<PAGE>
1994 ANNUAL REPORT
CENTENNIAL
CALIFORNIA TAX EXEMPT
TRUST
- -------------------------------------------------------------------------------
June 30, 1994
RA180.0894.N
<PAGE>
Dear Centennial California Tax Exempt Trust Shareholder:
We are pleased to provide you with the annual report for Centennial California
Tax Exempt Trust.
The Trust's compounded annualized yield for the 12 months ended June 30, 1994
was 1.80%. The corresponding yield without compounding was 1.79%. For investors
in the 41.95% combined federal and state tax bracket, this is equal to a taxable
yield of 3.10% with compounding and 3.08% without compounding.1
Centennial California Tax Exempt Trust is managed to seek maximum current
interest income exempt from federal and California income taxes for individual
investors that is consistent with preservation of capital, by investing in
short-term, California municipal 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 shortened the Trust's average maturity to 18 days at June
30 from 68 days at December 31, 1993, and did so in a manner intended to provide
the Trust with maximum flexibility.2
It is important to emphasize that Centennial California Tax Exempt Trust
generates its return from a portfolio of high-quality short-term securities.
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 California Tax Exempt Trust is ready
to respond to whatever opportunities the future holds in store.
We appreciate the confidence you have placed in Centennial California Tax Exempt
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 California
Tax Exempt Trust
JON S. FOSSEL
Jon S. Fossel
President -- Centennial California
Tax Exempt Trust
July 22, 1994
1. Compounded yields assume reinvestment of dividends.
2. The Fund's portfolio is subject to change.
Past performance is not indicative of future results.
<PAGE>
STATEMENT OF INVESTMENTS June 30, 1994
Centennial California Tax Exempt Trust
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT VALUE -- NOTE 1
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<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- 101.6%
CALIFORNIA -- 101.6%
Anaheim, California Certificates of Participation, 1993 Refunding Projects, AMBAC
Insured, 2.10% (1)................................................................ $1,000,000 $1,000,000
Anaheim, California Electric Revenue Anticipation Nts., 2.70%, 9/1/94 (2)........... 2,000,000 2,000,000
Anaheim, California Housing Authority Multifamily Housing Revenue Refunding Bonds,
Park Vista Apts., Series A, 2.60% (1)............................................. 3,000,000 3,000,000
California Health Facilities Finance Revenue Bonds:
Health Dimensions, Inc., Series A, 2.35%, 8/1/94 (2)................................ 2,000,000 2,000,000
Huntington Memorial Hospital, 2.20% (1)............................................. 700,000 700,000
Kaiser Permanente Medical, Series B, 2.15% (1)...................................... 900,000 900,000
Pooled Loan Program, Series B, FGIC Insured, 2.50% (1).............................. 500,000 500,000
Scripps Memorial Hospital, Series A, MBIA Insured, 2.50% (1)........................ 500,000 500,000
California Pollution Control Finance Authority Revenue Bonds:
Chevron Chemical Co. Project, 2.85%, 11/15/94 (2)................................... 2,275,000 2,275,000
Chevron USA, Inc. Project, 2.85%, 11/15/94 (2)...................................... 500,000 500,000
San Diego Gas and Electric, 2.90%, 9/1/94 (2)....................................... 4,000,000 4,000,000
California State General Obligation Bonds, Series A-3, MBIA Insured, 2.80% (1)...... 2,500,000 2,500,000
Contra Costa County, California Multifamily Housing Revenue Refunding Bonds, Del
Norte Place Apts., Series A, 2.95% (1)............................................ 2,500,000 2,500,000
Costa Mesa, California Certificates of Participation, Orange County Performing Arts
Center, 2.83% (1)................................................................. 2,860,000 2,860,000
Fairfield, California Industrial Development Revenue Bonds, Herman G. Rowland, 2.83%
(1)............................................................................... 1,050,000 1,050,000
First Nationwide Bank of Sacramento, California Multifamily Housing Revenue Bonds,
Grantor Trust, Series 1, Class K, 2.35% (1)....................................... 1,000,000 1,000,000
Huntington Park, California Redevelopment Agency Multifamily Housing Revenue Bonds,
Casa Rita Apts., Series A, 2.70% (1).............................................. 1,500,000 1,500,000
Irvine, California Multifamily Housing Revenue Bonds, Series 1983A, 2.65% (1)....... 1,000,000 1,000,000
Kern, California Community College District Certificates of Participation, Finance
Project, 2.55% (1)................................................................ 1,000,000 1,000,000
Kern County, California Union High School District Certificates of Participation,
Finance Project, 2.50% (1)........................................................ 1,600,000 1,600,000
Los Angeles, California Multifamily Housing Revenue Bonds, Series K, 2.40% (1)...... 2,500,000 2,500,000
Los Angeles County, California Housing Authority Revenue Bonds, Park Sierra Project,
2.80% (1)......................................................................... 1,000,000 1,000,000
Los Angeles County, California Transportation Commission Revenue Bonds, Second Sub.
Sales Tax, 2.75%, 7/11/94 (2)..................................................... 2,000,000 2,000,000
3
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Centennial California Tax Exempt Trust
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT VALUE -- NOTE 1
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<S> <C> <C>
Municipal Bonds and Notes (Continued)
California (Continued)
Northern California Public Power Agency Revenue Bonds, Geothermal Project No. 3,
Series 84A, 11.50%, 7/1/94 (2).................................................... $3,790,000 $3,903,700
Ontario, California Multifamily Revenue Bonds, Mtg. Residential Park Centre, Series
A, 2.30% (1)...................................................................... 2,400,000 2,400,000
Orange County, California Apt. Development Revenue Refunding Bonds, Series A, 2.45%
(1)............................................................................... 1,000,000 1,000,000
Orange County, California Municipal Water District Refunding Certificates of
Participation, Allen McColloch Project, Series A, 3% (1).......................... 4,000,000 4,000,000
Palm Springs, California Community Redevelopment Agency Certificates of
Participation, Headquarters Hotel, Series 7, 3% (1)............................... 500,000 500,000
San Bernardino County, California Multifamily Housing Authority Revenue Refunding
Bonds, Monterey Villas Apts. Project, Series A, 2.70% (1)......................... 2,125,000 2,125,000
San Diego, California Multifamily Housing Revenue Refunding Bonds, Coral Point Apts.
Project, Series A, 2.70% (1)...................................................... 2,500,000 2,500,000
San Diego County, California Regional Transportation District Revenue Bonds, Series
BT-134, 3%, 7/21/94 (2)........................................................... 2,000,000 2,000,000
San Marcos, California Redevelopment Agency Multifamily Housing Bonds, San Marcos
Retirement Village Project, 3% (1)................................................ 2,500,000 2,500,000
Southern California Rapid Transit District Certificates of Participation, Series
BT-10, MBIA Insured, 2.35% (1).................................................... 1,000,000 1,000,000
Stockton, California Industrial Development Authority Revenue Bonds, Citation
Circuit Co., 2.71% (1)............................................................ 375,000 375,000
Visalia, California Industrial Development Revenue Bonds, Akers West Assoc., 2.75%
(1)............................................................................... 1,150,000 1,150,000
----------------
Total Investments, at Value (Cost $61,338,700)...................................... 101.6% 61,338,700
Liabilities in Excess of Other Assets............................................... (1.6) (963,037)
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Net Assets.......................................................................... 100.0% $60,375,663
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</TABLE>
1. 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 June
30, 1994. A demand feature allows the recovery of principal at any time, or
at specified intervals not exceeding one year, on up to 30 days' notice.
2. Put obligation redeemable at full face value on the date reported.
See accompanying Notes to Financial Statements.
4
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES June 30, 1994
Centennial California Tax Exempt Trust
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $61,338,700) - see
accompanying statement..................................... $61,338,700
Cash 122,159
Receivables:
Interest .................................................. 437,913
Shares of beneficial interest sold ........................ 352,007
Deferred organization costs ................................. 3,881
Other ....................................................... 9,139
----------
Total assets ............................................ 62,263,799
----------
LIABILITIES:
Payables and other liabilities:
Shares of beneficial interest redeemed .................... 1,766,596
Dividends ................................................. 49,707
Service plan fees - Note 3 ................................ 33,359
Other ..................................................... 38,474
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Total liabilities ....................................... 1,888,136
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NET ASSETS .................................................. $60,375,663
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----------
COMPOSITION OF NET ASSETS:
Paid-in capital ............................................. $60,375,604
Accumulated net realized gain from investment
transactions .............................................. 59
----------
NET ASSETS - Applicable to 60,375,604 shares of
beneficial interest outstanding ........................... $60,375,663
----------
----------
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE
PER SHARE ................................................. $1.00
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended June 30, 1994
Centennial California Tax Exempt Trust
<TABLE>
<S> <C>
INVESTMENT INCOME - Interest ................................. $1,698,190
----------
EXPENSES:
Management fees - Note 3 ..................................... 327,466
Service plan fees - Note 3 ................................... 131,944
Custodian fees and expenses .................................. 36,500
Transfer and shareholder servicing agent fees
- Note 3 ................................................... 28,354
Shareholder reports .......................................... 17,830
Legal and auditing fees ...................................... 10,096
Registration and filing fees ................................. 2,729
Trustees' fees and expenses .................................. 1,825
Other ........................................................ 15,020
----------
Total expenses ........................................... 571,764
Less assumption of expenses by Centennial Asset
Management Corporation - Note 3 ............................ (48,265)
----------
Net expenses ............................................. 523,499
----------
NET INVESTMENT INCOME ........................................ 1,174,691
NET REALIZED GAIN ON INVESTMENTS ............................. 80
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ......... $1,174,771
----------
----------
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Centennial California Tax Exempt Trust
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------
1994 1993
---------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income ................... $ 1,174,691 $ 1,066,789
Net realized gain on investments ........ 80 4,381
----------- -----------
Net increase in net assets resulting
from operations ..................... 1,174,771 1,071,170
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS .......................... (1,177,627) (1,066,789)
BENEFICIAL INTEREST TRANSACTIONS:
Net increase in net assets resulting
from beneficial interest
transactions - Note 2 ................. 2,299,586 9,591,873
----------- -----------
NET ASSETS:
Total increase .......................... 2,296,730 9,596,254
Beginning of year ....................... 58,078,933 48,482,679
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End of year ............................. $60,375,663 $58,078,933
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</TABLE>
See accompanying Notes to Financial Statements.
7
<PAGE>
FINANCIAL HIGHLIGHTS
Centennial California Tax Exempt Trust
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------
1994 1993 1992 1991 1990(1)
-------- ------ ------ ------ --------
<S> <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
Income from investment operations -
net investment income and net realized gain
on investments ................................................. .02 .02 .03 .04 .003
Dividends and distributions to shareholders ...................... (.02) (.02) (.03) (.04) (.003)
------- ------- ------- ------- ------
Net asset value, end of period ................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------ ------
------- ------- ------- ------ ------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......................... $60,376 $58,079 $48,483 $32,337 $2,018
Average net assets (in thousands) ................................ $65,520 $56,082 $40,684 $16,150 $1,914
Number of shares outstanding at end of period
(in thousands) ................................................. 60,376 58,076 48,484 32,337 2,018
Ratios to average net assets:
Net investment income .......................................... 1.79% 1.90% 3.13% 4.09% 6.29%(2)
Expenses, before voluntary assumption by the Manager ........... .87% .86% .91% 1.09% 2.53%(2)
Expenses, net of voluntary assumption by the Manager ........... .80% .80% .80% .84% .90%(2)
</TABLE>
1. For the period from June 12, 1990 (commencement of operations) to
June 30, 1990.
2. Annualized.
See accompanying Notes to Financial Statements.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Centennial California Tax Exempt Trust
1. SIGNIFICANT ACCOUNTING POLICIES
Centennial California Tax Exempt Trust (the Trust) is registered under the
Investment Company Act of 1940, as amended, as a non-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.
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.
ORGANIZATION COSTS. The Manager advanced $18,743 for organization and
start-up costs of the Trust. Such expenses are being amortized over a five-year
period from the date operations commenced. In the event that all or part of the
Manager's initial investment in shares of the Trust is withdrawn during the
amortization period, the redemption proceeds will be reduced to reimburse the
Trust for any unamortized expenses, in the same ratio as the number of shares
redeemed bears to the number of initial shares outstanding at the time of such
redemption.
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.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Centennial California Tax Exempt 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>
YEAR ENDED JUNE 30,
--------------------------------------------------------------
1994 1993
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Sold.......................................... 231,741,608 $ 231,741,608 193,288,887 $ 193,288,887
Dividends and distributions reinvested........ 1,131,972 1,131,972 1,045,494 1,045,494
Redeemed...................................... (230,573,994) (230,573,994) (184,742,508) (184,742,508)
------------ ------------- ------------ -------------
Net increase............................. 2,299,586 $ 2,299,586 9,591,873 $ 9,591,873
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
</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 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 assume Trust expenses (with specified exceptions) in excess of the
regulatory limitation of the State of California. In addition, the Manager has
voluntarily undertaken to assume Trust expenses in excess of .80% of average
annual net assets.
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 Centennial Asset Management Corporation, as
distributor, for costs incurred in connection with the personal service and
maintenance of accounts that hold shares of the Trust, including amounts paid to
brokers, dealers, banks and other institutions.
10
<PAGE>
INDEPENDENT AUDITORS' REPORT
Centennial California Tax Exempt Trust
The Board of Trustees and Shareholders of
Centennial California Tax Exempt Trust:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Centennial California Tax Exempt
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 June 12, 1990
(commencement of operations) 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 and brokers. 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
California Tax Exempt 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
11
<PAGE>
FEDERAL INCOME TAX INFORMATION (Unaudited)
Centennial California Tax Exempt 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
dividends were derived from interest on municipal bonds and are not subject to
federal income tax. To the extent a shareholder is subject to any state or local
tax laws, some or all of the dividends received may be taxable.
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.
12
<PAGE>
CENTENNIAL CALIFORNIA TAX EXEMPT 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
Michael A. Carbuto, Vice President
Andrew J. Donahue, 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 California Tax
Exempt Trust. This report must be preceded or accompanied by a Prospectus of
Centennial California Tax Exempt 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
13
