UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-05871
Centennial California Tax Exempt Trust
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
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Date of fiscal year end: June 30
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Date of reporting period: July 1, 2003 - June 30, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
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STATEMENT OF INVESTMENTS June 30, 2004
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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SHORT-TERM TAX-EXEMPT OBLIGATIONS--99.9%
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CALIFORNIA--99.5%
ABAG FAU for Nonprofit Corporations MH RB, Geneva Pointe Apts., 1.11% 1 $ 1,000,000 $ 1,000,000
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ABAG FAU for Nonprofit Corporations RB, Valley Christian Schools,
Series 2003, 1.06% 1 7,000,000 7,000,000
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CA Department of Water Resources Power Supply RB, Series C-2, 1.07% 1 3,300,000 3,300,000
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CA Department of Water Resources Power Supply RB, Series C-4, 1.06% 1 1,000,000 1,000,000
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CA Department of Water Resources Power Supply RB, Series C-9, 1.08% 1 4,050,000 4,050,000
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CA Department of Water Resources Power Supply RB, Series C-15, 1.06% 1 5,800,000 5,800,000
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CA Department of Water Resources Power Supply RRB, Central Valley
Project, MERLOTS Series 2003 B32, 1.09% 1,2 1,995,000 1,995,000
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CA HFFAU RB, Kaiser Permanente, Series A, MSTFC Series 1998 26, 1.08% 1,2 5,000,000 5,000,000
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CA Infrastructure & ED Bank RB, Salvation Army Western Territory,
Series 2001, 1.02%, 11/17/04 3 4,400,000 4,400,000
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CA Infrastructure & ED Bank RRB, Independent System Operator
Corp. Project-C, 1.04% 1 1,900,000 1,900,000
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CA MSR PPA RRB, San Juan Project, Sub. Lien, Series E, 1.07% 1 700,000 700,000
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CA PCFAU SWD RB, Burrtec Waste Industries, Series A, 1.14% 1 2,500,000 2,500,000
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CA PCFAU SWD RB, Cedar Avenue Recycling Project-A, 1.14% 1 3,000,000 3,000,000
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CA SCDAU RB, IDV-Fibrebond, Inc., 1.25% 1 520,000 520,000
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Fremont, CA MH RB, Treetops Apts., Series A, 1.11% 1 1,000,000 1,000,000
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Irwindale, CA Community RA TXAL Bonds, City IDV Project 2002,
1.25%, 7/15/04 455,000 455,028
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Long Beach, CA USD COP, Capital Improvement Refinancing Project,
Series 2001, 1.08% 1 2,400,000 2,400,000
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Los Angeles Cnty., CA MH Mtg. RB, Valencia Housing Project, Series C, 1.02% 1 1,500,000 1,500,000
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Los Angeles, CA Airport RB, SGMSTR Series 1996 SG61, 1.11% 1,2 3,000,000 3,000,000
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Los Angeles, CA Community RA RB, Baldwin Hills Public Parking
Facilities Project, Series 1984, 1.04% 1 2,100,000 2,100,000
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Los Angeles, CA Community RA RB, Skyline at Southpark Apts.,
Series 1985, 1.07% 1 3,600,000 3,600,000
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Los Angeles, CA USD COP, Belmont Learning Complex,1997 Series A, 1.02% 1 5,300,000 5,300,000
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Los Angeles, CA USD GOB, AAMC Series 1999-7, 1.10% 1,2 6,000,000 6,000,000
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Los Angeles, CA Wastewater System GOB, AAMC Series 1998-25, 1.08% 1,2 2,000,000 2,000,000
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Oakland, CA Joint Powers FAU Lease RB, Series 1998, 1.05% 1 3,000,000 3,000,000
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Oakland/Alameda Cntys., CA Coliseum Authority RB, Coliseum Project,
Series C-2, 1.03% 1 5,000,000 5,000,000
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Oceanside, CA MH RRB, Lakeridge Apts. Project, 1.04% 1 3,300,000 3,300,000
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Orange Cnty., CA Apt. Development RB, Niguel Summit 2, Series B, 1.02% 1 4,861,000 4,861,000
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Orange Cnty., CA HAU MH RB, Lantern Pines Project-CC, 1.05% 1 700,000 700,000
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Sacramento Cnty., CA MH HAU RB, Shadowood Apts. Project-Issue A, 1.12% 1 6,000,000 6,000,000
5 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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STATEMENT OF INVESTMENTS Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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CALIFORNIA Continued
San Bernardino Cnty., CA MH HAU RRB, Montclair Heritage-A, 1.09% 1 $ 4,620,000 $ 4,620,000
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San Bernardino Cnty., CA MH HAU RRB, Somerset Apts.-A, 1.07% 1 1,395,000 1,395,000
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San Diego Cnty., CA Regional AA Sub. Airport RN, Lindbergh Field,
Series B, 1.07%, 8/2/04 3 5,000,000 5,000,000
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San Diego, CA Water Utility Fund Net System GOB, AAMC Series
1998-10, 1.08% 1,2 6,000,000 6,000,000
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San Francisco, CA City & Cnty. PUC Clean Water RRB, MERLOTS
Series B20, 1.09% 1,2 6,995,000 6,995,000
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San Francisco, CA City & Cnty. RA MH RB, Mission Creek Senior
Facility, 1.11% 1 2,000,000 2,000,000
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Stockton, CA CFD No. 99-02 SPTX Bonds, Arch Road East, 1.08% 1 2,605,000 2,605,000
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University of California Regents RB, 1.10%, 9/9/04 5,000,000 5,000,000
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Vallejo, CA COP, Golf Course Facilities Financing Project, Series 2001, 1.12% 1 10,200,000 10,200,000
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William S. Hart USD COP, School Facility Bridge Funding Project,
Series 2001, 1.06% 1 3,000,000 3,000,000
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139,196,028
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U.S. POSSESSIONS--0.4%
PR CMWLTH Public Improvement GOB, 7.50%, 7/1/04 500,000 500,000
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TOTAL INVESTMENTS, AT VALUE (COST $139,696,028) 99.9% 139,696,028
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OTHER ASSETS NET OF LIABILITIES 0.1 195,813
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NET ASSETS 100.0% $ 139,891,841
========================================
6 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
FOOTNOTES TO STATEMENT OF INVESTMENTS
TO SIMPLIFY THE LISTINGS OF SECURITIES, ABBREVIATIONS ARE USED PER THE TABLE
BELOW:
AA Airport Authority
AAMC ABN AMRO Munitops Certificates
CFD Community Facilities District
CMWLTH Commonwealth
COP Certificates of Participation
ED Economic Development
FAU Finance Authority
GOB General Obligation Bonds
HAU Housing Authority
HFFAU Health Facilities Finance Authority
IDV Industrial Development
MERLOTS Municipal Exempt Receipts Liquidity Option Tender
MH Multifamily Housing
MSR Modesta Irrigation District of the City of Santa Clara and the
City of Redding
MSTFC Morgan Stanley & Co., Inc. Trust Floater Certificates
PCFAU Pollution Control Finance Authority
PPA Public Power Agency
PUC Public Utilities Commission
RA Redevelopment Agency/Authority
RB Revenue Bonds
RN Revenue Nts.
RRB Revenue Refunding Bonds
SCDAU Statewide Communities Development Authority
SGMSTR Societe Generale, NY Branch Municipal Security Trust Receipts
SPTX Special Tax
SWD Solid Waste Disposal
TXAL Tax Allocation
USD Unified School District
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,
2004. This instrument has 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. Represents 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 $30,990,000 or 22.15% of the Trust's net
assets as of June 30, 2004.
3. Put obligation redeemable at full principal value on the date reported.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
7 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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STATEMENT OF ASSETS AND LIABILITIES June 30, 2004
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ASSETS
Investments, at value (cost $139,696,028)--see accompanying statement of investments $ 139,696,028
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Cash 445,649
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Receivables and other assets:
Shares of beneficial interest sold 274,205
Interest 221,842
Other 9,218
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Total assets 140,646,942
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LIABILITIES
Payables and other liabilities:
Shares of beneficial interest redeemed 619,251
Distribution and service plan fees 72,743
Shareholder communications 15,861
Dividends 15,721
Transfer and shareholder servicing agent fees 3,612
Trustees' compensation 3,292
Other 24,621
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Total liabilities 755,101
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NET ASSETS $ 139,891,841
===============
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COMPOSITION OF NET ASSETS
Paid-in capital $ 139,904,885
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Accumulated net realized loss on investments (13,044)
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NET ASSETS--applicable to 139,886,162 shares of beneficial interest outstanding $ 139,891,841
===============
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NET ASSET VALUE, REDEMPTION PRICE PER SHARE AND OFFERING PRICE PER SHARE $1.00
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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STATEMENT OF OPERATIONS For the Year Ended June 30, 2004
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INVESTMENT INCOME
Interest $1,467,680
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EXPENSES
Management fees 748,982
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Service plan fees 298,254
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Transfer and shareholder servicing agent fees 46,504
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Shareholder communications 20,920
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Trustees' compensation 6,305
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Custodian fees and expenses 4,802
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Other 35,761
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Total expenses 1,161,528
Less reduction to custodian expenses (1,879)
Less payments and waivers of expenses (1,675)
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Net expenses 1,157,974
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NET INVESTMENT INCOME 309,706
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NET REALIZED LOSS ON INVESTMENTS (13,044)
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 296,662
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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STATEMENTS OF CHANGES IN NET ASSETS
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YEAR ENDED JUNE 30, 2004 2003
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OPERATIONS
Net investment income $ 309,706 $ 805,721
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Net realized gain (loss) (13,044) 2,327
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Net increase in net assets resulting from operations 296,662 808,048
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DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (309,706) (805,721)
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BENEFICIAL INTEREST TRANSACTIONS
Net decrease in net assets resulting from beneficial interest transactions (12,950,996) (1,799,511)
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NET ASSETS
Total decrease (12,964,040) (1,797,184)
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Beginning of period 152,855,881 154,653,065
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End of period $139,891,841 $152,855,881
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SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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FINANCIAL HIGHLIGHTS
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YEAR ENDED JUNE 30 2004 2003 2002 2001 2000
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PER SHARE OPERATING DATA
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
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Income from investment operations--net
investment income and net realized gain -- 1 .01 .01 .03 .03
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Dividends and/or distributions to shareholders:
Dividends from net investment income -- 1 (.01) (.01) (.03) (.03)
Distributions from net realized gain -- -- -- 1 -- --
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Total dividends and/or distributions
to shareholders -- 1 (.01) (.01) (.03) (.03)
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Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
================================================================
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TOTAL RETURN 2 0.21% 0.52% 0.89% 2.74% 2.63%
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RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $139,892 $152,856 $154,653 $157,316 $162,261
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Average net assets (in thousands) $149,559 $156,348 $164,278 $166,654 $160,351
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Ratios to average net assets: 3
Net investment income 0.21% 0.52% 0.89% 2.72% 2.57%
Total expenses 0.78% 0.76% 0.77% 0.84% 0.83%
Expenses after payments and waivers
and reduction to custodian expenses N/A 4,5 N/A 4,5 N/A 4,5 0.81% 0.81%
<FN>
1. Less than $0.005 per share.
2. Assumes an investment on the business day before the first day of the fiscal period, with all
dividends and distributions 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 are not annualized for
periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Trust distributions or the redemption of Trust shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary reimbursement of expenses less than 0.01%.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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NOTES TO FINANCIAL STATEMENTS
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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 individ- ual investors as is consistent with the preservation
of capital. The Trust's investment advisor is Centennial Asset Management
Corporation (the Manager), a subsidiary of OppenheimerFunds, Inc. (OFI).
The following is a summary of significant accounting policies consistently
followed by the Trust.
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SECURITIES VALUATION. The net asset value of shares of the Trust is normally
determined twice each day, at 12:00 Noon Eastern time and at 4:00 P.M. Eastern
time on each day The New York Stock Exchange (the Exchange) is open for
trading. Portfolio securities are valued on the basis of amortized cost, which
approximates market value.
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SECURITY CREDIT RISK. There are certain risks arising from geographic
concentration in any state. Certain revenue or tax related events in a state
may impair the ability of certain issuers of municipal securities to pay
principal and interest on their obligations.
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FEDERAL TAXES. The Trust intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income to shareholders,
therefore, no federal income or excise tax provision is required.
The tax components of capital shown in the table below represent distribution
requirements the Trust must satisfy under the income tax regulations, losses
the Trust may be able to offset against income and gains realized in future
years for federal income tax purposes.
UNDISTRIBUTED NET UNDISTRIBUTED ACCUMULATED LOSS
INVESTMENT INCOME LONG-TERM GAIN CARRYFORWARD 1
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$34,105 $-- $13,044
1. As of June 30, 2004, the Trust had $13,044 of net capital loss carryforwards
available to offset future realized capital gains, if any, and thereby reduce
future taxable gain distributions. As of June 30, 2004, details of the capital
loss carryforward were as follows:
EXPIRING
----------------------
2012 $13,044
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Trust.
12 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
The tax character of distributions paid during the years ended June 30, 2004
and June 30, 2003 were as follows:
YEAR ENDED YEAR ENDED
JUNE 30, 2004 JUNE 30, 2003
------------------------------------------------------
Distributions paid from:
Exempt-interest dividends $309,706 $805,721
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TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Trust. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Trust or in other Oppenheimer funds
selected by the Trustee. The Trust does purchase shares of the funds selected
for deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Trust asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Trust, and will not materially affect the
Trust's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
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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. Income distributions, if any, are
declared daily and paid monthly. Capital gain distributions, if any, are
declared and paid annually.
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EXPENSE OFFSET ARRANGEMENT. The reduction of custodian fees, if applicable,
represents earnings on cash balances maintained by the Trust.
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SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
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OTHER. The preparation of financial statements in conformity with U.S.
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.
13 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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NOTES TO FINANCIAL STATEMENTS Continued
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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, 2004 YEAR ENDED JUNE 30, 2003
SHARES AMOUNT SHARES AMOUNT
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Sold 416,638,639 $ 416,638,639 450,261,068 $ 450,261,068
Dividends and/or
distributions reinvested 300,412 300,412 803,029 803,029
Redeemed (429,890,047) (429,890,047) (452,863,608) (452,863,608)
-------------------------------------------------------------
Net decrease (12,950,996) $ (12,950,996) (1,799,511) $ (1,799,511)
=============================================================
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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 at an
annual rate of 0.50% of the first $250 million of the 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.
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ADMINISTRATION SERVICES. The Trust pays the Manager a fee of $1,500 per year
for preparing and filing the Trust's tax returns.
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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 a per account fee. For the year ended June 30,
2004, the Trust paid $46,917 to SSI for services to the Trust.
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SERVICE PLAN (12B-1) FEES. The Trust has adopted a service plan. It reimburses
Centennial Asset Management Corporation, the Distributor, for a portion of its
costs incurred for services provided to accounts that hold shares of the Trust.
Reimbursement is made quarterly, or monthly depending on asset size, at an
annual rate of up to 0.20% of the average annual net assets of the Trust. The
Distributor currently uses all of those fees to pay dealers, brokers, banks and
other financial institutions quarterly for providing personal services and
maintenance of accounts of their customers that hold shares of the Trust. Fees
incurred by the Trust under the Plan are detailed in the Statement of
Operations.
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PAYMENTS AND WAIVERS OF EXPENSES. The Manager has voluntarily undertaken to
assume any expenses of the Trust in any fiscal year that they exceed 0.80% of
the Trust's average annual net assets. Effective July 7, 2003, the Manager has
voluntarily undertaken to waive receipt of its management fees to the extent
necessary so that the Trust may seek to maintain a positive yield. During the
year ended June 30, 2004, the Manager waived $1,675 of its management fees. The
Manager reserves the right to amend or terminate either voluntary expense
assumption at any time.
14 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
SSI has voluntarily agreed to limit transfer and shareholder servicing agent
fees to 0.35% of average annual net assets of the Trust. This undertaking may
be amended or withdrawn at any time.
15 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF CENTENNIAL CALIFORNIA TAX EXEMPT
TRUST:
We have audited the accompanying statement of assets and liabilities of
Centennial California Tax Exempt Trust, including the statement of investments,
as of June 30, 2004, and the related statement 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 the periods indicated.
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 the standards of the Public
Company Accounting Oversight Board (United States). 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, 2004, 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 California Tax Exempt Trust as of June 30, 2004, 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 the
periods indicated, in conformity with accounting principles generally accepted
in the United States of America.
DELOITTE & TOUCHE LLP
Denver, Colorado
August 13, 2004
16 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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FEDERAL INCOME TAX INFORMATION Unaudited
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In early 2005, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Trust during
calendar year 2004. Regulations of the U.S. Treasury Department require the
Trust to report this information to the Internal Revenue Service.
None of the dividends paid by the Trust during the year ended June 30, 2004
are qualified dividend income or eligible for the corporate dividend-received
deduction.
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.
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PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES Unaudited
- --------------------------------------------------------------------------------
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The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and
Procedures is available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.525.7048, (ii) on the Fund's website at
www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In
addition, the Fund is required to file new Form N-PX, with its complete proxy
voting record for the 12 months ended June 30th, no later than August 31st of
each year. The Fund's Form N-PX filing is available (i) without charge, upon
request, by calling the Fund toll-free at 1.800.525.7048, and (ii) on the SEC's
website at www.sec.gov.
17 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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TRUSTEES AND OFFICERS Unaudited
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NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD
TRUST, LENGTH OF SERVICE, AGE BY TRUSTEE; NUMBER OF PORTFOLIOS IN FUND COMPLEX CURRENTLY OVERSEEN BY TRUSTEE
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY,
TRUSTEES CENTENNIAL, CO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, UNTIL HIS
RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
WILLIAM L. ARMSTRONG, Chairman of the following private mortgage banking companies: Cherry Creek
Chairman of the Board Mortgage Company (since 1991), Centennial State Mortgage Company (since 1994),
(since 2003) and Trustee The El Paso Mortgage Company (since 1993), Transland Financial Services, Inc.
(since 2000) (since 1997); Chairman of the following private companies: Great Frontier
Age: 67 Insurance (insurance agency) (since 1995), Ambassador Media Corporation and
Broadway Ventures (since 1984); a director of the following public companies:
Helmerich & Payne, Inc. (oil and gas drilling/production company) (since 1992)
and UNUMProvident (insurance company) (since 1991). Mr. Armstrong is also a
Director/Trustee of Campus Crusade for Christ and the Bradley Foundation.
Formerly a director of the following: Storage Technology Corporation (a
publicly-held computer equipment company) (1991-February 2003), and
International Family Entertainment (television channel) (1992-1997), Frontier
Real Estate, Inc. (residential real estate brokerage) (1994-1999), and Frontier
Title (title insurance agency) (1995-June 1999); a U.S. Senator (January
1979-January 1991). Oversees 38 portfolios in the OppenheimerFunds complex.
ROBERT G. AVIS, Formerly, Director and President of A.G. Edwards Capital, Inc. (General
Trustee (since 1990) Partner of private equity funds) (until February 2001); Chairman,
Age: 73 President and Chief Executive Officer of A.G. Edwards Capital, Inc. (until
March 2000); Vice Chairman and Director of A.G. Edwards, Inc. and Vice
Chairman of A.G. Edwards & Sons, Inc. (its brokerage company subsidiary)
(until March 1999); Chairman of A.G. Edwards Trust Company and A.G.E.
Asset Management (investment advisor) (until March 1999); and a Director
(until March 2000) of A.G. Edwards & Sons and A.G. Edwards Trust Company.
Oversees 38 portfolios in the OppenheimerFunds complex.
GEORGE C. BOWEN, Formerly Assistant Secretary and a director (December 1991-April 1999) of
Trustee (since 1998) Centennial Asset Management Corporation; President, Treasurer and a
Age: 67 director (June 1989-April 1999) of Centennial Capital Corporation; Chief
Executive Officer and a director of MultiSource Services, Inc. (March
1996-April 1999). Until April 1999 Mr. Bowen held several positions in
subsidiary or affiliated companies of the Manager. Oversees 38 portfolios
in the OppenheimerFunds complex.
EDWARD L. CAMERON, A member of The Life Guard of Mount Vernon, George Washington's home
Trustee (since 2000) (since June 2000). Formerly Director (March 2001-May 2002) of Genetic ID,
Age: 65 Inc. and its subsidiaries (a privately held biotech company); a partner
(July 1974-June 1999) with PricewaterhouseCoopers LLP (an accounting
firm); and Chairman (July 1994-June 1998) of Price Waterhouse LLP Global
Investment Management Industry Services Group. Oversees 38 portfolios in
the OppenheimerFunds complex.
JON S. FOSSEL, Director (since February 1998) of Rocky Mountain Elk Foundation (a
Trustee (since 1990) not-for-profit foundation); a director (since 1997) of Putnam Lovell
Age: 62 Finance (finance company); a director (since June 2002) of UNUMProvident
(an insurance company). Formerly a director (October 1999-October 2003) of
P.R. Pharmaceuticals (a privately held company); Chairman and a director
(until October 1996) and President and Chief Executive Officer (until
October 1995) of the Manager; President, Chief Executive Officer and a
director (until October 1995) of Oppenheimer Acquisition Corp.,
Shareholders Services Inc. and Shareholder Financial Services, Inc.
Oversees 38 portfolios in the OppenheimerFunds complex.
18 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
SAM FREEDMAN, Director of Colorado Uplift (a non-profit charity) (since September 1984).
Trustee (since 1996) Formerly (until October 1994) Mr. Freedman held several positions in
Age: 63 subsidiary or affiliated companies of the Manager. Oversees 38 portfolios
in the OppenheimerFunds complex.
BEVERLY L. HAMILTON, Trustee of Monterey International Studies (an educational organization)
Trustee (since 2002) (since February 2000); a director of The California Endowment (a
Age: 57 philanthropic organization) (since April 2002) and of Community Hospital
of Monterey Peninsula (educational organization) (since February 2002); a
director of America Funds Emerging Markets Growth Fund (since October
1991) (an investment company); an advisor to Credit Suisse First Boston's
Sprout venture capital unit. Mrs. Hamilton also is a member of the
investment committees of the Rockefeller Foundation and of the University
of Michigan. Formerly, Trustee of MassMutual Institutional Funds (open-end
investment company) (1996-May 2004); a director of MML Series Investment
Fund (April 1989-May 2004) and MML Services (April 1987-May 2004)
(investment companies); member of the investment committee (2000-2003) of
Hartford Hospital; an advisor (2000-2003) to Unilever (Holland)'s pension
fund; and President (February 1991-April 2000) of ARCO Investment
Management Company. Oversees 37 portfolios in the OppenheimerFunds
complex.
ROBERT J. MALONE, Chairman, Chief Executive Officer and director of Steele Street State Bank
Trustee (since 2002) (a commercial banking entity) (since August 2003), Colorado UpLIFT (a
Age: 59 non-profit organization) (since 1986); a trustee (since 2000) of the
Gallagher Family Foundation (non-profit organization). Formerly a director
of Jones Knowledge, Inc. (a privately held company) (2001-July 2004), and
U.S. Exploration, Inc. (oil and gas exploration) (1997-February 2004),
Chairman of U.S. Bank-Colorado (a subsidiary of U.S. Bancorp and formerly
Colorado National Bank,) (July 1996-April 1999) and a director of
Commercial Assets, Inc. (a REIT) (1993-2000). Oversees 37 portfolios in
the OppenheimerFunds complex.
F. WILLIAM MARSHALL, JR., Trustee of MassMutual Institutional Funds (since 1996) and MML Series
Trustee (since 2000) Investment Fund (since 1987) (both open-end investment companies) and the
Age: 62 Springfield Library and Museum Association (since 1995) (museums) and the
Community Music School of Springfield (music school) (since 1996); Trustee
(since 1987), Chairman of the Board (since 2003) and Chairman of the
investment committee (since 1994) for the Worcester Polytech Institute
(private university); and President and Treasurer (since January 1999) of
the SIS Fund (a private not for profit charitable fund). Formerly, member
of the investment committee of the Community Foundation of Western
Massachusetts (1998 - 2003); Chairman (January 1999-July 1999) of SIS &
Family Bank, F.S.B. (formerly SIS Bank) (commercial bank); and Executive
Vice President (January 1999-July 1999) of Peoples Heritage Financial
Group, Inc. (commercial bank). Oversees 38 portfolios in the
OppenheimerFunds complex.
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INTERESTED TRUSTEE THE ADDRESS OF MR. GRABISH IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL,
CO 80112-3924. MR. GRABISH SERVES FOR AN INDEFINITE TERM, UNTIL HIS RESIGNATION,
RETIREMENT, DEATH OR REMOVAL.
RICHARD GRABISH, Senior Vice President, Assistant Director of Sales and Marketing (since
Trustee (since 2001) March 1997), and Manager of Private Client Services (since June 1985) for
Age: 55 A.G. Edwards & Sons, Inc. (broker/dealer and investment firm); Chairman
and Chief Executive Officer (since March 2001) of A.G. Edwards Trust
Company; Director (since March 1988) of A.G. Edwards & Sons, Inc. Formerly
(until March 1987) President and Vice Chairman of A.G. Edwards Trust
Company. Oversees 6 portfolios in the OppenheimerFunds complex.
19 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL
AND OFFICER CENTER, 225 LIBERTY STREET, NEW YORK, NY 10281-1008. MR. MURPHY SERVES FOR
AN INDEFINITE TERM, UNTIL HIS RESIGNATION, DEATH OR REMOVAL.
JOHN V. MURPHY, Chairman, Chief Executive Officer and director (since June 2001) and
President (since 2001) and President (since September 2000) of the Manager; President and a director
Trustee (since 2003) or trustee of other Oppenheimer funds; President and a director (since
Age: 55 July 2001) of Oppenheimer Acquisition Corp. (the Manager's parent holding
company) and of Oppenheimer Partnership Holdings, Inc. (a holding company
subsidiary of the Manager); a director (since November 2001) of
OppenheimerFunds Distributor, Inc. (a subsidiary of the Manager); Chairman
and a director (since July 2001) of Shareholder Services, Inc. and of
Shareholder Financial Services, Inc. (transfer agent subsidiaries of the
Manager); President and a director (since July 2001) of OppenheimerFunds
Legacy Program (a charitable trust program established by the Manager); a
director of the following investment advisory subsidiaries of the Manager:
OFI Institutional Asset Management, Inc., Centennial Asset Management
Corporation, Trinity Investment Management Corporation and Tremont Capital
Management, Inc. (since November 2001), HarbourView Asset Management
Corporation and OFI Private Investments, Inc. (since July 2001); President
(since November 1, 2001) and a director (since July 2001) of Oppenheimer
Real Asset Management, Inc.; Executive Vice President (since February
1997) of Massachusetts Mutual Life Insurance Company (the Manager's parent
company); a director (since June 1995) of DLB Acquisition Corporation (a
holding company that owns the shares of Babson Capital Management LLC);
a member of the Investment Company Institute's Board of Governors (elected
to serve from October 3, 2003 through September 30, 2006). Formerly, Chief
Operating Officer (September 2000-June 2001) of the Manager; President and
trustee (November 1999-November 2001) of MML Series Investment Fund and
MassMutual Institutional Funds (open-end investment companies); a director
(September 1999-August 2000) of C.M. Life Insurance Company; President,
Chief Executive Officer and director (September 1999-August 2000) of MML
Bay State Life Insurance Company; a director (June 1989-June 1998) of
Emerald Isle Bancorp and Hibernia Savings Bank (a wholly-owned subsidiary
of Emerald Isle Bancorp). Oversees 73 portfolios as Trustee/ Director and
10 portfolios as Officer in the OppenheimerFunds complex.
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OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MR.
ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW
YORK, NY 10281-1008, FOR MR. BONNELL, MR. WIXTED, AND MR. VANDEHEY, 6803
S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH OFFICER SERVES FOR AN
ANNUAL TERM OR UNTIL HIS OR HER EARLIER RESIGNATION, DEATH OR REMOVAL.
JOHN BONNELL, Vice President (since May 2004) of OppenheimerFunds, Inc.; an officer of 2
Vice President (since 2004) other portfolios in the OppenheimerFunds complex; formerly a portfolio
Age: 39 manager at Strong Financial Corp. (1999-2004).
BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager;
Treasurer (since 1999) Treasurer of HarbourView Asset Management Corporation, Shareholder
Age: 44 Financial Services, Inc., Shareholder Services, Inc., Oppenheimer Real
Asset Management Corporation, and Oppenheimer Partnership Holdings, Inc.
(since March 1999), of OFI Private Investments, Inc. (since March 2000),
of OppenheimerFunds International Ltd. and OppenheimerFunds plc (since May
2000), of OFI Institutional Asset Management, Inc. (since November 2000),
and of OppenheimerFunds Legacy Program (a Colorado non-profit corporation)
(since June 2003); Treasurer and Chief Financial Officer (since May 2000)
of OFI Trust Company (a trust
20 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
BRIAN W. WIXTED, company subsidiary of the Manager); Assistant Treasurer (since March 1999)
Continued of Oppenheimer Acquisition Corp. Formerly Assistant Treasurer of
Centennial Asset Management Corporation (March 1999-October 2003) and
OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and
Chief Operating Officer (March 1995-March 1999) at Bankers Trust
Company-Mutual Fund Services Division. An officer of 83 portfolios in the
OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since
Vice President and Secretary February 2002) of the Manager; General Counsel and a director (since
(since 2001) November 2001) of the Distributor; General Counsel (since November 2001)
Age: 56 of Centennial Asset Management Corporation; Senior Vice President and
General Counsel (since November 2001) of HarbourView Asset Management
Corporation; Secretary and General Counsel (since November 2001) of
Oppenheimer Acquisition Corp.; Assistant Secretary and a director (since
October 1997) of OppenheimerFunds International Ltd. and OppenheimerFunds
plc; Vice President and a director (since November 2001) of Oppenheimer
Partnership Holdings, Inc.; a director (since November 2001) of
Oppenheimer Real Asset Management, Inc.; Senior Vice President, General
Counsel and a director (since November 2001) of Shareholder Financial
Services, Inc., Shareholder Services, Inc., OFI Private Investments, Inc.
and OFI Trust Company; Vice President (since November 2001) of
OppenheimerFunds Legacy Program; Senior Vice President and General Counsel
(since November 2001) of OFI Institutional Asset Management, Inc.; a
director (since June 2003) of OppenheimerFunds (Asia) Limited. Formerly
Senior Vice President (May 1985-December 2003), Acting General Counsel
(November 2001-February 2002) and Associate General Counsel (May
1981-October 2001) of the Manager; Assistant Secretary of Shareholder
Services, Inc. (May 1985-November 2001), Shareholder Financial Services,
Inc. (November 1989-November 2001); and OppenheimerFunds International
Ltd. (October 1997-November 2001). An officer of 83 portfolios in the
OppenheimerFunds complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer (since March 2004) of
Vice President (since 2004) the Manager; Vice President (since June 1983) of OppenheimerFunds
Age: 53 Distributor, Inc., Centennial Asset Management Corporation and
Shareholder Services, Inc. Formerly (until February 2004)
Vice President and Director of Internal Audit of OppenheimerFunds, Inc. An
officer of 83 portfolios in the OppenheimerFunds complex.
THE TRUST'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE TRUST'S TRUSTEES AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST.
21 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of the registrant has determined that Edward L.
Cameron, the Chairman of the Board's Audit Committee, and George C. Bowen, a
member of the Board's Audit Committee, possess the technical attributes
identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as "audit
committee financial experts," and has designated Messrs. Cameron and Bowen as
the Audit Committee's financial experts. Messrs. Cameron and Bowen are
"independent" Trustees pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(a) Audit Fees
The principal accountant for the audit of the registrant's annual
financial statements billed $10,000 in fiscal 2004 and $9,500 in
fiscal 2003.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed $5,525 in fiscal 2004 and $45,744 in
fiscal 2003 to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant.
Such fees would include, among others: due diligence related to
mergers and acquisitions, accounting consultations and audits in
connection with acquisitions, internal control reviews and
consultation concerning financial accounting and reporting
standards.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed $0 in fiscal 2004 and $7,370 in fiscal
2003 to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant.
Such fees would include, among others: tax compliance, tax
planning and tax advice. Tax compliance generally involves
preparation of original and amended tax returns, claims for a
refund and tax payment-planning services. Tax planning and tax
advice includes assistance with tax audits and appeals, tax advice
related to mergers and acquisitions and requests for rulings or
technical advice from taxing authorities.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed $0 in fiscal 2004 and $3,500 in fiscal
2003 to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant.
Such fees would include services provided to the registrant's
Board of Trustees with respect to the annual renewal of the
registrant's investment advisory agreement.
(e) (1) During its regularly scheduled periodic meetings, the
registrant's audit committee will pre-approve all audit,
audit-related, tax and other services to be provided by the
principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its
Chairman for any subsequent new engagements that arise between
regularly scheduled meeting dates provided that any fees such
pre-approved are presented to the audit committee at its next
regularly scheduled meeting.
Pre-approval of non-audit services is waived provided that: 1) the
aggregate amount of all such services provided constitutes no more
than five percent of the total amount of fees paid by the
registrant to it principal accountant during the fiscal year in
which services are provided 2) such services were not recognized
by the registrant at the time of engagement as non-audit services
and 3) such services are promptly brought to the attention of the
audit committee of the registrant and approved prior to the
completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed $5,525 in fiscal 2004 and $56,614 in
fiscal 2003 to the registrant and the registrant's investment
adviser or any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the
registrant related to non-audit fees. Those billings did not
include any prohibited non-audit services as defined by the
Securities Exchange Act of 1934.
(h) The registrant's audit committee of the board of trustees has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser, and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal account's independence. No such services
were rendered.
ITEM 5. NOT APPLICABLE
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable
ITEM 7. NOT APPLICABLE
ITEM 8. NOT APPLICABLE
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Board is responsible for approving nominees for election as
trustees. To assist in this task, the Board has designated the Audit Committee
as the nominating committee for the Board. It reviews and recommends nominees to
the Board. The Committee is comprised entirely of disinterested trustees as
defined in Section 2(a)(19) of the Investment Company Act of 1940.
The Audit Committee charter describes the responsibilities of the Committee in
nominating candidates for election as independent Trustees of the Registrant.
The Registrant's Board has adopted a written charter for the Committee. A
current copy of the Audit Committee charter is available to shareholders on the
OppenheimerFunds website at www.oppenheimerfunds.com.
Under the current policy, if the Board determines that a vacancy exists or is
likely to exist on the Board, the Audit Committee of the Board will consider
candidates for Board membership including recommended by Registrant
shareholders. The Audit Committee will consider nominees recommended by
independent Board members or recommended by any other Board members including
Board members affiliated with the Registrant's investment advisors. The
Committee may, upon Board approval, retain an executive search firm to assist in
screening potential candidates. Upon Board approval, the Audit Committee may
also use the services of legal, financial, or other external counsel that it
deems necessary or desirable in the screening process. Shareholders wishing to
submit a nominee for election to the Board may do so by mailing their submission
to the offices of OppenheimerFunds, Inc., 6803 South Tucson Way, Centennial, CO
80112, to the attention of the Board of Trustees of the named Registrant, c/o
the Secretary of the Registrant.
The Committee's process for identifying and evaluating nominees for trustees
includes a number of factors. In screening candidates for board membership,
whether the candidate is suggested by Board members, shareholders or others, the
Committee considers the candidate's professional experience, soundness of
judgment, integrity, ability to make independent, analytical inquiries,
collegiality, willingness and ability to devote the time required to perform
Board activities adequately, ability to represent the interests of all
shareholders of the Registrant, and diversity relative to the board's
composition. Candidates are expected to provide a mix of attributes, experience,
perspective and skills necessary to effectively advance the interests of
shareholders.
ITEM 10. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-2(c) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(c)) as of June 30, 2004,
registrant's principal executive officer and principal financial
officer found registrant's disclosure controls and procedures to
provide reasonable assurances that information required to be
disclosed by registrant in the reports that it files under the
Securities Exchange Act of 1934 (a) is accumulated and
communicated to registrant's management, including its principal
executive officer and principal financial officer, to allow timely
decisions regarding required disclosure, and (b) is recorded,
processed, summarized and reported, within the time periods
specified in the rules and forms adopted by the U.S. Securities
and Exchange Commission.
(b) There have been no significant changes in registrant's internal
controls over financial reporting that occurred during the
registrant's last fiscal half-year that has materially affected,
or is reasonably likely to materially affect, the registrant's
internal control over financial reporting.
ITEM 11. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)