-----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, NnYmGa+jgGErpCh+woTPyu/uE9siDI/Km+HgGOrLZfquz9OMA6xhj+6kSJXuZxpG sS6AeKBBTX2ca4sl38pd1Q== 0000950133-02-000657.txt : 20020414 0000950133-02-000657.hdr.sgml : 20020414 ACCESSION NUMBER: 0000950133-02-000657 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTENNIAL GOVERNMENT TRUST /CO/ CENTRAL INDEX KEY: 0000357247 IRS NUMBER: 846172630 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-03391 FILM NUMBER: 02556454 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 q74911n-30d.txt N-30D 2001 SEMIANNUAL REPORT CENTENNIAL GOVERNMENT TRUST DECEMBER 31, 2001 DEAR SHAREHOLDER: During the six-month period ended December 31, 2001, Centennial Government Trust produced an annualized yield of 2.47% and an annualized yield including the effects of compounding of 2.50%. The Trust's seven-day and compounded seven-day yields on December 31, 2001, were 1.45% and 1.46%, respectively.(1) The U.S. officially entered a recession in March 2001, ending an unprecedented run of ten years of economic growth. With the events of September 11, massive job losses and disappointing company earnings, the economy has experienced large-scale deterioration during the second half of our reporting period. The Federal Reserve Board (the Fed) has moved aggressively to bolster the nation's troubled economy by making 11 successive rate cuts in 2001, bringing the benchmark interest rate down from 6.5% to 1.75%, its lowest level in almost 40 years. The continued reduction of interest rates has had a profound effect on the yields the Trust is able to generate. The Centennial Government Trust generally invests only in government securities and thus does not face many of the credit issues of general purpose money market funds. During the period, we invested conservatively in short-term government agencies, such as Federal National Mortgage Association Corp. discount notes (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal Home Loan Bank. We bought repurchase agreements, which typically have a one-day maturity and help to provide liquidity to fund shareholder redemptions. In addition, we purchased U.S. Treasury bills. With current yields at a 40-year low, the Trust has generally been investing in longer maturity instruments to seek to capture their higher yields. As a result, it is currently approaching a weighted average maturity of 60 days. The current investment outlook for the Trust is based on the expectation of lower yields resulting from potential additional Fed cuts. Given that money market funds generally hold shorter term investments than other types of fixed income funds, money market funds will feel the impact of any further rate cuts very quickly. In a climate of such severely depressed interest rates, we will continue to seek high quality In reviewing performance, please remember that past performance cannot guarantee future results. Yields will fluctuate. An investment in the Trust is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Trust seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Trust. 1. Compounded yields assume reinvestments of dividends. The Trust's investment strategy, allocations and focus can change over time. names and to strive to maximize share-holder returns. And we will seek out investment strategies, which are designed to help insure the liquidity and safety that we strive to provide you. Sincerely, /s/ JAMES C. SWAIN - ------------------ James C. Swain Chairman Centennial Government Trust /s/ JOHN V. MURPHY - ------------------ John V. Murphy President Centennial Government Trust January 23, 2002 2 STATEMENT OF INVESTMENTS December 31, 2001 (Unaudited) Centennial Government Trust
Principal Value Amount See Note 1 --------- ---------- REPURCHASE AGREEMENTS--5.8% Repurchase agreement with PaineWebber, Inc., 1.70%, dated 12/31/01, to be repurchased at $95,309,001 on 1/2/02, collateralized by Federal Home Loan Mtg. Corp., 6.50%, 11/1/31, with a value of $97,427,897 (Cost $95,300,000) ................................................. $95,300,000 $95,300,000 ----------- U.S. GOVERNMENT AGENCIES--91.8% Federal Farm Credit Bank: 1.98%, 5/14/02 ................................................... 10,800,000 10,720,998 2.03%, 6/3/02 .................................................... 10,000,000 10,008,682 2.41%, 1/2/02 .................................................... 21,000,000 21,000,015 3.75%, 7/2/02 .................................................... 15,000,000 15,139,846 6.625%, 2/1/02 ................................................... 4,575,000 4,591,336 Federal Home Loan Bank: 1.74%, 2/14/02 ................................................... 22,585,000 22,536,969 1.817%, 8/20/02(1) ............................................... 75,000,000 74,988,787 1.82%, 1/30/02 ................................................... 16,343,000 16,319,039 1.83%, 6/14/02 ................................................... 73,000,000 72,307,146 1.94%, 5/8/02 .................................................... 24,000,000 23,835,747 2.02%, 1/23/02 ................................................... 23,000,000 22,971,608 2.05%, 1/22/02 ................................................... 25,000,000 24,970,104 2.35%, 1/4/02 .................................................... 28,000,000 27,994,633 2.50%, 1/16/02 ................................................... 25,000,000 24,976,354 2.65%, 10/25/02 .................................................. 33,550,000 33,550,000 5.125%, 2/26/02 .................................................. 15,500,000 15,574,564 6.346%, 2/26/02 .................................................. 8,500,000 8,528,400 6.75%, 2/15/02-5/1/02 ............................................ 23,075,000 23,259,128 6.879%, 7/15/02 .................................................. 21,000,000 21,549,262 7.25%, 5/15/02 ................................................... 19,060,000 19,409,666
3 STATEMENT OF INVESTMENTS December 31, 2001 (Unaudited) (Continued) Centennial Government Trust
Principal Value Amount See Note 1 --------- ---------- U.S. GOVERNMENT AGENCIES (CONTINUED) Federal Home Loan Mortgage Corp.: 1.76%, 3/22/02 ................................................... $21,000,000 $ 20,917,867 1.82%, 5/23/02 ................................................... 48,500,000 48,151,824 1.83%, 2/7/02-6/20/02 ............................................ 50,000,000 49,669,329 1.855%, 6/26/02 .................................................. 16,107,000 15,960,927 1.95%, 4/25/02 ................................................... 18,000,000 17,888,850 2.27%, 1/17/02-2/28/02 ........................................... 80,000,000 79,819,346 2.28%, 1/10/02-2/1/02 ............................................ 55,000,000 54,933,817 2.29%, 1/3/02 .................................................... 30,000,000 29,996,183 2.35%, 1/25/02 ................................................... 50,000,000 49,924,667 3.47%, 1/31/02 ................................................... 64,000,000 63,868,908 5.50%, 5/15/02 ................................................... 28,100,000 28,449,868 Federal National Mortgage Assn.: 1.81%, 11/29/02(1) ............................................... 50,000,000 49,986,210 1.88%, 2/14/02 ................................................... 23,000,000 22,947,151 1.90%, 2/28/02 ................................................... 23,000,000 22,929,594 1.94%, 5/2/02 .................................................... 27,152,000 26,969,798 1.968%, 7/26/02(1) ............................................... 50,000,000 49,992,500 1.969%, 7/5/02(1) ................................................ 50,000,000 49,991,250 2.02%, 1/31/02-5/16/02 ........................................... 27,000,000 26,883,850 2.11%, 1/24/02 ................................................... 25,000,000 24,966,299 5.375%, 3/15/02 .................................................. 25,168,000 25,278,695 6.59%, 5/21/02 ................................................... 7,000,000 7,121,908 6.625%, 4/15/02 .................................................. 32,902,000 33,328,901 7.50%, 2/11/02 ................................................... 5,000,000 5,028,310 FNMA Master Credit Facility: 2%, 3/1/02 ....................................................... 22,400,000 22,326,578 2.08%, 3/1/02 .................................................... 15,000,000 14,948,867 2.15%, 1/8/02 .................................................... 22,000,000 21,990,803 2.16%, 2/5/02 .................................................... 33,637,000 33,566,362 2.42%, 4/1/02 .................................................... 20,000,000 19,879,000 2.48%, 1/15/02 ................................................... 30,000,000 29,971,067 3.39%, 3/1/02 .................................................... 35,000,000 34,805,546 Overseas Private Investment Corp.: 3.83%, 1/17/17(1)(2) ............................................. 2,642,406 2,665,451 3.855%, 1/20/07(1)(2) ............................................ 2,917,710 2,926,568
4 STATEMENT OF INVESTMENTS December 31, 2001 (Unaudited) (Continued) Centennial Government Trust
Principal Value Amount See Note 1 ----------- -------------- U.S. GOVERNMENT AGENCIES (CONTINUED) Student Loan Marketing Assn.: 3.75%, 7/1/02 .................................................... $10,000,000 $ 10,095,215 Student Loan Marketing Assn., guaranteeing commercial paper of Nebhelp, Inc.: 1.82%, 1/28/02(3) ................................................ 25,000,000 24,965,875 -------------- Total U.S. Government Agencies (Cost $1,517,379,668) ............... 1,517,379,668 -------------- Total Investments, at Value (Cost $1,612,679,668) .................. 97.6% 1,612,679,668 Other Assets Net of Liabilities .................................... 2.4 39,247,545 ----------- -------------- Net Assets ......................................................... 100.0% $1,651,927,213 =========== ==============
1. Represents the current interest rate for a variable rate security. 2. Identifies issues considered to be illiquid--See Note 4 of Notes to Financial Statements. 3. Security issued in an exempt transaction without registration under the Securities Act of 1933. Such securities amount to $24,965,875, or 1.51% of the Trust's net assets and have been determined to be liquid pursuant to guidelines adopted by the Board of Trustees. See accompanying Notes to Financial Statements. 5 STATEMENT OF ASSETS AND LIABILITIES December 31, 2001 (Unaudited) Centennial Government Trust
ASSETS Investments, at value (cost $1,612,679,668)--see accompanying statement ..... $1,612,679,668 Cash ........................................................................ 24,849,063 Receivables and other assets: Shares of beneficial interest sold ....................................... 24,188,848 Interest ................................................................. 4,224,043 Other .................................................................... 37,441 -------------- Total assets ......................................................... 1,665,979,063 -------------- LIABILITIES Payables and other liabilities: Shares of beneficial interest redeemed ................................... 13,783,736 Service plan fees ........................................................ 130,915 Shareholder reports ...................................................... 98,792 Dividends ................................................................ 900 Trustees' compensation ................................................... 510 Transfer and shareholder servicing agent fees ............................ 206 Other .................................................................... 36,791 -------------- Total liabilities .................................................... 14,051,850 -------------- NET ASSETS .................................................................. $1,651,927,213 ============== COMPOSITION OF NET ASSETS Paid-in capital ............................................................. $1,651,921,873 Accumulated net realized gain (loss) on investment transactions ............. 5,340 -------------- NET ASSETS--applicable to 1,651,921,873 shares of beneficial interest outstanding ..................................................... $1,651,927,213 ============== NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE .............. $1.00
See accompanying Notes to Financial Statements. 6 STATEMENT OF OPERATIONS For the Six Months Ended December 31, 2001 (Unaudited) Centennial Government Trust INVESTMENT INCOME--Interest ................................................... $25,003,491 ---------- EXPENSES Management fees ............................................................... 3,433,877 Service plan fees ............................................................. 1,583,169 Transfer and shareholder servicing agent fees ................................. 473,066 Custodian fees and expenses ................................................... 38,981 Other ......................................................................... 63,649 ---------- Total expenses ........................................................... 5,592,742 Less reduction to custodian expenses ................................ (5,727) --------- Net expenses .................................................................. 5,587,015 --------- NET INVESTMENT INCOME ......................................................... 19,416,476 ---------- NET REALIZED GAIN (LOSS) ON INVESTMENTS ....................................... 224,387 ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .......................... $19,640,863 ===========
See accompanying Notes to Financial Statements. 7 STATEMENTS OF CHANGES IN NET ASSETS Centennial Government Trust
Six Months Ended December 31, 2001 Year Ended (Unaudited) June 30, 2001 ---------------- ---------------- OPERATIONS Net investment income (loss) .................................... $ 19,416,476 $ 70,162,456 Net realized gain (loss) ........................................ 224,387 328,977 ------------ ------------- Net increase (decrease) in net assets resulting from operations . 19,640,863 70,491,433 ------------ ------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS .................. (19,416,476) (70,162,456) ------------ ------------- BENEFICIAL INTEREST TRANSACTIONS Net increase (decrease) in net assets resulting from beneficial interest transactions .............................. 194,198,006 265,420,116 ------------ ------------- NET ASSETS Total increase .................................................. 194,422,393 265,749,093 Beginning of period ............................................. 1,457,504,820 1,191,755,727 ------------ ------------- End of period ................................................... $1,651,927,213 $1,457,504,820 ============ ============
See accompanying Notes to Financial Statements. 8 FINANCIAL HIGHLIGHTS Centennial Government Trust
Six Months Ended December 31, 2001 Year Ended June 30, ----------------------------------------- (Unaudited) 2001 2000 1999 1998 1997 -------------- ---- ---- ---- ---- ---- 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 ........................... .01 .05 .05 .04 .05 .05 Dividends and/or distributions to shareholders ................................ (.01) (.05) (.05) (.04) (.05) (.05) ---- ---- ---- ---- ---- ---- Net asset value, end of period ................ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ==== ==== ==== ==== ==== ==== TOTAL RETURN(1) ............................... 1.25% 5.29% 5.07% 4.47% 4.93% 4.75% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in millions) ....... $1,652 $1,458 $1,192 $1,213 $1,132 $1,027 Average net assets (in millions) .............. $1,572 $1,367 $1,244 $1,245 $1,117 $1,032 Ratios to average net assets:(2) Net investment income ......................... 2.45% 5.13% 4.92% 4.37% 4.82% 4.65% Expenses ...................................... 0.70% 0.73% 0.74% 0.74% 0.75%(3) 0.76%(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. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 9 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 an open-end management investment company. The Trust's investment objective is to seek a high level of current income 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 its custodian bank 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 collat-eral 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 December 31, 2001, the Trust had available for federal income tax purposes an estimated unused capital loss carryover of zero. This estimated capital loss carryover represents carryover as of the end of the last fiscal year, increased for losses deferred under tax accounting rules to the current fiscal year and increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. As of June 30, 2001, the Trust had available for federal income tax purposes unused capital loss carryovers as follows: Expiring - ---------------- 2004 $195,788 2005 16,379 -------- Total $212,167 ======== 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. Security Transactions. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Other. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. 10 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, 2001 Year Ended June 30, 2001 ---------------------------------- ---------------------------- Shares Amount Shares Amount ---------- ----------- ---------- ----------- Sold 1,921,813,650 $ 1,921,813,650 3,739,905,295 $ 3,739,905,295 Dividends and/or distributions reinvested 20,393,483 20,393,483 70,389,432 70,389,432 Redeemed (1,748,009,127) (1,748,009,127) (3,544,874,611) (3,544,874,611) -------------- -------------- -------------- --------------- Net increase (decrease) 194,198,006 $ 194,198,006 265,420,116 $ 265,420,116 ============== =============== ============== ===============
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, 0.40% of the next $250 million, 0.375% of the next $250 million, 0.35% of net assets in excess of $1.5 billion. In the agreement, the Manager guarantees that the Trust's total expenses in any fiscal year, exclusive of taxes, interest and brokerage concessions, and extraordinary expenses such as litigation costs, shall not exceed the lesser of 1.50% of the average annual net assets of the Trust up to $30 million and 1% of its 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 six months ended December 31, 2001 was an annualized rate of 0.43%. Transfer Agent Fees. Shareholder Services, Inc. (SSI) acts as the transfer and shareholder servicing agent for the Trust and for other registered investment companies. The Trust pays SSI an annual maintenance fee for each Trust shareholder account. 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 six months ended December 31, 2001, the Trust paid $82,430 to a broker-dealer affiliated with the Manager as reimbursement for distribution-related expenses. 11 NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued) Centennial Government Trust 4. ILLIQUID SECURITIES As of December 31, 2001, investments in securities included issues that are illiquid. A security may be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Trust intends to invest no more than 10% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid securities. The aggregate value of illiquid securities subject to this limitation as of December 31, 2001, was $5,592,019, which represents 0.34% of the Trust's net assets. 12 This page intentionally left blank. This page intentionally left blank. This page intentionally left blank. CENTENNIAL GOVERNMENT TRUST Officers and Trustees James C. Swain, Trustee, CEO and Chairman of the Board John V. Murphy, President William L. Armstrong, Trustee Robert G. Avis, Trustee George C. Bowen, Trustee Edward L. Cameron, Trustee Jon S. Fossel, Trustee Sam Freedman, Trustee Richard F. Grabish, Trustee C. Howard Kast, Trustee Robert M. Kirchner, Trustee F. William Marshall, Jr., Trustee Barry Weiss, Vice President Carol E. Wolf, Vice President Robert G. Zack, Vice President and Secretary Brian W. Wixted, Treasurer Robert J. Bishop, Assistant Treasurer Scott T. Farrar, Assistant Treasurer Katherine P. Feld, Assistant Secretary Kathleen T. Ives, Assistant Secretary Denis R. Molleur, 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. The financial statements included herein have been taken from the records of the Trust without examination of those records by the independent auditors. For more complete information about Centennial Government Trust, please refer to the Prospectus. To obtain a copy, call your financial advisor, or contact Centennial Asset Management Corp. at 1.800.525.9310. Please read the prospectus carefully before you invest any money. RS0170.001.1201 [RECYCLED LOGO] Printed on recycled paper -----END PRIVACY-ENHANCED MESSAGE-----