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
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
Date of fiscal year end: JUNE
Date of reporting period: 06/30/2006
ITEM 1. REPORTS TO STOCKHOLDERS.
FUND EXPENSES
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FUND EXPENSES. As a shareholder of the Trust, you incur ongoing costs, including
management fees; service fees and other Trust expenses. These examples are
intended to help you understand your ongoing costs (in dollars) of investing in
the Trust and to compare these costs with the ongoing costs of investing in
other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended June 30, 2006.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line, together with the amount you invested, to estimate the expense that you
paid over the period. Simply divide your account value by $1,000.00 (for
example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply
the result by the number in the "actual" line under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Trust's actual expense ratio, and an assumed rate of
return of 5% per year before expenses, which is not the Trust's actual return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Trust and
other funds. To do so, compare this 5% hypothetical example for the class of
shares you hold with the 5% hypothetical examples that appear in the shareholder
reports of the other funds.
5 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
FUND EXPENSES
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BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(1/1/06) (6/30/06) JUNE 30, 2006
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Actual $1,000.00 $1,012.80 $ 3.85
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Hypothetical 1,000.00 1,020.98 3.86
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Trust's annualized expense ratio, multiplied by the
average account value over the period, multiplied by 181/365 (to reflect the
one-half year period). The annualized expense ratio based on the 6-month period
ended June 30, 2006 is as follows:
EXPENSE RATIO
- -------------
0.77%
The expense ratio reflects voluntary waivers or reimbursements of expenses by
the Trust's Manager that can be terminated at any time, without advance notice.
The "Financial Highlights" tables in the Trust's financial statements, included
in this report, also show the gross expense ratio, without such waivers or
reimbursements.
6 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
STATEMENT OF INVESTMENTS June 30, 2006
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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SHORT-TERM TAX-EXEMPT OBLIGATIONS--102.0%
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CALIFORNIA--89.8%
Alameda/Contra Costa, CA Schools FAU COP, Capital Improvements
Financing Project, Series A, 4% 1 $ 790,000 $ 790,000
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Auburn, CA USD COP, Refinance & Capital Improvement Project-2002, 4% 1 5,635,000 5,635,000
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CA Dept. of Water Resources Power Supply RB, Series B-1, 3.93% 1 3,000,000 3,000,000
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CA Dept. of Water Resources Power Supply RB, Series C-1, 3.93% 1 3,150,000 3,150,000
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CA Dept. of Water Resources Power Supply RB, Series C-2, 3.93% 1 4,000,000 4,000,000
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CA Dept. of Water Resources Power Supply RB, Series C-7, 3.97% 1 4,300,000 4,300,000
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CA Dept. of Water Resources Power Supply RRB, Central Valley Project,
MERLOTS Series 2003 B32, 4% 1,2 1,985,000 1,985,000
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CA Economic Recovery RB, Series 2004 C-16, 3.95% 1 4,400,000 4,400,000
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CA Economic Recovery RB, Series C-10, 3.92% 1 7,500,000 7,500,000
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CA EDFAU IDV RB, Applied Aerospace Structure Corp., Series 1998, 4.02% 1 1,200,000 1,200,000
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CA Golden State Tobacco Securitization Corp. RB, Reset Option Certificates
II-R Trust, Series 364, 4.03% 1,2 2,475,000 2,475,000
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CA GOUN, P-Floats, Series MT-162, 3.15% 1 2,000,000 2,000,000
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CA HFFAU RB, Adventist Health System, Series A, 3.95% 1 1,000,000 1,000,000
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CA I&E Development Bank RB, Salvation Army Western Territory, Series 2001,
3.40%, 11/13/06 9,000,000 9,000,000
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CA I&E Development Bank RB, Starter & Alternator Project, Series 199, 4.02% 1 3,900,000 3,900,000
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CA P-Floats, Series PZP-002, 4.07% 1 4,000,000 4,000,000
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CA P-Floats, Series PZP-005, 4.07% 1,2 2,000,000 2,000,000
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CA PCFAU RRB, Pacific Gas & Electric Co., 3.96% 1 700,000 700,000
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CA PCFAU RRB, Pacific Gas & Electric Co., Series F, 3.96% 1 800,000 800,000
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CA PCFAU SWD RB, CR&R, Inc. Project, Series A, 4.03% 1 3,920,000 3,920,000
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CA PCFAU SWD RB, Greenwaste Recovery Project, Series A, 4.05% 1 3,075,000 3,075,000
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CA PCFAU SWD RB, Marin San Services Project, Series A, 4.05% 1 1,500,000 1,500,000
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CA PCFAU SWD RB, Penas Disposal Inc. Project, Series A, 4.05% 1 1,345,000 1,345,000
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CA PCFAU SWD RB, Sunset Waste Paper, Inc. Project, 4.05% 1 3,170,000 3,170,000
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CA PCFAU SWD RB, Vanderham/J&D Wilson Dairy Project, Series 2004, 4.06% 1 2,500,000 2,500,000
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CA REF GOUN, Series 2005A, Subseries A-3, 3.93% 1 3,500,000 3,500,000
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CA SCDAU MH RB, Oakwood Apts. Project, Series 2006 L, 3.80%, 8/23/06 6,500,000 6,500,000
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CA SCDAU MH RB, P-Floats, Series PT-3099, 4.07% 1,2 4,975,000 4,975,000
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CA SCDAU RRB, Gemological Institute of America, 3.93% 1 2,100,000 2,100,000
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CA Statewide FAU TS RB, P-Floats, Series PA-1287, 4.03% 1,2 3,150,000 3,150,000
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Clovis, CA USD GOB, P-Floats, Series PZ-42, 4.04% 1 1,330,000 1,330,000
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El Rancho, CA USD GOUN, P-Floats, Series 807, 4% 1,2 6,205,000 6,205,000
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Fontana, CA PFAU TXAL RB, PTTR, Series 707, 4% 1,2 1,990,000 1,990,000
7 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
STATEMENT OF INVESTMENTS Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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CALIFORNIA Continued
Lancaster, CA RA MH RB, Floating Rate Trust Receipts, Series F12J,
Sunset Project, 4% 1,2 $ 9,475,000 $ 9,475,000
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Los Angeles, CA Municipal Improvement Corp. RB, Series A-1, 3.65%, 11/3/06 5,000,000 5,000,000
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Los Angeles, CA USD GOB, AAMC Series 1999-7, 3.98% 1,2 6,000,000 6,000,000
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Mt. Diablo, CA USD GOB, AAMC Series 2004-36, 4% 1,2 4,590,000 4,590,000
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Oakland, CA USD GOUN, Municipal Securities Trust Certificates, Series 9035,
Cl. A, 3.99% 1,2 4,000,000 4,000,000
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Orange Cnty., CA Apt. Development RB, Hidden Hills Project, Series C, 3.93% 1 5,700,000 5,700,000
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San Diego, CA Sewer RB, SGMSTR Series SG 14, 4% 1,2 3,955,000 3,955,000
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San Francisco, CA City & Cnty. PUC Clean Water RRB, MERLOTS
Series 2003 B20, 4% 1,2 6,975,000 6,975,000
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San Joaquin Delta Community College District GOUN, CA Municipal Securities
Trust Certificates, Cl. A, Series 3020, 4.08% 1,2 2,800,000 2,800,000
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Santa Clara Cnty., CA FAU Lease RB, Housing Authority Office Project,
Series 2004A, 3.95% 1 3,485,000 3,485,000
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Santa Rosa, CA Wastewater RB, P-Floats, Series PZ-43, 4.03% 1 2,085,000 2,085,000
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South Bay, CA Regional Public Communications Authority RB, Hawthorne
Project, Series B, 3.98% 1 2,405,000 2,405,000
--------------
163,565,000
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U.S. POSSESSIONS--12.2%
PR Commonwealth Credit Enhanced Custodial Receipts, 3.25%, 7/24/06 2 8,000,000 8,000,000
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PR Commonwealth GOUN, Floating Rate Trust Receipts, Series 2005-F2, 4.03% 1,2 5,250,000 5,250,000
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PR Commonwealth Infrastructure FAU RB, Tender Option Trust Certificates,
Series 2005 Z-6, 4.04% 1,2 2,905,000 2,905,000
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PR Commonwealth Public Finance Corp. RRB, Reset Option Certificates II-R
Trust, Series 415CE, 4.02% 1 2,700,000 2,700,000
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PR Commonwealth RB, Floating Rate Trust Receipts, Lehman Brothers, Inc. as
Trustor, Series F5, 3.98% 1,2 3,300,000 3,300,000
--------------
22,155,000
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TOTAL INVESTMENTS, AT VALUE (COST $185,720,000) 102.0% 185,720,000
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LIABILITIES IN EXCESS OF OTHER ASSETS (2.0) (3,655,283)
--------------------------------
NET ASSETS 100.0% $ 182,064,717
================================
8 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
FOOTNOTES TO STATEMENT OF INVESTMENTS
TO SIMPLIFY THE LISTINGS OF SECURITIES, ABBREVIATIONS ARE USED PER THE TABLE
BELOW:
AAMC ABN AMRO Munitops Certificates
COP Certificates of Participation
EDFAU Economic Development Finance Authority
FAU Finance Authority
GOB General Obligation Bonds
GOUN General Obligation Unlimited Nts.
HFFAU Health Facilities Finance Authority
I&E Infrastructure and Economic
IDV Industrial Development
MERLOTS Municipal Exempt Receipts Liquidity Option Tender
MH Multifamily Housing
P-Floats Puttable Floating Option Tax Exempt Receipts
PCFAU Pollution Control Finance Authority
PFAU Public Finance Authority
PTTR Puttable Tax Exempt Receipts
PUC Public Utilities Commission
RA Redevelopment Agency/Authority
RB Revenue Bonds
REF Refunding
RRB Revenue Refunding Bonds
SCDAU Statewide Communities Development Authority
SGMSTR Societe Generale, NY Branch Municipal Security Trust Receipts
SWD Solid Waste Disposal
TS Tobacco Settlement
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,
2006. 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 $80,030,000 or 43.96% of the Trust's net
assets as of June 30, 2006.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
STATEMENT OF ASSETS AND LIABILITIES June 30, 2006
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ASSETS
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Investments, at value (cost $185,720,000)--see accompanying statement of investments $ 185,720,000
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Cash 141,063
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Receivables and other assets:
Interest 1,311,487
Investments sold 400,000
Other 15,744
--------------
Total assets 187,588,294
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LIABILITIES
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Payables and other liabilities:
Investments purchased 5,196,059
Dividends 188,894
Distribution and service plan fees 95,514
Shareholder communications 9,296
Trustees' compensation 4,530
Transfer and shareholder servicing agent fees 3,567
Shares of beneficial interest redeemed 1,589
Other 24,128
--------------
Total liabilities 5,523,577
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NET ASSETS $ 182,064,717
==============
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COMPOSITION OF NET ASSETS
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Paid-in capital $ 182,030,732
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Accumulated net realized gain on investments 33,985
--------------
NET ASSETS--applicable to 182,012,009 shares of beneficial interest outstanding $ 182,064,717
==============
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NET ASSET VALUE, REDEMPTION PRICE PER SHARE AND OFFERING PRICE PER SHARE $ 1.00
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
STATEMENT OF OPERATIONS For the Year Ended June 30, 2006
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INVESTMENT INCOME
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Interest $ 5,569,656
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EXPENSES
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Management fees 924,555
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Service plan fees 369,661
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Transfer and shareholder servicing agent fees 41,925
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Shareholder communications 24,279
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Trustees' compensation 5,275
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Administration service fees 1,500
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Custodian fees and expenses 1,294
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Other 41,894
--------------
Total expenses 1,410,383
Less waivers and reimbursements of expenses (486)
--------------
Net expenses 1,409,897
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NET INVESTMENT INCOME 4,159,759
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NET REALIZED GAIN ON INVESTMENTS 42,239
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,201,998
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
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YEAR ENDED JUNE 30, 2006 2005
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OPERATIONS
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Net investment income $ 4,159,759 $ 1,651,449
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Net realized gain 42,239 4,790
-------------------------------
Net increase in net assets resulting from operations 4,201,998 1,656,239
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DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
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Dividends from net investment income (4,159,759) (1,651,449)
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BENEFICIAL INTEREST TRANSACTIONS
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Net increase in net assets resulting from beneficial interest transactions 16,160,365 25,965,482
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NET ASSETS
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Total increase 16,202,604 25,970,272
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Beginning of period 165,862,113 139,891,841
-------------------------------
End of period $ 182,064,717 $ 165,862,113
===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
FINANCIAL HIGHLIGHTS
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YEAR ENDED JUNE 30, 2006 2005 2004 2003 2002
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PER SHARE OPERATING DATA
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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 .02 1 .01 1 -- 2 .01 .01
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.02) (.01) -- 2 (.01) (.01)
Distributions from net realized gain -- -- -- -- -- 2
-------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.02) (.01) -- 2 (.01) (.01)
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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 3 2.27% 1.13% 0.21% 0.52% 0.89%
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RATIOS/SUPPLEMENTAL DATA
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Net assets, end of period (in thousands) $182,065 $165,862 $139,892 $152,856 $154,653
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $184,956 $148,312 $149,559 $156,348 $164,278
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 2.25% 1.11% 0.21% 0.52% 0.89%
Total expenses 0.76% 6 0.77% 5 0.78% 5,6 0.76% 5,6 0.77% 5,6
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Less than $0.005 per share.
3. 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.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
6. Voluntary reimbursement of expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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 individual investors as is consistent with the preservation of
capital. The Trust's investment advisor is Centennial Asset Management
Corporation (the Manager), a wholly owned 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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SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment
for securities that have been purchased by the Trust on a when-issued basis or
forward commitment can take place up to ten days or more after the trade date.
Normally the settlement date occurs within six months after the trade date;
however, the Trust may, from time to time, purchase securities whose settlement
date extends six months or more beyond trade date. During this period, such
securities do not earn interest, are subject to market fluctuation and may
increase or decrease in value prior to their delivery. The Trust maintains
internally designated assets with a market value equal to or greater than the
amount of its purchase commitments. The purchase of securities on a when-issued
basis or forward commitment may increase the volatility of the Trust's net asset
value to the extent the Trust executes such transactions while remaining
substantially fully invested. The Trust may also sell securities that it
purchased on a when-issued basis or forward commitment prior to settlement of
the original purchase. As of June 30, 2006, the Trust had sold $200,000 of
securities issued on a when-issued basis or forward commitment.
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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.
14 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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 UNDISTRIBUTED
NET INVESTMENT LONG-TERM ACCUMULATED LOSS
INCOME GAINS CARRYFORWARD 1,2
---------------------------------------------------------------
$220,881 $22,948 $--
1. During the fiscal year ended June 30, 2006, the Trust utilized $8,254 of
capital loss carryforward to offset capital gains realized in that fiscal year.
2. During the fiscal year ended June 30, 2005, the Trust utilized $4,790 of
capital loss carryforward to offset capital gains realized in that fiscal year.
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.
The tax character of distributions paid during the years ended June 30, 2006 and
June 30, 2005 was as follows:
YEAR ENDED YEAR ENDED
JUNE 30, 2006 JUNE 30, 2005
- -----------------------------------------------------------------
Distributions paid from:
Exempt-interest dividends $4,159,759 $1,651,449
- --------------------------------------------------------------------------------
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 purchases 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.
- --------------------------------------------------------------------------------
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 but may be paid at other times to maintain the net asset value per
share at $1.00.
15 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Trust on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Trust pays
interest to its custodian on such cash overdrafts, to the extent they are not
offset by positive cash balances maintained by the Trust, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if applicable, represents earnings on cash balances maintained by the Trust
during the period. At June 30, 2006, the Trust had $268 of such earnings on cash
balances available to offset future custodian fees or interest expenses incurred
during the next fiscal year.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Trust's organizational documents provide current and
former trustees and officers with a limited indemnification against liabilities
arising in connection with the performance of their duties to the Trust. In the
normal course of business, the Trust may also enter into contracts that provide
general indemnifications. The Trust's maximum exposure under these arrangements
is unknown as this would be dependent on future claims that may be made against
the Trust. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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, 2006 YEAR ENDED JUNE 30, 2005
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------
Sold 567,108,511 $ 567,108,511 435,633,846 $ 435,633,846
Dividends and/or
distributions reinvested 4,048,435 4,048,435 1,571,006 1,571,006
Redeemed (554,996,581) (554,996,581) (411,239,370) (411,239,370)
----------------------------------------------------------------
Net increase 16,160,365 $ 16,160,365 25,965,482 $ 25,965,482
================================================================
16 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
- --------------------------------------------------------------------------------
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
average annual rate as shown in the following table:
FEE SCHEDULE
------------------------------------------------
Up to $250 million of net assets 0.500%
Next $250 million of net assets 0.475
Next $250 million of net assets 0.450
Next $250 million of net assets 0.425
Over $1 billion of net assets 0.400
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. The Trust pays the Manager a fee of $1,500 per year
for preparing and filing the Trust's tax returns.
- --------------------------------------------------------------------------------
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,
2006, the Trust paid $41,933 to SSI for services to the Trust.
- --------------------------------------------------------------------------------
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 periodically, 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 periodically 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.
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily undertaken
to assume certain expenses of the Trust in any fiscal year that 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, 2006, the Manager waived $486 of its management fees. The
Manager reserves the right to amend or terminate either voluntary expense
assumption at any time.
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.
17 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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, 2006, 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 each of the five years in
the periods presented. 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.
The Trust is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audit includes consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Trust's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of June 30, 2006, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. 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, 2006, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the periods presented, in conformity with accounting
principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Denver, Colorado
August 8, 2006
18 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2007, if applicable, shareholders of record will receive information
regarding all taxable dividends and distributions paid to them by the Trust
during calendar year 2006. Regulations of the U.S. Treasury Department require
the Trust to report this information to the Internal Revenue Service.
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.
19 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Trust has adopted Portfolio Proxy Voting Policies and Procedures under which
the Trust votes proxies relating to securities ("portfolio proxies") held by the
Trust. A description of the Trust's Portfolio Proxy Voting Policies and
Procedures is available (i) without charge, upon request, by calling the Trust
toll-free at 1.800.525.7048, (ii) on the Trust's website at
www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In
addition, the Trust is required to file Form N-PX, with its complete proxy
voting record for the 12 months ended June 30, no later than August 31 of each
year. The Trust's voting record is available (i) without charge, upon request,
by calling the Trust toll-free at 1.800.525.7048, and (ii) in the Form N-PX
filing on the SEC's website at www.sec.gov.
The Trust files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Trust's Form N-Q filings are available on the SEC's website at
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
20 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS
TRUST, LENGTH OF SERVICE, AGE HELD; NUMBER OF PORTFOLIOS IN THE TRUST COMPLEX CURRENTLY OVERSEEN
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL,
TRUSTEES COLORADO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER
RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
WILLIAM L. ARMSTRONG, Chairman of the following private mortgage banking companies: Cherry Creek Mortgage
Chairman of the Board of Company (since 1991), Centennial State Mortgage Company (since 1994), and The El Paso
Trustees (since 2003), Mortgage Company (since 1993); Chairman of the following private companies: Ambassador
Trustee (since 2000) Media Corporation (since 1984) and Broadway Ventures (since 1984); Director of the
Age: 69 following: Helmerich & Payne, Inc. (oil and gas drilling/production company) (since
1992), Campus Crusade for Christ (since 1991) and The Lynde and Harry Bradley
Foundation, Inc. (non-profit organization) (since 2002); former Chairman of the
following: Transland Financial Services, Inc. (private mortgage banking company)
(1997-2003), Great Frontier Insurance (insurance agency) (1995-2000), Frontier Real
Estate, Inc. (residential real estate brokerage) (1994-2000) and Frontier Title (title
insurance agency) (1995-2000); former Director of the following: UNUMProvident
(insurance company) (1991-2004), Storage Technology Corporation (computer equipment
company) (1991-2003) and International Family Entertainment (television channel)
(1992-1997); U.S. Senator (January 1979-January 1991). Oversees 38 portfolios in the
OppenheimerFunds complex.
ROBERT G. AVIS, Director and President of A.G. Edwards Capital, Inc. (General Partner of private
Trustee (since 1990) equity funds) (until February 2001); Chairman, President and Chief Executive Officer
Age: 75 of A.G. Edwards Capital, Inc. (until March 2000); Director of A.G. Edwards & Sons,
Inc. (brokerage company) (until 2000) and A.G. Edwards Trust Company (investment
adviser) (until 2000); Vice Chairman and Director of A.G. Edwards, Inc. (until March
1999); Vice Chairman of A.G. Edwards & Sons, Inc. (until March 1999); Chairman of A.G.
Edwards Trust Company (until March 1999) and A.G.E. Asset Management (investment
adviser) (until March 1999). Oversees 38 portfolios in the OppenheimerFunds complex.
GEORGE C. BOWEN, Assistant Secretary and Director of the Manager (December 1991-April 1999); President,
Trustee (since 1998) Treasurer and Director of Centennial Capital Corporation (June 1989-April 1999); Chief
Age: 69 Executive Officer and Director of MultiSource Services, Inc. (March 1996-April 1999);
Mr. Bowen held several positions with OppenheimerFunds, Inc. and with subsidiary or
affiliated companies of OppenheimerFunds, Inc. (September 1987-April 1999). Oversees
38 portfolios in the OppenheimerFunds complex.
EDWARD L. CAMERON, Member of The Life Guard of Mount Vernon (George Washington historical site) (since
Trustee (since 2000) June 2000); Director of Genetic ID, Inc. (biotech company) (March 2001-May 2002);
Age: 67 Partner at PricewaterhouseCoopers LLP (accounting firm) (July 1974-June 1999);
Chairman of Price Waterhouse LLP Global Investment Management Industry Services Group
(accounting firm) (July 1994-June 1998). Oversees 38 portfolios in the
OppenheimerFunds complex.
JON S. FOSSEL, Director of UNUMProvident (insurance company) (since June 2002); Director of
Trustee (since 1990) Northwestern Energy Corp. (public utility corporation) (since November 2004); Director
Age: 64 of P.R. Pharmaceuticals (October 1999-October 2003); Director of Rocky Mountain Elk
Foundation (non-profit organization) (February 1998 February 2003 and since February
2005); Chairman and Director (until October 1996) and President and Chief Executive
Officer (until October 1995) of OppenheimerFunds, Inc.; President, Chief Executive
Officer and Director of the following: Oppenheimer Acquisition Corp. ("OAC") (parent
holding company
21 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
JON S. FOSSEL, of OppenheimerFunds, Inc.), Shareholders Services, Inc. and Shareholder Financial
Continued Services, Inc. (until October 1995). Oversees 38 portfolios in the OppenheimerFunds
complex.
SAM FREEDMAN, Director of Colorado Uplift (charitable organization) (since September 1984). Mr.
Trustee (since 1996) Freedman held several positions with OppenheimerFunds, Inc. and with subsidiary or
Age: 65 affiliated companies of OppenheimerFunds, Inc. (until October 1994). Oversees 38
portfolios in the OppenheimerFunds complex.
BEVERLY L. HAMILTON, Trustee of Monterey Institute for International Studies (educational organization)
Trustee (since 2002) (since February 2000); Board Member of Middlebury College (educational organization)
Age: 59 (since December 2005); Director of The California Endowment (philanthropic
organization) (since April 2002); Director (February 2002-2005) and Chairman of
Trustees (since 2006) of the Community Hospital of Monterey Peninsula; Director
(October 1991-2005) and Vice Chairman (since 2006) of American Funds' Emerging Markets
Growth Fund, Inc. (mutual fund); President of ARCO Investment Management Company
(February 1991-April 2000); Member of the investment committees of The Rockefeller
Foundation (since 2001) and The University of Michigan (since 2000); Advisor at Credit
Suisse First Boston's Sprout venture capital unit (venture capital fund) (1994-January
2005); Trustee of MassMutual Institutional Funds (investment company) (1996-June
2004); Trustee of MML Series Investment Fund (investment company) (April 1989-June
2004); Member of the investment committee of Hartford Hospital (2000-2003); and
Advisor to Unilever (Holland) pension fund (2000-2003). Oversees 38 portfolios in the
OppenheimerFunds complex.
ROBERT J. MALONE, Director of Jones International University (educational organization) (since
Trustee (since 2002) August 2005); Chairman, Chief Executive Officer and Director of Steele Street State
Age: 61 Bank (commercial banking) (since August 2003); Director of Colorado UpLIFT (charitable
organization) (since 1986); Trustee of the Gallagher Family Foundation (non-profit
organization) (since 2000); Former Chairman of U.S. Bank-Colorado (subsidiary of U.S.
Bancorp and formerly Colorado National Bank) (July 1996-April 1999); Director of
Commercial Assets, Inc. (real estate investment trust) (1993-2000); Director of Jones
Knowledge, Inc. (2001-July 2004); and Director of U.S. Exploration, Inc. (oil and gas
exploration) (1997- February 2004). Oversees 38 portfolios in the OppenheimerFunds
complex.
F. WILLIAM MARSHALL, JR., Trustee of MassMutual Select Funds (formerly MassMutual Institutional Funds)
Trustee (since 2000) (investment company) (since 1996) and MML Series Investment Fund (investment company)
Age: 64 (since 1996); Trustee (since 1987) and Chairman (1994-2005) of the Investment
Committee of the Worcester Polytech Institute (private university); President and
Treasurer of the SIS Funds (private charitable fund) (since January 1999); Chairman of
SIS & Family Bank, F.S.B. (formerly SIS Bank) (commercial bank) (January 1999-July
1999); and Executive Vice President of Peoples Heritage Financial Group, Inc.
(commercial bank) (January 1999-July 1999). Oversees 40 portfolios in the
OppenheimerFunds complex.
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INTERESTED TRUSTEE THE ADDRESS OF MR. GRABISH IS 6803 S. TUCSON WAY, CENTENNIAL, COLORADO 80112-3924. MR.
GRABISH SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR
REMOVAL. MR. GRABISH IS AN INTERESTED TRUSTEE DUE TO HIS POSITIONS WITH A.G. EDWARDS &
SONS, INC. WHICH SELLS SHARES OF THE TRUST.
RICHARD F. GRABISH, Senior Vice President and Assistant Director of Sales and Marketing (since March 1997),
Trustee (since 2001) Director (since March 1987) and Manager of Private Client Services (June 1985-June
Age: 57 2005) of A.G. Edwards & Sons, Inc. (broker/dealer and investment firm); Chairman and
Chief Executive Officer of A.G. Edwards Trust Company, FSB
22 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
RICHARD F. GRABISH, (since March 2001); President and Vice Chairman of A.G. Edwards Trust Company, FSB
Continued (investment adviser) (April 1987-March 2001); President of A.G. Edwards Trust Company,
FSB (investment adviser) (since June 2005). Oversees 5 portfolios in the
OppenheimerFunds complex.
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INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH
AND OFFICER FLOOR, NEW YORK, NEW YORK 10281-1008. MR. MURPHY SERVES AS A TRUSTEE FOR AN INDEFINITE
TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL AND AS AN OFFICER FOR AN
INDEFINITE TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS
AN INTERESTED TRUSTEE DUE TO HIS POSITIONS WITH OPPENHEIMERFUNDS, INC. AND ITS
AFFILIATES.
JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June 2001) and President (since
Trustee, President and September 2000) of OppenheimerFunds, Inc.; President and director or trustee of other
Principal Executive Officer Oppenheimer funds; President and Director of OAC and of Oppenheimer Partnership
(since 2001) Holdings, Inc. (holding company subsidiary of OppenheimerFunds, Inc.) (since July
Age: 57 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of OppenheimerFunds,
Inc.) (since November 2001); Chairman and Director of Shareholder Services, Inc. and
of Shareholder Financial Services, Inc. (transfer agent subsidiaries of
OppenheimerFunds, Inc.) (since July 2001); President and Director of OppenheimerFunds
Legacy Program (charitable trust program established by OppenheimerFunds, Inc.) (since
July 2001); Director of the following investment advisory subsidiaries of
OppenheimerFunds, Inc.: the Manager, OFI Institutional Asset Management, Inc., 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 2001) and Director (since July 2001) of
Oppenheimer Real Asset Management, Inc.; Executive Vice President of Massachusetts
Mutual Life Insurance Company (OAC's parent company) (since February 1997); Director
of DLB Acquisition Corporation (holding company parent of Babson Capital Management
LLC) (since June 1995); Member of the Investment Company Institute's Board of
Governors (since October 3, 2003); Chief Operating Officer of OppenheimerFunds, Inc.
(September 2000-June 2001); President and Trustee of MML Series Investment Fund and
MassMutual Select Funds (open-end investment companies) (November 1999-November 2001);
Director of C.M. Life Insurance Company (September 1999-August 2000); President, Chief
Executive Officer and Director of MML Bay State Life Insurance Company (September
1999-August 2000); Director of Emerald Isle Bancorp and Hibernia Savings Bank
(wholly-owned subsidiary of Emerald Isle Bancorp) (June 1989-June 1998). Oversees 86
portfolios in the OppenheimerFunds complex.
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OTHER OFFICERS OF THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MR. ZACK, TWO
THE TRUST WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NEW YORK 10281-1008, FOR MESSRS.
VANDEHEY AND WIXTED, 6803 S. TUCSON WAY, CENTENNIAL, COLORADO 80112-3924. EACH OFFICER
SERVES FOR AN INDEFINITE TERM OR UNTIL HIS OR HER RESIGNATION, RETIREMENT DEATH OR
REMOVAL.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager and
Vice President and OppenheimerFunds, Inc. (since March 2004); Vice President of the Manager,
Chief Compliance Officer OppenheimerFunds Distributor, Inc., and Shareholder Services, Inc. (since June 1983);
(since 2004) Vice President and Director of Internal Audit of OppenheimerFunds, Inc. (1997-February
Age: 55 2004). An officer of 86 portfolios in the Oppenheimer funds complex.
23 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
TRUSTEES AND OFFICERS Unaudited / Continued
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BRIAN W. WIXTED, Senior Vice President and Treasurer of OppenheimerFunds, Inc. (since March
Treasurer and Principal 1999); Treasurer of the following: Shareholder Services, Inc., HarbourView Asset
Financial and Accounting Management Corporation, Shareholder Financial Services, Inc., Oppenheimer
Officer (since 1999) Real Asset Management Corporation, and Oppenheimer Partnership Holdings,
Age: 46 Inc. (since March 1999), OFI Private Investments, Inc. (since March 2000),
OppenheimerFunds International Ltd. and OppenheimerFunds plc (since May 2000), OFI
Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds
Legacy Program (since June 2003); Treasurer and Chief Financial Officer of OFI Trust
Company (trust company subsidiary of OppenheimerFunds, Inc.) (since May 2000);
Assistant Treasurer of OAC (since March 1999); and Assistant Treasurer of the Manager
and Distributor (March 1999-October 2003) and OppenheimerFunds Legacy Program (April
2000-June 2003); Principal and Chief Operating Officer of Bankers Trust Company-Mutual
Fund Services Division (March 1995-March 1999). An officer of 86 portfolios in the
OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since March 2002)
Vice President and Secretary of OppenheimerFunds, Inc.; General Counsel of the Manager and Distributor (since
(since 2001) December 2001); General Counsel and Director of OppenheimerFunds Distributor, Inc.
Age: 58 (since December 2001); Senior Vice President, General Counsel and Director of the
Transfer Agent, Shareholder Financial Services, Inc., OFI Private Investments, Inc.
and OFI Trust Company (since November 2001); Senior Vice President and General Counsel
of HarbourView Asset Management Corporation (since December 2001); Secretary and
General Counsel of OAC (since November 2001); Assistant Secretary (since September
1997) and Director (since November 2001) of OppenheimerFunds International Ltd. and
OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings,
Inc. (since December 2002); Director of Oppenheimer Real Asset Management, Inc. (since
November 2001); Vice President of OppenheimerFunds Legacy Program (since June 2003);
Senior Vice President and General Counsel of OFI Institutional Asset Management, Inc.
(since November 2001); Director of OppenheimerFunds (Asia) Limited (since December
2003); Senior Vice President (May 1985-December 2003), Acting General Counsel
(November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of
OppenheimerFunds, Inc.; Assistant Secretary of the following: the Transfer Agent (May
1985-November 2001), Shareholder Financial Services, Inc. (November 1989-November
2001), and OppenheimerFunds International Ltd. (September 1997-November 2001). An
officer of 86 portfolios in the OppenheimerFunds complex.
THE TRUST'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE TRUST'S TRUSTEES AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE UPON
REQUEST.
24 | 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, are audit committee financial experts and that
Messrs. Cameron and Bowen are "independent" for purposes of this Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $11,000 in fiscal 2006 and $10,250 in fiscal 2005.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees for 2006 or 2005.
The principal accountant for the audit of the registrant's annual financial
statements billed $21,500 for 2006 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 services include: Merger related consents and financial statement reviews.
(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 no such fees 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.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees in the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed $880 in fiscal 2006 and no such fees in fiscal 2005to 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 the cost to the principal accountant of attending audit
committee meetings and consultations regarding the registrant's retirement plan
with respect to its trustees.
(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.
Under applicable laws, pre-approval of non-audit services maybe 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 $22,380 in fiscal 2006 and no such fees in
fiscal 2005 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 accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Governance Committee (the "Committee") will evaluate potential
Board candidates to assess their qualifications. The Committee shall have
the authority, upon approval of the Board, to retain an executive search
firm to assist in this effort. The Committee may consider recommendations
by business and personal contacts of current Board members and by
executive search firms which the Committee may engage from time to time
and may also consider shareholder recommendations. The Committee may
consider the advice and recommendation of the Funds' investment manager
and its affiliates in making the selection.
2. The Committee shall screen candidates for Board membership. The Committee
has not established specific qualifications that it believes must be met
by a trustee nominee. In evaluating trustee nominees, the Committee
considers, among other things, an individual's background, skills, and
experience; whether the individual is an "interested person" as defined in
the Investment Company Act of 1940; and whether the individual would be
deemed an "audit committee financial expert" within the meaning of
applicable SEC rules. The Committee also considers whether the
individual's background, skills, and experience will complement the
background, skills, and experience of other nominees and will contribute
to the Board. There are no differences in the manner in which the
Committee evaluates nominees for trustees based on whether the nominee is
recommended by a shareholder.
3. The Committee may consider nominations from shareholders for the Board at
such times as the Committee meets to consider new nominees for the Board.
The Committee shall have the sole discretion to determine the candidates
to present to the Board and, in such cases where required, to
shareholders. Recommendations for trustee nominees should, at a minimum,
be accompanied by the following:
o the name, address, and business, educational, and/or other pertinent
background of the person being recommended;
o a statement concerning whether the person is an "interested person"
as defined in the Investment Company Act of 1940;
o any other information that the Funds would be required to include in
a proxy statement concerning the person if he or she was nominated;
and
o the name and address of the person submitting the recommendation
and, if that person is a shareholder, the period for which that
person held Fund shares.
The recommendation also can include any additional information which the
person submitting it believes would assist the Committee in evaluating the
recommendation.
4. Shareholders should note that a person who owns securities issued by
Massachusetts Mutual Life Insurance Company (the parent company of the
Funds' investment adviser) would be deemed an "interested person" under
the Investment Company Act of 1940. In addition, certain other
relationships with Massachusetts Mutual Life Insurance Company or its
subsidiaries, with registered broker-dealers, or with the Funds' outside
legal counsel may cause a person to be deemed an "interested person."
5. Before the Committee decides to nominate an individual as a trustee,
Committee members and other directors customarily interview the individual
in person. In addition, the individual customarily is asked to complete a
detailed questionnaire which is designed to elicit information which must
be disclosed under SEC and stock exchange rules and to determine whether
the individual is subject to any statutory disqualification from serving
as a trustee of a registered investment company.
ITEM 11. CONTROLS AND PROCEDURES.
Based on their evaluation of the registrant's disclosure controls and procedures
(as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR
270.30a-3(c)) as of 06/30/2006, the registrant's principal executive officer and
principal financial officer found the registrant's disclosure controls and
procedures to provide reasonable assurances that information required to be
disclosed by the 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.
There have been no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's second fiscal quarter of the
period covered by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a) (1) Exhibit attached hereto.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Centennial California Tax Exempt Trust
By: /s/ John V. Murphy
----------------------------
John V. Murphy
Principal Executive Officer
Date: 08/08/2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John V. Murphy
----------------------------
John V. Murphy
Principal Executive Officer
Date: 08/08/2006
By: /s/ Brian W. Wixted
----------------------------
Brian W. Wixted
Principal Financial Officer
Date: 08/08/2006