<PAGE>
OPPENHEIMER CALIFORNIA TAX-EXEMPT FUND
SEMI-ANNUAL REPORT JUNE 30, 1994
[Logo]
OPPENHEIMER FUNDS.
"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."
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IN THIS REPORT:
ANSWERS TO THREE TIMELY QUESTIONS YOU SHOULD ASK YOUR FUND'S MANAGERS.
- - DID THE RAPID RISE IN INTEREST RATES OVER THE PAST SIX MONTHS AFFECT THE
FUND'S INVESTMENT STRATEGY AND RETURNS?
- - HOW IS CALIFORNIA'S CREDIT QUALITY HOLDING
UP IN LIGHT OF THE STATE'S BUDGET DIFFICULTIES
AND RECENT DISASTERS LIKE THE LOS ANGELES EARTHQUAKE?
- - WHAT'S THE LONGER-TERM OUTLOOK FOR THE CALIFORNIA MUNICIPAL MARKET?
FUND FACTS
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.
2 Standardized yields for Class A and B shares for the 30 days ended June 30,
1994 were 5.28% and 4.72%, respectively. (1)
3 Under the new higher federal tax rates, the value of tax-free income has
increased.
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 6/30/94 $92,000 $225,000 $260,000
- -------------------------------------------------------------------------------
CLASS A1 5.28% 8.44% 9.17% 9.71%
CLASS B1 4.72% 7.54% 8.19% 8.68%
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.
4 Total return at net asset value for Class A shares for the 6- and 12-month
periods ended June 30, 1994 were -6.05% and -1.32%, respectively. For Class
B shares, total return at net asset value for the same periods were -6.42%
and -2.13%, respectively. (2)
5 Average annual total returns for Class A shares for the 1- and 5-year periods
ended June 30, 1994 and since inception on November 3, 1988 were -6.01%,
6.21%, and 6.99% respectively. Average annual total returns for Class B shares
for the 1-year period ended June 30, 1994 and since their inception on May 1,
1993 to June 30, 1994 were -7.03% and -3.60%, respectively.3
6 "California faces significant challenges - for example, how best to
fund education, allocate tax revenues, help the economy grow, and recover
from last year's earthquake. Fortunately, these efforts are supported by
the state's underlying economic strength."
PORTFOLIO MANAGER BOB PATTERSON, JUNE 30, 1994
(1). Standardized yield is net investment income calculated on a
yield-to-maturity basis for the 30-day period ended 6/30/94, divided by the
maximum offering price at the end of the period, compounded semi-annually and
then annualized. Falling net asset values will tend to artificially raise
yields.
(2). Based on the change in net asset value per share from 12/31/93 and 6/30/93
to 6/30/94, without deducting any sales charges.
(3). Average annual total returns are based on a hypothetical investment held
until 6/30/94, after deducting the maximum initial sales charge of 4.75% for
Class A shares and the contingent deferred sales charge of 5% (1 year) and 4%
(since inception) for Class B shares.
All figures assume reinvestment of dividends and capital gains distributions.
Past performance is not indicative to 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
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REPORT TO SHAREHOLDERS
All things considered - and there has been a lot to consider over the last
several months - Oppenheimer California Tax-Exempt Fund met its objective of
providing income exempt from federal and state taxes for the six months ended
June 30, 1994. The Fund continues to produce a level of tax-free income that
would be difficult to match on taxable investments of comparable quality.
The Fund's total return over the last six months was, of course, affected by
the broad decline in bond prices that followed four increases in short-term
interest rates by the Federal Reserve Board from early February through
mid-May.
Throughout the period, however, your management team held to a steady
course. Rather than trying to track temporary turns in the market, your
managers continued to focus on bond quality, call protection, and
diversification - all factors that help moderate price fluctuations and have
contributed to the Fund's long-term performance.
As a result, the Fund today is well positioned to take advantage of what
your managers expect to be a strong California market in the months ahead, a
belief supported by several factors.
First, inflation - the factor that has the greatest effect on long-term bond
values - remains well under control. Barring a sudden shift in the economy or
the markets, interest rates are likely to hold in their current ranges, making
tax-free bonds more attractive to investors.
Second, the municipal market's supply and demand characteristics are
positive. Both new-issue and refunding volumes are running well below last
year's pace, while demand for tax-free securities is rising. California
remains the nation's largest single municipal issuer, and the combination of
shrinking supply and mounting demand nationwide should provide significant
support for California bond prices.
To take advantage of these developments, your managers continue to focus on
essential-service revenue issues which are bonds backed by strong, predictable
revenue streams. We also continue to invest in transportation, housing, and
education bonds - the market sectors likely to turn in the best performances
over time.
Looking ahead, your managers believe that at current price and yield levels
the California market offers real value to investors. While day-to-day market
fluctuations may be greater than has been the case in the past, the
fundamentals for long-term performance are in place, and your managers will
look for opportunities to buy value at attractive prices - the best way to
produce long-term investment gains.
We appreciate your trust in Oppenheimer California Tax-Exempt Fund, and we
look forward to helping you meet your investment goals in the future.
Donald W. Spiro
President
Oppenheimer California Tax-Exempt Fund
July 22, 1994
3 Oppenheimer California Tax-Exempt Fund
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Statement of Investments June 30, 1994 (Unaudited)
Ratings: Moody's/ Face Market Value
S&P's/Fitch's Amount See Note 1
- ------
Municipal Bonds and Notes--98.8%
- ------
California--92.7% Anaheim, California Public Financing Authority
Tax Allocation Revenue Bonds, MBIA Insured,
9.72%, 12/28/18(1) Aaa/AAA $3,000,000 $3,085,194
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California Educational Facilities Authority Revenue Bonds, Stanford University
Project, Series J,
6%, 11/1/09 Aaa/AAA 2,205,000 2,198,224
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California Health Facilities Financing Authority: Revenue Bonds:
AMBAC Insured, 7.625%, 10/1/15 Aaa/AAA/AAA 5,000 5,599
Children's Hospital of Los Angeles, Series A,
7.125%, 6/1/21 A1/A+ 1,000,000 1,118,448
Henry Mayo Newhall Project,
Series A, OSHPD Insured, 8%, 10/1/18 NR/A+ 2,720,000 2,970,963
La Palma Hospital Medical Center,
OSHPD Insured, 7.10%, 2/1/13 NR/A+ 1,875,000 1,919,257
Revenue Refunding Bonds, Catholic Health
Facilities, Series A, MBIA Insured,
5%, 7/1/11 Aaa/AAA 7,500,000 6,555,247
- ------
California Housing Finance Agency Revenue Bonds,
Home Mtg., Series C:
FHA Insured, 7.60%, 8/1/30 Aa/A+ 1,875,000 1,936,402
6.75%, 2/1/25 Aa/A+ 10,000,000 10,139,429
- ------
California Pollution Control Financing Authority,
Pacific Gas and Electric Co.:
Revenue Bonds, Series B,
8.875%, 1/1/10 A1/A 2,275,000 2,563,094
Revenue Refunding Bonds, Series A,
7.50%, 5/1/16 A1/A 1,450,000 1,538,833
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California State Department of Water Resources
Revenue Bonds, Central Valley Water System
Project, Series L, 5.50%, 12/1/23 Aa/AA 13,000,000 11,364,963
- ------
California State Franchise Tax Board Refunding Certificates of Participation,
6.90%, 10/1/06 A1/A 1,000,000 1,073,303
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California State General Obligation Bonds,
FSA Insured, 5.50%, 4/1/19 Aaa/AAA 5,500,000 4,882,383
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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 4,239,576
Regents of the University of California, Prerefunded, Series A,
7%, 9/1/15 Aaa/AAA/AAA 2,500,000 2,771,342
University of California Project, Series A,
AMBAC Insured, 6.40%, 12/1/16 Aaa/AAA/AAA 5,000,000 5,033,649
- ------
Campbell, California Certificates of Participation, Civic Center Project:
Prerefunded, 6.75%, 10/1/17 AAA/A- 1,870,000 2,057,097
6.75%, 10/1/17 A/A- 1,130,000 1,177,157
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Capistrano, California University School District
Community Facilities Special Tax Bonds, No. 87-1,
7.60%, 9/1/14 NR/NR 4,000,000 4,069,911
- ------
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 1,948,561
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Corona, California Certificates of Participation, Prerefunded, Series B,
10%, 11/1/20 Aaa/AAA 8,175,000 10,777,078
4 Oppenheimer California Tax-Exempt Fund
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Ratings: Moody's/ Face Market Value
S&P's/Fitch's Amount See Note 1
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California (continued) Culver City, California Redevelopment Financing
Authority Revenue Bonds, Loan Project, Sr. Lien, Series A, AMBAC Insured,
7.10%, 11/1/10 Aaa/AAA/AAA $75,000 $81,709
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Escondido, California Joint Powers Financing Authority Revenue Bonds, AMBAC
Insured,
6.125%, 9/1/11 Aaa/AAA/AAA 3,500,000 3,481,264
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Fresno, California Water System Revenue Bonds, Prerefunded, Series A,
7.30%, 6/1/20 NR/NR 1,500,000 1,655,278
- ------
Industry, California Improvement Bond Act of 1915 Bonds, Assessment District No.
91-1,
7.65%, 9/2/21 NR/NR 1,750,000 1,751,073
- ------
Intermodal Container Transfer Facility Joint Power Authority California Revenue
Refunding Bonds, Southern Pacific Transportation Co., Series A,
7.70%, 11/1/14 NR/A+ 1,000,000 1,091,118
- ------
La Quinta, California Redevelopment Agency Refunding Tax Allocation Bonds, La
Quinta Project, MBIA Insured,
8.40%, 9/1/12 Aaa/AAA 1,000,000 1,154,500
- ------
Los Angeles, California Community Redevelopment Agency:
Finance Revenue Bonds, Grand Century Qualified Redevelopment, Series A,
5.90%, 12/1/26 A/A 2,600,000 2,206,152
Refunding Tax Allocation Bonds, North Hollywood, Series C, MBIA Insured,
7%, 7/1/15 Aaa/AAA 2,000,000 2,113,318
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Los Angeles, California Department of Water and Power Electric Plant:
Revenue Bonds:
Second Issue 1991, 6%, 6/1/12 Aa/AA 2,500,000 2,417,367
Second Issue 1991, 6%, 6/1/13 Aa/AA 3,200,000 3,057,152
7.375%, 2/1/29 Aa/AA 8,000,000 8,937,511
Revenue Refunding Bonds, 5.375%, 9/1/23 Aa/AA 4,000,000 3,407,251
- ------
Los Angeles County, California Certificates of Participation: Correctional
Facilites Project, MBIA Insured,
6.50%, 9/1/13 Aaa/AAA 4,600,000 4,698,720
6.50%, 3/1/10 A/A 1,500,000 1,526,973
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Los Angeles County, California Transportation Revenue Bonds, Commission Sales
Tax, Prerefunded, Series A: FGIC Insured,
6.75%, 7/1/18 Aaa/AAA/AAA 4,000,000 4,391,904
6.75%, 7/1/11 Aaa/A+/A+ 4,260,000 4,676,952
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M-S-R Public Power Agency of California Revenue Bonds, San Juan Project, Series
C, AMBAC Insured,
6.875%, 7/1/19 Aaa/AAA 2,000,000 2,070,952
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Metropolitan Water District Revenue Bonds, Southern California Waterworks
Project:
5%, 7/1/20 Aa/AA 7,750,000 6,251,025
8.005%, 10/30/20(1) Aa/AA 4,700,000 3,603,908
6%, 7/1/21 Aa/AA 5,000,000 4,738,380
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Oakland, California Redevelopment Agency Tax Allocation Refunding Bonds, MBIA
Insured, 8.273%, 9/1/19(1) Aaa/AAA 4,300,000 3,890,270
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Oakland, California Special Edition Revenue Refunding Bonds, Series A, FGIC
Insured,
7.60%, 8/1/21 Aaa/AAA/AAA 2,000,000 2,182,976
5 Oppenheimer California Tax-Exempt Fund
<PAGE>
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Statement of Investments (Unaudited) (Continued)
Ratings: Moody's/ Face Market Value
S&P's/Fitch's 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
$3,291,579
No. 88-1 Aliso Viejo, Prerefunded, Series A,
7.10%, 8/15/05 NR/NR 1,440,000 1,618,570
No. 88-1 Aliso Viejo, Prerefunded, Series A,
7.35%, 8/15/18 NR/NR 8,000,000 9,122,184
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Paramount, California Redevelopment Agency Tax
Allocation Revenue Bonds, Redevelopment Project
No. 1, Prerefunded, Series A,
9.65%, 6/1/16 NR/AAA/AAA 6,000,000 6,427,080
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Pittsburg, California Improvement Bond Act of 1915
Bonds, Assessment District 1990-01,
7.75%, 9/2/20 NR/NR 1,255,000 1,264,640
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Rancho, California Water District Financing Authority Revenue Refunding Bonds,
AMBAC Insured,
5%, 8/15/14 Aaa/AAA/AAA 4,500,000 3,787,852
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Redding, California Electric System Revenue Certificates of Participation:
FGIC Insured, 8.043%, 6/1/19(1) Aaa/AAA/AAA 4,000,000 3,223,235
MBIA Insured, 9.461%, 7/8/22(1) Aaa/AAA 2,500,000 2,465,547
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Riverside, California Revenue Bonds, Kaiser Permanente, Series A,
9%, 12/1/15 Aa2/AA 2,700,000 2,913,060
- ------
Riverside County, California Community Facilities District Bonds, Special Tax
No. 88-12,
7.55%, 9/1/17 NR/NR 3,000,000 3,030,416
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Sacramento, California Municipal Utility District Electric Revenue Refunding
Bonds: Series B, FGIC Insured,
9.376%, 8/15/18(1) Aaa/AAA/AAA 5,500,000 5,453,855
Series D, MBIA Insured,
5.25%, 11/15/20 Aaa/AAA/A- 2,500,000 2,133,057
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Saddleback Community College District, California Refunding Certificates of
Participation, BIG Insured,
7%, 8/1/19 Aaa/AAA 1,000,000 1,068,458
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San Bernardino County, California Certificates of Participation, Medical Center
Financing Project,
5.50%, 8/1/17 Baa1/A 7,500,000 6,325,957
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San Diego County, California Certificates of Participation, MBIA Insured,
9.596%, 11/18/19(1) Aaa/AAA 2,000,000 2,027,256
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San Diego County, California Water Authority Revenue Certificates of
Participation, Series B, MBIA Insured,
9.28%, 4/8/21(1) Aaa/AAA 3,000,000 2,982,039
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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/AAA 4,385,000 4,429,328
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San Francisco, California City and County Sewer Revenue Refunding Bonds, FGIC
Insured,
5.375%, 10/1/16 Aaa/AAA/AAA 2,000,000 1,754,992
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San Joaquin Hills, California Transportation Corridor Agency Toll Road Revenue
Bonds, Sr. Lien:
6.75%, 1/1/32 NR/NR/BBB 7,000,000 6,697,718
5%, 1/1/33 NR/NR/BBB 8,000,000 5,771,103
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San Jose, California Redevelopment Agency Tax Allocation Bonds, Merged Area
Redevelopment Project, MBIA Insured,
5%, 8/1/20 Aaa/AAA/A 2,000,000 1,633,946
6 Oppenheimer California Tax-Exempt Fund
<PAGE>
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Ratings: Moody's/ Face Market Value
S&P's/Fitch's Amount See Note 1
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California (continued) South Orange County, California Public Financing
Authority Special Tax Revenue Bonds, Sr. Lien, Series A, MBIA Insured,
6.20%, 9/1/13 Aaa/AAA $3,000,000 $2,963,274
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Southern California Home Financing Authority Single Family Mtg. Revenue Bonds,
GNMA and FNMA Mtg.-Backed Securities, Series A,
7.35%, 9/1/24 NR/AAA 1,670,000 1,741,401
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Southern California Public Power Authority: Revenue Bonds, San Juan Unit 3,
Series A, MBIA Insured,
5%, 1/1/20 Aaa/AAA 3,000,000 2,455,962
Revenue Refunding Bonds,
8.848%, 7/1/12(1) Aa/AA- 5,500,000 5,213,637
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University of California Revenue Refunding Bonds, Multiple Purpose Project,
Series A,
6.875%, 9/1/16 A/A- 2,200,000 2,440,270
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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 2,344,259
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247,392,138
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U.S. Possessions--6.1% Puerto Rico Commonwealth Highway and
Transportation Authority Revenue Bonds:
Prerefunded, Series T, 6.625%, 7/1/18 NR/AAA 995,000 1,093,100
Prerefunded, Series T, 6.50%, 7/1/22 NR/AAA 2,050,000 2,236,209
Series T, 6.625%, 7/1/18 Baa1/A 4,005,000 4,087,126
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Puerto Rico Commonwealth Public Improvement General Obligation Bonds, YCNS, MBIA
Insured,
8.314%, 7/1/08(1) Aaa/AAA 3,500,000 3,541,447
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Puerto Rico Electric Power Authority Revenue Bonds, Series P,
7%, 7/1/21 Baa1/A- 4,000,000 4,178,992
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Puerto Rico Housing Finance Corp. Single Family Mtg. Revenue Bonds, Portfolio 1,
Series B,
7.65%, 10/15/22 Aaa/AAA 1,195,000 1,231,598
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16,368,472
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Total Investments, at Value (Cost $268,452,425) 98.8% 263,760,610
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Other Assets Net of Liabilities 1.2 3,158,752
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Net Assets 100.0% $266,919,362
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1. Represents the current interest rate for a variable rate bond. Variable rate
bonds known as ``inverse floaters'' pay interest at a rate that varies inversely
with short-term interest rates. As interest rates rise, inverse floaters produce
less current income.
Their price may be more volatile than the price of a comparable fixed-rate
security.
See accompanying Notes to Financial Statements.
7 Oppenheimer California Tax-Exempt Fund
<PAGE>
- ------
Statement of Assets and Liabilities June 30, 1994 (Unaudited)
- ------
Assets Investments, at value (cost $268,452,425)-
- -see accompanying statement $263,760,610
- ------
Cash 316,567
- ------
Receivables:
Interest 4,778,155
Shares of beneficial interest sold 288,434
Investments sold
- ------
Other 16,228
- ------
Total assets 269,159,994
- ------
Liabilities Payables and other liabilities:
Shares of beneficial interest redeemed 996,421
Dividends 844,504
Distribution and service plan fees--Note 4 165,702
Other 234,005
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Total liabilities 2,240,632
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Net Assets $266,919,362
- ------
- ------
- ------
Composition of
Net Assets
Paid-in capital $270,309,501
Undistributed net investment income 6,995
Accumulated net realized gain from investment transactions 1,294,681
Net unrealized depreciation on investments--Note 3 (4,691,815)
- ------
Net assets $266,919,362
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- ------
- ------
Net Asset Value
Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$249,150,340 and 24,880,099 shares of beneficial interest outstanding)
$10.01 Maximum offering price per share (net asset value plus sales charge of
4.75% of offering price) $10.51
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Class B Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $17,769,022 and 1,773,696 shares of beneficial interest outstanding)
$10.02
See accompanying Notes to Financial Statements.
8 Oppenheimer California Tax-Exempt Fund
<PAGE>
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Statement of Operations For the Six Months Ended June 30, 1994 (Unaudited)
- ------
Investment Income Interest $9,116,496
- ------
Expenses Management fees--Note 4 785,979
- ------
Distribution and service plan fees:
Class A--Note 4 313,036
Class B--Note 4 66,977
- ------
Transfer and shareholder servicing agent fees--Note 4 49,157
- ------
Shareholder reports 27,624
- ------
Legal and auditing fees 26,336
- ------
Custodian fees and expenses 15,584
- ------
Trustees' fees and expenses 6,319
- ------
Registration and filing fees:
Class A 1,267
Class B 2,956
- ------
Other 39,197
- ------
Total expenses 1,334,432
- ------
Net Investment Income 7,782,064
- ------
Realized and Unrealized
Gain (Loss) on Investments
Net realized gain on investments 1,505,657
- ------
Net change in unrealized appreciation or depreciation on investments
(26,235,772)
- ------
Net realized and unrealized loss on investments (24,730,115)
- ------
Net Decrease in Net Assets Resulting From Operations $(16,948,051)
- ------
- ------
See accompanying Notes to Financial Statements.
9 Oppenheimer California Tax-Exempt Fund
<PAGE>
- ------
Statements of Changes in Net Assets
Six Months Ended Year Ended
June 30, 1994 December 31,
(Unaudited) 1993
- ------
Operations Net investment income $7,782,064 $14,239,272
- ------
Net realized gain on investments 1,505,657 1,489,475
- ------
Net change in unrealized appreciation or depreciation
on investments (26,235,772) 14,305,322
- ------ ------
Net increase (decrease) in net assets resulting from operations
(16,948,051) 30,034,069
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Dividends and
Distributions to
Shareholders
Dividends from net investment income:
Class A ($.302 and $.648 per share, respectively) (7,424,528)
(14,653,931)
Class B ($.260 and $.361 per share, respectively) (332,029) (163,836)
- ------
Distributions from net realized gain on investments:
Class A ($.072 per share) -- (1,740,286)
Class B ($.072 per share) -- (60,371)
- ------
Beneficial Interest
Transactions
Net increase in net assets resulting from Class A
beneficial interest transactions--Note 2 6,209,364 48,808,693
- ------
Net increase in net assets resulting from Class B
beneficial interest transactions--Note 2 9,003,458 9,837,578
- ------
Net Assets Total increase (decrease) (9,491,786) 72,061,916
- ------
Beginning of period 276,411,148 204,349,232
- ------ ------
End of period (including undistributed net investment
income of $6,995 and $275,259, respectively) $266,919,362 $276,411,148
- ------ ------
- ------ ------
See accompanying Notes to Financial Statements.
10 Oppenheimer California Tax-Exempt Fund
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- ------
Financial Highlights
Class A Class B
- ------ ------
Six Months Six Months
Ended Year Ended Ended Period Ended
June 30, 1994 December 31, June 30, 1994 December 31,
(Unaudited) 1993 1992 1991 1990 1989(Unaudited) 1993(1)
- ------
Per Share Operating Data:
Net asset value, beginning
of period $10.97 $10.35 $10.22 $9.86 $9.94 $9.58 $10.98 $10.72
- ------
Income (loss) from investment operations:
Net investment income
.30 .62 .61 .66 .67 .71 .27 .35
Net realized and unrealized gain (loss) on investments
(.96) .72 .20 .38 (.07) .37 (.97) .34
- ------ ------ ------ ------ ------ ------ ------
- ------
Total income (loss) from investment operations
(.66) 1.34 .81 1.04 .60 1.08 (.70) .69
- ------
Dividends and distributions to shareholders:
Dividends from net investment income
(.30) (.65) (.60) (.62) (.68) (.70) (.26) (.36)
Distributions from net realized gain on investments
-- (.07) (.08) (.06) -- (.02) -- (.07)
- ------ ------ ------ ------ ------ ------ ------
- ------
Total dividends and distributions to shareholders
(.30) .72 (.68) (.68) (.68) (.72) (.26) (.43)
- ------
Net asset value, end of period
$10.01 $10.97 $10.35 $10.22 $9.86 $9.94 $10.02 $10.98
- ------ ------ ------ ------ ------ ------ ------
- ------
- ------ ------ ------ ------ ------ ------ ------
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- ------
Total Return, at Net Asset Value(2)
(6.05)% 13.26% 8.28% 10.93% 6.38% 11.62% (6.42)% 6.66%
- ------
Ratios/Supplemental Data:
Net assets, end of period (in thousands)
$249,150 $266,490 $204,349 $145,163 $92,514 $52,342 $17,769 $9,921
- ------
Average net assets (in thousands)
$256,410 $245,193 $174,055 $115,661 $72,879 $29,308 $13,503 $5,218
- ------
Number of shares outstanding at end of period (in thousands)
24,880 24,290 19,738 14,200 9,386 5,268 1,774 904
- ------
Ratios to average net assets:
Net investment income
5.86%(3) 5.74% 6.07% 6.52% 6.80% 7.11% 4.97%(3) 4.57%(3)
Expenses, before voluntary assumption by the Manager
.96%(3) .97% 1.07% 1.05% 1.05% 1.09% 1.74%(3) 1.79%(3)
Expenses, net of voluntary assumption by the Manager
N/A N/A N/A .73% .53% .16% N/A N/A
- ------
Portfolio turnover rate(4)
11.3% 13.7% 26.8% 26.6% 14.5% 20.7% 11.3% 13.7%
1. For the period from May 1, 1993 (inception of offering) to December 31, 1993.
2. 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.
3. Annualized.
4. 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 six
months ended June 30, 1994 were $43,258,277 and $30,071,358, respectively.
See accompanying Notes to Financial Statements.
11 Oppenheimer California Tax-Exempt Fund
<PAGE>
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Notes to Financial Statements (Unaudited)
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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 six months
ended June 30, 1994, a provision of $6,317 was made for the Fund's projected
benefit obligations, resulting in an accumulated liability of $70,663. 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 day the New York
Stock Exchange is open for business and pay such dividends monthly.
Distributions from net realized gains on investments, if any, will be declared
at least once each year.
- ------
Change in Accounting for Distributions to Shareholders. Effective January 1,
1994, the Fund adopted Statement of Position 93-2: Determination, Disclosure,
and Financial Statement Presentation of Income, Capital Gain, and Return of
Capital Distributions by Investment Companies. As a result, the Fund changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions determined in
accordance with income tax regulations. Accordingly, subsequent to December 31,
1993, amounts have been reclassified to reflect a decrease in undistributed net
investment income of $293,771, and an increase in undistributed capital gain on
investments of $293,771.
- ------
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date). Original issue discount on securities purchased
is amortized over the life of the respective securities, in accordance with
federal income tax requirements. 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. For bonds
acquired after April 30, 1993, accrued market discount is recognized at maturity
or disposition as taxable ordinary income. Taxable ordinary income is realized
to the extent of the lesser of gain or accrued market discount.
12 Oppenheimer California Tax-Exempt Fund
<PAGE>
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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:
Six Months Ended June 30, 1994 Year Ended December 31, 1993(1)
- ------ ------
Shares Amount Shares Amount
- ------
Class A:
Sold 2,857,688 $29,664,180 7,029,778 $75,603,080
Dividends and distributions reinvested
428,622 4,469,461 913,845 9,891,046
Redeemed (2,695,961) (27,924,277) (3,391,817) (36,685,433)
- ------ ------ ------ ------
Net increase 590,349 $6,209,364 4,551,806 $48,808,693
- ------ ------ ------ ------
- ------ ------ ------ ------
- ------
Class B:
Sold 967,776 $10,012,033 916,412 $9,977,857
Dividends and distributions reinvested
20,761 215,617 12,695 139,138
Redeemed (118,693) (1,224,191) (25,255) (279,417)
- ------ ------ ------ ------
Net increase 869,844 $9,003,459 903,852 $9,837,578
- ------ ------ ------ ------
- ------ ------ ------ ------
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.
- ------
3. Unrealized Gains and Losses on Investments
At June 30, 1994, net unrealized depreciation on investments of $4,691,815 was
composed of gross appreciation of $5,791,459, and gross depreciation of
$10,483,274.
- ------
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 $1.0 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 six months ended June 30, 1994, commissions (sales charges paid by
investors) on sales of Class A shares totaled $596,313, of which $121,170 was
retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. During the
six months ended June 30, 1994, OFDI received contingent deferred sales charges
of $29,622 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, each class may expend up to .25% of its net
assets annually to reimburse OFDI 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 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, the Board of Trustees may
allow the Fund to continue payment of the asset-based sales charge to OFDI for
distribution expenses incurred on Class B shares sold prior to termination or
discontinuance of the plan. During the six months ended June 30, 1994, OFDI paid
$9,566 to an affiliated broker/dealer as reimbursement for Class A personal
service and maintenance expenses and retained $66,455 as reimbursement for Class
B sales commissions and service fee advances, as well as financing costs.
13 Oppenheimer California Tax-Exempt Fund
<PAGE>
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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
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
- ------
Investment Advisor Oppenheimer Management Corporation
- ------
Distributor Oppenheimer Funds Distributor, Inc.
- ------
Transfer and Shareholder
Servicing Agent
Oppenheimer Shareholder Services
- ------
Custodian of
Portfolio Securities
Citibank, N.A.
- ------
Independent Auditors KPMG Peat Marwick
- ------
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
The financial statements included herein have been taken from the records of the
Fund without examination by the independent auditors.
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.
14 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 1.8 million shareholder accounts and more than $26
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.
- ------
Specialty Stock Fund Gold & Special Minerals 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
Total Return Fund
Global Growth & Income Fund
Equity Income Fund
Asset Allocation Fund
- ------
Bond Funds
High Yield Fund
Champion High Yield Fund
Strategic Income & Growth Fund
Strategic Income Fund
Strategic Diversified Income Fund
Strategic Investment Grade Bond Fund
Strategic Short-Term Income Fund
Investment Grade Bond Fund
Mortgage Income Fund
U.S. Government Trust
Limited-Term Government2
- ------
Tax-Exempt Funds
New York Tax-Exempt Fund3
California Tax-Exempt Fund3
Pennsylvania Tax-Exempt Fund3
Florida Tax-Exempt Fund3
New Jersey Tax-Exempt Fund3
Tax-Free Bond Fund
Insured Tax-Exempt Bond Fund
Intermediate Tax-Exempt Bond Fund
- ------
Money Market Funds Money Market Fund Cash Reserves
1. The fee is waived for PhoneLink exchanges between existing accounts. Exchange
privileges are subject to change or termination.
2. Formerly Government Securities Fund.
3. Available only to residents of those states.
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.
15 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 transactionswith 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
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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 mutual 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 and get the help you need.
"When you want to make account transactions, it's 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 a 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 the hours shown to the left.
"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 awarded Oppenheimer Shareholder Services a 1993 Award of Excellence
for consistently demonstrating superior customer service.
"Whatever your needs, we're ready to assist you."
[Logo]
OPPENHEIMER FUNDS
[Photo]
Barbra Hennigar
Chief Executive Officer
Oppenheimer Shareholder Services
Oppenheimer Funds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
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