[FRONT COVER]
Oppenheimer Main Street California Municipal Fund
Annual Report August 31, 1996
[PICTURE OF SHOPPING COUPLE]
"We want
investment
income
that won't
add to
our taxes."
[LOGO]OppenheimerFunds(R)
<PAGE>
Yield
Standardized Yields
For the 30 Days Ended 8/31/96:(4)
Class A
4.99%
Class B
4.20%
The Fund's Class A shares
are ranked ***** among 979 (3-year)
and 560 (5-year) municipal bond
funds for the combined 3-
and 5-year periods ended
8/31/96 by Morningstar
Mutual Funds.(5)
This Fund is for California residents who need income that's exempt from income
tax.
How Your Fund Is Managed
Oppenheimer Main Street California Municipal Fund invests in a portfolio with a
range of California municipal bonds. As a Fund shareholder, you receive income
that is free from federal and California income taxes.(1) Your dividends don't
increase your taxable income the way taxable investments do, so you can keep
more of what you earn.
Performance
Total return at net asset value for the 12 months ended 8/31/96 was 6.17% for
Class A shares and 4.99% for Class B shares.(2)
Your Fund's average annual total returns at maximum offering price for
Class A shares for the 1- and 5-year periods ended 8/31/96 and since inception
of the Class on 5/18/90 were 1.12%, 6.27% and 7.00%, respectively. For Class B
shares, average annual total returns for the 1-year period ended 8/31/96 and
since inception of the Class on 10/29/93 were 0.00% and 2.04%.(3)
Outlook
" Because we think the U.S. economy is likely to remain in a disinflationary
trend, our longer-term outlook for the Fund is highly positive. As a result, the
current cyclical boost in interest rates may represent a very good opportunity
for fixed-income investors, especially municipal bond investors."
Jerry Webman, Portfolio Manager
August 31, 1996
Total returns include change in share price and reinvestment of dividends and
capital gains distributions. In reviewing the notes that follow on performance
and rankings, please be aware that past performance does not guarantee future
results. Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than the original cost. For more complete information, please review the
prospectus carefully before you invest.
1. A portion of the distributions paid by the Fund may be subject to federal and
state income taxes. For investors subject to federal and/or state alternative
minimum tax (AMT), the Fund's distributions may increase this tax. Capital gains
distributions, if any, are taxed as capital gains.
2. Based on the change in net asset value per share for the period shown,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
3. Class A returns show results of hypothetical investments on 8/31/95, 8/31/91
and 5/18/90 (inception of class), after deducting the current maximum initial
sales charge of 4.75%. Class B returns show results of hypothetical investments
on 8/31/95 and 10/29/93 (inception of class), after the deduction of the
applicable contingent deferred sales charge of 5% (1-year) and 3% (since
inception). When such returns are calculated in the same manner for the period
ended 9/30/96, they are as follows: for Class A shares, 1.66%, 6.32%, and 7.13%
for the 1- and 5-year periods and since inception; for Class B shares, 0.65% and
2.41% for the 1-year period and since inception. An explanation of the different
performance calculations is in the Fund's prospectus.
4. Standardized yield is net investment income calculated on a yield-to-maturity
basis for the 30-day period ended 8/31/96, divided by the maximum offering price
at the end of the period, compounded semiannually and then annualized. Falling
net asset values will tend to artificially raise yields.
5. Source: Morningstar Mutual Funds, 8/31/96. Morningstar rankings are based on
risk-adjusted investment returns, after considering sales charges and expenses.
Investment return measures a fund's (or class's) 1-, 3-, 5- and 10-year
(depending on the inception of the class or fund) average annual total returns
in excess of 90-day U.S. Treasury bill returns. Risk and returns are combined to
produce star rankings, reflecting performance relative to the average fund in a
fund's category. Five stars is the "highest" ranking (top 10%), 4 stars is
"above average" (next 22.5%) and 1 star is the "lowest" (bottom 10%). The 5-star
current ranking is a weighted average of the 3- and 5-year rankings for the
class, which were 4 and 5 stars, weighted 40% and 60%, respectively. There were
979 and 560 funds ranked in these respective periods. The 1-year star ranking is
4 stars, but is not included in the overall ranking calculation. There were
1,742 funds ranked for the 1-year period. Rankings are subject to change. The
Fund's Class A and Class B shares have the same portfolio but different
expenses.
2 Oppenheimer Main Street California Municipal Fund
<PAGE>
Dear Shareholder,
[PHOTO-JAMES C. SWAIN]
James C. Swain
Chairman
Oppenheimer
Main Street California Municipal Fund
[PHOTO-BRIDGET A. MACASKILL]
Bridget A. Macaskill
President
Oppenheimer
Main Street California Municipal Fund
Even though rising interest rates pushed bond prices lower over the first six
months of 1996, our outlook for the remainder of the year is for moderate
economic growth and low inflation, which should lead to lower interest
rates--all factors that are likely to improve the municipal bond market.
To understand where we're going, let's first look at where we've been.
During the first six months of this year, interest rates rose sharply, mostly in
response to investors' concerns that the economy was growing too fast. They felt
stronger economic growth would trigger higher inflation, which would, in turn,
lead to higher interest rates. Indeed, we saw the yield on the benchmark 30-year
U.S. Treasury bond move from 6% in January to about 7% today. This rate increase
is important because, as a rule, municipal bond yields tend to track Treasuries
quite closely. Although municipal bonds have yields that are slightly less than
those of Treasuries--generally about 80-85%--the trade-off is that interest paid
by munis is usually free from federal income tax and, therefore, actual yields
are more attractive to shareholders.
Although economic factors such as declining unemployment and strong retail
sales still point toward growth, our outlook is for inflation to remain under
control for the following three reasons: the Federal Reserve's conservative
monetary policy over the last few years; the declining federal government
deficit; and higher corporate productivity that has caused unit labor costs to
grow more slowly than they have in the past.
Another development favorably impacting the municipal bond market is the
strengthening financial condition of many municipalities throughout the United
States. This trend is particularly strong in the state of California and its
subdivisions, which happen to be among the nation's largest issuers of municipal
bonds.
Finally, the tax-free market is also benefiting from a shrinking supply of
securities. We continue to see less issuance of bonds and more redemptions, and
we feel this shrinkage creates more buying opportunities as issuers take their
redemptions.
When you look at all the positive factors that are occurring right
now--the prospect of lower interest rates, the strengthening economies of states
and municipalities, as well as the shrinking supply of securities--the current
outlook for municipal bond investors is very positive.
Your portfolio managers discuss the outlook for your Fund in light of
these broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds. We look forward to helping you reach your investment goals in
the future.
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
September 20, 1996
The Board of Trustees recently decided to change the fiscal year end of this
Fund from June 30 to August 31 in order to facilitate the auditing process. Due
to this change, the next shareholder report you receive will cover the six-month
period ended February 28, 1997.
3 Oppenheimer Main Street California Municipal Fund
<PAGE>
Q + A
[PHOTO-TWO MANAGERS] [PHOTO-MANAGER ON PHONE]
An interview with your Fund's managers.
Q: What
factors helped
contribute
to the Fund's
strong
performance?
How has the Fund performed over the past two months?
During a period of rising interest rates and a weakening bond market,
Oppenheimer Main Street California Municipal Fund held its ground and performed
well. In fact, though the average municipal fund actually declined in value for
the first eight months of 1996, we're pleased to say that the Fund has had a
positive return so far this year during a difficult market. As a result of our
strategic positioning, as of 8/31/96, the Fund ranked 32nd out of 96 California
municipal debt funds, according to Lipper Analytical Services.(1)
[PHOTO-A MANAGER]
What factors contributed to your strong performance during the market's
difficulties?
With the increased volatility of bond prices during the period, we concentrated
on protecting the principal value of our assets and holding a defensive posture
in reaction to interest rates. Later, as the market began to rally, we benefited
from owning some bonds with longer maturity dates, and thereby increased the
port-folio's sensitivity as interest rates fluctuated. These bonds appreciated
particularly well during this mid-summer rally.
Another plus was our position in prerefunded bonds, which performed
extremely well as compared to other municipal bonds, and gave a significant
boost to the Fund's performance. Because these issuers have escrowed money to
repay bondholders, pre-refunded bonds have a low level of credit risk, and have
relatively low sensitivity to changes in interest rates, thus making them
desirable in a market in which interest rates are rising.
Did any investments perform poorly?
As would be expected, the
1. Source: Lipper Analytical Services, 8/31/96. Oppenheimer Main Street
California Municipal Fund Class A shares for the 3-year period ended 8/31/96 was
10th out of 62 funds, and for the 5-year period ended 8/31/96, the Fund was 13th
out of 47 funds in its category. Oppenheimer Main Street California Municipal
Fund is characterized by Lipper as a California municipal debt fund. Lipper
performance does not take sales charges into consideration.
4 Oppenheimer Main Street California Municipal Fund
<PAGE>
[PHOTO]
Facing page
Top left: Robert Patterson,
Portfolio Manager, with Len Darling,
Executive VP, Director of Fixed
Income Investments
Top right: Michael Maciolek,
Securities Analyst
Bottom: Caryn Halbrecht, Vice
President, Municipal Portfolio
Manager
This page
Top: Robert Patterson
Bottom:Caryn Halbrecht with Donna
Compert, Municipal Securities Trader
A: Owning
bonds with
higher
coupons
helped offset
interest rate
increases.
more defensive bonds that served the Fund well during the first and second
quarters, when the market was declining, appreciated less rapidly when the
market improved in July and August. Nevertheless, we were pleased with their
overall performance during the period.
What areas are you currently targeting?
Although we don't expect interest rates to fall to the levels they were earlier
this year, we do expect--barring any major political or eco-nomic
surprises--that interest rates will remain stable over the near term, perhaps
declining later this year or early 1997. Accordingly, we have purchased bonds
that should allow the Fund to take advantage of this environment.
Finding the right mix of bonds to achieve these goals entails intensive
credit research, seeking uncommon opportunities and paying a great amount of
attention to the risk characteristics and investments we consider buying for the
portfolio. Keep in mind, however, that should the economy show a significant
rebound in the fall, we would expect to return to a defensive posture.(2)
What is your outlook for the Fund?
Because we think the U.S. economy is likely to remain in a disinflationary
trend, our longer-term outlook for the Fund is highly positive. Shorter-term,
the bond market will require evidence of a slowing economy before interest rates
fall significantly. Meanwhile, concerns about an overheating U.S. domestic
economy and possible Fed tightening will probably keep interest rates within
their current range over the coming months. As a result, the current cyclical
boost in interest rates may represent a very good oppor-tunity for fixed-income
inves-tors, especially municipal bond investors. []
[PHOTO]
2. The Fund's portfolio is subject to change.
5 Oppenheimer Main Street California Municipal Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments August 31, 1996
Ratings: Moody's/
S&P's/Fitch's Face Market Value
(Unaudited) Amount See Note 1
<S> <C> <C> <C>
====================================================================================================================================
Municipal Bonds and Notes--99.1%
- ------------------------------------------------------------------------------------------------------------------------------------
California--90.3%
Alameda County, California Certificates of Participation,
Prerefunded, BIG Insured, 7.25%, 6/1/09 Aaa/AAA $ 1,635,000 $ 1,836,546
----------------------------------------------------------------------------------------------------------------
Anaheim, California Public Financing Authority Tax
Allocation Revenue Bonds, MBIA Insured, 6.45%, 12/28/18 Aaa/AAA 2,000,000 2,118,540
----------------------------------------------------------------------------------------------------------------
Berkeley, California Health Facility Revenue Bonds,
Alta Bates Medical Center, Series A, 6.50%, 12/1/11 Baa/BBB+ 1,500,000 1,511,505
----------------------------------------------------------------------------------------------------------------
California Health Facilities Financing
Authority Revenue Bonds:
Episcopal Homes Project, Series A, 7.80%, 7/1/15 NR/A 1,000,000 1,072,470
Refunding, Catholic Health Care West,
Series A, MBIA Insured, 5%, 7/1/11 Aaa/AAA 2,500,000 2,317,875
----------------------------------------------------------------------------------------------------------------
California Housing Finance Agency Home Mtg.
Revenue Bonds, Series C, 6.75%, 2/1/25 Aa/AA- 4,985,000 5,118,698
----------------------------------------------------------------------------------------------------------------
@ California Housing Finance Agency Single Family Mtg.
Purchase Revenue Bonds, Series A-2, 6.45%, 8/1/25 Aaa/AAA 2,500,000 2,522,725
----------------------------------------------------------------------------------------------------------------
California Pollution Control Financing Authority
Revenue Bonds, Pacific Gas & Electric Co. Project,
Series B, 6.35%, 6/1/09 A1/A 2,000,000 2,055,540
----------------------------------------------------------------------------------------------------------------
California State Public Works Board Lease
Revenue Bonds, Department of Corrections:
Series A, AMBAC Insured, 5.25%, 1/1/21 Aaa/AAA/AAA 2,250,000 2,082,622
Madera State Prison, Series E, 5.50%, 6/1/15 A1/A/A- 2,000,000 1,913,060
----------------------------------------------------------------------------------------------------------------
California Statewide Communities Development
Authority Revenue Certificates of Participation,
Cedars-Sinai Medical Center, 5.40%, 11/1/15 A1/NR 1,000,000 882,360
----------------------------------------------------------------------------------------------------------------
Capistrano, California Unified School District Community
Facilities District Special Tax Bonds, No. 87-1, 7.60%, 9/1/14 NR/NR 1,000,000 1,106,200
----------------------------------------------------------------------------------------------------------------
Central California Joint Powers Health Financing
Authority Certificates of Participation, Community
Hospitals of Central California Project, 5%, 2/1/23 A/NR/A- 1,050,000 865,473
----------------------------------------------------------------------------------------------------------------
Corona, California Certificates of Participation,
Prerefunded, Series B, 10%, 11/1/20 Aaa/AAA 3,250,000 4,194,385
----------------------------------------------------------------------------------------------------------------
Duarte, California Certificates of Participation,
City of Hope National Medical Center, 6.25%, 4/1/23 Baa1/NR 500,000 490,005
----------------------------------------------------------------------------------------------------------------
Foothill/Eastern Transportation Corridor Agency
California Toll Road Revenue Bonds,
Sr. Lien, Series A, 6.50%, 1/1/32 Baa/BBB-/BBB 1,400,000 1,404,536
----------------------------------------------------------------------------------------------------------------
Long Beach, California Harbor Revenue Bonds,
5.125%, 5/15/18 Aa/AA- 2,000,000 1,776,780
----------------------------------------------------------------------------------------------------------------
Los Angeles County, California Certificates
of Participation, Disney Parking Project,
Zero Coupon, 6.95%, 9/1/11(1) Baa1/BBB/A- 2,340,000 855,574
----------------------------------------------------------------------------------------------------------------
Los Angeles, California Convention & Exhibition Center
Authority Refunding Certificates of Participation,
Prerefunded, Series A, 7.375%, 8/15/18 Aaa/AAA 1,600,000 1,757,600
----------------------------------------------------------------------------------------------------------------
Los Angeles, California Wastewater System Revenue
Refunding Bonds, Series D, FGIC Insured, 8.70%, 11/1/03 Aaa/AAA/AAA 5,115,000 6,289,813
</TABLE>
6 Oppenheimer Main Street California Municipal Fund
<PAGE>
<TABLE>
<CAPTION>
Ratings: Moody's/
S&P's/Fitch's Face Market Value
(Unaudited) Amount See Note 1
<S> <C> <C> <C>
====================================================================================================================================
California
(continued)
Metropolitan Water District of Southern California
Waterworks Revenue Refunding Bonds, 5.55%, 10/30/20 Aa/AA $ 3,000,000 $ 2,817,780
----------------------------------------------------------------------------------------------------------------
Newport Mesa, California Unified School
District Special Tax Revenue Refunding Bonds,
Community Facilities District No. 90-1, 6.625%, 9/1/14 NR/NR 2,000,000 2,005,900
----------------------------------------------------------------------------------------------------------------
Orange County, California Community
Facilities District Special Tax Bonds:
No. 87-3, Prerefunded, Series A, 8.05%, 8/15/08 NR/NR 1,480,000 1,614,739
No. 88-1, Aliso Viejo, Prerefunded, Series A, 7.35%, 8/15/18 NR/AAA 3,000,000 3,465,420
----------------------------------------------------------------------------------------------------------------
Pittsburg, California Improvement Bond Act of 1915
Bonds, Assessment District 1990-01, 7.75%, 9/2/20 NR/NR 95,000 98,439
----------------------------------------------------------------------------------------------------------------
Pomona, California Single Family Mtg. Revenue Refunding
Bonds, Escrowed to Maturity, Series A, 7.60%, 5/1/23 NR/AAA 2,500,000 2,947,150
----------------------------------------------------------------------------------------------------------------
Redding, California Electric System
Revenue Certificates of Participation:
FGIC Insured, Inverse Floater, 7.494%, 6/1/19(2) Aaa/AAA/AAA 1,150,000 1,037,875
MBIA Insured, Inverse Floater, 9.002%, 7/8/22(2) Aaa/AAA 500,000 568,125
----------------------------------------------------------------------------------------------------------------
Regents of the University of California
Revenue Bonds, Multiple Purpose Projects,
Prerefunded, Series A, 6.875%, 9/1/16 NR/A 250,000 282,148
----------------------------------------------------------------------------------------------------------------
Riverside County, California Community Facilities
District Special Tax Bonds, No. 88-12, 7.55%, 9/1/17 NR/NR 1,500,000 1,573,095
----------------------------------------------------------------------------------------------------------------
Sacramento County, California Single Family
Mtg. Revenue Bonds, Escrowed to Maturity,
8.125%, 7/1/16(3) Aaa/AAA 2,810,000 3,446,577
----------------------------------------------------------------------------------------------------------------
Sacramento, California Municipal Utility District
Electric Revenue Refunding Bonds, FGIC Insured,
Inverse Floater, 8.717%, 8/15/18(2) Aaa/AAA/AAA 1,500,000 1,571,250
----------------------------------------------------------------------------------------------------------------
San Bernardino County, California Certificates
of Participation, Medical Center Financing Project,
5.50%, 8/1/17 Baa1/A- 1,750,000 1,616,073
----------------------------------------------------------------------------------------------------------------
San Diego County, California Water Authority
Revenue Certificates of Participation, Series 91-B,
MBIA Insured, Inverse Floater, 8.73%, 4/8/21(2) Aaa/AAA 1,000,000 1,067,500
----------------------------------------------------------------------------------------------------------------
San Francisco, California Bay Area Rapid Transit
District Sales Tax Revenue Refunding Bonds,
AMBAC Insured, 6.75%, 7/1/11 Aaa/AAA/AAA 1,000,000 1,125,010
----------------------------------------------------------------------------------------------------------------
San Joaquin Hills, California Transportation Corridor
Agency Toll Road Revenue Bonds, Sr. Lien, 6.75%,
1/1/32 NR/NR/BBB 3,500,000 3,581,200
----------------------------------------------------------------------------------------------------------------
Southern California Home Financing Authority Single
Family Mtg. Revenue Bonds, Series A, 7.35%, 9/1/24 NR/AAA 285,000 296,765
----------------------------------------------------------------------------------------------------------------
Southern California Public Power Authority
Power Project Revenue Bonds, San Juan Unit 3,
Series A, MBIA Insured, 5%, 1/1/20 Aaa/AAA 1,000,000 882,620
----------------------------------------------------------------------------------------------------------------
Southern California Public Power Authority Transmission
Project Revenue Bonds, Inverse Floater, 7.569%, 7/1/12(2) Aa/A+ 2,500,000 2,518,750
------------
74,688,723
</TABLE>
7 Oppenheimer Main Street California Municipal Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments (Continued)
Ratings: Moody's/
S&P's/Fitch's Face Market Value
(Unaudited) Amount See Note 1
<S> <C> <C> <C>
====================================================================================================================================
U.S. Possessions--8.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth General Obligation Bonds,
MBIA Insured, Inverse Floater, 7.887%, 7/1/08(2) Aaa/AAA $ 1,500,000 $ 1,565,625
----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway Authority
Revenue Bonds, Prerefunded, Series P, 8.125%, 7/1/13 Aaa/AAA 2,000,000 2,178,500
----------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Public Improvement
General Obligation Bonds, Prerefunded, Series A,
7.75%, 7/1/17 NR/AAA 1,000,000 1,105,670
----------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Finance Corp. Single Family Mtg.
Revenue Bonds, Portfolio 1, Series B, 7.65%, 10/15/22 Aaa/AAA 285,000 298,395
----------------------------------------------------------------------------------------------------------------
Puerto Rico Industrial, Medical & Environmental
Pollution Control Facilities Tourist Revenue Bonds,
Mennonite General Hospital Project,
Series A, 6.50%, 7/1/12 NR/BBB-/BBB 600,000 598,932
----------------------------------------------------------------------------------------------------------------
Puerto Rico Public Buildings Authority Guaranteed
Public Education & Health Facilities Revenue Bonds,
Prerefunded, Series H, 7.875%, 7/1/07 Aaa/AAA 1,500,000 1,579,320
------------
7,326,442
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $82,016,413) 99.1% 82,015,165
- ------------------------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.9 729,904
--------- ------------
Net Assets 100.0% $82,745,069
========= ============
</TABLE>
1. For zero coupon bonds, the interest rate shown is the
effective yield on the date of purchase.
2. Represents the current interest rate for a variable rate
bond. These bonds known as "inverse floaters" pay interest
at a rate that varies inversely with short-term interest
rates. As interest rates rise, inverse floaters produce less
current income. Their price may be more volatile than the
price of a comparable fixed-rate security. Inverse floaters
amount to $8,329,125 or 10.07% of the Fund's net assets at
August 31, 1996.
3. Securities with an aggregate market value of $165,583
are held in collateralized accounts to cover initial margin
requirements on open futures sales contracts. See Note 5 of
Notes to Financial Statements.
As of August 31, 1996, securities subject to the alternative minimum tax
amounted to $15,217,085 or 18.39% of the Fund's net assets.
Distribution of investments by industry, as a percentage of total investments at
value, is as follows:
Industry Market Value Percent
Utilities $16,753,713 20.4%
Housing 14,630,310 17.8
Lease/Rental 14,255,861 17.4
Special Tax Bonds 11,982,333 14.6
Transportation 10,066,026 12.3
Hospitals 9,317,940 11.4
General Obligation Bonds 2,671,295 3.3
Pollution Control 2,055,540 2.5
Education 282,147 0.3
----------- -----
$82,015,165 100.0%
=========== =====
See accompanying Notes to Financial Statements.
8 Oppenheimer Main Street California Municipal Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities August 31, 1996
<S> <C>
====================================================================================================================================
Assets Investments, at value (cost $82,016,413)--see accompanying statement $ 82,015,165
----------------------------------------------------------------------------------------------------------------
Receivables:
Interest 1,076,154
Shares of capital stock sold 41,084
Daily variation on futures contracts--Note 5 4,213
----------------------------------------------------------------------------------------------------------------
Other 4,852
------------
Total assets 83,141,468
------------
====================================================================================================================================
Liabilities Bank overdraft 27,084
----------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Dividends 288,301
Shares of capital stock redeemed 38,801
Shareholder reports 33,331
Transfer and shareholder servicing agent fees 2,535
Distribution and service plan fees 2,439
Other 3,908
------------
Total liabilities 396,399
====================================================================================================================================
Net Assets $ 82,745,069
============
====================================================================================================================================
Composition of
Net Assets Par value of shares of capital stock $ 68,064
----------------------------------------------------------------------------------------------------------------
Additional paid-in capital 82,069,527
----------------------------------------------------------------------------------------------------------------
Undistributed net investment income 598,945
----------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 1,187
----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Notes 3 and 5 7,346
------------
Net assets $ 82,745,069
============
====================================================================================================================================
Net Asset Value Class A Shares:
Per Share Net asset value and redemption price per share (based on
net assets of $76,817,365 and 6,318,241 shares of capital stock outstanding) $ 12.16
Maximum offering price per share (net asset value plus sales charge of
4.75% of offering price) $ 12.77
----------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $5,927,704 and 488,126 shares of capital stock outstanding) $ 12.14
See accompanying Notes to Financial Statements.
</TABLE>
9 Oppenheimer Main Street California Municipal Fund
<PAGE>
<TABLE>
<CAPTION>
Statements of Operations
Two Months Year Ended
Ended Aug. 31, June 30,
1996(1) 1995
<S> <C> <C>
====================================================================================================================================
Investment Income Interest $ 927,063 $ 5,417,420
------------ ------------
====================================================================================================================================
Expenses Management fees--Note 4 56,478 330,555
----------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class B 9,671 38,469
----------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 9,321 55,205
----------------------------------------------------------------------------------------------------------------
Shareholder reports 6,976 59,148
----------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 3,720 9,164
----------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 1,601 5,572
Class B 765 1,055
----------------------------------------------------------------------------------------------------------------
Legal and auditing fees 1,330 9,937
----------------------------------------------------------------------------------------------------------------
Directors' fees and expenses 226 1,857
----------------------------------------------------------------------------------------------------------------
Insurance expenses 642 3,740
----------------------------------------------------------------------------------------------------------------
Other 697 6,361
------------ -----------
Total expenses 91,427 521,063
Less expenses paid indirectly--Note 4 (3,383) (7,886)
------------ -----------
Net expenses 88,044 513,177
====================================================================================================================================
Net Investment Income 839,019 4,904,243
====================================================================================================================================
Realized and
Unrealized
Gain (Loss) Net realized gain (loss) on:
Investments (15,610) 37,776
Closing of futures contracts (27,098) (24,718)
------------ -----------
Net realized gain (loss) (42,708) 13,058
----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 52,839 446,150
------------ -----------
Net realized and unrealized gain 10,131 459,208
====================================================================================================================================
Net Increase in Net Assets Resulting From Operations $ 849,150 $ 5,363,451
============ ===========
</TABLE>
1. The Fund changed its fiscal year end from June 30 to
August 31.
See accompanying Notes to Financial Statements.
10 Oppenheimer Main Street California Municipal Fund
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Two Months
Ended Aug. 31, Year Ended June 30,
1996(1) 1996 1995
<S> <C> <C> <C>
====================================================================================================================================
Operations Net investment income $ 839,019 $ 4,904,243 $ 4,872,375
-----------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (42,708) 13,058 21,062
-----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 52,839 446,150 1,550,552
------------ ------------ -------------
Net increase in net assets resulting from operations 849,150 5,363,451 6,443,989
====================================================================================================================================
Dividends and Dividends from net investment income:
Distributions to Class A (773,949) (4,694,006) (4,502,183)
Shareholders Class B (47,009) (189,244) (89,348)
-----------------------------------------------------------------------------------------------------------------
Dividends in excess of net investment income:
Class A -- -- (258,329)
Class B -- -- (8,756)
-----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (11,115) --
Class B -- (475) --
-----------------------------------------------------------------------------------------------------------------
Distributions in excess of net realized gain:
Class A -- (60,043) --
Class B -- (2,568) --
====================================================================================================================================
Capital Stock Net increase (decrease) in net assets resulting from
Transactions capital stock transactions--Note 2:
Class A (125,718) (1,651,052) (2,943,992)
Class B 487,540 2,817,402 1,383,961
====================================================================================================================================
Net Assets Total increase 390,014 1,572,350 25,342
-----------------------------------------------------------------------------------------------------------------
Beginning of period 82,355,055 80,782,705 80,757,363
------------ ------------ -------------
End of period [including undistributed (overdistributed)
net investment income of $598,945, $(132,853) and
$(98,805), respectively] $ 82,745,069 $ 82,355,055 $ 80,782,705
============ ============ =============
</TABLE>
1. The Fund changed its fiscal year end from June 30 to
August 31.
See accompanying Notes to Financial Statements.
11 Oppenheimer Main Street California Municipal Fund
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
Class A
-----------------------------------------------------------
Two Months
Ended
August 31, Year Ended June 30,
1996(2) 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
==============================================================================================================
Per Share Operating Data:
Net asset value, beginning of period $12.15 $12.09 $11.82 $12.66 $12.05 $11.61
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .12 .73 .73 .75 .80 .82
Net realized and unrealized
gain (loss) .01 .07 .27 (.80) .64 .45
Total income (loss)
from investment operations .13 .80 1.00 (.05) 1.44 1.27
- --------------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.12) (.73) (.69) (.73) (.81) (.82)
Dividends in excess of net
investment income -- -- (.04) (.03) -- --
Distributions from net realized gain -- --(3) -- -- (.02) (.01)
Distributions in excess of net
realized gain -- (.01) -- (.03) -- --
Total dividends and
distributions to shareholders (.12) (.74) (.73) (.79) (.83) (.83)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.16 $12.15 $12.09 $11.82 $12.66 $12.05
====== ====== ====== ====== ====== ======
=============================================================================================================
Total Return, at Net Asset Value(4) 1.12% 6.73% 8.93% (0.60)% 12.53 11.21%
=============================================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $76,817 $76,913 $78,134 $79,555 $72,387 $40,055
- --------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $77,584 $78,676 $76,148 $81,741 $54,840 $26,304
- --------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 6.00%(5) 5.99% 6.27% 6.09% 6.46% 6.74%
Expenses(6) 0.57%(5) 0.58% 0.57% 0.53% 0.39% 0.32%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 1.4% 33.1% 14.2% 20.2% 5.8% 25.7%
</TABLE>
<TABLE>
<CAPTION>
Class B
-----------------
Two Months
Ended
August 31, Year Ended June 30,
1996(2) 1996
1995 1994(1)
=============================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $12.14 $12.08 $11.80 $12.90
- -------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .10 .61 .62 .38
Net realized and unrealized
gain (loss) -- .07 .27 (1.07)
------ ------
Total income (loss)
from investment operations .10 .68 .89 (.69)
- -------------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.10) (.61) (.57) (.37)
Dividends in excess of net
investment income -- -- (.04) (.01)
Distributions from net realized gain -- --(3) -- --
Distributions in excess of net
realized gain -- (.01) -- (.03)
------ ------
Total dividends and
distributions to shareholders (.10) (.62) (.61) (.41)
- -------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.14 $12.14 $12.08 $11.80
====== ====== ====== ======
=============================================================================================================
Total Return, at Net Asset Value(4) 0.85% 5.66% 7.90% (5.42)%
=============================================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $5,928 $5,442 $2,648 $1,203
- -------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $5,767 $3,848 $1,904 $649
- -------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.92%(5) 4.94% 5.17% 4.91%(5)
Expenses(6) 1.62%(5) 1.60% 1.55% 1.62%(5)
- -------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 1.4% 33.1% 14.2% 20.2%
</TABLE>
1. For the period from October 29, 1993 (inception of offering) to June 30,
1994.
2. The Fund changed its fiscal year end from June 30 to August 31.
3. Less than $.005 per share.
4. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
5. Annualized.
6. Beginning in fiscal 1995, the expense ratio reflects the effect of gross
expenses paid indirectly by the Fund. Prior year expense ratios have not been
adjusted.
7. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended August 31, 1996 were $2,272,749 and $1,109,040, respectively.
See accompanying Notes to Financial Statements.
12 Oppenheimer Main Street California Municipal Fund
<PAGE>
Notes to Financial Statements
================================================================================
1. Significant
Accounting Policies
Oppenheimer Main Street California Municipal Fund (the Fund), operating under
the name Oppenheimer Main Street California Tax-Exempt Fund through October 9,
1996, is a separate series of Oppenheimer Main Street Funds, Inc., an open-end
management investment company registered under the Investment Company Act of
1940, as amended. On August 27, 1996, the Board of Directors elected to change
the fiscal year end of the Fund from June 30 to August 31. Accordingly, these
financial statements include information for the two month period from July 1,
1996 to August 31, 1996. The Fund's investment objective is to seek as high a
level of current income which is exempt from Federal and California personal
income taxes for individual investors that is consistent with preservation of
capital. The Fund's investment adviser is OppenheimerFunds, Inc. (the Manager).
The Fund offers both Class A and Class B shares. Class A shares are sold with a
front-end sales charge. Class B shares may be subject to a contingent deferred
sales charge. Both classes of shares have identical rights to earnings, assets
and voting privileges, except that each class has its own distribution and/or
service plan, expenses directly attributable to a particular class and exclusive
voting rights with respect to matters affecting a single class. Class B shares
will automatically convert to Class A shares six years after the date of
purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.
- --------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at the close of the
New York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Directors. Such securities which cannot be valued by
the approved portfolio pricing service are valued using dealer-supplied
valuations provided the Manager is satisfied that the firm rendering the quotes
is reliable and that the quotes reflect current market value, or are valued
under consistently applied procedures established by the Board of Directors to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
Distributions to Shareholders. The Fund intends to declare dividends separately
for Class A and Class B shares from net investment income each day the New York
Stock Exchange is open for business and pay such dividends monthly.
Distributions from net realized gains on investments, if any, will be declared
at least once each year.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of premium amortization for tax purposes. The character of the
distributions made during the year from net investment income or net realized
gains may differ from the ultimate characterization for federal income tax
purposes. Also, due to timing of dividend distributions, the fiscal year in
which amounts are distributed may differ from the year that the income or
realized gain (loss) was recorded by the Fund.
During the two months ended August 31, 1996, the Fund adjusted the
classification of distributions to shareholders to reflect the differences
between financial statement amounts and distributions determined in accordance
with income tax regulations. Accordingly, during the two months ended August 31,
1996, amounts have been reclassified to reflect a decrease in paid-in capital of
$743,288, a decrease in overdistributed net investment income of $713,737, and a
decrease in accumulated net realized loss on investments of $29,551.
13 Oppenheimer Main Street California Municipal Fund
<PAGE>
Notes to Financial Statements (Continued)
================================================================================
1. Significant
Accounting Policies
(continued)
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date). Original issue discount on securities purchased
is amortized over the life of the respective securities, in accordance with
federal income tax requirements. For bonds acquired after April 30, 1993, on
disposition or maturity, taxable ordinary income is recognized to the extent of
the lesser of gain or market discount that would have accrued over the holding
period. Realized gains and losses on investments and unrealized appreciation and
depreciation are determined on an identified cost basis, which is the same basis
used for federal income tax purposes. The Fund concentrates its investments in
California and, therefore, may have more credit risks related to the economic
conditions of California than a portfolio with a broader geographical
diversification.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
================================================================================
2. Capital Stock
The Fund has authorized 26,250,000 shares of $.01 par value capital stock of
each class. Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
Two Months Ended
August 31, 1996(1) Year Ended June 30, 1996 Year Ended June 30, 1995
----------------------- ------------------------ -------------------------
Shares Amount Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Class A:
Sold 67,135 $ 819,316 387,788 $ 4,767,548 549,187 $ 6,492,313
Dividends and distributions reinvested 39,490 483,642 243,712 2,993,646 262,815 3,070,057
Redeemed (116,433) (1,428,676) (765,193) (9,412,246) (1,081,996) (12,506,362)
-------- ----------- -------- ----------- ---------- ------------
Net decrease (9,808) $ (125,718) (133,693) $(1,651,052) (269,994) $ (2,943,992)
======== =========== ======== =========== ========== ============
- ------------------------------------------------------------------------------------------------------------------------------------
Class B:
Sold 44,022 $ 538,404 247,941 $ 3,048,438 125,642 $ 1,482,012
Dividends and distributions reinvested 2,450 29,980 9,629 117,946 4,898 57,310
Redeemed (6,620) (80,844) (28,549) (348,982) (13,193) (155,361)
-------- ----------- -------- ----------- ---------- ------------
Net increase 39,852 $ 487,540 229,021 $ 2,817,402 117,347 $ 1,383,961
======== =========== ======== =========== ========== ============
</TABLE>
1. The Fund changed its fiscal year end from June 30 to August 31.
================================================================================
3. Unrealized Gains and
Losses on Investments
At August 31, 1996, net unrealized depreciation on investments of $1,248 was
composed of gross appreciation of $1,788,329, and gross depreciation of
$1,789,577.
================================================================================
4. Management Fees
And Other Transactions
With Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.55% of average
annual net assets, with a contractual waiver when net assets are less than $100
million. Annual fees, reflecting this waiver, are 0.40% of net assets of $75
million or more but less than $100 million, 0.25% of net assets of $50 million
or more but less than $75 million, 0.15% of net assets of $25 million or more
but less than $50 million, and 0% of net assets less than $25 million. The
Manager has agreed to assume Fund expenses (with specified exceptions) in excess
of the regulatory limitation of the state of California.
For the two months ended August 31, 1996, commissions (sales charges paid
by investors) on sales of Class A shares totaled $24,568, of which $4,283 was
retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class B shares
totaled $19,208. During the two months ended August 31, 1996, OFDI received
contingent deferred sales charges of $2,863 upon redemption of Class B shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer
and shareholder servicing agent for the Fund, and for other registered
investment companies. OFS's total costs of providing such services are allocated
ratably to these companies.
Expenses paid indirectly represent a reduction of custodian fees for
earnings on cash balances maintained by the Fund.
14 Oppenheimer Main Street California Municipal Fund
<PAGE>
================================================================================
4. Management Fees
And Other Transactions
With Affiliates
(continued)
The Fund has adopted a reimbursement type Distribution and Service Plan for
Class B shares to reimburse OFDI for its services and costs in distributing
Class B shares and servicing accounts. Under the Plan, the Fund pays OFDI an
annual asset-based sales charge of 0.75% per year on Class B shares that are
outstanding for 6 years or less. OFDI also receives a service fee of 0.25% per
year to reimburse dealers for providing personal services for accounts that hold
Class B shares. Both fees are computed on the average annual net assets of Class
B shares, determined as of the close of each regular business day. If the Plan
is terminated by the Fund, the Board of Directors may allow the Fund to continue
payments of the asset-based sales charge to OFDI for certain expenses it
incurred before the Plan was terminated. During the two months ended August 31,
1996, OFDI retained $8,439 as reimbursement for Class B sales commissions and
service fee advances, as well as financing costs. As of August 31, 1996, OFDI
had incurred unreimbursed expenses of $239,334 for Class B.
================================================================================
5. Futures Contracts
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Fund may also buy
or write put or call options on these futures contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable or
payable for the daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
At August 31, 1996, the Fund had outstanding futures contracts to sell debt
securities as follows:
<TABLE>
<CAPTION>
Number of Valuation as of Unrealized
Contracts to Sell Expiration Date Futures Contracts August 31, 1996 Appreciation
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Bonds 12/96 5 $533,906 $8,594
</TABLE>
15 Oppenheimer Main Street California Municipal Fund
<PAGE>
Independent Auditors' Report
================================================================================
The Board of Directors and
Shareholders of Oppenheimer
Main Street California Municipal Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Main Street California Municipal
Fund as of August 31, 1996, the statements of operations for the two months then
ended and the year ended June 30, 1996, the statements of changes in net assets
for the two months ended August 31, 1996 and the years ended June 30, 1996 and
1995, and the financial highlights for the period July 1, 1991 to August 31,
1996. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at August
31, 1996 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Oppenheimer Main
Street California Municipal Fund at August 31, 1996, the results of its
operations, the changes in its net assets, and the financial highlights for the
respective stated periods, in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
September 23, 1996
16 Oppenheimer Main Street California Municipal Fund
<PAGE>
Federal Income Tax Information (Unaudited)
================================================================================
In early 1997, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1996. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
None of the dividends paid by the Fund during the two month period ended
August 31, 1996 are eligible for the corporate dividend-received deduction. The
dividends were derived from interest on municipal bonds and are not subject to
federal income tax. To the extent a shareholder is subject to any state or local
tax laws, some or all of the dividends received may be taxable.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax adviser for specific guidance.
17 Oppenheimer Main Street California Municipal Fund
<PAGE>
Oppenheimer Main Street California Municipal Fund
A Series of Oppenheimer Main Street Funds, Inc.
================================================================================
Officers and Directors James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, Director and President
Robert G. Avis, Director
William A. Baker, Director
Charles Conrad, Jr., Director
Jon S. Fossel, Director
Sam Freedman, Director
Raymond J. Kalinowski, Director
C. Howard Kast, Director
Robert M. Kirchner, Director
Ned M. Steel, Director
George C. Bowen, Vice President, Treasurer and
Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
Jerry A. Webman, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
Investment Adviser OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors Deloitte & Touche LLP
================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
This is a copy of a report to shareholders of Oppenheimer Main Street California
Municipal Fund. This report must be preceded or accompanied by a Prospectus of
Oppenheimer Main Street California Municipal Fund. For material information
concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not
guaranteed by any bank, and are not insured by the FDIC or any other agency, and
involve investment risks, including possible loss of the principal amount
invested.
18 Oppenheimer Main Street California Municipal Fund
<PAGE>
OppenheimerFunds Family
================================================================================
OppenheimerFunds offers over 50 funds designed to fit virtually every investment
goal. Whether you're investing for retirement, your children's education or
tax-free income, we have the funds to help you seek your objective.
When you invest with OppenheimerFunds, you can feel comfortable knowing
that you are investing with a respected financial institution with over 35 years
of experience in helping people just like you reach their financial goals. And
you're investing with a leader in global, growth stock and flexible fixed-income
investments--with over 3 million shareholder accounts and more than $50 billion
under OppenheimerFunds' management and that of our affiliates.
At OppenheimerFunds we don't charge a fee to exchange shares. And you can
exchange shares easily by mail or by telephone.1 For more information on
Oppenheimer funds, please contact your financial adviser or call us at
1-800-525-7048 for a prospectus. You may also write us at the address shown on
the back cover. As always, please read the prospectus carefully before you
invest.
================================================================================
Stock Funds Global Emerging Growth Fund Growth Fund
Enterprise Fund(2) Global Fund
International Growth Fund Quest Global Value Fund
Discovery Fund Disciplined Value Fund
Quest Small Cap Value Fund Oppenheimer Fund
Gold & Special Minerals Fund Value Stock Fund
Target Fund Quest Value Fund
================================================================================
Stock &
Bond Funds Main Street Income & Growth Fund Equity Income Fund
Quest Opportunity Value Fund Disciplined Allocation Fund
Total Return Fund Asset Allocation Fund
Quest Growth & Income Value Fund Strategic Income & Growth Fund
Global Growth & Income Fund Bond Fund for Growth
================================================================================
Bond Funds International Bond Fund Bond Fund
High Yield Fund U.S. Government Trust
Champion Income Fund Limited-Term Government Fund
Strategic Income Fund
================================================================================
Municipal Funds
California Municipal Fund(3) Insured Municipal Fund
Florida Municipal Fund(3) Intermediate Municipal Fund
New Jersey Municipal Fund(3)
New York Municipal Fund(3) Rochester Division
Pennsylvania Municipal Fund(3) Rochester Fund Municipals
Municipal Bond Fund Limited Term New York
Municipal Fund
================================================================================
Money Market Funds(4)
Money Market Fund Cash Reserves
================================================================================
LifeSpan Growth Fund Income Fund
Balanced Fund
1. Exchange privileges are subject to change or termination. Shares may be
exchanged only for shares of the same class of eligible funds.
2. Effective 4/1/96, the Fund is closed to new investors.
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
U.S. government and there can be no assurance that a money market fund will be
able to maintain a stable net asset value of $1.00 per share.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc.,
Two World Trade Center, New York, NY 10048-0203.
(C) Copyright 1996 OppenheimerFunds, Inc. All rights reserved.
19 Oppenheimer Main Street California Municipal Fund
<PAGE>
[BACK COVER]
Information
General Information
Monday-Friday 8:30 a.m.-9 p.m. ET
Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
Telephone Transactions
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OppenheimerFunds
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RA0725.001.0896 October 31, 1996
[PICTURE OF CUSTOMER SERVICE REP.]
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OppenheimerFunds Services
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As an Oppenheimer fund shareholder, you have some special privileges. Whether
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For added convenience, you can get automated information with
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PhoneLink gives you access to a variety of fund, account, and market
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You can count on us whenever you need assistance. That's why the
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So call us today--we're here to help.
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