<PAGE>
[COVER PAGE]
1996 SEMIANNUAL REPORT
CENTENNIAL
CALIFORNIA TAX EXEMPT TRUST
- ---------------------------------------
December 31, 1996
RS0180.001.1296
<PAGE>
DEAR SHAREHOLDER,
The second half of 1996 was a period of uncertainty in the fixed income markets,
largely due to investor fears of rapid economic growth and accelerating
inflation. The 30-year Treasury rates rose above 7% in the second quarter and
remained relatively unchanged until the end of the third quarter. That's when
negative investor sentiment that led to the market downturn in June and July
began to subside.
The swing away from inflationary fears seemed complete in October with the
release of economic indicators showing a firm dollar, low inflation and slow
growth. When the Federal Reserve responded to these indicators with another
decision to leave rates alone, it appeared that concerns about rapid growth had
been overblown, and interest rates fell in response. The status quo outcome of
the presidential election also aided the decline in rates, and the bond market
experienced one of the most substantial post-election rallies in recent history.
With continued, sustainable non-inflationary growth of around 2% to 2.5%, and
long-term rates at their lowest levels since April, the economy seems to have
settled into a comfortable path of neither too little nor too much growth.
Centennial California Tax Exempt Trust performed well due to our bullish
outlook on interest rates. In the early part of 1996, we believed that the Fed
would be hesitant to raise rates as long as inflation didn't accelerate wildly.
In response, we extended the portfolio's duration and took advantage of the
higher returns that usually accompany longer-duration bonds. Later in the
summer, as it became accepted among analysts that the Fed was probably less
inclined to raise rates, we began to be even more aggressive in lengthening the
portfolio's maturity.
In the second half on 1996, rates declined quite a bit so we backed away from
the longer maturities and monitored year-end activity. We expect that the
economy will continue to slowly decelerate.
The Trust had a compounded annualized yield of 2.79% for the six months
ended December 31, 1996. Without compounding, the corresponding yield was 2.75%.
For investors in the 41.95% combined effective tax bracket, this is equivalent
to a taxable yield for six months of 4.81% with compounding, and 4.74% without.
The seven-day annualized yields, with and without compounding, for the six-month
period ended December 31, 1996 were 3.15% and 3.10%, respectively.(1)
<PAGE>
An investment in the Trust is neither insured nor guaranteed by the U.S.
government, and there is no assurance that the Trust will maintain a stable
$1.00 share price in the future.
Thank you for your confidence in Centennial California Tax Exempt Trust. We look
forward to helping you reach your investment goals in the future.
Sincerely,
/S/James C. Swain
James C. Swain
Chairman
Centennial California Tax Exempt Trust
/S/Brigdet A. Macaskill
Bridget A. Macaskill
President
Centennial California Tax Exempt Trust
January 22, 1997
1. Compounded yields assume reinvestment of dividends. A portion of the Trust's
distributions may be subject to federal and state income taxes. For investors
subject to the federal and/or state alternative minimum tax, a portion of the
Trust's distributions may increase this tax. Past performance does not
guarantee future results.
<PAGE>
<TABLE>
<CAPTION>
======================================================
STATEMENT OF INVESTMENTS DECEMBER 31, 1996 (UNAUDITED)
Centennial California Tax Exempt Trust
FACE VALUE
AMOUNT SEE NOTE 1
===============================================================================================================================
SHORT-TERM TAX-EXEMPT OBLIGATIONS - 99.0%
- -------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 99.0%
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CA EDFA ID RB, Inland Empire Venture, LLC Project,
4.25% (1) $ 2,000,000 $ 2,000,000
-----------------------------------------------------------------------------------------------------------------------
CA GOB, Series A-3, MBIA Insured, 4.20% (1) 3,500,000 3,500,000
-----------------------------------------------------------------------------------------------------------------------
CA HFFA RB:
Adventist Health System, Series B, 3.75% (1) 1,000,000 1,000,000
Catholic Healthcare Project, Series C, 4% (1) 200,000 200,000
Santa Barbara Cottage Project, Series C, 3.75% (1) 200,000 200,000
Catholic West Project, Series C, MBIA Insured, 4% (1) 700,000 700,000
Memorial Health Services Project, 3.75% (1) 2,000,000 2,000,000
-----------------------------------------------------------------------------------------------------------------------
CA PCFA RB:
3.60%, 1/14/97 (2) 5,500,000 5,500,000
Chevron USA, Inc. Project, 3.70%, 5/15/97 (2) 2,500,000 2,500,000
Southern California Edison Co. Project:
Series A, 3.45%, 2/10/97 (2) 1,200,000 1,200,000
Series C, 3.65%, 1/14/97 (2) 1,050,000 1,050,000
-----------------------------------------------------------------------------------------------------------------------
CA PCFA SWD RB, Western Waste Industries,
Series A, 4.10% (1) 4,000,000 4,000,000
-----------------------------------------------------------------------------------------------------------------------
CA Revenue Anticipation Nts., 4.50%, 6/30/97 12,500,000 12,533,942
-----------------------------------------------------------------------------------------------------------------------
CA Statewide CDC RB:
ID, Propak California Corp., Series B, 3.95% (1) 800,000 800,000
Fibrebond, Inc., 3.65% (1) 2,000,000 2,000,000
-----------------------------------------------------------------------------------------------------------------------
Costa Mesa, CA COP, Orange Cnty. Performing Arts
Center, 3.20% (1) 2,745,000 2,745,000
-----------------------------------------------------------------------------------------------------------------------
Covina City, CA RA MH RRB, Shadowhills Apts., Inc.,
Series A, 4.40% (1) 3,000,000 3,000,000
-----------------------------------------------------------------------------------------------------------------------
Fairfield, CA IDA RB, Herman G. Rowland, 3.20% (1) 1,250,000 1,250,000
-----------------------------------------------------------------------------------------------------------------------
Huntington Park, CA RA MH RB, Casa Rita Apts.,
Series A, 4.10% (1) 700,000 700,000
-----------------------------------------------------------------------------------------------------------------------
Irvine, CA Public Facilities & Intrastructure Authority
Lease RB, Capital Improvement Projects, 3.90% (1) 1,860,000 1,860,000
-----------------------------------------------------------------------------------------------------------------------
Kings Cnty., CA HAU Multifamily RRB, Edgewater Isle
Apts., Series A, 4.15% (1) 1,360,000 1,360,000
-----------------------------------------------------------------------------------------------------------------------
Los Angeles Cnty., CA:
HAU RB, Park Sierra Project, 3.10% (1) 2,000,000 2,000,000
Pension Obligation RRB, Series A, 3.80% (1) 2,000,000 2,000,000
Public Works FAU RRB, Series B, 4.25%, 3/1/97 3,060,000 3,062,796
Tax & Revenue Anticipation Nts., Series A, 4.50%, 6/30/97 15,575,000 15,626,310
-----------------------------------------------------------------------------------------------------------------------
Los Angeles, CA Airport Revenue Municipal Trust Bonds,
Series SG-61, 4.15% (1) 4,500,000 4,500,000
-----------------------------------------------------------------------------------------------------------------------
Modesto, CA Irrigation District FAU RB, Series SG-66,
4.10% (1) 5,500,000 5,500,000
-----------------------------------------------------------------------------------------------------------------------
Oceanside, CA MH RRB, Lakeridge Apts. Project, 4.40% (1) 5,900,000 5,900,000
-----------------------------------------------------------------------------------------------------------------------
Ontario, CA Multifamily Residential Mtg. RB, Park Centre
Project, Series A, 4% (1) 2,000,000 2,000,000
-----------------------------------------------------------------------------------------------------------------------
Palm Springs, CA Community RA COP, Headquarters
Hotel, Series 7, 3.95% (1) 300,000 300,000
-----------------------------------------------------------------------------------------------------------------------
Pittsburg, CA Mtg. Obligation Gtd. RB, Series A, 4% (1) 5,000,000 5,000,000
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
================================================
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
Centennial California Tax Exempt Trust
FACE VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rancho Mirage, CA RA COP, 4.25% (1) $ 2,700,000 $ 2,700,000
-----------------------------------------------------------------------------------------------------------------------
Regents of the University of CA Commercial Paper Nts.,
3.50%, 2/27/97 5,000,000 5,000,000
-----------------------------------------------------------------------------------------------------------------------
Riverside Cnty., CA HAU MH RB, McKinley Project, 4% (1) 4,300,000 4,300,000
-----------------------------------------------------------------------------------------------------------------------
Sacramento, CA MUD Tax-Exempt Commercial Paper,
3.60%, 1/14/97 (2) 5,500,000 5,500,000
-----------------------------------------------------------------------------------------------------------------------
San Diego, CA MH RRB, Coral Point Apts. Project,
Series A, 4.35% (1) 2,500,000 2,500,000
-----------------------------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty.:
International Airport RB, Series 88, 3.55% (1) 1,700,000 1,700,000
Redevelopment FAU RRB, Yerba Buena Garden, 3.95% (1) 4,260,000 4,260,000
-----------------------------------------------------------------------------------------------------------------------
San Jose, CA MH RB, Siena at Renaissance, Series A,
4.05% (1) 2,000,000 2,000,000
-----------------------------------------------------------------------------------------------------------------------
San Marcos, CA RA MH Bonds, San Marcos Retirement
Village Project, 4.04% (1) 2,500,000 2,500,000
-----------------------------------------------------------------------------------------------------------------------
Southern CA PAU RRB, Palo Verde Project, Series B,
AMBAC Insured, 3.90% (1) 600,000 600,000
-----------------------------------------------------------------------------------------------------------------------
Visalia, CA ID RB, Akers West Assn., 3.85% (1) 2,350,000 2,350,000
-----------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE 99.0% 129,398,048
-----------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.0 1,277,860
------ -------------
NET ASSETS 100.0% $130,675,908
====== =============
</TABLE>
<TABLE>
<CAPTION>
To simplify the listings of the Centennial California Tax Exempt Trust
holdings in the Statement of Investments, we have abbreviated the
descriptions of many of the securities per the table below:
<S> <C> <C> <C>
CDC Community Development Corp. MH Multifamily Housing
COP Certificates of Participation MUD Municipal Utility District
EDFA Economic Development Finance Authority PAU Power Authority
FAU Finance Authority PCFA Pollution Control Finance Authority
GOB General Obligation Bonds RA Redevelopment Agency
HAU Housing Authority RB Revenue Bonds
HFFA Health Facilities Finance Authority RRB Revenue Refunding Bonds
ID Industrial Development SWD Solid Waste Disposal
IDA Industrial Development Authority
</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 December 31, 1996. 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.
2. Put obligation redeemable at full face value on the date reported.
See accompanying Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
=================================================================
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1996 (UNAUDITED)
Centennial California Tax Exempt Trust
===============================================================================================================================
<S> <C> <C>
ASSETS Investments, at value - see accompanying statement $129,398,048
----------------------------------------------------------------------------------------------------
Cash 387,070
----------------------------------------------------------------------------------------------------
Receivables:
Interest 1,112,751
Shares of beneficial interest sold 652,026
----------------------------------------------------------------------------------------------------
Other 11,382
-------------
Total assets 131,561,277
===============================================================================================================================
LIABILITIES Payables and other liabilities:
Shares of beneficial interest redeemed 778,168
Service plan fees 63,662
Shareholder reports 26,964
Dividends 984
Other 15,591
-------------
Total liabilities 885,369
===============================================================================================================================
NET ASSETS $130,675,908
=============
===============================================================================================================================
COMPOSITION OF Paid-in capital - applicable to 130,675,908 shares of
NET ASSETS beneficial interest outstanding $130,675,908
=============
===============================================================================================================================
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $1.00
======
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
==============================================================================
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 (UNAUDITED)
Centennial California Tax Exempt Trust
===============================================================================================================================
<S> <C> <C>
INVESTMENT INCOME Interest $ 2,179,028
===============================================================================================================================
EXPENSES Management fees - Note 3 308,663
----------------------------------------------------------------------------------------------------
Service plan fees - Note 3 126,740
----------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees - Note 3 28,074
----------------------------------------------------------------------------------------------------
Custodian fees and expenses 23,910
----------------------------------------------------------------------------------------------------
Shareholder reports 11,906
----------------------------------------------------------------------------------------------------
Registration and filing fees 8,473
----------------------------------------------------------------------------------------------------
Legal and auditing fees 6,851
----------------------------------------------------------------------------------------------------
Insurance expenses 2,061
----------------------------------------------------------------------------------------------------
Trustees' fees and expenses 1,738
----------------------------------------------------------------------------------------------------
Other 1,820
-------------
Total expenses 520,236
-------------
Less assumption of expenses by Centennial Asset Management
Corporation - Note 3 (13,635)
Less expenses paid indirectly - Note 3 (9,719)
-------------
Net expenses 496,882
===============================================================================================================================
NET INVESTMENT INCOME 1,682,146
===============================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,682,146
=============
</TABLE>
<TABLE>
<CAPTION>
===================================
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1996 JUNE 30, 1996
(UNAUDITED)
===============================================================================================================================
<S> <C> <C> <C>
OPERATIONS Net investment income $ 1,682,146 $ 3,314,158
----------------------------------------------------------------------------------------------------
Net realized gain -- 13,191
---------------------------------
Net increase in net assets resulting from operations 1,682,146 3,327,349
===============================================================================================================================
DIVIDENDS AND
DISTRIBUTIONS
TO SHAREHOLDERS (1,683,773) (3,314,158)
===============================================================================================================================
BENEFICIAL INTEREST Net increase in net assets resulting from
TRANSACTIONS beneficial interest transactions - Note 2 11,839,373 26,507,136
===============================================================================================================================
NET ASSETS Total increase 11,837,746 26,520,327
----------------------------------------------------------------------------------------------------
Beginning of period 118,838,162 92,317,835
---------------------------------
End of period $130,675,908 $118,838,162
=================================
</TABLE>
See accompanying Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Centennial California Tax Exempt Trust
Six Months
Ended Year Ended June 30,
December 31, ------------------------------------------------------------
1996 (Unaudited) 1996 1995 1994 1993 1992
=================================================================================================================================
PER SHARE OPERATING DATA:
<S> <C> <C> <C> <C> <C> <C>
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 .01 .03 .03 .02 .02 .03
Dividends and distributions to shareholders (.01) (.03) (.03) (.02) (.02) (.03)
- ---------------------------------------------------------------------------------------------------------------------------------
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) 1.39% 2.97% 3.00% 1.82% 2.00% 3.29%
=================================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $130,676 $118,838 $92,318 $60,376 $58,079 $48,483
- ---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $122,874 $112,911 $71,278 $65,520 $56,082 $40,684
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 2.72%(2) 2.94% 2.99% 1.79% 1.90% 3.13%
Expenses, before voluntary assumption
by the Manager(3) 0.84%(2) 0.80% 0.83% 0.87% 0.86% 0.91%
Expenses, net of voluntary assumption
by the Manager 0.80%(2) 0.79% 0.80% 0.80% 0.80% 0.80%
</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.
3. Beginning in fiscal 1995, the expense ratio reflects the effect of expenses
paid indirectly by the Fund. Prior year expense ratios have not been adjusted.
See accompanying Notes to Financial Statements.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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 objective is to seek the
maximum current interest income exempt from Federal and California personal
income taxes for individual investors as is consistent with preservation of
capital. The Trust's investment adviser 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.
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 Trust concentrates its investments in California and,
therefore, may have more credit risks related to the economic conditions of
California than a portfolio with a broader geographical diversification.
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 Trust has authorized an unlimited number of no par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31, 1996 YEAR ENDED JUNE 30, 1996
-------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Sold 204,009,268 $204,009,268 397,706,144 $397,706,144
Dividends and distributions reinvested 1,730,004 1,730,004 3,281,812 3,281,812
Redeemed (193,899,899) (193,899,899) (374,480,820) (374,480,820)
------------- ------------- ------------- -------------
Net increase 11,839,373 $ 11,839,373 26,507,136 $ 26,507,136
============= ============= ============= =============
</TABLE>
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Centennial California Tax Exempt 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 a fee of 0.50% on the first
$250 million of average annual net assets with a reduction of 0.025% on each
$250 million thereafter, to 0.40% 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 0.80%
of average annual net assets.
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.
Expenses paid indirectly represent a reduction of custodian fees for earnings on
cash balances maintained by the Fund.
Under an approved plan of distribution, the Trust may expend up to 0.20% 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>
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
OFFICERS AND TRUSTEES
James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, Trustee and President
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
George C. Bowen, Vice President, Treasurer and Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
Michael A. Carbuto, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
INVESTMENT ADVISER AND DISTRIBUTOR
Centennial Asset Management Corporation
TRANSFER AND SHAREHOLDER SERVICING AGENT
Shareholder Services, Inc.
CUSTODIAN OF PORTFOLIO SECURITIES
Citibank, N.A.
INDEPENDENT AUDITORS
Deloitte & Touche 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 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:
1-800-525-9310 (in U.S.)
303-671-3200 (outside U.S.)
Or write:
Shareholder Services, Inc.
P.O. Box 5143
Denver, CO 80217-5143
11
