<PAGE>
Dear Shareholder:
For the fiscal year that ended June 30, 2000, a hale and hardy economy--and
persistent concern that rapid economic growth might trigger higher inflation--
set the tone for short-term fixed income markets. The Federal Reserve attempted
to keep the economy from becoming too robust for its own good by ratcheting up
short-term interest rates six times during the year-long period. But even this
was not enough to weaken economic growth significantly. For the fourth quarter
of 1999 and the first quarter of 2000, the U.S. economy expanded at annualized
rates of 7.3% and 5.4%, respectively.
Against this backdrop, Centennial California Tax-Exempt Trust produced a com-
pounded annual yield of 2.61%. Without compounding, the annual yield was 2.60%.
For investors in the 36% tax bracket, this is equivalent to a taxable com-
pounded yield of 4.08% and 4.06% without compounding. As of June 30, 2000, the
seven-day annualized yields, with and without compounding, were 3.40% and
3.34%, respectively./1/
Like most California tax-exempt funds, the Trust was hurt by the steady advance
of interest rates. It was also affected by a sizable imbalance in the supply-
demand relationship for California municipal securities. After nearly a decade
of economic expansion, many municipalities are posting budget surpluses and
have less need to issue new notes. The dwindling supply of notes issued by
state, county and municipal entities has contrasted sharply with rising demand
as the growing economy creates more investors who seek to purchase municipals
as a form of tax relief./2/ The result has generally been higher prices and
lower yields for investors in California, unless they were willing to assume
the additional risk of longer term or lower quality securities.
As the fiscal year began, the Trust was positioned in longer term but higher
quality securities. When it became obvious to us that interest rates were on an
upward path, we shifted our focus to shorter term securities. When rates rise,
bond prices generally fall, and the effect is more pronounced for longer-term
issues. Because the Trust seeks to maintain a stable $1.00 share price, we
wanted to minimize the devaluing effect of rising rates. There can be no assur-
ance that the Trust will maintain a stable share price, but we are ever mindful
of the need to protect your principal./3/
1. Compounded yields assume reinvestment of dividends. Past performance
is not indicative of future results.
2. A portion of the Fund's distributions may be subject to income tax
including state and local taxes. Capital gains distributions are taxable
as capital gains. For an investor subject to alternative minimum taxes, a
portion of the Fund's distributions may increase the investor's tax. Tax
rates may be lower depending on individual circumstances.
3. An investment in money market funds is neither insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government
agency. Although these funds may seek to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing
in these funds.
<PAGE>
By December, we had reduced the average maturity of the securities in the port-
folio. Between January and May 2000, we brought the average maturity down even
further. This helped to reduce volatility, or price instability, as interest
rates jumped to ever-higher levels.
As the fiscal period drew to a close, a large percentage of our short-term
securities were due to mature, while many California issuers were getting ready
to issue new one-year notes. Despite the possibility of additional interest
rate increases, we may elect to create a "barbell" portfolio structure by
purchasing some of these longer term securities, then balancing them with an
increased allocation to demand notes.
Because they are backed by commercial banks, demand notes are generally
considered both high-quality and short-term (i.e., less than seven days). Their
rates vary from week to week and, at times, may provide a yield advantage over
comparable-quality fixed-rate instruments. With additional use of these very
short-term securities, we believe we may be able to maintain a relatively short
average maturity.
Going forward, we will continue to be cautious. Until we see definite signs
that the Federal Reserve has concluded its course of interest rate hikes, we
will seek to keep the Trust's average maturity short. As long as our central
bank remains committed to a month-to-month approach and is not willing to
pronounce the economy "slow and steady," we expect to maintain our wait-and-see
investment strategy.
Sincerely,
/s/ James C. Swain
James C. Swain
Chairman
Centennial California Tax-Exempt Trust
/s/ Bridget A. Macaskill
Bridget A. Macaskill
President
Centennial California Tax-Exempt Trust
July 24, 2000
2
<PAGE>
Statement of Investments June 30, 2000
Centennial California Tax-Exempt Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
----------- -----------
<S> <C> <C>
Short-Term Tax-Exempt Obligations--97.6%
California--95.1%
Anaheim, CA HAU MH RRB, Park Vista Apts., Series A,
4.45%(/1/)........................................... $ 1,000,000 $ 1,000,000
CA Capital Improvements PFAU RB, Series A35-Reg D,
4.75%(/1/)........................................... 7,100,000 7,100,000
CA GOB, 4.32%(/1/).................................... 5,000,000 5,000,000
CA HF FAU RB, Series 152, FSA Insured, 4.37%(/1/)..... 4,500,000 4,500,000
CA PCFAU RB, Chevron USA, Inc. Project, 4.15%,
5/15/01(/2/)......................................... 2,500,000 2,500,000
CA PCFAU RB, Southern California Edison Co. Project,
Series C, 3.80%, 10/2/00(/2/)........................ 6,400,000 6,400,000
CA PWBL RB, Regents of the University of California,
Series A, 7%, 9/1/00................................. 2,000,000 2,049,503
CA School Cash Reserve Program Authority RB, Series A,
4%, 7/3/00........................................... 13,500,000 13,500,387
CA Statewide CDC IDV RB, Propak California Corp.,
Series B, 4.65%(/1/)................................. 635,000 635,000
CA Statewide CDC RB, Fibrebond, Inc., 4.65%(/1/)...... 1,175,000 1,175,000
CA University Board of Regents RB, 3.85%, 8/1/00...... 7,445,000 7,445,000
Castic Lake Water Agency, CA COP, WS Improvement
Project, MBIA Insured, 7.125%, 8/1/00................ 7,000,000 7,160,214
Freemont, CA MH RB, Treetops Apts., Series A,
4.35%(/1/)........................................... 4,000,000 4,000,000
Long Beach, CA Harbor RB, MBIA Insured, 9%, 5/15/01... 6,180,000 6,433,716
Los Angeles Cnty., CA MTAU Sales Tax RB, AMBAC
Insured, Series SG54, 4.42%(/1/)..................... 1,000,000 1,000,000
Los Angeles, CA Airport RB, Series SG61, 4.47%(/1/)... 6,000,000 6,000,000
Los Angeles, CA USD RB, ABN AMRO Munitops Certificates
Trust, Series 1999-7, MBIA Insured, 4.47%(/1/)(/3/).. 7,000,000 7,000,000
Los Angeles, CA Wastewater System RB, ABN AMRO
Munitops Certificates Trust, Series 1998-25,
4.47%(/1/)........................................... 2,000,000 2,000,000
Los Angeles, CA Wastewater System RB, 4.05%,
8/10/00(/2/)......................................... 4,500,000 4,500,000
Modesto, CA Irrigation District FAU RB, Series SG66,
4.42%(/1/)........................................... 5,500,000 5,500,000
Oakland/Alameda Cntys., CA Coliseum Authority Lease
RRB, Coliseum Project, Series C-1, 4.40%(/1/)........ 6,400,000 6,400,000
Oceanside, CA MH RRB, Lakeridge Apts. Project,
5.05%(/1/)........................................... 7,000,000 7,000,143
Orange Cnty., CA Sanitation District COP, Series C,
FGIC Insured, 4%(/1/)................................ 1,000,000 1,000,000
Paramount City, CA HAU MH RRB, Century Place Apts.
Project, Series A, 4.50%(/1/)........................ 7,000,000 7,000,000
Pittsburg, CA Mtg. Obligation RRB, Series A,
4.70%(/1/)........................................... 7,000,000 7,000,028
Sacramento Cnty., CA HAU MH RB, Shadowood Apts.
Project, Issue A, 4.70%(/1/)......................... 4,000,000 4,000,000
Sacramento, CA MUD RB, MBIA Insured, 7%, 7/1/00(/2/).. 4,000,000 4,080,000
San Diego Cnty., CA Airport RB, 4%, 7/26/00........... 3,290,000 3,290,000
San Diego Cnty., CA Airport RB, 4.25%, 7/26/00........ 2,000,000 2,000,000
San Diego, CA ABN AMRO Munitops Certificates, Series
1998-10, FGIC Insured, 4.47%(/1/)(/3/)............... 7,000,000 7,000,000
</TABLE>
3
<PAGE>
Statement of Investments June 30, 2000 (Continued)
Centennial California Tax-Exempt Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
----------- ------------
<S> <C> <C>
Short-Term Tax-Exempt Obligations (Continued)
California (Continued)
San Francisco, CA Bay Area Transit FAU RB, 3.75%,
10/2/00(/2/)....................................... $ 6,500,000 $ 6,500,000
San Francisco, CA City & Cnty. International Airport
RB, Series 88, 4.42%(/1/).......................... 1,700,000 1,700,000
Stanislaus, CA Waste-to-Energy FAU SWD Facility RRB,
Ogden Martin System Project, MBIA Insured,
4.35%(/1/)......................................... 2,500,000 2,500,000
------------
154,368,991
U.S. Possessions--2.5%
PR CMWLTH GOB, 4.42%(/1/)........................... 1,400,000 1,400,000
VI PFAU RRB, Prerefunded, Series A, 7.30%, 10/1/00.. 2,510,000 2,555,356
------------
3,955,356
------------
Total Investments, at Value.......................... 97.6% 158,324,347
------------
Other Assets Net of Liabilities...................... 2.4 3,936,158
----------- ------------
Net Assets........................................... 100.0% $162,260,505
=========== ============
</TABLE>
To simplify the listings of securities, abbreviations are used per the table
below:
CDC--Community Development Corp. MUD--Municipal Utility District
PCFAU--Pollution Control Finance
CMWLTH--Commonwealth Authority
PFAU--Public Finance Authority
COP--Certificates of Participation
PWBL--Public Works Board Lease
FAU--Finance Authority
RB--Revenue Bonds
GOB--General Obligation Bonds RRB--Revenue Refunding Bonds
HAU--Housing Authority SWD--Solid Waste Disposal
HF--Health Facilities USD--Unified School District
IDV--Industrial Development WS--Water System
MH--Multifamily Housing
MTAU--Metropolitan Transportation Authority
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,
2000. This instrument may also have a demand feature which allows, on up to 30
days' notice, the recovery of principal at any time, or at specified intervals
not exceeding one year.
2. Put obligation redeemable at full face value on the date reported.
3. Represents a security sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities
have been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $14,000,000 or 8.63% of the Trust's net
assets as of June 30, 2000.
See accompanying Notes to Financial Statements.
4
<PAGE>
Statement of Assets and Liabilities June 30, 2000
Centennial California Tax-Exempt Trust
<TABLE>
<S> <C>
ASSETS
Investments, at value--see accompanying statement............... $158,324,347
Cash............................................................ 820,349
Receivables and other assets:
Shares of beneficial interest sold............................. 3,902,848
Interest....................................................... 1,916,204
Other.......................................................... 29,609
------------
Total assets.................................................. 164,993,357
------------
LIABILITIES
Payables and other liabilities:
Shares of beneficial interest redeemed......................... 2,371,851
Dividends...................................................... 210,101
Service plan fees.............................................. 81,090
Transfer and shareholder servicing agent fees.................. 16,234
Trustees' compensation......................................... 1,295
Other.......................................................... 52,281
------------
Total liabilities............................................. 2,732,852
------------
NET ASSETS...................................................... $162,260,505
============
COMPOSITION OF NET ASSETS
Paid-in capital................................................. $162,303,138
Accumulated net realized loss on investment transactions........ (42,633)
------------
NET ASSETS--applicable to 162,303,138 shares of beneficial
interest outstanding........................................... $162,260,505
============
NET ASSET VALUE, REDEMPTION PRICE PER SHARE 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, 2000
Centennial California Tax-Exempt Trust
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest............................................................ $5,427,932
----------
EXPENSES
Management fees..................................................... 802,750
Service plan fees................................................... 320,466
Transfer and shareholder servicing agent fees....................... 79,351
Shareholder reports................................................. 49,240
Custodian fees and expenses......................................... 38,089
Trustees' compensation.............................................. 2,479
Other............................................................... 35,607
----------
Total expenses.................................................... 1,327,982
Less expenses paid indirectly.................................... (21,302)
----------
Net expenses...................................................... 1,306,680
----------
NET INVESTMENT INCOME............................................... 4,121,252
----------
NET REALIZED LOSS ON INVESTMENTS.................................... (10,121)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................ $4,111,131
==========
</TABLE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended June 30,
2000 1999
------------ ------------
<S> <C> <C>
OPERATIONS
Net investment income............................. $ 4,121,252 $ 4,010,707
Net realized loss................................. (10,121) (9,637)
------------ ------------
Net increase in net assets resulting from
operations....................................... 4,111,131 4,001,070
------------ ------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS.... (4,121,252) (4,010,707)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from
beneficial interest transactions................. 6,431,149 17,181
------------ ------------
NET ASSETS
Total increase.................................... 6,421,028 7,544
Beginning of period............................... 155,839,477 155,831,933
------------ ------------
End of period..................................... $162,260,505 $155,839,477
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
Financial Highlights
Centennial California Tax-Exempt Trust
<TABLE>
<CAPTION>
Year Ended June 30,
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<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...... .03 .02 .03 .03 .03
Dividends and/or
distributions to
shareholders........... (.03) (.02) (.03) (.03) (.03)
-------- -------- -------- -------- --------
Net asset value, end of
period................. $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======== ========
TOTAL RETURN(/1/)....... 2.63% 2.41% 2.86% 2.81% 2.97%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in thousands).. $162,261 $155,839 $155,832 $131,939 $118,838
Average net assets (in
thousands)............. $160,351 $168,272 $160,317 $129,087 $112,911
Ratios to average net
assets:(/2/)
Net investment income... 2.57% 2.38% 2.81% 2.78% 2.94%
Expenses................ 0.83% 0.80% 0.80%(/3/) 0.82%(/3/) 0.80%(/3/)
Expenses, net of
voluntary assumption of
expenses and/or
expenses paid
indirectly............. 0.81% 0.78% 0.79% 0.80% 0.79%
</TABLE>
1. Assumes a $1,000 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. Total returns are not
annualized for periods of less than one full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses
paid indirectly.
See accompanying Notes to Financial Statements.
7
<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 an 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 the preservation of
capital. 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.
Securities Valuation. Portfolio securities are valued on the basis of amortized
cost, which approximates market value.
Non-Diversification Risk. The Trust is "non-diversified" and can invest in the
securities of a single issuer. To the extent the Trust invests a relatively
high percentage of its assets in the obligations of a single issuer or a
limited number of issuers, the Trust is subject to additional risk of loss if
those obligations lose market value or the borrower or issuer of those
obligations defaults.
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. As of June 30, 2000, the Trust had
available for federal income tax purposes, an unused capital loss carryover as
follows:
<TABLE>
<CAPTION>
Expiring
--------
<S> <C>
2006 $ 3,041
2007 20,533
2008 10,414
</TABLE>
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Trust.
Other. Investment transactions are accounted for as of 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.
There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related event in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
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>
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, 2000 Year Ended June 30, 1999
--------------------------- ---------------------------
Shares Amount Shares Amount
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Sold.................... 568,522,086 $ 568,522,086 545,122,539 $ 545,122,539
Dividends and/or
distributions
reinvested............. 3,943,530 3,943,530 3,938,512 3,938,512
Redeemed................ (566,034,467) (566,034,467) (549,043,870) (549,043,870)
------------ ------------- ------------ -------------
Net increase............ 6,431,149 $ 6,431,149 17,181 $ 17,181
============ ============= ============ =============
</TABLE>
3. Fees and Other Transactions with Affiliates
Management Fees. 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% of the first $250 million of the Trust's net assets, 0.475% of the next
$250 million, 0.45% of the next $250 million, 0.425% of the next $250 million
and 0.40% of net assets in excess of $1 billion. The Manager has voluntarily
undertaken to assume any expenses of the Trust in any fiscal year they exceed
0.80% of the Trust's average annual net assets. The Manager reserves the right
to amend or terminate that expense assumption at any time. The Trust's
management fee for the year ended June 30, 2000, was an annualized rate of
0.50%, before any waiver by the Manager if applicable.
Transfer Agent Fees. Shareholder Services, Inc. (SSI) acts as the transfer and
shareholder servicing agent for the Trust and for other registered investment
companies on an "at-cost" basis.
Service Plan Fees. Under an approved service plan, the Trust may expend up to
0.20% of its average annual net assets annually to reimburse the Manager, 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 financial institutions.
9
<PAGE>
Independent Auditors' Report
Centennial California Tax-Exempt Trust
To the Board of Trustees and Shareholders of Centennial California Tax-Exempt
Trust:
We have audited the accompanying statement of assets and liabilities of
Centennial California Tax-Exempt Trust, including the statement of investments,
as of June 30, 2000, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. 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 auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the finan-
cial 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 as of June 30, 2000, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. 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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Cen-
tennial California Tax-Exempt Trust as of June 30, 2000, the results of its op-
erations for the year then ended, the changes in its net assets for each of the
two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with accounting princi-
ples generally accepted in the United States of America.
Deloitte & Touche LLP
Denver, Colorado
July 24, 2000
10
<PAGE>
Federal Income Tax Information (Unaudited)
Centennial California Tax-Exempt Trust
In early 2001 shareholders will receive information regarding all dividends and
distributions paid to them by the Trust during calendar year 2000. 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 year ended June 30, 2000 are
eligible for the corporate dividend-received deduction. The dividends were de-
rived 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 dis-
tributions 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.
11
<PAGE>
Centennial California Tax-Exempt Trust
Officers and Trustees
James C. Swain, Trustee and
Chairman of the Board
Bridget A. Macaskill, Trustee and President
Robert G. Avis, Trustee
William A. Baker, Trustee
George C. Bowen, Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
Michael J. Carbuto, Vice President
Andrew J. Donohue, Vice President and Secretary
Brian W. Wixted, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. 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.
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 other 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
RA0180.001.0600
Printed on recycled paper
2000 Annual Report
Centennial
California
Tax-Exempt
Trust
June 30, 2000
