-----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, AjED8rgX95d/e5qxLkoHkUBYQ/jZoSwUmJd/s+yRWG4lKxcibfv95li3CSRIbFsg HnQK51raT+YOFtY27AjZ3Q== 0000950130-00-001170.txt : 20000313 0000950130-00-001170.hdr.sgml : 20000313 ACCESSION NUMBER: 0000950130-00-001170 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000310 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTENNIAL GOVERNMENT TRUST /CO/ CENTRAL INDEX KEY: 0000357247 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 846172630 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-03391 FILM NUMBER: 565065 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 303-768-3200 MAIL ADDRESS: STREET 2: 3410 SOUTH GALENA STREET CITY: DENVER STATE: CO ZIP: 80231 FORMER COMPANY: FORMER CONFORMED NAME: DAILY CASH GOVERNMENT FUND DATE OF NAME CHANGE: 19851009 N-30D 1 CENTENNIAL GOVERNMENT TRUST S/A/R 12/31/1999 Dear Shareholder: Over the six-month period that ended December 31, 1999, Centennial Government Trust produced an annualized yield of 4.34% and an annualized yield, including the effects of compounding was 4.45%. On December 31, 1999, the Fund's seven- day and compounded seven-day yields were 4.87% and 4.99%, respectively./1/ These returns were generally higher than the yields reported six months ago, primarily because of higher short-term interest rates during the reporting pe- riod. When the reporting period began, the Federal Reserve had just initiated the first interest-rate increase of 1999. The rate hike was a pre-emptive response to concerns that stronger-than-expected economic growth might rekindle long- dormant inflationary pressures. These inflation concerns were fueled by positive economic news from overseas, where the worst of the economic malaise appeared to be over for Japan, Asia and Latin America, and within the United States, where unemployment reached historical lows and consumers appeared to be spending more than they were earning. The Federal Reserve Board subsequently raised interest rates twice more during the summer and fall of 1999, effectively offsetting all of the previous year's rate cuts. U.S. government securities were also affected by Y2K-related concerns. Although the investment community's consensus opinion appeared to be that the U.S. fi- nancial system was prepared for the advent of the year 2000, many government agencies decided to play it safe by issuing relatively 1. Compounded yields assume reinvestment of dividends. Past performance is not indicative of future results. longer term money-market securities over the summer and early fall of 1999. These securities generally featured maturity dates in January and February of 2000, reducing the need for issuers to return to the marketplace close to year- end 1999. However,because so many money market issuers came to market at the same time, they were compelled to increase their securities'yields in order to attract investor interest. Fund shareholders generally benefitedfrom these higher yields. Under these market conditions, we fo-cused primarily on enhancing the Fund's yield in a way that was consistent with liquidity and capital preservation. We generally found the most attractive yieldsin U.S. government agency securities, which comprised 99% of the portfolio as of December 31. In contrast, we found few oppor-tunities in U.S. Treasury bills, which werein relatively short supply because of the federal budget surplus. Thank you for your continued confi- dence and participation in Centennial Government Trust. We look forward to helping you achieve your financial goals in 2000 and beyond. Sincerely, /s/ James C. Swain James C. Swain Chairman Centennial Government Trust /s/ Bridget A. Macaskill Bridget A. Macaskill President Centennial Government Trust January 24, 2000 2 Statement of Investments December 31, 1999 (Unaudited) Centennial Government Trust
Face Value Amount See Note 1 ----------- ----------- Direct Bank Obligations--0.6% Student Loan Marketing Assn., guaranteeing commercial paper of Nebhelp, Inc.: 5.85%, 1/21/00(/1/).................................. $ 7,791,000 $ 7,765,679 ----------- U.S. Government Agencies--98.4% Federal Farm Credit Bank: 5.60%, 3/1/00........................................ 22,980,000 22,970,558 5.81%, 4/20/00....................................... 20,536,000 20,171,429 Federal Home Loan Bank: 4.86%, 1/14/00....................................... 19,875,000 19,874,277 4.90%, 1/14/00....................................... 16,480,000 16,479,860 4.91%, 2/9/00........................................ 8,000,000 7,991,733 4.935%, 1/19/00...................................... 5,875,000 5,875,007 4.98%, 3/29/00....................................... 26,250,000 26,205,651 5.00%, 1/11/00....................................... 25,000,000 25,000,000 5.07%, 3/17/00....................................... 7,000,000 6,989,212 5.16%, 3/8/00-3/22/00................................ 29,700,000 29,656,187 5.48%, 1/31/00....................................... 35,000,000 34,840,125 5.58%, 2/24/00....................................... 25,000,000 24,790,750 5.59%, 2/25/00....................................... 25,000,000 24,786,493 5.79%, 4/10/00....................................... 15,679,000 15,426,829 5.923%, 4/7/00(/2/).................................. 15,000,000 14,998,442 5.953%, 4/14/00(/2/)................................. 25,000,000 24,998,579 Federal Home Loan Mortgage Corp.: 5.227%, 5/18/00(/2/)................................. 10,000,000 9,996,984 5.48%, 2/10/00....................................... 25,000,000 24,847,778 5.50%, 1/14/00....................................... 25,000,000 24,950,347 5.51%, 1/20/00-1/27/00............................... 50,000,000 49,827,813 5.52%, 1/21/00-2/2/00................................ 80,000,000 79,697,166 5.53%, 1/10/00....................................... 25,000,000 24,965,438 5.54%, 2/14/00-3/8/00................................ 38,145,000 37,840,190 5.55%, 2/23/00-2/29/00............................... 75,000,000 74,364,062 5.555%, 3/30/00...................................... 29,117,000 28,717,131 5.587%, 4/13/00...................................... 25,000,000 24,600,374 5.61%, 3/23/00....................................... 25,000,000 24,680,542 5.63%, 3/21/00....................................... 25,000,000 24,687,222 5.82%, 4/3/00-4/20/00................................ 38,190,000 37,574,588 6.25%, 1/5/00........................................ 65,000,000 64,954,861
3 Statement of Investments December 31, 1999 (Unaudited)(Continued) Centennial Government Trust
Face Value Amount See Note 1 ----------- -------------- U.S. Government Agencies (Continued) Federal National Mortgage Assn.: 4.82%, 1/28/00.................................... $26,000,000 $ 25,980,413 4.94%, 7/17/00(/2/)............................... 20,000,000 19,994,605 5.296%, 8/4/00(/2/)............................... 15,000,000 14,993,597 5.53%, 4/24/00.................................... 30,000,000 29,474,651 5.54%, 1/19/00.................................... 24,100,000 24,033,243 5.56%, 2/17/00.................................... 33,031,000 32,790,707 5.58%, 2/7/00..................................... 25,000,000 24,856,625 5.67%, 4/7/00..................................... 20,000,000 19,694,450 6.10%, 2/10/00.................................... 25,000,000 25,005,440 6.30%, 8/2/00(/2/)................................ 20,000,000 19,992,107 5.94%, 2/5/00(/2/)................................ 20,000,000 19,995,754 FNMA Master Credit Facility: 5.58%, 2/1/00..................................... 25,000,000 24,879,875 5.66%, 3/1/00..................................... 25,000,000 24,764,167 Overseas Private Investment Corp.: 5.725%, 1/20/07(/2/)(/3/)......................... 3,750,000 3,765,894 5.813%, 1/17/17(/2/)(/3/)......................... 2,876,986 2,905,415 Student Loan Marketing Assn.: 4.91%, 4/17/00(/2/)............................... 30,000,000 29,997,420 4.93%, 2/8/00..................................... 15,000,000 14,999,900 4.96%, 9/15/00(/2/)............................... 25,000,000 24,994,831 ----------- -------------- Total U.S. Government Agencies..................... 1,235,878,722 -------------- Total Investments, at Value........................ 99.0% 1,243,644,401 -------------- Other Assets Net of Liabilities.................... 1.0 12,164,534 ----------- -------------- Net Assets......................................... 100.0% $1,255,808,935 =========== ==============
Direct bank obligations are generally traded on a discount basis; the interest rate is the discount rate received by the Fund at the time of purchase. Other securities normally bear interest at the rates shown. 1. Security issued in an exempt transaction without registration under the Securities Act of 1933. Such securities amount to $7,765,679, or 0.62% of the Trust's net assets, and have been determined to be liquid pursuant to guidelines adopted by the Board of Trustees. 2. Represents the current interest rate for a variable or increasing rate security. 3. Represents a restricted security which is considered illiquid, by virtue of the absence of a readily available market or because of legal or contractual restrictions on resale. Such securities amount to $6,671,309, or 0.53% of the Trust's net assets. The Trust may not invest more than 10% of its net assets (determined at the time of purchase) in illiquid securities. 4 Statement of Assets and Liabilities December 31, 1999 (Unaudited) Centennial Government Trust ASSETS Investments, at value--see accompanying statement............. $1,243,644,401 Cash.......................................................... 6,495,023 Receivables and other assets: Shares of beneficial interest sold........................... 12,636,917 Interest..................................................... 6,689,494 Other........................................................ 68,520 -------------- Total assets................................................ 1,269,534,355 -------------- LIABILITIES Payables and other liabilities: Shares of beneficial interest redeemed....................... 13,078,242 Dividends.................................................... 171,403 Service plan fees............................................ 132,533 Transfer and shareholder servicing agent fees................ 65,802 Trustees' compensation....................................... 455 Other........................................................ 276,985 -------------- Total liabilities........................................... 13,725,420 -------------- NET ASSETS.................................................... $1,255,808,935 ============== COMPOSITION OF NET ASSETS Paid-in capital............................................... $1,256,373,954 Accumulated net realized loss on investment transactions...... (565,019) -------------- NET ASSETS--applicable to 1,256,373,954 shares of beneficial interest outstanding......................................... $1,255,808,935 ============== NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE........................................................ $1.00
See accompanying Notes to Financial Statements. 5 Statement of Operations For the Six Months Ended December 31, 1999 (Unaudited) Centennial Government Trust INVESTMENT INCOME Interest........................................................... $33,588,183 ----------- EXPENSES Management fees.................................................... 2,845,115 Service plan fees.................................................. 1,264,279 Transfer and shareholder servicing agent fees...................... 392,510 Shareholder reports................................................ 43,323 Custodian fees and expenses........................................ 24,046 Trustees' compensation............................................. 7,890 Other.............................................................. 206,926 ----------- Total expenses................................................... 4,784,089 Less expenses paid indirectly...................................... (16,726) ----------- Net expenses....................................................... 4,767,363 ----------- NET INVESTMENT INCOME.............................................. 28,820,820 ----------- NET REALIZED LOSS ON INVESTMENTS................................... (3,267) ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... $28,817,553 ===========
See accompanying Notes to Financial Statements. 6 Statements of Changes in Net Assets Centennial Government Trust
Six Months Ended December 31, 1999 Year Ended (Unaudited) June 30, 1999 ----------------- -------------- OPERATIONS Net investment income....................... $ 28,820,820 $ 54,416,410 Net realized gain (loss).................... (3,267) 121,184 -------------- -------------- Net increase in net assets resulting from operations................................. 28,817,553 54,537,594 -------------- -------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLD- ERS........................................ (28,820,820) (54,416,410) -------------- -------------- BENEFICIAL INTEREST TRANSACTIONS Net increase in net assets resulting from beneficial interest transactions........... 42,690,894 80,656,449 -------------- -------------- NET ASSETS Total increase.............................. 42,687,627 80,777,633 Beginning of period......................... 1,213,121,308 1,132,343,675 -------------- -------------- End of period............................... $1,255,808,935 $1,213,121,308 ============== ==============
See accompanying Notes to Financial Statements. 7 Financial Highlights Centennial Government Trust
Six Months Ended December 31, Year Ended June 30, 1999 (Unaudited) 1999 1998 1997 1996 1995 ---------------- ------ ------ ------ ----- ----- PER SHARE OPERATING DATA 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...... .02 .04 .05 .05 .05 .05 Dividends and/or distributions to shareholders........... (.02) (.04) (.05) (.05) (.05) (.05) ------ ------ ------ ------ ----- ----- Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00 $1.00 ====== ====== ====== ====== ===== ===== TOTAL RETURN(/1/)....... 2.34% 4.47% 4.93% 4.75% 4.91% 4.93% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions)... $1,256 $1,213 $1,132 $1,027 $ 942 $ 893 Average net assets (in millions).............. $1,256 $1,245 $1,117 $1,032 $ 962 $ 719 Ratios to average net assets:(/2/) Net investment income... 4.55% 4.37% 4.82% 4.65% 4.83% 4.81% Expenses................ 0.76% 0.74% 0.75%(/3/) 0.76%(/3/) 0.77%(/3/) 0.80%(/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 less than one full year. 2. Anualized for periods less than one full year. 3. Expense ratio has not been grossed up to reflect the effect of expenses paid indirectly. 8 Notes to Financial Statements (Unaudited) Centennial Government Trust 1. Significant Accounting Policies Centennial Government Trust (the Trust) is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Trust's investment objective is to seek a high level of current income that is consistent with the preservation of capital 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. Repurchase Agreements. The Trust requires the custodian to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Trust may be delayed or limited. 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, 1999, the Trust had available for federal income tax purposes an unused capital loss carryover of approximately $550,000, which expires between 2003 and 2005. 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. 9 Notes to Financial Statements (Unaudited) (Continued) Centennial Government 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:
Six Months Ended December 31, 1999 Year Ended June 30, 1999 ------------------------------- ------------------------------- Shares Amount Shares Amount -------------- --------------- -------------- --------------- Sold.................... 1,795,210,024 $ 1,795,210,024 3,478,267,909 $ 3,478,267,909 Dividends and/or distri- butions reinvested..... 29,836,266 29,836,266 53,427,071 53,427,071 Redeemed................ (1,782,355,396) (1,782,355,396) (3,451,038,531) (3,451,038,531) -------------- --------------- -------------- --------------- Net increase............ 42,690,894 $ 42,690,894 80,656,449 $ 80,656,449 ============== =============== ============== ===============
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, and 0.40% of the next $250 million, 0.375% of the next $250 million and 0.35% of net assets in excess of $1.5 billion. The Manager has agreed to reimburse the Trust if aggregate expenses (with specified exceptions) exceed the lesser of 1.50% of the first $30 million of average annual net assets of the Trust, plus 1% of average annual net assets in excess of $30 million; or 25% of the total annual investment income of the Trust. The Trust's management fee for the six months ended December 31, 1999 was 0.45% of average annual net assets, annualized for periods of less than one full year. Transfer Agent Fees. Shareholder Services, Inc. (SSI), a subsidiary of the Manager, 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. Service Plan Fees. Under an approved plan of distribution, the Trust may expend up to 0.20% of its net assets annually to reimburse certain securities dealers and other financial institutions and organizations for costs incurred in distributing Trust shares. During the six months ended December 31, 1999, the Trust paid $59,345 to a broker/dealer affiliated with the Manager as reimbursement for distribution-related expenses. 10 Centennial Government 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 Carol E. Wolf, Vice President Arthur J. Zimmer, Vice President Andrew J. Donohue, Vice President and Secretary Brian W. Wixted, Treasurer Robert G. Zack, Assistant Treasurer Robert J. Bishop, Assistant Treasurer Scott T. Farrar, Assistant Treasurer 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, Adam & Wolf, P.C. The financial statements included herein have been taken from the records of the Trust without examination of the independent auditors. This copy of a report to shareholders of Centennial Government Trust. This report must be preceded or accompanied by a Prospectus of Centennial Government 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. Denver, CO 80217-5143 1999 Semiannual Report Centennial Government Trust December 31, 1999 -----END PRIVACY-ENHANCED MESSAGE-----