<PAGE> 1
ANNUAL REPORT AUGUST 31, 1999
OPPENHEIMER
MAIN STREET(R)
CALIFORNIA MUNICIPAL FUND
[PHOTO]
[OPPENHEIMERFUNDS LOGO]
THE RIGHT WAY TO INVEST
<PAGE> 2
CONTENTS
3 President's Letter
5 An Interview
with Your Fund's
Manager
9 Fund Performance
12 FINANCIAL STATEMENTS
28 INDEPENDENT
AUDITORS' REPORT
29 Federal Income
Tax Information
30 Officers and
Directors
31 OppenheimerFunds
Family
32 Information and
Services
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
IN STARK CONTRAST TO U.S. TREASURY SECURITIES, municipal bond prices were
generally stable throughout the reporting period.
OUR RESEARCH-INTENSIVE SECURITY SELECTION STRATEGY helped us find areas of
opportunity and helped avoid potential problems.
AVERAGE ANNUAL
TOTAL RETURNS
For the 1-Year Period Ended 8/31/99*
<TABLE>
<CAPTION>
CLASS A
Without With
Sales Chg. Sales Chg.
- --------------------------
<S> <C>
- -1.42% -6.11%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
Without With
Sales Chg. Sales Chg.
- --------------------------
<S> <C>
- -2.41% -7.10%
</TABLE>
NOT FDIC INSURED.
NO BANK GUARANTEE.
MAY LOSE VALUE.
* See page 11 for further details.
2 Oppenheimer Main Street California Municipal Fund
<PAGE> 3
PRESIDENT'S LETTER
[PHOTO]
JAMES C. SWAIN
Chairman
Oppenheimer
Main Street California
Municipal Fund
[PHOTO]
BRIDGET A. MACASKILL
President
Oppenheimer
Main Street California
Municipal Fund
DEAR SHAREHOLDER,
In many ways, the 1999 investment environment has, so far, unfolded as many
expected it would, producing both attractive opportunities and formidable
challenges for investors.
On the economic front, early worries about the effects of global weakness
in the wake of last year's credit and currency crises have abated. Instead, as
many economies around the world begin to strengthen, concerns now center around
whether the U.S. economy may be growing too quickly. Throughout the year,
consumers in the United States have continued to spend and borrow heavily, more
than offsetting any temporary slowdown in the industrial and export sectors.
The economy's strength has not gone unnoticed by the nation's monetary
policymakers. In an effort to ward off emerging inflationary pressures, the
Federal Reserve Board increased short-term interest rates this past summer.
Market reaction to robust economic growth has been mixed. The U.S. bond
market has generally declined, as fixed income investors became increasingly
concerned about the effects of rising interest rates.
In the stock market, the performance of large-capitalization growth stocks,
which has driven the market's advance over the past few years, has begun to
moderate, and many previously out-of-favor value-oriented, mid-cap and small-cap
stocks have rallied. At the same time, a healthy percentage of actively managed
diversified portfolios have once again begun to outperform unmanaged stock
indices such as Standard & Poor's 500.
3 Oppenheimer Main Street California Municipal Fund
<PAGE> 4
PRESIDENT'S LETTER
At OppenheimerFunds, we applaud the Fed's pre-emptive strike against inflation.
In our view, history has repeatedly demonstrated that most financial assets do
best in a low-inflation environment. What's more, we believe that the move to
higher interest rates should be temporary.
One recent development is quite troublesome to us however: the increasing
popularity of "day trading" among individuals seeking to make fast money in a
volatile stock market. In our opinion, day trading is not investing, it is
gambling. Experience proves that without extensive research and analysis,
attempting to time short-term price swings is a fool's errand. Instead, we
continue to encourage investors to maintain a long-term perspective that is
measured in years, not days.
Finally, while we remain alert to the potential impact of the Y2K issue, we
are encouraged by the progress made in addressing the matter. At
OppenheimerFunds, our shareholder accounting systems are already Y2K compliant,
and we have successfully participated in all required industrywide tests. We
intend to continue retesting our systems in order to help further protect
against any potential problems. After all, whether in our computer accounting
systems or the financial markets, managing risk is an important part of what
makes OppenheimerFunds The Right Way to Invest.
Sincerely,
/s/ JAMES C. SWAIN /s/ BRIDGET A. MACASKILL
James C. Swain Bridget A. Macaskill
September 22, 1999
4 Oppenheimer Main Street California Municipal Fund
<PAGE> 5
AN INTERVIEW WITH YOUR FUND'S MANAGER
[PHOTO]
PORTFOLIO MANAGEMENT
TEAM (L TO R)
Bob Patterson
Caryn Halbrecht
(Portfolio Manager)
HOW DID OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND PERFORM DURING THE
ONE-YEAR PERIOD THAT ENDED AUGUST 31, 1999?
A. In a rapidly changing investment environment, the Fund continued to provide
investors with current income that was exempt from federal and California income
taxes. Market conditions in late 1998 and early 1999 were, in many respects,
direct opposites of each other. The final months of 1998 were generally
characterized by recessionary economic conditions throughout much of the world,
declining interest rates in the United States and less restrictive monetary
policies worldwide. In contrast, 1999 has seen signs of global economic
recovery, rising domestic interest rates and, ultimately, a tighter monetary
policy in the United States.
HOW DID THESE ECONOMIC CONDITIONS AFFECT CALIFORNIA'S MUNICIPAL BOND MARKET?
In stark contrast to U.S. Treasury securities, municipal bond prices were
remarkably stable throughout the one-year reporting period. In the first half of
the period, global economic uncertainty triggered a "flight to quality" among
U.S. and foreign investors. This created unprecedented demand for U.S. Treasury
securities, driving their prices up and their yields down (prices and yields
move in opposite directions). However, because municipal bonds do not provide
tax advantages to foreign investors, municipals did not benefit to the same
extent. As a result, U.S. Treasury securities significantly outperformed
triple-A rated municipal bonds with comparable maturities.
5 Oppenheimer Main Street California Municipal Fund
<PAGE> 6
AN INTERVIEW WITH YOUR FUND'S MANAGER
"MUNICIPAL BONDS ENDURED SIGNIFICANTLY LESS VOLATILITY THAN OTHER HIGH-QUALITY,
FIXED INCOME SECURITIES OVER THE PAST YEAR."
In the second half of the reporting period, while municipal bonds remained
stable, prices of U.S. Treasury securities declined sharply. As the economy grew
stronger, investors appeared to regain some of their confidence and sold many
Treasury bonds in order to return to riskier financial assets such as stocks and
corporate bonds. Consequently, municipal bonds provided higher total returns
than U.S. Treasuries during the past twelve months.
In our opinion, municipal bonds' relative stability is the result of
supply-and-demand factors. Strong economic conditions in California reduced many
municipalities' need to borrow, leading to a modestly diminished supply of tax
exempt bonds. Yet, demand remained high from investors seeking to minimize their
income tax liabilities. This supply-and-demand relationship helped support the
stability of California's municipal bond prices and yields.
DID YOU FIND COMPELLING VALUES IN THIS MARKET ENVIRONMENT?
Yes. Long-term, tax exempt municipal bond yields have been high relative to
yields of long-term, taxable U.S. Treasury securities during the past twelve
months. In fact, by mid-1999, California municipal bond yields were more than
90% of comparable Treasury yields. As a result, we believe that California
municipal bonds have provided excellent after-tax values compared to historical
norms during this period.
6 Oppenheimer Main Street California Municipal Fund
<PAGE> 7
AVERAGE ANNUAL
TOTAL RETURNS
For the Periods Ended 9/30/99(1)
<TABLE>
<CAPTION>
- ------------------------------
Class A Since
1-Year 5-Year Inception
- ------------------------------
<S> <C> <C>
- -8.02% 5.73% 6.56%
Class B Since
1-Year 5-Year Inception
- ------------------------------
- -9.00% 5.37% 3.69%
- ------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARDIZED YIELDS(2)
For the 30 Days Ended 8/31/99
- ------------------------------
<S> <C>
Class A 5.01%
- ------------------------------
Class B 4.25
- ------------------------------
</TABLE>
HOW DID YOU MANAGE THE FUND IN THIS ENVIRONMENT?
We attempted to manage the risks of changing interest rates and emphasized those
sectors of the municipal bond market that we expected to benefit most from
prevailing economic and market conditions. This strategy led us to areas of
opportunity that we believed would benefit from California's growing population,
including residential land development and adult living facilities. Residential
land development bonds finance much of the basic infrastructure for new housing
construction. Adult living facilities are residential housing projects designed
to meet the unique demands of a growing population of aging Americans who want
amenities tailored to their lifestyles.
Our strategy also led us to generally avoid certain issuers, such as
hospitals, which have been subject to financial pressures because of an
unfavorable regulatory and legislative environment, including cutbacks in
Medicaid and Medicare. We also tended to avoid bonds issued by utilities that
are in the midst of industrywide deregulation.
Throughout the reporting period, we mostly targeted a neutral average
duration--which is a measure of sensitivity to changes in interest rates. When
interest rates declined in 1998, our neutral position constrained performance
slightly compared to portfolios with longer durations. However, when interest
rates rose in 1999, our neutral position helped shelter the portfolio from some
of the impact affecting investors who had previously adopted a longer, more
aggres-sive duration strategy.
1. See page 11 for further details.
2. Standardized yield is based on net investment income for the 30-day period
ended August 31, 1999. Falling share prices will tend to artificially raise
yields.
7 OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
<PAGE> 8
CREDIT ALLOCATION(3)
[PIE CHART]
<TABLE>
<S> <C>
- - AAA 50.5%
- - AA 12.1
- - A 13.4
- - BBB 21.9
- - BB 2.1
</TABLE>
WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET AND THE FUND?
We remain cautiously optimistic. First, we believe that municipal bonds are
attractively valued relative to comparable taxable securities, and should
benefit as that relationship returns to more normal levels. Second, California
has benefited greatly from the recent strength of the U.S. economy, which has
enabled many of its municipalities to put their fiscal houses in good order.
This should help reduce some of the risk of credit downgrades.
On the other hand, we remain concerned about rising interest rates.
Accordingly, we intend to continue to monitor the economic environment
carefully. If the economy continues to grow at an unsustainable rate, we may
position the portfolio to reduce the adverse effects of potentially higher
interest rates. We believe that these credit-conscious, risk manage-ment
strategies make Oppenheimer Main Street California Municipal Fund an important
part of The Right Way to Invest.
<TABLE>
<CAPTION>
TOP FIVE INDUSTRIES(4)
(Percentage of market value)
- ----------------------------------------------------------------------------
<S> <C>
Special Assessment 19.6%
- ----------------------------------------------------------------------------
Single Family Housing 17.9
- ----------------------------------------------------------------------------
Highways 12.6
- ----------------------------------------------------------------------------
General Obligation 10.4
- ----------------------------------------------------------------------------
Municipal Leases 6.3
- ----------------------------------------------------------------------------
</TABLE>
3. Portfolio data are as of August 31, 1999, are dollar-weighted based on
invested assets and are subject to change. The Fund may invest up to 25% of its
assets in below-investment-grade securities which carry greater risk of default.
Securities rated by any rating organization are included in the equivalent
Standard & Poor's rating category. Average credit quality and allocation include
rated securities and those not rated by a national rating organization
(currently 9.50% of total investments) but to which the Manager in its judgment
has assigned ratings as securities comparable to those rated by a rating agency
in the same category.
4. Industry weightings are as of August 31, 1999, and are subject to change.
8 Oppenheimer Main Street California Municipal Fund
<PAGE> 9
FUND PERFORMANCE
HOW HAS THE FUND PERFORMED? Below is a discussion, by the Manager, of the Fund's
performance during its fiscal year ended August 31, 1999, followed by a
graphical comparison of the Fund's performance to an appropriate broad-based
market index.
MANAGEMENT'S DISCUSSION OF PERFORMANCE. During the Fund's fiscal year that
ended August 31, 1999, Oppenheimer Main Street California Municipal Fund's
performance was negatively impacted by the performance of the overall bond
market, which weakened considerably in 1999. The weakness in the bond market
stemmed from signs of continuing strong economic growth, which could cause
inflation to reemerge. However, the Fund benefited from a reduced supply of new
tax exempt bond issues relative to robust demand from investors seeking to
manage their income tax liabilities. This reduction in issuance was primarily a
result of strong economic conditions throughout the United States, which helped
curtail California's need to borrow. In this environment, the Fund continued to
adhere to its longstanding strategy of holding a diversified portfolio of
municipal bonds selected after extensive research into their issuers' credit
quality. The Fund's portfolio holdings, allocations and strategies are subject
to change.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held from the inception of the class until August 31, 1999. In the case of
Class A shares, performance is measured from the inception of the class on May
18, 1990. In the case of Class B shares, performance is measured from the
inception of the class on October 29, 1993. The Fund's performance reflects the
deduction of the maximum initial sales charge on Class A shares and the
applicable contingent deferred sales charge for Class B shares. The graphs
assume that all dividends and capital gains distributions were reinvested in
additional shares.
Because the Fund invests in a variety of municipal securities, the Fund's
performance is compared to that of the Lehman Brothers Municipal Bond Index, an
unmanaged index of a broad range of investment grade municipal bonds that is
widely regarded as a measure of the performance of the general municipal bond
market. Index performance reflects the reinvestment of income but does not
consider the effect of capital gains or transaction costs, and none of the data
in the graphs that follow shows the effect of taxes. Also, the Fund's
performance reflects the effect of Fund business and operating expenses. While
index comparisons may be useful to provide a benchmark for the Fund's
performance, it must be noted that the Fund's investments are not limited to the
securities in any one index.
9 Oppenheimer Main Street California Municipal Fund
<PAGE> 10
FUND PERFORMANCE
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Main Street California Municipal Fund (Class A) and Lehman Brothers
Municipal Bond Index
[The following table was originally a line graph in the printed materials.]
<TABLE>
<CAPTION>
Oppenheimer Lehman Brothers
Main Street Municipal Bond
California Index
Municipal
Fund (Class A)
<S> <C> <C>
5/18/90 $ 9,525 $ 10,000
6/30/90 9,711 10,088
6/30/91 10,482 10,997
6/30/92 11,657 12,292
6/30/93 13,098 13,762
6/30/94 13,020 13,785
6/30/95 14,182 15,001
6/30/96 15,135 15,997
8/31/96 15,304 16,138
8/31/97 16,872 17,630
8/31/98 18,446 19,155
8/31/99 18,184 19,251
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS A SHARES OF THE FUND AT 8/31/99(2)
1-Year -6.11% 5-Year 5.44% Life 6.65%
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Main Street California Municipal Fund (Class B) and Lehman Brothers
Municipal Bond Index
[The following table was originally a line graph in the printed materials.]
<TABLE>
<CAPTION>
Oppenheimer Lehman Brothers
Main Street Municipal Bond
California Index
Municipal
Fund (Class B)
<S> <C> <C>
10/29/93 $10,000 $ 10,000
6/30/94 9,458 9,671
6/30/95 10,205 10,524
6/30/96 10,782 11,223
8/31/96 10,874 11,322
8/31/97 11,878 12,368
8/31/98 12,855 13,438
8/31/99 12,452 13,505
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS B SHARES OF THE FUND AT 8/31/99(2)
1 Year -7.10% 5 Year 5.09% Life 3.83%
The performance information for the Lehman Brothers Municipal Bond Index in the
graphs begins on 5/31/90 for Class A and 10/31/93 for Class B.
1. The Fund changed its fiscal year end from 6/30 to 8/31.
2. See page 11 for further details.
Past performance is not predictive of future performance. Graphs are not drawn
to the same scale.
10 Oppenheimer Main Street California Municipal Fund
<PAGE> 11
NOTES
IN REVIEWING PERFORMANCE AND RANKINGS, PLEASE REMEMBER 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. THE FUND'S
PERFORMANCE MAY FROM TIME TO TIME BE SUBJECT TO SUBSTANTIAL SHORT-TERM CHANGES,
PARTICULARLY DURING PERIODS OF MARKET OR INTEREST RATE VOLATILITY. FOR UPDATES
ON THE FUND'S PERFORMANCE, PLEASE CONTACT YOUR FINANCIAL ADVISOR, CALL US AT
1.800.525.7048 OR VISIT OUR WEBSITE, WWW.OPPENHEIMERFUNDS.COM.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown.
CLASS A shares were first publicly offered on 5/18/90. Class A returns include
the current maximum initial sales charge of 4.75%. The Fund's maximum sales
charge for Class A shares was lower prior to 11/2/91, so actual performance may
have been higher.
CLASS B shares of the Fund were first publicly offered on 10/29/93. Class B
returns include the applicable contingent deferred sales charge of 5% (1-year)
and 1% (since inception). Class B shares are subject to an annual 0.75%
asset-based sales charge. The ending account value shown in the graph is net of
the applicable 1% contingent deferred sales charge.
An explanation of the different performance calculations is in the Fund's
prospectus.
11 Oppenheimer Main Street California Municipal Fund
<PAGE> 12
STATEMENT OF INVESTMENTS August 31, 1999
<TABLE>
<CAPTION>
RATINGS:
MOODY'S/ MARKET
S&P/FITCH FACE VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--98.8%
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CALIFORNIA--90.6%
Anaheim, CA PFAU TXAL RB, MBIA Insured,
Inverse Floater, 9.37%, 12/28/18(1) Aaa/AAA $1,000,000 $1,167,500
- ------------------------------------------------------------------------------------------------------------------
Berkeley, CA HF RRB, Alta Bates Medical Center,
Prerefunded, Series A, 6.50%, 12/1/11 A2/NR 1,500,000 1,609,740
- ------------------------------------------------------------------------------------------------------------------
CA Assn. of Bay Area Governments FAU for
Non-profit Corps. Refunding COP, American
Baptist Homes, Series A, 6.20%, 10/1/27 NR/BBB 1,790,000 1,782,804
- ------------------------------------------------------------------------------------------------------------------
CA Assn. of Bay Area Governments FAU for
Non-profit Corps. Refunding COP, Episcopal
Homes Foundation, 5.125%, 7/1/18 NR/A- 1,500,000 1,383,975
- ------------------------------------------------------------------------------------------------------------------
CA Assn. of Bay Area Governments FAU for
Non-profit Corps. Refunding COP, Rhonda
Haas Goldman Plaza, 5.125%, 5/15/23 NR/AA- 700,000 638,218
- ------------------------------------------------------------------------------------------------------------------
CA CDAU Lease RB, United Airlines,
Series A, 5.70%, 10/1/33 Baa3/BB+ 3,200,000 2,976,064
- ------------------------------------------------------------------------------------------------------------------
CA CDAU MH RB, Village Riviera Hills,
Series E, 5.45%, 2/1/25 NR/AAA 1,000,000 1,003,830
- ------------------------------------------------------------------------------------------------------------------
CA Foothill/Eastern Corridor Agency
Toll Road RB, Sr. Lien, Prerefunded,
Series A, 6.50%, 1/1/32 Baa3/BBB-/BBB 1,400,000 1,557,892
- ------------------------------------------------------------------------------------------------------------------
CA Foothill/Eastern Corridor Agency
Toll Road RRB, Zero Coupon, 5.98%, 1/15/21(2) Baa3/BBB-/BBB 5,000,000 1,343,350
- ------------------------------------------------------------------------------------------------------------------
CA Foothill/Eastern Corridor Agency
Toll Road RRB, Zero Coupon, 6%, 1/15/22(2) Baa3/BBB-/BBB 5,500,000 1,387,705
- ------------------------------------------------------------------------------------------------------------------
CA GOB, 5%, 10/1/27 Aa3/AA-/AA- 3,000,000 2,721,030
- ------------------------------------------------------------------------------------------------------------------
CA HFA SFM Purchase RB, Series A-2, 6.45%, 8/1/25 Aaa/AAA 2,340,000 2,416,752
- ------------------------------------------------------------------------------------------------------------------
CA HFA SFM RB, Series A, Cl. I, 5.40%, 8/1/26 Aaa/AAA 1,810,000 1,674,829
- ------------------------------------------------------------------------------------------------------------------
CA HFA SFM RB, Series C, 6.75%, 2/1/25 Aa2/AA- 4,790,000 4,963,254
- ------------------------------------------------------------------------------------------------------------------
CA Infrastructure & ED Bank RB,
American Center for Wine Food Arts, 5.55%, 12/1/12 NR/A/A 1,710,000 1,697,962
- ------------------------------------------------------------------------------------------------------------------
CA PCFAU RB, Pacific Gas & Electric Co. Project,
Series B, 6.35%, 6/1/09 A1/AA- 2,000,000 2,139,500
- ------------------------------------------------------------------------------------------------------------------
CA PWBL RB, State Prison Department of
Corrections, Series E, FSA Insured, 5.50%, 6/1/15 Aaa/AAA/AAA 2,000,000 2,038,960
- ------------------------------------------------------------------------------------------------------------------
CA Rural Home Mtg. FAU SFM RB,
Mtg.-Backed Securities Program,
Series A, 5.75%, 12/1/29 NR/AAA 1,905,000 1,999,793
- ------------------------------------------------------------------------------------------------------------------
CA Rural Home Mtg. FAU SFM RB,
Mtg.-Backed Securities Program,
Series B, 7.75%, 9/1/26 NR/AAA 920,000 1,001,770
</TABLE>
12 Oppenheimer Main Street California Municipal Fund
<PAGE> 13
<TABLE>
<CAPTION>
RATINGS:
MOODY'S/ MARKET
S&P/FITCH FACE VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CALIFORNIA Continued
CA Rural Home Mtg. FAU SFM RB,
Mtg.-Backed Securities Program,
Series B-5, 6.35%, 12/1/29 NR/AAA $1,470,000 $1,548,007
- ------------------------------------------------------------------------------------------------------------------
CA Rural Home Mtg. FAU SFM RB,
Mtg.-Backed Securities Program,
Series D, Cl. 5, 6.70%, 5/1/29 NR/AAA 1,890,000 2,057,983
- ------------------------------------------------------------------------------------------------------------------
CA SCDAU COP, The Internext Group, 5.375%, 4/1/17 NR/BBB 3,000,000 2,794,770
- ------------------------------------------------------------------------------------------------------------------
CA SCDAU COP, The Internext Group, 5.375%, 4/1/30 NR/BBB 1,500,000 1,348,110
- ------------------------------------------------------------------------------------------------------------------
CA SCDAU Revenue Refunding COP,
Inverse Floater, 7.63%, 11/1/15(1) A1/NR 1,200,000 1,101,000
- ------------------------------------------------------------------------------------------------------------------
Central CA Joint Powers Health FAU COP,
Community Hospitals of Central California
Project, 5%, 2/1/23 Baa1/NR 285,000 247,451
- ------------------------------------------------------------------------------------------------------------------
Contra Costa Cnty., CA SPTX RRB,
CFD 91-1, 5.58%, 8/1/16 NR/NR 3,075,000 2,916,853
- ------------------------------------------------------------------------------------------------------------------
Corona, CA SFM RB, Sub. Lien,
Series B, 6.30%, 11/1/28 A2/NR 800,000 823,472
- ------------------------------------------------------------------------------------------------------------------
Escondido, CA Union High SDI CAP GOB,
MBIA Insured, Zero Coupon, 6.20%, 11/1/19(2) Aaa/AAA 2,000,000 636,960
- ------------------------------------------------------------------------------------------------------------------
Fontana, CA RA TXAL GORB,
Jurupa Hills Redevelopment Project,
Prerefunded, Series A, 7.10%, 10/1/23 NR/BBB+ 1,960,000 2,164,389
- ------------------------------------------------------------------------------------------------------------------
Fontana, CA RA TXAL Refunding Bonds,
Jurupa Hills Redevelopment Project,
Series A, 5.50%, 10/1/19 NR/BBB+ 1,185,000 1,130,253
- ------------------------------------------------------------------------------------------------------------------
Fresno, CA HAU MH RB, Central Valley
Coalition Projects, Series A, 5.60%, 8/1/30 NR/AAA 3,075,000 3,107,472
- ------------------------------------------------------------------------------------------------------------------
Fresno, CA USD GORB, Series A,
MBIA Insured, 6.55%, 8/1/20 Aaa/AAA/AAA 1,225,000 1,366,353
- ------------------------------------------------------------------------------------------------------------------
Fresno, CA USD GOUN, Series A,
MBIA Insured, 6.40%, 8/1/16 Aaa/AAA/AAA 1,000,000 1,108,490
- ------------------------------------------------------------------------------------------------------------------
Irvine, CA Improvement Bond Act 1915
SPAST Bonds, Assessment District No. 94-13,
Group 2, 5.875%, 9/2/17 NR/NR 1,250,000 1,212,225
- ------------------------------------------------------------------------------------------------------------------
Irvine, CA Improvement Bonds Act 1915 RB,
Assessment District 95-12, 6%, 9/2/21 NR/NR 1,750,000 1,709,295
- ------------------------------------------------------------------------------------------------------------------
Lake Elsinore, CA PFAU TXAL Bonds,
Series A, 5.50%, 9/1/30 NR/BBB 2,500,000 2,290,650
- ------------------------------------------------------------------------------------------------------------------
Lake Elsinore, CA School FAU RRB,
Horsethief Canyon, 5.35%, 9/1/10 NR/NR 1,015,000 972,664
- ------------------------------------------------------------------------------------------------------------------
Las Virgenes, CA USD CAP Bonds, Series A,
MBIA Insured, Zero Coupon, 4.95%, 11/1/12(2) Aaa/AAA/AAA 2,095,000 1,044,714
</TABLE>
13 Oppenheimer Main Street California Municipal Fund
<PAGE> 14
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
RATINGS:
MOODY'S/ MARKET
S&P/FITCH FACE VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CALIFORNIA Continued
Long Beach, CA Harbor RRB, Series A,
FGIC Insured, 6%, 5/15/10 Aaa/AAA $ 500,000 $ 533,960
- ------------------------------------------------------------------------------------------------------------------
Los Angeles Cnty., CA CAP COP, Disney
Parking Project, Zero Coupon, 6.95%, 9/1/11(2) Baa1/BBB/A- 2,340,000 1,198,384
- ------------------------------------------------------------------------------------------------------------------
Los Angeles Cnty., CA CAP COP, Disney
Parking Project, Zero Coupon, 5.67%, 9/1/16(2) Baa1/BBB /A- 1,745,000 631,934
- ------------------------------------------------------------------------------------------------------------------
Los Angeles Cnty., CA MTAU Sales Tax RRB,
Series A, FSA Insured, 5%, 7/1/12 Aaa/AAA/AAA 2,000,000 1,974,700
- ------------------------------------------------------------------------------------------------------------------
Los Angeles Cnty., CA MTAU Sales Tax RRB,
Series A, FSA Insured, 5%, 7/1/19 Aaa/AAA/AAA 2,000,000 1,862,880
- ------------------------------------------------------------------------------------------------------------------
Los Angeles Cnty., CA MTAU Sales Tax RRB,
Series A, MBIA Insured, 5.25%, 7/1/15 Aaa/AAA/AAA 2,000,000 1,970,000
- ------------------------------------------------------------------------------------------------------------------
Los Angeles Cnty., CA Public Works FAU RRB,
Regional Park & Open Space District,
Series A, 5%, 10/1/16 Aa3/AA 1,900,000 1,804,620
- ------------------------------------------------------------------------------------------------------------------
Los Angeles, CA USD GOB, Series A,
FGIC Insured, 6%, 7/1/15 Aaa/AAA/AAA 1,000,000 1,069,300
- ------------------------------------------------------------------------------------------------------------------
Los Angeles, CA USD GOB, Series B,
FGIC Insured, 5%, 7/1/23 Aaa/AAA/AAA 2,000,000 1,824,640
- ------------------------------------------------------------------------------------------------------------------
Palmdale, CA Civic Authority RRB,
Merged Redevelopment Project,
Prerefunded, Series A, 6.60%, 9/1/34 Aaa/AAA 595,000 666,317
- ------------------------------------------------------------------------------------------------------------------
Palmdale, CA Civic Authority RRB,
Merged Redevelopment Project,
Unrefunded Balance, Series A, 6.60%, 9/1/34 Aaa/AAA 405,000 429,029
- ------------------------------------------------------------------------------------------------------------------
Pittsburg, CA RA TXAL Refunding Bonds,
Los Medanos Community Development Project,
Sub. Lien, 6.20%, 8/1/19 NR/BBB 1,000,000 1,027,890
- ------------------------------------------------------------------------------------------------------------------
Pomona, CA SFM RRB, Escrowed to Maturity,
Series A, 7.60%, 5/1/23 Aaa/AAA 2,500,000 3,079,700
- ------------------------------------------------------------------------------------------------------------------
Pomona, CA USD GORB, Series A,
MBIA Insured, 6.15%, 8/1/15 Aaa/AAA 500,000 539,920
- ------------------------------------------------------------------------------------------------------------------
Redding, CA Electric System Revenue COP,
FGIC Insured, Inverse Floater, 7.97%, 6/1/19(1) Aaa/AAA/AAA 1,150,000 1,160,062
- ------------------------------------------------------------------------------------------------------------------
Redding, CA Electric System Revenue COP,
MBIA Insured, Inverse Floater, 9.01%, 7/8/22(1) Aaa/AAA 500,000 590,625
- ------------------------------------------------------------------------------------------------------------------
Riverside Cnty., CA CFD No. 88-12 SPTX Bonds,
Prerefunded, 7.55%, 9/1/17 NR/NR 1,500,000 1,586,280
- ------------------------------------------------------------------------------------------------------------------
Riverside Cnty., CA PFAU TXAL RRB,
Redevelopment Projects, Series A, 5.625%, 10/1/33 Baa2/BBB- 1,650,000 1,580,106
- ------------------------------------------------------------------------------------------------------------------
Riverside Cnty., CA SFM RB, Escrowed to Maturity,
Series A, 7.80%, 5/1/21 Aaa/AAA 1,000,000 1,269,860
</TABLE>
14 Oppenheimer Main Street California Municipal Fund
<PAGE> 15
<TABLE>
<CAPTION>
RATINGS:
MOODY'S/ MARKET
S&P/FITCH FACE VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CALIFORNIA Continued
Riverside, CA PFAU Lease RB, AMBAC Insured,
5.25%, 10/1/17 Aaa/AAA/AAA $2,100,000 $2,046,093
- ------------------------------------------------------------------------------------------------------------------
Sacramento Cnty., CA SFM RB,
Escrowed to Maturity, 8%, 7/1/16(3) Aaa/AAA 2,810,000 3,576,315
- ------------------------------------------------------------------------------------------------------------------
Sacramento, CA MUD Electric RRB,
FGIC Insured, Inverse Floater, 9.375%, 8/15/18(1) Aaa/AAA/AAA 1,500,000 1,674,375
- ------------------------------------------------------------------------------------------------------------------
Sacramento, CA Cogeneration Authority RRB,
MBIA Insured, 5.25%, 7/1/12 Aaa/AAA/AAA 250,000 251,935
- ------------------------------------------------------------------------------------------------------------------
Salinas Valley, CA Solid Waste Authority RB,
5.80%, 8/1/27 Baa3/BBB 1,665,000 1,584,414
- ------------------------------------------------------------------------------------------------------------------
San Diego Cnty., CA Water Authority
Revenue COP, Prerefunded, Series 91-B,
MBIA Insured, Inverse Floater, 8.87%, 4/8/21(1) Aaa/AAA 1,000,000 1,197,500
- ------------------------------------------------------------------------------------------------------------------
San Francisco, CA Bay Area Rapid Transit District
Sales Tax RRB, AMBAC Insured, 6.75%, 7/1/11 Aaa/AAA/AAA 1,000,000 1,153,350
- ------------------------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. International
Airport Commission RB, Second Series Issue 13-B,
MBIA Insured, 8%, 5/1/07 Aaa/AAA 1,140,000 1,353,864
- ------------------------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. International
Airport Commission RB, Second Series Issue 14-A,
MBIA Insured, 8%, 5/1/07 Aaa/AAA 1,290,000 1,532,004
- ------------------------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. RA Lease RB, CAP,
George R. Moscone Project, Zero Coupon,
5.36%, 7/1/10(2) A1/A-/A+ 4,500,000 2,533,185
- ------------------------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. Redevelopment
FAU TXAL CAP Refunding Bonds, Redevelopment
Projects, Series C, Zero Coupon, 5.20%, 8/1/13(2) A2/A 2,350,000 1,055,479
- ------------------------------------------------------------------------------------------------------------------
San Joaquin Hills, CA Transportation Corridor Agency
Toll Road CAP RRB, Series A, 0%/5.75%, 1/15/21(4) Baa3/BBB-/BBB 3,200,000 1,971,968
- ------------------------------------------------------------------------------------------------------------------
San Joaquin Hills, CA Transportation Corridor Agency
Toll Road RB, Sr. Lien, Prerefunded, 6.75%, 1/1/32 Aaa/AAA/AAA 3,500,000 3,844,225
- ------------------------------------------------------------------------------------------------------------------
San Ysidro, CA SDI GOB,
AMBAC Insured, 6.125%, 8/1/21 Aaa/AAA 700,000 747,635
- ------------------------------------------------------------------------------------------------------------------
South Orange Cnty., CA PFAU SPTX RB,
Foothill Area, Series C, FGIC Insured, 8%, 8/15/08 Aaa/AAA/AAA 1,500,000 1,845,420
- ------------------------------------------------------------------------------------------------------------------
Southern CA Home FAU SFM RB,
Series A, 7.35%, 9/1/24 NR/AAA 185,000 190,936
- ------------------------------------------------------------------------------------------------------------------
Southern CA Metropolitan Water District
Waterworks RB, Series A, 5%, 7/1/26 Aa2/AA 1,000,000 911,320
- ------------------------------------------------------------------------------------------------------------------
Southern CA Metropolitan Water District
Waterworks RRB, Inverse Floater, 7.42%, 10/30/20(1) Aa2/AA 1,200,000 1,152,000
</TABLE>
15 Oppenheimer Main Street California Municipal Fund
<PAGE> 16
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
RATINGS:
MOODY'S/ MARKET
S&P/FITCH FACE VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California Continued
Southern CA PPAU Transmission Project RB,
Inverse Floater, 7.615%, 7/1/12(1) Aa3/A+ $2,100,000 $ 2,299,500
- ------------------------------------------------------------------------------------------------------------------
Stanislaus, CA Waste-To-Energy Financing Agency
Solid Waste Facilities RRB,
Ogden Martin System, Inc.
Project, 7.50%, 1/1/05 NR/A- 1,285,000 1,321,430
- ------------------------------------------------------------------------------------------------------------------
Suisun City, CA PFAU TXAL RB, Suisun City
Redevelopment Project, Series A, 5.20%, 10/1/28 NR/A- 2,500,000 2,278,875
- ------------------------------------------------------------------------------------------------------------------
Temecula, CA CFD No. 88-12-A SPTX Refunding Bonds,
5.625%, 9/1/17 NR/NR 535,000 506,629
- ------------------------------------------------------------------------------------------------------------------
West Covina, CA COP, Queen of the Valley Hospital,
Prerefunded, 6.50%, 8/15/19 A2/NR 1,120,000 1,248,363
-------------
126,163,061
- ------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS--8.2%
PR CMWLTH GOB, 5.375%, 7/1/25 Baa1/A 1,650,000 1,574,595
- ------------------------------------------------------------------------------------------------------------------
PR CMWLTH GORB, MBIA Insured,
Inverse Floater, 8.08%, 7/1/08(1) Aaa/AAA 1,500,000 1,620,000
- ------------------------------------------------------------------------------------------------------------------
PR CMWLTH HTAU RB,
Inverse Floater, 6.75%, 7/1/28(1,5) NR/NR 5,000,000 4,165,800
- ------------------------------------------------------------------------------------------------------------------
PR CMWLTH HTAU RRB, Series A,
AMBAC Insured, 5.50%, 7/1/13 Aaa/AAA/AAA 1,500,000 1,543,140
- ------------------------------------------------------------------------------------------------------------------
PR CMWLTH HTAU RRB, Series A,
AMBAC Insured, 5.50%, 7/1/14 Aaa/AAA/AAA 1,500,000 1,537,410
- ------------------------------------------------------------------------------------------------------------------
PR Housing Finance Corp. SFM RB,
Portfolio 1, Series B, 7.65%, 10/15/22 Aaa/AAA 125,000 129,595
- ------------------------------------------------------------------------------------------------------------------
PR Industrial, Medical & Environmental PC
Facilities Tourist RB, Mennonite General
Hospital Project, Series A, 6.50%, 7/1/12 NR/BBB-/BBB 590,000 603,446
- ------------------------------------------------------------------------------------------------------------------
PR Public Buildings Authority RB,
Government Facilities, Series B,
AMBAC Insured, 5%, 7/1/27 Aaa/AAA 300,000 275,337
-------------
11,449,323
- ------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $138,482,564) 98.8% 137,612,384
- ------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.2 1,693,187
-----------------------------
NET ASSETS 100.0% $139,305,571
=============================
</TABLE>
16 Oppenheimer Main Street California Municipal Fund
<PAGE> 17
FOOTNOTES TO STATEMENT OF INVESTMENTS
To simplify the listings of securities, abbreviations are used per the table
below:
<TABLE>
<S> <C> <C> <C>
CAP Capital Appreciation MUD Municipal Utility District
CDAU Communities Development Authority PCFAU Pollution Control Finance Authority
CFD Community Facilities District PFAU Public Finance Authority
CMWLTH Commonwealth PPAU Public Power Authority
COP Certificates of Participation PWBL Public Works Board Lease
ED Economic Development RA Redevelopment Agency
FAU Finance Authority RB Revenue Bonds
GOB General Obligation Bonds RRB Revenue Refunding Bonds
GORB General Obligation Refunding Bonds SCDAU Statewide Communities Development Authority
GOUN General Obligation Unlimited Nts. SDI School District
HAU Housing Authority SFM Single Family Mtg.
HF Health Facilities SPAST Special Assessment
HFA Housing Finance Agency SPTX Special Tax
HTAU Highway & Transportation Authority TXAL Tax Allocation
MH Multifamily Housing USD Unified School District
MTAU Metropolitan Transportation Authority
</TABLE>
1. Represents the current interest rate for a variable rate bond known as an
"inverse floater" which pays 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 $16,128,362 or 11.58% of the
Fund's net assets as of August 31, 1999.
2. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
3. Securities with an aggregate market value of $559,992 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 of Notes to Financial Statements.
4. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
5. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Directors. These securities amount to $4,165,800 or 2.99% of the Fund's net
assets as of August 31, 1999.
AS OF AUGUST 31, 1999, SECURITIES SUBJECT TO THE ALTERNATIVE MINIMUM TAX AMOUNT
TO $34,930,607 OR 25.07% OF THE FUND'S NET ASSETS.
DISTRIBUTION OF INVESTMENTS BY INDUSTRY OF ISSUE, AS A PERCENTAGE OF TOTAL
INVESTMENTS AT VALUE, IS AS FOLLOWS:
<TABLE>
<CAPTION>
INDUSTRY MARKET VALUE PERCENT
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Special Assessment $ 26,947,089 19.6%
Single Family Housing 24,732,266 17.9
Highways 17,351,490 12.6
General Obligation 14,253,636 10.4
Municipal Leases 8,723,894 6.3
Sales Tax 8,056,275 5.9
Adult Living Facilities 7,947,877 5.8
Electric Utilities 5,976,498 4.3
Pollution Control 5,115,564 3.7
Hospital/Healthcare 4,810,001 3.5
Multifamily Housing 4,111,302 3.0
Marine/Aviation Facilities 3,419,828 2.5
Water Utilities 3,260,820 2.4
Resource Recovery 2,905,844 2.1
-----------------------------------
Total $137,612,384 100.0%
===================================
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer Main Street California Municipal Fund
<PAGE> 18
STATEMENT OF ASSETS AND LIABILITIES August 31, 1999
<TABLE>
<CAPTION>
==================================================================================================================
ASSETS
<S> <C>
Investments, at value (cost $138,482,564)--see accompanying statement $ 137,612,384
- ------------------------------------------------------------------------------------------------------------------
Cash 357,087
- ------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 2,007,893
Interest 1,763,865
Shares of capital stock sold 214,653
Other 1,446
--------------------
Total assets 141,957,328
==================================================================================================================
LIABILITIES
Payables and other liabilities:
Investments purchased 1,981,263
Dividends 372,159
Shares of capital stock redeemed 213,863
Shareholder reports 37,183
Distribution and service plan fees 12,740
Transfer and shareholder servicing agent fees 9,707
Daily variation on futures contracts--Note 5 6,438
Other 18,404
-------------------
Total liabilities 2,651,757
==================================================================================================================
NET ASSETS $139,305,571
===================
==================================================================================================================
COMPOSITION OF NET ASSETS
Par value of shares of capital stock $ 114,096
- ------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 140,300,950
- ------------------------------------------------------------------------------------------------------------------
Overdistributed net investment income (284,048)
- ------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (28,997)
- ------------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments--Notes 3 and 5 (796,430)
-------------------
Net assets $139,305,571
===================
==================================================================================================================
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$109,575,128 and 8,971,989 shares of capital stock outstanding) $12.21
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $12.82
- ------------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $29,730,443
and 2,437,647 shares of capital stock outstanding) $12.20
</TABLE>
See accompanying Notes to Financial Statements.
18 Oppenheimer Main Street California Municipal Fund
<PAGE> 19
STATEMENT OF OPERATIONS For the Year Ended August 31, 1999
<TABLE>
<CAPTION>
<S> <C>
===============================================================================================
INVESTMENT INCOME
Interest $ 7,761,775
===============================================================================================
EXPENSES
Management fees--Note 4 770,241
- -----------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class B 280,483
- -----------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 80,248
- -----------------------------------------------------------------------------------------------
Shareholder reports 44,221
- -----------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 11,266
Class B 4,659
- -----------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 11,998
- -----------------------------------------------------------------------------------------------
Custodian fees and expenses 8,823
- -----------------------------------------------------------------------------------------------
Insurance expenses 2,818
- -----------------------------------------------------------------------------------------------
Directors' compensation 2,304
- -----------------------------------------------------------------------------------------------
Other 2,779
---------------
Total expenses 1,219,840
Less expenses paid indirectly--Note 1 (8,088)
Less reimbursement of expenses by OppenheimerFunds, Inc.--Note 4 (210,066)
---------------
Net expenses 1,001,686
===============================================================================================
NET INVESTMENT INCOME 6,760,089
===============================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments (235,961)
Closing of futures contracts 208,713
---------------
Net realized loss (27,248)
- -----------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments (9,255,882)
---------------
Net realized and unrealized loss (9,283,130)
===============================================================================================
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(2,523,041)
===============
</TABLE>
See accompanying Notes to Financial Statements.
19 OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
<PAGE> 20
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 1999 1998
=======================================================================================================
<S> <C> <C>
OPERATIONS
Net investment income $ 6,760,089 $ 5,785,304
- -------------------------------------------------------------------------------------------------------
Net realized loss (27,248) (147,181)
- -------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (9,255,882) 4,576,330
--------------------------------
Net increase (decrease) in net assets resulting from operations (2,523,041) 10,214,453
=======================================================================================================
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (5,577,537) (5,113,266)
Class B (1,114,948) (736,400)
- -------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (802,490)
Class B -- (131,382)
=======================================================================================================
CAPITAL STOCK TRANSACTIONS
Net increase in net assets resulting from
capital stock transactions--Note 2:
Class A 7,019,301 16,887,977
Class B 8,515,921 10,757,185
=======================================================================================================
NET ASSETS
Total increase 6,319,696 31,076,077
- -------------------------------------------------------------------------------------------------------
Beginning of period 132,985,875 101,909,798
--------------------------------
End of period (including overdistributed net investment
income of $284,048 and $351,652, respectively) $139,305,571 $132,985,875
================================
</TABLE>
See accompanying Notes to Financial Statements.
20 OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
<PAGE> 21
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Year Year
Ended Ended
August 31, June 30,
Class A 1999 1998 1997 1996(1) 1996 1995
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $13.02 $12.64 $12.16 $12.15 $12.09 $11.82
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .65 .65 .73 .12 .73 .73
Net realized and unrealized gain (loss) (.82) .51 .49 .01 .07 .27
--------------------------------------------------------------------
Total income (loss) from
investment operations (.17) 1.16 1.22 .13 .80 1.00
- -------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.64) (.67) (.74) (.12) (.73) (.69)
Dividends in excess of
net investment income -- -- -- -- -- (.04)
Distributions from net realized gain -- (.11) -- -- -- --
Distributions in excess of net realized gain -- -- -- -- (.01) --
--------------------------------------------------------------------
Total dividends and distributions
to shareholders (.64) (.78) (.74) (.12) (.74) (.73)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.21 $13.02 $12.64 $12.16 $12.15 $12.09
====================================================================
=========================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) (1.42)% 9.33% 10.24% 1.12% 6.73% 8.93%
=========================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $109,575 $109,811 $89,991 $76,817 $76,913 $78,134
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $111,996 $ 99,678 $80,311 $77,584 $78,676 $76,148
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 5.03% 5.04% 5.91% 6.00% 5.99% 6.27%
Expenses, before voluntary assumption
and indirect expenses 0.67% 0.69%(4) 0.59%(4) 0.57%(4) 0.58%(4) 0.57%(4)
Expenses, after voluntary assumption
and indirect expenses 0.51% 0.53% N/A N/A N/A N/A
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 25% 30% 46% 1% 33% 14%
</TABLE>
1. For the two months ended August 31, 1996. The Fund changed its fiscal year
end from June 30 to August 31.
2. Assumes a $1,000 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.
3. Annualized for periods of less than one full year.
4. Expense ratios reflect the effect of expenses paid indirectly by the Fund.
5. 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, 1999 were $48,357,555 and $35,079,315,
respectively.
See accompanying Notes to Financial Statements.
21 OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
<PAGE> 22
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
AUGUST 31, JUNE 30,
CLASS B 1999 1998 1997 1996(1) 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $13.01 $12.63 $12.14 $12.14 $12.08 $11.80
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .53 .54 .60 .10 .61 .62
Net realized and unrealized gain (loss) (.83) .49 .50 -- .07 .27
--------------------------------------------------------------------------------
Total income (loss) from
investment operations (.30) 1.03 1.10 .10 .68 .89
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.51) (.54) (.61) (.10) (.61) (.57)
Dividends in excess of
net investment income -- -- -- -- -- (.04)
Distributions from net realized gain -- (.11) -- -- -- --
Distributions in excess of net realized gain -- -- -- -- (.01) --
--------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.51) (.65) (.61) (.10) (.62) (.61)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.20 $13.01 $12.63 $12.14 $12.14 $12.08
================================================================================
==================================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) (2.41)% 8.24% 9.24% 0.85% 5.66% 7.90%
==================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $29,730 $23,175 $11,919 $5,928 $5,442 $2,648
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $28,070 $18,087 $ 8,129 $5,767 $3,848 $1,904
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 4.02% 4.19% 4.85% 4.92% 4.94% 5.17%
Expenses, before voluntary assumption
and indirect expenses 1.67% 1.70%(4) 1.60%(4) 1.62%(4) 1.60%(4) 1.55%(4)
Expenses, after voluntary assumption
and indirect expenses 1.52% 1.53% N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 25% 30% 46% 1% 33% 14%
</TABLE>
1. For the two months ended August 31, 1996. The Fund changed its fiscal year
end from June 30 to August 31.
2. Assumes a $1,000 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.
3. Annualized for period of less than one full year.
4. Expense ratios reflect the effect of expenses paid indirectly by the Fund.
5. 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, 1999 were $48,357,555 and $35,079,315,
respectively.
See accompanying Notes to Financial Statements.
22 OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
<PAGE> 23
NOTES TO FINANCIAL STATEMENTS
===============================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Main Street California Municipal Fund (the Fund) 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. The Fund's investment objective is to seek as high a level of current
income exempt from federal and California personal income taxes as is available
from investing in municipal securities while attempting to preserve capital.
The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund
offers Class A and Class B shares. Class A shares are sold with a front-end
sales charge on investments up to $1 million. Class B shares may be subject to
a contingent deferred sales charge (CDSC). All classes of shares have identical
rights to earnings, assets and voting privileges, except that each class has
its own expenses directly attributable to that class and exclusive voting
rights with respect to matters affecting that class. Classes A and B have
separate distribution and/or service plans. 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.
- -------------------------------------------------------------------------------
SECURITIES 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
an 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. Options are valued based upon the last sale price on the
principal exchange on which the option is traded or, in the absence of any
transactions that day, the value is based upon the last sale price on the prior
trading date if it is within the spread between the closing bid and asked
prices. If the last sale price is outside the spread, the closing bid is used.
23 OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
<PAGE> 24
Notes to Financial Statements continued
===============================================================================
1. SIGNIFICANT ACCOUNTING POLICIES Continued
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), 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.
- -------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
- -------------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of distributions made during the year from net
investment income or net realized gains may differ from its 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 fiscal year in which the income or realized gain was recorded
by the Fund.
- -------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENTS. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- -------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for as of trade date. Original
issue discount is accreted and premium is amortized in accordance with federal
income tax requirements. For municipal 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.
There are certain risks arising from geographic concentration in any
state. Certain revenue- or tax-related events in a state may impair the ability
of certain issuers of municipal securities to pay principal and interest on
their obligations.
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.
24 OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
<PAGE> 25
===============================================================================
2. CAPITAL STOCK
The Fund has authorized 16,250,000 shares of $.01 par value capital stock of
each class. Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 1999 YEAR ENDED AUGUST 31, 1998
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Sold 1,681,985 $ 21,674,388 2,165,645 $ 27,847,918
Dividends and/or
distributions reinvested 281,702 3,627,456 290,138 3,721,102
Redeemed (1,423,149) (18,282,543) (1,141,736) (14,681,043)
----------------------------------------------------------
Net increase 540,538 $ 7,019,301 1,314,047 $ 16,887,977
==========================================================
- --------------------------------------------------------------------------------------
CLASS B
Sold 964,557 $ 12,473,622 931,591 $ 11,964,499
Dividends and/or
distributions reinvested 59,086 758,691 44,882 575,114
Redeemed (367,694) (4,716,392) (138,617) (1,782,428)
----------------------------------------------------------
Net increase 655,949 $ 8,515,921 837,856 $ 10,757,185
==========================================================
</TABLE>
===============================================================================
3. UNREALIZED GAINS AND LOSSES ON SECURITIES
As of August 31, 1999, net unrealized depreciation on securities of $870,180
was composed of gross appreciation of $3,223,012, and gross depreciation of
$4,093,192.
===============================================================================
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. 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 if the Fund's net assets are $100 million or
more (it is reduced if assets are less). The Manager has voluntarily undertaken
to limit its fees to 0.40% of average annual net assets if the Fund's assets
are $100 million or more. The Manager can terminate that waiver at any time.
The Fund's management fee for the year ended August 31, 1999 was 0.40% of
average annual net assets for each class of shares, after giving affect to the
waiver.
- -------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the
Manager, is the transfer and shareholder servicing agent for the Fund and for
other Oppenheimer funds. OFS's total costs of providing such services are
allocated ratably to these funds.
- -------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FEES. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
25 OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS Continued
===============================================================================
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES CONTINUED
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.
<TABLE>
<CAPTION>
AGGREGATE CLASS A COMMISSIONS COMMISSIONS
FRONT-END FRONT-END ON CLASS A ON CLASS B
SALES CHARGES SALES CHARGES SHARES SHARES
ON CLASS A RETAINED BY ADVANCED BY ADVANCED BY
YEAR ENDED SHARES DISTRIBUTOR DISTRIBUTOR(1) DISTRIBUTOR(1)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
August 31, 1999 $370,004 $65,422 $27,796 $426,112
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B shares from its own resources at the
time of sale.
<TABLE>
<CAPTION>
CLASS A CLASS B
CONTINGENT DEFERRED CONTINGENT DEFERRED
SALES CHARGES SALES CHARGES
YEAR ENDED RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
August 31, 1999 $4,038 $95,508
</TABLE>
The Fund has adopted a Distribution and Service Plan for Class B shares
under Rule 12b-1 of the Investment Company Act. Under those plans the Fund pays
the Distributor for all or a portion of its costs incurred in connection with
the distribution and/or servicing of the shares of the particular class.
- -------------------------------------------------------------------------------
CLASS B DISTRIBUTION AND SERVICE PLAN FEES. Under each plan, service fees and
distribution fees are computed on the average of the net asset value of shares
in the respective class, determined as of the close of each regular business
day during the period. The Class B plan allows the Distributor to be reimbursed
for its services and costs in distributing Class B and servicing accounts.
The Distributor retains the asset-based sales charge on Class B shares.
The asset-based sales charges on Class B shares allow investors to buy shares
without a front-end sales charge while allowing the Distributor to compensate
dealers that sell those shares.
The Distributor's actual expenses in selling Class B shares may be more
than the payments it receives from the contingent deferred sales charges
collected on redeemed shares and from the Fund under the plan. If the Class B
plan is terminated by the Fund, the Board of Directors may allow the Fund to
continue payments of the asset-based sales charge to the Distributor for
distributing shares before the plan was terminated. The plan allows for the
carry-forward of distribution expenses, to be recovered from asset-based sales
charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the year ended August 31, 1999
were as follows:
<TABLE>
<CAPTION>
DISTRIBUTOR'S DISTRIBUTOR'S
AGGREGATE UNREIMBURSED
UNREIMBURSED EXPENSES AS %
TOTAL PAYMENTS AMOUNT RETAINED EXPENSES OF NET ASSETS
UNDER PLAN BY DISTRIBUTOR UNDER PLAN OF CLASS
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $280,483 $238,366 $1,067,326 3.59%
</TABLE>
26 OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
<PAGE> 27
===============================================================================
5. FUTURES CONTRACTS
The Fund may buy and sell futures contracts in order to gain exposure to or to
seek to 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 (initial margin) in an amount 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 may recognize 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
and/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.
As of August 31, 1999, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
NUMBER OF VALUATION AS OF UNREALIZED
CONTRACT DESCRIPTION EXPIRATION DATE CONTRACTS AUGUST 31, 1999 APPRECIATION
- -----------------------------------------------------------------------------------------------------------
CONTRACTS TO SELL
- -----------------
<S> <C> <C> <C> <C>
U.S. Treasury Bonds 9/21/99 40 $4,573,750 $73,750
</TABLE>
===============================================================================
6. BANK BORROWINGS
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the year ended August 31,
1999.
27 OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
<PAGE> 28
INDEPENDENT AUDITORS' REPORT
===============================================================================
TO 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, 1999, the related statement of operations for the year
then ended, the statements of changes in net assets for the years ended August
31, 1999 and 1998 and the financial highlights for the period July 1, 1994, to
August 31, 1999. 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 as of
August 31, 1999, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of Oppenheimer
Main Street California Municipal Fund as of August 31, 1999, 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 22, 1999
28 OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
<PAGE> 29
FEDERAL INCOME TAX INFORMATION Unaudited
===============================================================================
In early 2000 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1999. 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 year ended August 31,
1999 are eligible for the corporate dividend-received deduction. The dividends
were derived from interest on municipal bonds and are not subject to federal
income taxes. To the extent a shareholder is subject to any state or local tax
laws, some or all of the dividends 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 advisor for specific
guidance.
29 OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
<PAGE> 30
OPPENHEIMER MAIN STREET(R) CALIFORNIA MUNICIPAL FUND
A Series of Oppenheimer Main Street Funds, Inc.
<TABLE>
==============================================================================================
<S> <C>
OFFICERS AND DIRECTORS James C. Swain, Director and Chairman of the Board
Bridget A. Macaskill, Director and President
Robert G. Avis, Director
William A. Baker, Director
George C. Bowen, Director
Jon S. Fossel, Director
Sam Freedman, Director
Raymond J. Kalinowski, Director
C. Howard Kast, Director
Robert M. Kirchner, Director
Ned M. Steel, Director
Caryn Halbrecht, Vice President
Andrew J. Donohue, Vice President and Secretary
Brian W. Wixted, Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
==============================================================================================
INVESTMENT ADVISOR 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 Funds, see the
Prospectus.
SHARES OF OPPENHEIMER FUNDS ARE NOT DEPOSITS OR
OBLIGATIONS OF ANY BANK, ARE NOT GUARANTEED BY ANY
BANK, ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY,
AND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.
</TABLE>
30 OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
<PAGE> 31
OPPENHEIMERFUNDS FAMILY
<TABLE>
================================================================================================================
<S> <C> <C>
GLOBAL EQUITY
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
================================================================================================================
EQUITY
Stock Stock & Bond
Enterprise Fund(1) Main Street(R) Growth & Income Fund
Discovery Fund Quest Opportunity Value Fund
Main Street(R) Small Cap Fund Total Return Fund
Quest Small Cap Value Fund Quest Balanced Value Fund
MidCap Fund Capital Income Fund(2)
Capital Appreciation Fund Multiple Strategies Fund
Growth Fund Disciplined Allocation Fund
Disciplined Value Fund Convertible Securities Fund
Quest Value Fund
Specialty
Real Asset Fund
Gold & Special Minerals Fund
================================================================================================================
FIXED INCOME
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund Florida Municipal Fund(3)
High Yield Fund New Jersey Municipal Fund(3)
Champion Income Fund New York Municipal Fund(3)
Strategic Income Fund Pennsylvania Municipal Fund(3)
Bond Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund
Limited-Term Government Fund Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York Municipal Fund
================================================================================================================
MONEY MARKET(4)
Money Market Fund Cash Reserves
</TABLE>
1. Effective July 1, 1999, this fund is closed to new investors. See prospectus
for details.
2. On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income
Fund."
3. Available to investors only in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds. Oppenheimer
funds are distributed by OppenheimerFunds Distributor, Inc., Two World Trade
Center, New York, NY 10048-0203.
(C) Copyright 1999 OppenheimerFunds, Inc. All rights reserved.
31 OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
<PAGE> 32
INFORMATION AND SERVICES
As an Oppenheimer fund shareholder, you can benefit from special services
designed to make investing simple. Whether it's automatic investment plans,
timely market updates, or immediate account access, you can count on us
whenever you need assistance. So call us today, or visit our website--we're
here to help.
- -------------------------------------------------------------------------
Internet
24-hr access to account information and transactions
www.oppenheimerfunds.com
- -------------------------------------------------------------------------
General Information
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
- -------------------------------------------------------------------------
Telephone Transactions
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
- -------------------------------------------------------------------------
PhoneLink
24-hr automated information and automated transactions
1.800.533.3310
- -------------------------------------------------------------------------
Telecommunications Device for the Deaf (TDD)
Mon-Fri 8:30am-7pm ET
1.800.843.4461
- -------------------------------------------------------------------------
OppenheimerFunds Information Hotline
24 hours a day, timely and insightful messages on the
economy and issues that may affect your investments
1.800.835.3104
- -------------------------------------------------------------------------
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
- -------------------------------------------------------------------------
[OPPENHEIMERFUNDS LOGO]
RA0725.001.0899 October 29, 1999 Distributor, Inc.
