSETS AND LIABILITIES December 31, 1997
Centennial America Fund, L.P.
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (including repurchase agreement of $3,400,000)
<S> <C>
- see accompanying statement $14,475,411
- -----------------------------------------------------------------------------------------------------------------------------
Cash 84,334
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Receivables:
Shares of beneficial interest sold 132,496
Interest 29,218
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Other 4,251
---------------------
Total assets 14,725,710
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LIABILITIES
Payables and other liabilities:
Shares of beneficial interest redeemed 128,309
Service plan fees 7,808
Shareholder reports 6,310
Dividends 2,238
Other 930
---------------------
Total liabilities 145,595
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NET ASSETS $14,580,115
=====================
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COMPOSITION OF NET ASSETS
Paid-in capital - applicable to 14,580,115 shares of beneficial interest
outstanding $14,580,115
=====================
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- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $1.00
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
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STATEMENT OF OPERATIONS For the Year Ended December 31, 1997
Centennial America Fund, L.P.
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME - Interest $898,892
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EXPENSES
Management fees - Note 3 73,491
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Service plan fees - Note 3 32,060
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Shareholder reports 20,951
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Transfer and shareholder servicing agent fees - Note 3 11,229
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Legal and auditing fees 8,504
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Registration and filing fees 5,919
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Custodian fees and expenses 3,080
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Managing General Partners' fees and expenses 2,330
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Insurance expenses 1,698
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Other 434
---------------------
Total expenses 159,696
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NET INVESTMENT INCOME $739,196
=====================
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31,
1997 1996
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
OPERATIONS
<S> <C> <C>
Net investment income $739,196 $768,975
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (739,196) (777,172)
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase (decrease) in net assets resulting from
beneficial interest transactions - Note 2 (4,081,282) 7,567,914
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Total increase (decrease) (4,081,282) 7,559,717
- -----------------------------------------------------------------------------------------------------------------------------
Beginning of period 18,661,397 11,101,680
------------------------------------------
End of period $14,580,115 $18,661,397
==========================================
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Centennial America Fund, L.P.
Year Ended December 31,
1997 1996 1995 1994 1993
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PER SHARE OPERATING DATA:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations - net
investment income and net realized gain .05 .05 .04 .03 .02
Dividends and distributions to shareholders (.05) (.05) (.04) (.03) (.02)
=================================================================================
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
=================================================================================
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TOTAL RETURN, AT NET ASSET VALUE(1) 4.63% 4.69% 4.56% 2.91% 2.23%
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RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $14,580 $18,661 $11,102 $6,201 $4,349
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Average net assets (in thousands) $16,320 $16,998 $ 7,862 $5,693 $4,780
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Ratios to average net assets:
Net investment income 4.53% 4.52% 4.48% 2.89% 2.22%
Expenses, before voluntary reimbursement by
the Manager 0.98% 0.86% 1.48% 1.47% 1.34%
Expenses, net of voluntary reimbursement by
the Manager N/A N/A N/A N/A 1.13%
</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
reflect changes in net investment income only.
See accompanying Notes to Financial Statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Centennial America Fund, L.P.
1. SIGNIFICANT ACCOUNTING POLICIES
Centennial America Fund, L.P. (the Fund) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Fund's investment objective is to seek as high a
level of current income as is consistent with the preservation of capital
and the maintenance of liquidity. The Fund is organized as a limited
partnership and issues one class of shares, in the form of limited
partnership interests. The Fund's investment advisor is OppenheimerFunds,
Inc. (the Manager). The following is a summary of significant accounting
policies consistently followed by the Fund.
INVESTMENT VALUATION. Portfolio securities are valued on the basis of
amortized cost, which approximates market value.
REPURCHASE AGREEMENTS. The Fund 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 Fund may be delayed or
limited.
FEDERAL TAXES. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to limited partnerships. As a limited
partnership, the Fund is not subject to U.S. federal income tax, and the
character of the income earned and capital gains or losses realized by the
Fund flows directly through to shareholders. Therefore, no federal income or
excise tax provision is required. Beginning in 1998, according to the
provisions of the 1997 Taxpayer Relief Act, the Fund will elect to be
treated as an "Electing 1987 Partnership". As such it will record a U.S.
Federal income tax provision equal to 3.50% of gross income.
DISTRIBUTIONS TO SHAREHOLDERS. The Fund 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 Fund 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.
2. SHARES OF BENEFICIAL INTEREST
The Fund 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 DECEMBER 31, 1997 YEAR ENDED DECEMBER 31, 1996
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Sold 44,369,483 $44,369,483 51,127,626 $51,127,626
Dividends and distributions
reinvested 706,803 706,803 749,505 749,505
Redeemed (49,157,568) (49,157,568) (44,309,217) (44,309,217)
------------ ------------ ------------ ------------
Net increase (decrease) (4,081,282) $(4,081,282) 7,567,914 $ 7,567,914
============ ============ ============ ============
</TABLE>
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
Centennial America Fund, L.P.
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for an annual fee of 0.45%
of the first $500 million of net assets and 0.40% on net assets over $500
million.
Shareholder Services, Inc. (SSI), a subsidiary of the Manager, is the
transfer and shareholder servicing agent for the Fund 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 Fund expends 0.20% of its net
assets annually to reimburse Centennial Asset Management Corporation, a
subsidiary of the Manager, for costs incurred in distributing shares of the
Fund, including amounts paid to brokers, dealers, banks and other
institutions.
9
<PAGE>
INDEPENDENT AUDITORS' REPORT
Centennial America Fund, L.P.
The Managing General Partners and Shareholders of
Centennial America Fund, L.P.:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Centennial America Fund, L.P. as of December
31, 1997, the related statement of operations for the year then ended, the
statements of changes in net assets for the years ended December 31, 1997 and
1996 and the financial highlights for the period January 1, 1993 to December 31,
1997. These financial statements and financial highlights are the responsibility
of the Fund'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 includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1997 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 America
Fund, L.P. at December 31, 1997, 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 LLP
Denver, Colorado
January 23, 1998
10
<PAGE>
FEDERAL INCOME TAX INFORMATION (Unaudited)
Centennial America Fund, L.P.
In early 1998 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1997. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
None of the dividends paid by the Fund during the fiscal year ended December 31,
1997 are eligible for the corporate dividend- received deduction.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund 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 AMERICA FUND, L.P.
OFFICERS AND MANAGING GENERAL PARTNERS
James C. Swain, Managing General Partner and Chairman
Bridget A. Macaskill, President
Robert G. Avis, Managing General Partner
William A. Baker, Managing General Partner
Charles Conrad, Jr., Managing General Partner
Sam Freedman, Managing General Partner
Raymond J. Kalinowski, Managing General Partner
C. Howard Kast, Managing General Partner
Robert M. Kirchner, Managing General Partner
Ned M. Steel, Managing General Partner
George C. Bowen, Vice President, Treasurer and Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
Dorothy G. Warmack, Vice President
Carol E. Wolf, Vice President
Arthur J. Zimmer, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
INVESTMENT ADVISOR
OppenheimerFunds, Inc.
DISTRIBUTOR
Centennial Asset Management Corporation
SUB-DISTRIBUTOR
OppenheimerFunds Distributor, Inc.
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.
This is a copy of a report to shareholders of Centennial America Fund, L.P. This
report must be preceded or accompanied by a Prospectus of Centennial America
Fund, L.P. For material information concerning the Fund, see the Prospectus.
For shareholder servicing call:
1-800-525-9310 (in U.S.)
303-768-3200 (outside U.S.)
Or write:
Shareholder Services, Inc.
P.O. Box 5143
Denver, CO 80217-5143
