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Semiannual Report January 31, 1999
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OPPENHEIMER
California
Municipal Fund
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[LOGO]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
4 An Interview
with Your Fund's
Manager
11 Financial
Statements
33 Officers and
Trustees
36 Information and
Services
Report highlights
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o Municipal bonds performed well over the past six months in a
declining-interest-rate environment.
o Several of the Fund's holdings received credit rating upgrades, which enhanced
the value of the securities.
Cumulative Total Returns
For the 6-Month Period
Ended 1/31/99
Class A
Without With
Sales Chg.(1) Sales Chg.(2)
- ---------------------------------------
4.47% -0.49%
- ---------------------------------------
Class B
Without With
Sales Chg.(1) Sales Chg.(2)
- ---------------------------------------
4.07% -0.93%
- ---------------------------------------
Class C
Without With
Sales Chg.(1) Sales Chg.(2)
- ---------------------------------------
3.99% 2.99%
- ---------------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. The Fund's
performance may from time to time be subject to substantial short-term changes,
particularly during periods of market or interest rate volatility. For updates
on the Fund's performance, please contact your financial advisor, call us at
1-800-525-7048 or visit our website, www.oppenheimerfunds.com.
1. Includes changes in net asset value per share without deducting any sales
charges. This performance is not annualized.
2. Class A returns include the current maximum initial sales charge of 4.75%.
Class B returns include the applicable contingent deferred sales charge of 5%.
Class C returns include the contingent deferred sales charge of 1%. Class B and
C shares are subject to an annual 0.75% asset-based sales charge. An explanation
of the different performance calculations is in the Fund's prospectus.
2 Oppenheimer California Municipal Fund
<PAGE>
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
California Municipal Fund
Dear shareholder,
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Contrary to what many analysts had expected, the U.S. economy appears to have
picked up steam over the past few months. The fourth quarter of 1998 posted the
fastest rate of economic growth in two years, and early indications suggest that
the first quarter of 1999 may follow suit.
With respect to the U.S. bond market, stronger than expected economic
growth has triggered concerns that the Federal Reserve may raise key interest
rates to forestall an acceleration of inflation. As a result, yields of longer
term taxable bonds have risen from their October 1998 lows, when investors had
bid up prices during the global "flight to quality." At the same time,
tax-exempt bond prices and yields have remained relatively stable.
In the U.S. stock market, it might appear at first glance that prices are
rising as rapidly as the economy is growing. However, a closer look reveals
that, with the exception of large-cap growth companies and the technology
industry, most stock prices remained relatively flat. What's more, the disparity
in val uations between large companies, which have led the market's advance, and
smaller ones, which have lagged, has become historically wide.
What do these observations mean for your investments? In our view,
actively managed portfolios that are closely monitored by expert money managers
are likely to provide better returns than passive index investing in 1999.
That's because selectivity is expected to be more critical to performance than
it has been over the past few years. In a potentially overvalued stock market
and rising interest-rate environment, the ability to identify the most promising
securities could become paramount.
Even though many equity investors may be tempted to jump aboard the
technology bandwagon, we suggest a more prudent course: broad diversification
beyond any single asset class, industry, capitalization range or geographic
region. We believe that the risks of this investment environment require
consideration of a broad range of investments and markets, including bonds. That
way, if one market experiences setbacks, one or more of the others may help
cushion the effects on your overall portfolio.
No matter what the financial markets have in store, we resolve to continue
working with your financial advisor to keep you apprised of potential risks and
opportunities. Providing you with the market information, professionally managed
investments and other resources you need to achieve your financial goals is an
important part of our enduring commitment to you as The Right Way to Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
February 22, 1999
3 Oppenheimer California Municipal Fund
<PAGE>
An interview with your Fund's manager
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How did the Fund perform during the six-month period that ended January 31,
1999?
We are pleased with the Fund's performance over the past six months. Not only
has the municipal bond market rallied overall since August 1, 1998, but the Fund
also held some of the individual securities that led the market's advance. In
fact, several of our holdings received credit rating upgrades from the major
independent rating agencies, which helped to increase their investment value.
Why did the municipal bond market rally during the second half of 1998?
When the reporting period began in August 1998, many financial markets around
the world were in disarray and global economic conditions were uncertain. The
U.S. stock market and the higher yielding sectors of the U.S. bond market were
in the midst of a sharp decline triggered by the spread of the global currency
and credit crisis from Asia to Russia and Latin America. Lower overseas demand
for U.S. goods and services was expected to reduce the growth of domestic
corporate earnings, and investors became concerned that U.S.
economic growth might suffer.
Unlike equity investors, fixed income investors tend to welcome slower
economic growth because it helps alleviate inflationary pressures that may be
present
4 Oppenheimer California Municipal Fund
<PAGE>
[PHOTO]
Portfolio Management
Team (l to r)
Bob Patterson
Caryn Halbrecht(1)
(Portfolio Manager)
Jerry Webman
in the economy. In addition, slower growth makes it more likely that interest
rates will decline, especially if the Federal Reserve Board cuts key short-term
rates to stimulate economic growth. As a result, prices of high-quality bonds
rose in the third quarter of 1998, especially U.S. Treasury securities and
highly rated municipal bonds. However, municipal bonds lagged the performance of
comparable U.S. Treasury securities over the same period.
Why did U.S. Treasury securities provide higher returns than municipal bonds?
In last summer's uncertain market environment, both domestic and overseas
investors sold investments they perceived as risky. Instead, they flocked to the
triple-A-rated U.S. Treasury securities, which are backed by the full faith and
credit of the U.S. government and are considered among the safest investments in
the world. This "flight to quality" drove up the demand of U.S. Treasury
securities and in turn, their prices.
1. Effective January 1, 1999, the Fund's portfolio manager is Caryn Halbrecht.
5 Oppenheimer California Municipal Fund
<PAGE>
Avg Annual Total Returns
For the Periods Ended 12/31/98(2)
Class A
1 year 5 year 10 year
- ---------------------------------------
0.88% 4.90% 7.45%
- ---------------------------------------
Class B
Since
1 year 5 year Inception
- ---------------------------------------
0.21% 4.78% 5.55%
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Class C
Since
1 year 5 year Inception
- ---------------------------------------
4.22% N/A 6.57%
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An interview with your Fund's manager
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Unlike U.S. Treasury securities, however, there was an abundant supply of
municipal bonds to meet the relatively steady level of demand. Because overseas
investors and most institutions receive no tax benefits from municipal bonds,
they did not contribute to an increase in demand within this market sector. In
addition, municipalities and other issuers took advantage of low interest rates
last year to finance new projects and refinance existing ones at lower costs.
With the second largest volume of new tax-exempt issuance in history entering
the market in 1998, plenty of securities were available to satisfy demand from
individual investors and mutual funds. Accordingly, while municipal bond prices
rallied when interest rates fell, they did not rise to the extent that prices of
U.S. Treasury securities did.
How was the Fund managed in this environment?
We remained nearly fully invested in a diversified portfolio of tax-exempt
securities from a wide variety of issuers within the state of California.
Because we had expected the U.S. economy to slow, we positioned the portfolio
for slower growth and lower interest rates well before the six-month reporting
period began. In doing so, we emphasized bonds that provide protection against
being redeemed early, or "called," by their issuers. Because having bonds called
while interest rates are falling often requires us to reinvest the proceeds at
lower yields, having such "call protection" was an important part of our
strategy over the past six months.
6 Oppenheimer California Municipal Fund
<PAGE>
Later in the six-month reporting period, we shifted our focus to higher quality
bonds, including insured bonds. That's because the differences in yields between
highly rated bonds and lower rated bonds had narrowed sub stantially during the
second half of last year, and there was little incentive to assume the
additional credit risks that lower rated bonds entail.
In what types of municipal projects did the Fund invest over the past six
months?
Our investment strategy has been two-pronged. First, we continued to add higher
yielding issues to the port-folio as opportunities arose. Second, we added bonds
that are structured to perform well in a falling interest rate environment.
Most of our high yield investments have been issues that are secured by
assessments on residential real estate developments. We believe the strong
California economy and its rebounding real estate market provide a solid basis
for investing in these higher yielding bonds. The developments we selected are
located near the most highly populated areas of the state, with some emphasis on
Orange County. These issues provide the Fund with attractive income as well as
the potential for appreciation through credit improvement as development occurs
at the sites.
2. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A returns include the current maximum initial sales charge of
4.75%. Class A shares were first publicly offered on 11/3/88. Class B returns
include the applicable contingent deferred sales charge of 5% (1-year) and 1%
(since inception on 5/3/93). Class C returns for the one-year result include the
contingent deferred sales charge of 1%. Class C shares have an inception date of
11/1/95. Class B and C shares are subject to an annual 0.75% asset-based sales
charge. An explanation of the different performance calculations is in the
Fund's prospectus.
7 Oppenheimer California Municipal Fund
<PAGE>
Standardized Yields(3)
For the 30 Days Ended 1/31/99
- ---------------------------------------
Class A 4.07%
- ---------------------------------------
Class B 3.50
- ---------------------------------------
Class C 3.50
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An interview with your Fund's manager
- --------------------------------------------------------------------------------
We have also been adding securities issued to finance adult living facilities.
These facilities provide housing, healthcare and recreation for older people. We
concentrate on facilities located in areas with above-average economic
indicators and demographics that we believe will support ongoing demand for the
service. We prefer to purchase these issues in the early stages of the project
development, with expectations that solid operating results, over time, will
bring the securities to investment-grade status.
What is your outlook for the municipal bond market?
We remain very optimistic. Our outlook is especially positive for tax-exempt
bonds, however, because they have become quite inexpensive relative to their
historical price relationship with U.S. Treasury securities. In fact, during
October 1998, some tax-exempt bond yields equaled the yields of comparable
taxable government bonds. In effect, those who invested in municipal bonds in
October received the income-tax benefits for free!
3. Standardized yield is based on net investment income for the 30-day period
ended January 31, 1999. Falling share prices will tend to artificially raise
yields.
8 Oppenheimer California Municipal Fund
<PAGE>
Credit Allocation(4)
[PIE CHART OMITTED]
o AAA 42.7%
o AA 8.9
o A 15.2
o BBB 23.4
o BB 9.0
o B 0.8
While municipal bond yields have moderated somewhat relative to U.S. Treasury
securities since this past October, they remain quite inexpensive compared to
historical norms. If the yield relationship between tax-exempt and taxable bonds
returns to more normal levels, as we expect, 1999 may be a particularly good
year for municipal bonds, making these tax-exempt securities an important part
of The Right Way to Invest.
Top 5 Industries
Percentage of invested assets(5)
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Special Assessment 25.3%
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Single Family Housing 12.5
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Municipal Leases 11.0
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Electric Utilities 9.7
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Hospital/Healthcare 9.0
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4. Portfolio data are as of January 31, 1999, are dollar-weighted based on
invested assets and are subject to change. The Fund may invest up to 25% of its
assets in below-investment-grade securities which carry greater risk of default.
Average credit quality and ratings allocations include securities rated by
national ratings organizations as well as unrated securities (currently 15.7% of
total investments) which have ratings assigned by the Manager in categories
equivalent to those of ratings organizations.
5. Industry weightings are as of January 31, 1999, and are subject to change.
9 Oppenheimer California Municipal Fund
<PAGE>
Financials
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10 Oppenheimer California Municipal Fund
<PAGE>
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Statement of Investments January 31, 1999 (Unaudited)
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<TABLE>
<CAPTION>
Ratings:
Moody's/ Face Market Value
S&P/Fitch Amount See Note 1
=========================================================================================
<S> <C> <C> <C>
Municipal Bonds and Notes--101.5%
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California--92.3%
Alameda, CA Corridor Transportation Authority
RB, Sr. Lien, Series A, 5%, 10/1/29 Aaa/AAA/AAA $ 3,100,000 $ 3,104,123
- -----------------------------------------------------------------------------------------
Anaheim, CA PFAU Lease RB, CAP, Sub. Lien,
Public Improvements Project, Series C,
FSA Insured, Zero Coupon, 5.193%, 9/1/24(1) Aaa/AAA/AAA 25,855,000 7,055,829
- -----------------------------------------------------------------------------------------
Anaheim, CA PFAU TXAL RB, MBIA Insured,
Inverse Floater, 9.72%, 12/28/18(2) Aaa/AAA 3,000,000 3,952,500
- -----------------------------------------------------------------------------------------
Berkeley, CA HF RRB, Alta Bates Medical
Center, Series A, 6.50%, 12/1/11 A2/A+ 4,500,000 4,997,520
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CA Assn. of Bay Area Governments FAU for
Non-profit Corps. Refunding COP, American
Baptist Homes, Series A, 6.20%, 10/1/27 NR/BBB 6,000,000 6,405,060
- -----------------------------------------------------------------------------------------
CA Assn. of Bay Area Governments FAU for
Non-profit Corps. Refunding COP, Episcopal
Homes Foundation, 5.125%, 7/1/18 NR/A- 5,900,000 5,899,764
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CA Assn. of Bay Area Governments FAU for
Non-profit Corps. Refunding COP, Rhonda
Haas Goldman Plaza, 5.125%, 5/15/23 NR/A+ 2,300,000 2,305,681
- -----------------------------------------------------------------------------------------
CA CDAU Lease RB, United Airlines, Series A,
5.70%, 10/1/33 Baa3/BB+ 9,185,000 9,484,523
- -----------------------------------------------------------------------------------------
CA Community College FAU Lease RB,
West Valley Mission Community College,
MBIA Insured, 5.625%, 5/1/22 Aaa/AAA 3,585,000 3,838,567
- -----------------------------------------------------------------------------------------
CA Educational FA RRB, L.A. College
Chiropractic, 5.60%, 11/1/17 Baa2/NR 1,000,000 1,045,550
- -----------------------------------------------------------------------------------------
CA Educational FA RRB, Pooled Educational
Facilities Program, MBIA Insured, 7%, 3/1/16 Aaa/AAA 100,000 105,812
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CA Foothill/Eastern Transportation Corridor
Agency Toll Road RB, Sr. Lien, Series A,
6.50%, 1/1/32 Baa3/BBB-/BBB 4,600,000 5,168,422
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CA GOB, 5%, 10/1/23 Aa3/A+/AA- 2,000,000 2,003,960
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CA HFA RB, Series A, 7.35%, 8/1/11 Aa2/AA- 75,000 79,342
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CA HFA RB, Series C, 6.75%, 2/1/25 Aa2/AA- 9,755,000 10,467,408
- -----------------------------------------------------------------------------------------
CA HFA RB, Series C, 7.60%, 8/1/30 Aa2/AA- 1,070,000 1,119,231
- -----------------------------------------------------------------------------------------
CA HFA RB, Series E-1, 6.45%, 2/1/12 Aa2/AA- 750,000 807,637
- -----------------------------------------------------------------------------------------
CA HFA RB, Series M, MBIA Insured,
5.60%, 8/1/29 Aaa/AAA 2,500,000 2,600,000
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CA HFA SFM RB, Series 83, Inverse Floater,
9.045%, 8/1/25(2) NR/AAA 4,000,000 4,576,320
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CA HFFAU RB, La Palma Hospital Medical
Center, 7.10%, 2/1/13 NR/A+ 1,875,000 1,912,931
</TABLE>
11 Oppenheimer California Municipal Fund
<PAGE>
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Statement of Investments (Unaudited) (Continued)
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<TABLE>
<CAPTION>
Ratings:
Moody's/ Face Market Value
S&P/Fitch Amount See Note 1
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
California (continued)
CA HFFAU RB, Los Angeles Children's Hospital,
Prerefunded, Series A, 7.125%, 6/1/21 Aaa/A+ $1,000,000 $1,106,280
- -----------------------------------------------------------------------------------------
CA HFFAU RRB, Kaiser Permanente, Series B,
5%, 10/1/18 A3/A 9,175,000 9,055,633
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CA Intermodal Container Transfer Facility Joint
PAU RRB, Southern Pacific Transportation Co.,
Series A, 7.70%, 11/1/14 Baa1/BBB+ 1,000,000 1,048,730
- -----------------------------------------------------------------------------------------
CA PCFAU SWD RRB, North Cnty. Recycling
Center, Escrowed to Maturity, Series A,
6.75%, 7/1/11 Aaa/NR 500,000 568,750
- -----------------------------------------------------------------------------------------
CA PWBL RB, State Prison Department of
Corrections, Series E, FSA Insured, 5.50%, 6/1/15 NR/AAA 3,000,000 3,324,000
- -----------------------------------------------------------------------------------------
CA Rural Home Mtg. FAU SFM RB, Mtg.-Backed
Securities Program, Series B-5, 5.75%, 12/1/29 NR/AAA 3,180,000 3,491,227
- -----------------------------------------------------------------------------------------
CA Saddleback Community College District
Refunding COP, BIG Insured, 7%, 8/1/19 Aaa/AAA 1,000,000 1,038,490
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CA SCDAU Revenue Refunding COP,
Cedars-Sinai Medical Center, 5.40%, 11/1/15 A1/NR 2,000,000 2,055,540
- -----------------------------------------------------------------------------------------
CA SCDAU Revenue Refunding COP, Inverse
Floater, 7.575%, 11/1/15(2) A1/NR 5,600,000 5,908,000
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Campbell, CA Refunding COP, Civic Center
Project, Unrefunded Balance, 6.75%, 10/1/17 A2/A 1,130,000 1,252,808
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Capistrano, CA USD CFD SPTX Bonds,
No. 92-1, 7.10%, 9/1/21 NR/NR 3,250,000 4,014,562
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Central CA Joint Powers Health FAU COP,
Community Hospitals of Central California
Project, 5%, 2/1/23 Baa1/NR 5,090,000 4,857,336
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Clovis, CA USD CAP GOB, Series D, FGIC
Insured, Zero Coupon, 5.60%, 8/1/10(1) Aaa/AAA 2,000,000 1,227,260
- -----------------------------------------------------------------------------------------
Colton, CA PFAU TXAL RRB, Redevelopment
Projects, Series B, 5.875%, 8/1/27 NR/NR 3,700,000 3,778,514
- -----------------------------------------------------------------------------------------
Commerce, CA Community Development
Commission TXAL Refunding Bonds,
Redevelopment Project No. 1, Sub. Lien,
Series B, 5.75%, 8/1/10 NR/NR 815,000 868,252
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Commerce, CA Community Development
Commission TXAL Refunding Bonds,
Redevelopment Project No. 1, Sub. Lien,
Series B, 6%, 8/1/21 NR/NR 2,800,000 2,875,712
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Commerce, CA Joint Powers FAU Lease RB,
Community Center, Series A, 6.25%, 10/1/22 Baa2/NR 1,410,000 1,519,740
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Compton, CA Refunding COP, Civic Center &
Capital Improvements, Series A, 5.50%, 9/1/15 NR/BBB 3,000,000 3,083,490
</TABLE>
12 Oppenheimer California Municipal Fund
<PAGE>
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<TABLE>
<CAPTION>
Ratings:
Moody's/ Face Market Value
S&P/Fitch Amount See Note 1
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<S> <C> <C> <C>
California (continued)
Davis, CA Public Facilities FAU Local Agency
RRB, Mace Ranch Area, Series A, 6.60%, 9/1/25 NR/NR $ 5,000,000 $ 5,332,450
- --------------------------------------------------------------------------------------------
Delta Cnty., CA Home Mtg. FAU SFM RB,
Series A, 5.35%, 6/1/24 Aaa/AAA/AAA 4,605,000 4,747,433
- --------------------------------------------------------------------------------------------
Duarte, CA COP, City of Hope National Medical
Center, 6.25%, 4/1/23 Baa1/NR 4,500,000 4,817,520
- --------------------------------------------------------------------------------------------
Escondido, CA Union High SDI CAP GOB,
MBIA Insured, Zero Coupon, 6.20%, 11/1/18(1) Aaa/AAA 6,000,000 2,263,920
- --------------------------------------------------------------------------------------------
Escondido, CA Union High SDI CAP GOB,
MBIA Insured, Zero Coupon, 6.20%, 11/1/19(1) Aaa/AAA 2,000,000 711,080
- --------------------------------------------------------------------------------------------
Fontana, CA RA TXAL Refunding Bonds,
Jurupa Hills Redevelopment Project,
Series A, 5.50%, 10/1/19 NR/BBB+ 1,345,000 1,384,852
- --------------------------------------------------------------------------------------------
Fontana, CA RA TXAL Refunding Bonds,
Jurupa Hills Redevelopment Project,
Series A, 5.50%, 10/1/27 NR/BBB+ 6,040,000 6,203,926
- --------------------------------------------------------------------------------------------
Huntington Park, CA PFAU Lease RRB,
Wastewater System Project, Series A,
6.20%, 10/1/25 NR/NR 3,000,000 3,135,750
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Industry, CA Improvement Bond Act of 1915
SPAST GOB, District No. 91-1, 7.65%, 9/2/21 NR/NR 1,750,000 2,009,928
- --------------------------------------------------------------------------------------------
Irvine, CA Improvement Bond Act of 1915
SPAST GOB, District 94-13-Group One,
5.50%, 9/2/22 NR/NR 10,000,000 10,047,500
- --------------------------------------------------------------------------------------------
Laguna Salada, CA USD GOB, CAP, Series B,
FGIC Insured, Zero Coupon, 5.30%, 8/1/22(1) Aaa/AAA/AAA 3,035,000 933,141
- --------------------------------------------------------------------------------------------
Lake Elsinore, CA Recreation Authority RB,
Public Facilities Project, Series A, 7.10%, 2/1/17 NR/NR 2,960,000 3,054,927
- --------------------------------------------------------------------------------------------
Lake Elsinore, CA School FAU SPTX RRB,
Horsethief Canyon, 5.625%, 9/1/16 NR/NR 4,760,000 4,775,803
- --------------------------------------------------------------------------------------------
Los Angeles Cnty., CA COP, CAP, Disney
Parking Project, Zero Coupon, 5.58%, 3/1/12(1) A3/BBB/A- 1,700,000 877,693
- --------------------------------------------------------------------------------------------
Los Angeles Cnty., CA COP, CAP, Disney
Parking Project, Zero Coupon, 6.924%, 9/1/10(1) A3/BBB/A- 5,960,000 3,395,174
- --------------------------------------------------------------------------------------------
Los Angeles Cnty., CA COP, CAP, Disney
Parking Project, Zero Coupon, 6.95%, 9/1/11(1) A3/BBB/A- 2,900,000 1,554,516
- --------------------------------------------------------------------------------------------
Los Angeles Cnty., CA COP, CAP, Disney
Parking Project, Zero Coupon, 7.03%, 9/1/13(1) A3/BBB/A- 4,500,000 2,132,460
- --------------------------------------------------------------------------------------------
Los Angeles Cnty., CA COP, CAP, Disney
Parking Project, Zero Coupon, 5.168%, 9/1/14(1) A3/BBB/A- 7,260,000 3,253,859
</TABLE>
13 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings:
Moody's/ Face Market Value
S&P/Fitch Amount See Note 1
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California (continued)
Los Angeles Cnty., CA MTAU Sales Tax RRB,
First Tier-Property A, Series A, FSA Insured,
5%, 7/1/15(3) Aaa/AAA/AAA $10,000,000 $10,172,300
- ------------------------------------------------------------------------------------------
Los Angeles Cnty., CA Public Works FAU
Lease RB, Multiple Capital Facilities Project V,
Series A, AMBAC Insured, 5.125%, 6/1/17 Aaa/AAA 1,965,000 2,014,577
- ------------------------------------------------------------------------------------------
Los Angeles Cnty., CA Public Works FAU RRB,
Regional Park & Open Space District,
Series A, 5%, 10/1/16 Aa3/AA 7,600,000 7,811,660
- ------------------------------------------------------------------------------------------
Los Angeles, CA Harbor Department RB,
Series B, 5.375%, 11/1/23 Aa3/AA/AA 5,000,000 5,137,100
- ------------------------------------------------------------------------------------------
Modesto, CA Irrigation District Refunding COP,
Capital Improvements, Series A, AMBAC
Insured, 4.75%, 7/1/26 Aaa/AAA/AAA 8,000,000 7,778,560
- ------------------------------------------------------------------------------------------
Oakland, CA RA TXAL Refunding Bonds,
MBIA Insured, 5.95%, 3/2/99(4) Aaa/AAA 8,600,000 9,288,172
- ------------------------------------------------------------------------------------------
Oakland, CA State Building Authority
Lease RB, Elihu M. Harris, Series A,
AMBAC Insured, 5%, 4/1/23 Aaa/AAA/AAA 1,900,000 1,905,510
- ------------------------------------------------------------------------------------------
Orange Cnty., CA CFD No. 86-2 SPTX
Refunding Bonds, Rancho Santa Margarita,
Series A, 5.55%, 8/15/17 NR/NR 1,000,000 1,015,530
- ------------------------------------------------------------------------------------------
Orange Cnty., CA CFD No. 88-1 SPTX Bonds,
Aliso Viejo, Prerefunded, Series A,
7.10%, 8/15/05 NR/AAA 1,440,000 1,645,733
- ------------------------------------------------------------------------------------------
Orange Cnty., CA CFD No. 88-1 SPTX Bonds,
Aliso Viejo, Prerefunded, Series A,
7.35%, 8/15/18 NR/AAA 7,000,000 8,056,580
- ------------------------------------------------------------------------------------------
Orange Cnty., CA Improvement Bond Act of
1915 RRB, Irvine Coast Assessment District
88-1-A, 5.50%, 9/2/16 NR/NR 3,000,000 3,075,300
- ------------------------------------------------------------------------------------------
Orange Cnty., CA Improvement Bond Act of
1915 SPAST GOB, Assessment No. 88-1,
6.25%, 9/2/18 NR/NR 2,300,000 2,358,397
- ------------------------------------------------------------------------------------------
Palm Springs, CA COP, Escrowed to Maturity,
Sub. Lien, Series B, Zero Coupon,
5.50%, 4/15/21(1) Aaa/AAA 15,000,000 4,816,050
- ------------------------------------------------------------------------------------------
Pittsburg, CA RA TXAL Refunding Bonds,
Los Medanos Community Development
Project, Sub. Lien, 6.20%, 8/1/19 NR/BBB 2,500,000 2,748,700
</TABLE>
14 Oppenheimer California Municipal Fund
<PAGE>
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<TABLE>
<CAPTION>
Ratings:
Moody's/ Face Market Value
S&P/Fitch Amount See Note 1
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California (continued)
Placentia, CA PFAU SPTX RB, Jr. Lien, Series B,
6.60%, 9/1/15 NR/NR $ 1,600,000 $ 1,669,392
- ------------------------------------------------------------------------------------------
Pomona, CA SFM RRB, Escrowed to Maturity,
Series A, 7.60%, 5/1/23 Aaa/AAA 4,500,000 6,012,270
- ------------------------------------------------------------------------------------------
Pomona, CA SFM RRB, Escrowed to Maturity,
Series B, 7.50%, 8/1/23 Aaa/AAA 500,000 663,900
- ------------------------------------------------------------------------------------------
Pomona, CA USD GORB, Series A, MBIA
Insured, 6.15%, 8/1/15 Aaa/AAA 2,000,000 2,321,060
- ------------------------------------------------------------------------------------------
Port Oakland, CA Port RB, Series G, MBIA
Insured, 5.375%, 11/1/25 Aaa/AAA/AAA 10,650,000 10,955,975
- ------------------------------------------------------------------------------------------
Redding, CA Electric System Revenue COP,
FGIC Insured, Inverse Floater, 7.535%, 6/1/19(2) Aaa/AAA/AAA 4,000,000 4,435,000
- ------------------------------------------------------------------------------------------
Redding, CA Electric System Revenue COP,
MBIA Insured, Inverse Floater, 9.258%, 7/8/22(2) Aaa/AAA 2,500,000 3,365,625
- ------------------------------------------------------------------------------------------
Richmond, CA Improvement Bond Act of
1915 GORB, Reassessment District No. 855,
6.60%, 9/2/19 NR/NR 1,500,000 1,546,170
- ------------------------------------------------------------------------------------------
Riverside Cnty., CA CFD No. 88-12 SPTX
Bonds, 7.55%, 9/1/17 NR/NR 3,000,000 3,260,850
- ------------------------------------------------------------------------------------------
Riverside Cnty., CA PFAU TXAL RRB,
Redevelopment Projects, Series A,
5.625%, 10/1/33 Baa2/BBB- 6,600,000 6,823,278
- ------------------------------------------------------------------------------------------
Riverside Cnty., CA Refunding COP, Air Force
Village West, Inc., Series A, 8.125%, 6/15/12 NR/NR 3,000,000 3,307,500
- ------------------------------------------------------------------------------------------
Riverside Cnty., CA Refunding COP, Air Force
Village West, Inc., Series A, 8.125%, 6/15/20 NR/NR 3,000,000 3,297,720
- ------------------------------------------------------------------------------------------
Riverside Cnty., CA SFM RB, Escrowed to
Maturity, Series A, 7.80%, 5/1/21 Aaa/AAA 4,285,000 5,834,627
- ------------------------------------------------------------------------------------------
Sacramento Cnty., CA SFM RB, Escrowed to
Maturity, 8.125%, 7/1/16(6) Aaa/AAA 10,000,000 13,694,400
- ------------------------------------------------------------------------------------------
Sacramento Cnty., CA SPTX Refunding Bonds,
CFD No. 1, 5.70%, 12/1/20 NR/NR 2,000,000 2,028,740
- ------------------------------------------------------------------------------------------
Sacramento, CA Cogeneration Authority RB,
Procter & Gamble Project, 6.50%, 7/1/14 NR/BBB/BBB 5,000,000 5,849,100
- ------------------------------------------------------------------------------------------
Sacramento, CA MUD Electric RRB, FGIC
Insured, Inverse Floater, 9.274%, 8/15/18(2) Aaa/AAA/AAA 5,500,000 6,524,375
- ------------------------------------------------------------------------------------------
Sacramento, CA PAU RB, Cogeneration Project,
6%, 7/1/22 NR/BBB- 7,300,000 7,857,063
- ------------------------------------------------------------------------------------------
Sacramento, CA Cogeneration Authority RRB,
MBIA Insured, 5.25%, 7/1/12 NR/AAA/AAA 750,000 805,193
</TABLE>
15 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings:
Moody's/ Face Market Value
S&P/Fitch Amount See Note 1
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California (continued)
San Bernardino Cnty., CA COP, Medical Center
Financing Project, MBIA Insured, 5.50%, 8/1/17 Aaa/AAA $ 5,250,000 $ 5,782,508
- ---------------------------------------------------------------------------------------------------
San Diego Cnty., CA COP, MBIA Insured, Inverse
Floater, 9.367%, 11/18/19(2) Aaa/AAA 2,000,000 2,287,500
- ---------------------------------------------------------------------------------------------------
San Diego Cnty., CA Water Authority Revenue
COP, Series 91-B, MBIA Insured, Inverse Floater,
9.22%, 4/8/21(2) Aaa/AAA 3,000,000 3,956,250
- ---------------------------------------------------------------------------------------------------
San Diego, CA Convention Center Expansion
FAU Lease RB, Series A, 5.25%, 4/1/16 Aaa/AAA/AAA 3,000,000 3,161,580
- ---------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. International
Airport Commission RB, Series 84, AMBAC
Insured, Inverse Floater, 6.145%, 5/1/19(2) NR/AAA 4,750,000 4,765,485
- ---------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. International
Airport Commission RB, Issue 22, AMBAC
Insured, 5%, 5/1/19 Aaa/AAA/AAA 235,000 236,088
- ---------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. Redevelopment
FAU TXAL Refunding Bonds, CAP
Redevelopment Projects, Series C,
Zero Coupon, 5.25%, 8/1/14(1) A2/A 2,350,000 1,104,359
- ---------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. Redevelopment
FAU TXAL Refunding Bonds, CAP
Redevelopment Projects, Series C,
Zero Coupon, 5.10%, 8/1/11(1) A2/A 2,350,000 1,282,301
- ---------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. Redevelopment
FAU TXAL Refunding Bonds, CAP
Redevelopment Projects, Series C,
Zero Coupon, 5.15%, 8/1/12(1) A2/A 2,350,000 1,228,627
- ---------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. Redevelopment
FAU TXAL Refunding Bonds, Series C,
Zero Coupon, 5%, 8/1/10(1) A2/A 2,350,000 1,358,253
- ---------------------------------------------------------------------------------------------------
San Joaquin Hills, CA Transportation Corridor
Agency Toll Road RB, Sr. Lien, 5%, 1/1/33 Baa3/BBB-/BBB 8,000,000 7,776,960
- ---------------------------------------------------------------------------------------------------
San Joaquin Hills, CA Transportation Corridor
Agency Toll Road RB, Sr. Lien, Prerefunded,
6.75%, 1/1/32 Aaa/AAA/AAA 7,000,000 7,969,780
- ---------------------------------------------------------------------------------------------------
San Joaquin Hills, CA Transportation Corridor
Agency Toll Road RRB, CAP, Series A,
0%/5.75%, 1/15/21(5) Baa3/BBB-/BBB 11,800,000 8,522,432
- ---------------------------------------------------------------------------------------------------
Santa Ana, CA FAU RRB, Inner-City Commuter,
Series C, 5.60%, 9/1/19 NR/BBB 3,060,000 3,113,366
- ---------------------------------------------------------------------------------------------------
Santa Ana, CA FAU RRB, Mainplace Project,
Series D, 5.50%, 9/1/15 NR/NR 1,000,000 1,008,910
</TABLE>
16 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings:
Moody's/ Face Market Value
S&P/Fitch Amount See Note 1
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California (continued)
Santa Ana, CA FAU RRB, Mainplace Project,
Series D, 5.60%, 9/1/19 NR/NR $ 1,000,000 $ 1,006,650
- -------------------------------------------------------------------------------------------
Santa Margarita/Dana Point, CA Authority RB,
Improvement Districts 3-3A-4-4A, Series B,
MBIA Insured, 7.25%, 8/1/14 Aaa/AAA 680,000 887,305
- -------------------------------------------------------------------------------------------
Southern CA Home FAU SFM RB, Series A,
7.35%, 9/1/24 NR/AAA 1,600,000 1,683,856
- -------------------------------------------------------------------------------------------
Southern CA Metropolitan Water District
Waterworks RB, 5.55%, 10/30/20 Aa2/AA 3,600,000 3,749,544
- -------------------------------------------------------------------------------------------
Southern CA Metropolitan Water District
Waterworks RB, Inverse Floater, 7.419%,
10/30/20(2) Aa2/AA 1,500,000 1,608,750
- -------------------------------------------------------------------------------------------
Southern CA PPAU Transmission Project RB,
Inverse Floater, 8.025%, 7/1/12(2) Aa3/A 1,900,000 2,194,500
- -------------------------------------------------------------------------------------------
Stockton, CA CFD No. 90-2 SPTX RRB,
Brookside Estates, 6.20%, 8/1/15 NR/NR 1,750,000 1,848,753
- -------------------------------------------------------------------------------------------
Temecula, CA CFD 88-12-A SPTX Refunding
Bonds, 5.625%, 9/1/17 NR/NR 2,175,000 2,215,694
- -------------------------------------------------------------------------------------------
Tustin, CA USD CFD No. 88-1 SPTX RB,
Series B, 6.375%, 9/1/21 NR/NR 3,500,000 4,120,165
- -------------------------------------------------------------------------------------------
University of CA Regents RB, Multiple Purpose
Projects, Prerefunded, Series A, 6.875%, 9/1/16 NR/AA- 1,950,000 2,213,387
- -------------------------------------------------------------------------------------------
West Sacramento, CA Improvement Bond Act
of 1915 SPAST Refunding Bonds, 5.60%, 9/2/17 NR/NR 2,000,000 2,012,540
- -------------------------------------------------------------------------------------------
Yuba City, CA USD Refunding COP,
Series A, 5%, 2/1/17 Aaa/AAA 3,010,000 3,060,628
------------
426,869,014
- -------------------------------------------------------------------------------------------
U.S. Possessions--9.2%
Guam PAU RB, Series A, 6.625%, 10/1/14 NR/BBB 2,000,000 2,219,780
- -------------------------------------------------------------------------------------------
PR CMWLTH GOB, 5.375%, 7/1/25 Baa1/A 6,600,000 6,797,868
- -------------------------------------------------------------------------------------------
PR CMWLTH GORB, MBIA Insured, Inverse
Floater, 7.884%, 7/1/08(2) Aaa/AAA 3,500,000 3,981,250
- -------------------------------------------------------------------------------------------
PR CMWLTH GOUN, Public Improvement,
4.75%, 7/1/23 Baa1/A 11,750,000 11,410,543
- -------------------------------------------------------------------------------------------
PR CMWLTH HTAU RRB, Series A, AMBAC
Insured, 5.50%, 7/1/13 Aaa/AAA/AAA 3,500,000 3,933,720
- -------------------------------------------------------------------------------------------
PR CMWLTH HTAU RRB, Series A, AMBAC
Insured, 5.50%, 7/1/14 Aaa/AAA/AAA 3,500,000 3,908,870
- -------------------------------------------------------------------------------------------
PR EPAU RB, Prerefunded, Series P, 7%, 7/1/21 Baa1/BBB+ 4,000,000 4,426,000
</TABLE>
17 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings:
Moody's/ Face Market Value
S&P/Fitch Amount See Note 1
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Possessions (continued)
PR HFA SFM RB, Affordable Housing Mtg
Portfolio I, 6.25%, 4/1/29 Aaa/AAA $ 2,440,000 $ 2,586,766
- -----------------------------------------------------------------------------------------------
PR Housing Finance Corp. SFM RB, Portfolio 1,
Series B, 7.65%, 10/15/22 Aaa/AAA 395,000 416,583
- -----------------------------------------------------------------------------------------------
PR Industrial, Medical & Environmental PC
Facilities Tourist RB, Mennonite General
Hospital Project, Series A, 6.50%, 7/1/12 NR/BBB-/BBB 2,375,000 2,581,625
------------
42,263,005
------------
Total Municipal Bonds and Notes (Cost $433,912,213) 469,132,019
<CAPTION>
Date Strike Contracts
===============================================================================================
<S> <C> <C> <C> <C>
Call Options Purchased--0.0%
- -----------------------------------------------------------------------------------------------
U.S. Treasury Bond Futures, 20 yr., 3/99 Call Opt.
(Cost $139,126) 2/99 $131 500 93,750
<CAPTION>
Face
Amount
===============================================================================================
<S> <C> <C>
Short-Term Tax-Exempt Obligations--0.1%
- -----------------------------------------------------------------------------------------------
CA PCFAU SWD RR RB, Shell Martinez Refining,
Series A, 3%, 2/1/99(4) (Cost $400,000) $ 400,000 400,000
- -----------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $434,451,339) 101.6% 469,625,769
- -----------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (1.6) (7,218,051)
------------ ------------
Net Assets 100.0% $462,407,718
============ ============
</TABLE>
To simplify the listings of securities, abbreviations are used per the table
below:
<TABLE>
<S> <C>
CAP --Capital Appreciation PC --Pollution Control
CDAU --Communities Development Authority PCFAU--Pollution Control Finance Authority
CFD --Community Facilities District PFAU --Public Finance Authority
COP --Certificates of Participation PPAU --Public Power Authority
CMWLTH--Commonwealth PWBL --Public Works Board Lease
EPAU --Electric Power Authority RA --Redevelopment Agency
FA --Facilities Authority RB --Revenue Bonds
FAU --Finance Authority RR --Resource Recovery
GOB --General Obligation Bonds RRB --Revenue Refunding Bonds
GORB --General Obligation Refunding Bonds SCDAU--Statewide Communities Development Authority
GOUN --General Obligation Unlimited Notes SDI --School District
HF --Health Facilities SFM --Single Family Mortgage
HFA --Housing Finance Agency SPAST--Special Assessment
HFFAU --Health Facilities Finance Authority SPTX --Special Tax
HTAU --Highway & Transportation Authority SWD --Solid Waste Disposal
MTAU --Metropolitan Transportation Authority TXAL --Tax Allocation
MUD --Municipal Utility District USD --Unified School District
PAU --Power Authority
</TABLE>
18 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
2. Represents the current interest rate for a variable rate bond known as an
"inverse floater" which pays interest at a rate that varies inversely with
short-term interest rates. As interest rates rise, inverse floaters produce less
current income. Their price may be more volatile than the price of a comparable
fixed-rate security. Inverse floaters amount to $47,555,555 or 10.28% of the
Fund's net assets as of January 31, 1999.
3. When-issued security to be delivered and settled after January 31, 1999.
4. Represents the current interest rate for a variable rate security, is subject
to change periodically, and is the effective rate on January 31, 1999.
5. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
6. Securities with an aggregate market value of $1,780,272 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 of Notes to Financial Statements.
As of January 31, 1999, securities subject to the Alternative Minimum Tax amount
to $82,588,075 or 17.86% of the Fund's net assets.
Distribution of investments by industry, as a percentage of total investments at
value, is as follows:
Industry Market Value Percent
- --------------------------------------------------------------------------------
Special Assessment $118,797,912 25.3%
- --------------------------------------------------------------------------------
Single Family Housing 58,781,000 12.5
- --------------------------------------------------------------------------------
Municipal Leases 51,852,550 11.0
- --------------------------------------------------------------------------------
Electric Utilities 45,455,196 9.7
- --------------------------------------------------------------------------------
Hospital/Healthcare 42,108,436 9.0
- --------------------------------------------------------------------------------
Highways 40,384,307 8.6
- --------------------------------------------------------------------------------
General Obligation 30,716,941 6.6
- --------------------------------------------------------------------------------
Marine/Aviation Facilities 22,143,378 4.7
- --------------------------------------------------------------------------------
Adult Living Facilities 21,215,725 4.5
- --------------------------------------------------------------------------------
Sales Tax 10,172,300 2.2
- --------------------------------------------------------------------------------
Corporate Backed 9,484,523 2.0
- --------------------------------------------------------------------------------
Water Utilities 9,314,544 2.0
- --------------------------------------------------------------------------------
Higher Education 7,203,316 1.5
- --------------------------------------------------------------------------------
Education 933,141 0.2
- --------------------------------------------------------------------------------
Resource Recovery 568,750 0.1
- --------------------------------------------------------------------------------
Pollution Control 400,000 0.1
- --------------------------------------------------------------------------------
Call Options 93,750 0.0
------------ -----
Total $469,625,769 100.0%
============ =====
See accompanying Notes to Financial Statements.
19 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities January 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
===============================================================================
Assets
Investments, at value (cost $434,451,339)--see accompanying
statement $469,625,769
- -------------------------------------------------------------------------------
Cash 55,205
- -------------------------------------------------------------------------------
Receivables and other assets:
Interest 6,260,087
Shares of beneficial interest sold 1,769,403
Other 7,830
------------
Total assets 477,718,294
===============================================================================
Liabilities
Payables and other liabilities:
Investments purchased 12,983,913
Dividends 1,174,364
Shares of beneficial interest redeemed 685,752
Trustees' compensation--Note 1 174,748
Daily variation on futures contracts--Note 5 141,326
Distribution and service plan fees 95,317
Transfer and shareholder servicing agent fees 6,791
Other 48,365
------------
Total liabilities 15,310,576
===============================================================================
Net Assets $462,407,718
============
===============================================================================
Composition of Net Assets
Paid-in capital $426,962,610
- -------------------------------------------------------------------------------
Overdistributed net investment income (849,092)
- -------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 1,261,096
- -------------------------------------------------------------------------------
Net unrealized appreciation on investments--Notes 3 and 5 35,033,104
------------
Net assets $462,407,718
============
20 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$315,182,793 and 28,286,025 shares of beneficial interest outstanding) $11.14
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $11.70
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $132,309,342 and 11,870,023 shares of beneficial interest
outstanding) $11.15
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $14,915,583 and 1,340,382 shares of beneficial interest
outstanding) $11.13
See accompanying Notes to Financial Statements.
21 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Six Months Ended January 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
===============================================================================
Investment Income
Interest $12,787,796
===============================================================================
Expenses
Management fees--Note 4 1,253,783
- -------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 374,405
Class B 625,589
Class C 66,555
- -------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 115,530
- -------------------------------------------------------------------------------
Trustees' compensation--Note 1 30,736
- -------------------------------------------------------------------------------
Shareholder reports 27,527
- -------------------------------------------------------------------------------
Custodian fees 15,549
- -------------------------------------------------------------------------------
Legal, auditing and other professional fees 14,091
- -------------------------------------------------------------------------------
Registration and filing fees 7,154
- -------------------------------------------------------------------------------
Other 9,263
-----------
Total expenses 2,540,182
Less expenses paid indirectly--Note 4 (14,865)
-----------
Net expenses 2,525,317
===============================================================================
Net Investment Income 10,262,479
===============================================================================
Realized and Unrealized Gain
Net realized gain on:
Investments 2,175,606
Closing of futures contracts 100,604
-----------
Net realized gain 2,276,210
- -------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on
investments 6,632,791
-----------
Net realized and unrealized gain 8,909,001
===============================================================================
Net Increase in Net Assets Resulting from Operations $19,171,480
===========
See accompanying Notes to Financial Statements.
22 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended
January 31, 1999 Year Ended
(Unaudited) July 31, 1998
========================================================================================
<S> <C> <C>
Operations
Net investment income $ 10,262,479 $ 19,136,459
- ----------------------------------------------------------------------------------------
Net realized gain (loss) 2,276,210 (1,120,364)
- ----------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 6,632,791 3,444,127
------------ ------------
Net increase in net assets resulting from operations 19,171,480 21,460,222
========================================================================================
Dividends and Distributions to Shareholders
Dividends from net investment income:
Class A (7,474,377) (14,732,831)
Class B (2,510,334) (4,147,106)
Class C (267,555) (359,910)
- ----------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (2,092,323)
Class B -- (677,374)
Class C -- (51,258)
========================================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A 8,253,469 3,072,554
Class B 14,407,206 33,042,362
Class C 3,326,034 5,382,827
========================================================================================
Net Assets
Total increase 34,905,923 40,897,163
- ----------------------------------------------------------------------------------------
Beginning of period 427,501,795 386,604,632
------------ ------------
End of period (including overdistributed net investment
income of $849,092 and $859,305, respectively) $462,407,718 $427,501,795
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
23 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
--------------------------------------------------
Six Months
Ended
January 31,
1999 Year Ended July 31,
(Unaudited) 1998 1997 1996(2)
======================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $10.92 $10.94 $10.39 $10.69
- ------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .27 .54 .58 .33
Net realized and unrealized gain (loss) .22 .06 .54 (.30)
------ ------ ------ ------
Total income (loss) from investment operations .49 .60 1.12 .03
- ------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.27) (.54) (.57) (.33)
Dividends in excess of net investment income -- -- -- --
Distributions from net realized gain -- (.08) -- --
------ ------ ------ ------
Total dividends and distributions to shareholders (.27) (.62) (.57) (.33)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.14 $10.92 $10.94 $10.39
====== ====== ====== ======
======================================================================================================
Total Return, at Net Asset Value(3) 4.47% 5.66% 11.11% 0.34%
======================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $315,183 $300,717 $298,162 $286,033
- ------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $310,200 $297,372 $289,439 $279,796
- ------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.79%(4) 4.91% 5.49% 5.53%(4)
Expenses(5) 0.89%(4) 0.92% 0.94% 0.97%(4)
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 15% 31% 31% 14%
</TABLE>
1. For the period from November 1, 1995, (inception of offering) to December 31,
1995.
2. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
24 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Class B
--------------------- --------------------------------------------------
Six Months
Ended
Year Ended January 31,
December 31, 1999 Year Ended July 31,
1995 1994 (Unaudited) 1998 1997 1996(2)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $9.45 $10.97 $10.92 $10.94 $10.39 $10.69
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .58 .60 .23 .46 .49 .28
Net realized and unrealized gain (loss) 1.25 (1.51) .22 .06 .55 (.30)
------ ------ ------ ------ ------ ------
Total income (loss) from investment operations 1.83 (.91) .45 .52 1.04 (.02)
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.58) (.61) (.22) (.46) (.49) (.28)
Dividends in excess of net investment income (.01) -- -- -- -- --
Distributions from net realized gain -- -- -- (.08) -- --
------ ------ ------ ------ ------ ------
Total dividends and distributions to shareholders (.59) (.61) (.22) (.54) (.49) (.28)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.69 $9.45 $11.15 $10.92 $10.94 $10.39
====== ====== ====== ====== ====== ======
================================================================================================================================
Total Return, at Net Asset Value(3) 19.76% (8.49)% 4.07% 4.86% 10.27% (0.12)%
================================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $285,307 $219,682 $132,309 $115,444 $82,474 $52,038
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $250,188 $248,850 $124,188 $99,266 $65,192 $46,422
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.64% 5.99% 4.02%(4) 4.21% 4.70% 4.74%(4)
Expenses(5) 0.95% 0.96% 1.65%(4) 1.67% 1.70% 1.74%(4)
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 23% 22% 15% 31% 31% 14%
<CAPTION>
Class B
--------------------
Year Ended
December 31,
1995 1994
========================================================================
<S> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $9.44 $10.98
- ------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .51 .54
Net realized and unrealized gain (loss) 1.25 (1.55)
------ ------
Total income (loss) from investment operations 1.76 (1.01)
- ------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.50) (.53)
Dividends in excess of net investment income (.01) --
Distributions from net realized gain -- --
------ ------
Total dividends and distributions to shareholders (.51) (.53)
- ------------------------------------------------------------------------
Net asset value, end of period $10.69 $9.44
====== ======
========================================================================
Total Return, at Net Asset Value(3) 18.97% (9.39)%
========================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $41,224 $20,224
- ------------------------------------------------------------------------
Average net assets (in thousands) $29,918 $16,552
- ------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.82% 5.17%
Expenses(5) 1.72% 1.73%
- ------------------------------------------------------------------------
Portfolio turnover rate(6) 23% 22%
</TABLE>
4. Annualized.
5. Beginning in fiscal 1995, the expense ratio reflects the effect of gross
expenses paid indirectly by the Fund. Prior year expense ratios have not been
adjusted.
6. 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 January 31, 1999, were $94,855,181 and $67,803,290, respectively.
25 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C
-------------------------------------------------------------
Six Months
Ended Period
January 31, Ended
1999 Year Ended July 31, December 31,
(Unaudited) 1998 1997 1996(2) 1995(1)
============================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $10.91 $10.93 $10.38 $10.68 $10.46
- ------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .23 .46 .49 .27 .08
Net realized and unrealized gain (loss) .21 .06 .55 (.30) .22
------ ------ ------ ------ ------
Total income (loss) from investment
operations .44 .52 1.04 (.03) .30
- ------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.22) (.46) (.49) (.27) (.07)
Dividends in excess of net investment income -- -- -- -- (.01)
Distributions from net realized gain -- (.08) -- -- --
------ ------ ------ ------ ------
Total dividends and distributions to
shareholders (.22) (.54) (.49) (.27) (.08)
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.13 $10.91 $10.93 $10.38 $10.68
====== ====== ====== ====== ======
============================================================================================================
Total Return, at Net Asset Value(3) 3.99% 4.87% 10.26% (0.19)% 2.90%
============================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $14,916 $11,340 $5,969 $2,171 $125
- ------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $13,223 $ 8,614 $3,869 $1,156 $ 91
- ------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.01%(4) 4.24% 4.66% 4.54%(4) 4.56%(4)
Expenses(5) 1.64%(4) 1.66% 1.70% 1.80%(4) 1.68%(4)
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 15% 31% 31% 14% 23%
</TABLE>
1. For the period from November 1, 1995, (inception of offering) to December 31,
1995.
2. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
4. Annualized.
5. Beginning in fiscal 1995, the expense ratio reflects the effect of gross
expenses paid indirectly by the Fund. Prior year expense ratios have not been
adjusted.
6. 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 January 31, 1999, were $94,855,181 and $67,803,290, respectively.
See accompanying Notes to Financial Statements.
26 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies
Oppenheimer California Municipal 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 objective is to seek
current income exempt from Federal and California income taxes by investing in
municipal securities, while attempting to preserve capital. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers
Class A, Class B and Class C shares. Class A shares are sold with a front-end
sales charge. Class B and Class C shares may be subject to a contingent deferred
sales charge. All classes of shares have identical rights to earnings, assets
and voting privileges, except that each class has its own distribution and/or
service plan, expenses directly attributable to that class and exclusive voting
rights with respect to matters affecting that class. Class B shares will
automatically convert to Class A shares six years after the date of purchase.
The following is a summary 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
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 an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of 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, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required. As of July 31, 1998, the
Fund had available for federal income tax purposes an unused capital loss
carryover of approximately $960,000, which expires in 2006.
27 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
Trustees' Compensation. 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
January 31, 1999, a provision of $6,625 was made for the Fund's projected
benefit obligations, resulting in an accumulated liability of $169,943 as of
January 31, 1999.
The Board of Trustees has adopted a deferred compensation plan for
independent Trustees that enables Trustees to elect to defer receipt of all or a
portion of annual fees they are entitled to receive from the Fund. Under the
plan, the compensation deferred is periodically adjusted as though an equivalent
amount had been invested for the Trustee in shares of one or more Oppenheimer
funds selected by the Trustee. The amount paid to the Trustee under the plan
will be determined based upon the performance of the selected funds. Deferral of
Trustees' fees under the plan will not affect the net assets of the Fund, and
will not materially affect the Fund's assets, liabilities or net income per
share.
- --------------------------------------------------------------------------------
Distributions to Shareholders. The Fund intends to declare dividends separately
for Class A, Class B and Class C shares from net investment income each day the
New York Stock Exchange is open for business and pay such dividends monthly.
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. The character of the distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
- --------------------------------------------------------------------------------
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. For bonds acquired after April 30, 1993, on
disposition or maturity, taxable ordinary income is recognized to the extent of
the lesser of gain or market discount that would have accrued over the holding
period. Realized gains and losses on investments and unrealized appreciation and
depreciation are determined on an identified cost basis, which is the same basis
used for federal income tax purposes.
28 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
The Fund concentrates its investments in California and, therefore, may have
more credit risks related to the economic conditions of California than a
portfolio with a broader geographical diversification.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Six Months Ended January 31, 1999 Year Ended July 31, 1998
--------------------------------- -------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 2,714,921 $30,051,126 4,625,371 $50,462,764
Dividends and
distributions reinvested 400,571 4,424,348 921,790 10,031,986
Redeemed (2,367,438) (26,222,005) (5,266,312) (57,422,196)
---------- ----------- ---------- -----------
Net increase 748,054 $8,253,469 280,849 $3,072,554
========== =========== ========== ===========
- ---------------------------------------------------------------------------------------
Class B:
Sold 1,837,794 $20,341,568 3,871,772 $42,232,554
Dividends and
distributions reinvested 142,217 1,571,400 279,759 3,046,210
Redeemed (677,958) (7,505,762) (1,120,147) (12,236,402)
---------- ----------- ---------- -----------
Net increase 1,302,053 $14,407,206 3,031,384 $33,042,362
========== =========== ========== ===========
- ---------------------------------------------------------------------------------------
Class C:
Sold 427,657 $4,734,960 697,841 $7,611,935
Dividends and
distributions reinvested 17,693 195,190 29,500 320,853
Redeemed (144,726) (1,604,116) (233,849) (2,549,961)
---------- ----------- ---------- -----------
Net increase 300,624 $3,326,034 493,492 $5,382,827
========== =========== ========== ===========
</TABLE>
29 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
3. Unrealized Gains and Losses on Investments
As of January 31, 1999, net unrealized appreciation on investments of
$35,174,430 was composed of gross appreciation of $35,314,728, and gross
depreciation of $140,298.
================================================================================
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 a fee of 0.60% of the first
$200 million of average annual net assets, 0.55% of the next $100 million, 0.50%
of the next $200 million, 0.45% of the next $250 million, 0.40% of the next $250
million and 0.35% of average annual net assets in excess of $1 billion. The
Fund's management fees for the six months ended January 31, 1999 was 0.57% of
the average annual net assets of Class A, Class B and Class C shares.
For the six months ended January 31, 1999, commissions (sales
charges paid by investors) on sales of Class A shares totaled $384,132, of which
$75,884 was retained by OppenheimerFunds 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 A,
Class B and Class C shares totaled $35,793, $681,847 and $42,088, respectively.
Amounts paid to an affiliated broker/dealer for Class B and Class C shares were
$16,976 and $4,812, respectively. During the six months ended January 31, 1999,
OFDI received contingent deferred sales charges of $142,669 and $6,115,
respectively, upon redemption of Class B and Class C shares as reimbursement for
sales commissions advanced by OFDI at the time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund and for other Oppenheimer
funds. OFS's total costs of providing such services are allocated ratably to
these funds.
Expenses paid indirectly represent a reduction of custodian fees for
earnings on cash balances maintained by the Fund.
The Fund has adopted a Service Plan for Class A shares to reimburse
OFDI for a portion of its costs incurred in connection with the personal service
and maintenance of shareholder accounts that hold Class A shares. Reimbursement
is made quarterly at an annual rate that may not exceed 0.25% of the average
annual net assets of Class A shares of the Fund. OFDI uses the service fee to
reimburse brokers, dealers, banks and other financial institutions quarterly for
providing personal service and maintenance of accounts of their customers that
hold Class A shares. During the six months ended January 31, 1999, OFDI paid
$12,445 to an affiliated broker/dealer as reimbursement for Class A personal
service and maintenance expenses.
30 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
The Fund has adopted Distribution and Service Plans for Class B and Class C
shares to compensate OFDI for its costs in distributing Class B and Class C
shares and servicing accounts. Under the Plans, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class B and Class C shares, for
its services rendered in distributing Class B and Class C shares. OFDI also
receives a service fee of 0.25% per year to compensate dealers for providing
personal services for accounts that hold Class B and Class C shares. Each fee is
computed on the average annual net assets of Class B or Class C shares,
determined as of the close of each regular business day. During the six months
ended January 31, 1999, OFDI paid $1,189 and $4,841, respectively, to an
affiliated broker/dealer as compensation for Class B and Class C personal
service and maintenance expenses and retained $515,962 and $51,106,
respectively, as compensation for Class B and Class C sales commissions and
service fee advances, as well as financing costs. If the Plans are terminated by
the Fund, the Board of Trustees may allow the Fund to continue payments of the
asset-based sales charge to OFDI for certain expenses it incurred before the
Plans were terminated. As of January 31, 1999, OFDI had incurred excess
distribution and servicing costs of $4,013,157 for Class B and $178,972 for
Class C.
================================================================================
5. Futures Contracts
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Fund may also buy
or write put or call options on these futures contracts.
The Fund generally sells futures contracts to hedge against
increases in interest rates and the resulting negative effect on the value of
fixed rate portfolio securities. The Fund may also purchase futures contracts to
gain exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to
deposit either cash or securities (initial margin) in an amount equal to a
certain percentage of the contract value. Subsequent payments (variation margin)
are made or received by the Fund each day. The variation margin payments are
equal to the daily changes in the contract value and are recorded as unrealized
gains and losses. The Fund recognizes a realized gain or loss when the contract
is closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable or
payable for the daily mark to market for variation margin.
31 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
5. Futures Contracts (continued)
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of January 31, 1999, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
Expiration Number of Valuation as of Unrealized
Contract Description Date Contracts January 31, 1999 Depreciation
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts to Sell
- -----------------
U.S. Treasury Bonds, 20 yr. 3/99 200 $25,600,000 $141,326
</TABLE>
================================================================================
6. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the six months ended
January 31, 1999.
32 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
Oppenheimer California Municipal Fund
- --------------------------------------------------------------------------------
================================================================================
Officers and Trustees Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board of Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Caryn Halbrecht, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and OppenheimerFunds Services
Shareholder Servicing
Agent
================================================================================
Custodian of Citibank, N.A.
Portfolio Securities
================================================================================
Independent Auditors KPMG 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 Municipal Fund. This report
must be preceded or accompanied by a Prospectus of
Oppenheimer California Municipal 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, are not insured by the FDIC or any other agency,
and involve investment risks, including the possible
loss of the principal amount invested.
33 Oppenheimer California Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
OppenheimerFunds Family
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
==================================================================================================================
Real Asset Funds
- ------------------------------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
==================================================================================================================
Global Stock Funds
- ------------------------------------------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Quest Global Value Fund
International Small Global Fund Global Growth & Income Fund
Company Fund Europe Fund
==================================================================================================================
Stock Funds
- ------------------------------------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Disciplined Value Fund
Quest Small Cap Value Fund Quest Capital Value Fund Quest Value Fund
Large Cap Growth Fund
==================================================================================================================
Stock & Bond Funds
- ------------------------------------------------------------------------------------------------------------------
Main Street Growth & Total Return Fund Disciplined Allocation Fund
Income Fund(1) Quest Balanced Multiple Strategies Fund
Quest Opportunity Value Fund Convertible Securities Fund
Value Fund Equity Income Fund
==================================================================================================================
Taxable Bond Funds
- ------------------------------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield Fund Bond Fund
==================================================================================================================
Municipal Bond Funds
- ------------------------------------------------------------------------------------------------------------------
California Municipal Fund(2) Pennsylvania Municipal Fund(2) Rochester Division:
Florida Municipal Fund(2) Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund(2) Insured Municipal Fund Limited Term New York
New York Municipal Fund(2) Intermediate Municipal Fund Municipal Fund
==================================================================================================================
Money Market Funds(3)
- ------------------------------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
</TABLE>
1. On 12/22/98, the Fund's name was changed from "Main Street Income & Growth
Fund."
2. Available only to investors in certain states.
3. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1999 OppenheimerFunds, Inc. All rights reserved.
34 Oppenheimer California Municipal Fund
<PAGE>
Internet
24-hr access to account
information. Online
trans actions now available
- ---------------------------------------
www.oppenheimerfunds.com
- ---------------------------------------
General Information
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
- ---------------------------------------
1-800-525-7048
- ---------------------------------------
Account Transactions
Mon-Fri 8:30am-8pm ET
- ---------------------------------------
1-800-852-8457
- ---------------------------------------
PhoneLink
24-hr automated information
and automated transactions
- ---------------------------------------
1-800-533-3310
- ---------------------------------------
Telecommunication Device
for the Deaf (TDD)
Mon-Fri 8:30am-2pm ET
- ---------------------------------------
1-800-843-4461
- ---------------------------------------
OppenheimerFunds
Information Hotline
24 hours a day, timely and
insightful messages on the
economy and issues that
affect your investments
- ---------------------------------------
1-800-835-3104
- ---------------------------------------
Information and services
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number or by visiting our website. And, by
enrolling in AccountLink, a convenient service that "links" your Oppenheimer
funds accounts and your bank checking or savings account, you can use the
Telephone Transactions number or website to make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at
www.oppenheimerfunds.com--we're here to help.
[LOGO] OppenheimerFunds(R)
Distributor, Inc.
RS0790.001.0199 April 1, 1999
