-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AOMP7PA89FgcDLHYKTS+I7OusP8EF3Qu0NMy/mN1IVFgdV2YILSjziRBauwIBykz Aht/zJ/hPyArUa1z9OI4+Q== /in/edgar/work/20000906/0000950133-00-003660/0000950133-00-003660.txt : 20000922 0000950133-00-003660.hdr.sgml : 20000922 ACCESSION NUMBER: 0000950133-00-003660 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000906 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTENNIAL TAX EXEMPT TRUST /CO/ CENTRAL INDEX KEY: 0000319880 STANDARD INDUSTRIAL CLASSIFICATION: [0000 ] IRS NUMBER: 222328954 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-03104 FILM NUMBER: 717606 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: 34TH FLOOR CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 303-768-3200 FORMER COMPANY: FORMER CONFORMED NAME: DAILY CASH TAX EXEMPT FUND INC DATE OF NAME CHANGE: 19851009 FORMER COMPANY: FORMER CONFORMED NAME: CENTENNIAL TAX EXEMPT CASH FUND INC DATE OF NAME CHANGE: 19820720 FORMER COMPANY: FORMER CONFORMED NAME: DAILY TAX EXEMPT CASH FUND INC DATE OF NAME CHANGE: 19811027 N-30D 1 q61385n-30d.txt FORM N-30D 1 2000 ANNUAL REPORT CENTENNIAL TAX EXEMPT TRUST JUNE 30, 2000 2 DEAR SHAREHOLDER: For the one-year period ended June 30, 2000, a hale and hardy economy--and persistent concern that rapid economic growth might trigger higher inflation--set the tone in the 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 or investor confidence 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. The fixed income markets responded to all of this with relative calmness, as many investors factored in most of the interest rate hikes prior to their actual occurrence. Against this steady advance of interest rates, Centennial Tax Exempt Trust produced a compounded annual yield of 2.98%. Without compounding, the annual yield was 2.97%. For investors in the 36% tax bracket, this is equivalent to a taxable compounded yield of 4.66% and 4.64% without compounding.(1) As of June 30, 2000, the seven-day annualized yields, with and without compounding, were 3.76% and 3.70%, respectively.(2) Like most professional investors, we generally anticipated the interest rate moves, which led us to shorten the Trust's average maturity until the fourth quarter. When interest rates rise, fixed income 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 assurance that the Trust will maintain a stable share price, but we are always mindful of the need to protect your principal.(3) We reduced the average maturity of the securities in the portfolio at the beginning of the fiscal year. Between January and May 2000, we brought it down even further. The shorter average maturity helped to reduce volatility, or price instability, for the Trust as interest rates jumped to ever-higher levels. The Trust invests in high quality, short-term, tax-exempt securities issued by states, counties and municipalities coast to coast. These generally are either insured or secured by liquidity arrangements with a bank, and they may pay either fixed or variable rates of return. It is important to remember that the Trust itself is neither insured nor guaranteed by the U.S. Government. 1. 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. 2. Compounded yields assume reinvestments of dividends. Past performance is not indicative of future results. 3. An investment in money market funds is neither insured nor 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. 3 We achieved our changes in the portfolio's overall maturity primarily by shifting our emphasis between the various fixed- and variable-rate investments available to us. During much of the year, we invested in demand notes backed by commercial banks. Adding them to the portfolio therefore helped reduce average maturity of the Trust's holdings and the duration of the portfolio (typically, the shorter a portfolio's duration, the better its resistance to the negative impact of rising interest rates). At the same time, investing in more demand notes helped increase the Trust's yield. Due to the demand feature, rates paid on demand notes fluctuate from week to week, and they may at times provide a yield advantage over comparable-quality fixed-rate instruments. As the year wound down, we replaced some of our demand notes with fixed-rate instruments, for two reasons. First, by late April, fixed-rate short-term securities had become very inexpensive, so we were able to acquire 90 to 180 day issues at very attractive prices. Second, yields on demand notes fell after mid-May to levels below those of fixed-rate securities. By switching our focus to fixed-rate securities, we were able to lock in additional yield, yet the increase in average maturity played a neutral role. 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. 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. Emphasizing securities that generally mature monthly will allow us to respond quickly if and when the Fed declares that it has reached its goal. In our view, this may well come about before the end of the year. June brought the first signs that the Federal Reserve's past efforts may be achieving the desired moderation of the economy. However, in keeping with the Trust's objective of safety and liquidity, we expect to wait for more positive indications of this before making any notable shift in our strategy. Sincerely, /s/ JAMES C. SWAIN James C. Swain Chairman Centennial Tax Exempt Trust /s/ BRIDGET A. MACASKILL Bridget A. Macaskill President Centennial Tax Exempt Trust July 24, 2000 2 4 STATEMENT OF INVESTMENTS June 30, 2000 Centennial Tax Exempt Trust
Principal Value Amount See Note 1 ------------- --------------- SHORT-TERM TAX-EXEMPT OBLIGATIONS--107.0% ALASKA--0.2% AK IDV & Export Authority RRB, Safeway, Inc. Projects, 4.75%, 12/1/00(1)............... $ 3,555,000 $ 3,555,000 --------------- ARIZONA--1.6% Maricopa Cnty., AZ PC RRB, El Paso Electric Co. Project, Series A, 4.90%(2)............ 4,400,000 4,401,334 Phoenix, AZ IDAU MH RRB, Paradise Lakes Apts. Project, Series 1995, 5%(2).............. 22,500,000 22,500,000 --------------- 26,901,334 --------------- CALIFORNIA--8.6% CA Capital Improvements PFAU RB, Series A35-Reg D, 4.75%(2)............................ 700,000 700,000 CA HFA RB, Series CMC2, AMBAC Insured, 4.55%(2)........................................ 5,000,000 5,000,000 CA RB, Series SG89, MBIA Insured, 4.42%(2)............................................. 7,425,000 7,425,000 CA School Cash Reserve Program Authority Nts., Series A, 5.25%, 7/3/01(1).............. 40,000,000 40,375,600 CA School Cash Reserve Program Authority RB, Series A, 4%, 7/3/00...................... 42,000,000 42,001,910 Huntington Park, CA RA MH RB, Casa Rita Apts., Series A, 4.37%(2)...................... 1,100,000 1,100,000 Irvine Ranch, CA Water District COP, CAP Improvement Project, 3.50%(2)................. 2,000,000 2,000,000 Los Angeles Cnty., CA Pension Obligation RB, Series B, AMBAC Insured, 4.30%(2)......... 1,600,000 1,600,000 Los Angeles Cnty., CA TAN & RAN, Series A, 5%, 6/29/01................................. 8,750,000 8,820,613 Los Angeles, CA Airport RB, Series SG61, 4.47%(2)...................................... 1,055,000 1,055,000 Los Angeles, CA Wastewater System ABN AMRO Munitops Certificates, Series 1998-25, 4.47%(2)............................................................ 6,000,000 6,000,000 Modesto, CA Irrigation District FAU RB, Series SG66, 4.42%(2).......................... 500,000 500,000 Oceanside, CA MH RRB, Lakeridge Apts. Project, 5.05%(2)................................ 3,000,000 2,999,999 Orange Cnty., CA FAU Teeter Plan RB, Series C, AMBAC Insured, 4.65%(2)................. 10,300,000 10,300,000 Orange Cnty., CA IDAU RB, Control Air Conditioning Project-A, 4.80%(2)................. 3,100,000 3,100,000 Orange Cnty., CA Sanitation District COP, Series C, FGIC Insured, 4%(2)................ 5,800,000 5,800,000 San Bernardino Cnty., CA, MH RB, Somerset Apts., Series A, 4.25%(2).................... 2,495,000 2,495,000 Southern CA PAU RRB, Palo Verde Project, Series B, AMBAC Insured, 4.30%(2)............. 2,400,000 2,400,000 Southern CA Public PAU RRB, Southern Transmission Project, AMBAC Insured, 4.30%(2)............................................................. 1,000,000 1,000,000 --------------- 144,673,122 --------------- COLORADO--0.8% CO Housing Finance Authority ED RB, Vincent Metal Goods Project, 4.90%(2).............. 5,000,000 5,000,000 Denver City & Cnty., CO Housing RB, KY Circle Village Project, 4.75%(2)................ 4,300,000 4,300,000 Englewood, CO IDV RRB, Safeway, Inc. Projects, 4.75%, 12/1/00(1)....................... 1,515,000 1,515,000 Fraser, CO IDV RRB, Safeway, Inc. Projects, 4.75%, 12/1/00(1).......................... 985,000 985,000 Idaho Springs, CO IDV RRB, Safeway, Inc. Projects, 4.75%, 12/1/00(1)................... 1,645,000 1,645,000 --------------- 13,445,000 ---------------
3 5 STATEMENT OF INVESTMENTS June 30, 2000 (Continued) Centennial Tax Exempt Trust
Principal Value Amount See Note 1 ------------- --------------- DELAWARE--1.1% DE EDAU IDV RRB, Delaware Clean Power Project, Series A, 4.95%(2)...................... $ 5,000,000 $ 5,000,000 DE EDAU IDV RRB, Delaware Clean Power Project, Series C, 4.81%(2)...................... 8,000,000 8,000,000 DE EDAU IDV RRB, Star Enterprise Project, Series B, 4.80%(2)........................... 5,000,000 5,000,000 --------------- 18,000,000 --------------- FLORIDA--11.2% Dade Cnty., FL WSS RB, FGIC Insured, 4.40%, 10/3/00(1)................................. 9,900,000 9,900,000 Escambia Cnty., FL HFAU RRB, Florida Convertible Centers Project, Series A, 4.45%(2).................................................................. 1,150,000 1,150,000 FL BOE Capital Outlay GOUN, Series 286, 4.87%(2)....................................... 2,600,000 2,600,000 FL BOE Capital Outlay Public Education RB, Series A, 4.90%, 8/1/00(1).................. 13,230,000 13,230,000 FL HFA MH RRB, Monterey Lake Project, 4.80%(2)......................................... 17,665,000 17,665,000 FL MPA RB, 4.30%, 10/2/00(1)........................................................... 29,300,000 29,300,000 FL MPA RB, 4.35%, 8/1/00(1)............................................................ 18,055,000 18,055,000 FL TUAU RB, Series A, FGIC Insured, 4.40%, 10/3/00(1).................................. 14,850,000 14,850,000 Hillsboro Cnty., FL IDV PC RB, Tampa Electric Co., MBIA Insured, 4.85%, 8/1/00(1)...... 17,795,000 17,795,000 Hillsboro Cnty., FL IDV PC RB, Tampa Electric Co., MBIA Insured, 4.85%, 8/1/00(1)...... 17,795,000 17,795,000 Lee Cnty., FL Airport & Marina ABN Amro Munitops Certificates, Series 2000-3, FSA Insured, 4.85%(2)................................................ 4,890,000 4,890,000 Putnam Cnty., FL PC DAU RRB, Seminole Electric Co-op, Series D, 4.35%, 12/15/00(1)........................................................ 2,000,000 2,000,000 St. Lucie Cnty., FL PC RB, Florida Power & Lite, 4.25%, 7/13/00(1)..................... 22,950,000 22,950,000 St. Lucie Cnty., FL PC RB, Florida Power & Lite, 4.35%, 10/2/00(1)..................... 17,725,000 17,725,000 --------------- 189,905,000 --------------- GEORGIA--8.4% Burke Cnty., GA DAU PC RB, Georgia Power Co. Plant Vogtle Project, 4.55%(2)............ 1,600,000 1,600,000 Burke Cnty., GA DAU PC RB, Oglethorpe Power Corp., AMBAC Insured, 4.30%, 8/1/00(1)..................................................... 8,000,000 8,000,000 Burke Cnty., GA DAU PC RB, Oglethorpe Power Corp., AMBAC Insured, 4.35%, 10/2/00(1).................................................... 15,000,000 15,000,000 Burke Cnty., GA DAU PC RB, Oglethorpe Power Corp., AMBAC Insured, 4.35%, 8/1/00(1)..................................................... 5,000,000 5,000,000 Cobb Cnty., GA HAU MH RRB, Terrell Mill Project, 5%(2)(3).............................. 11,200,000 11,200,000 Fulton Cnty., GA DAU RB, Georgia Tech Athletic Assn., Inc., 4.80%(2)................... 3,000,000 3,000,000 Fulton Cnty., GA DAU RB, Lovett School Project, 4.80%(2)............................... 3,000,000 3,000,000 Fulton Cnty., GA DAU RB, Robert W. Woodruff Arts Project, 4.80%(2)..................... 2,000,000 2,000,000 Fulton Cnty., GA GOUN, 5%, 12/29/00.................................................... 38,800,000 38,940,712 Fulton Cnty., GA HAU MF RRB, Spring Creek Crossing, 4.85%(2)........................... 15,400,000 15,400,000 GA GOB, 4.72%(2)....................................................................... 11,880,000 11,880,000 Monroe Cnty., GA DAU PC RB, Georgia Power Co. Scherer Plant Project, Series 1, 4.55%(2).................................................................. 1,000,000 1,000,000 Rockdale Cnty., GA WSS Authority, Series B, 4.25%, 7/1/00(1)........................... 2,770,000 2,770,000 Roswell, GA HAU MH RRB, Oxford Project, 4.90%(2)....................................... 23,610,000 23,610,000 --------------- 142,400,712 ---------------
4 6 STATEMENT OF INVESTMENTS June 30, 2000 (Continued) Centennial Tax Exempt Trust
Principal Value Amount See Note 1 ------------- --------------- ILLINOIS--5.5% Chicago, IL ABN AMRO Munitops Certificates, Trust 1998-3, 4.82%(2)(3).................. $ 8,735,000 $ 8,735,000 Chicago, IL Lakefront Millennium Parking Facilities RB, 4.65%, 12/15/00(1)............. 22,495,000 22,495,000 Elk Grove Village, IL IDV RB, La Quinta Motor Inns, Inc., 3.95%(2)..................... 1,800,000 1,800,000 IL Education FA RB, 4.25%, 7/19/00(1).................................................. 28,385,000 28,385,000 IL HFAU RB, Lake Forest Hospital Project, 4.75%(2)..................................... 9,755,000 9,755,000 IL HFAU RRB, Advocate Health Care, Series B, 4.90%(2).................................. 20,995,000 20,995,000 IL HFAU RRB, The Carle Foundation, Series B, 4.85%(2).................................. 200,000 200,000 --------------- 92,365,000 --------------- INDIANA--5.5% Dyer, IN HCF RRB, Regency Place, Series A-1, 4.95%(2).................................. 3,170,000 3,170,000 Fort Wayne, IN HCF RRB, Health Quest, Series X-A, 4.95%(2)............................. 2,875,000 2,875,000 IN HFFAU RRB, Ascension Health Credit-B, 5.10%(2)...................................... 52,000,000 52,000,000 IN MPA RB, MBIA Insured, 4.40%, 10/3/00(1)............................................. 13,600,000 13,600,000 Indianapolis, IN HCF RRB, Health Quest, Series A, 4.95%(2)............................. 3,775,000 3,775,000 Indianapolis, IN Local Public Improvement Board Nts., Series D, 5%, 1/8/01............. 5,100,000 5,118,220 Lawerence/Fort Harrison, IN Reuse Authority Tax Increment RB, Harrison Military Base, 5.81%(2).................................................... 3,345,000 3,345,000 Marion Cnty., IN HA Hospital Facility RB, Indianapolis Osteopathic, 4.85%(2)........... 2,810,000 2,810,000 Merrillville, IN HCF RRB, Southlake, Series A-1, 4.95%(2).............................. 3,755,000 3,755,000 South Bend, IN HCF RRB, Fountainview, Series A-1, 4.95%(2)............................. 3,005,000 3,005,000 --------------- 93,453,220 --------------- KANSAS--0.4% Manhattan, KS Industrial RRB, Parker Hannifin, Inc. Project, 4.80%(2).................. 6,000,000 6,000,000 --------------- KENTUCKY--3.9% KY Asset/Liability Commission General Fund TAN & RAN, Series A, 4.35%, 8/2/00(1).......................................................... 15,000,000 15,000,000 KY Asset/Liability Commission General Fund TAN & RAN, Series A, 5.25%, 6/27/01(1)......................................................... 40,000,000 40,267,200 KY EDFAU RRB, Baptist Convalescent Center, 5.01%(2).................................... 5,000,000 5,000,000 Mayfield, KY Multi-City Lease RB, Kentucky League of Cities Funding Trust, 4.90%(2).... 5,860,000 5,860,000 --------------- 66,127,200 --------------- LOUISIANA--2.7% LA PFFAU RRB, MBIA Insured, 4.85%(2)................................................... 17,600,000 17,600,000 New Orleans, LA IDV Board MH RB, Orleans LLC Project, Series 3700, 4.97%(2)............ 5,000,000 5,000,000 St. James Parish, LA PC RRB, Texaco Project, Series A, 4.25%, 10/17/00(1).............. 22,530,000 22,530,000 --------------- 45,130,000 ---------------
5 7 STATEMENT OF INVESTMENTS June 30, 2000 (Continued) Centennial Tax Exempt Trust
Principal Value Amount See Note 1 ------------- --------------- MARYLAND--0.5% Anne Arundel Cnty., MD ED RB, West Capitol, Series A, 4.80%(2)......................... $ 6,000,000 $ 6,000,000 Hyattsville, MD IDV RRB, Safeway, Inc. Projects, 4.75%, 12/1/00(1)..................... 1,800,000 1,800,000 MD Health & HEFAU RB, University of Maryland Pooled Loan Program, Series B, 4.20%(2).................................................................. 900,000 900,000 --------------- 8,700,000 --------------- MASSACHUSETTS--0.9% MA CMWLTH General Obligation Consolidation Loan, 4.85%, 8/1/00(1)...................... 15,245,000 15,245,000 --------------- MICHIGAN--0.8% MI Job DAU RB, East Lansing Residence Associates Project, 5%(2)........................ 1,900,000 1,900,000 Rochester, MI Community SDI GOUN, Series 289, 4.87%(2)................................. 3,745,000 3,745,000 St. Clair Cnty., MI ED RRB, Series 282, AMBAC Insured, 4.87%(2)........................ 8,000,000 8,000,000 --------------- 13,645,000 --------------- MINNESOTA--2.0% Minneapolis, MN CD RRB, Minnehaha/Lake Partners Project, 4.85%(2)...................... 2,750,000 2,750,000 MN GOB, 4.65%, 12/15/00(1)............................................................. 16,010,000 16,010,000 New Ulm, MN Hospital Facilities RB, Health Center Systems, 4.60%(2).................... 2,200,000 2,200,000 North Suburban Hospital District, MN RB, Anoka & Ramsey Cntys. Hospital Health Center, 4.60%(2).................................................... 3,200,000 3,200,000 Rochester, MN HCF RB, Mayo Foundation, 4.40%, 9/6/00(1)................................ 10,000,000 10,000,000 --------------- 34,160,000 --------------- MISSOURI--0.1% MO Education & HFAU RRB, The Washington University, Series C, 4.50%(2)................. 1,800,000 1,800,000 --------------- MONTANA--0.1% Great Falls, MT IDV RRB, Safeway, Inc. Projects, 4.75%, 12/1/00(1)..................... 1,635,000 1,635,000 --------------- NEVADA--1.2% NV Municipal Securities Trust Receipts, Series SG 114, 4.85%(2)........................ 20,350,000 20,350,000 --------------- NEW HAMPSHIRE--1.5% NH Business FAU PC RRB, Series 1990, 4.25%, 9/27/00(1)................................. 25,000,000 25,000,000 --------------- NEW JERSEY--2.9% NJ TUAU ABN AMRO Munitops Certificates, Series 2000-6, MBIA Insured, 4.40%, 10/2/00(1)..................................................... 48,420,000 48,420,000 --------------- NEW YORK--4.6% Hempstead, NY IDA RRB, Trigen-Nassau Energy, 4.70%(2).................................. 1,000,000 1,000,000 NYC HDC MH RB, James Tower Development, Series A, 4.50%(2)............................. 1,100,000 1,100,000 NYC HDC MH RB, Monterey Project, Series A, 4.40%(2).................................... 2,400,000 2,400,000 NYC Health & Hospital Corp. RB, Health Systems, Series E, 4.40%(2)..................... 1,000,000 1,000,000
6 8 STATEMENT OF INVESTMENTS June 30, 2000 (Continued) Centennial Tax Exempt Trust
Principal Value Amount See Note 1 ------------- --------------- NEW YORK (CONTINUED) NYC IDA Civic Facility RB, Columbia Grammar School Project, 4.65%(2)................... $ 800,000 $ 800,000 NYC Water FAU WSS RB, Series SGB 26, MBIA Insured, 4.84%(2)............................ 3,000,000 3,000,000 NYS DA RB, 4.77%(2).................................................................... 1,700,000 1,700,000 NYS DA RB, Cornell University, Series A, 4.35%(2)...................................... 2,000,000 2,000,000 NYS ERDAUEF RRB, Con Edison Co., Subseries A-3, 4.60%(2)............................... 2,400,000 2,400,000 NYS GOUN, Series A, 4.40%, 2/8/01(1)................................................... 1,700,000 1,700,000 NYS HFA RB, Saxony Housing, Series A, 4.75%(2)......................................... 3,000,000 3,000,000 NYS LGAC RB, Series SG99, MBIA Insured, 4.82%(2)....................................... 27,595,000 27,595,000 NYS LGAC RB, Series SG100, MBIA Insured, 6.875%(2)..................................... 10,420,000 10,420,000 NYS MCFFA RB, Pooled Equipment Loan Program I-A, 4.50%(2).............................. 670,000 670,000 NYS Mtg. Agency RB, Series CMC1, 4.90%(2).............................................. 6,820,000 6,820,000 NYS Urban Empire Development Corp. RB, Series A, 4.84%(2).............................. 9,555,000 9,555,000 TBTAU NY RB, Series T, 7%, 1/1/01(1)................................................... 2,000,000 2,065,922 --------------- 77,225,922 --------------- OHIO--3.5% Gallia Cnty., OH IDV Mtg. RRB, Jackson Pike Assn., 4.75%, 12/15/00(1).................. 3,400,000 3,400,000 Miami Valley, OH Tax-Exempt Mtg. Trust RB, Series 86, 4.88%, 10/15/00(1)............... 2,540,000 2,540,000 OH Adult Corrections Building Authority RB, 4.65%, 12/15/00(1)......................... 7,920,000 7,920,000 OH State University RB, 4.50%, 7/25/00(1).............................................. 31,000,000 31,000,000 Scioto Cnty., OH HCF RB, Hill View Retirement Center, 4.80%, 12/1/00(1)................ 4,275,000 4,275,000 University of Cincinnati, OH COP, Series 232, MBIA Insured, 4.87%(2)................... 10,575,000 10,575,000 --------------- 59,710,000 --------------- PENNSYLVANIA--2.5% Monroe Cnty., PA HA RB, Pocono Medical Center, Series C, 4.85%(2)...................... 2,835,000 2,835,000 PA GOB, 4.87%(2)....................................................................... 20,000,000 20,000,000 PA GOUN, 4.87%(2)...................................................................... 17,800,000 17,800,000 Philadelphia, PA IDAU RB, Fox Chase Cancer Center Project, 4.50%(2).................... 1,100,000 1,100,000 --------------- 41,735,000 --------------- SOUTH CAROLINA--2.2% SC POAU ABN AMRO Munitops Certificates, Trust 1998-7, 4.85%(2)......................... 7,325,000 7,325,000 SC Public Service Authority RB, 4.40%, 10/3/00(1)...................................... 14,850,000 14,850,000 York Cnty., SC PC RRB, Duke Power Co. Project, 4.35%, 8/1/00(1)........................ 2,200,000 2,200,000 York Cnty., SC PC RRB, Duke Power Co. Project, 4.40%, 8/1/00(1)........................ 7,100,000 7,100,000 York Cnty., SC PC RRB, Duke Power Co. Project, 4.75%, 8/1/00(1)........................ 5,450,000 5,450,000 --------------- 36,925,000 --------------- SOUTH DAKOTA--1.3% SD Health & Educational Facilities RB, Sioux Valley Hospital Issue, 4.85%(2)........... 20,800,000 20,800,000 Yankton, SD IDV RB, Kolber-Pioneer, Inc. Project, 4.80%(2)............................. 2,000,000 2,000,000 --------------- 22,800,000 ---------------
7 9 STATEMENT OF INVESTMENTS June 30, 2000 (Continued) Centennial Tax Exempt Trust
Principal Value Amount See Note 1 ------------- --------------- TENNESSEE--1.2% TN GOB, 4.20%, 8/22/00(1).............................................................. $ 20,000,000 $ 20,000,000 --------------- TEXAS--22.7% Austin, TX Travis & Williamson Cntys., Utility System RB, 4.25%, 10/2/00(1)............ 50,000,000 50,000,000 Bexar, TX Municipal Water District RB, 4.40%, 8/1/00(1)................................ 9,000,000 9,000,000 Brownsville, TX Utility System RB, 4.25%, 7/13/00(1)................................... 23,900,000 23,900,000 Brownsville, TX Utility System RB, 4.40%, 7/13/00(1)................................... 2,000,000 2,000,000 De Soto, TX IDAU RRB, National Service Industries, Inc. Project, 4.80%(2).............. 7,150,000 7,150,000 Greater East TX HEAU RRB, Student Loans, Series A, 4.50%, 5/1/01(1).................... 9,000,000 9,000,000 Harris Cnty., TX Criminal Justice Center RB, Series SG96, FGIC Insured, 4.85%(2)....... 7,475,000 7,475,000 Harris Cnty., TX ID Corp. RRB, Shell Oil Co. Project, 4.50%(2)......................... 2,800,000 2,800,000 Harris Cnty., TX Toll Road COP, 4.87%(2)............................................... 9,900,000 9,900,000 Houston, TX GOB, Series A, 4.30%, 8/1/00(1)............................................ 3,000,000 3,000,000 Houston, TX GOB, Series A, 4.30%, 10/2/00(1)........................................... 28,400,000 28,400,000 Houston, TX GOB, Series B, 4.30%, 8/1/00(1)............................................ 39,800,000 39,800,000 Houston, TX GOB, Series C, 4.30%, 10/2/00(1)........................................... 6,000,000 6,000,000 Houston, TX WSS RB, Series SG120, 4.85%(2)............................................. 37,600,000 37,600,000 San Antonio Water RB, 4.87%(2)......................................................... 4,000,000 4,000,000 San Antonio, TX Electric & Gas RRB, Series G-101, 4.85%(2)............................. 20,200,000 20,200,000 San Antonio, TX Electric & Gas RRB, Series SG105, 4.85%(2)............................. 20,000,000 20,000,000 TX TAN & RAN, Series A, 4.50%, 8/31/00................................................. 89,000,000 89,115,569 TX TUAU RB, Dallas Northtollway, Series SG70, 4.70%(2)................................. 15,325,000 15,325,000 --------------- 384,665,569 --------------- UTAH--2.8% Intermountain Power Agency, UT RB, Utah Power Supply, 4.30%, 9/11/00(1)................ 24,600,000 24,600,000 Intermountain Power Agency, UT RB, Utah Power Supply, 4.35%, 9/11/00(1)................ 7,600,000 7,600,000 Salt Lake Cnty., UT TAN & RAN, 5%, 12/29/00............................................ 10,000,000 10,029,969 Tremonton City, UT IDV RRB, Safeway, Inc. Projects, 4.75%, 12/1/00(1).................. 580,000 580,000 Utah Cnty., UT Environmental Improvement RRB, USX Corp. Project, 4.25%, 10/5/00(1).......................................................... 5,000,000 5,000,000 --------------- 47,809,969 --------------- VIRGINIA--2.2% Peninsula Ports Authority, VA Coal Terminal RRB, Dominion Terminal Project-A, 4.30%, 7/17/00(1)........................................................ 12,135,000 12,135,000 Stafford, VA IDV RRB, Safeway, Inc. Projects, 4.75%, 12/1/00(1)........................ 1,025,000 1,025,000 Washington D.C. Airport Authority RB, 4.35%, 10/2/00(1)................................ 24,000,000 24,000,000 --------------- 37,160,000 ---------------
8 10 STATEMENT OF INVESTMENTS June 30, 2000 (Continued) Centennial Tax Exempt Trust
Principal Value Amount See Note 1 ------------- --------------- WASHINGTON--1.0% Kitsap Cnty., WA SDI No. 401 GOUN, Series 252, MBIA Insured, 4.90%(2).................. $ 3,460,000 $ 3,460,000 WA Refunding GOB, 4.40%(2)............................................................. 13,710,000 13,710,000 --------------- 17,170,000 --------------- WEST VIRGINIA--0.4% WV Road GOB ABN AMRO Munitops Certificates, Series 1999-4, 4.55%(2).................... 6,000,000 6,000,000 --------------- WYOMING--0.2% Evanston, WY IDV RRB, Safeway, Inc. Projects, 4.75%, 12/1/00(1)........................ 3,700,000 3,700,000 --------------- DISTRICT OF COLUMBIA--0.6% DC HFA MH RB, Tyler House Trust Certificates Partnership A, 4.95%(2)................... 10,800,000 10,800,000 --------------- OTHER TERRITORIES--1.6% Greystone Tax Exempt Certificates RB, Trust 1998-1, Sr. Certificate Beneficial Ownership, 4.93%(2)...................................................... 27,900,000 27,900,000 --------------- U.S. POSSESSIONS--0.3% PR CMWLTH GOB, 4.42%(2)................................................................ 5,800,000 5,800,000 --------------- Total Investments, at Value............................................................ 107.0% 1,810,312,048 --------------- Liabilities in Excess of Other Assets.................................................. (7.0) (118,762,408) ------------- --------------- Net Assets............................................................................. 100.0% $ 1,691,549,640 ============= ===============
9 11 STATEMENT OF INVESTMENTS June 30, 2000 (Continued) Centennial Tax Exempt Trust To simplify the listings of securities, abbreviations are used per the table below: BOE --Board of Education HFFAU --Health Facilities Finance Authority CAP --Capital Appreciation IDA --Industrial Development Agency CD --Commercial Development IDAU --Industrial Development Authority CMWLTH --Commonwealth IDV --Industrial Development COP --Certificates of Participation LGAC --Local Government Assistance Corp. DA --Dormitory Authority MCFFA --Medical Care Facilities Finance DAU --Development Authority Agency ED --Economic Development MH --Multifamily Housing EDAU --Economic Development Authority MPA --Municipal Power Agency EDFAU --Economic Development Finance NYC --New York City Authority NYS --New York State ERDAUEF --Energy Research & Development PAU --Power Authority Authority Electric Facilities PC --Pollution Control FA --Facilities Authority PFAU --Public Finance Authority FAU --Finance Authority PFFAU --Public Facilities Finance Authority GOB --General Obligation Bonds POAU --Port Authority GOUN --General Obligation Unlimited Nts. RA --Redevelopment Agency HA --Hospital Authority RAN --Revenue Anticipation Nts. HAU --Housing Authority RB --Revenue Bonds HCF --Health Care Facilities RRB --Revenue Refunding Bonds HDC --Housing Development Corp. SDI --School District HEAU --Higher Education Authority TAN --Tax Anticipation Nts. HEFAU --Higher Educational Facilities TBTAU --Triborough Bridge & Tunnel Authority Authority TUAU --Turnpike Authority HFA --Housing Finance Agency WSS --Water & Sewer System HFAU --Health Facilities Authority
1. Put obligation redeemable at full face value on the date reported. 2. Floating or variable rate obligation maturing in more than one year. The interest rate, which is based on specific, or an index of, market interest rates, is subject to change periodically and is the effective rate on 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. 3. Represents a securities 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 $19,935,000 or 1.18% of the Trust's net assets as of June 30, 2000. See accompanying Notes to Financial Statements. 10 12 STATEMENT OF ASSETS AND LIABILITIES June 30, 2000 Centennial Tax Exempt Trust ASSETS Investments, at value--see accompanying statement ............ $ 1,810,312,048 Cash ......................................................... 9,172,350 Receivables and other assets: Shares of beneficial interest sold ........................... 38,527,064 Interest ..................................................... 15,890,060 Other ........................................................ 375,223 --------------- Total assets ................................................. 1,874,276,745 --------------- LIABILITIES Payables and other liabilities: Investments purchased ........................................ 161,553,479 Shares of beneficial interest redeemed ....................... 17,978,639 Dividends .................................................... 2,577,736 Transfer and shareholder servicing agent fees ................ 265,035 Service plan fees ............................................ 141,869 Trustees' compensation ....................................... 8,967 Other ........................................................ 201,380 --------------- Total liabilities ............................................ 182,727,105 --------------- NET ASSETS ................................................... $ 1,691,549,640 =============== COMPOSITION OF NET ASSETS Paid-in capital .............................................. $ 1,692,189,822 Accumulated net realized loss on investment transactions ..... (640,182) --------------- NET ASSETS--applicable to 1,692,205,790 shares of beneficial interest outstanding ........................... $ 1,691,549,640 =============== NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $ 1.00
See accompanying Notes to Financial Statements. 11 13 STATEMENT OF OPERATIONS For the Year Ended June 30, 2000 Centennial Tax Exempt Trust INVESTMENT INCOME Interest ..................................................... $ 63,595,519 ------------ EXPENSES Management fees .............................................. 7,404,944 Service plan fees ............................................ 3,420,376 Transfer and shareholder servicing agent fees ................ 1,075,775 Custodian fees and expenses .................................. 325,816 Trustees' compensation ....................................... 24,814 Other ........................................................ 501,232 ------------ Total expenses ............................................... 12,752,957 Less expenses paid indirectly ................................ (156,433) ------------ Net expenses ................................................. 12,596,524 ------------ NET INVESTMENT INCOME ........................................ 50,998,995 ------------ NET REALIZED LOSS ON INVESTMENTS ............................. (159,972) ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ......... $ 50,839,023 ============
- -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS
Year Ended June 30, -------------------------------------- 2000 1999 --------------- --------------- OPERATIONS Net investment income .......................................................... $ 50,998,995 $ 48,885,541 Net realized gain (loss) ....................................................... (159,972) 102,645 --------------- --------------- Net increase in net assets resulting from operations ........................... 50,839,023 48,988,186 --------------- --------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS ................................. (50,998,995) (48,855,541) --------------- --------------- BENEFICIAL INTEREST TRANSACTIONS Net decrease in net assets resulting from beneficial interest transactions ................................................................ (57,771,643) (79,607,151) --------------- --------------- NET ASSETS Total decrease ................................................................. (57,931,615) (79,504,506) Beginning of period ............................................................ 1,749,481,255 1,828,985,761 --------------- --------------- End of period .................................................................. $ 1,691,549,640 $ 1,749,481,255 =============== ===============
See accompanying Notes to Financial Statements. 12 14 FINANCIAL HIGHLIGHTS Centennial Tax Exempt Trust
Year Ended June 30, --------------------------------------------------------------------- 2000 1999 1998 1997 1996 --------- --------- --------- --------- --------- 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 .03 .03 .03 .03 Dividends and/or distributions to shareholders .... (.03) (.03) (.03) (.03) (.03) --------- --------- --------- --------- --------- Net asset value, end of period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========= ========= ========= ========= ========= TOTAL RETURN(1) ................................... 3.01% 2.61% 3.12% 3.01% 3.16% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) ........... $ 1,692 $ 1,749 $ 1,829 $ 1,649 $ 1,426 Average net assets (in millions) .................. $ 1,737 $ 1,896 $ 1,832 $ 1,591 $ 1,473 Ratios to average net assets:(2) Net investment income ............................. 2.94% 2.58% 3.07% 2.95% 3.12% Expenses .......................................... 0.72% 0.69% 0.69%(3) 0.72%(3) 0.72%(3)
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. 13 15 NOTES TO FINANCIAL STATEMENTS Centennial Tax Exempt Trust 1. SIGNIFICANT ACCOUNTING POLICIES Centennial 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 short-term interest income exempt from federal income taxes that is consistent with low capital risk and the maintenance of liquidity. 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. 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:
Expiring - -------- 2006 $ 33,976 2007 432,567 2008 88,401
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. 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. See accompanying Notes to Financial Statements. 14 16 NOTES TO FINANCIAL STATEMENTS (Continued) Centennial 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:
Year Ended June 30, 2000 Year Ended June 30, 1999 --------------------------------- --------------------------------- Shares Amount Shares Amount --------------- --------------- --------------- --------------- Sold .......................................... 5,849,279,745 $ 5,849,279,745 5,631,707,953 $ 5,631,707,953 Dividends and/or distributions reinvested .................................... 49,019,366 49,019,366 48,085,400 48,085,400 Redeemed ...................................... (5,956,070,754) (5,956,070,754) (5,759,400,504) (5,759,400,504) --------------- --------------- --------------- --------------- Net decrease .................................. (57,771,643) $ (57,771,643) (79,607,151) $ (79,607,151) =============== =============== =============== ===============
3. MANAGEMENT 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, 0.40% of the next $250 million, 0.375% of the next $250 million, 0.35% of the next $500 million and 0.325% of net assets in excess of $2 billion. Furthermore, under the Trust's Agreement, when the value of the Trust's net assets is less than $1.5 billion, the annual fee payable to the Manager shall be reduced by $100,000 based on average net assets computed daily and paid monthly at the annual rates. However, the annual fee cannot be less than $0. The Trust's management fee for the year ended June 30, 2000 was an annualized rate of 0.43%, 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. During the year ended June 30, 2000, the Trust paid $12,967 to a broker/dealer affiliated with the Manager as reimbursement for distribution-related expenses. 15 17 INDEPENDENT AUDITOR'S REPORT Centennial Tax Exempt Trust To the Board of Trustees and Shareholders of Centennial Tax Exempt Trust: We have audited the accompanying statement of assets and liabilities of Centennial 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 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 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 Centennial Tax Exempt Trust as of June 30, 2000, the results of its operations 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 principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Denver, Colorado July 24, 2000 16 18 FEDERAL INCOME TAX INFORMATION Centennial 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 Fund 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 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. 17 19 This page intentionally left blank. 18 20 This page intentionally left blank. 19 21 CENTENNIAL 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 Tax Exempt Trust. This report must be preceded or accompanied by a Prospectus of Centennial 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 RA0160.001.0600 [PRINTED ON RECYCLED PAPER LOGO] -----END PRIVACY-ENHANCED MESSAGE-----