Oppenheimer California Tax-Exempt Fund
Annual Report December 31, 1993
(FULL PAGE COVER PHOTO: COUPLE ON PARK BENCH)
(OPPENHEIMER FUNDS(R) LOGO)
"With today's higher taxes, we worried
that the income from our investments wouldn't be enough.
"This Fund has given us what we need--
tax-free income.
"We can keep more of what we earn,
while our investment helps build California."
<PAGE>
Fund Facts
Six Facts Every Shareholder Should Know About
Oppenheimer California Tax-Exempt Fund
1 The Fund seeks high current income exempt from federal and
California state income taxes. It invests principally in California
municipal securities rated within the four highest credit rating
categories.
2 During the past twelve months, dividends and capital gain
distributions paid per Class A share totaled $0.720. For Class B
shares, that figure for the eight months since inception of the
class on May 1, 1993, totaled $0.433.
3 The standardized yields for the 30 days ended December 31, 1993
were 5.32% for Class A shares, and 5.01% for Class B shares.(1)
4 Under the new, higher federal tax rates, the value of tax-free
income has increased. The table shows the taxable equivalent yield
required to match the Fund's current yield for the new tax
brackets.
Here is the taxable equivalent of
the Fund's yield for a California
resident, filing a joint return with
taxable income of:
Fund Yield
on 12/31/93 $92,000 $150,000 $260,000
Class A(1) 5.32% 8.50% 9.16% 9.79%
Class B(1) 5.01% 8.01% 8.63% 9.22%
This table assumes that an investor's highest effective tax bracket
(combined federal and state) applies to the change in taxable
income resulting from a switch between taxable and non-taxable
investments. A portion of the Fund's distributions may be subject
to income taxes. For investors subject to alternative minimum tax,
a portion of the Fund's distributions may increase that tax.
5 For the twelve-month period ended December 31, 1993, the Fund's
total return at net asset value for Class A shares was 13.26%.
Class B shares had a total return at net asset value of 6.66%
during the period from their inception on May 1, 1993 to December
31, 1993.(2)
6 "The California municipal bond market performed well during the
past year despite a difficult local economy, government budget
difficulties and various natural disasters. Because California is
the largest municipal bond market in the country, its size and
diversity make it very resilient and actually quite stable. Due to
the tremendous supply of California issues during the year, yields
were higher than the national average. And declining interest rates
caused price appreciation in many California municipal bonds. These
factors led to strong total returns for Fund shareholders."
Portfolio Manager, Robert Patterson, December 31, 1993
In this report:
Answers to three
timely questions
you should ask your
Fund's managers.
* What effect have the increased federal tax rates had on municipal bond markets
and the Fund?
* What is the outlook for California's
economic situation and state budget difficulties?
* With interest rates at historically low
levels, how has the Fund maintained
an attractive yield?
1. Standardized yield is net investment income calculated on a yield to maturity
basis for the 30-day period ended 12/31/93, divided by the maximum offering
price at the end of the period, compounded semi-annually and then annualized.
2. Based on the change in net asset value per Class A share from 12/31/92 to
12/31/93. The Fund's average annual total returns after deducting the current
maximum sales charge of 4.75% per Class A share for the 1- and 5-year periods
and since inception of the Fund on 11/1/88 ended 12/31/93 were 7.88%, 9.00%, and
9.00%, respectively. All performance figures assume reinvestment of dividends
and capital gains distributions. Total return for Class B shares from 5/1/93
(inception of the Class) and held until 12/31/93 was 1.66%. This reflects the
change in value of a hypothetical investment made on 5/1/93 and held until
12/31/93, with all dividends and capital gains distributions reinvested and
after applying the contingent deferred sales charge of 5%.
Past performance does not guarantee future results. The principal value and
return of an investment in the Fund will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
2 Oppenheimer California Tax-Exempt Fund
<PAGE>
Report to Shareholders
Oppenheimer California Tax-Exempt Fund provided shareholders with competitive
tax-free yields during the year ended December 31, 1993. The Fund's standardized
yields were 5.32% and 5.01% for Class A and Class B shares, respectively, for
the 30 days ended December 31, 1993.(3)
During 1993, the strong California municipal bond market was driven by three key
factors: declining interest rates, an increase in federal tax rates and signs
of economic improvement. Declining interest rates caused bond prices to
appreciate and also led to a record supply of new municipal bond issues used to
rebuild infrastructure and meet other obligations. The recent increase in
federal tax rates has made municipal bonds even more attractive to investors in
higher tax brackets. This demand has increased the value of bonds in the Fund's
portfolio.
Despite a later and deeper recession than the rest of the country, there are
signs of improvement in California's economy. The state government has made
progress in addressing its budget difficulties, which strengthened its ability
to meet its financial obligations. This positively affected the Fund's holdings.
In light of these developments, the Fund's strategy for the past year was to
stay fully invested in higher quality securities with an emphasis on essential
service revenue bonds.(4) Almost half the portfolio is currently invested in
AAA-rated bonds. We favor higher quality bonds because they offer more
dependable returns relative to lower-rated bonds which provide only slightly
higher yields. And with interest rates at low levels, we sought to lock in
attractive rates on the portfolio's securities using call protection. This
helps us to maintain the income available to the Fund from these investments.
In selecting bonds, your managers diversify the portfolio's holdings by geo-
graphic origin and by market sector, with holdings in utilities, transportation
and hospitals. Recent purchases included revenue bonds issued by Los Angeles
County Transportation Commission.
Going forward, we will continue to seek attractive essential service revenue
bonds and undervalued investment grade bonds. We are optimistic that California
will continue its economic rebound due to its well diversified resource base and
its position as a major world trade center. In addition, California demonstrated
its tremendous resiliency in 1993 in the face of several natural disasters. As
this letter is being written, we are just learning of the devastating effects
of the earthquake that struck the Los Angeles area on January 17. We firmly
believe that California will recover from this disaster and continue to
experience economic growth.
Our thoughts are with our shareholders who were affected by the recent
earthquake and we wish good health and prosperity for all Californians in 1994.
We thank you for your continuing confidence in the Fund's management and will
do our best to fulfill your need for tax-exempt income.
(Donald W. Spiro)
Donald W. Spiro
President, Oppenheimer California Tax-Exempt Fund
January 21, 1994
3. See footnote 1, page 2.
4. The Fund's portfolio is subject to change.
3 Oppenheimer California Tax-Exempt Fund
<PAGE>
Statement of Investments
December 31, 1993
<TABLE>
<CAPTION>
Ratings: Moody's/
S&P's/Fitch's Face Market Value
(Unaudited) Amount See Note 1
<S> <C> <C> <C>
Municipal Bonds and Notes--99.8%
California--94.1%
Alameda County, California Certificates of
Participation, BIG Insured, Prerefunded, 7.25%, 6/1/09 Aaa/AAA $ 2,500,000 $ 2,991,237
Anaheim, California Public Financing Authority
Tax Allocation Revenue Bonds, Registered
Residual Interest Tax-Exempt Securities,
MBIA Insured, 10.07%, 12/28/18(1) Aaa/AAA 3,000,000 3,676,929
California Educational Facilities Authority
Revenue Bonds:
Pepperdine University, MBIA Insured, Prerefunded,
7.20%, 11/1/15 Aaa/AAA 1,000,000 1,191,682
Stanford University Project, Series J, 6%, 11/1/09 Aaa/AAA 2,205,000 2,355,857
California Health Facilities Financing Authority:
Revenue Bonds, Children's Hospital of Los Angeles,
Series A, 7.125%, 6/1/21 A1/A+ 1,000,000 1,121,305
Revenue Insured Bonds:
Henry Mayo Newhall Project, Series A, OSHPD
Insured, 8%, 10/1/18 NR/A+ 2,720,000 3,125,144
La Palma Hospital Medical Center, OSHPD
Insured, 7.10%, 2/1/13 NR/A+ 1,875,000 2,034,812
Unihealth America Project, Series A, AMBAC Insured:
Prerefunded, 7.625%, 10/1/15 Aaa/AAA 769,998 904,173
7.625%, 10/1/15 Aaa/AAA 5,002 5,804
California Housing Finance Agency
Revenue Bonds, Home Mortgage, Series C,
FHA Insured, 7.60%, 8/1/30 Aa/A+ 1,875,000 2,015,818
California Pollution Control Financing Authority,
Pacific Gas & Electric Co.:
Revenue Bonds, Series B, 8.875%, 1/1/10 A1/A 2,275,000 2,702,663
Revenue Refunding Bonds, Series A, 7.50%, 5/1/16 A1/A 1,450,000 1,583,272
California State Department of Water Resources
Revenue Bonds, Central Valley Water System
Project:
Series J-1, 6%, 12/1/20 Aa/AA 3,250,000 3,395,740
Series J-2, 6%, 12/1/20 Aa/AA 5,300,000 5,537,668
Series L, 5.50%, 12/1/23 Aa/AA 13,000,000 13,041,676
California State Franchise Tax Board Refunding
Certificates of Participation, 6.90%, 10/1/06 A1/A 1,000,000 1,114,208
California State General Obligation Bonds:
FSA Insured, 5.50%, 4/1/19 Aaa/AAA 5,500,000 5,559,289
6%, 10/1/15 Aa/A+/AA 3,150,000 3,312,807
4 Oppenheimer California Tax-Exempt Fund
<PAGE>
Ratings: Moody's/
S&P's/Fitch's Face Market Value
(Unaudited) Amount See Note 1
California (continued)
California State Public Works Board Lease
Revenue Bonds:
Department of Corrections California State Prison,
Series B, MBIA Insured, 5.50%, 12/1/12 Aaa/AAA/A+ $4,600,000 $ 4,692,519
Regents of the University of California, Series A,
Prerefunded, 7%, 9/1/15 Aaa/AAA/AAA 2,500,000 2,941,815
Campbell, California Certificates of Participation,
Civic Center Project:
Prerefunded, 6.75%, 10/1/17 Aaa/A- 1,870,000 2,196,174
6.75%, 10/1/17 A/A- 1,130,000 1,271,067
Capistrano, California University School District
Community Facilities District Special Tax Bonds,
No. 87-1, 7.60%, 9/1/14 NR/NR 4,000,000 4,284,556
Cathedral City, California Improvement Bond Act
of 1915 Bonds, Limited Obligation Assessment
District No. 88-3, 7.85%, 9/2/11 NR/NR 1,980,000 2,042,287
Corona, California Certificates of Participation,
Series B, Prerefunded, 10%, 11/1/20 Aaa/AAA 8,175,000 11,607,035
Cucamonga County, California Water District
Facilities Refinancing Certificates of Participation,
FGIC Insured, 6.50%, 9/1/22 Aaa/AAA/AAA 4,000,000 4,360,348
Culver City, California Redevelopment Financing
Authority Revenue Bonds, Senior Lien Project
Loans, Series A, AMBAC Insured:
Prerefunded, 7.10%, 11/1/10 Aaa/AAA 925,000 1,082,393
7.10%, 11/1/10 Aaa/AAA 75,000 85,559
Escondido, California Joint Powers Financing
Authority Revenue Bonds, AMBAC Insured,
6.125%, 9/1/11 Aaa/AAA 3,500,000 3,763,963
Fresno, California Water System Revenue Bonds,
Series A, Prerefunded, 7.30%, 6/1/20 A/NR 2,500,000 2,879,090
Industry, California Improvement Bond Act of 1915
Bonds, Assessment District No. 91-1, 7.65%, 9/2/21 NR/NR 1,750,000 1,774,314
Intermodal Container Transfer Facility Joint Power
Authority California Revenue Refunding Bonds,
Southern Pacific Transportation Co., Series A,
7.70%, 11/1/14 Aa3/AA- 1,000,000 1,161,099
5 Oppenheimer California Tax-Exempt Fund
<PAGE>
Ratings: Moody's/
S&P's/Fitch's Face Market Value
(Unaudited) Amount See Note 1
Statement of Investments (Continued)
California (continued)
La Quinta, California Redevelopment Agency
Refunding Tax Allocation Bonds, La Quinta
Redevelopment Project, MBIA Insured,
8.40%, 9/1/12 Aaa/AAA $1,000,000 $1,222,944
Los Angeles, California Community
Redevelopment Agency:
Community Redevelopment Financing Authority
Revenue Bonds, Grand Century
Qualified Redevelopment, Series A, 5.90%, 12/1/26 A/A 2,600,000 2,581,165
Refunding Tax Allocation Bonds, North Hollywood,
Series C, MBIA Insured, 7%, 7/1/15 Aaa/AAA 2,000,000 2,213,636
Los Angeles, California Convention and Exhibition
Center Authority Certificates of Participation,
AMBAC Insured, Prerefunded, 7%, 8/15/21 Aaa/AAA 1,000,000 1,175,634
Los Angeles, California Department of Water
and Power Electric Plant:
Revenue Bonds:
Second Issue 1991 Bonds, 6%, 6/1/12 Aa/AA 2,500,000 2,654,230
Second Issue 1991 Bonds, 6%, 6/1/13 Aa/AA 3,200,000 3,377,129
7.375%, 2/1/29 Aa/AA 8,000,000 9,247,720
Revenue Refunding Bonds, 5.375%, 9/1/23 Aa/AA 5,500,000 5,427,234
Los Angeles County, California Certificates
of Participation:
Correctional Facilities Project, MBIA Insured,
6.50%, 9/1/13 Aaa/AAA 4,600,000 5,050,156
6.50%, 3/1/10 A1/A 1,500,000 1,635,949
Los Angeles County, California Transport
Commission Sales Tax Revenue Bonds, Series A,
Prerefunded, 6.75%, 7/1/11 Aaa/A+/A+ 4,260,000 4,985,427
Metropolitan Water District, Southern California
Waterworks Revenue Bonds:
5%, 7/1/20 Aa/AA 7,750,000 7,357,617
8.027%, 10/30/20(1) Aa/AA 4,700,000 4,777,568
6%, 7/1/21 Aa/AA 9,250,000 9,640,655
Oakland, California Redevelopment Agency Tax
Allocation Refunding Bonds, MBIA Insured,
9.142%, 9/1/19(1) Aaa/AAA 4,300,000 4,697,104
Oakland, California Revenue Refunding Special
Edition Bonds, Series A, FGIC Insured, 7.60%, 8/1/21 Aaa/AAA/AAA 2,000,000 2,309,252
6 Oppenheimer California Tax-Exempt Fund
<PAGE>
Ratings: Moody's/
S&P's/Fitch's Face Market Value
(Unaudited) Amount See Note 1
California (continued)
Orange County, California Community Facilities
District Special Tax Bonds:
No. 87-3 Mission Viejo, Series A, 8.05%, 8/15/08 A/NR $3,000,000 $3,468,141
No. 88-1 Aliso Viejo, Series A, 7.10%, 8/15/05 NR/NR 1,440,000 1,533,838
No. 88-1 Aliso Viejo, Series A, 7.35%, 8/15/18 NR/NR 8,000,000 8,515,000
Paramount, California Redevelopment
Agency Tax Allocation Revenue Refunding Bonds,
Redevelopment Project No. 1, Series A,
9.65%, 6/1/16 NR/AAA/BBB 6,000,000 6,653,723
Pittsburg, California Improvement Bond Act of 1915
Bonds, Assessment District 1990-01, 7.75%, 9/2/20 NR/NR 1,255,000 1,294,386
Rancho, California Water District Financing
Authority Revenue Refunding Bonds, AMBAC
Insured, 5%, 8/15/14 Aaa/AAA 3,750,000 3,627,188
Redding, California Electric System Revenue
Certificates of Participation, Registered Residual
Interest Certificates:
FGIC Insured, 8.348%, 6/1/19(1) Aaa/AAA/AAA 4,000,000 4,128,688
MBIA Insured, 9.968%, 7/8/22(1) Aaa/AAA 2,500,000 3,203,015
Riverside, California Kaiser Permanente Revenue
Bonds, Series A, 9%, 12/1/15 Aa2/AA 2,700,000 3,008,872
Riverside County, California Community Facilities
District Bonds, Special Tax No. 88-12, 7.55%, 9/1/17 NR/NR 3,000,000 3,246,003
Sacramento, California Municipal Utility District
Electric Revenue Refunding Bonds:
Series D, MBIA Insured, 5.25%, 11/15/20 Aaa/AAA/A- 2,500,000 2,460,912
FGIC Insured, 9.875%, 8/15/18(1) Aaa/AAA/AAA 5,500,000 6,323,680
Saddleback Community College District,
California Refunding Certificates of Participation,
BIG Insured, 7%, 8/1/19 Aaa/AAA 1,000,000 1,107,897
San Diego County, California Certificates
of Participation, Registered Residual Interest
Tax-Exempt Securities, MBIA Insured,
9.948%, 11/18/19(1) Aaa/AAA 2,000,000 2,303,468
San Diego County, California Water Authority
Water Revenue Certificates of Participation,
Series B, MBIA Insured, 9.78%, 4/8/21(1) Aaa/AAA 3,000,000 3,492,366
San Francisco, California City and County Airport
Commission International Airport Revenue
Refunding Bonds, Second Series, Issue I, AMBAC
Insured, 6.30%, 5/1/11 Aaa/AAA 4,385,000 4,789,612
7 Oppenheimer California Tax-Exempt Fund
<PAGE>
Ratings: Moody's/
S&P's/Fitch's Face Market Value
(Unaudited) Amount See Note 1
Statement of Investments (Continued)
California (continued)
San Joaquin Hills, California Transportation
Corridor Agency Toll Road Revenue Bonds, Sr. Lien:
6.75%, 1/1/32 NR/NR/BBB $7,000,000 $ 7,224,867
5%, 1/1/33 NR/NR/BBB 8,000,000 6,545,079
San Jose, California Redevelopment Agency Tax
Allocation Bonds, Merged Area Redevelopment
Project, MBIA Insured, 5%, 8/1/20 Aaa/AAA/A 2,000,000 1,912,138
Southern California Home Financing Authority
Single Family Mortgage Revenue Bonds,
GNMA and FNMA Mortgage-Backed Securities,
Series A, 7.35%, 9/1/24 NR/AAA 1,930,000 2,041,741
Southern California Public Power Authority:
Revenue Bonds, San Juan Unit 3, Series A,
MBIA Insured, 5%, 1/1/20 Aaa/AAA 3,000,000 2,873,769
Revenue Refunding Bonds, 8.897%, 7/1/12(1) Aa/AA- 5,500,000 6,170,746
University of California Revenue Refunding Bonds:
Housing Systems Project, Group A, Series W,
AMBAC Insured, Prerefunded, 7.80%, 11/1/18 Aaa/AAA 1,000,000 1,134,643
Multiple Purpose Project, Series A, 6.875%, 9/1/16 A/A- 2,200,000 2,473,484
Victorville, California Special Tax Bonds,
Community Facilities District No. 90-1
(Western Addition), Series A, 8.30%, 9/1/16 NR/NR 2,250,000 2,446,971
260,145,950
U.S. Possessions--5.7%
Puerto Rico Commonwealth Public Improvement
General Obligation Bonds, YCNS, MBIA Insured,
8.784%, 7/1/08(1) Aaa/AAA 3,500,000 3,886,638
Puerto Rico Commonwealth Highway and
Transportation Authority Highway Revenue
Bonds, Series T, Prerefunded, 6.625%, 7/1/18 Baa1/AAA 5,000,000 5,593,555
Puerto Rico Electric Power Authority Revenue
Bonds, Series P, 7%, 7/1/21 Baa1/A- 4,000,000 4,585,743
Puerto Rico Housing Finance Corp. Single Family
Mortgage Revenue Bonds, Portfolio 1, Series B,
7.65%, 10/15/22 Aaa/AAA 1,430,000 1,511,518
15,577,454
Total Municipal Bonds and Notes (Cost $254,179,447) 275,723,404
8 Oppenheimer California Tax-Exempt Fund<PAGE>
Ratings: Moody's/
S&P's/Fitch's Face Market Value
(Unaudited) Amount See Note 1
Short-Term Tax-Exempt Obligations--0.2%
California Health Facility Finance Authority Revenue
Bonds, Huntington Memorial Hospital, 2.75%(2) $200,000 $ 200,000
Los Angeles, California Multifamily Housing Revenue
Bonds, Series K, 2.65%(2) 400,000 400,000
Total Short-Term Tax-Exempt Obligations (Cost
$600,000) 600,000
Total Investments, at Value (Cost $254,779,447) 100.0% 276,323,404
Other Assets Net of Liabilities -- 87,744
Net Assets 100.0% $276,411,148
<FN>
1. Represents the current interest rate for a variable rate security.
2. Floating or variable rate obligation maturing in more than one year. 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 December 31, 1993. A
demand feature allows the recovery of principal at any time, or at specified intervals not exceeding one year, on up
to 30 days' notice.
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer California Tax-Exempt Fund
<PAGE>
Statement of Assets and Liabilities
December 31, 1993
<TABLE>
<S> <C>
Assets
Investments, at value (cost $254,779,447)--see accompanying statement $276,323,404
Cash 93,587
Receivables:
Interest 4,612,545
Shares of beneficial interest sold 698,928
Other 25,380
Total assets 281,753,844
Liabilities
Payables and other liabilities:
Investments purchased 3,629,167
Dividends 910,326
Shares of beneficial interest redeemed 392,136
Distribution assistance--Note 4 172,162
Other 238,905
Total liabilities 5,342,696
Net Assets $276,411,148
Composition of
Net Assets
Paid-in capital $255,096,679
Undistributed net investment income 275,259
Distributions in excess of net realized gain from investment transactions (504,747)
Net unrealized appreciation on investments--Note 3 21,543,957
Net assets $276,411,148
Net Asset Value
Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of $266,489,739 and
24,289,750 shares of beneficial interest outstanding) $ 10.97
Maximum offering price per share (net asset value plus sales
charge of 4.75% of offering price) $ 11.52
Class B Shares:
Net asset value, redemption price and offering price per
share (based on net assets of $9,921,409 and 903,852 shares
of beneficial interest outstanding) $ 10.98
See accompanying Notes to Financial Statements.
</TABLE>
10 Oppenheimer California Tax-Exempt Fund
<PAGE>
Statement of Operations
For the Year Ended December 31, 1993
<TABLE>
<S> <C>
Investment Income
Interest $16,690,167
Expenses
Management fees--Note 4 1,467,574
Distribution assistance:
Class A--Note 4 601,564
Class B--Note 4 34,469
Transfer and shareholder servicing agent fees--Note 4 116,863
Shareholder reports 60,390
Legal and auditing fees 44,258
Trustees' fees and expenses 41,459
Custodian fees and expenses 36,097
Registration and filing fees:
Class A 15,858
Class B 3,439
Other 28,924
Total expenses 2,450,895
Net Investment Income 14,239,272
Realized and Unrealized
Gain on Investments
Net realized gain on investments 1,489,475
Net change in unrealized appreciation on investments:
Beginning of year 7,238,635
End of year--Note 3 21,543,957
Net change 14,305,322
Net realized and unrealized gain on investments 15,794,797
Net Increase in Net Assets Resulting From Operations $30,034,069
See accompanying Notes to Financial Statements.
</TABLE>
11 Oppenheimer California Tax-Exempt Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1992
<S> <C> <C>
Operations
Net investment income $ 14,239,272 $ 10,571,616
Net realized gain on investments 1,489,475 1,299,096
Net change in unrealized appreciation or depreciation
on investments 14,305,322 2,153,935
Net increase in net assets resulting from operations 30,034,069 14,024,647
Dividends and
Distributions to
Shareholders
Dividends from net investment income:
Class A ($.648 and $.602 per share, respectively) (14,653,931) (10,191,305)
Class B ($.361 per share) (163,836) --
Distributions from net realized gain on investments:
Class A ($.072 and $.0828 per share, respectively) (1,740,286) (1,490,935)
Class B ($.072 per share) (60,371) --
Beneficial Interest
Transactions
Net increase in net assets resulting from Class A
beneficial interest transactions--Note 2 48,808,693 56,843,610
Net increase in net assets resulting from Class B
beneficial interest transactions--Note 2 9,837,578 --
Net Assets
Total increase 72,061,916 59,186,017
Beginning of year 204,349,232 145,163,215
End of year (including undistributed net investment
income of $275,259 and $853,754, respectively) $276,411,148 $204,349,232
See accompanying Notes to Financial Statements.
</TABLE>
12 Oppenheimer California Tax-Exempt Fund
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B
Year Ended Period Ended
December 31, December 31,
1993 1992 1991 1990 1989 1988(2) 1993(1)
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $ 10.35 $ 10.22 $ 9.86 $ 9.94 $ 9.58 $ 9.53 $10.72
Income from investment operations:
Net investment income .62 .61 .66 .67 .71 .09 .35
Net realized and unrealized gain
(loss) on investments .72 .20 .38 (.07) .37 .05 .34
Total income from investment
operations 1.34 .81 1.04 .60 1.08 .14 .69
Dividends and distributions to shareholders:
Dividends from net investment income (.65) (.60) (.62) (.68) (.70) (.09) (.36)
Distributions from net realized
gain on investments (.07) (.08) (.06) -- (.02) -- (.07)
Total dividends and distributions
to shareholders (.72) (.68) (.68) (.68) (.72) (.09) (.43)
Net asset value, end of period $ 10.97 $ 10.35 $ 10.22 $ 9.86 $ 9.94 $ 9.58 $10.98
Total Return, at Net Asset Value(3) 13.26% 8.28% 10.93% 6.38% 11.62% 1.43% 6.66%
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $266,490 $204,349 $145,163 $92,514 $52,342 $5,825 $9,921
Average net assets (in thousands) $245,193 $174,055 $115,661 $72,879 $29,308 $2,377 $5,218
Number of shares outstanding at
end of period (in thousands) 24,290 19,738 14,200 9,386 5,268 608 904
Ratios to average net assets:
Net investment income 5.74% 6.07% 6.52% 6.80% 7.11% 5.95%(4) 4.57%(4)
Expenses, before voluntary
assumption by the Manager .97% 1.07% 1.05% 1.05% 1.09% 2.25%(4) 1.79%(4)
Expenses, net of voluntary
assumption by the Manager N/A N/A .73% .53% .16% -- (4) N/A
Portfolio turnover rate(5) 13.7% 26.8% 26.6% 14.5% 20.7% 0.0% 13.7%
<FN>
1. For the period from May 1, 1993 (inception of offering) to December 31, 1993.
2. For the period from November 3, 1988 (commencement of operations) to December 31, 1988.
3. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, 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.
4. Annualized.
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 year ended December 31, 1993 were $92,539,523 and $33,483,495, respectively.
</TABLE>
See accompanying Notes to Financial Statements.
13 Oppenheimer California Tax-Exempt Fund
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Oppenheimer California Tax-Exempt Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, open-end
management investment company. The Fund's investment advisor is Oppenheimer
Management Corporation (the Manager). The Fund offers both Class A and Class
B shares. Class A shares are sold with a front-end sales charge. Class B
shares may be subject to a contingent deferred sales charge. Both classes of
shares have identical rights to earnings, assets and voting privileges,
except that each class has its own distribution plan, expenses directly
attributable to a particular class and exclusive voting rights with respect
to matters affecting a single class. Class B shares will automatically
convert to Class A shares six years after the date of purchase. The following
is a summary of significant accounting policies consistently followed by the
Fund.
Investment Valuation. Portfolio securities are valued at 4:00 p.m. (New York
time) on each trading day. Long-term debt securities are valued by a
portfolio pricing service approved by the Board of Trustees. Long-term debt
securities which cannot be valued by the approved portfolio pricing service
are valued by averaging the mean between the bid and asked prices obtained
from two active market makers in such securities. Short-term 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. Securities for which market quotes are not readily available are
valued under procedures established by the Board of Trustees to determine
fair value in good faith.
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 Income 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 tax provision is required.
Trustees' Fees and Expenses. The Fund has adopted a nonfunded retirement plan
for the Fund's independent trustees. Benefits are based on years of service
and fees paid to each trustee during the years of service. During the year
ended December 31, 1993, a provision of $4,736 was made for the Fund's
projected benefit obligations, resulting in an accumulated liability of
$64,346. No payments have been made under the plan.
Distributions to Shareholders. The Fund intends to declare dividends
separately for Class A and Class B shares from net investment income each
regular business day and pay such dividends monthly. Distributions from net
realized gains on investments, if any, will be declared at least once each
year.
Other. Investment transactions are accounted for on the date the investments
are purchased or sold (trade date). Discount on securities purchased is
amortized over the life of the respective securities, in accordance with
federal income tax requirements. 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.
14 Oppenheimer California Tax-Exempt Fund
<PAGE>
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
Year Ended December 31, 1993(1) Year Ended December 31, 1992
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Class A:
Sold 7,029,778 $ 75,603,080 7,250,089 $ 74,369,801
Dividends and distributions reinvested 913,845 9,891,046 709,437 7,284,671
Redeemed (3,391,817) (36,685,433) (2,421,535) (24,810,862)
Net increase 4,551,806 $ 48,808,693 5,537,991 $ 56,843,610
Class B:
Sold 916,412 $ 9,977,857 -- $ --
Dividends and distributions reinvested 12,695 139,138 -- --
Redeemed (25,255) (279,417) -- --
Net increase 903,852 $ 9,837,578 -- $ --
<FN>
1. For the year ended December 31, 1993 for Class A shares and for the period from May 1, 1993 (inception
of offering) to December 31, 1993 for Class B Shares.
</TABLE>
3. Unrealized Gains and Losses on Investments
At December 31, 1993, net unrealized appreciation on investments of $21,543,957
was composed of gross appreciation of $21,665,215, and gross depreciation of
$121,258.
4. Management Fees And Other Transactions With Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for an annual fee of .60%
on the first $200 million of net assets, .55% on the next $100 million, .50%
on the next $200 million, .45% on the next $250 million, .40% on the next
$250 million and .35% on net assets in excess of $1 billion. The Manager has
agreed to assume Fund expenses (with specified exceptions) in excess of the
regulatory limitation of the State of California.
For the year ended December 31, 1993, commissions (sales charges paid by
investors) on sales of Class A shares totaled $1,831,469, of which $368,898
was retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of
the Manager, as general distributor, and by an affiliated broker/dealer.
During the year ended December 31, 1993, OFDI received contingent deferred
sales charges of $5,046 upon redemption of Class B shares.
Oppenheimer Shareholder Services (OSS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other
registered investment companies. OSS's total costs of
providing such services are allocated ratably to these companies.
Under separate approved plans of distribution, each class may expend up to
.25% of its net assets annually to reimburse OFDI for costs incurred in
distributing shares of the Fund, including amounts paid to brokers,
dealers, banks and other institutions. In addition, Class B shares are
subject to an asset-based sales charge of .75% of net assets annually, to
reimburse OFDI for sales commissions paid from its own resources
at the time of sale and associated financing costs. In the event of
termination or discontinuance of the Class B plan of distribution, the Fund
would be contractually obligated to pay OFDI for any expenses not
previously reimbursed or recovered through contingent deferred sales charges.
During the year ended December 31, 1993, OFDI paid $16,929 to an affiliated
broker/dealer as reimbursement for Class A distribution-related
expenses and retained $34,469 as reimbursement for Class B distribution-
related expenses and sales commissions.
15 Oppenheimer California Tax-Exempt Fund
<PAGE>
Independent Auditors' Report
The Board of Trustees and Shareholders of
Oppenheimer California Tax-Exempt Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer California Tax-Exempt Fund as of December 31,
1993, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year
period then ended and the financial highlights for each of the years in the
five-year period then ended and the period from November 3, 1988 (commencement
of operations) to December 31, 1988. 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 and financial highlights. Our procedures included
confirmation of securities owned as of December 31, 1993, by correspondence
with the custodian and brokers; and where confirmations were not received from
brokers, we performed other auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Oppenheimer California Tax-Exempt Fund as of December 31, 1993, the results
of its operations for the year then ended, the changes in its net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the years in the five-year period then ended and the
period from November 3, 1988 (commencement of operations) to December 31,
1988, in conformity with generally accepted accounting principles.
KPMG Peat Marwick
Denver, Colorado
January 21, 1994
16 Oppenheimer California Tax-Exempt Fund
<PAGE>
Federal Income Tax Information (Unaudited)
In early 1994, shareholders will receive information regarding all dividends
and distributions paid to them by the Fund during calendar year 1993.
Regulations of the U.S. Treasury Department require the Fund to report this
information to the Internal Revenue Service.
A distribution of $.072 per share was paid on December 10, 1993, of which
$.064 was designated as a ``capital gain distribution'' for federal income tax
purposes. Whether received in stock or cash, the capital gain distribution
should be treated by shareholders as a gain from the sale of capital assets
held for more than one year (long-term capital gains). Both short-term and
long-term capital gain distributions are subject to federal, state and local
taxes.
None of the dividends paid by the Fund during the fiscal year ended December
31, 1993 are eligible for the corporate dividend-received deduction. The
dividends were derived from interest on municipal bonds and are not subject
to federal income tax. To the extent a shareholder is subject to any state or
local tax laws, some or all of the dividends received may be taxable.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because
of the complexity of the federal regulations which may affect your individual
tax return and the many variations in state and local tax regulations, we
recommend that you consult your tax advisor for specific guidance.
17 Oppenheimer California Tax-Exempt Fund
<PAGE>
Oppenheimer California Tax-Exempt Fund
Officers and Trustees Leon Levy, Chairman of the Board of Trustees
Leo Cherne, Trustee
Edmund T. Delaney, Trustee
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Donald W. Spiro, Trustee and President
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Robert E. Patterson, Vice President
George C. Bowen, Treasurer
Lynn M. Coluccy, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
Investment Advisor Oppenheimer Management Corporation
Distributor Oppenheimer Funds Distributor, Inc.
Transfer and Shareholder Oppenheimer Shareholder Services
Servicing Agent
Custodian of Citibank, N.A.
Portfolio Securities
Independent Auditors KPMG Peat Marwick
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
This is a copy of a report to shareholders of Oppenheimer California Tax-Exempt
Fund. This report must be preceded or accompanied by a Prospectus of Oppenheimer
California Tax-Exempt Fund. For material information concerning the Fund, see
the Prospectus.
18 Oppenheimer California Tax-Exempt Fund
<PAGE>
The Family of OppenheimerFunds
OppenheimerFunds offers over 30 funds designed to fit virtually every
investment goal. Whether you're investing for retirement, your children's
education, or tax-free income, we have the funds to help you seek your
objective.
When you invest with OppenheimerFunds, you can feel comfortable knowing that
you are investing with a respected financial institution with over 30 years
of experience in helping people just like you reach their financial goals.
And you're investing with a leader in global, growth stock, and flexible
fixed income investments--with over 1.7 million shareholder accounts and more
than $25 billion under Oppenheimer's management and that of our affiliates.
As an OppenheimerFunds shareholder, you can easily exchange shares of
eligible funds of the same class by mail or by telephone for a small
administrative fee.(1) For more information on OppenheimerFunds, please
contact your financial advisor or call us at 1-800-525-7048 for a
prospectus. You may also write us at the address shown on the back cover.
As always, please read the prospectus carefully before you invest.
<TABLE>
<S> <C> <C>
Specialty Stock Funds Global Bio-Tech Fund Gold & Special Minerals Fund
Global Environment Fund
Stock Funds Discovery Fund Global Fund
Time Fund Oppenheimer Fund
Target Fund Value Stock Fund
Special Fund
Stock and Bond Funds Main Street Income & Growth Fund Equity Income Fund
Total Return Fund Asset Allocation Fund
Global Growth & Income Fund
Bond Funds High Yield Fund Strategic Short-Term Income Fund
Champion High Yield Fund Investment Grade Bond Fund
Strategic Income & Growth Fund Mortgage Income Fund(3)
Strategic Income Fund U.S. Government Trust
Strategic Diversified Income Fund Government Securities Fund
Strategic Investment Grade Bond Fund
Tax-Exempt Funds New York Tax-Exempt Fund(2) Tax-Free Bond Fund
Main Street California Tax-Exempt Fund(2) Insured Tax-Exempt Bond Fund
Pennsylvania Tax-Exempt Fund(2) Intermediate Tax-Exempt Bond Fund
Florida Tax-Exempt Fund(2)
Money Market Funds Money Market Fund Tax-Exempt Cash Reserves
Cash Reserves
<FN>
1. The fee is waived for PhoneLink exchanges between existing accounts. Exchange privileges are subject to change or termination.
2. Available only to residents of those states.
3. Formerly GNMA Fund.
</TABLE>
OppenheimerFunds are distributed by Oppenheimer Funds Distributor, Inc.,
Two World Trade Center, New York, NY 10048-0203. (C) Copyright 1994 Oppenheimer
Management Corporation. All rights reserved.
19 Oppenheimer California Tax-Exempt Fund
<PAGE>
"How may I help you?"
General Information
1-800-525-7048
Talk to a Customer Service Representative.
Monday through Friday from
8:30 a.m. to 8:00 p.m., and Saturday from 10:00 a.m.
to 2:00 p.m. ET.
Telephone Transactions
1-800-852-8457
Make account transactions with a Customer Service Representative.
Monday through Friday from
8:30 a.m. to 8:00 p.m. ET.
PhoneLink
1-800-533-3310
Get automated information or make automated transactions.
24 hours a day, 7 days a week.
Telecommunication
Device for the Deaf
1-800-843-4461
Service for the hearing impaired.
Monday through Friday from
8:30 a.m. to 8:00 p.m. ET.
OppenheimerFunds Information Hotline
1-800-835-3104
Hear timely and insightful
messages on the economy and
issues that affect your finances.
24 hours a day, 7 days a week.
"Just as OppenheimerFunds offers over 30 different funds designed to help meet
virtually every investment need, Oppenheimer Shareholder Services offers a
variety of services to satisfy your individual needs. Whenever you require help,
we're only a toll-free phone call away.
"For personalized assistance and account information, call our General
Information number to speak with our knowledgeable Customer Service
Representatives.
"We also make it easy for you to redeem shares, exchange shares, or conduct
AccountLink transactions, simply by calling our Telephone Transactions number.
"And for added convenience, OppenheimerFunds' PhoneLink, an automated voice
response system, is available 24 hours a day, 7 days a week. PhoneLink gives you
access to variety of fund, account, and market information. You can even make
purchases, exchanges and redemptions using your touch-tone phone. Of course,
PhoneLink will always give you the option to speak with a Customer Service
Representative during regular business hours.
"When you invest in OppenheimerFunds, you know you'll receive a high level of
customer service. The International Customer Service Association knows it, too,
as it recently awarded Oppenheimer Shareholder Services a 1993 Award of
Excellence for consistently demonstrating superior customer service.
"Whatever your needs, we're ready to assist you."
(BARBARA HENNIGAR PHOTO)
Barbara Hennigar
President
Oppenheimer Shareholder Services
1993
AWARD OF
EXCELLENCE
INTERNATIONAL
CUSTOMER
SERVICE
ASSOCIATION
RS790.0294.R
Bulk Rate
U.S. Postage
PAID
Permit No. 469
Denver, CO
(OPPENHEIMER FUNDS(R) LOGO)
Oppenheimer Funds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
