<PAGE>
OPPENHEIMER CALIFORNIA TAX-EXEMPT FUND
Semiannual Report June 30, 1995
[PHOTO]
"We want investment income that won't add to our taxes."
[LOGO] OPPENHEIMERFUNDS
<PAGE>
NEWS
=================================
STANDARDIZED YIELD
- ---------------------------------
For the 30 Days Ended 6/30/95:(4)
Class A
- ---------------------------------
4.82%
- ---------------------------------
Class B
- ---------------------------------
4.27%
- ---------------------------------
- ---------------------------------
BEAT THE AVERAGE
- ---------------------------------
Total Return for the 1-Year
Period Ended 6/30/95:
Oppenheimer California Tax-Exempt Fund
(at net asset value)(2)
- ---------------------------------
8.55%
- ---------------------------------
Lipper California Municipal
Debt Fund Average(5)
- ---------------------------------
7.58%
- ---------------------------------
This Fund is for people who want to earn INCOME that's EXEMPT from taxes.
HOW YOUR FUND IS MANAGED
Oppenheimer California Tax-Exempt Fund invests in a diversified portfolio of
California municipal bonds. As a Fund shareholder, you receive income that is
free from federal and California income taxes.(1) Your dividends don't increase
your taxable income the way taxable investments do, so you can keep more of what
you earn.
California Tax-Exempt Fund is managed by an experienced team of municipal
bond specialists who research investments thoroughly before they are included in
the Fund's portfolio.
PERFORMANCE
Total return at net asset value for the 6 months ended 6/30/95 was 11.45% for
Class A shares and 11.14% for Class B shares.(2)
Your Fund's average annual total returns at maximum offering price for
Class A shares for the 1- and 5-year periods ended 6/30/95 and since inception
of the Class on 11/3/88 were 3.40%, 6.56% and 7.23%, respectively. For Class B
shares, average annual total returns for the 1-year period ended 6/30/95 and
since inception of the Class on 5/1/93 were 2.61% and 2.07%, respectively.(3)
OUTLOOK
"We believe the current market is fairly valued. There are still plenty of
positives, along with a good supply and demand relationship. As far as the Fund
is concerned, in the first half of the year, we realized significant
appreciation. For the remainder of the year, we expect a stable market. Relative
to other fixed income securities and aganst a low inflation backdrop, the
outlook for muni bonds is very good."
Robert Patterson, Portfolio Manager
June 30, 1995
All figures assume reinvestment of dividends and capital gains distributions.
Past performance is not indicative of future results. Investment and principal
value on an investment in the Fund will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than the original cost.
1. A portion of the distributions paid by the Fund may be subject to federal and
state income taxes. For investors subject to federal and/or state alternative
minimum tax (AMT), the Fund's distributions may increase this tax. Capital gains
distributions, if any, are taxed as capital gains.
2. Based on the change in net asset value per share for the period shown,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
3. Class A returns show results of hypothetical investments on 6/30/94, 6/30/90
and 11/3/88(inception of class), after deducting the current maximum initial
sales charge of 4.75%. The Fund's maximum sales charge for Class A shares was
higher during a portion of some of the periods shown, and actual investment
results will be different as a result of the change. Class B returns show
results of hypothetical investments on 6/30/94 and 5/1/93 (inception of class),
and the deduction of the applicable contingent deferred sales charge of 5%
(1-year) and 3% (since inception). An explanation of the different performance
calculations is in the Fund's prospectus.
4. Standardized yield is net investment income calculated on a yield-to-maturity
basis for the 30-day period ended 6/30/95, divided by the maximum offering price
at the end of the period, compounded semiannually and then annualized. Falling
net asset values will tend to artificially raise yields.
5. Source: Lipper Analytical Services. The Lipper total return average for the
1-year period was for 85 California municipal debt funds. The average is shown
for comparative purposes only. Oppenheimer California Tax-Exempt Fund is
characterized by Lipper as a California municipal debt fund. Lipper performance
does not take sales charges into consideration.
2 Oppenheimer California Tax-Exempt Fund
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[PHOTO]
Donald W. Spiro
President
Oppenheimer California Tax-Exempt Fund
[PHOTO]
Jon S. Fossel
Chairman and CEO
Oppenheimer Management Corporation
Dear OppenheimerFunds Shareholder,
In contrast to last year, the first half of 1995 has been exceptionally good for
the bond market. Almost all types of bonds have participated in the upswing and,
in many cases, have more than made up for last year's declines in the first half
alone--rewarding investors who were patient through the market's short-term
difficulties. The strength of the current market adds to evidence showing, once
again, that profitable investing calls for a long-term perspective.
The single most important factor behind the rally was a change in the
Federal Reserve's monetary policy. From February 1994 to February 1995, the Fed
raised rates aggressively to preempt possible inflation by slowing the economy
to a more moderate growth rate, thus prolonging the current cycle of economic
growth. As evidence began to mount that indicated the economy was indeed
slowing, the Fed stopped raising rates.
Like most bonds, municipal bonds benefited from the Fed's moves, but they
also gained for a number of other reasons. First, the income municipal or tax-
free bonds pay is currently very attractive compared to the after-tax income
from other fixed income investments. This has made them appealing to investors
whose primary goal is income. In addition, relatively short supply and
increased demand for municipal bonds--particularly in regions with high tax
rates--have supported higher prices.
We believe the municipal bond market is strong today; however, the ongoing
congressional budget talks may have an effect as the year continues. State
governments are under financial pressure as the Federal government moves to
reduce the deficit. Thus, states and municipalities may find that although they
will be in a position of having greater say over how money is spent locally,
they will have less money overall--lowering the ratings of some bonds, thus
decreasing the number of quality issues available. Careful credit analysis will
play an even more important role in selecting investments. The good news is that
your managers have always believed in careful analysis and will continue to
steer the Fund toward promising investment opportunities.
Going forward, your Fund's management team is optimistic, but somewhat more
conservative. Municipal bonds have experienced tremendous capital appreciation
during the first half of this year, and your managers want to avoid giving back
gains the Fund has made. Our goal remains to combine the income needs of our
shareholders with a desire to limit risk. Your managers believe the Fund will be
in a strong position to do both for the remainder of the year and in the future.
Your portfolio manager discusses the outlook for your Fund on the following
pages. Thank you for your confidence in OppenheimerFunds, and we look forward to
helping you continue to reach your investment goals in the future.
/s/ Donald W. Spiro /s/ Jon S. Fossel
Donald W. Spiro Jon S. Fossel
July 24, 1995
3 Oppenheimer California Tax-Exempt Fund
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Q+A [PHOTO] [PHOTO]
Q What is your outlook for the municipal market?
[PHOTO]
AN INTERVIEW WITH YOUR FUND'S MANAGER.
THE FUND HAS PERFORMED VERY WELL OVER THE LAST 12 MONTHS, AS IT BEAT THE LIPPER
CALIFORNIA MUNICIPAL DEBT FUND AVERAGE FOR THE 1-YEAR PERIOD ENDED JUNE 30,
1995. WHAT FACTORS AFFECTED THE MUNICIPAL BOND MARKET SINCE THE LAST REPORT?
Municipal bonds had a strong run since Thanksgiving of last year and
particularly in the first quarter of this year. Toward the end of last year,
interest rates began to decline and the fixed income markets started to rally,
and most bonds participated in the rally. This, in turn, increased demand for
municipal bonds and put pressure on already short supply. As a result, the
increased demand and short supply pushed prices higher. Thus, municipal bonds
experienced significant capital appreciation over the past six months.
Because we anticipated the rally, the Fund was well positioned, and we were
able to take advantage of the positive market environment.
WHAT CHANGES HAVE YOU MADE AS A RESULT OF THE BOND RALLY?
Most of the changes we made occurred last November, when we began to anticipate
a turnaround.
We've increased our holdings of prerefunded and insured bonds in the
portfolio--these issues were hit hardest in 1994's tough market, so they've
provided the greatest appreciation since the turnaround.
We've also been selling positions in par bonds, which we bought at a
discount and which have now reached par value. Our thinking here is that having
reached par, they may underperform in the future.(1)
WITH A RECORD NUMBER OF BOND CALLS EXPECTED THIS SUMMER, HOW ARE YOU POSITIONING
THE PORTFOLIO TO PROTECT INCOME?
The calls--or built-in opportunities for issuers to buy back bonds prior to
maturity--we
(1) The fund's portfolio is subject to change.
4 Oppenheimer California Tax-Exempt Fund
<PAGE>
expect to see will continue to bolster the favorable supply/demand
characteristics in the muni bond market.
Other than that, we don't expect to feel much effect from the number of
bond calls. We invest primarily in bonds with "call protection," a feature that
allows us to be the ones who
FACING PAGE
Top left: Robert Patterson, Portfolio Manager
Top Right: The trading desk
Bottom left: Len Darling, Executive VP, Director of Fixed Income Investments,
with Jon Fossel, CEO and Chairman, Oppenheimer Management Corporation
THIS PAGE
Right: Robert Patterson
Below: Len Darling and Caryn Halbrecht, Tax-Exempt Portfolio Manager
(A) The long-term outlook for the market remains positive.
[PHOTO]
decide how long we'll own a bond. We've always considered call protection an
important feature, so the Fund is fairly well insulated against call risk.
WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET?
Favorable economic fundamentals and strong technical factors, namely the
imbalance between supply and demand, continue to create a positive environment
for municipal bonds going forward.
This year, demand for municipal bonds is expected to outstrip supply, which
we believe should continue. While this "positive" for munis has been briefly
offset by concerns for various tax reform proposals, we believe that these fears
are overblown and the long-term outlook for the market remains positive.
WHAT IS YOUR OUTLOOK FOR THE FUND?
We believe the current market is fairly valued. As stated before, there are
still plenty of positives, along with a good supply and demand relationship.
As far as the Fund is concerned, in the first half of the year, we realized
significant appreciation. For the remainder of the year, we expect a stable
market.
Relative to other fixed income securities and against a low inflation
backdrop, the outlook for the Fund is very good. Investors were well compensated
for waiting out last year's market, and we believe the current strength should
persist through 1995 and into next year.
[PHOTO]
5 Oppenheimer California Tax-Exempt Fund
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<TABLE>
<CAPTION>
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STATEMENT OF INVESTMENTS June 30, 1995 (Unaudited)
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RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
==================================================================================================================================
<S> <C> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--99.5%
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CALIFORNIA--89.6% Anaheim, California Public Financing Authority
Tax Allocation Revenue Bonds, MBIA Insured,
6.45%, 12/28/18 Aaa/AAA $ 6,000,000 $ 6,222,341
---------------------------------------------------------------------------------------------------------
California Health Facilities Financing Authority
Revenue Bonds, Children's Hospital of
Los Angeles, Prerefunded, Series A, 7.125%, 6/1/21 NR/A+ 1,000,000 1,144,522
---------------------------------------------------------------------------------------------------------
California Health Facilities Financing Authority
Revenue Bonds, Henry Mayo Newhall Project,
Series A, OSHPD Insured, 8%, 10/1/18 NR/A 3,000,000 3,267,696
---------------------------------------------------------------------------------------------------------
California Health Facilities Financing Authority
Revenue Bonds, La Palma Hospital Medical Center,
OSHPD Insured, 7.10%, 2/1/13 NR/A 1,875,000 1,950,827
---------------------------------------------------------------------------------------------------------
California Health Facilities Financing Authority
Revenue Refunding Bonds, Catholic Health
Care West, Series A, MBIA Insured, 5%, 7/1/11 Aaa/AAA 7,500,000 6,821,556
---------------------------------------------------------------------------------------------------------
California Housing Finance Agency Revenue Bonds,
Home Mtg., Series C, 6.75%, 2/1/25 Aa/AA- 10,000,000 10,131,540
---------------------------------------------------------------------------------------------------------
California Housing Finance Agency Revenue Bonds,
Home Mtg., Series C, FHA Insured, 7.60%, 8/1/30 Aa/AA- 1,655,000 1,756,546
---------------------------------------------------------------------------------------------------------
California Housing Finance Agency Single
Family Mtg. Purchase Revenue Bonds, Series A-2,
6.45%, 8/1/25 Aaa/AAA 8,000,000 8,038,559
---------------------------------------------------------------------------------------------------------
California Pollution Control Financing Authority
Revenue Bonds, Pacific Gas & Electric Co.,
Series B, 8.875%, 1/1/10 A2/A 2,275,000 2,506,381
---------------------------------------------------------------------------------------------------------
California Pollution Control Financing Authority
Revenue Refunding Bonds, Pacific Gas & Electric Co.,
Series A, 7.50%, 5/1/16 A2/A 1,450,000 1,511,410
---------------------------------------------------------------------------------------------------------
California State Franchise Tax Board Refunding
Certificates of Participation, 6.90%, 10/1/06 A/A- 1,000,000 1,067,034
---------------------------------------------------------------------------------------------------------
California State General Obligation Bonds,
FSA Insured, 5.50%, 4/1/19 Aaa/AAA/A 5,500,000 5,101,250
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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- 3,600,000 3,448,152
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California State Public Works Board Lease
Revenue Bonds, Regents of the University of
California, Prerefunded, Series A, 7%, 9/1/15 Aaa/AAA/AAA 2,650,000 2,987,867
</TABLE>
6 Oppenheimer California Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
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RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
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<S> <C> <C> <C> <C>
CALIFORNIA (continued) California State Public Works Board Lease
Revenue Bonds, University of California Project,
Series A, AMBAC Insured, 6.40%, 12/1/16 Aaa/AAA/AAA $ 5,000,000 $ 5,185,695
---------------------------------------------------------------------------------------------------------
Campbell, California Certificates of Participation,
Civic Center Project, 6.75%, 10/1/17 A/A- 1,130,000 1,168,060
---------------------------------------------------------------------------------------------------------
Campbell, California Certificates of Participation,
Civic Center Project, Prerefunded, 6.75%, 10/1/17 Aaa/NR 1,870,000 2,109,932
---------------------------------------------------------------------------------------------------------
Capistrano, California Unified School District
Community Facilities District Special Tax Bonds,
No. 87-1, 7.60%, 9/1/14 NR/NR 4,000,000 3,843,791
---------------------------------------------------------------------------------------------------------
Cathedral City, California Improvement Bond
Act of 1915 Bonds, Limited Obligation Assessment
District No. 88-3, 7.85%, 9/2/11 NR/NR 1,975,000 2,034,694
---------------------------------------------------------------------------------------------------------
Corona, California Certificates of Participation,
Prerefunded, Series B, 10%, 11/1/20 Aaa/AAA 13,175,000 17,612,365
---------------------------------------------------------------------------------------------------------
Escondido, California Joint Powers Financing
Authority Revenue Bonds, AMBAC Insured,
6.125%, 9/1/11 Aaa/AAA/AAA 3,500,000 3,585,435
---------------------------------------------------------------------------------------------------------
Foothill/Eastern Transportation Corridor Agency
California Toll Road Revenue Bonds, Sr. Lien,
Series A, 6.50%, 1/1/32 NR/BBB- /BBB 4,600,000 4,438,687
---------------------------------------------------------------------------------------------------------
Fresno, California Water System Revenue Bonds,
Prerefunded, Series A, 7.30%, 6/1/20 NR/NR 1,500,000 1,649,086
---------------------------------------------------------------------------------------------------------
Industry, California Improvement Bond Act
of 1915 Bonds, Assessment District No. 91-1,
7.65%, 9/2/21 NR/NR 1,750,000 1,751,291
---------------------------------------------------------------------------------------------------------
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 1,066,773
---------------------------------------------------------------------------------------------------------
La Quinta, California Redevelopment Agency
Refunding Tax Allocation Bonds, La Quinta Project,
8.40%, 9/1/12 Aaa/AAA 1,000,000 1,189,285
---------------------------------------------------------------------------------------------------------
Los Angeles County, California Certificates of
Participation, 6.50%, 3/1/10 A/A 1,500,000 1,538,913
---------------------------------------------------------------------------------------------------------
Los Angeles County, California Certificates of
Participation, Correctional Facilities Project,
MBIA Insured, 6.50%, 9/1/13 Aaa/AAA 3,600,000 3,760,747
---------------------------------------------------------------------------------------------------------
Los Angeles County, California Transportation
Revenue Bonds, Commission Sales Tax,
Prerefunded, Series A, 6.75%, 7/1/11 Aaa/AA- /A+ 4,260,000 4,793,343
---------------------------------------------------------------------------------------------------------
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 4,500,792
</TABLE>
7 Oppenheimer California Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited)(Continued)
---------------------------------------------------------------------------------------------------------
RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CALIFORNIA (continued) Los Angeles, California Community Redevelopment
Agency Financing Authority Revenue Bonds,
Grand Century Qualified Redevelopment, Series A,
5.90%, 12/1/26 A/A $ 2,600,000 $ 2,291,739
---------------------------------------------------------------------------------------------------------
Los Angeles, California Community Redevelopment
Agency Tax Allocation Refunding Bonds,
North Hollywood, Series C, MBIA Insured, 7%, 7/1/15 Aaa/AAA 2,000,000 2,113,518
---------------------------------------------------------------------------------------------------------
Los Angeles, California Convention & Exhibition
Center Authority Refunding Certificates of
Participation, Prerefunded, Series A,
7.375%, 8/15/18 Aaa/AAA 3,000,000 3,361,710
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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/AAA 2,000,000 2,095,094
---------------------------------------------------------------------------------------------------------
Metropolitan Water District of Southern California
Revenue Bonds, Waterworks Project, 5%, 7/1/20 Aa/AA 7,750,000 6,725,915
---------------------------------------------------------------------------------------------------------
Metropolitan Water District of Southern California
Revenue Bonds, Waterworks Project, Inverse Floater,
6.05%, 10/30/20(1) Aa/AA 4,700,000 3,948,000
---------------------------------------------------------------------------------------------------------
Northern California Transmission Agency Revenue
Bonds, California-Oregon Transmission Project,
Prerefunded, Series A, MBIA Insured, 7%, 5/1/24 Aaa/AAA 5,500,000 6,132,279
---------------------------------------------------------------------------------------------------------
Oakland, California Redevelopment Agency
Tax Allocation Refunding Bonds, MBIA Insured,
Inverse Floater, 7.713%, 9/1/19(1) Aaa/AAA 4,300,000 3,855,384
---------------------------------------------------------------------------------------------------------
Oakland, California Revenue Refunding Bonds,
Series A, FGIC Insured, 7.60%, 8/1/21 Aaa/AAA/AAA 2,000,000 2,161,498
---------------------------------------------------------------------------------------------------------
Orange County, California Community Facilities
District No. 87-3 Special Tax Bonds, Prerefunded,
Series A, 8.05%, 8/15/08 NR/NR 3,000,000 3,379,878
---------------------------------------------------------------------------------------------------------
Orange County, California Community Facilities
District Special Tax Bonds, No. 88-1 Aliso Viejo,
Prerefunded, Series A, 7.10%, 8/15/05 NR/AAA 1,440,000 1,667,782
---------------------------------------------------------------------------------------------------------
Orange County, California Community Facilities
District Special Tax Bonds, No. 88-1 Aliso Viejo,
Prerefunded, Series A, 7.35%, 8/15/18 NR/AAA 8,000,000 9,369,383
---------------------------------------------------------------------------------------------------------
Pittsburg, California Improvement Bond Act of 1915
Bonds, Assessment District 1990-01, 7.75%, 9/2/20 NR/NR 1,235,000 1,272,123
---------------------------------------------------------------------------------------------------------
Rancho California Water District Financing
Authority Revenue Refunding Bonds,
AMBAC Insured, 5%, 8/15/14 Aaa/AAA/AAA 4,500,000 4,001,193
---------------------------------------------------------------------------------------------------------
Redding, California Electric System Revenue
Certificates of Participation, FGIC Insured,
Inverse Floater, 7.10%, 6/28/19(1) Aaa/AAA/AAA 4,000,000 3,567,524
---------------------------------------------------------------------------------------------------------
Redding, California Electric System Revenue
Certificates of Participation, MBIA Insured,
Inverse Floater, 8.396%, 7/8/22(1) Aaa/AAA 2,500,000 2,677,927
</TABLE>
8 Oppenheimer California Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
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RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
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<S> <C> <C> <C> <C>
CALIFORNIA (continued) Riverside County, California Community Facilities
District Bonds, Special Tax No. 88-12, 7.55%, 9/1/17 NR/NR $ 3,000,000 $ 3,014,319
---------------------------------------------------------------------------------------------------------
Sacramento, California Cogeneration Authority
Revenue Bonds, Procter & Gamble Project,
6.50%, 7/1/14 NR/BBB- 5,000,000 4,956,960
---------------------------------------------------------------------------------------------------------
Sacramento, California Municipal Utility District
Electric Revenue Bonds, Prerefunded, Series W,
7.50%, 8/15/18 Aaa/AAA/A- 2,500,000 2,735,252
---------------------------------------------------------------------------------------------------------
Sacramento, California Municipal Utility District
Electric Revenue Refunding Bonds, Series B,
FGIC Insured, Inverse Floater, 8.261%, 8/15/18(1) Aaa/AAA/AAA 5,500,000 5,439,659
---------------------------------------------------------------------------------------------------------
Sacramento, California Municipal Utility District
Electric Revenue Refunding Bonds, Series D,
MBIA Insured, 5.25%, 11/15/20 Aaa/AAA/A- 2,500,000 2,248,052
---------------------------------------------------------------------------------------------------------
Saddleback Community College District,
California Refunding Certificates of Participation,
BIG Insured, 7%, 8/1/19 Aaa/AAA 1,000,000 1,059,241
---------------------------------------------------------------------------------------------------------
San Bernardino County, California Certificates
of Participation, Medical Center Financing Project,
5.50%, 8/1/17 Baa1/A- 7,500,000 6,446,497
---------------------------------------------------------------------------------------------------------
San Diego County, California Certificates of
Participation, MBIA Insured, Inverse Floater,
8.446%, 11/18/19(1) Aaa/AAA 2,000,000 2,095,948
---------------------------------------------------------------------------------------------------------
San Diego County, California Water Authority
Revenue Certificates of Participation, Series B,
MBIA Insured, Inverse Floater, 8.07%, 4/8/21(1) Aaa/AAA 3,000,000 3,034,515
---------------------------------------------------------------------------------------------------------
San Francisco, California City & 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 4,549,836
---------------------------------------------------------------------------------------------------------
San Francisco, California City & County Sewer
Revenue Refunding Bonds, FGIC Insured,
5.375%, 10/1/16 Aaa/AAA/AAA 2,000,000 1,854,106
---------------------------------------------------------------------------------------------------------
San Joaquin Hills, California Transportation
Corridor Agency Toll Road Revenue Bonds,
Sr. Lien, 5%, 1/1/33 NR/NR/BBB 8,000,000 6,115,320
---------------------------------------------------------------------------------------------------------
San Joaquin Hills, California Transportation
Corridor Agency Toll Road Revenue Bonds,
Sr. Lien, 6.75%, 1/1/32 NR/NR/BBB 7,000,000 6,990,535
---------------------------------------------------------------------------------------------------------
San Jose, California Redevelopment Agency Tax
Allocation Bonds, Merged Area Redevelopment
Project, MBIA Insured, 5%, 8/1/20 Aaa/AAA/A 2,000,000 1,735,236
---------------------------------------------------------------------------------------------------------
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 3,006,177
</TABLE>
9 Oppenheimer California Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited)(Continued)
---------------------------------------------------------------------------------------------------------
RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
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<S> <C> <C> <C> <C>
CALIFORNIA (continued) 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 $ 1,747,299
---------------------------------------------------------------------------------------------------------
Southern California Public Power Authority
Power Project Revenue Bonds, San Juan Unit 3,
Series A, MBIA Insured, 5%, 1/1/20 Aaa/AAA 3,000,000 2,572,932
---------------------------------------------------------------------------------------------------------
Southern California Public Power Authority
Power Project Revenue Refunding Bonds, Series A,
5.50%, 7/1/12 Aa/AA 1,000,000 954,332
---------------------------------------------------------------------------------------------------------
Southern California Public Power Authority
Transmission Project Revenue Bonds, Inverse Floater,
6.644%, 7/1/12(1) Aa/AA-- 5,500,000 5,288,162
---------------------------------------------------------------------------------------------------------
University of California Revenue Bonds,
Multiple Purpose Projects, Prerefunded, Series A,
6.875%, 9/1/16 NR/A-- 2,200,000 2,511,834
---------------------------------------------------------------------------------------------------------
Victorville, California Special Tax Bonds,
Community Facilities District No. 90-1, Series A,
8.30%, 9/1/16 NR/NR 2,250,000 2,140,294
---------------------------------------------------------------------------------------------------------
West & Central Basin Financing Authority
California Revenue Refunding Bonds, West Basin
Refunding Project, Series A, AMBAC Insured,
5%, 8/1/16 Aaa/AAA/AAA 3,000,000 2,650,125
------------
247,952,148
- ----------------------------------------------------------------------------------------------------------------------------------
U.S. Possessions--9.9% Guam Power Authority Revenue Bonds, Series A,
6.625%, 10/1/14 NR/BBB 2,000,000 2,020,272
---------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth General Obligation Bonds,
Yield Curve Notes, MBIA Insured, Inverse Floater,
7.384%, 7/1/08(1) Aaa/AAA 3,500,000 3,567,028
---------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway &
Transportation Authority Revenue Bonds,
Prerefunded, Series T, 6.50%, 7/1/22 NR/AAA 2,250,000 2,522,266
---------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway &
Transportation Authority Revenue Bonds,
Prerefunded, Series T, 6.625%, 7/1/18 NR/AAA 1,995,000 2,250,585
---------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway &
Transportation Authority Revenue Bonds, Series T,
6.625%, 7/1/18 Baa1/A 4,005,000 4,164,495
---------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Revenue Bonds,
Series P, 7%, 7/1/21 Baa1/A-- 4,000,000 4,309,844
---------------------------------------------------------------------------------------------------------
Puerto Rico Housing Bank & Finance Agency
Single Family Mtg. Revenue Bonds,
Affordable Housing Mtg.--Portfolio I, 6.25%, 4/1/29 Aaa/AAA 7,600,000 7,567,281
---------------------------------------------------------------------------------------------------------
Puerto Rico Housing Finance Corp.
Single Family Mtg. Revenue Bonds,
Portfolio 1, Series B, 7.65%, 10/15/22 Aaa/AAA 995,000 1,053,593
------------
27,455,364
</TABLE>
10 Oppenheimer California Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
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MARKET VALUE
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Total Investments, at Value (Cost $273,220,805) 99.5% $275,407,512
- ----------------------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.5 1,287,003
----------- ------------
Net Assets 100.0% $276,694,515
----------- ------------
----------- ------------
<FN>
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. Inverse floaters amount to $33,474,147 or 12.1% of the Fund's net assets,
at June 30, 1995.
Distribution of investments by industry, as a percentage of total investments at value, is as follows:
Industry Market Value Percent
-------------------------------------------------------------------------------------
Utilities $72,139,220 26.2%
Lease/Rental 53,251,860 19.3
Special Tax Bonds 52,448,081 19.0
Transportation 36,599,289 13.3
Housing 32,586,558 11.8
Hospitals 13,184,601 4.8
General Obligation Bonds 8,668,278 3.1
Pollution Control 4,017,791 1.6
Education 2,511,834 0.9
------------ -----
$275,407,512 100.0%
------------ -----
------------ -----
See accompanying Notes to Financial Statements.
</TABLE>
11 Oppenheimer California Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES June 30, 1995 (Unaudited)
---------------------------------------------------------------------------------------------------------
==================================================================================================================================
<C> <S> <C>
ASSETS Investments, at value (cost $273,220,805)--see accompanying statement $275,407,512
---------------------------------------------------------------------------------------------------------
Cash 120,704
---------------------------------------------------------------------------------------------------------
Receivables:
Interest 5,251,676
Shares of beneficial interest sold 589,770
---------------------------------------------------------------------------------------------------------
Other 75,591
------------
Total assets 281,445,253
==================================================================================================================================
LIABILITIES Payables and other liabilities:
Shares of beneficial interest redeemed 3,528,957
Dividends 931,521
Distribution and service plan fees--Note 4 171,584
Trustees' fees 7,558
Transfer and shareholder servicing agent fees 2,855
Other 108,263
------------
Total liabilities 4,750,738
==================================================================================================================================
NET ASSETS $276,694,515
------------
------------
==================================================================================================================================
COMPOSITION OF Paid-in capital $275,873,392
NET ASSETS ---------------------------------------------------------------------------------------------------------
Overdistributed net investment income (498,939)
---------------------------------------------------------------------------------------------------------
Accumulated net realized loss from investment transactions (866,645)
---------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Note 3 2,186,707
------------
Net assets $276,694,515
------------
------------
==================================================================================================================================
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on net assets of $246,731,968
and 24,142,217 shares of beneficial interest outstanding) $10.22
Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price) $10.73
---------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $29,962,547 and 2,930,799 shares of beneficial interest outstanding) $10.22
</TABLE>
See accompanying Notes to Financial Statements.
12 Oppenheimer California Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Six Months Ended June 30, 1995 (Unaudited)
---------------------------------------------------------------------------------------------------------
==================================================================================================================================
<C> <S> <C>
INVESTMENT INCOME Interest $ 8,800,543
==================================================================================================================================
EXPENSES Management fees--Note 4 772,064
---------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A--Note 4 293,047
Class B--Note 4 123,986
---------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 61,024
---------------------------------------------------------------------------------------------------------
Shareholder reports 28,000
---------------------------------------------------------------------------------------------------------
Legal and auditing fees 14,121
---------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 1,609
Class B 2,670
---------------------------------------------------------------------------------------------------------
Custodian fees and expenses 4,185
---------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 177
---------------------------------------------------------------------------------------------------------
Other 10,706
------------
Total expenses 1,311,589
==================================================================================================================================
NET INVESTMENT INCOME 7,488,954
==================================================================================================================================
REALIZED AND UNREALIZED Net realized gain on investments 221,633
GAIN ON INVESTMENTS ---------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 19,851,875
------------
Net realized and unrealized gain on investments 20,073,508
==================================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 27,562,462
------------
------------
</TABLE>
See accompanying Notes to Financial Statements.
13 Oppenheimer California Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
---------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994
==================================================================================================================================
<C> <S> <C> <C>
OPERATIONS Net investment income $ 7,488,954 $ 15,748,324
---------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 221,633 (999,410)
---------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation
on investments 19,851,875 (39,209,125)
------------ ------------
Net increase (decrease) in net assets resulting from operations 27,562,462 (24,460,211)
==================================================================================================================================
DIVIDENDS AND Dividends from net investment income:
DISTRIBUTIONS TO Class A ($.302 and $.605 per share, respectively) (7,171,123) (14,920,148)
SHAREHOLDERS Class B ($.263 and $.526 per share, respectively) (646,759) (857,567)
==================================================================================================================================
BENEFICIAL INTEREST Net increase (decrease) in net assets resulting from Class A
TRANSACTIONS beneficial interest transactions--Note 2 9,013,391 (8,912,194)
---------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Class B
beneficial interest transactions--Note 2 8,030,660 12,644,856
==================================================================================================================================
NET ASSETS Total increase (decrease) 36,788,631 (36,505,264)
---------------------------------------------------------------------------------------------------------
Beginning of period 239,905,884 276,411,148
------------ ------------
End of period (including overdistributed net investment
income of $498,939 and $170,011, respectively) $276,694,515 $239,905,884
------------ ------------
------------ ------------
</TABLE>
See accompanying Notes to Financial Statements.
14 Oppenheimer California Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
---------------------------------------------------------------------------------------------------------
CLASS A CLASS B
---------------------------------------------------------------------- ----------------------------------
SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
1995 YEAR ENDED DECEMBER 31, 1995 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1994 1993 1992 1991 1990 (UNAUDITED) 1994 1993(1)
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value,
beginning of period $ 9.45 $10.97 $10.35 $10.22 $ 9.86 $ 9.94 $ 9.44 $10.98 $10.72
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income .29 .60 .62 .61 .66 .67 .25 .54 .35
Net realized and
unrealized gain (loss)
on investments .78 (1.51) .72 .20 .38 (.07) .79 (1.55) .34
------ ------ ------ ------ ------ ------ ------ ------ ------
Total income (loss) from
investment operations 1.07 (.91) 1.34 .81 1.04 .60 1.04 (1.01) .69
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.30) (.61) (.65) (.60) (.62) (.68) (.26) (.53) (.36)
Distributions from net
realized gain on
investments -- -- (.07) (.08) (.06) -- -- -- (.07)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total dividends and
distributions
to shareholders (.30) (.61) (.72) (.68) (.68) (.68) (.26) (.53) (.43)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $10.22 $ 9.45 $10.97 $10.35 $10.22 $ 9.86 $10.22 $ 9.44 $10.98
------ ------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------ ------
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT
NET ASSET VALUE(2) 11.45% (8.49)% 13.26% 8.28% 10.93% 6.38% 11.14% (9.39)% 6.66%
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $246,732 $219,682 $266,490 $204,349 $145,163 $92,514 $29,963 $20,224 $9,921
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $240,049 $248,850 $245,193 $174,055 $115,661 $72,879 $25,049 $16,552 $5,218
- ----------------------------------------------------------------------------------------------------------------------------------
Number of shares
outstanding at end of
period (in thousands) 24,142 23,256 24,290 19,738 14,200 9,386 2,931 2,142 904
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average
net assets:
Net investment income 5.78%(3) 5.99% 5.74% 6.07% 6.52% 6.80% 4.95%(3) 5.17% 4.57%(3)
Expenses, before
voluntary assumption
by the Manager .93%(3) .96% .97% 1.07% 1.05% 1.05% 1.69%(3) 1.73% 1.79%(3)
Expenses, net of
voluntary assumption
by the Manager N/A N/A N/A N/A .73% .53% N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 11.3% 21.9% 13.7% 26.8% 26.6% 14.5% 11.3% 21.9% 13.7%
<FN>
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. Total returns are not annualized for periods of less than one full
year.
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 period ended June 30, 1995 were
$50,535,439 and $29,167,489, respectively.
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer California Tax-Exempt Fund
<PAGE>
-------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
-------------------------------------------------------
================================================================================
1. SIGNIFICANT Oppenheimer California Tax-Exempt Fund (the Fund) is
ACCOUNTING registered under the Investment Company Act of 1940, as
POLICIES 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 and/or service
plan, expenses directly attributable to a particular
class and exclusive voting rights with respect to
matters affecting a single class. Class B shares will
automatically convert to Class A shares six years after
the date of purchase. The following is a summary of
significant accounting policies consistently followed
by the Fund.
-------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued
at the close of the New York Stock Exchange on each
trading day. Listed and unlisted securities for which
such information is regularly reported are valued at
the last sale price of the day or, in the absence of
sales, at values based on the closing bid or asked
price or the last sale price on the prior trading day.
Long-term and short-term ``non-money market'' debt
securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities
which cannot be valued by the approved portfolio
pricing service are valued using dealer-supplied
valuations provided the Manager is satisfied that the
firm rendering the quotes is reliable and that the
quotes reflect current market value, or under
consistently applied procedures established by the
Board of Trustees to determine fair value in good
faith. Short-term ``money market type'' debt securities
having a remaining maturity of 60 days or less are
valued at cost (or last determined market value)
adjusted for amortization to maturity of any premium or
discount.
-------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES AND GAINS AND LOSSES.
Income, expenses (other than those attributable to a
specific class) and gains and losses are allocated
daily to each class of shares based upon the relative
proportion of net assets represented by such class.
Operating expenses directly attributable to a specific
class are charged against the operations of that class.
-------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply
with provisions of the Internal Revenue Code applicable
to regulated investment companies and to distribute all
of its taxable income, including any net realized gain
on investments not offset by loss carryovers, to
shareholders. Therefore, no federal income or excise
tax provision is required.
-------------------------------------------------------
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, 1995, a provision
of $24,745 was made for the Fund's projected benefit
obligations, and a payment of $1,182 was made to a
retired trustee, resulting in an accumulated liability
of $63,985 at June 30, 1995.
-------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to
declare dividends separately for Class A and Class B
shares from net investment income each day the New York
Stock Exchange is open for business and pay such
dividends monthly. Distributions from net realized
gains on investments, if any, will be declared at least
once each year.
-------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net
investment income (loss) and net realized gain (loss)
may differ for financial statement and tax purposes
primarily because of premium amortization. The
character of the distributions made during the year
from net investment income or net realized gains may
differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividend
distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or
realized gain (loss) was recorded by the Fund.
16 Oppenheimer California Tax-Exempt Fund
<PAGE>
-------------------------------------------------------
-------------------------------------------------------
================================================================================
1. SIGNIFICANT OTHER. Investment transactions are accounted for on the
ACCOUNTING date the investments are purchased or sold (trade
POLICIES date). Original issue discount on securities purchased
(CONTINUED) is amortized over the life of the respective
securities, in accordance with federal income tax
requirements. 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. 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.
================================================================================
2. SHARES OF The Fund has authorized an unlimited number of no par
BENEFICIAL INTEREST value shares of beneficial interest of each class.
Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1995 YEAR ENDED DECEMBER 31, 1994
------------------------------ ------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 2,360,220 $ 23,922,201 4,682,338 $ 47,539,656
Dividends reinvested 415,546 4,179,053 895,069 9,014,619
Redeemed (1,889,278) (19,087,863) (6,611,428) (65,466,469)
---------- ------------ ---------- ------------
Net increase (decrease) 886,488 $ 9,013,391 (1,034,021) $ (8,912,194)
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
---------------------------------------------------------------------------------------------------------
Class B:
Sold 868,896 $8,833,596 1,595,370 $16,152,328
Dividends reinvested 36,161 364,403 52,979 528,961
Redeemed (115,875) (1,167,339) (410,584) (4,036,433)
---------- ------------ ---------- ------------
Net increase 789,182 $8,030,660 1,237,765 $12,644,856
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
================================================================================
3. UNREALIZED GAINS At June 30, 1995, net unrealized appreciation on
AND LOSSES ON investments of $2,186,707 was composed of gross
INVESTMENTS appreciation of $7,530,816, and gross depreciation of
$5,344,109.
================================================================================
4. MANAGEMENT FEES Management fees paid to the Manager were in accordance
AND OTHER with the investment advisory agreement with the Fund
TRANSACTIONS which provides for a fee of .60% on the first $200
WITH AFFILIATES million of average annual 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 six months ended June 30, 1995,
commissions (sales charges paid by investors) on sales
of Class A shares totaled $434,871, of which $74,571
was retained by Oppenheimer Funds Distributor, Inc.
(OFDI), a subsidiary of the Manager, as general
distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of
the Fund's Class B shares totaled $332,024, of which
$804 was paid to an affiliated broker/dealer. During
the six months ended June 30, 1995, OFDI received
contingent deferred sales charges of $27,525 upon
redemption of Class B shares, as reimbursement for
sales commissions advanced by OFDI at the time of sale
of such 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, 1995, OFDI paid $10,107 and $550 to an
affiliated broker/dealer as reimbursement for Class A
and Class B personal service and maintenance expenses,
respectively, and retained $109,680 as reimbursement
for Class B sales commissions and service fee advances,
as well as financing costs.
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
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 Oppenheimer Shareholder Services
SHAREHOLDER
SERVICING AGENT
================================================================================
CUSTODIAN OF Citibank, N.A.
PORTFOLIO SECURITIES
================================================================================
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
================================================================================
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.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, and are not insured by the FDIC or any other
agency, and involve investment risks, including
possible loss of the principal amount invested.
18 Oppenheimer California Tax-Exempt Fund
<PAGE>
- --------------------------------------------------------------------------------
OPPENHEIMERFUNDS FAMILY
- --------------------------------------------------------------------------------
================================================================================
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 2.6 million shareholder accounts and more than $35
billion under Oppenheimer's management and that of our affiliates.
At OppenheimerFunds, we don't charge a fee to exchange shares of eligible
funds of the same class. And you can exchange shares easily by mail or by
telephone.(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>
- -----------------------------------------------------------------------------------------------
STOCK FUNDS Discovery Fund Global Fund
Global Emerging Growth Fund(2) Oppenheimer Fund
Target Fund Value Stock Fund
Growth Fund(3) Gold & Special Minerals Fund
- -----------------------------------------------------------------------------------------------
STOCK & 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 International Bond Fund
Strategic Income & Growth Fund Bond Fund(4)
Strategic Income Fund U.S. Government Trust
Strategic Investment Grade Bond Fund Limited-Term Government Fund
- -----------------------------------------------------------------------------------------------
TAX-EXEMPT FUNDS New York Tax-Exempt Fund(5) New Jersey Tax-Exempt Fund(5)
California Tax-Exempt Fund(5) Tax-Free Bond Fund
Pennsylvania Tax-Exempt Fund(5) Insured Tax-Exempt Bond Fund
Florida Tax-Exempt Fund(5) Intermediate Tax-Exempt Bond Fund
- -----------------------------------------------------------------------------------------------
MONEY MARKET FUNDS Money Market Fund Cash Reserves
- -----------------------------------------------------------------------------------------------
<FN>
1. Exchange privileges are subject to change or termination.
2. Formerly Global Bio-Tech Fund.
3. Formerly Special Fund.
4. Formerly Investment Grade Bond Fund.
5. Available only to residents of certain states.
OppenheimerFunds are distributed by Oppenheimer Funds Distributor, Inc.,
Two World Trade Center, New York, NY 10048-0203.
-C- Copyright 1995 Oppenheimer Management Corporation. All rights reserved.
</TABLE>
19 Oppenheimer California Tax-Exempt Fund
<PAGE>
INFORMATION
GENERAL INFORMATION
Monday-Friday 8:30 a.m.-8 p.m. ET
Saturday 10 a.m.-2 p.m. ET
- -----------------------------------
1-800-525-7048
- -----------------------------------
TELEPHONE TRANSACTIONS
Monday-Friday 8:30 a.m.-8 p.m. ET
- -----------------------------------
1-800-852-8457
- -----------------------------------
PHONELINK
24 hours a day, automated
information and transactions
- -----------------------------------
1-800-533-3310
- -----------------------------------
TELECOMMUNICATIONS DEVICE FOR THE
DEAF (TDD)
Monday-Friday 8:30 a.m.-8 p.m. 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
- -----------------------------------
RS0790.001.0695 AUGUST 31, 1995
- --------------------------------------------------------------------------------
"HOW MAY I HELP YOU?"
As an OppenheimerFunds 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 OppenheimerFunds' transfer agent,
Oppenheimer Shareholder Services, with their Award of Excellence in 1993.
So call us today--we're here to help.
- --------------------------------------------------------------------------------
[LOGO] OPPENHEIMERFUNDS Bulk Rate
Oppenheimer Funds Distributors, Inc. U.S. Postage
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Denver, CO 80217-5270 Permit No. 469
Denver, CO
