<PAGE>
Investors are advised to read and retain this Prospectus for future
reference.
Oppenheimer Zero Coupon U.S. Treasuries Trust,
Series A through F
OPPENHEIMER ZERO COUPON U.S. TREASURIES TRUST, SERIES A through F
(the "Fund"), seeks safety of principal and income through investment in
and appreciation of 13 series unit investment trusts, each with its own
fixed portfolio of debt obligations issued or backed by the full faith and
credit of the U.S. Government which make no periodic interest payments and
are therefore purchased at a deep discount. The 13 fixed investment
portfolios (each of which is designated as a "Series") consist mainly of
bearer debt obligations issued by the U.S. Government which have been
stripped of their unmatured interest coupons ("zero coupon obligations"),
coupons stripped from U.S. debt obligations, and receipts and certificates
for such stripped debt obligations and coupons (collectively, "Stripped
Treasury Securities").
The obligations held in each of the Series currently have maturity
dates in the years 1994 through 2000, and 2005 through 2010. When held
to maturity, Stripped Treasury Securities receive approximately a fixed
yield. The value of Stripped Treasury Securities prior to maturity, and
therefore of Units of the Fund, may fluctuate more in response to changing
interest rates than debt obligations of comparable maturities making
periodic distributions of interest. See "Description of the Fund -
Special Considerations."
Units of the Fund are sold only to separate investment accounts of
life insurance companies to fund variable life or variable annuity
insurance policies. At the date of this Prospectus, Units are being sold
to Monarch Life Insurance Company ("Monarch") to fund the benefits under
Variable Life Insurance Policies, including Variable Account B, issued by
Monarch. Variable Account B invests in Units of the Fund in accordance
with allocation instructions received from Policyowners. These allocation
rights are further described in the accompanying Prospectus for the
Policies. Oppenheimer Funds Distributor, Inc. (the "Sponsor") has
undertaken to maintain a secondary market for Units based on the aggregate
offering side evaluation of the underlying obligations of each Series,
which will enhance the liquidity of an investment in Units.
Sponsor: Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus is effective April 8, 1994.
<PAGE>
TABLE OF CONTENTS
Page
Investment Summary . . . . . . . . . . . . . . . . . . . . . . . .3
Description of the Fund. . . . . . . . . . . . . . . . . . . . . 11
Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Special Considerations . . . . . . . . . . . . . . . . . . . . . 12
Special Considerations of Stripped Treasury Securities . . . . . 13
The Portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . 13
Selection and Acquisition of Obligations . . . . . . . . . . . . 14
The Units. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Income and Yield . . . . . . . . . . . . . . . . . . . . . . . . 15
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Sale of Units. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Offering Price . . . . . . . . . . . . . . . . . . . . . . . . . 18
Comparison of Offering Price, Sponsor's Repurchase Price
and Redemption Price . . . . . . . . . . . . . . . . . . . . . 18
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Sponsor's Profits. . . . . . . . . . . . . . . . . . . . . . . . 18
Market for Units . . . . . . . . . . . . . . . . . . . . . . . . 19
Redemption of Units. . . . . . . . . . . . . . . . . . . . . . . 19
Expenses and Charges . . . . . . . . . . . . . . . . . . . . . . 21
Administration of the Fund . . . . . . . . . . . . . . . . . . . 22
Resignation, Removal and Limitations on Liability. . . . . . . . 23
Additional Information . . . . . . . . . . . . . . . . . . . . . 24
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Legal Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . 24
Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Sponsor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Financial Statements of Series A . . . . . . . . . . . . . . . . 26
Financial Statements of Series B . . . . . . . . . . . . . . . . 36
Financial Statements of Series C . . . . . . . . . . . . . . . . 43
Financial Statements of Series D . . . . . . . . . . . . . . . . 50
Financial Statements of Series E . . . . . . . . . . . . . . . . 57
Financial Statements of Series F . . . . . . . . . . . . . . . . 64
Financial Statements of the Sponsor. . . . . . . . . . . . . . . 71
<PAGE>
Investment Summary of Series A+
as of December 31, 1993
- ---------------------------------------------------------------------------
Series A is a series unit investment trust consisting of nine separate series,
each with its own portfolio. At December 31, 1993, there are four series
which are still outstanding, these are the 1994 Series, the 1995 Series, the
2000 Series and the 2005 Series, designated for the maturities of their
underlying Portfolios (see Portfolios herein).
<TABLE>
<CAPTION>
1994 1995
Series Series
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Face Amount of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 967,481 $ 3,904,361
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 967,481 3,904,361
Fractional Undivided Interest in Fund Represented by Each Unit . . . . . . . . . . . 1/967,481 st 1/3,904,361 st
Offering Price per 1,000 Units***
Aggregate offering side evaluation of Securities in Fund* . . . . . . . . . . . $ 938,628.00 $ 3,705,429.00
------------ --------------
Divided by number of Units times 1,000 . . . . . . . . . . . . . . . . . . . . . $ 970.18 $ 949.05
Plus the applicable transaction charge** . . . . . . . . . . . . . . . . . . . . 2.43 2.37
------------ --------------
Offering Price per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . . . $ 972.60 $ 951.42
============ ==============
Sponsor's Repurchase Price Per 1,000 Units (based on offering
side evaluation of underlying Securities) . . . . . . . . . . . . . . . . . . . . $ 970.18 $ 949.05
Redemption Price Per 1,000 Units (based on bid side evaluation
of underlying Securities)**** . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 969.85 $ 948.54
Calculation of Estimated Net Annual Interest Income per 1,000
Units Received in Cash by the Fund
Gross annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . $ 0.45 $ 0.45
Less estimated annual expense per 1,000 Units . . . . . . . . . . . . . . . . . 0.45 0.45
------------ --------------
Net annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00
============ ==============
Distributions
Distributions will be made on the first business day
following the maturity of each Security in a Series
to holders of record on the business day immediately
preceding the date of such distribution.
Trustee's Annual Fee
Per $1,000 face amount of underlying Securities (see
Expenses and Charges) $ 0.35 $ 0.35
Evaluator's Fee for Each Evaluation
$.35 for each issue of underlying Securities.
' Treating separate maturities as separate issues.
Evaluation Time
3:30 P.M. New York Time
Mandatory Termination Date
January 1, 2035
Minimum Value of Fund
Trust Indenture may be terminated with respect to any
Series if the value of that Series is less than 40% of
the face amount of Securities.
</TABLE>
<PAGE>
Investment Summary of Series A+
as of December 31, 1993 (Concluded)
- ---------------------------------------------------------------------------
Series A is a series unit investment trust consisting of nine separate series,
each with its own portfolio. At December 31, 1993, there are four series
which are still outstanding, these are the 1994 Series, the 1995 Series, the
2000 Series and the 2005 Series, designated for the maturities of their
underlying Portfolios (see Portfolios herein).
<TABLE>
<CAPTION>
2000 2005
Series Series
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Face Amount of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,963,103 $ 4,728,778
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,963,103 4,728,778
Fractional Undivided Interest in Fund Represented by Each Unit . . . . . . . . . . . 1/8,963,103 rd 1/4,728,778 th
Offering Price per 1,000 Units***
Aggregate offering side evaluation of Securities in Fund* . . . . . . . . . . . $ 6,253,008.00 $ 2,358,016.00
-------------- --------------
Divided by number of Units times 1,000 . . . . . . . . . . . . . . . . . . . . . $ 697.64 $ 498.65
Plus the applicable transaction charge** . . . . . . . . . . . . . . . . . . . . 6.98 7.48
-------------- --------------
Offering Price per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . . . $ 704.62 $ 506.13
============== ==============
Sponsor's Repurchase Price Per 1,000 Units (based on offering
side evaluation of underlying Securities) . . . . . . . . . . . . . . . . . . . . $ 697.64 $ 498.65
Redemption Price Per 1,000 Units (based on bid side evaluation
of underlying Securities)**** . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 695.86 $ 496.48
Calculation of Estimated Net Annual Interest Income per 1,000
Units Received in Cash by the Fund
Gross annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . $ 0.45 $ 0.45
Less estimated annual expense per 1,000 Units . . . . . . . . . . . . . . . . . 0.45 0.45
-------------- --------------
Net annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00
============== ==============
Distributions
Distributions will be made on the first business day
following the maturity of each Security in a Series
to holders of record on the business day immediately
preceding the date of such distribution.
Trustee's Annual Fee
Per $1,000 face amount of underlying Securities (see
Expenses and Charges) $ 0.35 $ 0.35
Evaluator's Fee for Each Evaluation
$.35 for each issue of underlying Securities.
Treating separate maturities as separate issues.
Evaluation Time
3:30 P.M. New York Time
Mandatory Termination Date
January 1, 2035
Minimum Value of Fund
Trust Indenture may be terminated with respect to any
Series if the value of that Series is less than 40% of
the face amount of Securities.
<FN>
- --------------
+ The Indenture was signed and the initial deposit was made as of March 20, 1985.
* The aggregate offering side evaluation of the obligations is determined by the Evaluator on the basis of current offering
prices for the obligations.
** The transaction charges currently applicable to the 1994 Series, the 1995 Series, the 2000 Series and the 2005 Series are
.25%, .25%, 1.00% and 1.50% of their respective offering prices per 1,000 Units (.251%, .251%, 1.010% and 1.523%,
respectively, of the net amount invested in Securities).
*** These figures are computed by dividing the aggregate offering side evaluation of the underlying Securities in the
particular Series (the price at which they could be purchased directly by the public if they were available) by the number
of Units of the Series outstanding, multiplying the result times 1,000 and adding the applicable transaction charge as
described in the preceding footnote. These figures assume a purchase of 1,000 Units. The price of a single Unit, or any
multiple thereof, is calculated by dividing the Offering Price per 1,000 Units above by 1,000 and multiplying by the number
of Units.
**** Figures shown are $2.75, $2.88, $8.76, and $9.65 less than the Offering Price per 1,000 Units and $.33, $.51, $1.78 and $2.17
less than the Sponsor's Repurchase Price per 1,000 Units with respect to the 1994 Series, the 1995 Series, the 2000 Series
and the 2005 Series, respectively.
</TABLE>
<PAGE>
Investment Summary of Series B+
as of December 31, 1993
- ---------------------------------------------------------------------------
Series B is a series unit investment trust consisting of three separate
series, each with its own portfolio. As of December 31, 1993, there are two
series which are still outstanding, these are the 1996 Series and the 2006
Series designated for the maturities of their underlying Portfolios. (See
Portfolios herein).
<TABLE>
<CAPTION>
1996 2006
Series Series
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Face Amount of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,004,095 $ 3,220,427
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,004,095 3,220,427
Fractional Undivided Interest in Fund Represented by Each Unit . . . . . . . . . . 1/2,004,095 th 1/3,220,427 th
Offering Price per 1,000 Units***
Aggregate offering side evaluation of Securities in Fund* . . . . . . . . . . $ 1,830,943.00 $ 1,487,507.00
-------------- --------------
Divided by number of Units times 1,000 . . . . . . . . . . . . . . . . . . . . $ 913.60 $ 461.90
Plus the applicable transaction charge** . . . . . . . . . . . . . . . . . . . 4.57 6.93
-------------- --------------
Offering Price per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . . $ 918.17 $ 468.83
============== ==============
Sponsor's Repurchase Price per 1,000 Units (based on offering side evaluation of
underlying Securities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 913.60 $ 461.90
Redemption Price per 1,000 Units (based on bid side evaluation of underlying
Securities)**** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 912.85 $ 459.76
Calculation of Estimated Net Annual Interest Income per 1,000 Units Received in
Cash by the Fund
Gross annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . $ 0.45 $ 0.45
Less estimated annual expense per 1,000 Units . . . . . . . . . . . . . . . . 0.45 0.45
-------------- --------------
Net annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00
============== ==============
Distributions
Distributions will be made on the first business day following the maturity
of each Security in a Series to holders of record on the business day
immediately preceding the date of such distribution.
Trustee's Annual Fee
Per $1,000 face amount of underlying Securities (see Expenses and Charges)
$ 0.35 $ 0.35
Evaluator's Fee for Each Evaluation
$.35 for each issue of underlying Securities.
Treating separate maturities as separate issues.
Evaluation Time
3:30 P.M. New York Time
Mandatory Termination Date
January 1, 2036
Minimum Value of Fund
Trust Indenture may be terminated with respect to any Series if the value of
that Series is less than 40% of the face amount of Securities.
<FN>
- ----------------
+ The Indenture was signed and the initial deposit was made as of January 27, 1986.
* The aggregate offering side evaluation of the obligations is determined by the Evaluator on the basis of current offering
prices for the obligations.
** The transaction charges currently applicable to the 1996 Series and the 2006 Series are .50% and 1.50% of their respective
Offering Price per 1,000 Units (.503% and 1.523%, respectively, of the net amount invested in Securities).
*** These figures are computed by dividing the aggregate offering side evaluation of the underlying Securities in the particular
Series (the price at which they could be purchased directly by the public if they were available) by the number of Units of
the Series outstanding, multiplying the result times 1,000 and adding the applicable transaction charges described in the
preceding footnote. These figures assume a purchase of 1,000 Units. The price of a single Unit, or any multiple thereof,
is calculated by dividing the Offering Price per 1,000 Units above by 1,000 and multiplying by the number of Units.
**** Figures shown are $5.32 and $9.07 less than the Offering Price per 1,000 Units and $0.75 and $2.14 less than the
Sponsor's Repurchase Price per 1,000 Units, with respect to the 1996 Series and the 2006 Series, respectively.
</TABLE>
<PAGE>
Investment Summary of Series C+
As of December 31, 1993
- ---------------------------------------------------------------------------
Series C is a series unit investment trust consisting of two separate series,
each with its own portfolio. These are the 1997 Series and the 2007 Series,
designated for the maturities of their underlying Portfolios (see Portfolios
herein).
<TABLE>
<CAPTION>
1997 2007
Series Series
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Face Amount of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,105,325 $ 1,477,056
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,105,325 1,477,056
Fractional Undivided Interest in Fund Represented by Each Unit . . . . . . . . . . . . 1/4,105,325 th 1/1,477,056 th
Offering Price per 1,000 Units***
Aggregate offering side evaluation of Securities in Fund* . . . . . . . . . . . . $ 3,436,185.00 $ 630,775.00
-------------- --------------
Divided by number of Units times 1,000 . . . . . . . . . . . . . . . . . . . . . . $ 837.01 $ 427.05
Plus the applicable transaction charge** . . . . . . . . . . . . . . . . . . . . . 6.28 7.47
-------------- --------------
Offering Price per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . . . . $ 843.29 $ 434.52
============== ==============
Sponsor's Repurchase Price Per 1,000 Units (based on offering side evaluation of
underlying Securities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 837.01 $ 427.05
Redemption Price Per 1,000 Units (based on bid side evaluation of underlying
Securities)**** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 835.83 $ 424.92
Calculation of Estimated Net Annual Interest Income per 1,000 Units Received in
Cash by the Fund
Gross annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . $ 0.45 $ 0.45
Less estimated annual expense per 1,000 Units . . . . . . . . . . . . . . . . . . 0.45 0.45
-------------- --------------
Net annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00
============== ==============
Distributions
Distributions will be made on the first business day following the maturity of each
Security in a Series to holders of record on the business day immediately
preceding the date of such distribution.
Trustee's Annual Fee
Per $1,000 face amount of underlying Securities (see Expenses and Charges) . . . . $ 0.35 $ 0.35
Evaluator's Fee for Each Evaluation
$.35 for each issue of underlying Securities.
Treating separate maturities as separate issues.
Evaluation Time
3:30 P.M. New York Time
Mandatory Termination Date
January 1, 2037
Minimum Value of Fund
Trust Indenture may be terminated with respect to any Series if the value of that
Series is less than 40% of the face amount of Securities.
<FN>
- -------------------------
+ The Indenture was signed and the initial deposit was made as of April 21, 1987.
* The aggregate offering side evaluation of the obligations is determined by the Evaluator on the basis of current offering
prices for the obligations.
** The transaction charges currently applicable to the 1997 Series and the 2007 Series, are .75% and 1.75% of their
respective Offering Prices per 1,000 Units (.756% and 1.781%, respectively, of the net amount invested in Securities).
*** These figures are computed by dividing the aggregate offering side evaluation of the underlying Securities in the
particular Series (the price at which they could be purchased directly by the public if they were available) by the
number of Units of the Series outstanding, multiplying the result times 1,000 and adding the applicable transaction
charge as described in the preceding footnote. These figures assume a purchase of 1,000 Units. The price of a
single Unit, or any multiple thereof, is calculated by dividing the Offering Price per 1,000 Units above by 1,000 and
multiplying by the number of Units.
**** Figures shown are $7.46 and $9.60 less then the Offering Price per 1,000 Units and $1.18 and $2.13 less than the
Sponsor's Repurchase Price per 1,000 Units, with respect to the 1997 Series and the 2007 Series respectively.
</TABLE>
<PAGE>
Investment Summary of Series D+
as of December 31, 1993
- ---------------------------------------------------------------------------
Series D is a series unit investment trust consisting of two separate series,
each with its own portfolio. These are the 1998 Series and 2008 Series,
designated for the maturities of their underlying Portfolios (see Portfolios
herein).
<TABLE>
<CAPTION>
1998 2008
Series Series
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Face Amount of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,321,762 $ 1,256,429
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,321,762 1,256,429
Fractional Undivided Interest in Fund Represented by Each Unit . . . . . . . . . . . 1/1,321,762 nd 1/1,256,429 th
Offering Price per 1,000 Units***
Aggregate offering side evaluation of Securities in Fund* . . . . . . . . . . . $ 1,063,062.00 $ 481,029.00
-------------- --------------
Divided by number of Units times 1,000 . . . . . . . . . . . . . . . . . . . . . $ 804.28 $ 382.85
Plus the applicable transaction charge** . . . . . . . . . . . . . . . . . . . . 6.03 6.70
-------------- --------------
Offering Price per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . . . $ 810.31 $ 389.55
============== ==============
Sponsor's Repurchase Price Per 1,000 Units (based on offering
side evaluation of underlying Securities) . . . . . . . . . . . . . . . . . . . $ 804.28 $ 382.85
Redemption Price Per 1,000 Units (based on bid side evaluation
of underlying Securities)**** . . . . . . . . . . . . . . . . . . . . . . . . . $ 802.92 $ 380.69
Calculation of Estimated Net Annual Interest Income Per 1,000
Units Received in Cash by the Fund
Gross annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . $ 0.45 $ 0.45
Less estimated annual expense per 1,000 Units . . . . . . . . . . . . . . . . . 0.45 0.45
-------------- --------------
Net annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00
============== ==============
Distributions
Distributions will be made on the first business day following
the maturity of each Security in a Series to holders of
record on the business day immediately preceding the date
of such distribution.
Trustee's Annual Fee
Per $1,000 face amount of underlying Securities (see Expenses
and Charges) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.35 $ 0.35
Evaluator's Fee for Each Evaluation
$.35 for each issue of underlying
Securities. Treating separate
maturities as separate issues.
Evaluation Time
3:30 P.M. New York Time
Mandatory Termination Date
January 1, 2038
Minimum Value of Fund
Trust Indenture may be terminated with respect to any Series
if the value of that Series is less than 40% of the face
amount of Securities.
<FN>
- ------------------
+ The Indenture was signed and the initial deposit was made as of April 18, 1988.
* The aggregate offering side evaluation of the obligations is determined by the Evaluator on the basis of current offering
prices for the obligations.
** The transaction charges currently applicable to the 1998 Series and the 2008 Series are .75% and 1.75% of their
respective Offering Prices per 1,000 Units (.756% and 1.781%, respectively, of the net amount invested in Securities).
*** These figures are computed by dividing the aggregate offering side evaluation of the underlying Securities in the
particular Series (the price at which they could be purchased directly by the public if they were available) by the
number of Units of the Series outstanding, multiplying the result times 1,000 and adding the applicable transaction charge
as described in the preceding footnote. These figures assume a purchase of 1,000 Units. The price of a single Unit, or
any multiplying thereof, is calculated by dividing the Offering Price per 1,000 Units above by 1,000 and multiplying by
the number of Units.
**** Figures shown are $7.39 and $8.86 less than the Offering Price per 1,000 Units and $1.36 and $2.16 less than the
Sponsor's Repurchase Price per 1,000 Units, with respect to the 1998 Series and the 2008 Series, respectively.
</TABLE>
<PAGE>
Investment Summary of Series E+
As of December 31, 1993
- ---------------------------------------------------------------------------
Series E is a series unit investment trust consisting of two separate series,
each with its own portfolio. These are the 1999 Series and 2009 Series,
designated for the maturities of their underlying Portfolios (see Portfolios
herein).
<TABLE>
<CAPTION>
1999 2009
Series Series
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Face Amount of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 567,866 $ 802,717
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 567,866 802,717
Fractional Undivided Interest in Fund Represented by Each Unit . . . . . . . . 1/567,866 th 1/802,717 th
Offering Price per 1,000 Units***
Aggregate offering side evaluation of Securities in Fund* . . . . . . . . $ 429,589.00 $ 296,038.00
------------ --------------
Divided by number of Units times 1,000 . . . . . . . . . . . . . . . . . . $ 756.50 $ 368.80
Plus the applicable transaction charge** . . . . . . . . . . . . . . . . . 7.56 6.45
------------ --------------
Offering Price per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . $ 764.06 $ 375.25
============ ==============
Sponsor's Repurchase Price per 1,000 Units (based on offering side evaluation
of underlying Securities) . . . . . . . . . . . . . . . . . . . . . . . . . $ 756.50 $ 368.80
Redemption Price per 1,000 Units (based on bid side evaluation of underlying
Securities)**** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 754.93 $ 366.64
Calculation of Estimated Net Annual Interest Income per 1,000 Units Received
in Cash by the Fund
Gross annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . $ 0.45 $ 0.45
Less estimated annual expense per 1,000 Units . . . . . . . . . . . . . . 0.45 0.45
------------ --------------
Net annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00
============ ==============
Distributions
Distributions will be made on the first business day following the maturity of
each Security in a Series to holders of record on the business day immediately
preceding the date of such distribution.
Trustee's Annual Fee
Per $1,000 face amount of underlying Securities (see Expenses and Charges) $ 0.35 $ 0.35
Evaluator's Fee for Each Evaluation
$.35 for each issue of underlying Securities.
Treating separate maturities as separate issues.
Evaluation Time
3:30 P.M. New York Time
Mandatory Termination Date
January 1, 2039
Minimum Value of Fund
Trust Indenture may be terminated with respect to any Series if the value of
that Series is less than 40% of the face amount of Securities.
<FN>
- --------------------
+ The Indenture was signed and the initial deposit was made as of April 17, 1989.
* The aggregate offering side evaluation of the obligations is determined by the Evaluator on the basis of current offering
prices for the obligations.
** The transaction charges currently applicable to the 1999 Series and the 2009 Series are 1.00% and 1.75% of their respective
Offering Prices per 1,000 Units (1.010% and 1.781%, respectively, of the net amount invested in Securities).
*** These figures are computed by dividing the aggregate offering side evaluation of the underlying Securities in the particular
Series (the price at which they could be purchased directly by the public if they were available) by the number of Units of
the Series outstanding, multiplying the result times 1,000 and adding the applicable transaction charge as described in the
preceding footnote. These figures assume a purchase of 1,000 Units. The price of a single Unit, or any multiple thereof, is
calculated by dividing the Offering Price per 1,000 Units above by 1,000 and multiplying by the number of Units.
**** Figures shown are $9.13 and $8.61 less than the Offering Price per 1,000 Units and $1.57 and $2.16 less than the Sponsor's
Repurchase Price per 1,000 Units, with respect to the 1999 Series and the 2009 Series, respectively.
</TABLE>
<PAGE>
Investment Summary of Series F+
As of December 31, 1993
- ---------------------------------------------------------------------------
Series F is a series unit investment trust consisting of the 2010 Series
designated for the maturity of its underlying Portfolio (see Portfolio
herein).
<TABLE>
<CAPTION>
2010
Series
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Face Amount of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,776,780
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,776,780
Fractional Undivided Interest in Fund Represented by Each Unit . . . . . . . . . . . . . . . . . . . . . . 1/1,776,780 th
Offering Price per 1,000 Units***
Aggregate offering side evaluation of Securities in Fund*... . . . . . . . . . . . . . . . . . . . . $ 617,994.00
--------------
Divided by number of units times 1,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 347.82
Plus the applicable transaction charge** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
--------------
Offering price per 1,000 units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 353.91
==============
Sponsor's Repurchase Price Per 1,000 Units (based on offering side evaluation of underlying Securities) . . $ 347.82
Redemption Price Per 1,000 Units (based on bid side evaluation of underlying Securities)**** . . . . . . . $ 345.69
Calculation of Estimated Net Annual Interest Income Per 1,000 Units Received in Cash by the Fund
Gross annual income per 1,000 units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.45
Less estimated annual expenses per 1,000 units . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.45
--------------
Net annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.00
==============
Distributions
Distributions will be made on the first business day following the maturity of each Security in a
Series to holders of record on the business day immediately preceding the date of such
distribution.
Trustee's Annual Fee
Per $1,000 face amount of underlying Securities (see Expenses and Charges) . . . . . . . . . . . . . $ 0.35
Evaluator's Fee for Each Evaluation
$.35 for each issue of underlying Securities. Treating separate maturities
as separate issues.
Evaluation Time
3:30 p.m. New York Time
Mandatory Termination Date
January 1, 2040
Minimum Value of Fund
Trust Indenture may be terminated with respect to the Series if the value is less than 40%
of the face amount of Securities.
<FN>
- ------------
+ The Indenture was signed and the initial deposit was made as of April 24, 1990.
* The aggregate offering side evaluation of the obligations is determined by the Evaluator on the basis of current offering
prices for the obligations.
** The transaction charge currently applicable to the 2010 Series is 1.75% of its respective Offering Price per 1,000 Units
(1.781% of the net amount invested in Securities).
*** This figure is computed by dividing the aggregate offering side evaluation of the underlying Securities in the Series (the
price at which they could be purchased directly by the public if they were available) by the number of Units of the Series
outstanding, multiplying the result times 1,000 and adding the applicable transaction charge as described in the preceding
footnote. This figure assumes a purchase of 1,000 Units. The price of a single Unit, or any multiple thereof, is
calculated by dividing the Offering Price per 1,000 Units above by 1,000, and multiplying by the number of Units.
**** Amount shown is $8.22 less than the Offering Price per 1,000 Units and $2.13 less than the Sponsor's Repurchase Price
per 1,000 Units.
</TABLE>
<PAGE>
Investment Summary
OBJECTIVE OF THE FUND - The Fund's objective is to provide safety of
capital and income by offering Units in fixed portfolios consisting
primarily of bearer debt obligations issued by the United States of
America that have been stripped of their unmatured interest coupons,
interest coupons that have been stripped from bearer debt obligations
issued by the United States of America and receipts and certificates for
such stripped debt obligations and stripped coupons (collectively,
"Stripped Treasury Securities"). The Fund consists of Series A (four
separate series which are still outstanding), Series B, C, D and E (each
of which have two separate series outstanding) and Series F (one separate
series), each separate series containing Stripped Treasury Securities with
a fixed maturity corresponding to the designation of the series
(collectively and individually, the "Series"). Stripped Treasury
Securities do not make any periodic payments of interest prior to
maturity. The stripping of the interest coupons will cause Stripped
Treasury Securities to be purchased by the Fund at a deep discount. The
Sponsor may at one or more times in the future deposit additional Stripped
Treasury Securities, with maturities identical to those of the securities
initially deposited, in any or all of the Series following the Initial
Date of Deposit (See "Description of Fund - Structure"). The market value
of the obligations held by the Series, and therefore the value of Units,
will fluctuate with changes in interest rates and other factors. The
value of zero coupon obligations, and therefore of Units, may be subject
to greater fluctuations in response to changing interest rates than debt
obligations making distributions of interest on a periodic basis. See
"Description of the Fund - Special Considerations."
Units of the Fund are sold only to separate accounts of life
insurance companies to fund the benefits under variable life or variable
annuity insurance policies. At the date of this Prospectus, Units are
being sold to Monarch Life Insurance Company ("Monarch") to fund the
benefits under Variable Life Insurance Policies, including Variable
Account B, issued by Monarch (the "Account"). Accordingly, the interest
of a Policyowner in the Units is subject to the terms of the Policy and
is described in the accompanying Prospectus for the Policies, which should
be reviewed carefully by a person considering the purchase of a Policy.
The Prospectus for the Policies describes the relationship between
increases or decreases in the net asset value of, and any distributions
of, Units, and the benefits provided under a Policy. The rights of an
Account as a Holder of Units should be distinguished from the rights of
a Policyowner which are described in the Policies. As Units of the Fund
are sold only to Accounts, the term "Holder" in this Prospectus shall
refer to the Accounts (or to the Sponsor if it holds Units acquired in the
secondary market - see "Market for Units").
SECURITIES - Each Series consists primarily of an issue of Stripped
Treasury Securities, and it is intended that the obligation selected for
inclusion in each of the Series will comply with any investment
limitations required to assure favorable Federal income tax treatment for
the Policies. Each such obligation was purchased at a deep discount.
Although the obligations are not rated, in the opinion of the Sponsor,
they have credit characteristics comparable to or higher than those of
debt securities rated "AAA" by nationally recognized rating agencies.
Each Series also initially contains one interest-bearing obligation issued
by the United States of America or backed by the full faith and credit of
the United States (the "Interest-Bearing Security") deposited in order to
provide income with which to pay the expenses of such Series.
SPECIAL CONSIDERATIONS - An investment in Units of a Series should
be made with an understanding of the risks which an investment in deep
discount obligations may entail, including the risk that the value of the
obligations in a Series and hence of the Units will decline with increases
in interest rates (see "Description of the Fund - Special
Considerations"). For each 1,000 Units of a Series purchased, a Holder
will receive total distributions of $1,000 for Units held until maturity
of the underlying Securities of that Series. Furthermore, the Offering
Price will vary in accordance with fluctuations in the values of the
Securities and the distributions could change if such obligations are
retired or sold prior to maturity, or as the expenses of the Series
change. For a discussion of the economic differences between the Fund and
a fund comprised primarily of interest-bearing debt obligations, see
"Description of the Fund - Income and Yield."
DISTRIBUTIONS - There will be no payments of interest on the
obligations held by each Series other than interest on the
Interest-Bearing Security in each Series, which will be used to pay the
expenses of each such Series. Consequently, it is not anticipated that
there will be any distributions of interest income. However, each
Stripped Treasury Security will be treated for Federal income tax purposes
as having "original issue discount," which must be amortized over the
remaining maturity of the Stripped Treasury Security and must be included
in a Holder's ordinary income before the Holder receives the cash
attributable to such income (see "Description of the Fund - Taxes". A
distribution will be made in cash when the obligations in a Series mature.
Any amount received prior to such time as a result of the sale of
obligations held by a Series in order to meet redemptions of Units
exceeding the amount necessary to meet such redemptions will not be
distributed until the maturity of the remaining obligations in such Series
(see "Administration of the Fund - Accounts and Distributions").
MARKET FOR UNITS - The Sponsor has undertaken to maintain a secondary
market for Units based on the aggregate offering side evaluation of the
underlying obligations of each Series (see "Market for Units"). If the
Sponsor should fail to maintain that market, a Holder will be able to
dispose of Units through redemption at prices based on the aggregate bid
side evaluation of the underlying obligations of the Series in which it
holds Units (see "Redemption"). Market conditions may cause the prices
to be more or less than the amount paid for Units.
DESCRIPTION OF THE FUND
STRUCTURE - Series A through F were created under New York law by one
Trust Indenture (the "Indenture")1 among Oppenheimer Funds Distributor,
Inc. (the "Sponsor"), United States Trust Company of New York (the
"Trustee") and Standard & Poor's Corporation (the "Evaluator"). On the
respective initial dates of deposit for each of Series A through F stated
in the Investment Summary (the "Initial Date of Deposit"), the Sponsor
deposited the underlying obligations with the Trustee of each Series at
prices equal to the valuation of those obligations on the offering side
of the market as determined by the Evaluator, and the Trustee delivered
to the Sponsor units of interest ("Units") representing the entire
ownership of each Series of the Fund. As indicated under "The Portfolio,"
below, the obligations deposited in the Series were the Securities or were
represented by purchase contracts assigned to the Trustee together with
an irrevocable letter or letters of credit issued by a commercial bank or
banks in the amount necessary to complete their purchase. Holders of
Units will have the right to have their Units redeemed (see "Redemption")
at a price based on the aggregate bid side evaluation of the obligations
("Redemption Price per Unit") if they cannot be sold in the secondary
market that the Sponsor has undertaken to maintain (see "Market for
Units"). Redemptions will be made in cash or, if elected by the Holder,
in kind by distributing to the Holders obligations held by the Series
having an aggregate value equal to the value of the Units being redeemed.
- --------------
[FN]
References in this Prospectus are made to selected articles and sections
of the Indenture, and all statements made herein are qualified in their
entirety by the terms of the indenture, which is hereby incorporated in
its entirety by reference. A complete copy of the Trust Indenture is
available upon request to the Trustee.
SPECIAL CONSIDERATIONS - An investment in Units of the Fund should
be made with an understanding of the risks which an investment in deep
discount debt obligations may entail, including the risk that the value
of the obligations in a Series and hence of the Units will decline with
increases in interest rates and that a direct Holder (but not necessarily
Policyowners - see "Taxes" under this caption) will have significant
amounts of taxable income attributable to it before the receipt of the
cash attributable to such income. In the past, periods of high inflation,
together with the fiscal measures adopted to attempt to deal with it, have
caused wide fluctuations in interest rates and, thus, of the value of
fixed rate debt obligations generally. The Sponsor cannot predict whether
such fluctuations will continue in the future.
Because interest on zero coupon obligations and similarly, the
amounts the Fund will receive from Stripped Treasury Securities, are not
distributed to the Fund on a current basis but are in effect compounded,
the value of obligations of these types, including the value of accrued
and reinvested interest (and of a fund comprised of such obligations), is
subject to greater fluctuations than obligations which distribute income
regularly. Accordingly, while the full faith and credit of the United
States Government backs the obligations held in the Series, the value of
Units will fluctuate in response to changes in interest rates to a greater
extent than would be the case if the Series consisted primarily of debt
obligations which paid interest on a regular basis. In addition, the
longer the maturity of the obligations in a Series, the greater the
fluctuation in value of the Units as a result of changes in interest
rates. The sale or redemption of Units prior to the maturity of the
obligations in a Series could, therefore, result in a loss if effected at
a time when interest rates are higher than they were at the time such
Units were purchased.
SPECIAL CONSIDERATIONS OF STRIPPED TREASURY SECURITIES - The Stripped
Treasury Securities held in the Series are bearer obligations which are
transferable by delivery. Stripped Bonds are those that have been
stripped of their unmatured interest coupons by the holder; Stripped
Coupons are coupons that were originally issued as part of and attached
to a debt obligation and have subsequently been stripped from such
obligation by a holder. Payments of principal, in the case of stripped
bonds, and payments of interest, in the case of stripped coupons, are made
to the holder of such bonds or coupons at the time of payment. Stripped
Bonds and Stripped Coupons are sold at a deep discount because the buyer
of such obligations receives only the right to receive a future fixed
payment and does not receive payments on a periodic basis.
Stripped Treasury Securities held by any Series shall consist solely
of one or more of the following types of obligations: (a) U.S. Treasury
debt obligations originally issued as bearer coupon bonds which have been
stripped of their unmatured interest coupons, (b) coupons which have been
stripped from U.S. Treasury bearer bonds, and (c) receipts or certificates
for either of the foregoing that evidence ownership of future interest or
principal payments on such obligations. Stripped Treasury Securities are
debt obligations of the United States Government which are payable in full
at maturity at their stated maturity amount and are not subject to
redemption prior to maturity. The Stripped Treasury Securities do not
make any periodic payments of interest.
The receipts or certificates described above must be issued in
registered form by a major bank which acts as custodian and nominal holder
of the obligation (which may be held by it either in physical or in book
entry form). The terms of custody with the bank must provide that the
underlying debt obligations will be held separate from the general assets
of the bank and will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of the bank or any person
claiming through the bank, and the bank will be responsible for applying
all payments received on those underlying debt obligations to the related
receipts or certificates without making any deductions other than
applicable tax withholding. The bank is required to maintain insurance
for the protection of holders of receipts or certificates in customary
amounts against losses resulting from the custody arrangement due to
dishonest or fraudulent action by the bank's employees. The holders of
receipts or certificates, as the real parties in interest, are entitled
to the rights and privileges of the underlying debt obligations including
the right in the event of default in payment of principal or interest
thereof to proceed individually against the United States without acting
in concert with other holders of such receipts or certificates, or the
bank.
The Stripped Treasury Securities in each Series are purchased at a
substantial discount from their principal amounts payable at maturity.
A holder of Stripped Treasury Securities will be required to include
annually in gross income an allocable portion of the discount created by
coupon stripping, prior to receipt of the principal payments at maturity
notwithstanding the fact that the holder receives no cash payment until
the maturities of the obligations. However, an insurance company separate
account such as the Account can avoid being taxed on such income by
deducting an equal amount for an increase in reserves. Stripped Treasury
Securities are marketable in substantially the same manner as other
discount securities issued by the U.S. Treasury.
THE PORTFOLIO - The Portfolio of each Series consists of one issue
of Stripped Treasury Securities, with a fixed maturity date, that has been
stripped of its interest coupons or underlying bond and as such was
purchased at a deep discount (see above), and of an Interest-Bearing
Treasury Security generally with the same maturity date as the Stripped
Treasury Security, deposited in order to provide income with which to pay
the expenses of the Series. If the Interest-Bearing Treasury Security in
a Series matures either prior or subsequent to its corresponding Stripped
Treasury Security, and as a result the Series has either a deficit or an
excess of income at maturity of the Stripped Treasury Security, the
Sponsor shall reallocate income from or to its own account as necessary.
It is intended that the Portfolio of each Series will comply with any
investment limitations required to assure favorable Federal income tax
treatment for the Policies.
SELECTION AND ACQUISITION OF OBLIGATIONS - In selecting obligations
for deposit in the Fund, the following factors, among others, were
considered by the Sponsor: (i) the types of such obligations available;
(ii) the prices of such obligations relative to other comparable
obligations; (iii) the extent to which such obligations trade at a
discount from par once the interest coupons are stripped; (iv) the yield
to maturity of such obligations; and (v) the maturities of such
obligations.
The yield to maturity and discount from par on debt obligations of
the type deposited in the Fund are dependent on a variety of factors,
including general money market conditions, general conditions of the bond
market, prevailing interest rates and the maturities of the obligations.
Each Series consists of such of the obligations listed under
"Portfolio" (or contracts to purchase such obligations) as may continue
to be held from time to time in the Series and any additional obligations
acquired and held by the Series pursuant to the provisions of the
Indenture (including provisions with respect to deposit into the Series
of obligations in connection with the sale of additional Units), together
with accrued and undistributed interest on the Interest-Bearing Treasury
Security deposited in order to pay the expenses of the Series and
undistributed cash representing payments of principal and uninvested cash
realized from the disposition of obligations (see "Administration of the
Fund - Portfolio Supervision").
Neither the Sponsor nor the Trustee shall be liable in any way for
any default, failure or defect in any of the obligations. In the event
of a failure to deliver any obligation that has been purchased for a
Series under a contract ("Failed Security"), the Sponsor is authorized
under the Indenture to direct the Trustee to acquire other obligations
("Replacement Securities") to make up the original portfolio of the
Series. Replacement Securities must be purchased within 20 days after the
Initial Date of Deposit and the purchase price may not exceed the amount
of funds reserved for the purchase of the Failed Security. Replacement
Securities must: (i) be obligations of a type authorized to be held by the
Fund; (ii) have a fixed maturity identical to that of the Failed Security;
and (iii) be purchased at a price that results in a yield to maturity as
of the Date of Deposit which is equivalent (taking into consideration then
current market conditions) to the yield to maturity of the Failed
Security. Whenever a Replacement Security has been acquired for a Series,
the Trustee shall, within five days thereafter, notify all Holders of the
affected Series of the acquisition of the Replacement Security and, within
30 days thereafter, make a pro rata distribution of the amount, if any,
by which the cost to the Series of the Failed Security exceeded the cost
of the Replacement Security plus any accrued interest or amortization.
If this right of substitution shall not be utilized to acquire Replacement
Securities in the event of a failed contract, the Sponsor shall, within
30 days after the failure, cause to be refunded the attributable
transaction charge plus the attributable Cost of Obligations to Series
listed under Portfolio, plus accrued interest and amortization.
Because certain of the obligations held in a Series may be sold under
certain circumstances described herein, each Series is not expected to
retain its present size and composition (see "Redemption"). The Indenture
also authorizes the Sponsor to increase the size and number of Units of
any Series by the deposit of additional obligations and the issue of a
corresponding number of additional Units at times following the Initial
Date of Deposit, subject to the requirements applicable to Replacement
Securities, with the further requirement that any additional
Interest-Bearing Treasury Securities bear interest at the same rate as the
Interest-Bearing Treasury Securities initially deposited in the Series.
These requirements are designed to avoid any adverse impact upon the
amounts available to Holders who acquire Units prior to the deposit of
additional obligations.
THE UNITS - On the date of the Investment Summary, each Unit of each
Series represented the fractional undivided interest in such Series set
forth under "Investment Summary." Thereafter, if Units of any Series are
redeemed by the Trustee, the face amount of obligations in the Series will
be reduced by amounts allocable to redeemed Units, and the fractional
undivided interest represented by each Unit in the balance of the Series
will be increased. If additional Units are issued by any Series (through
deposit of additional obligations by the Sponsor in connection with the
sale of additional Units), the aggregate value of obligations in the
Series will be increased by amounts allocable to additional Units, and the
fractional undivided interest represented by each Unit in the balance of
the Series will be decreased. Units will remain outstanding until
redeemed upon tender to the Trustee by a Holder, which may include the
Sponsor (see "Redemption") or until the termination of the Indenture (see
"Administration of the Fund - Amendment and Termination") with respect to
a Series.
INCOME AND YIELD - The economic effect of purchasing Units of any
Series is that the investor who holds his Units until maturity of the
underlying obligations should receive approximately a fixed yield, not
only on his original investment but on all earned discount during the term
of the obligations. The assumed or implicit automatic reinvestment of the
portion of the yield represented by earned discount differentiates this
Fund from funds comprised of customary debt payments which make periodic
payments of interest. Accordingly, an investor in the Units, unlike an
investor in a fund comprised of payments of interest bearing obligations,
virtually eliminates the risk of being unable to reinvest distributions
at a rate as high as that at the time of the initial investment, but will
forgo the ability to reinvest at higher rates which may be available in
the future.
The Interest-Bearing Treasury Security deposited in each Series
includes an item of accrued but unpaid interest up to the Initial Date of
Deposit. To avoid having a Holder pay this accrued interest (which earns
no return) when Units are purchased, the Trustee pays this amount of
accrued interest to the Sponsor as a special distribution. The Trustee
will recover the amount of this distribution from interest subsequently
received on the Interest-Bearing Treasury Security. Although this
obligation will also accrue interest during the period between the Initial
Date of Deposit and the date of settlement for Units, the Sponsor
anticipates that any such amount of accrued interest will be minimal and,
therefore, will not be added to the Offering Price indicated under
"Investment Summary." Any accrued interest on obligations deposited
subsequent to the Initial Date of Deposit which accrues prior to the
deposit of such obligations will be paid to the Sponsor as a special
distribution and no such interest accruing between the date of deposit of
such obligations and the settlement date for Units offered for sale in
connection with the deposit of such obligations will be added to the
Offering Price of such Units.
The Offering Price of each Series will vary in accordance with
fluctuations in the prices of the obligations held by the Series. Changes
in the Offering Prices will result in changes in the yields to maturity.
TAXES - The following discussion relates only to direct Holders of
Units of the Fund and not to Policyowners. If an Account is the Holder,
any taxable income will in effect be offset by a deduction for an increase
in reserves. For information on tax consequences to Policyowners, see the
attached Prospectus for the Policies.
In the opinion of Gordon Altman Butowsky Weitzen Shalov & Wein,
special counsel for the Sponsor, with respect to rendering advice to
direct Holders of Units, under existing law:
Each Series will not be considered an association taxable as a
corporation, but is classified as a trust for Federal income tax purposes.
Each Series will be treated as a grantor trust for Federal income tax
purposes. Each Holder of Units of a Series will be considered the owner
of a pro rata portion of each obligation in such Series. The total cost
to a Holder for Units of a Series, including sales charges, is allocated
among its pro rata portion of each obligation in such Series (in
proportion to the fair market value thereof on the date the Units are
purchased) in order to determine its tax cost for its pro rata portion of
each obligation.
A Holder is required to treat its pro rata portion of each Stripped
Treasury Security in its Series as a bond that was originally issued on
the date the Holder purchased its Units at an original issue discount
equal to the excess of the stated redemption price at maturity (or, in the
case of a coupon, the amount payable on the due date of such coupon) over
the Holder's tax cost of such Stripped Treasury Security as discussed
above, and to include annually in income a portion of such original issue
discount determined under a formula which takes into account the
compounding of interest.
Each Holder of a Series will be considered to have received the
income of its pro rata portion of the Interest-Bearing Treasury Security
when interest thereon is received by the Series. Each Holder of a Series
will be considered to have paid its pro rata share of expenses paid by its
Series, including fees of the Trustee and the Evaluator.
A Holder will recognize taxable gain (or loss) when all or part of
its pro rata portion of an obligation in its Series is disposed of (i.e.,
if the Series sells the obligation or if the Holder sells or redeems for
cash all or some of its Units) for an amount greater (or less) than its
original tax cost therefor, increased by the amount of amortized original
issue discount included in the Holder's gross income as discussed above.
Such resulting gain or loss will be capital gain or loss (except in the
case of a dealer or financial institution), and will be long-term capital
gain if the Holder has held its Units for more than one year. However,
a distribution to a Holder upon redemption of Units made in kind by
distributing obligations held by a Series will not be a taxable event to
the Holder or to nonredeeming Holders. The redeeming Holder's basis for
any obligations distributed in kind will be equal to its basis in such
obligations (previously represented by its Units) prior to such
redemption, and its holding period for such obligations will include the
period during which it held its Units. However, a Holder may recognize
taxable gain or loss when the Holder sells the obligations so distributed
for cash.
Under the income tax laws of the State and City of New York, each
Series is not an association taxable as a corporation and income received
by the Series will be treated as income of the Holders of the Series in
the same manner as for Federal income tax purposes.
* * *
The direct Holders of Units will be required for Federal income tax
purposes to include amounts in ordinary gross income in advance of the
receipt of the cash attributable to such income. Therefore, direct
purchase of Units may be appropriate only for a tax-deferred account which
can have taxable income attributed in advance of the receipt of the cash
attributable to such income and prior to the time that such income is
earned.
After the end of each calendar year, the Trustee will furnish to each
such Holder a report from which the Holder may determine the income
received by its Series on its pro rata portion of the Interest-Bearing
Treasury Security and the Holder's pro rata portion of the fees and
expenses paid by its Series. In order to enable compliance with Federal
and state tax reporting requirements, Holders will be furnished upon
request to the Trustee with evaluations of obligations held by the Fund
furnished to it by the Evaluator (Section 4.01).
The foregoing discussion relates only to Federal and New York income
taxes. Holders may also be subject to state and local taxation in other
jurisdictions.
SALE OF UNITS
OFFERING PRICE - The Offering Price of the Units of each Series is
computed by adding to the offering side evaluation of the Units in such
Series, divided by the number of Units of such Series outstanding, the
applicable transaction charge depending on the remaining years to maturity
of the Stripped Treasury Security in the Series:
<TABLE>
<CAPTION>
Transaction ChargeTransaction Charge
Remaining Years as Percentage of as Percentage of
to Maturity Offering Price Net Amount Invested
<S> <C> <C>
Less than 2 years 0.25% 0.251%
At least 2 years but less than 3 years0.50 0.503
At least 3 years but less than 5 years0.75 0.756
At least 5 years but less than 8 years1.00 1.010
At least 8 years but less than 13 years1.50 1.523
At least 13 years but less than 18 years1.75 1.781
18 years or more 2.00 2.041
</TABLE>
On Units sold to an Account, Monarch will initially pay the
transaction charge, which it may recover through an asset charge. (See
the accompanying Prospectus for the Policies for further information.)
Except as described under "Description of the Fund - Income and Yield,"
a proportionate share of any accrued but undistributed interest on the
obligations at the date of delivery of Units to the purchaser of Units is
added to the Offering Price. The Offering Prices on the date of this
Prospectus or on any subsequent date will vary from the Offering Prices
on the Initial Date of Deposit in accordance with fluctuations in the
offering side evaluations of the underlying obligations of the Series.
Amortization of discount will have the effect of increasing at any
particular time the offering side evaluation of the underlying
obligations.
The offering side evaluation of a Unit of a Series is computed by
adding: (a) the aggregate offering side evaluation of the obligations
determined by the Evaluator, (b) cash on hand in the Series (other than
cash deposited by the Sponsor for the purchase of obligations), (c)
accrued and unpaid interest as of the date of computation and (d) all
other assets of the Series; deducting therefrom, to the extent it does not
exceed the sum of (b), (c) and (d) above, the sum of (x) taxes or other
governmental charges against the Series not previously deducted, (y)
accrued fees and expenses of the Trustee (including legal and auditing
expenses), the Evaluator and counsel, and certain other expenses, and (z)
any cash held for distribution to Holders of record as of a date prior to
the evaluation; and dividing the result by the number of Units outstanding
(Sections 4.01 and 5.01). Any expenses in excess of the sum of (b), (c)
and (d) above shall be assumed by the Sponsor.
The aggregate offering side evaluation of the obligations shall be
determined by the Evaluator in the following manner: (a) on the basis of
current offering prices for the obligations, or (b) if offering prices are
not available for the obligations, on the basis of current offering prices
for comparable securities, or (c) by determining the value of the
obligations on the offering side of the market by appraisal, or (d) by any
combination of these three. The Evaluator may obtain current price
information as to the obligations from investment dealers or brokers
(including those affiliated with the Sponsor) which customarily deal in
such obligations.
The Offering Price is determined each business day during any initial
offering as of the Evaluation Time set forth under "Investment Summary,"
effective for all sales made since the last such evaluation and is made
on the last business day of each week during any period when there is no
initial offering (i.e., when no additional Units are being offered for
sale), effective for all sales made during the following week. The
Sponsor shall also cause the aggregate value of each Series to be
evaluated as of the Evaluation Time (i) on each June 30 and December 31
(or the last business day prior thereto), (ii) on the day on which any
Unit is tendered for redemption and (iii) at such other times as may be
necessary (Section 5.01).
COMPARISON OF OFFERING PRICE, SPONSOR'S REPURCHASE PRICE AND
REDEMPTION PRICE - On the date of the Investment Summary, the Offering
Prices per Unit (which includes the transaction charge) and the Sponsor's
Repurchase Prices per Unit (each based on the offering side evaluation of
obligations in each of the Series - see "Offering Price" under this
caption) exceeded the Redemption Prices per Unit (based on the bid side
evaluation thereof - see "Redemption of Units") by the amounts set forth
under "Investment Summary."
Because the bid side evaluations of Units are lower than the offering
side evaluations thereof by the amounts set forth under the Investment
Summary and for other reasons (including fluctuations in the market
prices of such obligations and the fact that the Offering Prices include
a transaction charge), the amount realized by a Holder upon any redemption
of Units may be less than the price paid for such Units.
DISTRIBUTION - During the initial offering period (i) for Units
issued on the Initial Date of Deposit and (ii) for additional Units issued
after such date relating to additional obligations deposited by the
Sponsor, Units may be purchased by the Account at the Offering Price by
means of this Prospectus (except that, as explained above, the transaction
charge is initially paid by the life insurance company). The initial
offering period in each case will terminate on the date all newly issued
Units are sold. Upon the completion of any initial offering, Units which
may be acquired in the secondary market may be offered to an Account by
this Prospectus at the secondary market Offering Prices (see "Market for
Units"), also less the transaction charge paid by the life insurance
company.
SPONSOR'S PROFITS - Upon the sale of the Units, the Sponsor receives
the transaction charge at the rates set forth above. This is the
difference between the cost of the obligations to the Series (which is
based on the offering side evaluation of the obligations deposited in the
Series on the Initial Date of Deposit) and the purchase price of such
obligations to the Sponsor. The Sponsor may realize a profit or loss on
the deposit of additional obligations in the Series following the Initial
Date of Deposit. During the initial offering period, and thereafter to
the extent additional Units continue to be offered for sale, the Sponsor
also may realize profits or sustain losses as a result of fluctuations in
the aggregate value of the obligations after the initial date of their
deposit, which will affect the Offering Price received by it on the sale
of Units. Cash, if any, made available to the Sponsor prior to the
settlement dates for Units may be used in the Sponsor's business and may
be of benefit to the Sponsor.
In maintaining a market for the Units (see "Market for Units" below),
the Sponsor will also realize profits or sustain losses in the amount of
any difference between the prices at which it buys Units and the prices
at which it resells those Units (which include the relevant transaction
charge) or the prices at which it may redeem such Units, as the case may
be.
MARKET FOR UNITS
The Sponsor has undertaken to maintain a secondary market for Units
of each Series of the Fund at its own expense and continuously to offer
to purchase Units of each Series of the Fund at prices, subject to change
at any time, which will be computed on the basis of the offering side of
the market, taking into account the same factors referred to in
determining the offering side of the market for purposes of the sale of
Units (see "Sale of Units - Offering Price"). During the initial offering
period or thereafter, on a given day, the price offered by the Trustee for
the redemption of Units shall be an amount not less than the Redemption
Price per Unit, based on the aggregate bid side evaluation of obligations
in the relevant Series on the date on which the Units are tendered for
redemption.
The Sponsor may redeem any Units it has purchased in the secondary
market if it determines it is undesirable to continue to hold such Units
in its inventory, provided that it has committed to redeem Units only in
an amount substantially equal in value to the value of one or more
obligations so that uninvested cash generated by such redemption is de
minimis. Factors that the Sponsor will consider in making such a
determination will include the number of Units of all Series which it has
in its inventory, the saleability of such Units and its estimate of the
time required to sell such Units and general market conditions.
REDEMPTION OF UNITS
Although in most cases Units can be sold in the secondary market that
the Sponsor will maintain at prices which will exceed the Redemption Price
per Unit (see below), Units may also be redeemed at the corporate trust
office of the Trustee upon tender of Certificates, if issued, or
accompanied (in the case of uncertificated Units) by such documents as the
Trustee may reasonably require, and payment of any relevant tax without
any other fee (Section 5.02). Any Certificates tendered for redemption
must be properly endorsed or accompanied by a written instrument or
instruments of transfer.
The Trustee will redeem Units in cash or, if requested in writing by
the Holder to the Trustee, "in kind". Not later than the seventh calendar
day following a tender of Units for redemption (or if the seventh calendar
day is not a business day, on the last business day prior thereto), a
Holder will be paid an amount per Unit in cash (or if redemption in kind
has been requested, will be paid in obligations and cash, as described
below) equal to the Redemption Price per Unit as determined as of the
Evaluation Time next following such tender. The Redemption Price per Unit
for in kind distributions (the "In Kind Distribution") will take the form
of the distribution of whole obligations represented by the fractional
undivided interest in the applicable Series of the Units tendered for
redemption (based upon the Redemption Price per Unit) plus any cash for
amounts less than a whole obligation (Section 5.02). Because the Sponsor
has undertaken to maintain a secondary market for Units of each Series,
at prices based on the offering side evaluation per Unit which is likely
to exceed the redemption price per Unit, the Sponsor will repurchase any
Units tendered for redemption in cash no later than the close of business
on the business day following the tender.
If the tendering Holder requests distribution in kind, the Trustee
shall sell any portion of the In Kind Distribution represented by
fractional interests in accordance with the instructions of the tendering
Holder and distribute net cash proceeds to the tendering Holder together
with certificates representing whole obligations comprising the In Kind
Distribution. In implementing these redemption procedures, the Trustee
shall make any adjustments necessary to reflect differences between the
Redemption Price of the Units and the value of the In Kind Distribution
as of the date of tender.
The Trustee is empowered to sell obligations held by the Series in
order to make funds available for cash redemptions (Section 5.02). The
obligations to be sold by the Trustee will be selected from a list
supplied by the Sponsor. Obligations will be chosen for this list by the
Sponsor on the basis of such market and credit factors as it may determine
are in the best interests of the relevant Series. Provision is made under
the Indenture for the Sponsor to specify minimum face amounts in which
blocks of obligations are to be sold in order to obtain the best available
prices. While such minimum amounts may vary from time to time in
accordance with market conditions, the Sponsor believes that the minimum
face amounts that would be specified would range from $25,000 to $100,000.
To the extent that obligations are redeemed in kind or sold, the size
of the relevant Series will be reduced. Sales will usually be required
at a time when obligations would not otherwise be sold and may result in
lower prices than might otherwise be realized. In addition, because of
the minimum face amounts in which obligations are required to be sold, the
proceeds of sale may, if the Sponsor fails to adhere to its commitment
described above, exceed the amount required at the time to redeem Units.
Such excess proceeds will be distributed ratably to Holders (see
"Administration of the Fund - Accounts and Distributions"). The price
received upon redemption may be more than or less than the amount paid by
the Holder depending on the value of the obligations in the Trust at the
time of redemption.
The right to redemption may be suspended and payment postponed for
any period (1) during which the New York Stock Exchange is closed other
than for customary weekend and holiday closings, or (2) during which, as
determined by the Securities and Exchange Commission (i) trading on that
Exchange is restricted or (ii) an emergency exists as a result of which
disposal or evaluation
of the Securities is not reasonably practicable, or (3) for such other
periods as the Securities and Exchange Commission may permit (Section
5.02).
Redemption Price per Unit is computed by the Trustee as of the
Evaluation Time on each June 30 and December 31 (or the last business day
prior thereto), on any day on which the New York Stock Exchange is open
or on any other day in which there is a sufficient degree of trading in
the obligations held by a Series that the Redemption Price for Units of
such Series might be materially affected, as of the Evaluation Time next
following the tender of any Unit for redemption, and on any other business
day desired by the Trustee or the Sponsor, on the bid side of the market,
taking into account the same factors referred to in determining the
offering side evaluation for purposes of sales of Units (see "Sale of
Units - Offering Price").
While obligations of the type held by the Series involve minimal risk
of loss of principal, the market value of such obligations and Redemption
Prices per Unit can be expected to fluctuate during the period of an
investment in the Fund due to variations in interest rates.
EXPENSES AND CHARGES
INITIAL EXPENSES - All expenses incurred in establishing the Fund and
the initial offering of Units and any additional Units, including the cost
of the initial preparation, printing and execution of the Indenture and
the Certificates, the initial fees and expenses of the Trustee, fees of
the Evaluator during the initial offering and the initial offering of
additional Units, legal expenses, advertising and selling expenses and any
other out-of-pocket expenses, will be paid by the Sponsor at no charge to
the Fund.
SPONSOR'S FEES - The Sponsor receives no fee from the Series for its
services as such. However, while the transaction charge paid by the life
insurance company to the Sponsor is not directly charged to the Account,
because of the asset charge by the life insurance company assessed against
the Account, Policyowners will indirectly bear these charges (see
"Expenses Charged to Divisions Investing in the Trust" in the accompanying
Prospectus).
FEES - The Trustee's and Evaluator's fees are set forth under
"Investment Summary." The Trustee's fees, payable in semi-annual
installments, are based on the face amount of obligations in a Series at
the beginning of each semi-annual period. Certain regular and recurring
expenses of each Series, including the Evaluator's fee and certain mailing
and printing expenses, are borne by the Trustee; provided that the Trustee
shall not be obligated to bear expenses in excess of an amount specified
in the Indenture with regard to any calendar year for the Series (or in
excess of a prorated portion of such amount in regard to periods of less
than one year) and any such amount so paid by the Trustee shall be
reimbursed to the Trustee pursuant to Section 6.05 of the Indenture.
Expenses in excess of that amount will be borne by the Series. The
Trustee also receives benefits to the extent that it holds funds on
deposit in the various non-interest bearing accounts created under the
Indenture.
OTHER CHARGES - These include: (a) fees of the Trustee for
extraordinary services (Section 6.05 of the Indenture), (b) certain
expenses of the Trustee (including legal and auditing expenses) and of
counsel designated by the Sponsor (Sections 3.05, 3.10, 6.01(E) and 6.05),
(c) various governmental charges (Sections 3.04 and 6.01(H)), (d) expenses
and costs of any action taken to protect any Series (Section 6.01(D)), (e)
indemnification of the Trustee for any loss, liabilities and expenses
incurred in the absence of gross negligence, bad faith or willful
misconduct on its part (Section 6.05), and (f) indemnification of the
Sponsor for any loss, liabilities and expenses incurred in the absence of
gross negligence, bad faith, willful misconduct or reckless disregard of
its duties (Section 8.03(B)). The amounts of these charges and fees are
secured by a lien on the relevant Series (Section 6.05). If the balances
in the Income and Capital Account of a Series (see below) are insufficient
to provide for amounts payable by the Series, the Sponsor will pay such
excess expenses, although the Trustee has the power to sell obligations
of such Series to pay such amounts (Section 6.05).
ADMINISTRATION OF THE FUND
RECORDS - The Trustee keeps records of transactions of the Fund at
its corporate trust office, including a current list of the obligations
held by each Series and a copy of the Indenture. Such records are
available to record Holders for inspection at reasonable times during
business hours (Sections 6.02 and 6.04).
ACCOUNTS AND DISTRIBUTIONS - The terms of the obligations held by the
Series provide for payments to be made to holders of such obligations
(including the Fund) upon their maturities. Interest-Bearing Treasury
Securities held by the Series, including that part of the proceeds of any
disposition of any such Security which represents accrued interest and any
late payment penalties, is credited to an Income Account and all other
receipts are credited to a Capital Account (Sections 3.02 and 3.03).
Distributions to Holders as of the Record Date normally will be made on
the following Distribution Date and shall consist of an amount
substantially equal to each Holder's pro rata share of the distributable
cash balance in the Income and Capital Accounts computed as of the close
of business on the Record Date. The Distribution Date for each Series
shall be the next business day following the maturity of the obligations
in that Series' Portfolio. The Record Date shall be the business day
immediately preceding the Distribution Date.
The amount to be distributed may change as obligations are exchanged,
paid or sold. Proceeds received from the disposition of any of the
obligations which are not used for redemption payments will be held in the
Capital Account (Section 3.05). However, the Sponsor will maintain a
secondary market and has undertaken to redeem Units purchased in that
market only when the value of such Units in the aggregate substantially
equals the value of an obligation held in the relevant Series. Amounts,
if any, in the Income Account of a Series will be distributed to Holders
pro rata upon termination of the Series. A Reserve Account may be created
by the Trustee by withdrawing from the Income or Capital Accounts, from
time to time, such amounts as it deems requisite to establish a reserve
for any taxes or other governmental charges that may be payable out of the
Series (Section 3.04). Funds held by the Trustee in the various accounts
created under the Indenture do not bear interest (Section 6.01).
PORTFOLIO SECURITIES - The Sponsor may direct the disposition of
obligations upon default in payment of principal or interest, institution
of certain legal proceedings, default in payment of principal of or
interest on other obligations of the same issuer, or decline in price or
the occurrence of other market or credit factors that in the opinion of
the Sponsor would make the retention of such obligations detrimental to
the interest of the Holders of a Series (Section 3.08). If such a default
in the payment of principal or interest on any of the obligations occurs
and if the Sponsor fails to instruct the Trustee to sell or hold such
obligations, the Indenture provides that the Trustee may, within 30 days
of such failure by the Sponsor, sell such Securities (Section 3.11). The
Sponsor is required by the Indenture to direct the Trustee to reject any
offer made by an issuer to issue new obligations in exchange and
substitution for any obligations held by the Fund pursuant to a refunding
or refinancing plan.
REPORTS TO HOLDERS - The Trustee will furnish Holders of record with
each distribution a statement of the amounts of interest and other
receipts which are being distributed, expressed in each case as a dollar
amount per Unit. After the end of each calendar year, the Trustee will
furnish to Holders of record a statement (i) summarizing transactions for
such year in the Income, Capital and Reserve Accounts of the Series, (ii)
identifying obligations sold and purchased during such year and listing
obligations held at the end of such year by the Series, (iii) stating the
Series' Redemption Price per Unit based upon the computation thereof made
at the end of such year, (iv) specifying the amounts, if any, distributed
during such year from the Series' Income and Capital Accounts and (v)
certain other information. The accounts of each Series shall be audited
at least annually by independent certified public accountants designated
by the Sponsor, and the report of such accountants shall be furnished by
the Trustee to Holders upon request (Section 6.01(E)).
AMENDMENT AND TERMINATION - The Sponsor and Trustee may amend the
Indenture without the consent of Holders (a) to cure any ambiguity or to
correct or supplement any provision thereof which may be defective or
inconsistent, (b) to change any provision thereof as may be required by
the Securities and Exchange Commission or any successor governmental
agency, (c) to permit the deposit of additional obligations with respect
to the issuance of additional Units, or (d) to make such other provisions
as shall not adversely affect the interest of Holders (as determined in
good faith by the Sponsor). The Indenture may also be amended in any
respect by the Sponsor and Trustee, or any of the provisions thereof may
be waived, with the consent of the Holders of 51% of the Units then
outstanding, provided that no such amendment or waiver will reduce the
interest in any Series of any Holder without the consent of such Holder
or reduce the percentage of Units required to consent to any such
amendment or waiver without the consent of all Holders. The Trustee must
promptly notify Holders of the substance of any such amendment (Section
9.01).
The Indenture will terminate with respect to a Series upon the
earlier of the maturity, redemption, sale or other disposition of the last
Security held in a Series or the mandatory termination date. The
Indenture as to any Series may be terminated by the Sponsor if the value
of the Series is less than the minimum value set forth under "Investment
Summary" and may be terminated at any time by Holders of 51% of the Units
(Sections 6.01(G) and 9.02). The Trustee will deliver written notice of
any termination to each Holder within a reasonable period of time prior
to such termination, specifying the times at which the Holders may
surrender their Certificates, if issued, for cancellation. Within a
reasonable period of time after such termination, the Trustee must sell
all of the obligations then held in the Series so terminated and
distribute to each Holder, upon surrender for cancellation of its
Certificates, if any, and after deductions of accrued and unpaid fees,
taxes and governmental and other charges, such Holder's interest in the
Income and Capital Accounts (Section 9.02). Such distribution will
normally be made by mailing a check in the amount of each Holder's
interest in such accounts to the address of such Holder appearing on the
record books of the Trustee.
RESIGNATION, REMOVAL AND LIMITATIONS ON LIABILITY
THE TRUSTEE - The Trustee or any successor may resign upon notice to
the Sponsor. The Trustee may be removed upon the direction of the Holders
of 51% of the Units at any time or by the Sponsor without the consent of
any of the Holders if it becomes incapable of acting or becomes bankrupt
or its affairs are taken over by public authorities. Such resignation or
removal shall become effective upon the acceptance of appointment by the
successor. In case of such resignation or removal, the Sponsor is to use
its best efforts to appoint a successor promptly and if upon resignation
of the Trustee, no successor has accepted appointment within thirty days
after notification, the Trustee may apply to a court of competent
jurisdiction for the appointment of a successor (Section 6.06). The
Trustee shall be under no liability for any action taken in good faith in
reliance on prima facie properly executed documents or for the disposition
of monies or obligations, nor shall it be liable or responsible in any way
for depreciation or loss incurred by reason of the sale of any obligation.
However, this provision shall not protect the Trustee in cases of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties. In the event of the failure of the Sponsor to
act, the Trustee may act under the Indenture and shall not be liable for
any such action taken in good faith. The Trustee shall not be personally
liable for any taxes or other governmental charges imposed upon or in
respect of the obligations or upon the interest thereon. In addition, the
Indenture contains other customary provisions limiting the liability of
the Trustee (Sections 3.08, 3.11, 6.01 and 6.05).
THE EVALUATOR - The Evaluator may resign or may be removed by the
Sponsor, effective upon the acceptance of appointment by its successor;
the Sponsor is to use its best efforts to appoint a successor promptly.
If upon resignation of the Evaluator, no successor has accepted
appointment within thirty days after notification, the Evaluator may
apply to a court of competent jurisdiction for the appointment of a
successor (Section 4.04). Determinations by the Evaluator under the
Indenture shall be made in good faith upon the basis of the best
information available to it; provided however, that the Evaluator shall
be under no liability to the Trustee, the Sponsor or the Holders for
errors in judgment. However, this provision shall not protect the
Evaluator in cases of willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties (Section 4.03). The
Trustee, the Sponsor and the Holders may rely on any evaluation furnished
by the Evaluator and shall have no responsibility for the accuracy
thereof.
THE SPONSOR - If the Sponsor fails to perform its duties or becomes
incapable of acting or becomes bankrupt or its affairs are taken over by
public authorities, then the Trustee may (a) appoint a successor Sponsor
at rates of compensation deemed by the Trustee to be reasonable and as may
not exceed amounts prescribed by the Securities and Exchange Commission,
(b) terminate the Indenture and liquidate the Fund or (c) continue to act
as Trustee without terminating the Indenture (Section 6.01(F)). The
Sponsor shall be under no liability to the Fund or to the Holders for
taking any action or for refraining from taking any action in good faith
or for errors in judgment and shall not be liable or responsible in any
way for depreciation or loss incurred by reason of the sale of any
obligation. However, this provision shall not protect the Sponsor in
cases of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties (Section 8.03). The Sponsor and
its successors are jointly and severally liable under the Indenture. The
Sponsor may transfer all or substantially all of its assets to a
corporation or partnership which carries on its business and duly assumes
all of its obligations under the Indenture and in such event it shall be
relieved of all further liability under the Indenture (Section 8.02).
ADDITIONAL INFORMATION
TRUSTEE - The Trustee is United States Trust Company of New York, a
banking corporation with its corporate trust office at 45 Wall Street, New
York, New York 10005, which is subject to supervision by the Comptroller
of the Currency, the Federal Deposit Insurance Corporation and the Board
of Governors of the Federal Reserve System.
LEGAL OPINION - The legality of the Units has been passed upon by
Gordon Altman Butowsky Weitzen Shalov & Wein, 114 West 47th Street, New
York, New York 10036, as special counsel for the Sponsor. Carter, Ledyard
& Milburn, 2 Wall Street, New York, New York 10015, act as counsel for the
Trustee.
AUDITORS - The Financial Statements of Series A through F, including
the respective Portfolios included herein, have been audited by Deloitte
& Touche, independent auditors, as stated in their reports appearing
herein, and are included in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
SPONSOR - The Sponsor (a New York corporation), is a wholly-owned
subsidiary of Oppenheimer Management Corporation ("OMC"), and is the
general distributor of shares of certain of the registered investment
companies (commonly known as "mutual funds") managed by OMC and its
subsidiaries. Financial Statements of the Sponsor are included in this
Prospectus. See the accompanying Prospectus of Oppenheimer Variable
Account Funds for further information on OMC and the OppenheimerFunds.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series A
Independent Auditors' Report
- -------------------------------------------------------------------
We have audited the accompanying statements of condition, including the
related portfolios of the 1994 Series, the 1995 Series, the 2000 Series
and the 2005 Series of the Oppenheimer Zero Coupon U.S. Treasuries Trust,
Series A, as of December 31, 1993 and the related statements of operations
and changes in net assets, including the 1993 Series, for the years ended
December 31, 1993, 1992 and 1991. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at
December 31, 1993 by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets of Oppenheimer Zero Coupon U.S.
Treasuries Trust, Series A at December 31, 1993, and the results of its
operations and changes in its net assets, for the above stated periods,
in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche
- ---------------------
DELOITTE & TOUCHE
Denver, Colorado
February 8, 1994
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series A
Statements of Condition as of December 31, 1993
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
1994 1995
Series Series
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Trust Property
Investment in marketable securities (see Portfolios) - Note 1 . . . . . . . . . . . . . . $938,308 $3,703,443
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,768 3,953
Accrued interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 1,099
-------- ----------
Total trust property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 940,131 3,708,495
Less Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,823 5,052
-------- ----------
Net Assets - Note 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $938,308 $3,703,443
======== ==========
Units Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 967,481 3,904,361
======== ==========
Unit Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .96985 $ .94854
======== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series A
Statements of Condition as of December 31, 1993 (Continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
2000 2005
Series Series
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Trust Property
Investment in marketable securities (see Portfolios) - Note 1 . . . . . . . . . . . . . . $6,237,029 $2,347,757
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,185 6,141
Accrued interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,513 1,330
---------- ----------
Total trust property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,243,727 2,355,228
Less Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,698 7,471
---------- -----------
Net Assets - Note 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,237,029 $2,347,757
========== ==========
Units Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,963,103 4,728,778
========== ==========
Unit Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .69586 $ .49648
========== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series A
Statements of Operations
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
1993 Series
---------------------------------
1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income:
Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 505 $ 686 $ 838
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . . . 106,594 133,081 153,068
Trustee's fees and expenses - Note 3 . . . . . . . . . . . . . . . . . . . . . . (505) (686) (838)
-------- -------- --------
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,594 133,081 153,068
Realized and Unrealized Gain (Loss)
on Investments
Realized gain on securities
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,689 21,433 17,172
Net change in unrealized appreciation
of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (70,689) (67,262) 44,690
-------- -------- --------
Net gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . . . 0 (45,829) 61,862
-------- -------- --------
Net Increase in Net Assets Resulting
from Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $106,594 $ 87,252 $214,930
======== ======== ========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series A
Statements of Operations
For the Years Ended December 31, 1993, 1992 and 1991 (Continued)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
1994 Series 1995 Series
------------------------------ ------------------------------
1993 1992 1991 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest Income . . . . . . . . . . . . . . . $ 433 $ 456 $ 607 $ 1,745 $ 1,860 $ 2,440
Accretion of original issue discount . . . . 76,653 93,898 119,320 308,088 324,994 382,416
Trustee's fees and expenses - Note 3 . . . . (433) (456) (607) (1,745) (1,860) (2,440)
-------- -------- -------- -------- -------- --------
Net investment income . . . . . . . . . . . . 76,653 93,898 119,320 308,088 324,994 382,416
Realized and Unrealized Gain (Loss)
on Investments
Realized gain on securities
transactions . . . . . . . . . . . . . . - 26,695 55,797 4,281 67,600 155,252
Net change in unrealized appreciation
of investments . . . . . . . . . . . . . (29,770) (41,618) 28,639 (101,947) (121,562) 77,972
-------- -------- -------- -------- -------- --------
Net gain (loss) on investments . . . . . . . (29,770) (14,923) 84,436 (97,666) (53,862) 233,224
-------- -------- -------- -------- -------- --------
Net Increase in Net Assets Resulting
from Operations . . . . . . . . . . . . . $ 46,883 $ 78,975 $203,756 $210,422 $271,032 $615,640
======== ======== ======== ========
======== ========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series A
Statements of Operations
For the Years Ended December 31, 1993, 1992 and 1991 (Concluded)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
2000 Series 2005 Series
--------------------------------- -------------------------------
1993 1992 1991 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest Income . . . . . . . . . . . . . . . $ 4,001 $ 4,732 $ 5,357 $ 2,240 $ 2,686 $ 3,989
Accretion of original issue discount . . . . 431,009 470,591 493,626 167,463 192,694 248,006
Trustee's fees and expenses - Note 3 . . . . (4,001) (4,732) (5,357) (2,240) (2,686) (3,989)
-------- -------- ---------- -------- -------- --------
Net investment income . . . . . . . . . . . . 431,009 470,591 493,626 167,463 192,694 248,006
Realized and Unrealized Gain (Loss)
on Investments
Realized gain on securities
transactions . . . . . . . . . . . . . . 140,068 163,914 166,548 92,226 92,668 84,022
Net Change in unrealized appreciation
of investments . . . . . . . . . . . . . 299,144 (136,385) 495,674 214,645 (92,683) 253,709
-------- -------- ---------- -------- -------- --------
Net gain (loss) on investments . . . . . . . 439,212 27,529 662,222 306,871 (15) 337,731
-------- -------- ---------- -------- -------- --------
Net Increase in Net Assets Resulting
from Operations . . . . . . . . . . . . . $870,221 $498,120 $1,155,848 $474,334 $192,679 $585,737
======== ======== ========== ========
======== ========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series A
Statements of Changes in Net Assets
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
1993 Series
---------------------------------
1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 106,594 $ 133,081 $ 153,068
Realized gain on securities
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,689 21,433 17,172
Net unrealized appreciation
(depreciation) of
investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (70,689) (67,262) 44,690
-------- -------- ---------
Net increase in net assets
resulting from operations . . . . . . . . . . . . . . . . . . . . . . . . . 106,594 87,252 214,930
Capital Share
Transactions - Note 4
Issuance of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - 85
Redemption of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,481,998) (404,426) (305,672)
---------- --------- ---------
Net increase (decrease) in
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,375,404) (317,174) (90,657)
Net Assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,375,404 1,692,578 1,783,235
--------- --------- ---------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0 $1,375,404 $1,692,578
========== ========== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series A
Statements of Changes in Net Assets
For the Years Ended December 31, 1993, 1992 and 1991 (Continued)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
1994 Series 1995 Series
------------------------------------- -----------------------------------
1993 1992 1991 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income . . . . . . $ 76,653 $ 93,898 $ 119,320 $ 308,088 $ 324,994 $ 382,416
Realized gain on securities
transactions . . . . . . . . . - 26,695 55,797 4,281 67,600 155,252
Net unrealized appreciation
(depreciation) of
investments . . . . . . . . . . (29,770) (41,618) 28,639 (101,947) (121,562) 77,972
-------- ---------- --------- --------- --------- ----------
Net increase in net assets
resulting from operations . . . 46,883 78,975 203,756 210,422 271,032 615,640
Capital Share
Transactions - Note 4
Issuance of Units . . . . . . . . - - - - - -
Redemption of Units . . . . . . . - (353,557) (916,388) (54,412) (745,228) (1,593,904)
-------- --------- --------- --------- --------- ----------
Net increase (decrease) in
Net Assets . . . . . . . . . . 46,883 (274,582) (712,632) 156,010 (474,196) (978,264)
Net Assets:
Beginning of period . . . . . . . 891,425 1,166,007 1,878,639 3,547,433 4,021,629 4,999,893
-------- --------- --------- --------- --------- ---------
End of period . . . . . . . . . . $938,308 $ 891,425 $1,166,007 $3,703,443 $3,547,433 $4,021,629
======== ========== ========== ========== ========== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series A
Statements of Changes in Net Assets
For the Years Ended December 31, 1993, 1992 and 1991 (Concluded)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
2000 Series 2005 Series
--------------------------------- ----------------------------------
1993 1992 1991 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income . . . . . . $ 431,009 $ 470,591 $ 493,626 $ 167,463 $ 192,694 $ 248,006
Realized gain on securities
transactions . . . . . . . . . 140,068 163,914 166,548 92,226 92,668 84,022
Net unrealized appreciation
(depreciation) of
investments . . . . . . . . . . 299,144 (136,385) 495,674 214,645 (92,683) 253,709
--------- ---------- ---------- -------- ---------- ----------
Net increase in net assets
resulting from operations . . . 870,221 498,120 1,155,848 474,334 192,679 585,737
Capital Share
Transactions - Note 4
Issuance of Units . . . . . . . . 130,275 410,460 145,840 - - 20,058
Redemption of Units . . . . . . . (646,397) (1,279,762) (934,304) (470,251) (884,195) (689,193)
--------- ---------- ---------- --------- ---------- ----------
Net increase (decrease) in
Net Assets . . . . . . . . . . 354,099 (371,182) 367,384 4,083 (691,516) (83,398)
Net Assets:
Beginning of period . . . . . . . 5,882,930 6,254,112 5,886,728 2,343,674 3,035,190 3,118,588
--------- ---------- ---------- ---------- ---------- ----------
End of period . . . . . . . . . . $6,237,029 $5,882,930 $6,254,112 $2,347,757 $2,343,674 $3,035,190
. . . . . . . . . . . . . . . . ========== ========== ========== ==========
========== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series A
Notes to Financial Statements
For the Years Ended December 31, 1993, 1992 and 1991
- ----------------------------------------------------------------
1. Significant Accounting Policies
The Fund is registered under the Investment Company Act of 1940 as a unit
investment trust. Units of the Fund are sold only to separate investment
accounts of life insurance companies to fund variable life insurance
policies. The Fund's sponsor is Oppenheimer Funds Distributor, Inc. The
following is a summary of significant accounting policies consistently
followed by the Fund. The policies are in conformity with generally
accepted accounting principles.
(a) Securities are stated at value as determined by the Evaluator based
on bid side evaluations for the securities.
(b) Cost of securities have been adjusted to include the accretion of
original issue discount on the Stripped Treasury Securities.
2. Net Capital
<TABLE>
<CAPTION>
December 31,
------------------------------------------------
1993 1992 1991
<S> <C> <C> <C>
1993 Series
- -----------
Cost of 1,417,359, and 1,849,006 Units, respectively . . . . . . . . $ 769,341 $1,034,178
Less sales charge . . . . . . . . . . . . . . . . . . . . . . . . . . 12,418 11,285
---------- ----------
Net amount applicable to certificateholders . . . . . . . . . . . . . 756,923 1,022,893
Accretion of original issue discount . . . . . . . . . . . . . . . . 551,165 535,107
Net unrealized appreciation of investments . . . . . . . . . . . . . 67,316 134,578
---------- ----------
Net capital applicable to certificateholders . . . . . . . . . . . . $1,375,404 $1,692,578
========== ==========
1994 Series
- -----------
Cost of 967,481, 967,481, and 1,353,971 Units, respectively . . . . . $448,823 $ 448,823 $ 700,019
Less sales charge . . . . . . . . . . . . . . . . . . . . . . . . . . 8,438 8,438 8,037
-------- ---------- ----------
Net amount applicable to certificateholders . . . . . . . . . . . . . 440,385 440,385 691,982
Accretion of original issue discount . . . . . . . . . . . . . . . . 451,641 374,989 356,356
Net unrealized appreciation of investments . . . . . . . . . . . . . 46,282 76,051 117,669
-------- ---------- ----------
Net capital applicable to certificateholders . . . . . . . . . . . . $938,308 $ 891,425 $1,166,007
======== ========== ==========
</TABLE>
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series A
Notes to Financial Statements
For the Years Ended December 31, 1993, 1992 and 1991 (Continued)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
December 31,
----------------------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
1995 Series
- -----------
Cost of 3,904,361, 3,964,621, and 4,828,351 Units, respectively . . . $1,838,780 $1,867,912 $2,244,734
Less sales charge . . . . . . . . . . . . . . . . . . . . . . . . . . 25,358 25,632 30,152
---------- ---------- ----------
Net amount applicable to certificateholders . . . . . . . . . . . . . 1,813,422 1,842,280 2,214,582
Accretion of original issue discount . . . . . . . . . . . . . . . . 1,618,192 1,331,377 1,311,709
Net unrealized appreciation of investments . . . . . . . . . . . . . 271,829 373,776 495,338
---------- ---------- ----------
Net capital applicable to certificateholders . . . . . . . . . . . . $3,703,443 $3,547,433 $4,021,629
========== ========== ==========
2000 Series
- -----------
Cost of 8,963,103, 9,757,347, and 11,275,461 Units, respectively . . $3,421,333 $3,601,554 $3,880,735
Less sales charge . . . . . . . . . . . . . . . . . . . . . . . . . . 32,898 38,151 47,431
---------- ---------- ----------
Net amount applicable to certificateholders . . . . . . . . . . . . . 3,388,435 3,563,403 3,833,304
Accretion of original issue discount . . . . . . . . . . . . . . . . 1,646,008 1,416,085 1,380,981
Net unrealized appreciation of investments . . . . . . . . . . . . . 1,202,586 903,442 1,039,827
---------- ---------- ----------
Net capital applicable to certificateholders . . . . . . . . . . . . $6,237,029 $5,882,930 $6,254,112
========== ========== ==========
2005 Series
- -----------
Cost of 4,728,778, 5,739,260, and 8,162,406 Units, respectively . . . $1,321,058 $1,555,784 $2,122,093
Less sales charge . . . . . . . . . . . . . . . . . . . . . . . . . . 28,042 35,279 13,045
---------- ---------- ----------
Net amount applicable to certificateholders . . . . . . . . . . . . . 1,293,016 1,520,505 2,109,048
Accretion of original issue discount . . . . . . . . . . . . . . . . 481,234 429,028 439,318
Net unrealized appreciation of investments . . . . . . . . . . . . . 573,507 394,141 486,824
---------- ---------- ----------
Net capital applicable to certificateholders . . . . . . . . . . . . $2,347,757 $2,343,674 $3,035,190
========== ========== ==========
</TABLE>
3. Expenses
Trustee's fees and other expenses incurred by the Fund are limited to the
amount of income generated by the Interest Bearing Treasury Securities in each
Series. Any excess expenses are assumed by the Sponsor.
4. Capital Share Transactions
Issuance
Additional Units were issued by the Fund during the years ended December 31,
1993, 1992, and 1991 as follows:
<TABLE>
<CAPTION>
Series 1993 1992 1991
- ------ ---- ---- ----
<S> <C> <C> <C>
1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 77
1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - -
1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - -
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201,075 749,003 301,612
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - 19,909
</TABLE>
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series A
Notes to Financial Statements
For the Years Ended December 31, 1993, 1992 and 1991 (Concluded)
- ---------------------------------------------------------------------------
Redemption
During 1993, 1992 and 1991, the Sponsor elected to redeem Units of the Fund as
follows:
<TABLE>
<CAPTION>
Series 1993 1992 1991
- ------ ---- ---- ----
<S> <C> <C> <C>
1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,555 431,647 351,340
1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 386,490 1,174,529
1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,260 863,730 2,119,153
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 995,319 2,267,117 1,819,725
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,010,482 2,423,146 2,031,018
</TABLE>
The total proceeds were remitted to the Sponsor.
5. Income Taxes
All income received, accretion of original issue discount, expenses paid,
and realized gains and losses on securities sold are attributable to the
holder, on a pro rata basis, for Federal income tax purposes in
accordance with the grantor trust rules of the Internal Revenue Code.
At December 31, 1993, the cost of investment securities for Federal income
tax purposes was approximately equivalent to the adjusted cost as shown
in each Series' portfolio.
6. Distributions
It is anticipated that each Series will not make any distributions until
the first business day following the maturity of its holding in the
Stripped Treasury Securities which are non-interest bearing. In November
of 1993 Series 1993 matured and distributions of $1,275,875 were made.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series A
Portfolios as of December 31, 1993
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Series No. and Coupon Face Adjusted
Title of Securities Rates Maturities Amount Cost (+) Value (*)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1994 Series
- -----------
Stripped Treasury Securities . . . . . . . . . 0% 11-15-94 $ 963,750 $ 888,477 $ 934,325
U.S. Treasury Notes . . . . . . . . . . . . . 11.625% 11-15-94 3,731 3,549 3,983
---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . . $ 967,481 $ 892,026 $ 938,308
========== ========== ==========
1995 Series
- -----------
Stripped Treasury Securities . . . . . . . . . 0% 5-15-95 $3,887,500 $3,414,878 $3,685,144
U.S. Treasury Notes . . . . . . . . . . . . . 10.375% 5-15-95 16,861 16,736 18,299
---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . . $3,904,361 $3,431,614 $3,703,443
========== ========== ==========
2000 Series
- -----------
Stripped Treasury Securities . . . . . . . . . 0% 8-15-00 $8,915,200 $4,987,993 $6,186,177
U.S. Treasury Notes . . . . . . . . . . . . . 8.375% 8-15-00 47,903 46,450 50,852
---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . . $8,963,103 $5,034,443 $6,237,029
========== ========== ==========
2005 Series
- -----------
Stripped Treasury Securities . . . . . . . . . 0% 5-15-05 $4,703,125 $1,750,448 $2,318,617
U.S. Treasury Notes . . . . . . . . . . . . . 8.25% 5-15-05 25,653 23,802 29,140
---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . . $4,728,778 $1,774,250 $2,347,757
========== ========== ==========
<FN>
- -------------
(+) See Notes to Financial Statements.
(*) The aggregate values based on offering side evaluations at December 31, 1993 were as follows:
Series Amount
------ ------
1994 $ 938,628
1995 3,705,429
2000 6,253,008
2005 2,358,016
</TABLE>
See Notes to Financial Statements.
<PAGE>
Investment Summary of Series A+
as of December 31, 1993
- ------------------------------------------------------------
Series A is a series unit investment trust consisting of nine separate
series, each with its own portfolio. At December 31, 1993, there are
four series which are still outstanding, these are the 1994 Series, the
1995 Series, the 2000 Series and the 2005 Series, designated for the
maturities of their underlying Portfolios (see Portfolios herein).
<TABLE>
<CAPTION>
1994 1995
Series Series
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Face Amount of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 967,481 $ 3,904,361
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 967,481 3,904,361
Fractional Undivided Interest in Fund Represented by Each Unit . . . . . . . . . . . 1/967,481 st 1/3,904,361 st
Offering Price per 1,000 Units***
Aggregate offering side evaluation of Securities in Fund* . . . . . . . . . . . $ 938,628.00 $ 3,705,429.00
------------ --------------
Divided by number of Units times 1,000 . . . . . . . . . . . . . . . . . . . . . $ 970.18 $ 949.05
Plus the applicable transaction charge** . . . . . . . . . . . . . . . . . . . . 2.43 2.37
------------ --------------
Offering Price per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . . . $ 972.60 $ 951.42
============ ==============
Sponsor's Repurchase Price Per 1,000 Units (based on offering
side evaluation of underlying Securities) . . . . . . . . . . . . . . . . . . . . $ 970.18 $ 949.05
Redemption Price Per 1,000 Units (based on bid side evaluation
of underlying Securities)**** . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 969.85 $ 948.54
Calculation of Estimated Net Annual Interest Income per 1,000
Units Received in Cash by the Fund
Gross annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . $ 0.45 $ 0.45
Less estimated annual expense per 1,000 Units . . . . . . . . . . . . . . . . . 0.45 0.45
------------ --------------
Net annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00
============ ==============
Distributions
Distributions will be made on the first business day
following the maturity of each Security in a Series
to holders of record on the business day immediately
preceding the date of such distribution.
Trustee's Annual Fee
Per $1,000 face amount of underlying Securities (see
Expenses and Charges) $ 0.35 $ 0.35
Evaluator's Fee for Each Evaluation
$.35 for each issue of underlying Securities.
' Treating separate maturities as separate issues.
Evaluation Time
3:30 P.M. New York Time
Mandatory Termination Date
January 1, 2035
Minimum Value of Fund
Trust Indenture may be terminated with respect to any
Series if the value of that Series is less than 40% of
the face amount of Securities.
</TABLE>
<PAGE>
Investment Summary of Series A+
as of December 31, 1993 (Concluded)
- ----------------------------------------------------------------
Series A is a series unit investment trust consisting of nine separate
series, each with its own portfolio. At December 31, 1993, there are four
series which are still outstanding, these are the 1994 Series, the 1995
Series, the 2000 Series and the 2005 Series, designated for the maturities
of their underlying Portfolios (see Portfolios herein).
<TABLE>
<CAPTION>
2000 2005
Series Series
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Face Amount of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,963,103 $ 4,728,778
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,963,103 4,728,778
Fractional Undivided Interest in Fund Represented by Each Unit . . . . . . . . . . . 1/8,963,103 rd 1/4,728,778 th
Offering Price per 1,000 Units***
Aggregate offering side evaluation of Securities in Fund* . . . . . . . . . . . $ 6,253,008.00 $ 2,358,016.00
-------------- --------------
Divided by number of Units times 1,000 . . . . . . . . . . . . . . . . . . . . . $ 697.64 $ 498.65
Plus the applicable transaction charge** . . . . . . . . . . . . . . . . . . . . 6.98 7.48
-------------- --------------
Offering Price per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . . . $ 704.62 $ 506.13
============== ==============
Sponsor's Repurchase Price Per 1,000 Units (based on offering
side evaluation of underlying Securities) . . . . . . . . . . . . . . . . . . . . $ 697.64 $ 498.65
Redemption Price Per 1,000 Units (based on bid side evaluation
of underlying Securities)**** . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 695.86 $ 496.48
Calculation of Estimated Net Annual Interest Income per 1,000
Units Received in Cash by the Fund
Gross annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . $ 0.45 $ 0.45
Less estimated annual expense per 1,000 Units . . . . . . . . . . . . . . . . . 0.45 0.45
-------------- --------------
Net annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00
============== ==============
Distributions
Distributions will be made on the first business day
following the maturity of each Security in a Series
to holders of record on the business day immediately
preceding the date of such distribution.
Trustee's Annual Fee
Per $1,000 face amount of underlying Securities (see
Expenses and Charges) $ 0.35 $ 0.35
Evaluator's Fee for Each Evaluation
$.35 for each issue of underlying Securities.
Treating separate maturities as separate issues.
Evaluation Time
3:30 P.M. New York Time
Mandatory Termination Date
January 1, 2035
Minimum Value of Fund
Trust Indenture may be terminated with respect to any
Series if the value of that Series is less than 40% of
the face amount of Securities.
<FN>
- --------------
+ The Indenture was signed and the initial deposit was made as of March 20, 1985.
* The aggregate offering side evaluation of the obligations is determined by the Evaluator on the basis of current offering
prices for the obligations.
** The transaction charges currently applicable to the 1994 Series, the 1995 Series, the 2000 Series and the 2005 Series are
.25%, .25%, 1.00% and 1.50% of their respective offering prices per 1,000 Units (.251%, .251%, 1.010% and 1.523%,
respectively, of the net amount invested in Securities).
*** These figures are computed by dividing the aggregate offering side evaluation of the underlying Securities in the
particular Series (the price at which they could be purchased directly by the public if they were available) by the number
of Units of the Series outstanding, multiplying the result times 1,000 and adding the applicable transaction charge as
described in the preceding footnote. These figures assume a purchase of 1,000 Units. The price of a single Unit, or any
multiple thereof, is calculated by dividing the Offering Price per 1,000 Units above by 1,000 and multiplying by the number
of Units.
**** Figures shown are $2.75, $2.88, $8.76, and $9.65 less than the Offering Price per 1,000 Units and $.33, $.51, $1.78 and $2.17
less than the Sponsor's Repurchase Price per 1,000 Units with respect to the 1994 Series, the 1995 Series, the 2000 Series
and the 2005 Series, respectively.
</TABLE>
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series B
Independent Auditors' Report
- ---------------------------------------------------------------------------
We have audited the accompanying statements of condition, including the
related portfolios of the 1996 Series and the 2006 Series of the Oppenheimer
Zero Coupon U.S. Treasuries Trust, Series B, as of December 31, 1993 and the
related statements of operations and changes in net assets for the years ended
December 31, 1993, 1992 and 1991. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at December 31, 1993 by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets of Oppenheimer Zero Coupon U.S.
Treasuries Trust, Series B at December 31, 1993 and the results of its
operations and changes in its net assets for the above stated periods, in
conformity with generally accepted accounting principles.
/s/ Deloitte & Touche
- ---------------------
DELOITTE & TOUCHE
Denver, Colorado
February 8, 1994
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series B
Statements of Condition as of December 31, 1993
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
1996 2006
Series Series
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Trust Property
Investment in marketable securities (see Portfolios) - Note 1 . . . . . . . . . . . . . . . $1,829,429 $1,480,623
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,785 3,392
Accrued interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 544
---------- ----------
Total trust property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,832,327 1,484,559
Less Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,898 3,936
---------- ----------
Net Assets - Note 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,829,429 $1,480,623
========== ==========
Units Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,004,095 3,220,427
========== ==========
Unit Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .91285 $ .45976
========== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series B
Statements of Operations
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
1996 Series
------------------------------------------
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income:
Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 896 $ 1,166 $ 1,204
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . 126,935 155,364 165,867
Trustee's fees and expenses - Note 3 . . . . . . . . . . . . . . . . . . . . (896) (1,166) (1,204)
------- -------- --------
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,935 155,364 165,867
Realized and unrealized gain on Investments
Realized gain on securities transactions . . . . . . . . . . . . . . . . . . - 37,929 43,717
Net change in unrealized appreciation of investments . . . . . . . . . . . . 8,942 (28,649) 143,476
------- -------- --------
Net gain on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,942 9,280 187,193
------ -------- --------
Net Increase in Net Assets Resulting from Operations . . . . . . . . . . . . $135,877 $164,644 $353,060
======== ======== ========
2006 Series
------------------------------------------
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,439 $ 1,500 $ 1,788
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . 94,089 94,747 109,891
Trustee's fees and expenses - Note 3 . . . . . . . . . . . . . . . . . . . . (1,439) (1,500) (1,788)
------- -------- --------
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,089 94,747 109,891
Realized and Unrealized Gain (Loss) on Investments
Realized gain (loss) on securities transactions . . . . . . . . . . . . . . . 8,786 6,458 150,465
Net change in unrealized appreciation of investments . . . . . . . . . . . . 176,267 26,521 27,613
------- -------- --------
Net gain on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . 185,053 32,979 178,078
------- -------- --------
Net Increase in Net Assets Resulting from Operations . . . . . . . . . . . . $279,142 $127,726 $287,969
======== ======== ========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series B
Statements of Changes in Net Assets
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
1996 Series
--------------------------------------------
1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 126,935 $ 155,364 $ 165,867
Realized gain on securities transactions . . . . . . . . . . . . . . . . . - 37,929 43,717
Net unrealized appreciation (depreciation) of investments . . . . . . . . 8,942 (28,649) 143,476
--------- ---------- ----------
Net increase in net assets resulting from operations . . . . . . . . . . . 135,877 164,644 353,060
Capital Share Transactions - Note 4
Issuance of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - -
Redemption of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . - (572,665) (640,227)
--------- ---------- ----------
Net increase (decrease) in net assets . . . . . . . . . . . . . . . . . . 135,877 (408,021) (287,167)
Net Assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,693,552 2,101,573 2,388,740
--------- ---------- ----------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,829,429 $1,693,552 $2,101,573
========== ========== ==========
2006 Series
----------------------------------------------
1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------------------
Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 94,089 $ 94,747 $ 109,891
Realized gain (loss) on securities transactions . . . . . . . . . . . . . 8,786 6,458 150,465
Net unrealized appreciation of investments . . . . . . . . . . . . . . . . 176,267 26,521 27,613
---------- ---------- ----------
Net increase in net assets resulting from operations . . . . . . . . . . . 279,142 127,726 287,969
Capital Share Transactions - Note 4
Issuance of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - 2,533,089
Redemption of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . (51,720) (210,213) (3,668,712)
---------- ---------- ----------
Net increase (decrease) in net assets . . . . . . . . . . . . . . . . . . 227,422 (82,487) (847,654)
---------- ---------- ----------
Net Assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,253,201 1,335,688 2,183,342
--------- ---------- ----------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,480,623 $1,253,201 $1,335,688
========== ========== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series B
Notes to Financial Statements
For the Years Ended December 31, 1993, 1992 and 1991
- ---------------------------------------------------------------------------
1. Significant Accounting Policies
The Fund is registered under the Investment Company Act of 1940 as a unit
investment trust. Units of the Fund are sold only to separate investment
accounts of life insurance companies to fund variable life insurance policies.
The Fund's sponsor is Oppenheimer Funds Distributor, Inc. The following is a
summary of significant accounting policies consistently followed by the Fund.
The policies are in conformity with generally accepted accounting principles.
(a) Securities are stated at value as determined by the Evaluator based
on bid side evaluations for the securities.
(b) Cost of securities have been adjusted to include the accretion of
original issue discount on the Stripped Treasury Securities.
2. Net Capital
<TABLE>
<CAPTION>
December 31,
-------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
1996 Series
- -----------
Cost of 2,004,095, 2,004,095 and 2,686,786 Units,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 991,255 $ 991,255 $1,323,580
Less sales charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,009 16,008 20,351
---------- ---------- ----------
Net amount applicable to certificateholders . . . . . . . . . . . . . . . . . 975,246 975,247 1,303,229
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . 724,869 597,933 649,323
Net unrealized appreciation of investments . . . . . . . . . . . . . . . . . 129,314 120,372 149,021
---------- ---------- ----------
Net capital applicable to certificateholders . . . . . . . . . . . . . . . . $1,829,429 $1,693,552 $2,101,573
========== ========== ==========
2006 Series
- -----------
Cost of 3,220,427, 3,345,950, and 3,988,629 Units,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 934,290 $ 971,084 $1,159,137
Less sales charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,338 12,120 15,778
---------- ---------- ----------
Net amount applicable to certificateholders . . . . . . . . . . . . . . . . . 922,952 958,964 1,143,359
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . 248,789 161,622 86,235
Net unrealized appreciation of investments . . . . . . . . . . . . . . . . . 308,882 132,615 106,094
---------- ---------- ----------
Net capital applicable to certificateholders . . . . . . . . . . . . . . . . $1,480,623 $1,253,201 $1,335,688
========== ========== ==========
</TABLE>
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series B
Notes to Financial Statements
For the Years Ended December 31, 1993, 1992 and 1991 (Concluded)
- ---------------------------------------------------------------------------
3. Expenses
Trustee's fees and other expenses incurred by the Fund are limited to the
amount of income generated by the Interest Bearing Treasury Securities in each
Series. Any excess expenses are assumed by the Sponsor.
4. Capital Share Transactions
Issuance
Additional Units were issued by the Fund during the periods ended December 31,
1993, 1992 and 1991 as follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - -
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - 8,836,838
</TABLE>
Redemption
During 1993, 1992 and 1991, the Sponsor elected to redeem units of the Fund as
follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 682,691 918,580
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,523 642,679 12,753,162
</TABLE>
The total proceeds were remitted to the sponsor.
5. Income Taxes
All income received, accretion of original issue discount, expenses paid, and
realized gains and losses on securities sold are attributable to the holder,
on a pro rata basis, for Federal income tax purposes in accordance with the
grantor trust rules of the Internal Revenue Code.
At December 31, 1993, the cost of investment securities for Federal income tax
purposes was approximately equivalent to the adjusted cost as shown in each
Series' portfolio.
6. Distributions
It is anticipated that each Series will not make any distributions until the
first business day following the maturity of its holding in the Stripped
Treasury Securities which are non-interest bearing.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series B
Portfolios as of December 31, 1993
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Series No. and Coupon Face Adjusted
Title of Securities Rates Maturities Amount Cost (+) Value (*)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1996 Series
- -----------
Stripped Treasury Securities . . . . . . . . . . . 0% 2-15-96 $1,996,283 $1,691,145 $1,820,594
U.S. Treasury Notes . . . . . . . . . . . . . . . . 11.50% 11-15-95 7,812 8,970 8,835
---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . . . $2,004,095 $1,700,115 $1,829,429
========== ========== ==========
2006 Series
- -----------
Stripped Treasury Securities . . . . . . . . . . . 0% 2-15-06 $3,207,000 $1,155,440 $1,461,876
U.S. Treasury Notes . . . . . . . . . . . . . . . . 10.75% 8-15-05 13,427 16,301 18,747
---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . . . . $3,220,427 $1,171,741 $1,480,623
========== ========== ==========
<FN>
- -------------------------
(+) See Notes to Financial Statements.
(*) The aggregate values based on offering side evaluations at December 31, 1993 were as follows:
Series Amount
------ ------
1996 . . . . . . . . . . . $1,830,943
2006 . . . . . . . . . . . 1,487,507
</TABLE>
See Notes to Financial Statements.
<PAGE>
Investment Summary of Series B+
as of December 31, 1993
- ---------------------------------------------------------------------------
Series B is a series unit investment trust consisting of three separate
series, each with its own portfolio. As of December 31, 1993, there are two
series which are still outstanding, these are the 1996 Series and the 2006
Series designated for the maturities of their underlying Portfolios. (See
Portfolios herein).
<TABLE>
<CAPTION>
1996 2006
Series Series
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Face Amount of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,004,095 $ 3,220,427
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,004,095 3,220,427
Fractional Undivided Interest in Fund Represented by Each Unit . . . . . . . . . . 1/2,004,095 th 1/3,220,427 th
Offering Price per 1,000 Units***
Aggregate offering side evaluation of Securities in Fund* . . . . . . . . . . $ 1,830,943.00 $ 1,487,507.00
-------------- --------------
Divided by number of Units times 1,000 . . . . . . . . . . . . . . . . . . . . $ 913.60 $ 461.90
Plus the applicable transaction charge** . . . . . . . . . . . . . . . . . . . 4.57 6.93
-------------- --------------
Offering Price per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . . $ 918.17 $ 468.83
============== ==============
Sponsor's Repurchase Price per 1,000 Units (based on offering side evaluation of
underlying Securities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 913.60 $ 461.90
Redemption Price per 1,000 Units (based on bid side evaluation of underlying
Securities)**** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 912.85 $ 459.76
Calculation of Estimated Net Annual Interest Income per 1,000 Units Received in
Cash by the Fund
Gross annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . $ 0.45 $ 0.45
Less estimated annual expense per 1,000 Units . . . . . . . . . . . . . . . . 0.45 0.45
-------------- --------------
Net annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00
============== ==============
Distributions
Distributions will be made on the first business day following the maturity
of each Security in a Series to holders of record on the business day
immediately preceding the date of such distribution.
Trustee's Annual Fee
Per $1,000 face amount of underlying Securities (see Expenses and Charges)
$ 0.35 $ 0.35
Evaluator's Fee for Each Evaluation
$.35 for each issue of underlying Securities.
Treating separate maturities as separate issues.
Evaluation Time
3:30 P.M. New York Time
Mandatory Termination Date
January 1, 2036
Minimum Value of Fund
Trust Indenture may be terminated with respect to any Series if the value of
that Series is less than 40% of the face amount of Securities.
<FN>
- ----------------
+ The Indenture was signed and the initial deposit was made as of January 27, 1986.
* The aggregate offering side evaluation of the obligations is determined by the Evaluator on the basis of current offering
prices for the obligations.
** The transaction charges currently applicable to the 1996 Series and the 2006 Series are .50% and 1.50% of their respective
Offering Price per 1,000 Units (.503% and 1.523%, respectively, of the net amount invested in Securities).
*** These figures are computed by dividing the aggregate offering side evaluation of the underlying Securities in the particular
Series (the price at which they could be purchased directly by the public if they were available) by the number of Units of
the Series outstanding, multiplying the result times 1,000 and adding the applicable transaction charges described in the
preceding footnote. These figures assume a purchase of 1,000 Units. The price of a single Unit, or any multiple thereof,
is calculated by dividing the Offering Price per 1,000 Units above by 1,000 and multiplying by the number of Units.
**** Figures shown are $5.32 and $9.07 less than the Offering Price per 1,000 Units and $0.75 and $2.14 less than the
Sponsor's Repurchase Price per 1,000 Units, with respect to the 1996 Series and the 2006 Series, respectively.
</TABLE>
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series C
Independent Auditors' Report
- ---------------------------------------------------------------------------
We have audited the accompanying statements of condition, including the
related portfolios of the 1997 Series and the 2007 Series of the Oppenheimer
Zero Coupon U.S. Treasuries Trust, Series C, as of December 31, 1993 and the
related statements of operations and changes in net assets for the years ended
December 31, 1993, 1992 and 1991. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at December 31, 1993 by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets of Oppenheimer Zero Coupon U.S.
Treasuries Trust, Series C at December 31, 1993 and the results of its
operations and changes in its net assets, for the above stated periods, in
conformity with generally accepted accounting principles.
/s/ Deloitte & Touche
- ---------------------
DELOITTE & TOUCHE
Denver, Colorado
February 8, 1994
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series C
Statements of Condition as of December 31, 1993
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
1997 2007
Series Series
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Trust Property
Investment in marketable securities(see Portfolios) - Note 1 . . . . . $3,431,363 $ 627,624
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,564 544
Accrued interest receivable . . . . . . . . . . . . . . . . . . . . . . 231 577
---------- ----------
Total trust property . . . . . . . . . . . . . . . . . . . . 3,435,158 628,745
Less Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,795 1,121
---------- ----------
Net Assets - Note 2 . . . . . . . . . . . . . . . . . . . . . . . . . . $3,431,363 $ 627,624
========== ==========
Units Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,105,325 1,477,056
========== ==========
Unit Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .83583 $ .42492
========== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series C
Statements of Operations
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
1997 Series
-----------------------------
1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income:
Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,831 $ 2,221 $ 2,361
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . . 253,557 277,506 313,937
Trustee's fees and expenses - Note 3 . . . . . . . . . . . . . . . . . . . . . (1,831) (2,221) (2,361)
-------- -------- --------
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253,557 277,506 313,937
Realized and Unrealized Gain (Loss) on Investments
Realized gain on securities transactions . . . . . . . . . . . . . . . . . . . 39,770 112,227 99,494
Net change in unrealized appreciation of investments . . . . . . . . . . . . . 47,606 (108,286) 240,300
-------- -------- --------
Net gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . . 87,376 3,941 339,794
-------- -------- --------
Net Increase in Net Assets Resulting from Operations . . . . . . . . . . . . . $340,933 $281,447 $653,731
======== ======== ========
2007 Series
-----------------------------
1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 668 $ 765 $ 1,101
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . . 39,285 53,213 63,411
Trustee's fees and expenses - Note 3 . . . . . . . . . . . . . . . . . . . . . (668) (765) (1,101)
-------- -------- --------
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,285 53,213 63,411
Realized and Unrealized Gain (Loss) on Investments
Realized gain on securities transactions . . . . . . . . . . . . . . . . . . . 14,716 61,945 36,618
Net change in unrealized appreciation of investments . . . . . . . . . . . . . 68,738 (40,568) 56,377
-------- -------- --------
Net gain (loss) on Investments . . . . . . . . . . . . . . . . . . . . . . . . 83,454 21,377 92,995
-------- -------- --------
Net Increase in Net Assets Resulting From Operations . . . . . . . . . . . . . $122,739 $ 74,590 $156,406
======== ======== ========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series C
Statements of Changes in Net Assets
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
1997 Series
------------------------------------
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 253,557 $ 277,506 $ 313,937
Realized gain on securities transactions . . . . . . . . . . . . . . . . . 39,770 112,227 99,494
Net unrealized appreciation (depreciation) of investments . . . . . . . . . 47,606 (108,286) 240,300
---------- ---------- ----------
Net increase in net assets resulting from operations . . . . . . . . . . . 340,933 281,447 653,731
Capital Share Transactions - Note 4
Issuance of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 258,765 2,784
Redemption of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . (257,107) (870,181) (994,594)
---------- ---------- ----------
Net increase (decrease) in Net Assets . . . . . . . . . . . . . . . . . . . 83,826 (329,969) (338,079)
Net Assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,347,537 3,677,506 4,015,585
---------- ---------- ----------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,431,363 $3,347,537 $3,677,506
========== ========== ==========
2007 Series
-----------------------------------
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 39,285 $ 53,213 $ 63,411
Realized gain on securities transactions . . . . . . . . . . . . . . . . . 14,716 61,945 36,618
Net unrealized appreciation (depreciation) of investments . . . . . . . . . 68,738 (40,568) 56,377
-------- -------- --------
Net increase in net assets resulting from operations . . . . . . . . . . . 122,739 74,590 156,406
Capital Share Transactions - Note 4
Issuance of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - -
Redemption of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . (51,373) (259,463) (209,217)
-------- -------- --------
Net increase (decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . 71,366 (184,873) (52,811)
Net Assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 556,258 741,131 793,942
-------- -------- --------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $627,624 $556,258 $741,131
======== ======== ========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series C
Notes to Financial Statements
For the Years Ended December 31, 1993, 1992 and 1991
- ---------------------------------------------------------------------------
1. Significant Accounting Policies
The Fund is registered under the Investment Company Act of 1940 as a unit
investment trust. Units of the Fund are sold only to separate investment
accounts of life insurance companies to fund variable life insurance policies.
The Fund's Sponsor is Oppenheimer Funds Distributor, Inc. The following is a
summary of significant accounting policies consistently followed by the Fund.
The policies are in conformity with generally accepted accounting principles.
(a) Securities are stated at value as determined by the Evaluator based on
bid side evaluations for the securities.
(b) Cost of securities has been adjusted to include the accretion of
original issue discount on the Stripped Treasury Securities.
2. Net Capital
<TABLE>
<CAPTION>
December 31,
-------------------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
1997 Series
- -----------
Cost of 4,105,325, 4,437,373, and 5,277,556 Units,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,964,823 $2,101,741 $2,345,310
Less sales charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,692 24,625 31,669
---------- ---------- ----------
Net amount applicable to certificateholders . . . . . . . . . . . . . . . . . . 1,942,131 2,077,116 2,313,641
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . . 1,045,542 874,337 859,495
Net unrealized appreciation of investments . . . . . . . . . . . . . . . . . . 443,690 396,084 504,370
--------- ---------- ----------
Net capital applicable to certificateholders . . . . . . . . . . . . . . . . . $3,431,363 $3,347,537 $3,677,506
========== ========== ==========
2007 Series
- -----------
Cost of 1,477,056, 1,612,704, and 2,366,304 Units,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 326,201 $ 350,409 $ 486,117
Less sales charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,944 2,853 6,733
---------- ---------- ----------
Net amount applicable to certificateholders . . . . . . . . . . . . . . . . . . 324,257 347,556 479,384
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . . 164,282 138,355 150,832
Net unrealized appreciation of investments . . . . . . . . . . . . . . . . . . 139,085 70,347 110,915
---------- ---------- ----------
Net capital applicable to certificateholders . . . . . . . . . . . . . . . . . $ 627,624 $ 556,258 $ 741,131
========== ========== ==========
</TABLE>
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series C
Notes to Financial Statements
For the Years Ended December 31, 1993, 1992 and 1991 (Concluded)
- ---------------------------------------------------------------------------
3. Expenses
Trustee's fees and other expenses incurred by the Fund are limited to the
amount of income generated by the Interest Bearing Treasury Securities in each
Series. Any excess expenses are assumed by the Sponsor.
4. Capital Share Transactions
Issuance
Additional Units were issued by the Fund during the periods ended December 31,
1993, 1992 and 1991 as follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 367,266 2,878
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - -
</TABLE>
Redemption
During 1993, 1992 and 1991, the Sponsor elected to redeem Units of the Fund as
follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332,048 1,207,449 1,599,868
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,648 753,600 718,432
</TABLE>
The total proceeds were remitted to the Sponsor.
5. Income Taxes
All income received, accretion of original issue discount, expenses paid, and
realized gains and losses on securities sold are attributable to the holder,
on a pro rata basis, for Federal income tax purposes in accordance with the
grantor trust rules of the Internal Revenue Code.
At December 31, 1993, the cost of investment securities for Federal income tax
purposes was approximately equivalent to the adjusted cost as shown in each
Series' portfolio.
6. Distributions
It is anticipated that each Series will not make any distributions until the
first business day following the maturity of its holding in the Stripped
Treasury Securities which are non-interest bearing.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series C
Portfolios as of December 31, 1993
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Series No. and Coupon Face Adjusted
Title of Securities Rates Maturities Amount Cost (+) Value (*)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997 Series
- -----------
Stripped Treasury Securities . . . . . . 0% 8-15-97 $4,080,000 $2,962,463 $3,404,226
U.S. Treasury Notes . . . . . . . . . . . 7.25% 11-15-96 25,325 25,210 27,137
---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . $4,105,325 $2,987,673 $3,431,363
========== ========== ==========
2007 Series
- -----------
Stripped Treasury Securities . . . . . . 0% 2-15-07 $1,470,000 $ 480,706 $ 618,522
U.S. Treasury Notes . . . . . . . . . . . 9.375% 2-15-06 7,056 7,833 9,102
---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . $1,477,056 $ 488,539 $ 627,624
========== ========== ==========
<FN>
- -------------------------
(+) See Notes to Financial Statements.
(*) The aggregate values based on offering side evaluations at December 31, 1993 were as follows:
Series Amount
------ ------
1997 . . . . . . . . . . . . . $3,436,185
2007 . . . . . . . . . . . . . 630,775
</TABLE>
See Notes to Financial Statements.
<PAGE>
Investment Summary of Series C+
As of December 31, 1993
- ---------------------------------------------------------------------------
Series C is a series unit investment trust consisting of two separate series,
each with its own portfolio. These are the 1997 Series and the 2007 Series,
designated for the maturities of their underlying Portfolios (see Portfolios
herein).
<TABLE>
<CAPTION>
1997 2007
Series Series
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Face Amount of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,105,325 $ 1,477,056
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,105,325 1,477,056
Fractional Undivided Interest in Fund Represented by Each Unit . . . . . . . . . . . . 1/4,105,325 th 1/1,477,056 th
Offering Price per 1,000 Units***
Aggregate offering side evaluation of Securities in Fund* . . . . . . . . . . . . $ 3,436,185.00 $ 630,775.00
-------------- --------------
Divided by number of Units times 1,000 . . . . . . . . . . . . . . . . . . . . . . $ 837.01 $ 427.05
Plus the applicable transaction charge** . . . . . . . . . . . . . . . . . . . . . 6.28 7.47
-------------- --------------
Offering Price per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . . . . $ 843.29 $ 434.52
============== ==============
Sponsor's Repurchase Price Per 1,000 Units (based on offering side evaluation of
underlying Securities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 837.01 $ 427.05
Redemption Price Per 1,000 Units (based on bid side evaluation of underlying
Securities)**** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 835.83 $ 424.92
Calculation of Estimated Net Annual Interest Income per 1,000 Units Received in
Cash by the Fund
Gross annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . $ 0.45 $ 0.45
Less estimated annual expense per 1,000 Units . . . . . . . . . . . . . . . . . . 0.45 0.45
-------------- --------------
Net annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00
============== ==============
Distributions
Distributions will be made on the first business day following the maturity of each
Security in a Series to holders of record on the business day immediately
preceding the date of such distribution.
Trustee's Annual Fee
Per $1,000 face amount of underlying Securities (see Expenses and Charges) . . . . $ 0.35 $ 0.35
Evaluator's Fee for Each Evaluation
$.35 for each issue of underlying Securities.
Treating separate maturities as separate issues.
Evaluation Time
3:30 P.M. New York Time
Mandatory Termination Date
January 1, 2037
Minimum Value of Fund
Trust Indenture may be terminated with respect to any Series if the value of that
Series is less than 40% of the face amount of Securities.
<FN>
- -------------------------
+ The Indenture was signed and the initial deposit was made as of April 21, 1987.
* The aggregate offering side evaluation of the obligations is determined by the Evaluator on the basis of current offering
prices for the obligations.
** The transaction charges currently applicable to the 1997 Series and the 2007 Series, are .75% and 1.75% of their
respective Offering Prices per 1,000 Units (.756% and 1.781%, respectively, of the net amount invested in Securities).
*** These figures are computed by dividing the aggregate offering side evaluation of the underlying Securities in the
particular Series (the price at which they could be purchased directly by the public if they were available) by the
number of Units of the Series outstanding, multiplying the result times 1,000 and adding the applicable transaction
charge as described in the preceding footnote. These figures assume a purchase of 1,000 Units. The price of a
single Unit, or any multiple thereof, is calculated by dividing the Offering Price per 1,000 Units above by 1,000 and
multiplying by the number of Units.
**** Figures shown are $7.46 and $9.60 less then the Offering Price per 1,000 Units and $1.18 and $2.13 less than the
Sponsor's Repurchase Price per 1,000 Units, with respect to the 1997 Series and the 2007 Series respectively.
</TABLE>
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series D
Independent Auditors' Report
- ---------------------------------------------------------------------------
We have audited the accompanying statements of condition, including the
related portfolios of the 1998 Series and the 2008 Series of the Oppenheimer
Zero Coupon U.S. Treasuries Trust, Series D, as of December 31, 1993 and the
related statements of operations and changes in net assets for the years ended
December 31, 1993, 1992 and 1991. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at December 31, 1993 by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets of Oppenheimer Zero Coupon U.S.
Treasuries Trust, Series D at December 31, 1993 and the results of its
operations and changes in its net assets, for the above stated periods, in
conformity with generally accepted accounting principles.
/s/ Deloitte & Touche
- ---------------------
DELOITTE & TOUCHE
Denver, Colorado
February 8, 1994
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series D
Statements of Condition as of December 31, 1993
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
1998 2008
Series Series
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Trust Property
Investment in marketable securities
(see Portfolios)-Note 1 . . . . . . . . . . . . . . . . . . . . . . . $1,061,262 $ 478,309
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 673 2,427
Accrued interest receivable . . . . . . . . . . . . . . . . . . . . . . . 74 71
---------- ----------
Total trust property . . . . . . . . . . . . . . . . . . . . . 1,062,009 480,807
Less Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 747 2,498
---------- ----------
Net Assets-Note 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,061,262 $ 478,309
========== ==========
Units Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,321,762 1,256,429
========== ==========
Unit Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .80292 $ .38069
========== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series D
Statements of Changes In Net Assets
For the years ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
1998 Series
--------------------------------------
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,284 $ 59,636 $ 80,627
Realized gain on securities transactions . . . . . . . . . . . . . . . . . . 10,954 - 39,173
Net unrealized appreciation of investments . . . . . . . . . . . . . . . . . 44,373 17,589 64,897
---------- ---------- ----------
Net increase in net assets resulting from operations . . . . . . . . . . . . 115,611 77,225 184,697
Capital Share Transactions - Note 4
Issuance of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - -
Redemption of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (66,466) - (507,094)
---------- ---------- ----------
Net increase (decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . 49,145 77,225 (322,397)
---------- ---------- ----------
Net Assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,012,117 934,892 1,257,289
---------- ---------- ----------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,061,262 $1,012,117 $ 934,892
========== ========== ==========
2008 Series
--------------------------------------
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 42,419 $ 47,289 $ 65,875
Realized gain on securities transactions . . . . . . . . . . . . . . . . . . 75,586 17,976 37,223
Net unrealized appreciation (depreciation) of investments . . . . . . . . . . 13,877 (22,766) 31,869
---------- ---------- ----------
Net increase in net assets resulting from operations . . . . . . . . . . . . 131,882 42,499 134,967
Capital Share Transactions - Note 4
Issuance of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - -
Redemption of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (279,036) (201,947) (395,938)
---------- ---------- ----------
Net increase (decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . (147,154) (159,448) (260,971)
Net Assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625,463 784,911 1,045,882
---------- ---------- ----------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 478,309 $ 625,463 $ 784,911
========== ========== ==========
</TABLE>
See Notes To Financial Statements
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series D
Statements of Operations
For the years ended December 31, 1993, 1992, and 1991
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
1998 Series
-------------------------------------
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income:
Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 74 $ 630 $ 772
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . . . 60,284 59,636 80,627
Trustee's fees and expenses - Note 3 . . . . . . . . . . . . . . . . . . . . . . (74) (630) (772)
-------- -------- -------
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,284 59,636 80,627
Realized and Unrealized Gain on Investments
Realized gain on securities transactions . . . . . . . . . . . . . . . . . . . . 10,954 - 39,173
Net change in unrealized appreciation of investments . . . . . . . . . . . . . . 44,373 17,589 64,897
-------- -------- -------
Net gain on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,327 17,589 104,070
-------- -------- -------
Net Increase in Net Assets Resulting From Operations . . . . . . . . . . . . . . $115,611 $ 77,225 $184,697
======== ======== ========
2008 Series
--------------------------------------
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 561 $ 909 $ 1,260
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . . . 42,419 47,289 65,875
Trustee's fees and expenses-Note 3 . . . . . . . . . . . . . . . . . . . . . . . (561) (909) (1,260)
-------- -------- --------
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,419 47,289 65,875
Realized and Unrealized Gain (Loss) on Investments
Realized gain on securities transactions . . . . . . . . . . . . . . . . . . . . 75,586 17,976 37,223
Net change in unrealized appreciation of investments . . . . . . . . . . . . . . 13,877 (22,766) 31,869
-------- -------- --------
Net gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . . . 89,463 (4,790) 69,092
-------- -------- --------
Net Increase in Net Assets Resulting From Operations . . . . . . . . . . . . . . $131,882 $ 42,499 $134,967
======== ======== ========
</TABLE>
- -------------------------
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series D
Notes To Financial Statements
For the years ended December 31, 1993, 1992, and 1991
- ---------------------------------------------------------------------------
1. Significant Accounting Policies
The Fund is registered under the Investment Company Act of 1940 as a unit
investment trust. Units of the Fund are sold only to separate investment
accounts of life insurance companies to fund variable life insurance policies.
The Fund's sponsor is Oppenheimer Funds Distributor, Inc. The following is a
summary of significant accounting policies consistently followed by the Fund.
The policies are in conformity with generally accepted accounting principles.
(a) Securities are stated at value as determined by the Evaluator based on
bid side evaluations for the securities.
(b) Cost of securities has been adjusted to include the accretion of original
issue discount on the Stripped Treasury Securities.
2. Net Capital
<TABLE>
<CAPTION>
December 31,
------------------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
1998 Series
- -----------
Cost of 1,321,762, 1,409,001, and 1,409,001 Units,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 626,780 $ 665,568 $665,568
Less sales charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,397 10,064 10,064
---------- ---------- --------
Net amount applicable to certificateholders . . . . . . . . . . . . . . . . . . . 617,383 655,504 655,504
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . . . 238,442 195,549 135,913
Net unrealized appreciation of investments . . . . . . . . . . . . . . . . . . . 205,437 161,064 143,475
---------- ---------- --------
Net capital applicable to certificateholders . . . . . . . . . . . . . . . . . . $1,061,262 $1,012,117 $934,892
========== ========== ========
2008 Series
- -----------
Cost of 1,256,429, 2,030,389, and 2,814,400 Units,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 236,061 $ 370,309 $511,320
Less sales charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,215 2,440 10,271
---------- ---------- --------
Net amount applicable to certificateholders . . . . . . . . . . . . . . . . . . . 228,846 367,869 501,049
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . . . 113,591 135,598 139,100
Net unrealized appreciation of investments . . . . . . . . . . . . . . . . . . . 135,872 121,996 144,762
---------- ---------- --------
Net capital applicable to certificateholders . . . . . . . . . . . . . . . . . . $ 478,309 $ 625,463 $784,911
========== ========== ========
</TABLE>
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series D
Notes to Financial Statements
For the years ended December 31, 1993, 1992 and 1991 (Concluded)
- ---------------------------------------------------------------------------
3. Expenses
Trustee's fees and other expenses incurred by the Fund are limited to the
amount of income generated by the Interest Bearing Treasury Securities in each
Series. Any excess expenses are assumed by the Sponsor.
4. Capital Share Transactions
Issuance
Additional Units were issued by the Fund during the periods ended
December 31, 1993, 1992 and 1991 as follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - -
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - -
</TABLE>
Redemption
During 1993, 1992 and 1991, the Sponsor elected to redeem Units of the Fund
as follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,239 - 855,464
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 773,960 784,011 1,708,743
</TABLE>
The total proceeds were remitted to the Sponsor.
5. Income Taxes
All income received, accretion of original issue discount, expenses paid, and
realized gains and losses on securities sold are attributable to the holder,
on a pro rata basis, for Federal income tax purposes in accordance with the
grantor trust rules of the Internal Revenue Code.
At December 31, 1993, the cost of investment securities for Federal income tax
purposes was approximately equivalent to the adjusted cost as shown in each
Series' portfolio.
6. Distributions
It is anticipated that each Series will not make any distributions until the
first business day following the maturity of its holding in the Stripped
Treasury Securities which are non-interest bearing.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series D
Portfolios as of December 31, 1993
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Series No. and Coupon Face Adjusted
Title of Securities Rates Maturities Amount Cost (+) Value (*)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1998 Series
- -----------
Stripped Treasury Securities . . . . . . 0% 5-15-98 $1,315,000 $848,890 $1,053,165
U.S. Treasury Notes . . . . . . . . . . 7.00% 5-15-98 6,762 6,935 8,097
---------- -------- ---------
Total . . . . . . . . . . . . . . . . $1,321,762 $855,825 $1,061,262
========== ======== ==========
2008 Series
- -----------
Stripped Treasury Securities . . . . . . 0% 11-15-08 $1,250,000 $336,496 $ 470,610
U.S. Treasury Notes . . . . . . . . . . 8.75% 11-15-08 6,429 5,940 7,699
--------- -------- ----------
Total . . . . . . . . . . . . . . . . $1,256,429 $342,436 $ 478,309
=========== ======== ==========
<FN>
- -------------------------
(+) See Notes to Financial Statements.
(*) The aggregate values based on offering side evaluations at December 31, 1993 were as follows:
Series Amount
------ ------
1998 . . . . . . . . . . . . $1,063,062
2008 . . . . . . . . . . . . 481,029
</TABLE>
See Notes to Financial Statements.
<PAGE>
Investment Summary of Series D+
as of December 31, 1993
- ---------------------------------------------------------------------------
Series D is a series unit investment trust consisting of two separate series,
each with its own portfolio. These are the 1998 Series and 2008 Series,
designated for the maturities of their underlying Portfolios (see Portfolios
herein).
<TABLE>
<CAPTION>
1998 2008
Series Series
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Face Amount of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,321,762 $ 1,256,429
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,321,762 1,256,429
Fractional Undivided Interest in Fund Represented by Each Unit . . . . . . . . . . . 1/1,321,762 nd 1/1,256,429 th
Offering Price per 1,000 Units***
Aggregate offering side evaluation of Securities in Fund* . . . . . . . . . . . $ 1,063,062.00 $ 481,029.00
-------------- --------------
Divided by number of Units times 1,000 . . . . . . . . . . . . . . . . . . . . . $ 804.28 $ 382.85
Plus the applicable transaction charge** . . . . . . . . . . . . . . . . . . . . 6.03 6.70
-------------- --------------
Offering Price per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . . . $ 810.31 $ 389.55
============== ==============
Sponsor's Repurchase Price Per 1,000 Units (based on offering
side evaluation of underlying Securities) . . . . . . . . . . . . . . . . . . . $ 804.28 $ 382.85
Redemption Price Per 1,000 Units (based on bid side evaluation
of underlying Securities)**** . . . . . . . . . . . . . . . . . . . . . . . . . $ 802.92 $ 380.69
Calculation of Estimated Net Annual Interest Income Per 1,000
Units Received in Cash by the Fund
Gross annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . $ 0.45 $ 0.45
Less estimated annual expense per 1,000 Units . . . . . . . . . . . . . . . . . 0.45 0.45
-------------- --------------
Net annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00
============== ==============
Distributions
Distributions will be made on the first business day following
the maturity of each Security in a Series to holders of
record on the business day immediately preceding the date
of such distribution.
Trustee's Annual Fee
Per $1,000 face amount of underlying Securities (see Expenses
and Charges) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.35 $ 0.35
Evaluator's Fee for Each Evaluation
$.35 for each issue of underlying
Securities. Treating separate
maturities as separate issues.
Evaluation Time
3:30 P.M. New York Time
Mandatory Termination Date
January 1, 2038
Minimum Value of Fund
Trust Indenture may be terminated with respect to any Series
if the value of that Series is less than 40% of the face
amount of Securities.
<FN>
- ------------------
+ The Indenture was signed and the initial deposit was made as of April 18, 1988.
* The aggregate offering side evaluation of the obligations is determined by the Evaluator on the basis of current offering
prices for the obligations.
** The transaction charges currently applicable to the 1998 Series and the 2008 Series are .75% and 1.75% of their
respective Offering Prices per 1,000 Units (.756% and 1.781%, respectively, of the net amount invested in Securities).
*** These figures are computed by dividing the aggregate offering side evaluation of the underlying Securities in the
particular Series (the price at which they could be purchased directly by the public if they were available) by the
number of Units of the Series outstanding, multiplying the result times 1,000 and adding the applicable transaction charge
as described in the preceding footnote. These figures assume a purchase of 1,000 Units. The price of a single Unit, or
any multiplying thereof, is calculated by dividing the Offering Price per 1,000 Units above by 1,000 and multiplying by
the number of Units.
**** Figures shown are $7.39 and $8.86 less than the Offering Price per 1,000 Units and $1.36 and $2.16 less than the
Sponsor's Repurchase Price per 1,000 Units, with respect to the 1998 Series and the 2008 Series, respectively.
</TABLE>
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series E
Independent Auditors' Report
- -----------------------------------------------------------------------------
We have audited the accompanying statements of condition, including the
related portfolios of the 1999 Series and the 2009 Series of the Oppenheimer
Zero Coupon U.S. Treasuries Trust, Series E, as of December 31, 1993 and the
related statements of operations and changes in net assets for the years ended
December 31, 1993, 1992 and 1991. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at December 31, 1993 by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets of Oppenheimer Zero Coupon U.S.
Treasuries Trust, Series E at December 31, 1993 and the results of its
operations and changes in its net assets, for the above stated periods, in
conformity with generally accepted accounting principles.
/s/ Deloitte & Touche
- ---------------------
DELOITTE & TOUCHE
Denver, Colorado
February 8, 1994
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series E
Statements of Condition As of December 31, 1993
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
1999 2009
Series Series
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Trust Property
Investment in marketable securities
(see Portfolios)-Note 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $428,697 $ 294,308
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 6,275
Accrued interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 226
-------- ----------
Total trust property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428,919 300,809
Less Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 6,501
-------- ----------
Net Assets-Note 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $428,697 $ 294,308
======== ==========
Units Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 567,866 802,717
======== ==========
Unit Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .75493 $ .36664
======== ==========
</TABLE>
See Notes to Financial Statements
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series E
Statements of Changes in Net Assets
For the years ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
1999 Series
----------------------------------------
1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 28,399 $ 27,755 $ 25,469
Realized gain on securities transactions . . . . . . . . . . . . . . . . . . . 9,378 - -
Net unrealized appreciation of investments . . . . . . . . . . . . . . . . . . 13,325 4,053 34,486
-------- -------- --------
Net increase in net assets resulting from operations . . . . . . . . . . . . . 51,102 31,808 59,955
Capital Share Transactions - Note 4
Issuance of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,091 - -
Redemption of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . (53,027) - -
-------- -------- --------
Net increase in Net Assets . . . . . . . . . . . . . . . . . . . . . . . . 34,166 31,808 59,955
Net Assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394,531 362,723 302,768
-------- -------- --------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $428,697 $394,531 $362,723
======== ======== ========
2009 Series
----------------------------------------
1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------
Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22,463 $ 41,995 $ 61,825
Realized Gain (Loss) on securities transactions . . . . . . . . . . . . . . . 20,020 (13,381) (29,794)
Net unrealized appreciation (depreciation) of investments . . . . . . . . . . 33,888 (6,988) 118,200
-------- -------- --------
Net increase in net assets resulting from operations . . . . . . . . . . . . 76,371 21,626 150,231
Capital Share Transactions - Note 4
Redemption of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (122,097) (404,491) (318,217)
-------- -------- --------
Net increase (decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . (45,726) (382,865) (167,986)
Net Assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340,034 722,899 890,885
-------- -------- --------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $294,308 $340,034 $722,899
======== ======== ========
</TABLE>
See Notes to Financial Statements
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series E
Statement of Operations
For the years ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
1999 Series
-----------------------------------
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income:
Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 255 $ 266 $ 266
Accretion of original issue discount . . . . . . . . . . . . . . . . . . 28,399 27,755 25,469
Trustee's fees and expenses - Note 3 . . . . . . . . . . . . . . . . . . (255) (266) (266)
-------- ------- -------
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . 28,399 27,755 25,469
Realized and Unrealized Gain (Loss) on Investments
Realized Gain on Securities Transactions . . . . . . . . . . . . . . . . 9,378 - -
Net change in unrealized appreciation of investments . . . . . . . . . . 13,325 4,053 34,486
-------- ------- -------
Net gain on investments . . . . . . . . . . . . . . . . . . . . . . . . . 22,703 4,053 34,486
-------- ------- -------
Net Increase in Net Assets Resulting From Operations . . . . . . . . . . $ 51,102 $31,808 $59,955
======== ======= =======
2009 Series
----------------------------------------------
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 417 $ 640 $ 1,431
Accretion of original issue discount . . . . . . . . . . . . . . . . . . 22,463 41,995 61,825
Trustee's fees and expenses - Note 3 . . . . . . . . . . . . . . . . . . (417) (640) (1,431)
-------- -------- --------
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . 22,463 41,995 61,825
Realized and Unrealized Gain (Loss) on Investments
Realized gain (loss) on securities transactions . . . . . . . . . . . . . 20,020 (13,381) (29,794)
Net change in unrealized appreciation of investments . . . . . . . . . . 33,888 (6,988) 118,200
-------- -------- --------
Net gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . 53,908 (20,369) 88,406
-------- -------- --------
Net Increase in Net Assets Resulting From Operations . . . . . . . . . . $ 76,371 $ 21,626 $150,231
======== ======== ========
</TABLE>
- --------------------------
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series E
Notes to Financial Statements
For the years ended December 31, 1993, 1992 and 1991
- ---------------------------------------------------------------------------
1. Significant Accounting Policies
The Fund is registered under the Investment Company Act of 1940 as a unit
investment trust. Units of the Fund are sold only to separate investment
accounts of life insurance companies to fund variable life insurance policies.
The Fund's sponsor is Oppenheimer Funds Distributor, Inc. The following is a
summary of significant accounting policies consistently followed by the Fund.
The policies are in conformity with generally accepted accounting principles.
(a) Securities are stated at value as determined by the Evaluator based on
bid side evaluations for the securities.
(b) Cost of securities has been adjusted to include the accretion of original
issue discount on the Stripped Treasury Securities.
2. Net Capital
<TABLE>
<CAPTION>
December 31,
-----------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
1999 Series
- -----------
Cost of 567,866, 592,992, and 592,992 Units, respectively . . . . . . . . . . . . . . $277,822 $272,631 $272,631
Less sales charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,916 4,091 4,091
-------- -------- --------
Net amount applicable to certificateholders . . . . . . . . . . . . . . . . . . . . . 273,906 268,540 268,540
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . . . . . 97,556 82,081 54,326
Net unrealized appreciation of investments . . . . . . . . . . . . . . . . . . . . . 57,235 43,910 39,857
-------- -------- --------
Net capital applicable to certificateholders . . . . . . . . . . . . . . . . . . . . $428,697 $394,531 $362,723
======== ======== ========
2009 Series
- -----------
Cost of 802,717, 1,153,906, and 2,709,170 Units, respectively . . . . . . . . . . . . $186,079 $265,578 $615,076
Less sales charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,726 10,924 18,255
-------- -------- --------
Net amount applicable to certificateholders . . . . . . . . . . . . . . . . . . . . . 177,353 254,654 596,821
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . . . . . 64,511 66,824 100,534
Net unrealized appreciation of investments . . . . . . . . . . . . . . . . . . . . . 52,444 18,556 25,544
-------- -------- --------
Net capital applicable to certificateholders . . . . . . . . . . . . . . . . . . . . $294,308 $340,034 $722,899
======== ======== ========
</TABLE>
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series E
Notes to Financial Statements
For the years ended December 31, 1993, 1992 and 1991
- ---------------------------------------------------------------------------
3. Expenses
Trustee's fees and other expenses incurred by the Fund are limited to the
amount of income generated by the Interest Bearing Treasury Securities in each
Series. Any excess expenses are assumed by the Sponsor.
4. Capital Share Transactions
Issuance
Additional Units were issued by the Fund during the periods ended December 31,
1993, 1992 and 1991 as follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,254 - -
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - -
</TABLE>
Redemption
During 1993, 1992 and 1991, the Sponsor elected to redeem Units of the Fund as
follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,380 - -
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351,189 1,555,264 1,304,415
</TABLE>
The total proceeds were remitted to the Sponsor.
5. Income Taxes
All income received, accretion of original issue discount, expenses paid, and
realized gains and losses on securities sold are attributable to the holder,
on a pro rata basis, for Federal income tax purposes in accordance with the
grantor trust rules of the Internal Revenue Code.
At December 31, 1993, the cost of investment securities for Federal income tax
purposes was approximately equivalent to the adjusted cost as shown in each
Series' portfolio.
6. Distributions
It is anticipated that each Series will not make any distributions until the
first business day following the maturity of its holding in the Stripped
Treasury Securities which are non-interest bearing.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series E
Portfolios as of December 31, 1993
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Series No. and Coupon Face Adjusted
Title of Securities Rates Maturities Amount Cost (+) Value (*)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1999 Series
- -----------
Stripped Treasury Securities . . . . . . . . . . 0% 5-15-99 $565,000 $368,449 $425,370
U.S. Treasury Notes . . . . . . . . . . . . . . 8.875% 2-15-99 2,866 3,013 3,327
-------- -------- --------
Total . . . . . . . . . . . . . . . . . . . . . $567,866 $371,462 $428,697
======== ======== ========
2009 Series
- -----------
Stripped Treasury Securities . . . . . . . . . . 0% 05-15-09 $800,000 $237,095 $289,727
U.S. Treasury Notes . . . . . . . . . . . . . . 13.25% 05-15-14 2,717 4,769 4,581
-------- -------- --------
Total . . . . . . . . . . . . . . . . . . $802,717 $241,864 $294,308
======== ======== ========
<FN>
- -----------------
(+) See Notes to Financial Statements.
(*) The aggregate values based on offering side evaluations at December 31, 1993 were as follows:
Series Amount
------ ------
1999 . . . . . . . . . . . . . . $429,589
2009 . . . . . . . . . . . . . . 296,038
</TABLE>
See Notes to Financial Statements.
<PAGE>
Investment Summary of Series E+
As of December 31, 1993
- ---------------------------------------------------------------------------
Series E is a series unit investment trust consisting of two separate series,
each with its own portfolio. These are the 1999 Series and 2009 Series,
designated for the maturities of their underlying Portfolios (see Portfolios
herein).
<TABLE>
<CAPTION>
1999 2009
Series Series
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Face Amount of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 567,866 $ 802,717
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 567,866 802,717
Fractional Undivided Interest in Fund Represented by Each Unit . . . . . . . . 1/567,866 th 1/802,717 th
Offering Price per 1,000 Units***
Aggregate offering side evaluation of Securities in Fund* . . . . . . . . $ 429,589.00 $ 296,038.00
------------ --------------
Divided by number of Units times 1,000 . . . . . . . . . . . . . . . . . . $ 756.50 $ 368.80
Plus the applicable transaction charge** . . . . . . . . . . . . . . . . . 7.56 6.45
------------ --------------
Offering Price per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . $ 764.06 $ 375.25
============ ==============
Sponsor's Repurchase Price per 1,000 Units (based on offering side evaluation
of underlying Securities) . . . . . . . . . . . . . . . . . . . . . . . . . $ 756.50 $ 368.80
Redemption Price per 1,000 Units (based on bid side evaluation of underlying
Securities)**** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 754.93 $ 366.64
Calculation of Estimated Net Annual Interest Income per 1,000 Units Received
in Cash by the Fund
Gross annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . $ 0.45 $ 0.45
Less estimated annual expense per 1,000 Units . . . . . . . . . . . . . . 0.45 0.45
------------ --------------
Net annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00
============ ==============
Distributions
Distributions will be made on the first business day following the maturity of
each Security in a Series to holders of record on the business day immediately
preceding the date of such distribution.
Trustee's Annual Fee
Per $1,000 face amount of underlying Securities (see Expenses and Charges) $ 0.35 $ 0.35
Evaluator's Fee for Each Evaluation
$.35 for each issue of underlying Securities.
Treating separate maturities as separate issues.
Evaluation Time
3:30 P.M. New York Time
Mandatory Termination Date
January 1, 2039
Minimum Value of Fund
Trust Indenture may be terminated with respect to any Series if the value of
that Series is less than 40% of the face amount of Securities.
<FN>
- --------------------
+ The Indenture was signed and the initial deposit was made as of April 17, 1989.
* The aggregate offering side evaluation of the obligations is determined by the Evaluator on the basis of current offering
prices for the obligations.
** The transaction charges currently applicable to the 1999 Series and the 2009 Series are 1.00% and 1.75% of their respective
Offering Prices per 1,000 Units (1.010% and 1.781%, respectively, of the net amount invested in Securities).
*** These figures are computed by dividing the aggregate offering side evaluation of the underlying Securities in the particular
Series (the price at which they could be purchased directly by the public if they were available) by the number of Units of
the Series outstanding, multiplying the result times 1,000 and adding the applicable transaction charge as described in the
preceding footnote. These figures assume a purchase of 1,000 Units. The price of a single Unit, or any multiple thereof, is
calculated by dividing the Offering Price per 1,000 Units above by 1,000 and multiplying by the number of Units.
**** Figures shown are $9.13 and $8.61 less than the Offering Price per 1,000 Units and $1.57 and $2.16 less than the Sponsor's
Repurchase Price per 1,000 Units, with respect to the 1999 Series and the 2009 Series, respectively.
</TABLE>
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series F
Independent Auditors' Report
- ---------------------------------------------------------------------------
We have audited the accompanying statement of condition, including the related
portfolio of the 2010 Series of the Oppenheimer Zero Coupon U.S. Treasuries
Trust, Series F, as of December 31, 1993 and the related statement of
operations and changes in net assets for the years ended December 31, 1993,
1992 and 1991. These financial statements are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at December 31, 1993 by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets of Oppenheimer Zero Coupon U.S.
Treasuries Trust, Series F at December 31, 1993 and the results of its
operations and changes in its net assets, for the above stated periods, in
conformity with generally accepted accounting principles.
/s/ Deloitte & Touche
- ---------------------
DELOITTE & TOUCHE
Denver, Colorado
February 8, 1994
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series F
Statement of Condition as of December 31, 1993
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
2010
Series
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Trust Property
Investment in marketable securities (see Portfolio) - Note 1 . . . . . . . . . . . . . . . . . . . $ 614,209
Cash 4,872
Accrued interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694
----------
Total trust property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 619,775
Less Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,566
----------
Net Assets - Note 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 614,209
==========
Units Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,776,780
==========
Unit Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .34569
==========
</TABLE>
See Notes to Financial Statements
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series F
Statement of Changes in Net Assets
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
2010
Series
- -------------------------------------------------------------------------------------------------------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Operations
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . $ 37,999 $ 108,654 $ 98,259
Realized gain on securities transactions . . . . . . . . . . . . . . . 15,524 133,215 44,119
Net unrealized appreciation (depreciation) of investments . . . . . . . 71,612 (70,864) 68,281
-------- ---------- ----------
Net increase in net assets resulting from operations . . . . . . . . . 125,135 171,005 210,659
Capital Share Transactions - Note 4
Issuance of Units . . . . . . . . . . . . . . . . . . . . . . . . . . - 1,862,846 -
Redemption of Units . . . . . . . . . . . . . . . . . . . . . . . . . (152,570) (2,366,950) (599,692)
-------- ---------- ----------
Net increase (decrease) in Net Assets . . . . . . . . . . . . . . . . . (27,435) (333,099) (389,033)
Net Assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . 641,644 974,743 1,363,776
------- ---------- ----------
End of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $614,209 $ 641,644 $ 974,743
======== ========== ==========
</TABLE>
See Notes to Financial Statements
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series F
Statement of Operations
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
2010
Series
- ------------------------------------------------------------------------------------------------------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Investment Income:
Interest Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 794 $ 1,127 $ 1,888
Accretion of original issue discount . . . . . . . . . . . . . . . . . . 37,999 108,654 98,259
Trustee's fees and expenses - Note 3 . . . . . . . . . . . . . . . . . . (794) (1,127) (1,888)
-------- -------- --------
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . 37,999 108,654 98,259
Realized and Unrealized Gain (Loss) on Investments
Realized gain on securities transactions . . . . . . . . . . . . . . . . 15,524 133,215 44,119
Net change in unrealized appreciation (depreciation) of investments . . . 71,612 (70,864) 68,281
-------- -------- --------
Net gain on investments . . . . . . . . . . . . . . . . . . . . . . . . . 87,136 62,351 112,400
-------- -------- --------
Net Increase in Net Assets Resulting From Operations . . . . . . . . . . $125,135 $171,005 $210,659
======== ======== ========
</TABLE>
- ------------
See Notes to Financial Statements.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series F
Notes to Financial Statements
For the Years Ended December 31, 1993, 1992 and 1991
- ---------------------------------------------------------------------------
1. Significant Accounting Policies
The Fund is registered under the Investment Company Act of 1940 as a unit
investment trust. Units of the Fund are sold only to separate investment
accounts of life insurance companies to fund variable life insurance policies.
The Fund's sponsor is Oppenheimer Funds Distributor, Inc. The following is a
summary of significant accounting policies consistently followed by the Fund.
The policies are in conformity with generally accepted accounting principles.
(a) Securities are stated at value as determined by the Evaluator based on
bid side evaluations for the securities.
(b) Cost of securities have been adjusted to include the accretion of
original issue discount on the Stripped Treasury Securities.
2. Net Capital
<TABLE>
<CAPTION>
December 31,
----------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
2010 Series
- -----------
Cost of 1,776,780, 2,318,848 and 3,874,785 Units, respectively . . . . . . . . . . $423,138 $554,215 $784,990
Less sales charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,237 4,007 13,623
-------- -------- --------
Net amount applicable to certificateholders . . . . . . . . . . . . . . . . . . . . 421,901 550,208 771,367
Accretion of original issue discount . . . . . . . . . . . . . . . . . . . . . . . 63,184 33,924 75,000
Net unrealized appreciation of investments . . . . . . . . . . . . . . . . . . . . 129,124 57,512 128,376
-------- -------- --------
Net capital applicable to certificateholders . . . . . . . . . . . . . . . . . . . $614,209 $641,644 $974,743
======== ======== ========
</TABLE>
3. Expenses
Trustee's fees and other expenses incurred by the Fund are limited to the
amount of income generated by the Interest Bearing Treasury Securities in each
Series. Any excess expenses are assumed by the Sponsor.
4. Capital Share Transactions
Issuance
Additional Units were issued by the Fund during the periods ended December 31,
1993, 1992 and 1991, as follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 7,829,872 -
</TABLE>
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series F
Notes to Financial Statements
For the Years Ended December 31, 1993, 1992 and 1991
- ---------------------------------------------------------------------------
Redemptions
During 1993, 1992 and 1991, the Sponsor elected to redeem Units of the
Fund, as follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 542,068 9,385,809 2,600,149
</TABLE>
The total proceeds were remitted to the Sponsor.
5. Income Taxes
All income received, accretion of original issue discount, expenses paid, and
realized gains and losses on securities sold are attributable to the holder,
on a pro rata basis, for Federal income tax purposes in accordance with the
grantor trust rules of the Internal Revenue Code.
At December 31, 1993, the cost of investment securities for Federal income tax
purposes was approximately equivalent to the adjusted cost as shown in each
Series' portfolio.
6. Distributions
It is anticipated that the Series will not make any distributions until the
first business day following the maturity of its holding in the Stripped
Treasury Securities which are non-interest bearing.
<PAGE>
Oppenheimer Zero Coupon U.S. Treasuries Trust, Series F
Portfolio as of December 31, 1993
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Series No. and Coupon Face Adjusted
Title of Securities Rates Maturities Amount Cost (+) Value (*)
- ------------------- ----- ---------- ------ -------- ---------
<S> <C> <C> <C> <C> <C>
2010 Series
- -----------
Stripped Treasury Securities . . . . 0% 2-15-10 $1,770,000 $475,329 $604,340
U.S. Treasury Notes . . . . . . . . 11.75% 2-15-10 6,780 9,756 9,869
---------- -------- --------
Total . . . . . . . . . . . . . . $1,776,780 $485,085 $614,209
========== ======== ========
<FN>
- ------------
(+) See Notes to Financial Statements.
(*) The aggregate values based on offering side evaluations at December 31, 1993 were as follows:
Series Amount
------ ------
2010 . . . . . . . . . . . . . $617,994
</TABLE>
See Notes to Financial Statements.
<PAGE>
Investment Summary of Series F+
As of December 31, 1993
- ---------------------------------------------------------------------------
Series F is a series unit investment trust consisting of the 2010 Series
designated for the maturity of its underlying Portfolio (see Portfolio
herein).
<TABLE>
<CAPTION>
2010
Series
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Face Amount of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,776,780
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,776,780
Fractional Undivided Interest in Fund Represented by Each Unit . . . . . . . . . . . . . . . . . . . . . . 1/1,776,780 th
Offering Price per 1,000 Units***
Aggregate offering side evaluation of Securities in Fund*... . . . . . . . . . . . . . . . . . . . . $ 617,994.00
--------------
Divided by number of units times 1,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 347.82
Plus the applicable transaction charge** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
--------------
Offering price per 1,000 units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 353.91
==============
Sponsor's Repurchase Price Per 1,000 Units (based on offering side evaluation of underlying Securities) . . $ 347.82
Redemption Price Per 1,000 Units (based on bid side evaluation of underlying Securities)**** . . . . . . . $ 345.69
Calculation of Estimated Net Annual Interest Income Per 1,000 Units Received in Cash by the Fund
Gross annual income per 1,000 units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.45
Less estimated annual expenses per 1,000 units . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.45
--------------
Net annual income per 1,000 Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.00
==============
Distributions
Distributions will be made on the first business day following the maturity of each Security in a
Series to holders of record on the business day immediately preceding the date of such
distribution.
Trustee's Annual Fee
Per $1,000 face amount of underlying Securities (see Expenses and Charges) . . . . . . . . . . . . . $ 0.35
Evaluator's Fee for Each Evaluation
$.35 for each issue of underlying Securities. Treating separate maturities
as separate issues.
Evaluation Time
3:30 p.m. New York Time
Mandatory Termination Date
January 1, 2040
Minimum Value of Fund
Trust Indenture may be terminated with respect to the Series if the value is less than 40%
of the face amount of Securities.
<FN>
- ------------
+ The Indenture was signed and the initial deposit was made as of April 24, 1990.
* The aggregate offering side evaluation of the obligations is determined by the Evaluator on the basis of current offering
prices for the obligations.
** The transaction charge currently applicable to the 2010 Series is 1.75% of its respective Offering Price per 1,000 Units
(1.781% of the net amount invested in Securities).
*** This figure is computed by dividing the aggregate offering side evaluation of the underlying Securities in the Series (the
price at which they could be purchased directly by the public if they were available) by the number of Units of the Series
outstanding, multiplying the result times 1,000 and adding the applicable transaction charge as described in the preceding
footnote. This figure assumes a purchase of 1,000 Units. The price of a single Unit, or any multiple thereof, is
calculated by dividing the Offering Price per 1,000 Units above by 1,000, and multiplying by the number of Units.
**** Amount shown is $8.22 less than the Offering Price per 1,000 Units and $2.13 less than the Sponsor's Repurchase Price
per 1,000 Units.
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
Oppenheimer Funds Distributor, Inc.:
We have audited the statement of financial condition of Oppenheimer Funds
Distributor, Inc. as of December 31, 1993 and the related statements of
income, cash flows and changes in shareholders's equity for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Oppenheimer Funds Distributor, Inc.
at December 31, 1993 and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
As discussed in Note 1 to the financial statements, the Company changed
its method of accounting for income taxes to conform with Statement of
Financial Accounting Standards No. 109.
/s/ Deloitte & Touche
- ---------------------
DELOITTE & TOUCHE
Denver, Colorado
February 16, 1994
<PAGE>
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993
- ------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS NOTES
<S> <C> <C>
CURRENT ASSETS:
Cash $ 26,791,579
Investment in money market mutual fund 7,938,297
Investments in managed mutual funds 2,449,516
Investments in Zero Coupon U.S. Treasuries
Trust, at market 3,897,237
Receivables:
Brokers and dealers 2 49,538,320
Mutual funds managed by affiliated companies 2 8,967,608
Affiliated companies 1,131,405
Income taxes 21,269,395
Other 1,282,489
Other current assets 539,582
Total current assets 123,805,428
OTHER ASSETS:
Deferred sales commissions 54,452,051
TOTAL $178,257,479
============
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Subscriptions payable to managed mutual funds 2 $70,722,607
Payable to brokers and dealers 2 9,483,935
Accounts payable and accrued expenses 4,821,501
Payable to affiliated companies 1,969,954
Total current liabilities 86,997,997
OTHER LIABILITIES:
Deferred income taxes 21,113,926
TOTAL 108,111,923
COMMITMENTS 1
SHAREHOLDER'S EQUITY: 3
Common stock; $300 stated value; 200 shares
authorized; 100 shares issued and outstanding 30,000
Additional paid-in capital 62,245,000
Retained earnings 7,870,556
Shareholder's equity 70,145,556
TOTAL $178,257,479
============
</TABLE>
See notes to statement of financial condition.
- ---------------------------------------------------------------
<PAGE>
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1993
- ---------------------------------------------------------------------
REVENUES:
Underwriting commissions $ 21,976,131
Dividends from mutual funds 429,78
Gain from investments in Zero Coupon
U.S. Treasuries Trust - net 133,837
Distribution plan fees 6,018,099
Gain on investment in managed mutual funds 40,497
Other 15,491
Total 28,613,838
========
EXPENSES:
Salaries, wages, and benefits 8,868,068
Selling, general, and administrative 16,535,433
Amortization of deferred sales commissions 3,913,071
Total 29,316,572
LOSS BEFORE INCOME TAXES (702,734)
INCOME TAX PROVISION:
Current (20,247,192)
Deferred 20,584,347
Total 337,155
NET LOSS $ (1,039,889)
============
See notes to financial statements.
- ---------------------------------------------------------------------
<PAGE>
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1993
- ---------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,039,889)
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on investment in managed mutual funds (40,497)
Amortization of discount on units in Zero Coupon
U.S. Treasuries Trust (170,099)
Amortization of deferred sales commissions 3,913,071
Deferred income taxes 20,584,347
Deferred sales commissions (57,145,501)
Changes in operating assets and liabilities:
Brokers and dealers receivables (27,327,568)
Mutual funds managed by affiliated
companies receivables (3,833,131)
Affiliated company receivables (1,004,344)
Income taxes receivable (21,269,395)
Other receivables (470,832)
Other current assets (28,783)
Subscriptions payable to managed mutual funds 36,503,294
Payable to brokers and dealers 4,210,631
Accounts payable and accrued expenses 3,367,531
Payable to affiliated companies (761,822)
Income taxes payable (286,707)
Cash used by operating activities (44,799,694)
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contribution 56,000,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of units in Zero Coupon U.S. Treasuries Trust 4,291,035
Purchase of units in Zero Coupon U.S. Treasuries Trust (5,849,084)
Cash used by investing activities (1,558,049)
INCREASE IN CASH AND CASH EQUIVALENTS 9,642,257
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 25,087,619
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 34,729,876
==============
See notes to financial statements.
- ---------------------------------------------------------------------
<PAGE>
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1993
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
SHARES PAID-IN RETAINED
NOTE OUTSTANDING AMOUNT CAPITAL EARNINGS
<S> <C> <C> <C> <C> <C>
BALANCE,
BEGINNING OF YEAR,
AS PREVIOUSLY REPORTED 100 $30,000 $ 6,245,000 $8,922,411
ADJUSTMENT FOR THE
CUMULATIVE EFFECT ON
PRIOR YEARS OF APPLYING
RETROACTIVELY THE NEW
METHOD OF ACCOUNTING
FOR INCOME TAXES 1 (11,666)
BALANCE,
BEGINNING OF YEAR,
AS ADJUSTED 100 $30,000 $ 6,245,000 $8,910,445
CAPITAL CONTRIBUTION 56,000,000
NET LOSS (1,039,889)
BALANCE,
END OF YEAR 100 $30,000 $62,245,000 $7,870,556
See notes to financial statements.
</TABLE>
- ---------------------------------------------------------------------
<PAGE>
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1993
- ---------------------------------------------------------------------
1. THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Funds Distributor, Inc. (formerly Oppenheimer Fund
Management, Inc.) (Company) acts as general distributor for the sale
and distribution of shares of registered investment companies
(hereafter referred to as "mutual funds") which are managed by
Oppenheimer Management Corporation (OMC). The Company is a wholly-
owned subsidiary of OMC, a wholly-owned subsidiary of Oppenheimer
Acquisition Corporation (OAC), which is controlled by Massachusetts
Mutual Life Insurance Company and senior management of OMC.
Investment in Money Market Mutual Fund - The Company invests
available cash in a money market mutual fund managed by OMC. The
investment is recorded at cost which equals market; dividend income
is recorded when earned.
Investments in Managed Mutual Funds - The Company owns shares of
stock in several of the mutual funds managed by OMC. The shares are
purchased at their respective net asset values. The investments are
carried at market; dividend income is recorded when earned.
Investments in Zero Coupon U.S. Treasuries Trust - The Company is the
Sponsor for the Oppenheimer Zero Coupon U.S. Treasuries Trust and has
undertaken to maintain a secondary market for units in the Trust.
The investments are carried at market. The Company recognizes income
earned by the units (principally accretion of original issue discount
on the underlying bonds) and from receipt of a certain percentage of
the offering price of the units. In addition, the Company realizes
gains and losses upon the sales of units.
Deferred Sales Commissions - Sales commissions paid to brokers and
dealers in connection with sales of shares of certain mutual funds
are charged to deferred sales commissions and amortized over six
years. Distribution plan payments received by the Company from
mutual funds are credited to income as earned. Early withdrawal
charges received by the Company from redeeming shareholders reduce
unamortized deferred sales commissions.
Underwriting Commissions - The Company receives commission income for
its services as the general distributor for the sale of mutual fund
shares. The commission income is recorded on the date of sale (trade
date).
<PAGE>
Income Taxes - OAC files a consolidated federal income tax return
which includes the Company. Income taxes are recorded as if the
Company files on a separate return basis. During 1993 the Company
was required to adopt Statement of Financial Accounting Standards No.
109, Accounting for Income Taxes. Statement 109 requires a change
from the deferred method of accounting for income taxes of APB
Opinion 11 to the asset and liability method of accounting for income
taxes. The asset and liability method prescribed by Statement 109
results in deferred tax assets and liabilities being recorded for the
differences between the book and tax basis relating to the Company's
assets and liabilities.
The Company adopted Statement 109 in 1993 and has elected to restate
prior years beginning with the 1990 period. The effect of this
restatement on prior years has been reflected in retained earnings
as of December 31, 1992.
Statement of Cash Flows - For purposes of the statement of cash
flows, investments in money market mutual funds are considered cash
equivalents.
2. TRANSACTIONS WITH BROKERS AND DEALERS
The Company acts as general distributor for the sale and distribution
of shares of several mutual funds. In this capacity, the Company
records a receivable when it issues confirmations of all accepted
purchase orders to the originating brokers and dealers; at the same
time, the Company records a liability to the mutual funds equal to
the net asset value of all shares subject to such confirmations.
This liability must be paid to the mutual funds within eleven
business days unless the trade is canceled. If the originating
broker or dealer fails to make timely settlement of its purchase
order under the terms of its dealer agreement with the Company, the
Company may cancel the purchase order and, at the Company's risk,
hold responsible the originating broker or dealer.
When brokers and dealers place share redemption orders with the
Company, a receivable is recorded from the mutual funds equal to the
net asset value of all shares redeemed; at the same time, the Company
records a corresponding liability payable to the originating brokers
and dealers.
3. RELATED PARTIES AND OTHER MATTERS
The following is a summary of the significant transactions and
relationships with affiliated companies and other related parties as
of December 31, 1993 and for the year then ended:
Officers and Directors of the Company; Shareholders of OAC - Several
officers and directors of the Company and shareholders of OAC are
also officers and directors or trustees of the mutual funds
distributed by the Company.
<PAGE>
Transactions with Oppenheimer Shareholder Services - Oppenheimer
Shareholder Services, a division of OMC, performs certain accounting
and data processing functions for the Company and charges the Company
its allocable share of the cost of such services. Expenses allocated
to the Company were $2,489,254 for the year ended December 31, 1993.
Distributor Agreements - The Company's revenue from underwriting
commissions is earned for its services as the general distributor for
the sale of shares of mutual funds managed by OMC. OMC pays certain
advertising, printing, promotion, and personnel costs relating to the
sale of shares of these mutual funds.
4. INCOME TAXES
The primary differences between the Company's effective tax rate and
the federal statutory rate are the effect on deferred taxes of
recording a 1% increase in the top corporate tax rate from 34% to 35%
and state income taxes.
Deferred tax assets of $3,907,975 have been recorded in the
accompanying financial statements. These amounts primarily relate
to the benefit associated with certain state tax loss carryforwards.
A valuation allowance has not been recorded with respect to this
deferred tax asset. Deferred tax liabilities of $25,021,901 have
also been recorded. These amounts relate primarily to the current
deduction, for tax purposes, of deferred sales commissions which are
amortized over six years for book purposes.
The Company has certain net operating loss carryforwards relating to
various states. If not used in the interim, these losses will
generally expire on December 31, 2008.
5. NET CAPITAL REQUIREMENT
As a broker and dealer registered with the Securities and Exchange
Commission, the Company is required to maintain minimum net capital,
as defined in Rule 15c3-1 of the Securities Exchange Act of 1934,
equivalent to 6-2/3% of aggregate indebtedness, as defined, or
$50,000, whichever is greater. At December 31, 1993 the Company had
net capital of $9,723,206 which exceeded requirements of $5,799,866
by $3,923,340.
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<PAGE>
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in
this Prospectus, and if given or made, such information and
representations must not be relied upon as having been authorized by the
Fund, Oppenheimer Funds Distributor, Inc., or any affiliate thereof. This
Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such an offer in such state.
Sponsor
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
Two World Trade Center
New York, New York 10048-0203
Trustee
UNITED STATES TRUST COMPANY OF NEW YORK
45 Wall Street
New York, New York 10005
Evaluator
STANDARD & POOR'S CORPORATION
25 Broadway
New York, New York 10004
Auditors
DELOITTE & TOUCHE
1560 Broadway
Denver, Colorado 80202
