-----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, FfrvgWjLljiV809Oi3x8rR04w0Xjw7gZ7KTnn3T1LjK/7h5cD++nI7jPPfO9EI0d +jvvkeDW9Zy1x+vxLtYoxw== 0000854437-98-000006.txt : 19980909 0000854437-98-000006.hdr.sgml : 19980909 ACCESSION NUMBER: 0000854437-98-000006 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980908 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTENNIAL CALIFORNIA TAX EXEMPT TRUST CENTRAL INDEX KEY: 0000854437 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 841121370 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-05871 FILM NUMBER: 98704994 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 303-768-3200 MAIL ADDRESS: STREET 1: 3410 S GALENA STREET STREET 2: 3410 S GALENA STREET CITY: DENVER STATE: CO ZIP: 80231 N-30D 1 CENTENNIAL CALIFORNIA TAX EXEMPT TRUST - S/R [Cover Page] 1998 ANNUAL REPORT CENTENNIAL CALIFORNIA TAX EXEMPT TRUST June 30, 1998 [Blank Page] JAMES C. SWAIN Chairman Centennial California Tax Exempt Trust BRIDGET A. MACASKILL President Centennial California Tax Exempt Trust DEAR SHAREHOLDER, In a year of excitement and volatility for stock markets here and abroad, tax-exempt money market funds, such as Centennial California Tax Exempt Trust, generally continued to provide relatively stable returns. True, the supply of and demand for tax-exempt securities are variable, causing fluctuations in yield on a month-to-month basis. Nevertheless, the overall pattern of tax-exempt yields generally tends to track the actions of the Federal Reserve Board, which raises and lowers short-term interest rates based on its view of inflation. Because the Fed stayed on the sidelines for the entire fiscal year, tax-exempt yields remained relatively unchanged. Two opposing forces have kept the Fed from raising or lowering rates. On one hand, the U.S. economy continues to grow at a strong pace, with the unemployment rate at just 4.5% and consumer confidence soaring. On the other hand, the Asian financial crisis shows no signs of easing, which has weakened global demand for goods and services. Since the United States is a major exporter to Asia, slackening demand and devalued currencies in the Far East have created a dampening effect on inflation. Remarkably, seven years into an economic expansion, U.S. inflation is now trending below 2%. For the fiscal year ended June 30, 1998, the Centennial California Tax Exempt Trust produced a compounded annual yield of 2.86%. Without compounding, the corresponding yield was 2.82%. For investors in the combined 42% Federal and California state income tax bracket, this is equivalent to a taxable yield of 4.93% with compounding, and 4.86% without. On June 30, 1998, the seven-day annualized yields, with and without compounding, were 2.79% and 2.76%, respectively.(1) It is important to remember that an investment in the Trust is neither insured nor guaranteed by the U.S. government, and there is no assurance that the Trust will maintain a stable $1.00 share price in the future. Generally speaking, securities that mature in several months pay higher yields than those maturing within days or weeks. The reason is that the issuer needs to compensate the investor for the risk that future inflation could trigger higher interest rates, which would create more-attractive investment opportunities. However, because of today's very low inflationary environment, tax-exempt money market securities with longer maturities have not offered much extra yield. The California economy has improved dramatically in the last year or two, bolstered by the booming entertainment, manufacturing and high technology industries. Because investors and issuers assume there is very little additional risk in lower-quality credits, yields on these lower-quality credits are just marginally higher. We don't believe sacrificing credit quality for this slight benefit is worthwhile, particularly in light of the potential risks posed by the Asian economic crisis on California, which is a major trading partner. During the rest of 1998 and beyond, we plan to continue monitoring global events so that we can position the portfolio accordingly. If the Asian crisis diminishes and the U.S. economy continues growing, then we would expect the Federal Reserve Board to raise short-term interest rates to keep inflation in check. In that event, we would keep the portfolio's maturity fairly short to allow us to reinvest at higher yeilds. however, if the U.S. economy should begin to slow and the Fed appears likely to lower short-term interest rates, then we would lengthen the portfolio's 3 Centennial Californina Tax Exempt Trust maturity to lock in higher yeilds. In either case, we will continue to invest conservatively, always keeping in mind your objectives of safety and liquidity. Thank you for your confidence in Centennial California Tax Exempt Trust. We look forward to helping you reach your investment goals, part of our commitment to you as The Right Way to Invest. Sincerely, /S/ James C. Swain James C. Swain /S/ Bridget A. Macaskill Bridget A. Macaskill July 22, 1998 1. Compounded yields assume reinvestment of dividends. Past performance is not indicative of future results. 4 Centennial California Tax Exempt Trust
============================================================================================================================= STATEMENT OF INVESTMENTS June 30, 1998 Centennial California Tax Exempt Trust FACE VALUE AMOUNT SEE NOTE 1 ============================================================================================================================= SHORT-TERM TAX-EXEMPT OBLIGATIONS - 97.3% - ----------------------------------------------------------------------------------------------------------------------------- CALIFORNIA - 97.3% - ----------------------------------------------------------------------------------------------------------------------------- Agoura Hills, CA MH RRB, Oakridge Apts. Project, 3.55% 1 $2,900,000 $2,900,000 - ----------------------------------------------------------------------------------------------------------------------------- CA CDAU Apartment Development RRB, Whispering Winds Apts., Series D, 3.55% 1 5,750,000 5,750,000 - ----------------------------------------------------------------------------------------------------------------------------- CA EDFAU IDV RB, Inland Empire Venture, LLC Project, 3.55% 1 1,875,000 1,875,000 - ----------------------------------------------------------------------------------------------------------------------------- CA EDFAU RB, California Independent System Project: Series B, 3.40% 1 2,000,000 2,000,000 Series D, 3.50% 1 1,600,000 1,600,000 - ----------------------------------------------------------------------------------------------------------------------------- CA GOB Tendered Option Certificates, Series 1998A, MBIA Insured, 4% 1 3,470,000 3,470,000 - ----------------------------------------------------------------------------------------------------------------------------- CA HFFAU RRB, Catholic West Project, Series C, MBIA Insured, 3% 1 5,000,000 4,999,751 - ----------------------------------------------------------------------------------------------------------------------------- CA M-S-R PPA RB, San Juan Project, Sub. Lien, Series E, MBIA Insured, 3.10% 1 2,000,000 1,999,920 - ----------------------------------------------------------------------------------------------------------------------------- CA PCFAU RB: Chevron USA, Inc. Project, 3.65%, 5/15/99 2,500,000 2,500,000 Pacific Gas, 3.35%, 8/6/98 2 1,000,000 1,000,000 Southern California Edison Co. Project, Series C, 3.60%, 8/12/98 2 1,050,000 1,050,000 Southern California Edison Co. Project, Series D, 3.60%, 8/12/98 2 4,100,000 4,100,000 - ----------------------------------------------------------------------------------------------------------------------------- CA PCFAU RRB, Pacific Gas & Electric: Series A, 3.50% 1 2,700,000 2,700,000 Series C, 3.35% 1 3,400,000 3,400,000 - ----------------------------------------------------------------------------------------------------------------------------- CA PCFAU SWD RB: Shell Oil Co. Martinez Project, Series A, 3.35% 1 1,700,000 1,700,000 Western Waste Industries, Series A, 3.70% 1 1,500,000 1,500,000 - ----------------------------------------------------------------------------------------------------------------------------- CA PCFAU SWD RR RB, Shell Martinez Refining, Series A, 3.40% 1 5,300,000 5,300,000 - ----------------------------------------------------------------------------------------------------------------------------- CA School Cash Reserve Program Authority Nts., Series A, AMBAC Insured, 4.75%, 7/2/98 7,965,000 7,965,229 - ----------------------------------------------------------------------------------------------------------------------------- CA Statewide CDC IDV RB, Propak California Corp., Series B, 3.40% 1 700,000 700,000 - ----------------------------------------------------------------------------------------------------------------------------- CA University Board of Regents RB, 3.20%, 8/10/98 6,000,000 6,000,000 - ----------------------------------------------------------------------------------------------------------------------------- Covina City, CA RA MH RRB, Shadowhills Apts., Inc., Series A, 3.70% 1 3,000,000 3,000,000 - ----------------------------------------------------------------------------------------------------------------------------- Los Angeles Cnty., CA MTAU Sales Tax RB, Series SG54, AMBAC Insured, 3.60% 1 1,000,000 1,000,000 - ----------------------------------------------------------------------------------------------------------------------------- Los Angeles Cnty., CA Pension Obligation RRB, Series A, 3.10% 1 7,300,000 7,300,000 - ----------------------------------------------------------------------------------------------------------------------------- Los Angeles, CA Airport RB, Series SG61, 3.63% 1 6,000,000 6,000,000 - ----------------------------------------------------------------------------------------------------------------------------- Los Angeles, CA Department of Water RB, Power Project, 3.40%, 7/13/98 3,000,000 3,000,000 - ----------------------------------------------------------------------------------------------------------------------------- Los Angeles, CA Wastewater System RB, 3.50%, 8/7/98 2,100,000 2,100,000 - ----------------------------------------------------------------------------------------------------------------------------- Modesto, CA Irrigation District FAU RB, Series SG66, 3.58% 1 5,500,000 5,500,000 - ----------------------------------------------------------------------------------------------------------------------------- Oceanside, CA MH RRB, Lakeridge Apts. Project, 3.80% 1 7,000,000 7,000,160 - ----------------------------------------------------------------------------------------------------------------------------- Orange Cnty., CA Sanitation District COP, FGIC Insured, 3.50% 1 1,000,000 1,000,000 - ----------------------------------------------------------------------------------------------------------------------------- Pittsburg, CA Mortgage Obligation RRB, Series A, 3.61% 1 7,000,000 7,000,035 - ----------------------------------------------------------------------------------------------------------------------------- Riverside Cnty., CA HAU MH RB, McKinley Project, 3.30% 1 6,300,000 6,300,082 - ----------------------------------------------------------------------------------------------------------------------------- Sacramento Cnty., CA MH RRB, Issue A, 3.30% 1 3,400,000 3,400,071 - ----------------------------------------------------------------------------------------------------------------------------- Sacramento Cnty., CA Tax & RAN, 4.50%, 9/30/98 3,700,000 3,708,488 - ----------------------------------------------------------------------------------------------------------------------------- Sacramento, CA MUD RB, 3.35%, 8/5/98 7,000,000 7,000,000 - ----------------------------------------------------------------------------------------------------------------------------- San Bernardino Cnty., CA COP, West Valley Detention Center Project, 7.70%, 11/1/98 2 8,975,000 9,195,142 5
- ----------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS (Continued) Centennial California Tax Exempt Trust FACE VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------- CALIFORNIA (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------- San Diego Cnty., CA Tax & RAN, 4.50%, 9/30/98 $4,920,000 $ 4,930,262 - ----------------------------------------------------------------------------------------------------------------------------- San Diego, CA MH RRB, Coral Point Apts. Project, Series A, 3.80% 1 2,500,000 2,500,000 - ----------------------------------------------------------------------------------------------------------------------------- San Francisco, CA City & Cnty.: International Airport RB, Series 88, 3.58% 1 1,700,000 1,700,000 Redevelopment FAU RRB, Yerba Buena Garden, 3.20% 1 2,150,000 2,150,040 - ----------------------------------------------------------------------------------------------------------------------------- San Marcos, CA RA MH Bonds, San Marcos Retirement Village Project, 4.33% 1 2,400,000 2,400,000 - ----------------------------------------------------------------------------------------------------------------------------- Southern CA Metropolitan Water District Waterworks RRB, Series A, AMBAC Insured, 3% 1 600,000 599,998 - ----------------------------------------------------------------------------------------------------------------------------- Visalia, CA IDV RB, Akers West Assn., 3.25% 1 2,350,000 2,350,000 - ----------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE 97.3% 151,644,178 - ----------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 2.7 4,187,755 ------------ --------------- NET ASSETS 100.0% $155,831,933 ============ =============== To simplify the listings of securities, abbreviations are used per the table below: CDAU - Communities Development Authority MTAU - Metropolitan Transportation Authority CDC - Community Development Corp. MUD - Municipal Utility District COP - Certificates of Participation PCFAU - Pollution Control Finance Authority EDFAU - Economic Development Finance Authority PPA - Public Power Agency FAU - Finance Authority RA - Redevelopment Agency GOB - General Obligation Bonds RAN - Revenue Anticipation Nts. HAU - Housing Authority RB - Revenue Bonds HFFAU - Health Facilities Finance Authority RR - Resource Recovery IDV - Industrial Development RRB - Revenue Refunding Bonds MH - Multifamily Housing SWD - Solid Waste Disposal
1. Floating or variable rate obligation maturing in more than one year. The interest rate, which is based on specific, or an index of, market interest rates, is subject to change periodically and is the effective rate on June 30, 1998. This instrument may also have a demand feature which allows, on up to 30 days' notice, the recovery of principal at any time, or at specified intervals not exceeding one year. 2. Put obligation redeemable at full face value on the date reported. See accompanying Notes to Financial Statements. 6
============================================================================================================================= STATEMENT OF ASSETS AND LIABILITIES June 30, 1998 Centennial California Tax Exempt Trust ============================================================================================================================= ASSETS Investments, at value $151,644,178 - ----------------------------------------------------------------------------------------------------------------------------- Cash 700,816 - ----------------------------------------------------------------------------------------------------------------------------- Receivables: Shares of beneficial interest sold 3,543,970 Interest 1,129,573 - ----------------------------------------------------------------------------------------------------------------------------- Other 4,695 --------------------- Total assets 157,023,232 ============================================================================================================================= LIABILITIES Payables and other liabilities: Shares of beneficial interest redeemed 902,838 Dividends 130,833 Service plan fees 87,362 Transfer and shareholder servicing agent fees 17,214 Other 53,052 --------------------- Total liabilities 1,191,299 ============================================================================================================================= NET ASSETS $155,831,933 ===================== ============================================================================================================================= COMPOSITION OF NET ASSETS Paid-in capital $155,854,808 - ----------------------------------------------------------------------------------------------------------------------------- Accumulated net realized loss on investment transactions (22,875) - ----------------------------------------------------------------------------------------------------------------------------- Net assets - applicable to 155,854,808 shares of beneficial interest outstanding $155,831,933 ===================== ============================================================================================================================= NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $1.00
See accompanying Notes to Financial Statements. 7
============================================================================================================================= STATEMENT OF OPERATIONS For the Year Ended June 30, 1998 Centennial California Tax Exempt Trust ============================================================================================================================= INVESTMENT INCOME-Interest $5,773,872 ============================================================================================================================= EXPENSES Management fees - Note 3 801,264 - ----------------------------------------------------------------------------------------------------------------------------- Service plan fees - Note 3 320,662 - ----------------------------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees - Note 3 68,783 - ----------------------------------------------------------------------------------------------------------------------------- Custodian fees and expenses 39,178 - ----------------------------------------------------------------------------------------------------------------------------- Shareholder reports 24,979 - ----------------------------------------------------------------------------------------------------------------------------- Registration and filing fees 14,378 - ----------------------------------------------------------------------------------------------------------------------------- Legal, auditing and other professional fees 11,100 - ----------------------------------------------------------------------------------------------------------------------------- Trustees' fees and expenses 2,193 - ----------------------------------------------------------------------------------------------------------------------------- Other 3,328 --------------------- Total expenses 1,285,865 Less assumption of expenses by Centennial Asset Management Corporation - Note 3 (2,862) Less expenses paid indirectly - Note 3 (21,684) --------------------- Net expenses 1,261,319 ============================================================================================================================= NET INVESTMENT INCOME 4,512,553 ============================================================================================================================= NET REALIZED LOSS ON INVESTMENTS (19,307) ============================================================================================================================= NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,493,246 =====================
============================================================================================================================= STATEMENTS OF CHANGES IN NET ASSETS Year Ended June 30, 1998 1997 ============================================================================================================================= OPERATIONS Net investment income $4,512,553 $3,586,720 - ----------------------------------------------------------------------------------------------------------------------------- Net realized loss (19,307) (3,568) ------------------------------------------ Net increase in net assets resulting from operations 4,493,246 3,583,152 ============================================================================================================================= DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (4,512,553) (3,588,347) ============================================================================================================================= BENEFICIAL INTEREST TRANSACTIONS Net increase in net assets resulting from beneficial interest transactions - Note 2 23,912,099 13,106,174 ============================================================================================================================= NET ASSETS Total increase 23,892,792 13,100,979 - ----------------------------------------------------------------------------------------------------------------------------- Beginning of period 131,939,141 118,838,162 ------------------------------------------ End of period $155,831,933 $131,939,141 ==========================================
See accompanying Notes to Financial Statements. 8
- -------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS Centennial California Tax Exempt Trust Year Ended June 30, ------------------------------------------------------------------------- 1998 1997 1996 1995 1994 ========================================================================================================================== 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 .02 Dividends and distributions to shareholders (.03) (.03) (.03) (.03) (.02) - -------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 ========================================================================= ========================================================================================================================== TOTAL RETURN(1) 2.86% 2.81% 2.97% 3.00% 1.82% ========================================================================================================================== RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $155,832 $131,939 $118,838 $92,318 $60,376 - -------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $160,317 $129,087 $112,911 $71,278 $65,520 - -------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 2.81% 2.78% 2.94% 2.99% 1.79% Expenses, before voluntary assumption by the Manager(2) 0.80% 0.82% 0.80% 0.83% 0.87% Expenses, net of voluntary assumption by the Manager 0.79% 0.80% 0.79% 0.80% 0.80%
1. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns reflect changes in net investment income only. 2. Beginning in fiscal 1995, the expense ratio reflects the effect of gross expenses paid indirectly by the Trust. Prior year expense ratios have not been adjusted. See accompanying Notes to Financial Statements. 9 NOTES TO FINANCIAL STATEMENTS Centennial California Tax Exempt Trust 1. SIGNIFICANT ACCOUNTING POLICIES Centennial California Tax Exempt Trust (the Trust) is registered under the Investment Company Act of 1940, as amended, as a non-diversified, open-end management investment company. The Trust's investment objective is to seek the maximum current interest income exempt from Federal and California personal income taxes for individual investors as is consistent with preservation of capital. The Trust's investment 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. INVESTMENT VALUATION. Portfolio securities are valued on the basis of amortized cost, which approximates market value. FEDERAL TAXES. The Trust intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders. Therefore, no federal income or excise tax provision is required. DISTRIBUTIONS TO SHAREHOLDERS. The Trust intends to declare dividends from net investment income each day the New York Stock Exchange is open for business and pay such dividends monthly. To effect its policy of maintaining a net asset value of $1.00 per share, the Trust may withhold dividends or make distributions of net realized gains. OTHER. Investment transactions are accounted for on the date the investments are purchased or sold (trade date). Realized gains and losses on investments are determined on an identified cost basis, which is the same basis used for federal income tax purposes. The Trust concentrates its investments in California and, therefore, may have more credit risks related to the economic conditions of California than a portfolio with a broader geographical diversification. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 2. SHARES OF BENEFICIAL INTEREST The Trust has authorized an unlimited number of no par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows:
Year Ended June 30, 1998 Year Ended June 30, 1997 Shares Amount Shares Amount Sold 587,035,412 $ 587,035,412 400,712,797 $ 400,712,797 Dividends and distributions reinvested 4,414,987 4,414,987 3,470,265 3,470,265 Redeemed (567,538,300) (567,538,300) (391,076,888) (391,076,888) -------------- --------------- ---------------- --------------- Net increase 23,912,099 $ 23,912,099 13,106,174 $ 13,106,174 ============== ============== =============== =============
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Management fees paid to the Manager were in accordance with the investment advisory agreement with the Trust which provides for a fee of 0.50% of the first $250 million of net assets; 0.475% of the next $250 million of net assets; 0.45% of the next $250 million of net assets; 0.425% of the next $250 million of net assets and 0.40% of net assets in excess of $1 billion. The Manager has voluntarily undertaken to assume Trust expenses in excess of 0.80% of average annual net assets. Shareholder Services, Inc. (SSI), a subsidiary of OFI, is the transfer and shareholder servicing agent for the Trust and for other registered investment companies. SSI's total costs of providing such services are allocated ratably to these companies. Expenses paid indirectly represent a reduction of custodian fees for earnings on cash balances maintained by the Trust. Under an approved plan of distribution, the Trust may expend up to 0.20% of its 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 institutions. 10 INDEPENDENT AUDITORS' REPORT Centennial California Tax Exempt Trust The Board of Trustees and Shareholders of Centennial California Tax Exempt Trust: We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Centennial California Tax Exempt Trust as of June 30, 1998, the related statement of operations for the year then ended, the statements of changes in net assets for the years ended June 30, 1998 and 1997, and the financial highlights for the period July 1, 1993 to June 30, 1998. 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 generally accepted auditing standards. 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 at June 30, 1998 by correspondence with the custodian. 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, such financial statements and financial highlights present fairly, in all material respects, the financial position of Centennial California Tax Exempt Trust at June 30, 1998, the results of its operations, the changes in its net assets, and the financial highlights for the respective stated periods, in conformity with generally accepted accounting principles. DELOITTE & TOUCHE LLP Denver, Colorado July 22, 1998 11 FEDERAL INCOME TAX INFORMATION (Unaudited) Centennial California Tax Exempt Trust In early 1999, shareholders will receive information regarding all dividends and distributions paid to them by the Trust during calendar year 1998. Regulations of the U.S. Treasury Department require the Trust to report this information to the Internal Revenue Service. None of the dividends paid by the Trust during the fiscal year ended June 30, 1998 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. 12 [This Page Intentionally Left Blank] [This Page Intentionally Left Blank] [Blank Page] CENTENNIAL CALIFORNIA TAX EXEMPT TRUST OFFICERS AND TRUSTEES James C. Swain, Chairman and Chief Executive Officer Bridget A. Macaskill, Trustee and President Robert G. Avis, Trustee William A. Baker, Trustee Charles Conrad, Jr., Trustee Jon S. Fossel, Trustee Sam Freedman, Trustee Raymond J. Kalinowski, Trustee C. Howard Kast, Trustee Robert M. Kirchner, Trustee Ned M. Steel, Trustee George C. Bowen, Trustee, Vice President, Treasurer and Assistant Secretary Andrew J. Donohue, Vice President and Secretary Michael J. Carbuto, Vice President Robert J. Bishop, Assistant Treasurer Scott T. Farrar, Assistant Treasurer Robert G. Zack, Assistant Secretary INVESTMENT ADVISOR AND DISTRIBUTOR Centennial Asset Management Corporation TRANSFER AND SHAREHOLDER SERVICING AGENT Shareholder Services, Inc. CUSTODIAN OF PORTFOLIO SECURITIES Citibank, N.A. INDEPENDENT AUDITORS Deloitte & Touche LLP LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C. This is a copy of a report to shareholders of Centennial California Tax Exempt Trust. This report must be preceded or accompanied by a Prospectus of Centennial California Tax Exempt Trust. For material information concerning the Trust, see the Prospectus. For shareholder servicing, call: 1-800-525-9310 (in U.S.) 303-768-3200 (outside U.S.) Or write: Shareholder Services, Inc. P.O. Box 5143 Denver, CO 80217-5143 RA0180.001.0698 -----END PRIVACY-ENHANCED MESSAGE-----