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 811-5584
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CENTENNIAL NEW YORK TAX EXEMPT TRUST
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(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
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(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: DECEMBER 31, 2006
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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
December 31, 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 NEW YORK TAX EXEMPT TRUST
FUND EXPENSES
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BEGINNING ENDING EXPENSES PAID
ACCOUNT ACCOUNT DURING 6-MONTHS
VALUE VALUE ENDED
(7/1/06) (12/31/06) DECEMBER 31, 2006
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Actual $1,000.00 $1,014.30 $4.07
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Hypothetical 1,000.00 1,021.17 4.08
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 184/365 (to reflect the
one-half year period). The annualized expense ratio based on the 6-month period
ended December 31, 2006 is as follows:
EXPENSE RATIO
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0.80%
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.
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6 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
STATEMENT OF INVESTMENTS December 31, 2006 / Unaudited
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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SHORT-TERM TAX-EXEMPT OBLIGATIONS--101.7%
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NEW YORK--99.1%
Auburn, NY IDAU RB, Goulds Pumps, Inc. Project, Series 1989, 4.20% 1 $ 875,000 $ 875,000
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North Salem, NY REF GOUN, Central SDI, Series 1999, 4.75%, 6/15/07 100,000 100,532
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NY MTAU RRB, ETET Series 20022305, Cl. A, 3.96% 1,2 2,000,000 2,000,000
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NY TS Financing Corp. RB, P-Floats, Series PT-972, 3.70%, 6/1/07 3,4 1,000,000 1,000,000
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NY TSASC, Inc. RRB, P-Floats, Series PA-1355, 3.97% 1,2 2,280,000 2,280,000
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NY TSASC, Inc. RRB, P-Floats, Series PA-1389, 3.97% 1,2 2,500,000 2,500,000
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NY TWY Personal Income Tax RRB, MSTFC Series 2005-1194, 3.94% 1,2 690,000 690,000
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NY Upstate Telecommunications Corp. RB, Series 2005, 3.96% 1 2,700,000 2,700,000
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NYC GOUN, P-Floats, Series PT-2615, 3.96% 1,2 1,340,000 1,340,000
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NYC GOUN, P-Floats, Series PT-2848, 3.63% 1,2 1,785,000 1,785,000
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NYC IDA Civic Facilities RB, Casa Project, 3.98% 1 2,400,000 2,400,000
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NYC IDA Civic Facilities RB, French Institute Alliance Project,
Series 2005, 3.98% 1 2,250,000 2,250,000
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NYC IDA Civic Facilities RB, Sephardic Community Youth Center Project,
Series 2006, 3.96% 1 2,000,000 2,000,000
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NYC IDA RB, Super Tek Products, Inc. Project, Series 2004, 3.98% 1 1,800,000 1,800,000
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NYC Municipal FAU WSS RRB, AUSTIN Trust Certificates
Series BOA 115, 3.85% 1,2 4,400,000 4,400,000
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NYC TFA BANs, 4.25%, 6/29/07 500,000 501,807
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NYC TFA Future Tax Secured RB, Subseries 2003-2F, 3.98% 1 2,690,000 2,690,000
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NYC TFA Future Tax Secured RRB, Subseries 2003-3E, 3.98% 1 1,005,000 1,005,000
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NYS DA RB, Personnel Income Tax Education, Series 2003 A, 4%, 3/15/07 700,000 700,599
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NYS DA RRB, P-Floats, Series PT-3639, 3.54%, 1/1/07 2,4 1,000,000 1,000,000
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NYS GOUN, 6%, 3/1/07 225,000 225,809
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NYS GOUN, Series A, 3.60%, 1/16/07 4 2,000,000 2,000,000
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NYS TWY RB, Second General Highway & Bridge Trust Fund, PTTR,
Series 1413, 3.95% 1,2 2,800,000 2,800,000
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Oneida Cnty., NY IDA RB, Mohawk Valley Network, Series A, 5%, 2/1/07 445,000 445,522
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Ontario Cnty., NY IDA RB, Seneca Foods Corp. Project, Series 2002, 4.16% 1 5,185,000 5,185,000
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PAUNYNJ RB, Equipment Nts., Series 2006-1, 4.03% 1 1,745,000 1,745,000
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PAUNYNJ RB, Equipment Nts., Series 2006-2, 3.95% 1 1,255,000 1,255,000
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PAUNYNJ RRB, ETET Series 20060134, Cl. A, 3.95% 1,2 2,000,000 2,000,000
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PAUNYNJ RRB, P-Floats, Series MT-388, 3.96% 1,2 2,500,000 2,500,000
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Southeast NY IDA RB, Unilock NY, Inc. Project, Series 1997, 4.20% 1 1,400,000 1,400,000
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Suffolk Cnty., NY REF GOUN, Series 2004B, 5%, 5/1/07 300,000 301,396
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Syracuse, NY RANs, Series 2006 C, 4.25%, 6/29/07 2,000,000 2,007,084
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Wayne Cnty., NY IDA RB, Seneca Foods Corp. Project, Series 1992, 4.16% 1 5,060,000 5,060,000
7 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
STATEMENT OF INVESTMENTS Unaudited / Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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NEW YORK Continued
Westchester Cnty., NY IDA RB, P-Floats, Series MT-257, 3.98% 1,2 $ 1,200,000 $ 1,200,000
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62,142,749
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U.S. POSSESSIONS--2.6%
PR CMWLTH GOUN, Trust Receipts, Series 2005-F2, 4.03% 1,2 1,250,000 1,250,000
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PR Public Buildings Education HFAU RRB, Series M, 5.50%, 7/1/07 400,000 404,112
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1,654,112
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TOTAL INVESTMENTS, AT VALUE (COST $63,796,861) 101.7% 63,796,861
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LIABILITIES IN EXCESS OF OTHER ASSETS (1.7) (1,073,331)
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NET ASSETS 100.0% $62,723,530
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FOOTNOTES TO STATEMENT OF INVESTMENTS
To simplify the listings of securities, abbreviations are used per the table
below:
BANs Bond Anticipation Nts.
CMWLTH Commonwealth
DA Dormitory Authority
ETET Eagle Tax-Exempt Trust
FAU Finance Authority
GOUN General Obligation Unlimited Nts.
HFAU Health Facilities Authority
IDA Industrial Development Agency
IDAU Industrial Development Authority
MSTFC Morgan Stanley & Co., Inc. Trust Floater
Certificates
MTAU Metropolitan Transportation Authority
NYC New York City
NYS New York State
P-Floats Puttable Floating Option Tax Exempt
Receipts
PAUNYNJ Port Authority of New York & New Jersey
PTTR Puttable Tax Exempt Receipts
RANs Revenue Anticipation Nts.
RB Revenue Bonds
REF Refunding
RRB Revenue Refunding Bonds
SDI School District
TFA Transitional Finance Authority
TS Tobacco Settlement
TWY Thruway/Tollway Authority/Agency
WSS Water & Sewer System
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 December
31, 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 $25,745,000 or 41.05% of the Trust's net
assets as of December 31, 2006.
3. Illiquid security. The aggregate value of illiquid securities as of December
31, 2006 was $1,000,000, which represents 1.59% of the Trust's net assets. See
Note 4 of accompanying Notes.
4. Put obligation redeemable at full principal value on the date reported.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
STATEMENT OF ASSETS AND LIABILITIES Unaudited
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December 31, 2006
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ASSETS
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Investments, at value (cost $63,796,861)--see accompanying statement of investments $ 63,796,861
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Cash 113,691
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Receivables and other assets:
Investments sold 1,000,000
Interest 350,078
Shares of beneficial interest sold 12,594
Other 7,805
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Total assets 65,281,029
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LIABILITIES
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Payables and other liabilities:
Investments purchased 2,501,356
Service plan fees 31,096
Shareholder communications 8,772
Trustees' compensation 4,658
Transfer and shareholder servicing agent fees 2,858
Dividends 14
Shares of beneficial interest redeemed 6
Other 8,739
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Total liabilities 2,557,499
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NET ASSETS $ 62,723,530
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COMPOSITION OF NET ASSETS
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Paid-in capital $ 62,732,916
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Accumulated net realized loss on investments (9,386)
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NET ASSETS--applicable to 62,646,114 shares of beneficial interest outstanding $ 62,723,530
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NET ASSET VALUE, REDEMPTION PRICE PER SHARE AND OFFERING PRICE PER SHARE $ 1.00
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
STATEMENT OF OPERATIONS Unaudited
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For the Six Months Ended December 31, 2006
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INVESTMENT INCOME
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Interest $ 1,187,299
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EXPENSES
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Management fees 163,140
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Service plan fees 64,469
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Transfer and shareholder servicing agent fees 16,135
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Shareholder communications 13,073
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Legal, auditing and other professional fees 8,053
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Trustees' compensation 3,183
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Administration service fees 750
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Custodian fees and expenses 120
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Other 7,490
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Total expenses 276,413
Less reduction to custodian expenses (120)
Less waivers and reimbursements of expenses (15,176)
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Net expenses 261,117
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NET INVESTMENT INCOME 926,182
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NET REALIZED GAIN ON INVESTMENTS 512
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 926,694
============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
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SIX MONTHS YEAR
ENDED ENDED
DECEMBER 31, 2006 JUNE 30,
(UNAUDITED) 2006
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OPERATIONS
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Net investment income $ 926,182 $ 1,337,729
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Net realized gain 512 102
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Net increase in net assets resulting from operations 926,694 1,337,831
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DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
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Dividends from net investment income (926,182) (1,337,729)
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BENEFICIAL INTEREST TRANSACTIONS
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Net increase (decrease) in net assets resulting from
beneficial interest transactions 4,264,823 (547,805)
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NET ASSETS
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Total increase (decrease) 4,265,335 (547,703)
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Beginning of period 58,458,195 59,005,898
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End of period $ 62,723,530 $ 58,458,195
==============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
FINANCIAL HIGHLIGHTS
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SIX MONTHS YEAR
ENDED ENDED
DECEMBER 31, 2006 JUNE 30,
(UNAUDITED) 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 $ 1.00
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Income from investment operations--
net investment income and net realized gain .02 1 .02 1 .01 1 -- 2 .01 .01
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Dividends and/or distributions to shareholders:
Dividends from net investment income (.02) (.02) (.01) -- 2 (.01) (.01)
Distributions from net realized gain -- -- -- -- -- -- 2
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Total dividends and/or
distributions to shareholders (.02) (.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 $ 1.00
==========================================================================
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TOTAL RETURN 3 1.43% 2.29% 1.08% 0.20% 0.50% 0.96%
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RATIOS/SUPPLEMENTAL DATA
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Net assets, end of period (in thousands) $62,724 $58,458 $59,006 $58,141 $67,599 $68,618
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Average net assets (in thousands) $64,747 $59,797 $58,050 $65,140 $72,117 $76,925
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Ratios to average net assets: 4
Net investment income 2.84% 2.24% 1.06% 0.19% 0.50% 0.96%
Total expenses 0.85% 0.85% 0.83% 0.86% 0.82% 0.84%
Expenses after payments and waivers and
reduction to custodian expenses 0.80% 0.80% 0.78% 0.80% 0.80% 0.80%
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 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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
NOTES TO FINANCIAL STATEMENTS Unaudited
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1. SIGNIFICANT ACCOUNTING POLICIES
Centennial New York 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 income exempt from federal, New York State and New York City
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. As permitted under Rule 2a-7 of the Investment Company Act of 1940,
portfolio securities are valued on the basis of amortized cost, which
approximates market value. If amortized cost is determined not to approximate
market value, the fair value of the portfolio securities will be determined
under procedures approved by the Trust's Board of Trustees.
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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, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
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.
As of December 31, 2006, the Trust had available for federal income tax
purposes an estimated capital loss carryforward of $9,386 expiring by 2014. This
estimated capital loss carryforward represents carryforward as of the end of the
last fiscal year, increased for losses deferred under tax accounting rules to
the current fiscal year and is increased or decreased by capital losses or gains
realized in the first six months of the current fiscal year. During the six
months ended December 31, 2006, it is estimated that the Trust will utilize $512
of capital loss carryforward to offset realized capital gains. During the year
ended June 30, 2006, the Trust did not utilize any capital loss carryforward to
offset realized capital gains realized in that fiscal year.
13 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
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1. SIGNIFICANT ACCOUNTING POLICIES Continued
As of June 30, 2006, the Trust had available for federal income tax purposes an
unused capital loss carryforward as follows:
EXPIRING
-----------------------------
2014 $9,898
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TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral 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.
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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 but may be paid at other times to maintain the net asset value per
share at $1.00.
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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. Such interest expense and other custodian fees may be paid
with these earnings.
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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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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
14 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
on future claims that may be made against the Trust. The risk of material loss
from such claims is considered remote.
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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.
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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:
SIX MONTHS ENDED DECEMBER 31, 2006 YEAR ENDED JUNE 30, 2006
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------
Sold 102,109,481 $ 102,109,481 191,779,929 $ 191,779,929
Dividends and/or
distributions reinvested 889,069 889,069 1,306,547 1,306,846
Redeemed (98,733,727) (98,733,727) (193,634,580) (193,634,580)
--------------------------------------------------------------------
Net increase (decrease) 4,264,823 $ 4,264,823 (548,104) $ (547,805)
====================================================================
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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 average net assets as shown in the following table:
FEE SCHEDULE
-----------------------------------------
Up to $250 million 0.500%
Next $250 million 0.475
Next $250 million 0.450
Next $250 million 0.425
Over $1 billion 0.400
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ADMINISTRATION SERVICE FEES. 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 six months ended
December 31, 2006, the Trust paid $15,607 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 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
15 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
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3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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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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. During the six months ended December 31,
2006, the Manager waived $15,176 of its management fees. 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.
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.
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4. ILLIQUID SECURITIES
As of December 31, 2006, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Trust will not invest more than 10% of its net assets (determined at the time of
purchase and reviewed periodically) in illiquid securities. Securities that are
illiquid are marked with the applicable footnote on the Statement of
Investments.
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5. RECENT ACCOUNTING PRONOUNCEMENTS
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES.
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions
taken in the course of preparing the Trust's tax returns to determine whether it
is "more-likely-than-not" that tax positions taken in the Trust's tax return
will be ultimately sustained. A tax liability and expense must be recorded in
respect of any tax position that, in OFI's judgment, will not be fully realized.
FIN 48 is effective for fiscal years beginning after December 15, 2006. As of
December 31, 2006, OFI has evaluated the implications of FIN 48 and does not
currently anticipate a material impact to the Trust's financial statements. OFI
will continue to monitor the Trust's tax positions prospectively for potential
future impacts.
In September 2006, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This standard establishes a
single authoritative definition of fair value, sets out a framework for
measuring fair value and expands disclosures about fair value measurements. SFAS
No. 157 applies to fair value measurements already required or permitted by
existing standards. SFAS No. 157 is effective for financial
16 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of December 31, 2006, OFI does not
believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
17 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
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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 30th, no later than August 31st 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.
18 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
BOARD APPROVAL OF THE TRUST'S INVESTMENT
ADVISORY AGREEMENT Unaudited
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Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Trust's
investment advisory agreement (the "Agreement"). The Investment Company Act of
1940, as amended, requires that the Board request and evaluate, and that the
Manager provide, such information as may be reasonably necessary to evaluate the
terms of the Agreement. The Board employs an independent consultant to prepare a
report that provides information, including comparative information that the
Board requests for that purpose. In addition, the Board receives information
throughout the year regarding Trust services, fees, expenses and performance.
The Manager and the independent consultant provided information to the
Board on the following factors: (i) the nature, quality and extent of the
Manager's services, (ii) the investment performance of the Trust and the
Manager, (iii) the fees and expenses of the Trust, including comparative expense
information, (iv) the profitability of the Manager and its affiliates, including
an analysis of the cost of providing services, (v) whether economies of scale
are realized as the Trust grows and whether fee levels reflect these economies
of scale for Trust investors and (vi) other benefits to the Manager from its
relationship with the Trust. Outlined below is a summary of the principal
information considered by the Board as well as the Board's conclusions.
The Board was aware that there are alternatives to retaining the Manager.
NATURE, QUALITY AND EXTENT OF SERVICES. The Board considered information
about the nature and extent of the services provided to the Trust and
information regarding the Manager's key personnel who provide such services. The
Manager's duties include providing the Trust with the services of the portfolio
manager and the Manager's investment team, who provide research, analysis and
other advisory services in regard to the Trust's investments; securities trading
services; oversight of third party service providers; monitoring compliance with
applicable Trust policies and procedures and adherence to the Trust's investment
restrictions. The Manager is responsible for providing certain administrative
services to the Trust as well. Those services include providing and supervising
all administrative and clerical personnel who are necessary in order to provide
effective corporate administration for the Trust; compiling and maintaining
records with respect to the Trust's operations; preparing and filing reports
required by the Securities and Exchange Commission; preparing periodic reports
regarding the operations of the Trust for its shareholders; preparing proxy
materials for shareholder meetings; and preparing the registration statements
required by Federal and state securities laws for the sale of the Trust's
shares. The Manager also provides the Trust with office space, facilities and
equipment.
19 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
BOARD APPROVAL OF THE TRUST'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
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The Board also considered the quality of the services provided and the
quality of the Manager's resources that are available to the Trust. The Board
took account of the fact that the Manager has had over twenty-five years of
experience as an investment adviser and that its assets under management rank it
among the top mutual fund managers in the United States. The Board evaluated the
Manager's administrative, accounting, legal and compliance services, and
information the Board has received regarding the experience and professional
qualifications of the Manager's key personnel and the size and functions of its
staff providing investment management services to the Trust. In its evaluation
of the quality of the portfolio management services provided, the Board
considered the experience of Cameron Ullyatt and the Manager's Money Market
investment team and analysts. Mr. Ullyatt has been the portfolio manager of the
Trust since July 2006. The Board members also considered the totality of their
experiences with the Manager as directors or trustees of the Trust and other
funds advised by the Manager. In light of the foregoing, the Board concluded
that the Trust benefits from the services provided under the Agreement as a
result of the Manager's experience, reputation, personnel, operations, and
resources.
INVESTMENT PERFORMANCE OF THE MANAGER AND THE TRUST. During the year, the
Manager provided information on the investment performance of the Trust and the
Manager at each Board meeting, including comparative performance information.
The Board also reviewed information, prepared by the Manager and by the
independent consultant, comparing the Trust's historical performance to relevant
market indices and to the performance of all other retail front-end load and
no-load New York tax-exempt money market funds. The Board noted that the Trust's
one-year, three-year, five-year and ten-year performance were below its peer
group median. The Board considered the Manager's assertion, however, that the
performance rankings in this universe are very compressed and that the
dispersion between the top performer and the bottom performer is less than 1%.
COSTS OF SERVICES AND PROFITS REALIZED BY THE MANAGER. The Board
considered information regarding the Manager's costs in serving as the Trust's
investment adviser, including the costs associated with the personnel and
systems necessary to manage the Trust, and information regarding the Manager's
profitability from its relationship with the Trust. The Board reviewed the fees
paid to the Manager and the other expenses borne by the Trust. The Board also
evaluated the comparability of the fees charged and the services provided to the
Trust to the fees and services for other clients or accounts advised by the
Manager. The independent consultant provided comparative data in regard to the
fees and expenses of the Trust, other New York tax-exempt money market funds and
other funds with comparable asset levels and distribution features. The Board
noted that
20 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
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.
Additionally, 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. The Manager reserves the right to amend or terminate either
voluntary expense assumption at any time. The Board noted that the Trust's
contractual management fees are equal to its peer group median although its
actual management fees are higher than its peer group median. The board also
considered the Manager's assertion that there is significant compression among
the expense quintiles and the Trust's total expenses are only one basis point
above the expense group median.
ECONOMIES OF SCALE. The Board reviewed whether the Manager may realize
economies of scale in managing and supporting the Trust, whether those economies
of scale benefit the Trust's shareholders and the current level of Trust assets
in relation to the Trust's management fee breakpoints, which are intended to
share with shareholders economies of scale that may exist as the Trust grows.
OTHER BENEFITS TO THE MANAGER. In addition to considering the profits
realized by the Manager, the Board considered information that was provided
regarding the direct and indirect benefits the Manager receives as a result of
its relationship with the Trust, including compensation paid to the Manager's
affiliates. The Board also considered that the Manager must be able to pay and
retain experienced professional personnel at competitive rates to provide
services to the Trust and that maintaining the financial viability of the
Manager is important in order for the Manager to continue to provide significant
services to the Trust and its shareholders.
CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Trust and to the independent Trustees. Trust counsel and the independent
Trustees' counsel are both independent of the Manager within the meaning and
intent of the Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
decided to continue the Agreement for another year. In arriving at this
decision, the Board did not single out any factor or factors as being more
important than others, but considered all of the factors together. The Board
judged the terms and conditions of the Agreement, including the management fee,
in light of all of the surrounding circumstances.
21 | CENTENNIAL NEW YORK TAX EXEMPT TRUST
ITEM 2. CODE OF ETHICS.
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semiannual reports.
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 December 31, 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) Not applicable to semiannual reports.
(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 New York Tax Exempt Trust
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: February 8, 2007
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: February 8, 2007
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: February 8, 2007