CENTENNIAL GOVERNMENT TRUST

497 1 sai.htm SAI WITH FINANCIALS CENTENNIAL GOVERNMENT TRUST

---------------------------------------------------------------------------------------------------------------------------------------
Centennial Government Trust
---------------------------------------------------------------------------------------------------------------------------------------

6803 South Tucson Way, Englewood, Colorado 80112
1.800.525.9310

Statement of Additional Information dated November 1, 2001, revised July 1, 2002

This Statement of Additional Information is not a prospectus. This document contains additional information about the Trust
and supplements information in the Prospectus dated November 1, 2001. It should be read together with the Prospectus, which may be
obtained by writing to the Trust's Transfer Agent, Shareholder Services, Inc., at P.O. Box 5143, Denver, Colorado 80217, or by
calling the Transfer Agent at the toll-free number shown above.

Contents
Page
About the Trust
Additional Information about the Trust's Investment Policies and Risks............................................2
The Trust's Investment Policies..............................................................................2
Other Investment Strategies..................................................................................6
Investment Restrictions......................................................................................7

How the Trust is Managed..........................................................................................9
Organization and History.....................................................................................9
Trustees and Officers of the Trust..........................................................................10
The Manager...................................................................................................17
Service Plan.....................................................................................................19
Performance of the Trust.........................................................................................20

About Your Account

How To Buy Shares................................................................................................24
How To Sell Shares.................................................................................................25
How To Exchange Shares...........................................................................................26
Dividends and Taxes..............................................................................................28
Additional Information About the Trust...........................................................................29

Financial Information About the Trust

Independent Auditors' Report.....................................................................................30
Financial Statements.............................................................................................31

Appendix A: Description of Securities Ratings...................................................................A-1
Appendix B: Industry Classifications............................................................................B-1

A B O U T T H E T R U S T

Additional Information About the Trust's Investment Policies and Risks

The investment objective and the principal investment policies of the Trust are described in the Prospectus. This Statement of
Additional Information contains supplemental information about those policies and the types of securities that the Trust's investment
manager, Centennial Asset Management Corporation, (referred to as, the "Manager") will select for the Trust. Additional explanations
are also provided about the strategies the Trust may use to try to achieve its objective.

The Trust's Investment Policies. The composition of the Trust's portfolio and the techniques and strategies that the Trust's Manager
uses in selecting portfolio securities will vary over time. The Trust is not required to use all of the investment techniques and
strategies described below at all times in seeking its goal. It may use some of the special investment techniques and strategies at
some times or not at all.

The Trust's objective is to seek a high level of current income consistent with preservation of capital and the maintenance
of liquidity. The Trust will not make investments with the objective of seeking capital growth. However, the value of the
securities held by the Trust may be affected by changes in general interest rates. Because the current value of debt securities
varies inversely with changes in prevailing interest rates, if interest rates increase after a security is purchased, that security
would normally decline in value. Conversely, if interest rates decrease after a security is purchased, its value would rise.
However, those fluctuations in value will not generally result in realized gains or losses to the Trust since the Trust does not
usually intend to dispose of securities prior to their maturity. A debt security held to maturity is redeemable by its issuer at
full principal value plus accrued interest.

The Trust may sell securities prior to their maturity, to attempt to take advantage of short-term market variations, or
because of a revised credit evaluation of the issuer or other considerations. The Trust may also do so to generate cash to satisfy
redemptions of Trust shares. In such cases, the Trust may realize a capital gain or loss on the security.

|X| Ratings of Securities - Portfolio Quality, Maturity and Diversification. Under Rule 2a-7 of the Investment Company Act,
the Trust uses the amortized cost method to value its portfolio securities to determine the Trust's net asset value per share. Rule
2a-7 imposes requirements for the maturity, quality and diversification of the securities which the Trust buys. The Trust may
purchase only those securities that the Manager, under procedures approved by the Board of Trustees, has determined have minimal
credit risk and, as such, are "eligible securities".

|_| Quality. Eligible securities are securities that have received a rating in one of the two highest short-term rating
categories by a rating organization. Rating organizations are designated by the SEC. Eligible securities may be "first tier" or
"second tier" securities. First tier securities are those that have received a rating in the highest category for short term debt
obligations by at least two rating organizations. If only one rating organization has rated the security, it must be rated in the
highest category for that rating organization. U.S. government securities and securities issued by a registered money market mutual
fund are also first tier securities.

The Trust may also buy second tier "conduit securities". These eligible securities are securities rated by rating
organizations but are not first tier securities. Conduit securities are municipal securities such as industrial development or
revenue bonds issued to finance non-government projects. The payment of the principal and interest on a conduit security is not the
obligation of the municipal issuer, but is the obligation of another person who is ultimately responsible for the payment of
principal and interest, such as the user of the facility. The Trust may not invest more than 5% of its total assets in second tier
conduit securities.

The Trust may also buy unrated securities that the Manager determines are comparable in quality to a first or second tier
security by applying certain criteria established by the Board to determine its creditworthiness. These criteria require a high
quality short term or long-term rating (depending on the security) from a rating organization. Unrated securities the Trust may buy
include asset backed securities and securities subject to "demand features" or "guarantees".

The Trust may purchase a security subject to a guarantee if the guarantee is an eligible security or a first tier security.
The trust may also purchase a security subject to a "conditional" demand feature if the demand feature is an eligible security and
the Manager has decided that the conditional demand feature meets the requirements imposed by Rule 2a-7.

If a security's rating is downgraded, the Manager or the Board of Trustees may have to reassess the security's credit risk.
If a security is downgraded, the Manager or the Board of Trustees will promptly reassess whether the security continues to present
minimal credit risk, reassess the status of the security as an "eligible security," and take such actions as is appropriate. If the
Trust disposes of the security within five days of the Manager learning of the downgrade, the Manager will provide the Board of
Trustees with subsequent notice of such downgrade. If a security is in default, or ceases to be an eligible security, or is
determined no longer to present minimal credit risks, the Board of Trustees must determine whether it would be in the best interests
of the Trust to dispose of the security.

|_| Diversification. With respect to 75% of its total assets, the Trust cannot invest more than 5% of its total assets in
securities issued by one issuer. It cannot invest more than 5% of its total assets in securities of one issuer unless the security
is a first tier security. The Trust also cannot invest more than 1% of its total assets or $1.0 million, whichever is greater, in
second tier securities of one issuer. For diversification purposes, the Trust is considered to have purchased the security
underlying a repurchase agreement if the repurchase agreement is fully collateralized. For a refunded security, the Trust is
considered to have the U.S. government securities underlying the refunded security. For conduit securities, the Trust considers the
issuer to be the person ultimately responsible for payment of the obligation. If the Trust buys an asset backed security, the issuer
of the security is deemed to be the "special purpose" entity which issued the security. A special purpose entity is an entity which
is organized solely for the purpose of issuing asset backed securities. If the asset backed securities issued by the special purpose
entity include the obligations of another person or another special purpose entity and those obligations amount to 10% or more of the
asset backed securities the Trust buys, that other person or entity is considered to be the issuer of a pro rata percentage of the
asset backed security.

The Trust may buy a security subject to a demand feature or guarantee. In this case, with respect to 75% of its total
assets, the Trust may not invest more than 10% of its total assets in securities issued by or subject to demand features or
guarantees issued by the same issuer. If the demand feature or guarantee is a second tier security, the Trust may not invest more
than 5% of its total assets in securities subject to demand features or guarantees from the same issuer. And, the Trust may not
invest more than 10% of its total assets in securities issued by or subject to demand features or guarantees from the same issuer.
However, if the demand feature or guarantee is issued by a person who is a non-controlled person, the Trust does not have to limit
its investments to no more than 10% of its total assets in securities issued by or subject to demand features or guarantees from the
same issuer.

|_| Maturity. The Trust must maintain a dollar-weighted average portfolio maturity of not more than 90 days, and the
maturity of any single security must not be in excess the maximum permitted maturity under Rule 2a-7 (or any other applicable rule)
which is currently 397 days from the date of purchase. The Trust also may buy adjustable and floating rate securities, enter into
repurchase agreements and lend portfolio securities. Rule 2a-7 defines how the maturities of these securities are determined.

|_| Demand Features and Guarantees. Demand features and guarantees and some of their uses are described in the Prospectus.
The Trust also uses demand features and guarantees to satisfy the maturity, quality and diversification requirements described
above. The Trust considers the person which issues the demand feature as the person to whom the Trust will look for payment. An
unconditional demand feature is considered a guarantee and the Trust looks to the person making the guarantee for payment of the
obligation of the underlying security.

When the Trust buys municipal securities, it may obtain a demand feature from the seller to repurchase the securities that
entitles the Trust to achieve same day settlement from the repurchaser and to receive an exercise price equal to the amortized cost
of the underlying security plus accrued interest, if any, at the time of exercise. Another type of demand feature purchased in
conjunction with a Municipal Security enables the Trust to sell the underlying security within a specified period of time at a fixed
exercise price. The Trust may pay for demand features either separately in cash or by paying a higher price for the securities
acquired subject to the demand features. The Trust will enter into these transactions only with banks and dealers which, in the
Manager's opinion, present minimal credit risks. The Trust's purchases of demand features are subject to the provisions of Rule 2a-7
under the Investment Company Act because the Trust uses the amortized cost method to value its portfolio securities.

The Trust's ability to exercise a demand feature or guarantee will depend on the ability of the bank or dealer to pay for
the securities if the demand feature or guarantee is exercised. If the bank or dealer should default on its obligation, the Trust
might not be able to recover all or a portion of any loss sustained from having to sell the security elsewhere. Demand features and
guarantees are not transferable by the Trust, and therefore terminate if the Trust sells the underlying security to a third party.
The Trust intends to enter into these arrangements to facilitate portfolio liquidity, although such arrangements may enable the Trust
to sell a security at a pre-arranged price which may be higher than the prevailing market price at the time the demand feature or
guarantee is exercised. Any considerations paid by the Trust for the demand feature (which increases the cost of the security and
reduces the yield otherwise available for the security) will be reflected on the Trust's books as unrealized depreciation while the
demand feature or guarantee is held, and a realized gain or loss when demand feature is exercised or expires.

|X| U.S. Government Securities. U.S. government securities are obligations issued or guaranteed by the U.S. government or
its agencies or instrumentalities. They include Treasury Bills (which mature within one year of the date they are issued) and
Treasury Notes and Bonds (which are issued with longer maturities). All Treasury securities are backed by the full faith and credit
of the United States.

U.S. government agencies and instrumentalities that issue or guarantee securities include, but are not limited to, the
Federal Housing Administration, Farmers Home Administration, Export-Import Bank of the United States, Small Business Administration,
Government National Mortgage Association, General Services Administration, Bank for Cooperatives, Federal Home Loan Banks, Federal
Home Loan Mortgage Corporation, Federal Intermediate Credit Banks, Federal Land Banks, Maritime Administration, the Tennessee Valley
Authority and the District of Columbia Armory Board. The Trust will not invest in securities issued by the Inter-American
Development Bank, the Asian-American Development Bank and the International Bank for Reconstruction and Development or in pooled
mortgages offered by the Federal Housing Administration or Veterans Administration.

Securities issued or guaranteed by U.S. government agencies and instrumentalities are not always backed by the full faith
and credit of the United States. Some, such as securities issued by the Federal National Mortgage Association ("Fannie Mae"), are
backed by the right of the agency or instrumentality to borrow from the Treasury. Others, such as securities issued by the Federal
Home Loan Mortgage Corporation ("Freddie Mac"), are supported only by the credit of the instrumentality and not by the Treasury. If
the securities are not backed by the full faith and credit of the United States, the purchaser must look principally to the agency
issuing the obligation for repayment and may not be able to assert a claim against the United States if the issuing agency or
instrumentality does not meet its commitment. The Trust will invest in U.S. government securities of such agencies and
instrumentalities only when the Manager is satisfied that the credit risk with respect to such instrumentality is minimal and that
the security is an Eligible Security.

|X| Repurchase Agreements. In a repurchase transaction, the Trust acquires a security from, and simultaneously resells it
to, an approved vendor for delivery on an agreed-upon future date. The resale price exceeds the purchase price by an amount that
reflects an agreed-upon interest rate effective for the period during which the repurchase agreement is in effect. An "approved
vendor" may be a U.S. commercial bank or the U.S. branch of a foreign bank having total domestic assets of at least $1 billion, or a
broker-dealer with a net capital of $50 million which has been designated a primary dealer in government securities.

The majority of these transactions run from day to day, and delivery pursuant to the resale typically will occur within one
to five days of the purchase. The Trust will not enter into a repurchase agreement that will cause more than 10% of its net assets
to be subject to repurchase agreements maturing in more than seven days.

Repurchase agreements are considered "loans" under the Investment Company Act, collateralized by the underlying security.
The Trust's repurchase agreements require that at all times while the repurchase agreement is in effect, the collateral's value must
equal or exceed the repurchase price to fully collateralize the repayment obligation. Additionally, the Manager will monitor the
vendor's creditworthiness to confirm that the vendor is financially sound and will continuously monitor the collateral's value.
However, if the vendor fails to pay the resale price on the delivery date, the Trust may incur costs in disposing of the collateral
and may experience losses if there is any delay in its ability to do so.

Other Investment Strategies

o Floating Rate/Variable Rate Obligations. The Trust may invest in instruments with floating or variable interest rates.
The interest rate on a floating rate obligation is based on a stated prevailing market rate, such as a bank's prime rate, the 90-day
U.S. Treasury Bill rate, the rate of return on commercial paper or bank certificates of deposit, or some other standard. The rate on
the investment is adjusted automatically each time the market rate is adjusted. The interest rate on a variable rate obligation is
also based on a stated prevailing market rate but is adjusted automatically at a specified interval. Some variable rate or floating
rate obligations in which the Trust may invest have a demand feature entitling the holder to demand payment of an amount
approximately equal to the amortized cost of the instrument or the principal amount of the instrument plus accrued interest at any
time, or at specified intervals not exceeding the maximum time permitted under Rule 2a-7 (which is currently 397 days). These notes
may or may not be backed by bank letters of credit.

Variable rate demand notes may include master demand notes, which are obligations that permit the Trust to invest
fluctuating amounts in a note. The amount may change daily without penalty, pursuant to direct arrangements between the Trust, as
the note purchaser, and the issuer of the note. The interest rates on these notes fluctuate from time to time. The issuer of this
type of obligation normally has a corresponding right in its discretion, after a given period, to prepay the outstanding principal
amount of the obligation plus accrued interest. The issuer must give a specified number of days' notice to the holders of those
obligations. Generally, the changes in the interest rate on those securities reduce the fluctuation in their market value. As
interest rates decrease or increase, the potential for capital appreciation or depreciation is less than that for fixed-rate
obligations having the same maturity.

Because these types of obligations are direct lending arrangements between the note purchaser and issuer of the note, these
instruments generally will not be traded. Generally, there is no established secondary market for these types of obligations,
although they are redeemable from the issuer at face value. Accordingly, where these obligations are not secured by letters of
credit or other credit support arrangements, the Trust's right to redeem them is dependent on the ability of the note issuer to pay
principal and interest on demand. These types of obligations usually are not rated by credit rating agencies. The Trust may invest
in obligations that are not rated only if the Manager determines at the time of investment that they are Eligible Securities. The
Manager, on behalf of the Trust, will monitor the creditworthiness of the issuers of the floating and variable rate obligations in
the Trust's portfolio on an ongoing basis. There is no limit on the amount of the Trust's assets that may be invested in floating
rate and variable rate obligations that meet the requirements of Rule 2a-7.

o Loans of Portfolio Securities. To attempt to increase its income, the Trust may lend its portfolio securities to brokers,
dealers and other financial institutions. These loans are limited to not more than 25% of the value of the Trust's total assets and
are subject to other conditions described below. The Trust will not enter into any securities lending agreements having a maturity of
greater than the maximum time permitted under Rule 2a-7. The Trust presently does not intend that the value of securities loaned will
exceed 5% of the value of the Trust's total assets in the coming year. There are some risks in lending securities. The Trust could
experience a delay in receiving additional collateral to secure a loan, or a delay in recovering the loaned securities.

The Trust may receive collateral for a loan. Any securities received as collateral for a loan must mature in twelve months
or less. Under current applicable regulatory requirements (which are subject to change), on each business day the loan collateral
must be at least equal to the market value of the loaned securities. The collateral must consist of cash, bank letters of credit,
U.S. government securities or other cash equivalents in which the Trust is permitted to invest. To be acceptable as collateral,
letters of credit must obligate a bank to pay amounts demanded by the Trust if the demand meets the terms of the letter. Such terms
and the issuing bank must be satisfactory to the Trust.

When it lends securities, the Trust receives from the borrower an amount equal to the interest paid or the dividends
declared on the loaned securities during the term of the loan. It may also receive negotiated loan fees and the interest on the
collateral securities, less any finders', custodian, administrative or other fees the Trust pays in connection with the loan. The
Trust may share the interest it receives on the collateral securities with the borrower as long as it realizes at least a minimum
amount of interest required by the lending guidelines established by its Board of Trustees.
The Trust will not lend its portfolio securities to any officer, Trustee, employee or affiliate of the Trust or its
Manager. The terms of the Trust's loans must meet certain tests under the Internal Revenue Code and permit the Trust to reacquire
loaned securities on five business days notice or in time to vote on any important matter.

o Bank Loan Participation Agreements. The Fund may invest in bank loan participation agreements, subject to the
investment limitation set forth in the Prospectus as to investments in illiquid securities. Participation agreements provide an
undivided interest in a loan made by the bank issuing the participation interest in the proportion that the buyer's investment bears
to the total principal amount of the loan. Under this type of arrangement, the issuing bank may have no obligation to the buyer
other than to pay principal and interest on the loan if and when received by the bank. Thus, the Fund must look to the
creditworthiness of the borrower, which is obligated to make payments of principal and interest on the loan. If the borrower fails
to pay scheduled principal or interest payments, the Fund may experience a reduction in income.

Investment Restrictions

|X| What Are "Fundamental Policies?" Fundamental policies are those policies that the Trust has adopted to govern its
investments that can be changed only by the vote of a "majority" of the Trust's outstanding voting securities. Under the Investment
Company Act, a "majority" vote is defined as the vote of the holders of the lesser of:

|_| 67% or more of the shares present or represented by proxy at a shareholder meeting, if the holders of more than 50% of
the outstanding shares are present or represented by proxy, or
|_| more than 50% of the outstanding shares.

The Trust's investment objective is a fundamental policy. Other policies described in the Prospectus or this Statement of
Additional Information are "fundamental" only if they are identified as such. The Trust's Board of Trustees can change
non-fundamental policies without shareholder approval. However, significant changes to investment policies will be described in
supplements or updates to the Prospectus or this Statement of Additional Information, as appropriate. The Trust's most significant
investment policies are described in the Prospectus.

|X| Does the Trust Have Additional Fundamental Policies? The following investment restrictions are fundamental policies of the
Trust.

|_| The Trust cannot enter into repurchase agreements maturing in more than seven days or purchase securities which are
restricted as to resale or for which market quotations are not readily available, if any such investment would cause more than 10% of
the Trust's assets to be invested in such securities;

|_| The Trust cannot borrow money in excess of 10% of the value of its total assets, and then only as a temporary measure
for extraordinary or emergency purposes; provided that the Trust will not make any investment at a time during which such borrowing
exceeds 5% of the value of its assets; no assets of the Trust may be pledged, mortgaged or assigned to secure a debt;

|_| The Trust cannot make loans, except through (i) the purchase of debt securities listed in the Prospectus under
"Investment Objective and Policies," (ii) the purchase of such debt securities subject to repurchase agreements, or (iii) loans of
securities as described under "Other Investment Strategies - Loans of Portfolio Securities," in this Statement of Additional
Information;

|_| The Trust cannot invest in commodities or commodity contracts or invest in interests in oil, gas or other mineral
exploration or development programs;

|_| The Trust cannot invest in real estate;

|_| The Trust cannot purchase securities on margin or make short sales of securities;

|_| The Trust cannot invest in or hold securities of any issuer if those officers and Trustees of the Trust or its advisor
who beneficially own individually more than 0.5% of the securities of such issuer together own more than 5% of the securities of such
issuer;

|_| The Trust cannot underwrite securities of other companies; or

|_| The Trust cannot invest in securities of other investment companies, except as they may be acquired as part of a merger,
consolidation or acquisition of assets.

|_| The Trust cannot issue "senior securities," but this does not prohibit certain investment activities for which assets of the
Trust are designated as segregated, or margin, collateral or escrow arrangements are established, to cover the related obligations.

|_| The Trust cannot invest 25% or more of its total assets in any one industry; however, for the purposes of this restriction,
municipal securities and U.S. government obligations are not considered to be part of any single industry.

|_| The Trust cannot invest in any debt instrument having a maturity in excess of the time period provided for in Rule 2a-7 of
the Investment Company Act of 1940, or any other applicable rule, or in the case of a debt instrument subject to a repurchase
agreement or called for redemption, unless purchased subject to a demand feature which may not exceed the time period provided for in
Rule 2a-7, or any other applicable rule.

How the Trust is Managed

Organization and History. The Trust is an open-end, diversified management investment company organized as a Massachusetts business
trust in 1982, with an unlimited number of authorized shares of beneficial interest.

The Trust is governed by a Board of Trustees, which is responsible for protecting the interests of shareholders under
Massachusetts law. The Trustees meet periodically throughout the year to oversee the Trust's activities, review its performance, and
review the actions of the Manager. Although the Trust will not normally hold annual meetings of its shareholders, it may hold
shareholder meetings from time to time on important matters. Shareholders of the Trust may have the right to call a meeting to
remove a Trustee or to take other action described in the Declaration of Trust.

The Board of Trustees has an Audit Committee and a Review Committee. Effective June 25, the members of the Audit Committee
are Edward L. Cameron (Chairman), William L. Armstrong, George C. Bowen and Robert J. Malone. The Audit Committee held six meetings
during the Trust's fiscal year ended June 30, 2001. The Audit Committee provides the Board with recommendations regarding the
selection of the Trust's independent auditor. The Audit Committee also reviews the scope and results of audits and the audit fees
charged, reviews reports from the Trust's independent audit concerning the Trust's internal accounting procedures and controls and
selects and nominates for approval by the Board the independent Trustees, among other duties as set forth in the Committee's charter.

Effective June 25, the members of the Review Committee are Jon S. Fossel (Chairman), Robert G. Avis, Sam Freedman, Beverly
L. Hamilton, and F. William Marshall, Jr. The Review Committee held six meetings during the fiscal year ended June 30, 2001. The
Review Committee reviews reports and makes recommendations to the Board concerning the fees paid to the Trust's Transfer Agent and
the services provided to the Trust by the Transfer Agent. The Review Committee also reviews policies and procedures adopted by the
Trust to comply with the Investment Company Act of 1940 and other applicable law, among other duties as set forth in the Committee's
charter.

|X| Classes of Shares. The Trust has a single class of shares of stock. While that class has no designation, it is deemed
to be the equivalent of Class A for purposes of the shareholder account policies that apply to Class A shares of the Oppenheimer
funds. Shares of the Trust are freely transferable. Each share has one vote at shareholder meetings, with fractional shares voting
proportionally on matters submitted to a vote of shareholders. There are no preemptive or conversion rights and shares participate
equally in the assets of the Trust upon liquidation.

|X| Meetings of Shareholders. As a Massachusetts business trust, the Trust is not required to hold, and does not plan to
hold, regular annual meetings of shareholders. The Trust will hold meetings when required to do so by the Investment Company Act or
other applicable law. It will also do so when a shareholder meeting is called by the Trustees or upon proper request of the
shareholders.

Shareholders have the right, upon the declaration in writing or vote of two-thirds of the outstanding shares of the Trust,
to remove a Trustee. The Trustees will call a meeting of shareholders to vote on the removal of a Trustee upon the written request
of the record holders of 10% of the outstanding shares of the Trust. If the Trustees receive a request from at least 10 shareholders
stating that they wish to communicate with other shareholders to request a meeting to remove a Trustee, the Trustees will then either
make the shareholder lists of the Trust available to the applicants or mail their communication to all other shareholders at the
applicants' expense. The shareholders making the request must have been shareholders for at least six months and must hold
shares of the Trust valued at $25,000 or more or constituting at least 1% of the outstanding shares of the Trust, whichever is less.
The Trustees may also take other action as permitted by the Investment Company Act.

|_| Shareholder and Trustee Liability. The Declaration of Trust contains an express disclaimer of shareholder or
Trustee liability for the Trust's obligations. It also provides for indemnification and reimbursement of expenses out of the Trust's
property for any shareholder held personally liable for its obligations. The Declaration of Trust also states that upon request, the
Trust shall assume the defense of any claim made against a shareholder for any act or obligation of the Trust and shall satisfy any
judgment on that claim. Massachusetts law permits a shareholder of a business trust (such as the Trust) to be held personally liable
as a "partner" under certain circumstances. However, the risk that a Trust shareholder will incur financial loss from being held
liable as a "partner" of the Trust is limited to the relatively remote circumstances in which the Trust would be unable to meet its
obligations.

The Trust's contractual arrangements state that any person doing business with the Trust (and each shareholder of the Trust)
agrees under the Declaration of Trust to look solely to the assets of the Trust for satisfaction of any claim or demand that may
arise out of any dealings with the Trust. Additionally, the Trustees shall have no personal liability to any such person, to the
extent permitted by law.

Trustees and Officers of the Trust. The Trust's Trustees and officers and their principal occupations and business affiliations
during the past five years are listed below. Trustees denoted with an asterisk (*) below are deemed to be "interested persons" of
the Trust under the Investment Company Act. All of the Trustees are also trustees, directors or managing general partners of the
following Board II Oppenheimer funds1:

Oppenheimer Cash Reserves Oppenheimer Select Managers
Oppenheimer Champion Income Fund Oppenheimer Senior Floating Rate Fund
Oppenheimer Capital Income Fund Oppenheimer Strategic Income Fund
Oppenheimer High Yield Fund Oppenheimer Total Return Fund, Inc.
Oppenheimer International Bond Fund Oppenheimer Variable Account Funds
Oppenheimer Integrity Funds Panorama Series Fund, Inc.
Oppenheimer Limited-Term Government Fund Centennial America Fund, L. P.
Oppenheimer Main Street(R)Funds, Inc. Centennial California Tax Exempt Trust
Oppenheimer Main Street(R)Opportunity Fund Centennial Government Trust
Oppenheimer Main Street(R)Small Cap Fund Centennial Money Market Trust
Oppenheimer Municipal Fund Centennial New York Tax Exempt Trust
Oppenheimer Real Asset Fund(R) Centennial Tax Exempt Trust

Messrs. Zack,Murphy, Molleur, Wixted,
Carbuto and Zack, and Mses. Feld, and Ives who are
officers of the Trust, respectively hold the same
offices with the other Board II Oppenheimer funds.
As of October 9, 2001, the Trustees and officers of
the Trust as a group owned less than 1% of the
outstanding shares of the Fund. The foregoing
statement does not reflect shares held of record by
an employee benefit plan for employees of
OppenheimerFunds, Inc. other than shares beneficially
owned under that plan by the officers of the Fund
listed below. Mr. Murphy is the trustee of that plan.

James C. Swain, Chairman, Chief Executive Officer and
Trustee, Age: 68.
6803 South Tucson Way, Englewood, Colorado 80112
Formerly Vice Chairman(since of OppenheimerFunds,
Inc. (until January 2, 2002) and President and a
director of Inc.Centennial Asset Management
Corporation (the Fund's Distributor) (until 1997).
Oversees 41 portfolios in the OppenheimerFunds
complex.

John V. Murphy, President, Age: 52.
498 Seventh Avenue, New York, New York 10018
Director (since November 2001) of the Manager;
Chairman, Chief Executive Officer and director (since
June 2001) and President (since September 2000) of
OppenheimerFunds, Inc. ("OFI"); President and a
trustee of other Oppenheimer funds; President and a
director (since July 2001) of Oppenheimer Acquisition
Corp. and of Oppenheimer Partnership Holdings, Inc.;
a director (since November 2001) of OppenheimerFunds
Distributor, Inc.; Chairman and a director (since
July 2001) of Shareholder Services, Inc. and of
Shareholder Financial Services, Inc.; President and a
director (since July 2001) of OppenheimerFunds Legacy
Program, a charitable trust program established by
OFI; a director of the following investment advisory
subsidiaries of OFI: OAM Institutional, Inc. (since
November 2001), HarbourView Asset Management
Corporation and OFI Private Investments, Inc. (since
July 2002); President (since November 1, 2001) and a
director (since July 2001) of Oppenheimer Real Asset
Management, Inc.; a director (since November 2001) of
Trinity Investment Management Corp. and Tremont
Advisers, Inc., investment advisory affiliates of
OFI; Executive Vice President (since February 1997)
of Massachusetts Mutual Life Insurance Company, OFI's
parent company; a director (since June 1995) of DBL
Acquisition Corporation; formerly Chief Operating
Officer (from September 2000 to June 2001) of OFI;
President and trustee (from November 1999 to November
2001) of MML Series Investment Fund and MassMutual
Institutional Funds, open-end investment companies; a
director (from September 1999 to August 2000) of C.M.
Life Insurance Company; President, Chief Executive
Officer and director (from September 1999 to August
2000) of MML Bay State Life Insurance Company; a
director (from June 1989 to June 1998) of Emerald
Isle Bancorp and Hibernia Savings Bank, wholly-owned
subsidiary of Emerald Isle Bancorp. A
director/trustee of 63 other investment companies in
the OppenheimerFunds complex.

William L. Armstrong, Trustee, Age: 65.
6803 South Tucson Way, Englewood, Colorado 80112
Chairman of the following private mortgage banking
companies: Cherry Creek Mortgage Company (since
1991), Centennial State Mortgage Company (since
1994), The El Paso Mortgage Company (since 1993),
Transland Financial Services, Inc. (since 1997);
Chairman of the following private companies: Great
Frontier Insurance (insurance agency) (since 1995)
and Ambassador Media Corporation (since 1984); a
director of the following public companies: Storage
Technology Corporation (computer equipment company)
(since 1991), Helmerich & Payne, Inc. (oil and gas
drilling/production company) (since 1992),
UNUMProvident (insurance company) (since 1991).
Formerly Director of International Family
Entertainment (television channel) (1992 - 1997) and
Natec Resources, Inc. (air pollution control
equipment and services company) (1991-1995), Frontier
Real Estate, Inc. (residential real estate brokerage)
(1994-1999), and Frontier Title (title insurance
agency) (1995-June 1999); a U.S. Senator (January
1979-January 1991). Oversees 41 portfolios in the
OppenheimerFunds complex.

Robert G. Avis, Trustee, Age: 70.
6803 South Tucson Way, Englewood, Colorado 80112
Formerly, (until February 2001) Director and
President of A.G. Edwards Capital, Inc. (General
Formerly Mr. Avis held the following positions:
Director and President of A.G. Edwards Capital, Inc.
(General Partner of private equity funds) (until
February 2001); Chairman, President and Chief
Executive Officer of A.G. Edwards Capital, Inc.
(until March 2000); Vice Chairman and Director of
A.G. Edwards, Inc. and Vice Chairman of A.G. Edwards
& Sons, Inc. (its brokerage company subsidiary)
(until - March 1999); Chairman of A.G. Edwards Trust
Company and A.G.E. Asset Management (investment
advisor) (until - March 1999); and a Director of A.G.
Edwards & Sons and A.G. Edwards Trust Company (until
- March 2000). Oversees 41 portfolios in the
OppenheimerFunds complex.

George C. Bowen, Trustee, Age: 65.
6803 South Tucson Way, Englewood, Colorado 80112
Formerly (until April 1999) Mr. Bowen held the
following positions: Senior Vice President (from
September 1987) and Treasurer (from March 1985) of
OppenheimerFunds, Inc.; Vice President (from June
1983) and Treasurer (since March 1985) of
OppenheimerFunds Distributor, Inc.; Senior Vice
President (since February 1992), Treasurer (since
July 1991) Assistant Secretary and a director (since
December 1991) of OppenheimerFunds, Inc.; Vice
President (since October 1989) and Treasurer (since
April 1986) of HarbourView Asset Management
Corporation an investment advisory subsidiary of
OppenheimerFunds, Inc.; President, Treasurer and a
director of Centennial Capital Corporation (June 1989
- January 1990), an investment advisory subsidiary of
the Manager; Vice President and Treasurer (since
August 1978) and Secretary (since April 1981) of
Shareholder Services, Inc., a transfer agent
subsidiary of OppenheimerFunds, Inc.; Vice President,
Treasurer and Secretary of Shareholder Financial
Services, Inc. (since November 1989), a transfer
agent subsidiary of OppenheimerFunds, Inc.; Assistant
Treasurer of Oppenheimer Acquisition Corp. (since
March 1998), OppenheimerFunds, Inc.'s parent
corporation; Treasurer of Oppenheimer Partnership
Holdings, Inc. (since November 1989), a holding
company subsidiary of OppenheimerFunds, Inc.; Vice
President and Treasurer of Oppenheimer Real Asset
Management, Inc. (since July 1996), an investment
advisory subsidiary of OppenheimerFunds, Inc.; Chief
Executive Officer and director of MultiSource
Services, Inc., a broker-dealer subsidiary of
OppenheimerFunds, Inc. (since March 1996); Treasurer
of OppenheimerFunds International Ltd. and
Oppenheimer Millennium Funds plc (since October
1997), offshore fund management subsidiaries of
OppenheimerFunds, Inc.. Oversees 41 portfolios in the
OppenheimerFunds complex.

Edward L. Cameron, Trustee, Age: 63.
6803 South Tucson Way, Englewood, Colorado 80112
Director of Genetic ID, Inc. and its subsidiaries, a
privately held biotech company (since March 2001); a
member of The Life Guard of Mount Vernon, George
Washington's home (since June 2000). Formerly a
partner with PricewaterhouseCoopers LLP (an
accounting firm) (from 1974-1999) and Chairman, Price
Waterhouse LLP Global Investment Management Industry
Services Group (from 1994-1998). Oversees 41
portfolios in the OppenheimerFunds complex.

Jon S. Fossel, Trustee, Age: 60.
6803 South Tucson Way, Englewood, Colorado 80112
Chairman and Director of Rocky Mountain Elk
Foundation, a not-for-profit foundation (since 1998);
and a director of P.R. Pharmaceuticals, a privately
held company (since October 1999) and UNUMProvident
(insurance company) (since June 1, 2002). Formerly
Mr. Fossel held the following positions: Chairman and
a director (until October 1996) and President and
Chief Executive Officer (until October 1995) of
OppenheimerFunds, Inc.; President, Chief Executive
Officer and a director of Oppenheimer Acquisition
Corp., Shareholder Services, Inc. and Shareholder
Financial Services, Inc. (until October 1995).
Oversees 41 portfolios in the OppenheimerFunds
complex.

Sam Freedman, Trustee, Age: 61.
6803 South Tucson Way, Englewood, Colorado 80112
Formerly (until October 1994) Mr. Freedman held the
following positions: Chairman and Chief Executive
Officer of OppenheimerFunds Services (from August
1980); Chairman, Chief Executive Officer and a
director of Shareholder Services, Inc. (from August
1980); Chairman, Chief Executive Officer and director
of Shareholder Financial Services, Inc. (from
November 1989); Vice President and director of
Oppenheimer Acquisition Corp. (from October 1990) and
a director of the Manager (from October 1990).
Oversees 41 portfolios in the OppenheimerFunds
complex.

Richard F. Grabish*, Trustee, Age: 53.
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President, Assistant Director of Sales
and Marketing (since March 1997), and Manager of
Private Client Services (since June 1985) for A.G.
Edwards & Sons, Inc. (broker/dealer and investment
firm). Chairman and Chief Executive Officer of A.G.
Edwards Trust Company (since March 2001); Director of
A.G. Edwards & Sons, Inc. (since March 1988).
Formerly (until March 1987) President and Vice
Chairman of A.G. Edwards Trust Company. Oversees 6
portfolios in the OppenheimerFunds complex.

Beverly L. Hamilton, Trustee, Age 55.
6803 South Tucson Way, Englewood, Colorado 80112
Director of MML Services, an investment company
(since April 1987), America Funds Emerging Markets
Growth Fund, an investment company (since October
1991), The California Endowment, a philanthropy
organization (since April 2002), and Community
Hospital of Monterey Peninsula, (since February
2002), a Trustee of Monterey International Studies,
an educational organization (since February 2000),
and an advisor to Unilever (Holland)'s pension fund
and to Credit Suisse First Boston's Sprout venture
capital unit. Mrs. Hamilton also is a member of the
investment committees of the Rockefeller Foundation,
the University of Michigan and Hartford Hospital.
Formerly, Mrs. Hamilton held the following position:
President ARCO Investment Management Company, (from
February 1991 until April 2000). Oversees 40
portfolios in the OppenheimerFunds complex.

Robert J. Malone, Trustee, Age 57.
6803 South Tucson Way, Englewood, Colorado 80112
Director of Jones Knowledge, Inc., a privately held
company (since 2001), director of U.S. Exploration,
Inc., (since 1997), director of Colorado UpLIFT, a
non-profit organization (since 1986) and a Trustee of
the Gallagher Family Foundation, (since 2000).
Formerly, Mr. Malone held the following positions:
Chairman of U.S. Bank (formerly Colorado National
Bank) a subsidiary of U.S. Bancorp (from July 1, 1996
until April 1, 1999); Chairman of the Board and Chief
Executive Officer of Colorado National Bank (from
December 18, 1992 until July 1, 1996); director of
Commercial Assets, Inc. (from 1993 to 2000). Oversees
40 portfolios in the OppenheimerFunds complex.

F. William Marshall, Jr., Trustee, Age: 59.
6803 South Tucson Way, Englewood, Colorado 80112
Trustee (since 1996) of MassMutual Institutional
Funds and of MML Series Investment Fund (open-end
investment companies). Formerly Chairman of SIS &
Family Bank, F.S.B. (formerly SIS Bank) (January 1999
- July 1999); President, Chief Executive Officer and
Director of SIS Bankcorp., Inc. and SIS Bank
(formerly Springfield Institution for Savings) (May
1993 - December 1998); Executive Vice President of
Peoples Heritage Financial Group, Inc. (January 1999
- July 1999); Chairman and Chief Executive Office of
Bank of Ireland First Holdings, Inc. and First New
Hampshire Banks (June 1990 - May 1993). Oversees 41
portfolios in the OppenheimerFunds complex.

Carol E. Wolf, Vice President and Portfolio Manager,
Age: 49.
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President (since June 2000) of
OppenheimerFunds, Inc.; an officer and portfolio
manager of other Oppenheimer funds; formerly Vice
President of OppenheimerFunds, Inc. (June 1990 - June
2000).

Barry D. Weiss, Vice President and Portfolio Manager,
Age: 37.
6803 South Tucson Way, Englewood, Colorado 80112
Vice President (since June 2001) of OppenheimerFunds,
Inc.; an officer and portfolio manager of other
Oppenheimer funds; formerly Senior Credit Analyst of
the Manager (February 2000 - June 2001); formerly
Associate Director, Fitch IBCA Inc. (April 1998 -
February 2000); formerly News Director, Fitch
Investors Service (September 1996 - April 1998);
formerly Senior Budget Analyst, City of New York,
Office of Management & Budget (February 1990 -
September 1996).

Robert G. Zack, Vice President and Secretary, Age:
53.
498 Seventh Avenue, New York, New York 10018
Senior Vice President (since May 1985) and General
Counsel (since February 2002) of OppenheimerFunds,
Inc.; Assistant Secretary of Shareholder Services,
Inc. (since May 1985), Shareholder Financial
Services, Inc. (since November 1989);
OppenheimerFunds International Ltd. and Oppenheimer
Millennium Funds plc (since October 1997); an officer
of other Oppenheimer funds; formerly, Acting General
Counsel (November 2001-February 2002) and Associate
General Counsel (1984 - October 2001).

Brian W. Wixted, Treasurer, Age: 42.
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President and Treasurer (since March
1999) of OppenheimerFunds, Inc.; Treasurer (since
March 1999) of HarbourView Asset Management
Corporation, Shareholder Services, Inc., Oppenheimer
Real Asset Management Corporation, Shareholder
Financial Services, Inc. and Oppenheimer Partnership
Holdings, Inc., of OFI Private Investments, Inc.
(since March 2000) and of OppenheimerFunds
International Ltd. and Oppenheimer Millennium Funds
plc (since May 2000); Treasurer and Chief Financial
Officer (since May 2000) of Oppenheimer Trust
Company; Assistant Treasurer (since March 1999) of
Oppenheimer Acquisition Corp. and of the Manager; an
officer of other Oppenheimer funds; formerly
Principal and Chief Operating Officer, Bankers Trust
Company - Mutual Fund Services Division (March 1995 -
March 1999); Vice President and Chief Financial
Officer of CS First Boston Investment Management
Corp. (September 1991 - March 1995).

Denis R. Molleur, Assistant Secretary, Age: 44.
498 Seventh Avenue, New York, New York 10018
Vice President and Senior Counsel of
OppenheimerFunds, Inc. (since July 1999); an officer
of other Oppenheimer funds; formerly a Vice President
and Associate Counsel of OppenheimerFunds, Inc.
(September 1991 - July 1999).

Katherine P. Feld, Assistant Secretary, Age: 43.
498 Seventh Avenue, New York, New York 10018
Vice President and Senior Counsel of
OppenheimerFunds, Inc (since July 1999); Vice
President of OppenheimerFunds Distributor, Inc.
(since June 1990); an officer of other Oppenheimer
funds; formerly a Vice President and Associate
Counsel of OppenheimerFunds, Inc. (June 1990 - July
1999).

Kathleen T. Ives, Assistant Secretary, Age: 36.
6803 South Tucson Way, Englewood, CO 80112
Vice President and Assistant Counsel of
OppenheimerFunds, Inc (since June 1998); an officer
of other Oppenheimer funds; formerly an Assistant
Vice President and Assistant Counsel of
OppenheimerFunds, Inc. (August 1997 - June 1998); and
Assistant Counsel of OppenheimerFunds, Inc. (August
1994 - August 1997).

o Remuneration of Trustees. The officers of
the Trust are affiliated with the Manager and receive
no salary or fee from the Trust. The remaining
Trustees of the Trust received the compensation shown
below. The compensation from the Trust was paid
during its fiscal year ended June 30, 2001. Mr.
Swain was affiliated with the Manager until January
2, 2002. The compensation from all of the Board II
Oppenheimer funds includes the Trust and is
compensation received as a director, trustee,
managing general partner or member of a committee of
the Board during the calendar year 2000.

-------------------------- ------------------------------------------

Total Compensation
from all Board II
Trustee's Name Aggregate Compensation Oppenheimer Funds2
and Other Positions from Trust1 (41 Funds)

-------------------------- ------------------------------------------
------------------------------------------ -------------------------- ------------------------------------------

William L. Armstrong $1,599 $49,270
Audit Committee Member

George C. Bowen $1,613 $55,948
Audit Committee Member

------------------------------------------ -------------------------- ------------------------------------------
------------------------------------------ -------------------------- ------------------------------------------
Edward L. Cameron $1,228 $26,709
Audit Committee Chairman
------------------------------------------ -------------------------- ------------------------------------------
------------------------------------------ -------------------------- ------------------------------------------
Jon S. Fossel $2,024 $77,880
Review Committee Chairman
-------------------------- ------------------------------------------
------------------------------------------ -------------------------- ------------------------------------------
Sam Freedman $2,117 $80,100
Review Committee Member
-------------------------- ------------------------------------------
------------------------------------------ -------------------------- ------------------------------------------
Richard F. Grabish $62 $0
-------------------------- ------------------------------------------
------------------------------------------ -------------------------- ------------------------------------------

Beverly Hamilton3 None None
Review Committee Member

C. Howard Kast4 $2,245 $86,150

------------------------------------------ -------------------------- ------------------------------------------
-------------------------- ------------------------------------------

Robert M. Kirchner4 $2,036 $76,950

------------------------------------------ -------------------------- ------------------------------------------
-------------------------- ------------------------------------------

Robert J. Malone3 None None
Audit Committee Member

------------------------------------------ -------------------------- ------------------------------------------
-------------------------- ------------------------------------------

F. William Marshall, Jr. $828 $3,768
Review Committee Member

------------------------------------------ -------------------------- ------------------------------------------

* Effective July 1, 2000, William A. Baker and Ned M. Steel resigned as Trustees of the Trust and subsequently became Trustees
Emeritus of the Trust. For the fiscal year ended June 30, 2001, Messrs. Baker and Steel each received $1,474 aggregate
compensation from the Trust and for the calendar year ended December 31, 2000, they each received $63,999 total compensation from
all Board II Oppenheimer funds. Effective April 5, 2001, Raymond J. Kalinowski resigned as Trustee of the Trust. For the fiscal
year ended June 30, 2001, Mr. Kalinowski received $1,447 aggregate compensation from the Trust and for the calendar year ended
December 31, 2000, he received $73,500 total compensation from all Board II Oppenheimer funds.

1. For the Trust's fiscal year end June 30, 2001.
For the 2000 calendar year.

3. Mrs. Hamilton and Mr. Malone were elected as Directors/Trustees of the Board II Funds effective June 1, 2002 and therefore
did not receive compensation from any of the Board II Funds during the Fund's fiscal year ended June 30, 2001or calendar
year 2000.
4. Effective July 1, 2002, Messrs. Kast and Kirchner retired as Directors/Trustees from the Board II funds.

o Deferred Compensation Plan for Trustees. The Trustees have adopted a Deferred Compensation Plan for disinterested Trustees
that enables them to elect to defer receipt of all or a portion of the annual fees they are entitled to receive from the Trust.
Under the plan, the compensation deferred by a Trustee is periodically adjusted as though an equivalent amount had been invested in
shares of one or more Oppenheimer funds selected by the Trustee. The amount paid to the Trustee under this plan will be determined
based upon the performance of the selected funds.

Deferral of fees of the Trustees under this plan will not materially affect the Trust's assets, liabilities or net income
per share. This plan will not obligate the Trust to retain the services of any Trustee or to pay any particular level of
compensation to any Trustee. Pursuant to an Order issued by the Securities and Exchange Commission, the Trust may invest in the
funds selected by any Trustee under this plan without shareholder approval for the limited purpose of determining the value of the
Trustees' deferred fee accounts.

|X| Major Shareholders. As of October 9, 2001 the only person who owned of record or was known by the Trust to own
beneficially 5% or more of the Trust's outstanding retail shares was A.G. Edwards & Sons, Inc., 1 North Jefferson Avenue, St. Louis,
Missouri 63103, which owned 1,617,124,608.150 shares of the Trust which was 94.85% of the outstanding shares of the Trust on that
date, for accounts of its customers none of whom individually owned more than 5% of the outstanding shares.

The Manager. The Manager, Centennial Asset Management Corporation, is wholly-owned by OppenheimerFunds, Inc., which is a
wholly-owned subsidiary of Oppenheimer Acquisition Corp., a holding company controlled by Massachusetts Mutual Life Insurance
Company.

The portfolio managers of the Trust are principally responsible for the day-to-day management of the Trust's investment
portfolio. Other members of the Manager's fixed-income portfolio department, particularly security analysts, traders and other
portfolio managers, have broad experience with fixed-income securities. They provide the Trust's portfolio managers with research
and support in managing the Trust's investments.

|X| The Investment Advisory Agreement. The Manager provides investment advisory and management services to the Trust under
an investment advisory agreement between the Manager and the Trust. The Manager selects securities for the Trust's portfolio and
handles its day-to-day business. The agreement requires the Manager, at its expense, to provide the Trust with adequate office
space, facilities and equipment. It also requires the Manager to provide and supervise the activities of all administrative and
clerical personnel required to provide effective administration for the Trust. Those responsibilities include the compilation and
maintenance of records with respect to its operations, the preparation and filing of specified reports, and composition of proxy
materials and registration statements for continuous public sale of shares of the Trust.

Expenses not expressly assumed by the Manager under the investment advisory agreement are paid by the Trust. The investment
advisory agreement lists examples of expenses paid by the Trust. The major categories relate to interest, taxes, fees to
unaffiliated Trustees, legal and audit expenses, custodian and transfer agent expenses, share issuance costs, certain printing and
registration costs and non-recurring expenses, including litigation costs. The management fees paid by the Trust to the Manager are
calculated at the rates described in the Prospectus.

------------------------- --------------------------------------------------------------------------------------------
Fiscal Year ending 6/30 Management Fee Paid to Centennial Asset Management Corporation
------------------------- --------------------------------------------------------------------------------------------
------------------------- --------------------------------------------------------------------------------------------
1999 $5,601,294
------------------------- --------------------------------------------------------------------------------------------
------------------------- --------------------------------------------------------------------------------------------
2000 $5,607,527
------------------------- --------------------------------------------------------------------------------------------
------------------------- --------------------------------------------------------------------------------------------
2001 $6,049,419
------------------------- --------------------------------------------------------------------------------------------

Under the investment advisory agreement, the Manager has agreed to reimburse the Trust to the extent that the Trust's total
expenses (including the management fee but excluding interest, taxes, brokerage commissions, and extraordinary expenses such as
litigation costs) exceed in any fiscal year the lesser of: (i) 1.5% of average annual net assets of the Trust up to $30 million plus
1% of the average annual net assets in excess of $30 million or; (ii) 25% of the total annual investment income of the Trust.

The investment advisory agreement provides that the Manager shall not be liable for any loss sustained by reason of the adoption
of an investment policy or the purchase, sale or retention of any security on its recommendation, whether or not such recommendation
shall have been based upon its own investigation and research or upon investigation and research made by any other individual, firm
or corporation, if such recommendation shall have been made and such other individual, firm or corporation shall have been selected
with due care and in good faith, provided that nothing in the agreement shall be construed to protect the Manager against any
liability to the Trust or its shareholders by reason of willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of its reckless disregard of its obligations and duties under the agreement.

|X| The Distributor. Under its General Distributor's Agreement with the Trust, Centennial Asset Management Corporation acts
as the Trust's principal underwriter and Distributor in the continuous public offering of the Trust's shares. The Distributor is not
obligated to sell a specific number of shares. The Distributor bears the expenses normally attributable to sales, including
advertising and the cost of printing and mailing prospectuses, other than those furnished to existing shareholders. For other
distribution expenses paid by the Trust, see the section entitled "Service Plan" below. The Trust's Sub-Distributor is
OppenheimerFunds Distributor, Inc.

Portfolio Transactions. Portfolio decisions are based upon recommendations and judgment of the Manager subject to the overall
authority of the Board of Trustees. Most purchases made by the Trust are principal transactions at net prices, so the Trust incurs
little or no brokerage costs. The Trust deals directly with the selling or purchasing principal or market maker without incurring
charges for the services of a broker on its behalf unless the Manager determines that a better price or execution may be obtained by
using the services of a broker. Purchases of portfolio securities from underwriters include a commission or concession paid by the
issuer to the underwriter, and purchases from dealers include a spread between the bid and asked prices.

The Trust seeks to obtain prompt execution of orders at the most favorable net price. If broker/dealers are used for
portfolio transactions, transactions may be directed to broker/dealers for their execution and research services. The research
services provided by a particular broker may be useful only to one or more of the advisory accounts of the Manager and its
affiliates. Investment research received for the commissions of those other accounts may be useful both to the Trust and one or more
of such other accounts. Investment research services may be supplied to the Manager by a third party at the instance of a broker
through which trades are placed. It may include information and analyses on particular companies and industries as well as market or
economic trends and portfolio strategy, receipt of market quotations for portfolio evaluations, information systems, computer
hardware and similar products and services. If a research service also assists the Manager in a non-research capacity (such as
bookkeeping or other administrative functions), then only the percentage or component that provides assistance to the Manager in the
investment decision-making process may be paid in commission dollars.

The research services provided by brokers broaden the scope and supplement the research activities of the Manager. That
research provides additional views and comparisons for consideration, and helps the Manager obtain market information for the
valuation of securities held in the Trust's portfolio or being considered for purchase.

Subject to applicable rules covering the Manager's activities in this area, sales of shares of the Trust and/or the other
investment companies managed by the Manager or distributed by the Distributor may also be considered as a factor in the direction of
transactions to dealers. That must be done in conformity with the price, execution and other considerations and practices discussed
above. Those other investment companies may also give similar consideration relating to the sale of the Trust's shares. No
portfolio transactions will be handled by any securities dealer affiliated with the Manager.

The Trust may experience high portfolio turnover that may increase the Trust's transaction costs. However, since brokerage
commissions, if any, are small, high turnover does not have an appreciable adverse effect upon the income of the Trust.

Service Plan

The Trust has adopted a Service Plan for the shares. The plan has been approved by a vote of the Board of Trustees, including a
majority of the Independent Trustees2, cast in person at a meeting called for the purpose of voting on that plan.

Under the plan, the Manager and the Distributor may make payments to affiliates and, in their sole discretion, from time to
time, may use their own resources (at no direct cost to the Trust) to make payments to brokers, dealers or other financial
institutions for distribution and administrative services they perform. The Manager may use its profits from the advisory fee it
receives from the Trust. In their sole discretion, the Distributor and the Manager may increase or decrease the amount of payments
they make from their own resources to plan recipients.

Unless a plan is terminated as described below, the plan continues in effect from year to year but only if the Trust's Board
of Trustees and its Independent Trustees specifically vote annually to approve its continuance. Approval must be by a vote cast in
person at a meeting called for the purpose of voting on continuing the plan. A plan may be terminated at any time by the vote of a
majority of the Independent Trustees or by the vote of the holders of a "majority" (as defined in the Investment Company Act) of the
outstanding shares of the Trust.

The Board of Trustees and the Independent Trustees must approve all material amendments to a plan. An amendment to increase
materially the amount of payments to be made under a plan must be approved by shareholders of the class affected by the amendment.
The approval must be by a "majority" (as defined in the Investment Company Act) of the shares.

While the plan is in effect, the Treasurer of the Trust shall provide separate written reports on the plan to the Board of
Trustees at least quarterly for its review. The Reports shall detail the amount of all payments made under the plan and the purpose
for which the payments were made. Those reports are subject to the review and approval of the Independent Trustees.

The plan states that while it is in effect, the selection and nomination of those Trustees of the Trust who are not
"interested persons" of the Trust is committed to the discretion of the Independent Trustees. This does not prevent the involvement
of others in the selection and nomination process as long as the final decision as to selection or nomination is approved by a
majority of the Independent Trustees.

Under the plan, no payment will be made to any recipient in any quarter in which the aggregate net asset value of all Trust
shares held by the recipient for itself and its customers does not exceed a minimum amount, if any, that may be set from time to time
by a majority of the Independent Trustees. The Board of Trustees has set no minimum amount of assets to qualify for payments under
the plan.

|X| Service Plan Fees. Under the service plan, the Distributor currently uses the fees it receives from the Trust to pay
brokers, dealers and other financial institutions (they are referred to as "recipients") for personal services and account
maintenance services they provide for their customers who hold shares. The services include, among others, answering customer
inquiries about the Trust, assisting in establishing and maintaining accounts in the Trust, making the Trust's investment plans
available and providing other services at the request of the Trust or the Distributor. The service plan permits reimbursements to the
Distributor at a rate of up to 0.20% of average annual net assets of the shares. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.20% of the average annual net assets consisting of shares held in the accounts of the
recipients or their customers.

For the fiscal year ended June 30, 2001 payments under the plan totaled $2,727,603, all of which was paid by the Distributor
to recipients. That included $168,532 paid to an affiliate of the Distributor's parent company. For the fiscal year ended June 30,
2001, the Manager paid, in the aggregate, $3,834,735 in fees out of its own resources for distribution assistance. Any unreimbursed
expenses the Distributor incurs with respect to the shares in any fiscal quarter cannot be recovered in subsequent quarters. The
Distributor may not use payments received under the plan to pay any of its interest expenses, carrying charges, or other financial
costs, or allocation of overhead.

Performance of the Trust

Explanation of Performance Terminology. The Trust uses a variety of terms to illustrate its performance. These terms include
"yield," "compounded effective yield" and "average annual total return." An explanation of how yields and total returns are
calculated is set forth below. The charts below show the Trust's performance as of the Trust's most recent fiscal year end. You can
obtain current performance information by calling the Trust's Transfer Agent at 1.800.525.9310.

The Trust's illustrations of its performance data in advertisements must comply with rules of the Securities and Exchange
Commission. Those rules describe the types of performance data that may be used and how it is to be calculated. If the Trust shows
total returns in addition to its yields, the returns must be for the 1-, 5- and 10-year periods ending as of the most recent calendar
quarter prior to the publication of the advertisement (or its submission for publication).

Use of standardized performance calculations enables an investor to compare the Trust's performance to the performance of
other funds for the same periods. However, a number of factors should be considered before using the Trust's performance information
as a basis for comparisons with other investments:

o Yields and total returns measure the performance of a hypothetical account in the Trust over various periods and do not show
the performance of each shareholder's account. Your account's performance will vary from the model performance data if
your dividends are received in cash, or you buy or sell shares during the period, or you bought your shares at a
different time than the shares used in the model.
o An investment in the Trust is not insured by the FDIC or any other government agency.
o The Trust's yield is not fixed or guaranteed and will fluctuate.
o Yields and total returns for any given past period represent historical performance information and are not, and should not
be considered, a prediction of future yields or returns.

|_| Yields. The Trust's current yield is calculated for a seven-day period of time as follows. First, a base period
return is calculated for the seven-day period by determining the net change in the value of a hypothetical pre-existing account
having one share at the beginning of the seven-day period. The change includes dividends declared on the original share and
dividends declared on any shares purchased with dividends on that share, but such dividends are adjusted to exclude any realized or
unrealized capital gains or losses affecting the dividends declared. Next, the base period return is multiplied by 365/7 to obtain
the current yield to the nearest hundredth of one percent.

The compounded effective yield for a seven-day period is calculated by
(1) adding 1 to the base period return (obtained as described above),
(2) raising the sum to a power equal to 365 divided by 7, and
(3) subtracting 1 from the result.

The yield as calculated above may vary for accounts less than approximately $100 in value due to the effect of rounding off
each daily dividend to the nearest full cent. The calculation of yield under either procedure described above does not take into
consideration any realized or unrealized gains or losses on the Trust's portfolio securities which may affect dividends. Therefore,
the return on dividends declared during a period may not be the same on an annualized basis as the yield for that period.

o Total Return Information. There are different types of "total returns" to measure the Trust's performance. Total return
is the change in value of a hypothetical investment in the Trust over a given period, assuming that all dividends and capital gains
distributions are reinvested in additional shares and that the investment is redeemed at the end of the period. The cumulative total
return measures the change in value over the entire period (for example, ten years). An average annual total return shows the
average rate of return for each year in a period that would produce the cumulative total return over the entire period. However,
average annual total returns do not show actual year-by-year performance. The Trust uses standardized calculations for its total
returns as prescribed by the SEC. The methodology is discussed below.

|_| Average Annual Total Return. The "average annual total return" of each class is an average annual compounded rate
of return for each year in a specified number of years. It is the rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a number of years ("n") to achieve an Ending Redeemable Value ("ERV"
in the formula) of that investment, according to the following formula:

1/n
(ERV)
(---) -1 = Average Annual Total Return
( P )

|_| Cumulative Total Return. The "cumulative total return" calculation measures the change in value of a hypothetical
investment of $1,000 over an entire period of years. Its calculation
|_| uses some of the same factors as average annual total return, but it does not average the rate of return on an annual
basis. Cumulative total return is determined as follows:

ERV - P
------- = Total Return
P

------------------------- ---------------------- ---------------------------------------------------------------------
Yield Compounded Effective Average Annual Total Returns (at 6/30/01)
(7 days ended 6/30/01) Yield
(7 days ended
6/30/01)
------------------------- ---------------------- ---------------------------------------------------------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------

1-Year 5 Years 10 Years
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------

3.53% 3.59% 5.29% 4.90% 4.48%
------------------------- ---------------------- ----------------------- ---------------------- ----------------------

|X| Other Performance Comparisons. Yield information may be useful to investors in reviewing the Trust's performance. The
Trust may make comparisons between its yield and that of other investments, by citing various indices such as The Bank Rate Monitor
National Index (provided by Bank Rate Monitor(TM)) which measures the average rate paid on bank money market accounts, NOW accounts and
certificates of deposits by the 100 largest banks and thrifts in the top ten metro areas. When comparing the Trust's yield with that
of other investments, investors should understand that certain other investment alternatives such as certificates of deposit, U.S.
government securities, money market instruments or bank accounts may provide fixed yields and may be insured or guaranteed.

From time to time, the Trust may include in its advertisements and sales literature performance information about the Trust
cited in other newspapers and periodicals, such as The New York Times, which may include performance quotations from other sources.

From time to time the Trust may include in its advertisements and sales literature the total return performance of a
hypothetical investment account that includes shares of the Trust and other Oppenheimer funds. The combined account may be part of an
illustration of an asset allocation model or similar presentation. The account performance may combine total return performance of
the Trust and the total return performance of other Oppenheimer funds included in the account. Additionally, from time to time, the
Trust's advertisements and sales literature may include, for illustrative or comparative purposes, statistical data or other
information about general or specific market and economic conditions. That may include, for example,
o information about the performance of certain securities or commodities markets or segments of those markets,
o information about the performance of the economies of particular countries or regions,
o the earnings of companies included in segments of particular industries, sectors, securities markets, countries or regions,
o the availability of different types of securities or offerings of securities,
o information relating to the gross national or gross domestic product of the United States or other countries or regions,
o comparisons of various market sectors or indices to demonstrate performance, risk, or other characteristics of the Trust.

A B O U T Y O U R A C C O U N T

How to Buy Shares

Determination of Net Asset Value Per Share. The net asset value per share of the Trust is determined twice each day that the New York
Stock Exchange ("Exchange") is open, at 12:00 Noon and at 4:00 P.M, on each day that the Exchange is open, by dividing the value of
the Trust's net assets by the total number of shares outstanding. All references to time in this Statement of Additional Information
mean New York time. The Exchange's most recent annual announcement (which is subject to change) states that it will close on New
Year's Day, Martin Luther King Jr. Day, Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day and Christmas Day. It may also close on other days.

The Trust's Board of Trustees has adopted the amortized cost method to value the Trust's portfolio securities. Under the
amortized cost method, a security is valued initially at its cost and its valuation assumes a constant amortization of any premium or
accretion of any discount, regardless of the impact of fluctuating interest rates on the market value of the security. This method
does not take into consideration any unrealized capital gains or losses on securities. While this method provides certainty in
valuing securities, in certain periods the value of a security determined by amortized cost may be higher or lower than the price the
Trust would receive if it sold the security.

The Trust's Board of Trustees has established procedures reasonably designed to stabilize the Trust's net asset value at
$1.00 per share. Those procedures include a review of the valuations of the Trust's portfolio holdings by the Board of Trustees, at
intervals it deems appropriate, to determine whether the Trust's net asset value calculated by using available market quotations
deviates from $1.00 per share based on amortized cost.

The Board of Trustees will examine the extent of any deviation between the Trust's net asset value based upon available
market quotations and amortized cost. If the Trust's net asset value were to deviate from $1.00 by more than 0.5%, Rule 2a-7 requires
the Board of Trustees to consider what action, if any, should be taken. If they find that the extent of the deviation may cause a
material dilution or other unfair effects on shareholders, the Board of Trustees will take whatever steps it considers appropriate to
eliminate or reduce the dilution, including, among others, withholding or reducing dividends, paying dividends from capital or
capital gains, selling portfolio instruments prior to maturity to realize capital gains or losses or to shorten the average maturity
of the portfolio, or calculating net asset value per share by using available market quotations.

During periods of declining interest rates, the daily yield on shares of the Trust may tend to be lower (and net investment
income and dividends higher) than those of a fund holding the identical investments as the Trust but which used a method of portfolio
valuation based on market prices or estimates of market prices. During periods of rising interest rates, the daily yield of the Trust
would tend to be higher and its aggregate value lower than that of an identical portfolio using market price valuation.

How to Sell Shares

The information below supplements the terms and conditions for redeeming shares set forth in the Prospectus.

Checkwriting. When a check is presented to the Bank for clearance, the Bank will ask the Trust to redeem a sufficient number of full
and fractional shares in the shareholder's account to cover the amount of the check. This enables the shareholder to continue
receiving dividends on those shares until the check is presented to the Trust. Checks may not be presented for payment at the
offices of the Bank or the Trust's Custodian. This limitation does not affect the use of checks for the payment of bills or to
obtain cash at other banks. The Trust reserves the right to amend, suspend or discontinue offering checkwriting privileges at any
time without prior notice.

In choosing to take advantage of the Checkwriting privilege, by signing the Account Application or by completing a
Checkwriting card, each individual who signs:
(1) for individual accounts, represents that they are the registered owner(s) of the shares of the Trust in that account;
(2) for accounts for corporations, partnerships, trusts and other entities, represents that they are an officer, general
partner, trustee or other fiduciary or agent, as applicable, duly authorized to act on behalf of the registered
owner(s);
(3) authorizes the Trust, its Transfer Agent and any bank through which the Trust's drafts (checks) are payable to pay all
checks drawn on the Trust account of such person(s) and to redeem a sufficient amount of shares from that account to
cover payment of each check;
(4) specifically acknowledges that if they choose to permit checks to be honored if there is a single signature on checks
drawn against joint accounts, or accounts for corporations, partnerships, trusts or other entities, the signature of any
one signatory on a check will be sufficient to authorize payment of that check and redemption from the account, even if
that account is registered in the names of more than one person or more than one authorized signature appears on the
Checkwriting card or the Application, as applicable;
(5) understands that the Checkwriting privilege may be terminated or amended at any time by the Trust and/or the Trust's bank;
and
(6) acknowledges and agrees that neither the Trust nor its bank shall incur any liability for that amendment or termination of
checkwriting privileges or for redeeming shares to pay checks reasonably believed by them to be genuine, or for
returning or not paying checks that have not been accepted for any reason.

Sending Redemption Proceeds by Federal Funds Wire. The Federal Funds wire of redemptions proceeds may be delayed if the Trust's
custodian bank is not open for business on a day when the Trust would normally authorize the wire to be made, which is usually the
Trust's next regular business day following the redemption. In those circumstances, the wire will not be transmitted until the next
bank business day on which the Trust is open for business. No distributions will be paid on the proceeds of redeemed shares awaiting
transfer by Federal Funds wire

Distributions From Retirement Plans. Requests for distributions from OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans,
401(k) plans or pension or profit-sharing plans should be addressed to "Trustee, OppenheimerFunds Retirement Plans," c/o the Transfer
Agent at its address listed in "How To Sell Shares" in the Prospectus or on the back cover of this Statement of Additional
Information. The request must

(1) state the reason for the distribution;
(2) state the owner's awareness of tax penalties if the distribution is premature; and
(3) conform to the requirements of the plan and the Trust's other redemption requirements.

Participants (other than self-employed persons) in OppenheimerFunds-sponsored pension or profit-sharing plans with shares of
the Trust held in the name of the plan or its fiduciary may not directly request redemption of their accounts. The plan
administrator or fiduciary must sign the request.

Distributions from pension and profit sharing plans are subject to special requirements under the Internal Revenue Code and
certain documents (available from the Transfer Agent) must be completed and submitted to the Transfer Agent before the distribution
may be made. Distributions from retirement plans are subject to withholding requirements under the Internal Revenue Code, and IRS
Form W-4P (available from the Transfer Agent) must be submitted to the Transfer Agent with the distribution request, or the
distribution may be delayed. Unless the shareholder has provided the Transfer Agent with a certified tax identification number, the
Internal Revenue Code requires that tax be withheld from any distribution even if the shareholder elects not to have tax withheld.
The Trust, the Manager, the Distributor the Sub-Distributor, and the Transfer Agent assume no responsibility to determine whether a
distribution satisfies the conditions of applicable tax laws and will not be responsible for any tax penalties assessed in connection
with a distribution.

How to Exchange Shares

As stated in the Prospectus, direct shareholders can exchange shares of the Trust for Class A shares of any of the following eligible
funds:

Oppenheimer Bond Fund Oppenheimer Municipal Bond Fund
Oppenheimer California Municipal Fund Oppenheimer New York Municipal Fund
Oppenheimer Capital Appreciation Fund Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Preservation Fund Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Capital Income Fund Oppenheimer Quest Balanced Value Fund
Oppenheimer Champion Income Fund Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Concentrated Growth Fund Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Convertible Securities Fund Oppenheimer Quest Opportunity Value Fund
Oppenheimer Developing Markets Fund Oppenheimer Quest Value Fund, Inc.
Oppenheimer Disciplined Allocation Fund Oppenheimer Real Asset Fund(R)
Oppenheimer Discovery Fund Oppenheimer Real Estate Fund
Oppenheimer Emerging Growth Fund Oppenheimer Rochester National Municipals Fund
Oppenheimer Emerging Technologies Fund Oppenheimer Senior Floating Rate Fund
Oppenheimer Enterprise Fund Oppenheimer Small Cap Value Fund
Oppenheimer Europe Fund Oppenheimer Special Value Fund
Oppenheimer Global Fund Oppenheimer Strategic Income Fund
Oppenheimer Global Growth & Income Fund Oppenheimer Total Return Fund, Inc.
Oppenheimer Gold & Special Minerals Fund Oppenheimer Trinity Core Fund
Oppenheimer Growth Fund Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer High Yield Fund Oppenheimer Trinity Value Fund
Oppenheimer Intermediate Municipal Fund Oppenheimer U.S. Government Trust
Oppenheimer International Bond Fund Oppenheimer Value Fund
Oppenheimer International Growth Fund Limited-Term New York Municipal Fund
Oppenheimer International Small Company Fund Rochester Fund Municipals
Oppenheimer Limited-Term Government Fund OSM1- Gartmore Millennium Growth Fund II
Oppenheimer Main Street(R)Growth & Income Fund OSM1 - Jennison Growth Fund
Oppenheimer Main Street(R)Opportunity Fund OSM1 - Mercury Advisors S&P 500 Index
Oppenheimer Main Street(R)Small Cap Fund OSM1 - Mercury Advisors Focus Growth Fund
Oppenheimer MidCap Fund OSM1 - QM Active Balanced Fund
Oppenheimer Multiple Strategies Fund OSM1 - Salomon Brothers All Cap Fund
and the following money market funds:

Centennial America Fund, L. P. Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust Centennial Tax Exempt Trust
Centennial Government Trust Oppenheimer Cash Reserves
Centennial Money Market Trust Oppenheimer Money Market Fund, Inc.

1 - "OSM" stands for Oppenheimer Select Managers

Shares of the Trust purchased without a sales charge may be exchanged for shares of an eligible fund offered with a sales
charge upon payment of the sales charge. Shares of the Trust acquired by reinvestment of dividends or distributions from the Trust
or any of the other eligible funds (other than Oppenheimer Cash Reserves) or from any unit investment trust for which reinvestment
arrangements have been made with the Distributor may be exchanged at net asset value for shares of any of the eligible funds.

|_| Limits on Multiple Exchange Orders. The Trust reserves the right to reject telephone or written exchange requests
submitted in bulk by anyone on behalf of more than one account. The Trust may accept requests for exchanges of up to 50 accounts per
day from representatives of authorized dealers that qualify for this privilege.

|_| Telephone Exchange Requests. When exchanging shares by telephone, a direct shareholder must have an existing account in
the fund to which the exchange is to be made. Otherwise, the investor must obtain a prospectus of that fund before the exchange
request may be submitted. If all telephone lines are busy (which might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by telephone and would have to submit written exchange requests.

|_| Processing Exchange Requests. Shares to be exchanged are redeemed on the regular business day the Transfer Agent
receives an exchange request in proper form (the "Redemption Date"). Normally, shares of the fund to be acquired are purchased on
the Redemption Date, but such purchases may be delayed by either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The Trust reserves the right, in its discretion, to refuse any
exchange request that may disadvantage it (for example, if the receipt of multiple exchange requests from a dealer might require the
disposition of portfolio securities at a time or at a price that might be disadvantageous to the Trust).

In connection with any exchange request, the number of shares exchanged may be less than the number requested if the
exchange or the number requested would include shares subject to a restriction cited in the Prospectus or this Statement of
Additional Information or would include shares covered by a share certificate that is not tendered with the request. In those cases,
only the shares available for exchange without restriction will be exchanged.

The different eligible funds available for exchange have different investment objectives, policies and risks. A shareholder
should assure that the fund selected is appropriate for his or her investment and should be aware of the tax consequences of an
exchange. For federal income tax purposes, an exchange transaction is treated as a redemption of shares of one fund and a purchase
of shares of another. The Trust, the Distributor, the Sub-Distributor, and the Transfer Agent are unable to provide investment, tax
or legal advice to a shareholder in connection with an exchange request or any other investment transaction.

The Trust may amend, suspend or terminate the exchange privilege at any time. Although, the Trust may impose these changes
at any time, it will provide you with notice of those changes whenever it is required to do so by applicable law. It may be required
to provide 60 days notice prior to materially amending or terminating the exchange privilege. That 60-day notice is not required in
extraordinary circumstances.

Dividends and Taxes

Tax Status of the Trust's Dividends and Distributions. The federal tax treatment of the Trust's dividends and capital gains
distributions is explained in the Prospectus under the caption "Distributions and Taxes." Under the Internal Revenue Code, by
December 31 each year, the Trust must distribute 98% of its taxable investment income earned from January 1 through December 31 of
that year and 98% of its capital gains realized in the period from November 1 of the prior year through October 31 of the current
year. It if does not, the Trust must pay an excise tax on the amounts not distributed. It is presently anticipated that the Trust
will meet those requirements. However, the Board of Trustees and the Manager might determine in a particular year that it would be
in the best interest of shareholders for the Trust not to make distributions at the required levels and to pay the excise tax on the
undistributed amounts. That would reduce the amount of income or capital gains available for distribution to shareholders. The
Trust's dividends will not be eligible for the dividends-received deduction for corporations.

If the Trust qualifies as a "regulated investment company" under the Internal Revenue Code, it will not be liable for
federal income taxes on amounts paid by it as distributions. That qualification enables the Trust to "pass through" its income and
realized capital gains to shareholders without having to pay tax on them. The Trust qualified as a regulated investment company in
its last fiscal year and intends to qualify in future years, but reserves the right not to qualify. The Internal Revenue Code
contains a number of complex tests to determine whether the Trust qualifies. The Trust might not meet those tests in a particular
year. If it does not qualify, the Trust will be treated for tax purposes as an ordinary corporation and will receive no tax
deduction for payments of distributions made to shareholders.

Dividends, distributions and the proceeds of the redemption of Trust shares represented by checks returned to the Transfer
Agent by the Postal Service as undeliverable will be invested in shares of the Trust as promptly as possible after the return of such
checks to the Transfer Agent, in order to enable the investor to earn a return on otherwise idle funds.

Dividend Reinvestment in Another Trust. Direct shareholders of the Trust may elect to reinvest all dividends and/or capital gains
distributions in Class A shares of any eligible fund listed above. To elect this option, the shareholder must notify the Transfer
Agent in writing and must have an existing account in the fund selected for reinvestment. Otherwise, the shareholder first must
obtain a prospectus for that fund and an application from the Distributor to establish an account. The investment will be made at
the close of business on the payable date of the dividend or distribution.

Additional Information About the Trust

The Distributor. The Trust's shares are sold through dealers, brokers and other financial institutions that have a sales agreement
with the Sub-Distributor. The Distributor and the Sub-Distributor also distribute shares of the other funds managed by the Manager
or an affiliate.

The Transfer Agent. Shareholder Services, Inc. the Trust's Transfer Agent, is responsible for maintaining the Trust's shareholder
registry and shareholder accounting records, and for paying dividends and distributions to shareholders of the Trust. It also
handles shareholder servicing and administrative functions.

The Custodian. Citibank, N.A. is the Custodian of the Trust's assets. The Custodian's responsibilities include safeguarding and
controlling the Trust's portfolio securities and handling the delivery of such securities to and from the Trust. It will be the
practice of the Trust to deal with the Custodian in a manner uninfluenced by any banking relationship the Custodian may have with the
Manager and its affiliates. The Trust's cash balances with the Custodian in excess of $100,000 are not protected by federal deposit
insurance. Those uninsured balances at times may be substantial.

Independent Auditors. Deloitte & Touche LLP are the independent auditors of the Trust. They audit the Trust's financial statements
and perform other related audit services. They also act as auditors for the Manager and OppenheimerFunds, Inc. and for certain other
funds advised by the Manager and its affiliates.

INDEPENDENT AUDITORS' REPORT
Centennial Government Trust

To the Shareholders and Board of Trustees of Centennial Government Trust:

We have audited the accompanying statement of assets and liabilities of
Centennial Government Trust, including the statement of investments, as of June
30, 2001, 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 period
then ended. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of June 30, 2001, by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Centennial Government Trust as of June 30, 2001, 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 period then ended, in conformity with accounting principles
generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Denver, Colorado
July 23, 2001

12 STATEMENT OF INVESTMENTS June 30, 2001 Centennial Government Trust


                                                                                     PRINCIPAL              VALUE
                                                                                       AMOUNT             SEE NOTE 1
                                                                                    ------------        ---------------

REPURCHASE AGREEMENTS--15.4%
Repurchase agreement with PaineWebber, Inc., 4.01%, dated 6/29/01, to be
repurchased at $224,274,920 on 7/2/01, collateralized by Federal National
Mortgage Assn., 7%, 6/1/28, with a value of $85,277,425, Federal Home Loan
Mortgage Corp., 6.50%, 3/1/29, with a value of $91,069,151 and Government
National Mortgage Assn., 6.50%, 4/20/28, with a value of $52,796,280
  (Cost $ 224,200,000)                                                                 $224,200,000         $224,200,000

U.S. GOVERNMENT AGENCIES--84.9%
Federal Farm Credit Bank:
 3.80%, 7/20/01                                                                          20,000,000           19,959,889
Federal Home Loan Bank:
 3.67%, 9/28/01                                                                          20,000,000           19,818,539
 3.77%, 7/24/01                                                                          33,600,000           33,519,071
 3.79%, 8/15/01(1)                                                                       35,000,000           34,975,972
 4.14%, 7/25/01                                                                          35,000,000           34,903,400
 4.60%, 7/6/01                                                                            8,000,000            7,994,889
 4.81%, 8/24/01                                                                          48,643,000           48,295,117
 5.20%, 7/11/01                                                                          46,000,000           45,938,156
 5.21%, 7/18/01                                                                          40,000,000           39,912,167
 5.49%, 7/13/01                                                                          40,000,000           39,938,000
 5.82%, 7/9/01(1)                                                                        23,000,000           23,002,138
 5.875%, 9/17/01                                                                         16,500,000           16,562,394
 6%, 11/15/01                                                                            17,000,000           17,124,492
 6.346%, 2/26/02                                                                          8,500,000            8,621,714
 6.375%, 12/5/01                                                                         20,525,000           20,741,941
 6.55%, 9/28/01                                                                          11,695,000           11,744,607
 6.70%, 12/19/01                                                                         10,000,000           10,122,306
 6.75%, 2/15/02                                                                           5,000,000            5,079,465
Federal Home Loan Mortgage Corp.:
 3.53%, 8/21/01                                                                          20,000,000           19,899,983
 3.595%, 7/26/01(1)                                                                      25,000,000           24,982,500
 3.67%, 12/6/01                                                                          30,000,000           29,516,783
 3.71%, 9/6/01                                                                           20,000,000           19,861,906
 3.897%, 8/23/01                                                                         48,000,000           47,724,612
 4.12%, 8/2/01                                                                           25,000,000           24,908,444
 4.13%, 7/26/01                                                                          25,000,000           24,928,299
 4.15%, 5/15/02                                                                          25,000,000           24,980,469

3 STATEMENT OF INVESTMENTS June 30, 2001 (Continued) Centennial Government Trust


                                                                PRINCIPAL                VALUE
                                                                 AMOUNT                SEE NOTE 1
                                                            -----------------       ---------------

U.S. GOVERNMENT AGENCIES (Continued)
Federal Home Loan Mortgage Corp.: (Continued)
  4.40%, 5/8/02                                               $  25,000,000           $  24,994,141
  4.478%, 7/12/01                                                57,824,000              57,743,954
  4.56%, 7/6/01-7/19/01                                          48,000,000              47,928,433
  4.58%, 7/27/01                                                 53,000,000              52,824,688
  4.59%, 7/5/01                                                  25,000,000              24,987,250
  4.65%, 9/13/01                                                 47,000,000              46,658,963
  4.75%, 12/14/01                                                42,365,000              42,558,410
Federal National Mortgage Assn.:
  3.83%, 8/16/01                                                 15,000,000              14,926,592
  4.625%, 10/15/01                                               20,000,000              20,051,563
  5.94%, 9/4/01                                                  45,000,000              45,142,479
  6.24%, 12/6/01                                                 10,000,000              10,095,382
  6.40%, 12/21/01                                                 6,000,000               6,066,827
  6.48%, 11/2/01                                                  5,325,000               5,372,109
  6.64%, 9/18/01                                                 11,000,000              11,059,085
FNMA Master Credit Facility:
  3.86%, 9/4/01                                                   7,000,000               6,951,214
  4.08%, 11/1/01                                                 45,000,000              44,372,700
  4.67%, 7/3/01                                                  36,000,000              35,990,660
  5.10%, 8/1/01                                                  49,000,000              48,784,808
Overseas Private Investment Corp.:
  4.076%, 7/20/01(1)(2)                                           2,642,406               2,666,223
  5.736%, 7/20/01(1)(2)                                           3,167,710               3,178,286
Student Loan Marketing Assn., guaranteeing commercial
paper of New Hampshire Higher Education Loan Corp.,
Series 1995A:
  3.83%, 7/23/01                                                 15,917,000              15,879,745
  3.85%, 7/16/01                                                 15,000,000              14,975,937
                                                                                      -------------
Total U.S. Government Agencies (Cost $1,238,266,702)                                  1,238,266,702
                                                                                      -------------
Total Investments, at Value (Cost $1,462,466,702)                     100.3%          1,462,466,702
Liabilities in Excess of Other Assets                                  (0.3)             (4,961,882)
                                                                 -----------          -------------
Net Assets                                                            100.0%        $ 1,457,504,820
                                                                 ==========         ===============

---------- 1. Represents the current interest rate for a variable rate security. 2. Identifies issues considered to be illiquid--See Note 4 of Notes to Financial Statements. See accompanying Notes to Financial Statements. 4 STATEMENT OF ASSETS AND LIABILITIES June 30, 2001 Centennial Government Trust


ASSETS
Investments, at value (Cost $1,462,466,702)Esee accompanying statement                     $ 1,462,466,702
Cash                                                                                             1,896,555
Receivables and other assets:
  Interest                                                                                       3,714,963
  Shares of beneficial interest sold                                                             2,962,843
  Other                                                                                             58,725
                                                                                           ---------------
    Total assets                                                                             1,471,099,788
                                                                                           ===============
LIABILITIES
Payables and other liabilities:
  Dividends                                                                                      1,281,316
  Shares of beneficial interest redeemed                                                        11,939,300
  Shareholder reports                                                                              145,136
  Service plan fees                                                                                111,532
  Trustees' compensation                                                                             7,042
  Other                                                                                            110,642
                                                                                           ---------------
    Total liabilities                                                                           13,594,968
                                                                                           ---------------
NET ASSETS                                                                                 $ 1,457,504,820
                                                                                           ===============
COMPOSITION OF NET ASSETS
Paid-in capital                                                                            $ 1,457,723,867
Accumulated net realized gain (loss) on investment transactions                                   (219,047)
                                                                                           ---------------
NET ASSETS--applicable to 1,457,723,867 shares of beneficial interest
outstanding                                                                                $ 1,457,504,820
                                                                                           ===============
NET ASSETS VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE                            $          1.00

See accompanying Notes to Financial Statements. 5 STATEMENT OF OPERATIONS For the Year Ended June 30, 2001 Centennial Government Trust


INVESTMENT INCOME--Interest                                              $ 80,100,943
                                                                         ------------
EXPENSES
Management fees                                                             6,049,419
Service plan fees                                                           2,727,603
Transfer and shareholder servicing agent fees                                 678,718
Shareholder reports                                                           251,476
Custodian fees and expenses                                                    48,318
Trustees' compensation                                                         20,015
Other                                                                         175,287
                                                                         ------------
  Total expenses                                                            9,950,836
    Less reduction to custodian expenses                                      (12,349)
                                                                         ------------
  Net expenses                                                              9,938,487
                                                                         ------------
NET INVESTMENT INCOME                                                      70,162,456
                                                                         ------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS                                       328,977
                                                                         ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                     $ 70,491,433
                                                                         ============

See accompanying Notes to Financial Statements. 6 STATEMENTS OF CHANGES IN NET ASSETS Centennial Government Trust


                                                                                           YEAR ENDED JUNE 30,
                                                                                --------------------------------------
                                                                                      2001                  2000
                                                                                --------------        ----------------


OPERATIONS
Net investment income (loss)                                                   $    70,162,456        $    61,238,668
Net realized gain (loss)                                                               328,977                 13,728
                                                                               ---------------        ---------------
Net increase (decrease) in net assets resulting from operations                     70,491,433             61,252,396
                                                                               ---------------        ---------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS                                     (70,162,456)           (61,238,668)
                                                                               ---------------        ---------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase (decrease) in net assets resulting from
  beneficial interest transactions                                                 265,420,116            (21,379,309)
                                                                               ---------------        ---------------
NET ASSETS
Total increase (decrease)                                                          265,749,093            (21,365,581)
Beginning of period                                                              1,191,755,727          1,213,121,308
                                                                               ---------------        ---------------
End of period                                                                  $ 1,457,504,820        $ 1,191,755,727
                                                                               ===============        ===============

See accompanying Notes to Financial Statements. 7 FINANCIAL HIGHLIGHTS Centennial Government Trust


                                                                              YEAR ENDED JUNE 30,
                                              ---------------------------------------------------------------------------------
                                                 2001              2000              1999             1998              1997
                                              ---------         ---------         ---------         ---------         ---------

PER SHARE OPERATING DATA
Net asset value, beginning of period          $    1.00         $    1.00         $    1.00         $    1.00         $    1.00
Income from investment operations--
  net investment income and
  net realized gain                                 .05               .05               .04               .05               .05
Dividends and/or distributions to
  shareholders                                     (.05)             (.05)             (.04)             (.05)             (.05)
                                              ---------         ---------         ---------         ---------         ---------
Net asset value, end of period                $    1.00         $    1.00         $    1.00         $    1.00         $    1.00
                                              =========         =========         =========         =========         =========
TOTAL RETURN(1)                                    5.29%             5.07%             4.47%             4.93%             4.75%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions)       $   1,458         $   1,192         $   1,213         $   1,132         $   1,027
Average net assets (in millions)              $   1,367         $   1,244         $   1,245         $   1,117         $   1,032
Ratios to average net assets:(2)
Net investment income                              5.13%             4.92%             4.37%             4.82%             4.65%
Expenses                                           0.73%             0.74%             0.74%             0.75%(3)          0.76%(3)

---------------- 1. Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns reflect changes in net investment income only. Total returns are not annualized for periods of less than one full year. 2. Annualized for periods of less than one full year. 3. Expense ratio reflects the reduction to custodian expenses. See accompanying Notes to Financial Statements. 8 NOTES TO FINANCIAL STATEMENTS Centennial Government Trust 1. SIGNIFICANT ACCOUNTING POLICIES Centennial Government Trust (the Trust) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Trust's investment objective is to seek a high level of current income consistent with the preservation of capital and the maintenance of liquidity. The Trust's investment advisor is Centennial Asset Management Corporation (the Manager), a subsidiary of OppenheimerFunds, Inc. (OFI). The following is a summary of significant accounting policies consistently followed by the Trust. Securities Valuation. Portfolio securities are valued on the basis of amortized cost, which approximates market value. Repurchase Agreements. The Trust requires its custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Trust may be delayed or limited. Federal Taxes. The Trust intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders. Therefore, no federal income or excise tax provision is required. As of June 30, 2001, the Trust had available for federal income tax purposes unused capital loss carryovers as follows:


                            EXPIRING
                            --------

                            2004        $195,788
                            2005          16,379
                                        --------
                            Total       $212,167
                                        ========

        Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date.

Security Transactions. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost.

        Other. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

9 NOTES TO FINANCIAL STATEMENTS (Continued) Centennial Government Trust 2. SHARES OF BENEFICIAL INTEREST The Trust has authorized an unlimited number of no par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows:


                                          YEAR ENDED JUNE 30, 2001                      YEAR ENDED JUNE 30, 2000
                                  --------------------------------------        ---------------------------------------
                                        SHARES                AMOUNT                 SHARES                 AMOUNT
                                  ---------------        ---------------        ---------------        ---------------

 Sold                             3,739,905,295          $ 3,739,905,295        3,599,296,440          $ 3,599,296,440
 Dividends and/or
   distributions reinvested          70,389,432               70,389,432           58,889,090               58,889,090
 Redeemed                        (3,544,874,611)          (3,544,874,611)      (3,679,564,839)          (3,679,564,839)
                                  ---------------        ---------------        ---------------         ---------------
 Net increase (decrease)            265,420,116          $   265,420,116          (21,379,309)         $   (21,379,309)
                                  ===============        ===============        ===============         ===============

3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES

Management Fees. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Trust which provides for a fee of 0.50% of the first $250 million of the Trusts net assets, 0.475% of the next $250 million, 0.45% of the next $250 million, 0.425% of the next $250 million, 0.40% of the next $250 million, 0.375% of the next $250 million, 0.35% of net assets in excess of $1.5 billion. In the agreement, the Manager guarantees that the Trusts total expenses in any fiscal year, exclusive of taxes, interest and brokerage concessions, and extraordinary expenses such as litigation costs, shall not exceed the lesser of 1.5% of the average annual net assets of the Trust up to $30 million and 1% of its average annual net assets in excess of $30 million; or 25% of the total annual investment income of the Trust. The Trusts management fee for year ended June 30, 2001, was an annualized rate of 0.44%.

Transfer Agent Fees. Shareholder Services, Inc. (SSI) acts as the transfer and shareholder servicing agent for the Trust and for other registered investment companies. The Trust pays SSI an annual maintenance fee for each Trust shareholder account.

Service Plan Fees. Under an approved service plan, the Trust may expend up to 0.20% of its average annual net assets annually to reimburse the Manager, as distributor, for costs incurred in connection with the personal service and maintenance of accounts that hold shares of the Trust, including amounts paid to brokers, dealers, banks and other financial institutions. During the year ended June 30, 2001, the Trust paid $168,532 to a broker/dealer affiliated with the Manager as reimbursement for distribution-related expenses.

10 NOTES TO FINANCIAL STATEMENTS (Continued) Centennial Government Trust 4. ILLIQUID SECURITIES

As of June 30, 2001, investments in securities included issues that are illiquid. A security may be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Trust intends to invest no more than 10% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid securities. The aggregate value of illiquid securities subject to this limitation as of June 30, 2001, was $5,844,509, which represents 0.40% of the Trusts net assets.

Appendix A Description of Securities Ratings Below is a description of the two highest rating categories for Short Term Debt and Long Term Debt by the "Nationally-Recognized Statistical Rating Organizations" which the Manager evaluates in purchasing securities on behalf of the Fund. The ratings descriptions are based on information supplied by the ratings organizations to subscribers. SHORT TERM DEBT RATINGS. Moody's Investors Service, Inc. ("Moody's") The following rating designations for commercial paper (defined by Moody's as promissory obligations not having original maturity in excess of nine months), are judged by Moody's to be investment grade, and indicate the relative repayment capacity of rated issuers: Prime-1: Superior capacity for repayment. Capacity will normally be evidenced by the following characteristics: (a) leading market positions in well-established industries; (b) high rates of return on funds employed; (c) conservative capitalization structure with moderate reliance on debt and ample asset protection; (d) broad margins in earning coverage of fixed financial charges and high internal cash generation; and (e) well-established access to a range of financial markets and assured sources of alternate liquidity. Prime-2: Strong capacity for repayment. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. Moody's ratings for state and municipal short-term obligations are designated "Moody's Investment Grade" ("MIG"). Short-term notes which have demand features may also be designated as "VMIG". These rating categories are as follows: MIG 1/VMIG 1: Denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support or demonstrated broad-based access to the market for refinancing. MIG 2/VMIG 2: Denotes strong credit quality. Margins of protection are ample although not as large as in the preceding group. Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. ("Standard and Poor's") --------------------------------------------------------------------------------------------------------- The following ratings by Standard and Poor's for commercial paper (defined by Standard and Poor's as debt having an original maturity of no more than 365 days) assess the likelihood of payment: A-1: Obligation is rated in the highest category. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, a plus (+) sign designation indicates the obligor's capacity to meet its financial obligation is extremely strong. A-2: Obligation is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory. Standard and Poor's ratings for Municipal Notes due in 3 years or less: ------------------------------------------------------------------------ SP-1: Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a (+) designation. SP-2: Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes. Standard and Poor's assigns "dual ratings" to all municipal debt issues that have a demand or double feature as part of their provisions. The first rating addresses the likelihood of repayment of principal and interest as due, and the second rating addresses only the demand feature. With short-term demand debt, Standard and Poor's note rating symbols are used with the commercial paper symbols (for example, "SP-1+/A-1+"). Fitch, Inc. ("Fitch") --------------------- Fitch assigns the following short-term ratings to debt obligations that are payable on demand or have original maturities of generally up to three years, including commercial paper, certificates of deposit, medium-term notes, and municipal and investment notes: F1: Highest credit quality. Strongest capacity for timely payment of financial commitments. May have an added "+" to denote any exceptionally strong credit feature. F2: Good credit quality. A satisfactory capacity for timely payment of financial commitments, but the margin of safety is not as great as in the case of higher ratings. LONG TERM DEBT RATINGS. These ratings are relevant for securities purchased by the Fund with a remaining maturity of 397 days or less, or for rating issuers of short-term obligations. Moody's ------- Bonds (including municipal bonds) are rated as follows: Aaa: Judged to be the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edged." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, the changes that can be expected are most unlikely to impair the fundamentally strong position of such issues. Aa: Judged to be of high quality by all standards. Together with the "Aaa" group, they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as with "Aaa" securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk appear somewhat larger than that of "Aaa" securities. Moody's applies numerical modifiers "1", "2" and "3" in its "Aa" rating classification. The modifier "1" indicates that the obligation ranks in the higher end of its generic rating category; the modifier "2" indicates a mid-range ranking; and the modifier "3" indicates a ranking in the lower end of that generic rating category. Standard and Poor's ------------------- Bonds (including municipal bonds maturing beyond 3 years) are rated as follows: AAA: Bonds rated "AAA" have the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong. AA: Bonds rated "AA" differ from the highest rated obligations only in small degree. A strong capacity to meet its financial commitment on the obligation is very strong. Fitch ----- AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of credit risk. They are assigned only in the case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events. AA: Very High Credit Quality. "AA" ratings denote a very low expectation of credit risk. They indicate a very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. Because bonds rated in the "AAA" and "AA" categories are not significantly vulnerable to foreseeable future developments, short-term debt of these issuers is generally rated "F-1+". B-1 Appendix B --------------------------------------------------------------------------------------------------------------------------------------- Industry Classifications --------------------------------------------------------------------------------------------------------------------------------------- Aerospace & Defense Household Products Air Freight & Couriers Industrial Conglomerates Airlines Insurance Asset Backed Securities Internet & Catalog Retail Auto Components Internet Software & Services Automobiles Information Technology Consulting & Services Banks Leasing & Factoring Beverages Leisure Equipment & Products Biotechnology Machinery Broker-Dealer Marine Building Products Media Chemicals Metals & Mining Commercial Finance Multiline Retail Commercial Services & Supplies Multi-Utilities Communications Equipment Municipal Computers & Peripherals Office Electronics Construction & Engineering Oil & Gas Construction Materials Paper & Forest Products Consulting & Services Personal Products Consumer Finance Pharmaceuticals Containers & Packaging Real Estate Distributors Repurchase Agreements Diversified Financials Road & Rail Diversified Telecommunication Services Semiconductor Equipment & Products Electric Utilities Software Electrical Equipment Special Purpose Financial Electronic Equipment & Instruments Specialty Retail Energy Equipment & Services Textiles & Apparel Food & Drug Retailing Tobacco Food Products Trading Companies & Distributors Foreign Government Transportation Infrastructure Gas Utilities U.S. Government Agencies-Full Faith and Credit Agencies Health Care Equipment & Supplies U.S. Government Agencies-Government Sponsored Enterprises Health Care Providers & Services U.S. Government Instrumentalities Hotels Restaurants & Leisure U.S. Government Obligations Household Durables Water Utilities Wireless Telecommunication Services --------------------------------------------------------------------------------------------------------------------------------------- Centennial Government Trust --------------------------------------------------------------------------------------------------------------------------------------- Investment Advisor and Distributor Centennial Asset Management Corporation 6803 South Tucson Way Englewood, Colorado 80112 Sub-Distributor OppenheimerFunds Distributor, Inc. P.O. Box 5254 Denver, Colorado 80217 Transfer Agent Shareholder Services, Inc. P.O. Box 5143 Denver, Colorado 80217 1.800.525.9310 Custodian of Portfolio Securities Citibank, N.A. 399 Park Avenue New York, New York 10043 Independent Auditors Deloitte & Touche LLP 555 Seventeenth Street Denver, Colorado 80202 Legal Counsel Myer, Swanson, Adams & Wolf, P.C. 1600 Broadway Denver, Colorado 80202 PX0170.001(rev)070102 -------- Partners1Mr. Grabish is only a Trustee of Centennial Money Market Trust, Centennial Tax Exempt Trust, Centennial Government Trust, Centennial New York Tax Exempt Trust and Centennial California Tax Exempt Trust and a Managing General Partner of Centennial America Fund, L.P. Mr. Malone and Mrs. Hamilton are not Trustees of Oppenheimer Senior Floating Rate Fund. 2. In accordance with Rule 12b-1 of the Investment Company Act, the term "Independent Trustees" in this Statement of Additional Information refers to those Trustees who are not "interested persons" of the Trust and who do not have any direct or indirect financial interest in the operation of any agreement under the plan.