Annual Report July 31, 1997
OPPENHEIMER
Cash
Reserves
[PICTURE OF CHECKBOOK AND PEN]
[OPPENHEIMER LOGO]
OppenheimerFunds(SM)
THE RIGHT WAY TO INVEST
<PAGE>
Report highlights
- --------------------------------------------------------------------------------
Contents
3 President's Letter
4 An Interview with the Fund's Managers
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statements of Changes in Net Assets
12 Financial Highlights
14 Notes to Financial Statements
17 Independent Auditors' Report
18 Federal Income Tax Information
19 Officers & Trustees
20 Information & Services
[bullet] Oppenheimer Cash Reserves is for investors seeking maximum current
income consistent with stability of principal.
[bullet] "Now, rather than chasing the market, the Fund has settled into a more
comfortable pace."
--Dottie Warmack, Portfolio Manager
7-day Annualized Yield(2) 12-month Annualized Yield(2)
For the Period Ended 7/31/97 For the Period Ended 7/31/97
Class A Class A
With Without With Without
Compounding(1) Compounding Compounding(1) Compounding
4.45% 4.36% 4.41% 4.32%
Class B Class B
With Without With Without
Compounding(1) Compounding Compounding(1) Compounding
3.84% 3.77% 3.82% 3.75%
Class C Class C
With Without With Without
Compounding(1) Compounding Compounding(1) Compounding
3.81% 3.74% 3.84% 3.77%
Past performance does not guarantee future results. Yields will fluctuate.
1. Compounded yields assume reinvestment of dividends.
2. As of 6/30/97, the Fund's 7-day annualized yields for Class A, B, and C
shares were 4.55%, 3.94% and 3.93% with compounding and 4.45%, 3.87% and 3.86%
without compounding, respectively. Compounded annualized yields for Class A, B
and C shares for the 12 months ended 6/30/97 were 4.42%, 3.83% and 3.85%,
respectively. Without compounding, the annualized yields for the 12 months ended
6/30/97 were 4.33%, 3.76% and 3.78%, respectively.
2 Oppenheimer Cash Reserves
<PAGE>
Dear shareholder,
- --------------------------------------------------------------------------------
[PHOTO OF JAMES C. SWAIN]
James C. Swain
Chairman
Oppenheimer
Cash Reserves
[PHOTO OF BRIDGET A. MACASKILL]
Bridget A. Macaskill
President
Oppenheimer
Cash Reserves
We'd like to welcome you to the premier issue of our newly redesigned
shareholder reports. As you can see, we've changed the format to allow easier
access to the information you need to monitor your investments.
On the following pages, your portfolio team discuss their current
investment thinking, your Fund's strategies, and performance. Before these
commentaries, we'd like to share a few global observations.
As we consider the world's financial markets over the past twelve months,
some global trends emerge. For example, inflation has hit its lowest level in
three decades worldwide, which has helped spur many bullish financial markets.
The United States has been a beneficiary of this low-inflation environment, as
well as of a strong dollar, robust corporate earnings and a healthy economy.
However, many financial analysts are now concerned that the United States has
reached a point in the business cycle where earnings could decline because
companies are unable to further reduce costs.
On the other hand, a wave of corporate restructuring throughout Europe
has resulted in some exciting changes and opportunities. Because a similar
restructuring took place in the United States ten years ago, European companies
have been able to enjoy the benefit of hindsight by following our footsteps.
Latin America, too, has begun to shift its economies more toward the U.S.
capitalist model and has reported positive earnings growth along the way.
With major changes occurring in today's economies around the globe, it's
more important than ever to maintain a diversified portfolio across different
countries and market sectors. Now is the time to speak to your financial adviser
to ensure that your assets are allocated properly, so you have the opportunity
to benefit from investments in both domestic and international funds. It's
important to remember that investing abroad can involve greater risk and
expenses--including political and economic uncertainties--and should be
undertaken with a long-term approach in mind.
To keep in touch with our views on the markets, visit our website,
www.oppenheimerfunds.com, where you can access your account information and
fund performance data, 24 hours a day. The site also features prospectuses,
timely market updates and insightful commentaries. Our new shareholder reports
and presence on the Internet are just two examples of our commitment to keeping
you well informed.
Thank you for your confidence in OppenheimerFunds, The Right Way to
Invest. We look forward to helping you reach your investment goals in the
future.
Sincerely,
/s/ James C. Swain /s/ Bridget A. Macaskill
-------------- --------------------
James C. Swain Bridget A. Macaskill
August 21, 1997
3 Oppenheimer Cash Reserves
<PAGE>
An interview with your Fund's managers
- --------------------------------------------------------------------------------
How has the Fund performed over the past year?
Oppenheimer Cash Reserves has performed very well during the period. The Fund
has maintained a stable share price of $1.00 per share, while providing a
steady stream of monthly income.
The concern over the possibility of further tightening of interest
rates by the Federal Reserve made for a very nervous bond market. But we used
this market climate to our advantage. First, by "laddering" our maturities
across the board, we had money working at all different levels during the
Federal Open Market Committee (FOMC) meetings. And second, we picked up yield
through longer-term investments that benefited from the stabilization in
interest rates.
By extending maturities to approach the average maturity of other money
funds with the same objectives as ours, we've positioned the Fund more
conservatively. In March 1997, our average maturity was 40 days. But, as of
July 31, 1997, our average maturity rose to 49 days. This new posture remains
in line with the Fund's strategy to achieve the highest possible yields,
without sacrificing safety or liquidity.
"By 'laddering' our maturities across the board . . ."
What factors have had a positive effect on the portfolio?
When the Fed raised interest rates on March 25, 1997, the Fund was using a
"barbell" strategy that involved keeping money "up front" by primarily
investing in short, average-maturity instruments, while allocating some money
to longer maturities in pursuit of higher yields. Since we had a lot of cash to
reinvest from the short maturities, we took advantage of the rate hike by
purchasing six-month maturities that evenly structured our maturities across
the board.
4 Oppenheimer Cash Reserves
<PAGE>
Did anything negatively impact performance?
High valuations and uncertainty in the stock market during the first half of
1997 made some investors jittery. This resulted in a surplus of money flowing
out of the stock market and into cash funds--all of which was vying for the
same pool of short commercial paper. The increased demand drove bond prices up,
which in turn lowered potential yields.
". . . the Fund had money working at all levels."
What areas of the market are you currently targeting?
The portfolio invests primarily in commercial paper, which are short-term notes
issued by a corporation, bank or trust. Our strategy is to invest in the
securities that represent minimal credit risk. Through our independent credit
analysis--identifying and investing in securities that are improving
credits--we are able to add value, which translates into additional yield.
What is your outlook for the Fund?
Barring further Fed actions, the Fund has settled into a more comfortable pace
for the second half of 1997. Rather than chasing the market, we've settled into
a better rhythm of taking advantage of market developments within the Fund's
strategy. However, if we see signs in the market and economy that are likely to
prompt the Fed to hike interest rates, we would shorten the portfolio's
maturity--which would enable us to reinvest quickly at higher yields.
5 Oppenheimer Cash Reserves
<PAGE>
Statement of Investments July 31, 1997
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Bankers' Acceptances--2.1%
- ----------------------------------------------------------------------------------------
BankBoston, N.A., 5.60%, 10/24/97 $5,000,000 $ 4,934,667
- ----------------------------------------------------------------------------------------
Direct Bank Obligations--7.1%
- ----------------------------------------------------------------------------------------
Abbey National North America Corp., 5.54%, 1/23/98 5,000,000 4,865,347
- ----------------------------------------------------------------------------------------
Bankers Trust Co., New York, 5.71%, 4/15/98(1) 7,000,000 7,000,000
- ----------------------------------------------------------------------------------------
CoreStates Bank, N.V., 5.596%, 12/18/97(1) 5,000,000 4,998,919
------------
Total Direct Bank Obligations 16,864,266
- ----------------------------------------------------------------------------------------
Letters of Credit--9.0%
- ----------------------------------------------------------------------------------------
ABN Amro Bank, N.V., guaranteeing commercial paper of Formosa
Plastics Corp. USA-Series A, 5.63%, 8/28/97 5,000,000 4,978,888
- ----------------------------------------------------------------------------------------
Bayerische Vereinsbank AG, guaranteeing commercial paper of:
Banco Rio de la Plata S.A.-Series A, 5.31%, 8/25/97 4,000,000 3,985,840
- ----------------------------------------------------------------------------------------
Societe Generale, guaranteeing commercial paper of:
Banco Nacionale de Comericio Exterior SNC-Series A,
5.61%, 12/2/97 5,500,000 5,394,852
Nacional Financiera SNC-Series A, 5.75%, 8/18/97 7,000,000 6,980,993
------------
Total Letters of Credit 21,340,573
- ----------------------------------------------------------------------------------------
Short-Term Notes--81.5%
- ----------------------------------------------------------------------------------------
Banks--2.1%
Bankers Trust Co., New York, 5.54%, 12/11/97 5,000,000 4,898,433
- ----------------------------------------------------------------------------------------
Broker/Dealers--26.2%
Bear Stearns Cos., Inc.:
5.677%, 2/9/98(1) 5,000,000 5,005,412
5.75%, 4/1/98(1) 5,000,000 5,000,000
5.875%, 2/20/98(1) 4,000,000 4,004,365
- ----------------------------------------------------------------------------------------
CS First Boston, Inc., 5.54%, 1/22/98(2) 2,000,000 1,946,447
- ----------------------------------------------------------------------------------------
Dean Witter, Discover & Co., 5.868%, 9/29/97(1) 2,500,000 2,500,919
- ----------------------------------------------------------------------------------------
Goldman Sachs Group, L.P., 5.844%, 10/10/97(3) 6,000,000 6,000,000
- ----------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc.:
5.62%, 11/21/97 7,000,000 6,877,609
5.64%, 9/10/97 5,000,000 4,968,667
- ----------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.:
5.54%, 12/12/97 2,500,000 2,448,740
5.55%, 12/17/97 8,000,000 7,829,800
- ----------------------------------------------------------------------------------------
Morgan Stanley, Dean Witter, Discover & Co., 5.812%, 3/24/98 7,251,000 7,251,000
- ----------------------------------------------------------------------------------------
Republic New York Securities Corp., 6.06%, 4/24/98(1) 8,000,000 8,000,000
------------
61,832,959
</TABLE>
6 Oppenheimer Cash Reserves
<PAGE>
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Commercial Finance--14.3%
CIT Group Holdings, Inc., 5.625%, 9/17/97(1) $5,000,000 $ 4,999,533
- ----------------------------------------------------------------------------------------
Countrywide Home Loans, 6.069%, 1/28/98(1) 5,000,000 5,007,782
- ----------------------------------------------------------------------------------------
FINOVA Capital Corp.:
5.57%, 11/10/97 5,000,000 4,921,865
5.61%, 10/30/97 2,000,000 1,971,950
5.64%, 9/8/97 5,000,000 4,970,233
- ----------------------------------------------------------------------------------------
Heller Financial, Inc.:
5.75%, 12/15/97 4,000,000 3,913,111
5.75%, 9/4/97 8,000,000 7,956,556
------------
33,741,030
- ----------------------------------------------------------------------------------------
Diversified Financial--9.2%
Associates Corp. of North America, 5.875%, 8/1/97 8,911,000 8,911,000
- ----------------------------------------------------------------------------------------
General Motors Acceptance Corp.:
5.31%, 8/6/97 5,000,000 4,996,299
5.73%, 11/18/97 3,000,000 2,947,952
5.75%, 4/21/98(1) 5,000,000 4,998,154
------------
21,853,405
- ----------------------------------------------------------------------------------------
Electronics--1.3%
Mitsubishi Electric Finance America, Inc., 5.65%, 8/27/97(2) 3,000,000 2,987,758
- ----------------------------------------------------------------------------------------
Industrial Services--3.0%
Atlas Copco AB, 5.625%, 8/25/97(2) 5,000,000 4,981,250
- ----------------------------------------------------------------------------------------
PHH Corp., 5.618%, 1/27/98(1) 2,000,000 1,999,806
------------
6,981,056
- ----------------------------------------------------------------------------------------
Insurance--2.1%
Pacific Mutual Life Insurance Co., 5.744%, 7/21/97(1)(3) 5,000,000 5,000,000
- ----------------------------------------------------------------------------------------
Savings & Loans--5.5%
Great Western Bank FSB:
5.61%, 9/12/97 5,000,000 4,967,275
5.61%, 9/17/97 3,000,000 2,978,027
5.63%, 9/10/97 5,000,000 4,968,722
------------
12,914,024
- ----------------------------------------------------------------------------------------
Special Purpose Financial--17.8%
Asset Backed Capital Finance, Inc.:
5.60%, 12/26/97(1)(3) 4,000,000 3,998,630
5.65%, 9/23/97 1,000,000 991,682
- ----------------------------------------------------------------------------------------
Beta Finance, Inc., 5.65%, 9/15/97(2) 6,000,000 5,957,625
</TABLE>
7 Oppenheimer Cash Reserves
<PAGE>
Statement of Investments (Continued)
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Special Purpose Financial (continued)
Enterprise Funding Corp.:
5.62%, 9/3/97(2) $ 5,981,000 $ 5,950,188
5.65%, 12/15/97(2) 3,000,000 2,935,967
5.67%, 8/18/97(2) 3,000,000 2,991,967
- ----------------------------------------------------------------------------------------
New Center Asset Trust, 5.55%, 12/29/97 3,000,000 2,930,625
- ----------------------------------------------------------------------------------------
Preferred Receivables Funding Corp., 5.63%, 8/19/97 5,875,000 5,858,462
- ----------------------------------------------------------------------------------------
RACERS Series 1996-MM-12-3, 5.668%, 12/15/97(1)(3) 3,000,000 3,000,000
- ----------------------------------------------------------------------------------------
Sigma Finance, Inc., 5.55%, 10/6/97(2) 2,500,000 2,474,563
- ----------------------------------------------------------------------------------------
TIERS Series DCMT 1996-A, 5.698%, 10/15/97(1)(3) 5,000,000 5,000,000
------------
42,089,709
------------
Total Short-Term Notes 192,298,374
- ----------------------------------------------------------------------------------------
U.S. Government Agencies--2.1%
- ----------------------------------------------------------------------------------------
Federal Home Loan Bank, 5.93%, 8/1/97(1) 5,000,000 5,000,000
- ----------------------------------------------------------------------------------------
Total Investments, at Value 101.8% 240,437,880
- ----------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (1.8) (4,334,526)
----------- ------------
Net Assets 100.0% $236,103,354
=========== ===========
</TABLE>
Short-term notes, bankers' acceptances, direct bank obligations and letters of
credit are generally traded on a discount basis; the interest rate is the
discount rate received by the Fund at the time of purchase. Other securities
normally bear interest at the rates shown.
1. Floating or variable rate obligation. The interest rate, which is based on
specific, or an index of, market interest rates, is subject to change
periodically and is the effective rate on July 31, 1997. This instrument may
also have a demand feature which allows, on up to 30 days notice, the recovery
of principal at any time, or at specified intervals not exceeding one year.
Maturity date shown represents effective maturity based on variable rate and,
if applicable, demand feature.
2. Security issued in an exempt transaction without registration under the
Securities Act of 1933. Such securities amount to $30,225,765, or 12.80% of the
Fund's net assets, and have been determined to be liquid pursuant to guidelines
adopted by the Board of Trustees.
3. Represents a restricted security which is considered illiquid, by virtue of
the absence of a readily available market or because of legal or contractual
restrictions on resale. Such securities amount to $22,998,630, or 9.74% of the
Fund's net assets. The Fund may not invest more than 10% of its net assets
(determined at the time of purchase) in illiquid securities.
See accompanying Notes to Financial Statements.
8 Oppenheimer Cash Reserves
<PAGE>
Statement of Assets and Liabilities July 31, 1997
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------
Assets
Investments, at value--see accompanying statement $240,437,880
- ----------------------------------------------------------------------------------------------------
Cash 374,059
- ----------------------------------------------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 1,281,224
Interest 617,488
- ----------------------------------------------------------------------------------------------------
Other 87,486
------------
Total assets 242,798,137
- ----------------------------------------------------------------------------------------------------
Liabilities
Payables and other liabilities:
Shares of beneficial interest redeemed 6,243,447
Dividends 302,465
Shareholder reports 57,081
Transfer and shareholder servicing agent fees 46,690
Distribution and service plan fees 29,105
Other 15,995
------------
Total liabilities 6,694,783
- ----------------------------------------------------------------------------------------------------
Net Assets $236,103,354
============
- ----------------------------------------------------------------------------------------------------
Composition of Net Assets
Paid-in capital $236,108,871
- ----------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (5,517)
- ----------------------------------------------------------------------------------------------------
Net assets $236,103,354
============
- ----------------------------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $172,969,845 and 173,031,349 shares of beneficial interest outstanding) $1.00
- ----------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $54,008,935 and 54,008,096 shares of beneficial interest outstanding) $1.00
- ----------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $9,124,574 and 9,124,096 shares of beneficial interest outstanding) $1.00
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer Cash Reserves
<PAGE>
Statement of Operations For the Year Ended July 31, 1997
- ---------------------------------------------------------------------
Investment Income
Interest $14,514,957
- ---------------------------------------------------------------------
Expenses
Management fees--Note 3 1,286,675
- ---------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 3 1,032,743
- ---------------------------------------------------------------------
Distribution and service plan fees--Note 3:
Class A 348,634
Class B 505,099
Class C 81,952
- ---------------------------------------------------------------------
Registration and filing fees:
Class A 168,435
Class B 63,969
Class C 10,387
- ---------------------------------------------------------------------
Shareholder reports 207,407
- ---------------------------------------------------------------------
Custodian fees and expenses 22,201
- ---------------------------------------------------------------------
Legal and auditing fees 16,778
- ---------------------------------------------------------------------
Insurance expenses 4,693
- ---------------------------------------------------------------------
Other 20,614
------------
Total expenses 3,769,587
- ---------------------------------------------------------------------
Net Investment Income 10,745,370
- ---------------------------------------------------------------------
Net Realized Gain on Investments 2,265
- ---------------------------------------------------------------------
Net Increase in Net Assets Resulting From Operations $10,747,635
============
See accompanying Notes to Financial Statements.
10 Oppenheimer Cash Reserves
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended
Year Ended July 31, December 31,
1997 1996(1) 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations
Net investment income $ 10,745,370 $ 5,166,134 $ 6,676,570
- -------------------------------------------------------------------------------------------------
Net realized gain (loss) 2,265 (6,753) 37,450
- -------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 10,747,635 5,159,381 6,714,020
- -------------------------------------------------------------------------------------------------
Dividends and Distributions to Shareholders
Class A (7,785,359) (3,897,426) (4,996,089)
Class B (2,546,870) (1,119,443) (1,474,886)
Class C (413,141) (143,788) (249,786)
- -------------------------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase (decrease) in net assets
resulting from beneficial interest
transactions--Note 2:
Class A 2,937,563 21,502,771 49,175,977
Class B (31,565,083) 48,195,633 (9,426,294)
Class C (2,592,039) 6,692,718 (580,955)
- -------------------------------------------------------------------------------------------------
Net Assets
Total increase (decrease) (31,217,294) 76,389,846 39,161,987
- -------------------------------------------------------------------------------------------------
Beginning of period 267,320,648 190,930,802 151,768,815
------------- ------------ ------------
End of period $ 236,103,354 $267,320,648 $190,930,802
============= ============ ============
</TABLE>
1. For the period ended July 31, 1996. The Fund changed its fiscal year end
from December 31 to July 31.
See accompanying Notes to Financial Statements.
11 Oppenheimer Cash Reserves
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A
-------------------------------------------------------------------------------
Year Ended July 31, Year Ended December 31,
1997 1996(2) 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------------------------------------------------------------------
Income from investment
operations -- net investment
income and net realized gain .04 .03 .05 .03 .02 .03
Dividends and distributions to
shareholders (.04) (.03) (.05) (.03) (.02) (.03)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value(5) 4.41% 2.68% 4.84% 3.22% 2.05% 3.07%
- ---------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $172,970 $170,031 $148,529 $99,361 $70,924 $ 89,266
- ---------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $179,948 $149,889 $105,349 $87,908 $76,910 $104,970
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.33% 4.47%(6) 4.71% 3.25% 1.99% 3.07%
Expenses 1.29% 1.06%(6) 1.36% 1.32% 1.55% 1.25%(7)
</TABLE>
1. For the period from December 1, 1993 (inception of offering) to December 31,
1993.
2. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31.
3. For the period from August 17, 1993 (inception of offering) to December 31,
1993.
4. Less than $.005 per share.
12 Oppenheimer Cash Reserves
<PAGE>
<TABLE>
<CAPTION>
Class B Class C
- ------------------------------------------------------- ----------------------------------------------------------
Year Ended July 31, Year Ended December 31, Year Ended July 31, Year Ended December 31,
1997 1996(2) 1995 1994 1993(3) 1997 1996(2) 1995 1994 1993(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------------
.04 .02 .04 .03 --(4) .04 .02 .04 .02 --(4)
(.04) (.02) (.04) (.03) --(4) (.04) (.02) (.04) (.02) --(4)
- -------------------------------------------------------------------------------------------------------------------------
$1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
- -------------------------------------------------------------------------------------------------------------------------
3.82% 2.35% 4.26% 2.54% 0.56% 3.84% 2.35% 4.21% 2.51% 0.14%
- -------------------------------------------------------------------------------------------------------------------------
$54,009 $85,573 $37,378 $46,803 $628 $ 9,125 $11,717 $5,024 $5,604 $1
- -------------------------------------------------------------------------------------------------------------------------
$67,333 $49,226 $35,360 $21,262 $454 $10,930 $ 6,333 $6,040 $2,107 $1
- -------------------------------------------------------------------------------------------------------------------------
3.78% 3.91%(6) 4.15% 3.05% 1.49%(6) 3.78% 3.91%(6) 4.12% 3.19% 1.18%(6)
1.84% 1.61%(6) 1.92% 1.89% 2.12%(6) 1.85% 1.61%(6) 1.97% 1.90% 2.35%(6)
</TABLE>
5. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Total
returns are not annualized for periods of less than one full year. Total returns
reflect changes in net investment income only.
6. Annualized.
7. The expense ratio was 1.42% absent the voluntary reimbursement by the
Manager.
See accompanying Notes to Financial Statements.
13 Oppenheimer Cash Reserves
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Cash Reserves (the Fund) is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. The Fund's investment objective is to seek the maximum current income
that is consistent with stability of principal by investing in "money market"
securities meeting specified quality standards. The Fund's investment adviser
is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B and
Class C shares. Class B and Class C shares may be subject to a contingent
deferred sales charge. All 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 that class and exclusive
voting rights with respect to matters affecting that 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 on the basis of amortized
cost, which approximates market value.
- --------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is
required to be at least 102% of the resale price at the time of purchase. If
the seller of the agreement defaults and the value of the collateral declines,
or if the seller enters an insolvency proceeding, realization of the value of
the collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
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 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, Class B and Class C shares from net investment income each day the
New York Stock Exchange is open for business and pay such dividends monthly. To
effect its policy of maintaining a net asset value of $1.00 per share, the Fund
may withhold dividends or make distributions of net realized gains.
14 Oppenheimer Cash Reserves
<PAGE>
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for on the date the investments
are purchased or sold (trade date). Realized gains and losses on investments
are determined on an identified cost basis, which is the same basis used for
federal income tax purposes.
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. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Year Ended July 31, 1997 Period Ended July 31, 1996(1) Year Ended December 31, 1995
----------------------------------- ----------------------------------- --------------------------------
Shares Amount Shares Amount Shares Amount
----------------- ----------------- ----------------- ----------------- ----------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Class A:
Sold 539,202,800 $ 539,202,800 265,507,057 $ 265,507,057 367,360,698 $ 367,360,698
Dividends and
distributions
reinvested 7,258,877 7,258,877 3,477,339 3,477,339 4,666,289 4,666,289
Redeemed (543,524,114) (543,524,114) (247,481,625) (247,481,625) (322,851,010) (322,851,010)
------------- -------------- ------------- -------------- ------------- --------------
Net increase 2,937,563 $ 2,937,563 21,502,771 $ 21,502,771 49,175,977 $ 49,175,977
============= ============== ============= ============== ============= ==============
- -----------------------------------------------------------------------------------------------------------------------
Class B:
Sold 228,968,814 $ 228,968,814 175,381,171 $ 175,381,171 111,551,709 $ 111,551,709
Dividends and
distributions
reinvested 2,072,482 2,072,482 836,342 836,342 1,179,668 1,179,668
Redeemed (262,606,379) (262,606,379) (128,021,880) (128,021,880) (122,157,671) (122,157,671)
------------- -------------- ------------- -------------- ------------- --------------
Net increase
(decrease) (31,565,083) $ (31,565,083) 48,195,633 $ 48,195,633 (9,426,294) $ (9,426,294)
============= ============== ============= ============== ============= ==============
- -----------------------------------------------------------------------------------------------------------------------
Class C:
Sold 72,171,736 $ 72,171,736 32,552,967 $ 32,552,967 20,708,644 $ 20,708,644
Dividends and
distributions
reinvested 343,761 343,761 116,233 116,233 207,924 207,924
Redeemed (75,107,536) (75,107,536) (25,976,482) (25,976,482) (21,497,523) (21,497,523)
------------- -------------- ------------- -------------- ------------- --------------
Net increase
(decrease) (2,592,039) $ (2,592,039) 6,692,718 $ 6,692,718 (580,955) $ (580,955)
============= ============== ============= ============== ============= ==============
</TABLE>
1. The Fund changed its fiscal year end from December 31 to July 31.
15 Oppenheimer Cash Reserves
<PAGE>
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
3. 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 0.50% of the first
$250 million of net assets, 0.475% of the next $250 million, 0.45% of the next
$250 million, 0.425% of the next $250 million and 0.40% of net assets in excess
of $1 billion.
Sales charges advanced to broker/dealers by OFDI on sales of the
Fund's Class B and Class C shares totaled $61,806 and $5,635, respectively, of
which $11,448 and $1,225 were paid to an affiliated broker/dealer for Class B
and Class C, respectively.
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.
The Fund has adopted a Service Plan for Class A shares to
reimburse OFDI for a portion of its costs incurred in connection with the
personal service and maintenance of shareholder accounts that hold Class A
shares. Reimbursement is made quarterly at an annual rate that may not exceed
0.20% of the average annual net assets of Class A shares of the Fund. OFDI uses
the service fee to reimburse brokers, dealers, banks and other financial
institutions quarterly for providing personal service and maintenance of
accounts of their customers that hold Class A shares. During the year ended
July 31, 1997, OFDI paid $92,272 to an affiliated broker/dealer as
reimbursement for Class A personal service and maintenance expenses.
The Fund has adopted Distribution and Service Plans for Class B
and Class C shares to compensate OFDI for its services and costs in
distributing Class B and Class C shares and servicing accounts. Under the
Plans, the Fund pays OFDI an annual asset-based sales charge of 0.75% per year
on Class B and Class C shares, as compensation for sales commissions paid from
its own resources at the time of sale and associated financing costs. OFDI also
receives a service fee of 0.25% per year as compensation for costs incurred in
connection with the personal service and maintenance of accounts that hold
shares of the Fund, including amounts paid to brokers, dealers, banks and other
financial institutions. At present, these service fees are set at zero for
Class B and Class C shares. Both fees are computed on the average annual net
assets of Class B and Class C shares, determined as of the close of each
regular business day. During the year ended July 31, 1997, OFDI retained
$505,099 and $81,952, respectively, as compensation for Class B and Class C
sales commissions and service fee advances, as well as financing costs. If
either Plan is terminated by the Fund, the Board of Trustees may allow the Fund
to continue payments of the asset-based sales charge to OFDI for distributing
shares before the Plan was terminated.
16 Oppenheimer Cash Reserves
<PAGE>
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of
Oppenheimer Cash Reserves:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Cash Reserves as of July 31, 1997,
the related statement of operations for the year then ended, the statements of
changes in net assets for the year then ended, for the seven months ended July
31, 1996 and the year ended December 31, 1995, and the financial highlights for
the period January 1, 1992 to July 31, 1997. 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 July 31, 1997 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
Cash Reserves at July 31, 1997, 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
August 21, 1997
17 Oppenheimer Cash Reserves
<PAGE>
Federal Income Tax Information (Unaudited)
- --------------------------------------------------------------------------------
In early 1998, shareholders will receive information regarding all dividends
and distributions paid to them by the Fund during calendar year 1997.
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 fiscal year ended
July 31, 1997 are eligible for the corporate dividend-received deduction.
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.
18 Oppenheimer Cash Reserves
<PAGE>
Oppenheimer Cash Reserves
- --------------------------------------------------------------------------------
Officers and Trustees James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, Trustee and President
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
George C. Bowen, Vice President, Treasurer and
Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
Dorothy G. Warmack, 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 Citibank, N.A.
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 Cash Reserves. This report must be preceded
or accompanied by a Prospectus of Oppenheimer Cash
Reserves. 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.
19 Oppenheimer Cash Reserves
<PAGE>
Information and services
- --------------------------------------------------------------------------------
Internet
24-hr access to account information
www.oppenheimerfunds.com
General Information
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
1-800-525-7048
Account 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
Telecommunication Device for the Deaf (TDD)
Mon-Fri 8:30am-2pm ET
1-800-843-4461
OppenheimerFunds
Information Hotline
24 hours a day, timely and insightful messages on the economy and issues that
affect your investments
1-800-835-3104
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing
simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number. And, by enrolling in AccountLink, a
convenient service that "links" your OppenheimerFunds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at www.oppenheimerfunds.com--
we're here to help.
[OPPENHEIMER LOGO]
OppenheimerFunds(SM)
Distributor, Inc.
RA0760.001.0797 September 30, 1997
