<PAGE> 1
SEMIANNUAL REPORT JANUARY 31, 2000
OPPENHEIMER
CALIFORNIA MUNICIPAL FUND
[PHOTO]
[OPPENHEIMERFUNDS LOGO]
THE RIGHT WAY TO INVEST
<PAGE> 2
CONTENTS
1 President's Letter
3 An Interview
with Your Fund's Manager
8 Financial
Statements
29 Officers and Trustees
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
RISING INTEREST RATES HURT THE PERFORMANCE OF MUNICIPAL BONDS throughout the
reporting period.
AS OF JANUARY 31, 2000, LONG-TERM CALIFORNIA MUNICIPAL BONDS PROVIDED OVER 90%
OF THE YIELD AVAILABLE FROM COMPARABLE U.S. TREASURIES--making them attractive
values on an after-tax basis.
CUMULATIVE TOTAL RETURNS
For the 6-Month Period
Ended 1/31/00*
CLASS A
Without With
Sales Chg. Sales Chg.
- ----------------------
- -6.07% -10.54%
CLASS B
Without With
Sales Chg. Sales Chg.
- ----------------------
- -6.34% -10.91%
CLASS C
Without With
Sales Chg. Sales Chg.
- ----------------------
- -6.35% -7.26%
NOT FDIC INSURED.
NO BANK GUARANTEE.
MAY LOSE VALUE.
* See page 7 for further details.
<PAGE> 3
PRESIDENT'S LETTER
[PHOTO]
BRIDGET A. MACASKILL
President
Oppenheimer
California
Municipal Fund
DEAR SHAREHOLDER,
- --------------------------------------------------------------------------------
Whenever a new year begins--let alone a new decade or century--it makes sense to
pause a moment to assess where we've been and where we're going.
In retrospect, U.S. stocks and bonds in 1999 were subject to sudden and
substantial swings in investor sentiment because of economic uncertainty. When
the year began, investors were concerned that growth in the United States might
slow in response to economic weakness overseas. At mid-year, investors were
concerned that the economy was too strong, potentially rekindling inflationary
pressures. Yet, by year end, it became clearer that while the U.S. economy grew
robustly in 1999, inflation remained at low levels. Indeed, investors appeared
more comfortable with the economy after the Federal Reserve Board demonstrated
its inflation-fighting resolve by raising interest rates three times between
June and November.
As is normal in a rising-interest-rate environment, bond prices generally
declined in 1999, led lower by U.S. Treasury bonds. In the stock market, while
most major indices advanced, strong performance was mostly limited to a handful
of large-capitalization growth companies, principally in the technology arena.
Smaller and value-oriented stocks provided particularly lackluster returns, and
overall, foreign stocks outperformed U.S. stocks in 1999.
Looking forward, we expect the U.S. economy to remain on a
moderate-growth, low-inflation course. As recent revisions of 1999's economic
statistics demonstrated, the economy has defied many analysts' forecasts by
growing at a strong rate, which should be positive for the bond market.
Similarly, positive economic forces could help the stock market's performance
broaden to include value-oriented and smaller stocks.
We see particularly compelling opportunities outside of the U.S. market.
Manyforeign stocks also ended 1999 more attractively valued than large-cap U.S.
stocks, and economic trends in overseas markets could lead to higher stock
prices. In Europe, corporate restructuring has just begun, giving
1 Oppenheimer California Municipal Fund
<PAGE> 4
PRESIDENT'S LETTER
companies there the same potential for cost-cutting and productivity
improvements that U.S. companies enjoyed 10 years ago. In Japan and Asia,
economic recovery is expected to gain strength, which could allow stocks to
rally from relatively low levels.
Another 1999 trend that should remain in force in 2000 is the growth of
businesses related to the Internet. The rise of e-Commerce has been good for
consumers and the economy because of greater price competition, which has helped
keep inflation under control. The Internet has also been good for investors, as
even companies with no earnings have seen their stock prices soar. Clearly,
while the Internet is here to stay, not all "dot-com" companies will survive,
and many of these high-flying Internet stocks will eventually--and perhaps very
suddenly--return to more reasonable levels. The long-term winners are most
likely to be companies that support the Internet's growth with content or
infrastructure.
What else is in store for investors in 2000? While we do not have an
infallible crystal ball, we believe that in almost any investment environment,
consistent success stems from an unwavering focus on fundamental investment
principles such as maintaining a long-term perspective, using diversification to
manage risks and availing oneself of the services of a knowledgeable financial
advisor. Indeed, these principles serve as the foundation for every investment
we offer, helping to make OppenheimerFunds The Right Way to Invest in 2000 and
beyond.
Sincerely,
/s/ Bridget A. Macaskill
February 22, 2000
These general market views represent opinions of OppenheimerFunds, Inc. and are
not intended to predict or depict performance of any particular fund. Specific
discussion, as it applies to your Fund, is contained in the pages that follow.
2 Oppenheimer California Municipal Fund
<PAGE> 5
[PHOTO]
PORTFOLIO MANAGEMENT
TEAM (L TO R)
Christian Smith (Portfolio Manager)
Robert Patterson
AN INTERVIEW WITH YOUR FUND'S MANAGER
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM DURING THE SIX-MONTH PERIOD THAT ENDED JANUARY 31,
2000?
A. It has been a difficult period for the municipal securities market, including
Oppenheimer California Municipal Fund. The rising interest rate environment, a
sharp decline in the demand for municipal bonds and a lack of supply of new
issues were some of the challenges the Fund encountered.
WHAT STEPS ARE YOU TAKING TO HELP IMPROVE THE FUND'S PERFORMANCE?
In November 1999, we began to restructure the Fund under the guidance of
Christian Smith, a money management professional with over 10 years experience
in the municipal market. This change should help us gain a fresh perspective on
the California municipal market, and proactively access the opportunities
available for the Fund.
HOW DID THE ROBUST U.S. ECONOMY AFFECT THE OVERALL MUNICIPAL MARKET?
Ongoing economic strength led to higher interest rates, which, in turn, led to
lower bond prices. With bonds becoming less attractive to investors, many turned
to the stock market for better returns.
The lengthy economic expansion has also resulted in a decrease in supply
of municipal bonds. First, government surpluses on the federal and state level
resulted in less need to issue debt to finance new projects. Second, the rise in
interest rates caused a natural decline in the refinancing of existing debt.
When interest rates are on the upswing, there is little reason for an
organization to retire existing, lower yielding debt, and introduce new
securities with higher yields. Often times in the financial markets, a decrease
in supply of a particular security leads to higher prices. However, the decline
in the demand for municipals more than offset the falling supply.
3 Oppenheimer California Municipal Fund
<PAGE> 6
"Our focus has been to lower the portfolio's sensitivity to changes in interest
rates."
AN INTERVIEW WITH YOUR FUND'S MANAGER
- --------------------------------------------------------------------------------
HOW WAS THE FUND MANAGED GIVEN THIS DIFFICULT ENVIRONMENT?
Our focus has been to lower the portfolio's sensitivity to interest rates. For
example, we have been working to reduce the Fund's duration versus its benchmark
by focusing on shorter-term securities. When it appears that interest rates have
peaked, we may look to extend the Fund's duration to take advantage of rising
bond prices.
COULD YOU DESCRIBE SOME OF YOUR INVESTMENT STRATEGIES THAT HELPED PERFORMANCE
DURING THE REPORTING PERIOD?
We enhanced returns through select investments in non-rated California real
estate securities. These bonds are typically issued by smaller organizations,
and are used to help finance the infrastructure needed in new housing
developments. As non-rated securities, they generally offer attractive yields.
Once the developments are occupied by tax-paying families and organizations,
this revenue aids the financial stability of the issuer, and the securities may
then become rated--sometimes leading to capital appreciation for the Fund.
In addition, we benefited from our investment in a non-profit organization
that helps train handicapped individuals to join the mainstream workforce. This
organization has been in existence for over 30 years, it has a strong management
team in place, and is widely known by companies that are looking for its
services.
4 Oppenheimer California Municipal Fund
<PAGE> 7
AVERAGE ANNUAL
TOTAL RETURNS
For the Periods Ended 12/31/99(1)
Class A
1-Year 5-Year 10-Year
- --------------------------
- -10.98% 5.34% 5.56%
Class B Since
1-Year 5-Year Inception
- --------------------------
- -11.78% 5.26% 3.70%
Class C Since
1-Year 5-Year Inception
- --------------------------
- -8.14% N/A 3.07%
STANDARDIZED YIELD(2)
For the 30-days Ended 1/31/00
- ---------------------------------
Class A 5.18%
- ---------------------------------
Class B 4.67
- ---------------------------------
Class C 4.68
HOW DID CALIFORNIA MUNICIPAL BONDS PERFORM COMPARED TO U.S. TREASURIES?
As interest rates rose, both types of securities performed poorly. However, in
recent months municipals outperformed U.S. Treasuries with comparable
maturities, due to municipal's attractive after-tax values. As of January 31,
2000, yields available from California municipal bonds were over 90% of the
yields available from comparable taxable government bonds. When considering the
tax-advantaged yields provided by California municipals, these securities
present better values compared to Treasuries.
WHAT IS YOUR OUTLOOK FOR THE ECONOMY OVER THE NEXT FEW MONTHS?
As we see it, the Federal Reserve will remain diligent in its attempt to slow
the pace of economic growth to help ward off an increase in inflation. As such,
we expect interest rates to continue rising into the summer. However, as the
year progresses, we anticipate seeing growth rates fall, as rising interest
rates should lead to a decline in consumer spending, and less dramatic stock
market gains. Ideally, this would result in interest rates moving downward.
1. See page 7 for further details.
2. Standardized yield is based on net investment income for the 30-day period
ended January 31, 2000. Falling share prices will tend to artificially raise
yields.
5 Oppenheimer California Municipal Fund
<PAGE> 8
CREDIT ALLOCATION(3)
[PIE CHART]
<TABLE>
<S> <C>
AAA 45.9%
AA 8.9
A 9.5
BBB 23.5
BB 11.4
B 0.8
</TABLE>
In the meantime, we will continue to actively monitor the markets--making
careful adjustments to the Fund's portfolio as is necessary. Diligently working
to enhance returns while being mindful of risk--just two reasons why Oppenheimer
California Municipal Fund is an important part of The Right Way to Invest.
<TABLE>
<CAPTION>
TOP FIVE INDUSTRIES (Percentage of invested assets)(4)
- --------------------------------------------------------
<S> <C>
Special Assessment 28.7%
- --------------------------------------------------------
Municipal Leases 11.2
- --------------------------------------------------------
Single Family Housing 10.7
- --------------------------------------------------------
Highways 9.3
- --------------------------------------------------------
Electric Utilities 8.2
- --------------------------------------------------------
</TABLE>
3. Portfolio data are as of January 31, 2000, are subject to change, and are
dollar-weighted based on total market value of investments. 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 19.6% of total investments) which have ratings assigned by the
Manager in categories equivalent to those of ratings organizations.
4. Industry weightings are as of January 31, 2000, and are subject to change.
6 Oppenheimer California Municipal Fund
<PAGE> 9
NOTES
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.
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized.
CLASS A shares were first publicly offered on 11/3/88. Class A returns include
the current maximum initial sales charge of 4.75%.
CLASS B shares of the Fund were first publicly offered on 5/3/93. Class B
returns include the applicable contingent deferred sales charge of 5% (1-year)
and 1% (5-year). Because Class B shares convert to Class A shares 72 months
after purchase, the "life-of-class" return for Class B uses Class A performance
for the period after conversion. Class B shares are subject to an annual 0.75%
asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 11/1/95. Class C
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class 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> 10
STATEMENT OF INVESTMENTS January 31, 2000 / Unaudited
<TABLE>
<CAPTION>
RATINGS:
MOODY'S/ FACE MARKET VALUE
S&P/FITCH AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--98.3%
- -----------------------------------------------------------------------------------------------------------------
CALIFORNIA--93.8%
Alhambra, CA COP, Police Facilities Assessment
District No. 91-1, AMBAC Insured, 6.75%, 9/1/23 Aaa/AAA/AAA $5,000,000 $5,209,950
- -----------------------------------------------------------------------------------------------------------------
Anaheim, CA PFAU Lease RB, Public Improvements
Project, Sub. Lien, Series C, FSA Insured, Zero
Coupon, 5.27%, 9/1/20(1) Aaa/AAA/AAA 6,630,000 1,847,582
- -----------------------------------------------------------------------------------------------------------------
Anaheim, CA PFAU TXAL RB, MBIA Insured,
Inverse Floater, 8.97%, 12/28/18(2) Aaa/AAA 3,000,000 3,270,000
- -----------------------------------------------------------------------------------------------------------------
Berkeley, CA HF RRB, Alta Bates Medical Center,
Prerefunded, Series A, 6.50%, 12/1/11 A2/NR 4,270,000 4,493,449
- -----------------------------------------------------------------------------------------------------------------
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 5,277,180
- -----------------------------------------------------------------------------------------------------------------
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 4,756,521
- -----------------------------------------------------------------------------------------------------------------
CA Assn. of Bay Area Governments FAU for
Non-profit Corps. Refunding COP, Rhonda Haas
Goldman Plaza, 5.125%, 5/15/23 NR/AA- 2,300,000 1,936,232
- -----------------------------------------------------------------------------------------------------------------
CA CDAU Lease RB, United Airlines, Series A,
5.70%, 10/1/33 Baa3/BB+ 9,185,000 7,656,616
- -----------------------------------------------------------------------------------------------------------------
CA Community College FAU Lease RB,
West Valley Mission Community College,
MBIA Insured, 5.625%, 5/1/22 Aaa/AAA 1,085,000 1,028,265
- -----------------------------------------------------------------------------------------------------------------
CA Educational FA RRB, Los Angeles College
Chiropractic, 5.60%, 11/1/17 Baa2/NR 1,000,000 882,050
- -----------------------------------------------------------------------------------------------------------------
CA Foothill/Eastern Corridor Agency Toll Road RB,
Sr. Lien, Prerefunded, Series A, 6.50%, 1/1/32 Baa3/BBB-/BBB 4,600,000 5,042,658
- -----------------------------------------------------------------------------------------------------------------
CA Foothill/Eastern Corridor Agency Toll Road
RRB, Zero Coupon, 5.98%, 1/15/21(1) Baa3/BBB-/BBB 7,500,000 1,879,200
- -----------------------------------------------------------------------------------------------------------------
CA Foothill/Eastern Corridor Agency Toll Road
RRB, Zero Coupon, 6%, 1/15/22(1) Baa3/BBB-/BBB 7,500,000 1,751,625
- -----------------------------------------------------------------------------------------------------------------
CA HFA Home Mtg. RB, Series C, 6.75%, 2/1/25 Aa2/AA- 80,000 80,000
- -----------------------------------------------------------------------------------------------------------------
CA HFA RB, Series A, 7.35%, 8/1/11 Aa2/AA- 75,000 77,206
- -----------------------------------------------------------------------------------------------------------------
CA HFA RB, Series C, 7.60%, 8/1/30 Aa2/AA- 540,000 543,521
- -----------------------------------------------------------------------------------------------------------------
CA HFA RB, Series C, 7.60%, 8/1/30 Aa2/AA- 220,000 220,000
- -----------------------------------------------------------------------------------------------------------------
CA HFA RB, Series E-1, 6.45%, 2/1/12 Aa2/AA- 750,000 758,820
- -----------------------------------------------------------------------------------------------------------------
CA HFA SFM RB, Series 83, Inverse Floater,
9.71%, 8/1/25(2) NR/AAA 3,245,000 3,292,637
- -----------------------------------------------------------------------------------------------------------------
CA HFA SFM RB, Series 83, Inverse Floater,
9.77%, 8/1/25(2) NR/AAA 385,000 385,000
- -----------------------------------------------------------------------------------------------------------------
CA HFA SFM RB, Series C, 6.75%, 2/1/25 Aa2/AA- 9,515,000 9,629,465
</TABLE>
8 OPPENHEIMER CALIFORNIA MUNICIPAL FUND
<PAGE> 11
<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/NR $1,000,000 $1,056,060
- -----------------------------------------------------------------------------------------------------------------
CA Infrastructure & ED Bank RB, American Center for
Wine, Food & Arts, 5.75%, 12/1/24 NR/A/A 5,000,000 4,635,900
- -----------------------------------------------------------------------------------------------------------------
CA PCFAU SWD RRB, North Cnty. Recycling Center,
Escrowed to Maturity, Series A, 6.75%, 7/1/11 Aaa/NR 500,000 531,285
- -----------------------------------------------------------------------------------------------------------------
CA PWBL RB, State Prison Department of Corrections,
Series E, FSA Insured, 5.50%, 6/1/15 Aaa/AAA/AAA 3,000,000 2,964,600
- -----------------------------------------------------------------------------------------------------------------
CA PWBL RRB, Various University of CA Projects,
Series A, 5.50%, 6/1/14 Aa3/A+/A+ 1,500,000 1,499,145
- -----------------------------------------------------------------------------------------------------------------
CA SCDAU COP, 7.25%, 11/1/29 NR/NR 5,000,000 4,843,650
- -----------------------------------------------------------------------------------------------------------------
CA SCDAU COP, Childrens Hospital--Los Angeles,
5.25%, 8/15/29 A1/A+ 5,000,000 4,146,900
- -----------------------------------------------------------------------------------------------------------------
CA SCDAU COP, The Internext Group, 5.375%, 4/1/30 NR/BBB 6,500,000 4,866,615
- -----------------------------------------------------------------------------------------------------------------
CA SCDAU COP, Winward Schools, 7.25%, 11/1/29 NR/NR 1,500,000 1,483,530
- -----------------------------------------------------------------------------------------------------------------
CA SCDAU Revenue Refunding COP, Inverse Floater,
6.915%, 11/1/15(2) A1/NR 6,600,000 6,014,250
- -----------------------------------------------------------------------------------------------------------------
Campbell, CA RA TXAL RB, Central Campbell
Redevelopment Project, Series B, 6.60%, 10/1/32 Baa3/BBB- 1,255,000 1,204,662
- -----------------------------------------------------------------------------------------------------------------
Campbell, CA Refunding COP, Civic Center Project,
Unrefunded Balance, 6.75%, 10/1/17 A2/NR 1,130,000 1,195,698
- -----------------------------------------------------------------------------------------------------------------
Capistrano, CA USD CFD SPTX Bonds, Ladera
No. 98-2, 5.70%, 9/1/20 NR/NR 5,000,000 4,242,050
- -----------------------------------------------------------------------------------------------------------------
Capistrano, CA USD CFD SPTX Bonds, Prerefunded,
No. 92-1, 7.10%, 9/1/21 NR/NR 3,250,000 3,686,637
- -----------------------------------------------------------------------------------------------------------------
Cerritos, CA PFAU RB, Los Coyotes Redevelopment
Project, 6.50%, 11/1/23 Aaa/AAA/AAA 3,000,000 3,202,080
- -----------------------------------------------------------------------------------------------------------------
Chino Basin, CA Regional FAU RB, Inland Empire
Utility Agency Sewer Project, MBIA Insured,
5.75%, 11/1/19 Aaa/AAA 1,000,000 978,540
- -----------------------------------------------------------------------------------------------------------------
Chino Basin, CA Regional FAU RB, Inland Empire
Utility Agency Sewer Project, MBIA Insured,
5.75%, 11/1/22 Aaa/AAA 500,000 483,640
- -----------------------------------------------------------------------------------------------------------------
Clovis, CA USD CAP GOB, Series D, FGIC Insured,
Zero Coupon, 5.60%, 8/1/10(1) Aaa/AAA 2,000,000 1,143,600
- -----------------------------------------------------------------------------------------------------------------
Colton, CA PFAU TXAL RRB, Redevelopment
Projects, Series B, 5.875%, 8/1/27 NR/NR 3,700,000 3,200,204
- -----------------------------------------------------------------------------------------------------------------
Commerce, CA Community Development
Commission TXAL Refunding Bonds, Redevelopment
Project No. 1, Sub. Lien, Series B, 5.75%, 8/1/10 NR/NR 815,000 791,275
- -----------------------------------------------------------------------------------------------------------------
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 2,495,388
</TABLE>
9 OPPENHEIMER CALIFORNIA MUNICIPAL FUND
<PAGE> 12
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
Commerce, CA Joint Powers FAU Lease RB,
Community Center, Series A, 6.25%, 10/1/22 Baa2/NR $1,410,000 $1,323,158
----------------------------------------------------------------------------------------------------------------
Compton, CA Refunding COP, Civic Center &
Capital Improvements, Series A, 5.50%, 9/1/15 NR/BBB 3,000,000 2,640,390
- -----------------------------------------------------------------------------------------------------------------
Davis, CA Public Facilities FAU Local Agency RRB,
Mace Ranch Area, Series A, 6.60%, 9/1/25 NR/NR 5,000,000 4,830,450
- -----------------------------------------------------------------------------------------------------------------
Duarte, CA COP, City of Hope National Medical
Center, 6.25%, 4/1/23 Baa1/AAA 4,500,000 4,797,495
- -----------------------------------------------------------------------------------------------------------------
East Palo Alto, CA RA TXAL RB, 6.625%, 10/1/29 NR/NR 2,430,000 2,332,508
- -----------------------------------------------------------------------------------------------------------------
Escondido, CA Union High SDI CAP GOB, MBIA
Insured, Zero Coupon, 6.20%, 11/1/18(1) Aaa/AAA 6,000,000 1,921,860
- -----------------------------------------------------------------------------------------------------------------
Escondido, CA Union High SDI CAP GOB, MBIA
Insured, Zero Coupon, 6.20%, 11/1/19(1) Aaa/AAA 2,000,000 599,420
- -----------------------------------------------------------------------------------------------------------------
Folsom, CA SPTX Bonds, CFD No. 10, 6.875%, 9/1/19 NR/NR 6,500,000 6,289,400
- -----------------------------------------------------------------------------------------------------------------
Huntington Park, CA PFAU Lease RRB, Wastewater
System Project, Series A, 6.20%, 10/1/25 NR/NR 3,000,000 2,749,680
- -----------------------------------------------------------------------------------------------------------------
Industry, CA Improvement Bond Act of 1915 SPAST
GOB, Prerefunded, District No. 91-1, 7.65%, 9/2/21 NR/NR 1,750,000 1,906,520
- -----------------------------------------------------------------------------------------------------------------
Laguna Salada, CA USD CAP GOB, Series B, FGIC
Insured, Zero Coupon, 5.30%, 8/1/22(1) Aaa/AAA/AAA 3,035,000 744,364
- -----------------------------------------------------------------------------------------------------------------
Lake Elsinore, CA PFAU TXAL Bonds, Series A,
5.50%, 9/1/30 NR/BBB 5,000,000 4,077,550
- -----------------------------------------------------------------------------------------------------------------
Lake Elsinore, CA School FAU SPTX RRB,
Horsethief Canyon, 5.625%, 9/1/16 NR/NR 4,760,000 4,072,656
- -----------------------------------------------------------------------------------------------------------------
Lincoln, CA Improvement Bond Act 1915
PFAU RB, 6.20%, 9/2/25 NR/NR 4,000,000 3,632,160
- -----------------------------------------------------------------------------------------------------------------
Los Angeles Cnty., CA CAP COP, Disney Parking
Project, Zero Coupon, 5.94%, 3/1/12(1) Aaa/AAA/AAA 1,100,000 557,447
- -----------------------------------------------------------------------------------------------------------------
Los Angeles Cnty., CA CAP COP, Disney Parking
Project, Zero Coupon, 6.92%, 9/1/10(1) A3/BBB+/A- 5,960,000 3,222,632
- -----------------------------------------------------------------------------------------------------------------
Los Angeles Cnty., CA CAP COP, Disney Parking
Project, Zero Coupon, 6.95%, 9/1/11(1) A3/BBB+/A- 2,900,000 1,461,368
- -----------------------------------------------------------------------------------------------------------------
Los Angeles Cnty., CA CAP COP, Disney Parking
Project, Zero Coupon, 7.03%, 9/1/13(1) A3/BBB+/A- 4,500,000 1,962,135
- -----------------------------------------------------------------------------------------------------------------
Los Angeles Cnty., CA CAP COP, Disney Parking
Project, Zero Coupon, 6.13%, 9/1/14(1) A3/BBB+/A- 7,260,000 2,936,162
- -----------------------------------------------------------------------------------------------------------------
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 1,770,347
- -----------------------------------------------------------------------------------------------------------------
Los Angeles, CA Department Water & Power
Waterworks RRB, 6.40%, 5/15/28 Aa3/AA 7,200,000 7,317,936
- -----------------------------------------------------------------------------------------------------------------
Los Angeles, CA Harbor Department RB,
Series B, 5.375%, 11/1/23 Aa3/AA/AA 5,000,000 4,425,200
</TABLE>
10 OPPENHEIMER CALIFORNIA MUNICIPAL FUND
<PAGE> 13
<TABLE>
<CAPTION>
RATINGS:
MOODY'S/ FACE MARKET VALUE
S&P/FITCH AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CALIFORNIA Continued
Modesto, CA Irrigation District FAU RRB,
Series A, MBIA Insured, 6%, 10/1/15 Aaa/AAA $ 5,000,000 $5,116,200
- -----------------------------------------------------------------------------------------------------------------
Mountain View Los Altos, CA Union High SDI RB,
Series B, 6.50%, 5/1/17 Aa2/AA 2,000,000 2,088,720
- -----------------------------------------------------------------------------------------------------------------
Oakland, CA Building Authority Lease RB,
Series A, 5%, 4/1/16 Aaa/AAA/AAA 3,000,000 2,702,070
- -----------------------------------------------------------------------------------------------------------------
Oakland, CA RA TXAL Refunding Bonds,
MBIA Insured, 5.95%, 9/1/19(3) Aaa/AAA 8,600,000 8,424,302
- -----------------------------------------------------------------------------------------------------------------
Orange Cnty., CA CFD No. 88-1 SPTX Bonds,
Aliso Viejo, Prerefunded, Series A, 7.10%, 8/15/05 NR/AAA 1,440,000 1,556,338
- -----------------------------------------------------------------------------------------------------------------
Orange Cnty., CA CFD No. 88-1 SPTX Bonds,
Aliso Viejo, Prerefunded, Series A, 7.35%, 8/15/18 NR/AAA 7,000,000 7,605,360
- -----------------------------------------------------------------------------------------------------------------
Orange Cnty., CA CFD No. 99-1 SPTX RB,
Series A, 6.70%, 8/15/29 NR/NR 1,600,000 1,551,008
- -----------------------------------------------------------------------------------------------------------------
Orange Cnty., CA Improvement Bond Act of 1915 RRB,
Irvine Coast Assessment No. 88-1-A, 5.50%, 9/2/16 NR/NR 2,450,000 2,102,198
- -----------------------------------------------------------------------------------------------------------------
Orange Cnty., CA Improvement Bond Act of 1915
SPAST GOB, Assessment No. 88-1, 6.25%, 9/2/18 NR/NR 2,130,000 2,005,139
- -----------------------------------------------------------------------------------------------------------------
Pittsburg, CA RA TXAL Bonds, Los Medanos
Community Development Project,
AMBAC Insured, 5.80%, 8/1/17 Aaa/AAA 1,525,000 1,496,269
- -----------------------------------------------------------------------------------------------------------------
Pittsburg, CA RA TXAL Bonds, Los Medanos
Community Development Project,
AMBAC Insured, 5.85%, 8/1/18 Aaa/AAA 1,615,000 1,581,973
- -----------------------------------------------------------------------------------------------------------------
Pittsburg, CA RA TXAL Bonds, Los Medanos
Community Development Project, AMBAC Insured,
Zero Coupon, 6.10%, 8/1/20(1) Aaa/AAA 5,150,000 1,439,682
- -----------------------------------------------------------------------------------------------------------------
Pittsburg, CA RA TXAL Refunding Bonds,
Los Medanos Community Development Project,
Sub. Lien, 6.20%, 8/1/19 NR/BBB 2,500,000 2,341,075
- -----------------------------------------------------------------------------------------------------------------
Placentia, CA PFAU SPTX RB, Jr. Lien,
Series B, 6.60%, 9/1/15 NR/NR 1,600,000 1,595,104
- -----------------------------------------------------------------------------------------------------------------
Pomona, CA SFM RRB, Escrowed to Maturity,
Series A, 7.60%, 5/1/23 Aaa/AAA 4,500,000 5,280,300
- -----------------------------------------------------------------------------------------------------------------
Pomona, CA SFM RRB, Escrowed to Maturity,
Series B, 7.50%, 8/1/23 Aaa/AAA 500,000 581,040
- -----------------------------------------------------------------------------------------------------------------
Pomona, CA USD GORB, Series A,
MBIA Insured, 6.15%, 8/1/15 Aaa/AAA 2,000,000 2,097,480
- -----------------------------------------------------------------------------------------------------------------
Port Oakland, CA POAU RB, Series G,
MBIA Insured, 5.375%, 11/1/25 Aaa/AAA/AAA 10,650,000 9,383,395
- -----------------------------------------------------------------------------------------------------------------
Redding, CA Electric System Revenue COP,
FGIC Insured, Inverse Floater, 7.79%, 6/1/19(2) Aaa/AAA/AAA 4,000,000 3,685,000
- -----------------------------------------------------------------------------------------------------------------
Redding, CA Electric System Revenue COP,
MBIA Insured, Inverse Floater, 8.80%, 7/8/22(2) Aaa/AAA 2,500,000 2,712,500
</TABLE>
11 OPPENHEIMER CALIFORNIA MUNICIPAL FUND
<PAGE> 14
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
Richmond, CA Improvement Bond Act of 1915
GORB, Reassessment District No. 855, 6.60%, 9/2/19 NR/NR $ 1,500,000 $ 1,483,815
- -----------------------------------------------------------------------------------------------------------------
Richmond, CA Wastewater RB, FGIC Insured,
5.80%, 8/1/18 Aaa/AAA 3,315,000 3,279,828
- -----------------------------------------------------------------------------------------------------------------
Riverside Cnty., CA CFD No. 88-12 SPTX Bonds,
Prerefunded, 7.55%, 9/1/17 NR/NR 3,000,000 3,122,880
- -----------------------------------------------------------------------------------------------------------------
Riverside Cnty., CA PFAU Refunding COP,
5.75%, 5/15/19 NR/BBB- 2,100,000 1,759,989
- -----------------------------------------------------------------------------------------------------------------
Riverside Cnty., CA PFAU TXAL RRB,
Redevelopment Projects, Series A, 5.625%, 10/1/33 Baa2/BBB- 6,600,000 5,416,290
- -----------------------------------------------------------------------------------------------------------------
Riverside Cnty., CA Refunding COP, Air Force
Village West, Inc., Prerefunded, Series A,
8.125%, 6/15/12 NR/NR 3,000,000 3,282,150
- -----------------------------------------------------------------------------------------------------------------
Riverside Cnty., CA Refunding COP, Air Force
Village West, Inc., Series A, 8.125%, 6/15/20 NR/NR 3,000,000 3,289,980
- -----------------------------------------------------------------------------------------------------------------
Riverside Cnty., CA SFM RB, Escrowed to Maturity,
Series A, 7.80%, 5/1/21 Aaa/AAA 4,285,000 5,142,600
- -----------------------------------------------------------------------------------------------------------------
Roseville, CA SPTX RB, Woodcreek West
Community Facility No. 1 Project, 5.875%, 9/1/08 NR/NR 1,235,000 1,206,348
- -----------------------------------------------------------------------------------------------------------------
Roseville, CA SPTX RB, Woodcreek West
Community Facility No. 1 Project, 6.70%, 9/1/25 NR/NR 1,750,000 1,682,730
- -----------------------------------------------------------------------------------------------------------------
Sacramento Cnty., CA SFM RB, Escrowed to
Maturity, 8%, 7/1/16(4) Aaa/AAA 10,000,000 12,170,400
- -----------------------------------------------------------------------------------------------------------------
Sacramento, CA Cogeneration Authority RB,
Procter & Gamble Project, 6.50%, 7/1/14 NR/BBB-/NR 5,000,000 5,474,550
- -----------------------------------------------------------------------------------------------------------------
Sacramento, CA MUD Electric RRB, FGIC Insured,
Inverse Floater, 8.89%, 8/15/18(2) Aaa/AAA/AAA 5,500,000 5,747,500
- -----------------------------------------------------------------------------------------------------------------
Sacramento, CA PAU RB, Cogeneration Project,
6%, 7/1/22 NR/BBB-/BBB- 6,800,000 6,181,812
- -----------------------------------------------------------------------------------------------------------------
San Bernardino Cnty., CA COP, Medical Center
Financing Project, MBIA Insured, 5.50%, 8/1/17 Aaa/AAA 5,250,000 5,081,107
- -----------------------------------------------------------------------------------------------------------------
San Diego Cnty., CA COP, MBIA Insured, Inverse
Floater, 8.995%, 11/18/19(2) A1/NR 2,000,000 2,110,000
- -----------------------------------------------------------------------------------------------------------------
San Diego Cnty., CA Water Authority Revenue
COP, Prerefunded, Series 91-B, MBIA Insured,
Inverse Floater, 8.62%, 4/8/21(2) Aaa/AAA 3,000,000 3,506,250
- -----------------------------------------------------------------------------------------------------------------
San Francisco, CA Bay Area Rapid Transit District
Sales Tax RB, 5.25%, 7/1/14 Aa3/AA-/AA 1,500,000 1,446,300
- -----------------------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. Redevelopment
FAU TXAL Refunding Bonds, CAP Redevelopment
Projects, Series C, Zero Coupon, 5.79%, 8/1/11(1) A2/A/AAA 1,650,000 873,774
- -----------------------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. Redevelopment
FAU TXAL Refunding Bonds, CAP Redevelopment
Projects, Series C, Zero Coupon, 5.89%, 8/1/12(1) A2/A/AAA 1,750,000 866,302
</TABLE>
12 OPPENHEIMER CALIFORNIA MUNICIPAL FUND
<PAGE> 15
<TABLE>
<CAPTION>
RATINGS:
MOODY'S/ FACE MARKET VALUE
S&P/FITCH AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CALIFORNIA Continued
San Francisco, CA City & Cnty. Redevelopment
FAU TXAL Refunding Bonds, CAP Redevelopment
Projects, Series C, Zero Coupon, 5.81%, 8/1/14(1) A2/A/AAA $ 1,925,000 $ 827,866
- -----------------------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. Redevelopment FAU
TXAL Refunding Bonds, Series C, Zero Coupon,
5.69%, 8/1/10(1) A2/A/AAA 1,650,000 933,867
- -----------------------------------------------------------------------------------------------------------------
San Joaquin Hills, CA Transportation Corridor Agency
Toll Road CAP RRB, Series A, 0%/5.75%, 1/15/21(5) Baa3/BBB-/BBB 11,800,000 6,877,394
- -----------------------------------------------------------------------------------------------------------------
San Joaquin Hills, CA Transportation Corridor Agency
Toll Road CAP RRB, Series A, MBIA Insured,
Zero Coupon, 5.73%, 1/15/25(1) Aaa/AAA/AAA 18,250,000 3,802,570
- -----------------------------------------------------------------------------------------------------------------
San Joaquin Hills, CA Transportation Corridor
Agency Toll Road CAP RRB, Series A, MBIA Insured,
Zero Coupon, 5.90%, 1/15/26(1) Aaa/AAA/AAA 15,000,000 2,927,550
- -----------------------------------------------------------------------------------------------------------------
San Joaquin Hills, CA Transportation Corridor
Agency Toll Road RB, Sr. Lien, 5%, 1/1/33 Baa3/BBB-/BBB 8,000,000 6,355,680
- -----------------------------------------------------------------------------------------------------------------
San Joaquin Hills, CA Transportation Corridor
Agency Toll Road RB, Sr. Lien, Prerefunded,
6.75%, 1/1/32 Aaa/AAA/AAA 7,000,000 7,541,660
- -----------------------------------------------------------------------------------------------------------------
Santa Ana, CA FAU RRB, Inner-City Commuter,
Series C, 5.60%, 9/1/19 NR/BBB 3,060,000 2,621,655
- -----------------------------------------------------------------------------------------------------------------
Santa Ana, CA FAU RRB, Mainplace Project,
Series D, 5.50%, 9/1/15 NR/NR 1,000,000 869,690
- -----------------------------------------------------------------------------------------------------------------
Santa Ana, CA FAU RRB, Mainplace Project,
Series D, 5.60%, 9/1/19 NR/NR 1,000,000 860,570
- -----------------------------------------------------------------------------------------------------------------
Southern CA Home FAU SFM RB, Series A,
7.35%, 9/1/24 NR/AAA 1,115,000 1,142,563
- -----------------------------------------------------------------------------------------------------------------
Southern CA Metropolitan Water District
Waterworks RRB, Inverse Floater, 6.56%, 10/30/20(2) Aa2/AA 3,300,000 2,875,125
- -----------------------------------------------------------------------------------------------------------------
Southern CA PPAU Transmission Project RB,
Inverse Floater, 7.25%, 7/1/12(2) Aa3/A+ 1,900,000 1,978,375
- -----------------------------------------------------------------------------------------------------------------
Stockton, CA CFD No. 90-2 SPTX RRB,
Brookside Estates, 6.20%, 8/1/15 NR/NR 1,750,000 1,674,698
- -----------------------------------------------------------------------------------------------------------------
Tustin, CA USD CFD No. 88-1 SPTX RB,
Prerefunded, Series B, 6.375%, 9/1/21 NR/NR 3,500,000 3,853,850
- -----------------------------------------------------------------------------------------------------------------
University of CA Regents RB, Multiple Purpose
Projects, Prerefunded, Series A, 6.875%, 9/1/16 Aa3/AAA 1,950,000 2,098,805
- -----------------------------------------------------------------------------------------------------------------
West Sacremento, CA Improvement Bond Act
of 1915 SPAST Refunding Bonds, 5.60%, 9/2/17 NR/NR 2,000,000 1,710,320
- -----------------------------------------------------------------------------------------------------------------
Yuba City, CA USD Refunding COP,
Series A, 5%, 2/1/17 Aaa/AAA 3,010,000 2,675,800
-----------
370,352,320
</TABLE>
13 Oppenheimer California Municipal Fund
<PAGE> 16
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--4.5%
Guam PAU RB, Series A, 6.625%, 10/1/14 NR/AAA $2,000,000 $ 2,179,800
- -----------------------------------------------------------------------------------------------------------------
PR CMWLTH GORB, MBIA Insured,
Inverse Floater, 7.78%, 7/1/08(2) Aaa/AAA 3,500,000 3,648,750
- -----------------------------------------------------------------------------------------------------------------
PR EPAU RB, Prerefunded, Series P, 7%, 7/1/21 Aaa/AAA 4,000,000 4,222,320
- -----------------------------------------------------------------------------------------------------------------
PR HFA SFM RB, Affordable Housing Mtg.
Portfolio I, 6.25%, 4/1/29 Aaa/AAA 2,375,000 2,358,660
- -----------------------------------------------------------------------------------------------------------------
PR Housing Finance Corp. SFM RB, Portfolio 1,
Series B, 7.65%, 10/15/22 Aaa/AAA 145,000 148,985
- -----------------------------------------------------------------------------------------------------------------
PR Industrial, Medical & Environmental PC
Facilities Tourist RB, Mennonite General Hospital
Project, Series A, 6.50%, 7/1/12 NR/BBB-/BBB 2,350,000 2,234,733
- -----------------------------------------------------------------------------------------------------------------
Virgin Islands PFAU RB, Series A, 6.375%, 10/1/19 NR/BBB- 3,000,000 2,902,830
--------------
17,696,078
--------------
Total Municipal Bonds and Notes (Cost $401,927,975) 388,048,398
=================================================================================================================
SHORT-TERM TAX-EXEMPT OBLIGATIONS--0.8%
Los Angeles Cnty., CA Pension Obligation RB,
Series B, AMBAC Insured, 2.30%, 6/30/00(3) 1,200,000 1,200,000
- -----------------------------------------------------------------------------------------------------------------
Orange Cnty., CA Special FAU Teeter Plan RB,
Series B, AMBAC Insured, 2.45%, 2/1/00(3) 2,000,000 2,000,000
--------------
Total Short-Term Tax-Exempt Obligations (Cost $3,200,000) 3,200,000
- -----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $405,127,975) 99.1% 391,248,398
- -----------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.9 3,611,728
------------------------------
NET ASSETS 100.0% $394,860,126
==============================
</TABLE>
14 Oppenheimer California Municipal Fund
<PAGE> 17
FOOTNOTES TO STATEMENT OF INVESTMENTS
To simplify the listings of securities, abbreviations are used per the table
below:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CAP Capital Appreciation PCFAU Pollution Control Finance Authority
CDAU Communities Development Authority PFAU Public Finance Authority
CFD Community Facilities District POAU Port Authority
CMWLTH Commonwealth PPAU Public Power Authority
COP Certificates of Participation PWBL Public Works Board Lease
ED Economic Development RA Redevelopment Agency
EPAU Electric Power Authority RB Revenue Bonds
FA Facilities Authority RRB Revenue Refunding Bonds
FAU Finance Authority SCDAU Statewide Communities Development Authority
GOB General Obligation Bonds SDI School District
GORB General Obligation Refunding Bonds SFM Single Family Mtg.
HF Health Facilities SPAST Special Assessment
HFA Housing Finance Agency SPTX Special Tax
HFFAU Health Facilities Finance Authority SWD Solid Waste Disposal
MUD Municipal Utility District TXAL Tax Allocation
PAU Power Authority USD Unified School District
PC Pollution Control
</TABLE>
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 $39,225,387 or 9.93%
of the Fund's net assets as of January 31, 2000.
3. Represents the current interest rate for a variable or increasing rate
security.
4. Securities with an aggregate market value of $1,592,500 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 of Notes to Financial Statements.
5. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
15 Oppenheimer California Municipal Fund
<PAGE> 18
STATEMENT OF INVESTMENTS Unaudited/Continued
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
AS OF JANUARY 31, 2000, SECURITIES SUBJECT TO THE ALTERNATIVE MINIMUM TAX
AMOUNT TO $57,188,877 OR 14.48% OF THE FUND'S NET ASSETS.
DISTRIBUTION OF INVESTMENTS BY INDUSTRY, AS A PERCENTAGE OF TOTAL INVESTMENTS
AT VALUE, IS AS FOLLOWS:
<TABLE>
<CAPTION>
INDUSTRY MARKET VALUE PERCENT
- ----------------------------------------------------------------------------------
<S> <C> <C>
Special Assessment $112,136,643 28.7%
Municipal Leases 43,909,271 11.2
Single Family Housing 41,811,196 10.7
Highways 36,178,337 9.3
Electric Utilities 32,181,857 8.2
Adult Living Facilities 25,168,667 6.4
Hospital/Healthcare 22,742,887 5.8
Marine/Aviation Facilities 21,465,212 5.5
Water Utilities 18,815,511 4.9
General Obligation 12,244,194 3.1
Not-for-Profit Organization 9,479,550 2.4
Sewer Utilities 4,742,008 1.2
Sales Tax 4,349,130 1.1
Higher Education 4,009,120 1.0
Education 1,483,530 0.4
Resource Recovery 531,285 0.1
---------------------------
Total $391,248,398 100.0%
===========================
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer California Municipal Fund
<PAGE> 19
STATEMENT OF ASSETS AND LIABILITIES Unaudited
<TABLE>
<CAPTION>
January 31, 2000
==================================================================================
<S> <C>
ASSETS
Investments, at value (cost $405,127,975)--see accompanying statement $391,248,398
- ----------------------------------------------------------------------------------
Cash 1,768,437
- ----------------------------------------------------------------------------------
Receivables and other assets:
Interest 6,046,989
Shares of beneficial interest sold 358,454
Daily variation on futures contracts 274,063
Other 10,249
--------------
Total assets 399,706,590
==================================================================================
LIABILITIES
Payables and other liabilities:
Investments purchased 2,003,396
Shares of beneficial interest redeemed 1,335,552
Dividends 1,172,965
Trustees' compensation 163,288
Distribution and service plan fees 86,325
Transfer and shareholder servicing agent fees 19,477
Other 65,461
--------------
Total liabilities 4,846,464
==================================================================================
NET ASSETS $394,860,126
==============
==================================================================================
COMPOSITION OF NET ASSETS
Paid-in capital $423,162,561
- ----------------------------------------------------------------------------------
Overdistributed net investment income (950,895)
- ----------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (13,657,121)
- ----------------------------------------------------------------------------------
Net unrealized depreciation on investments (13,694,419)
--------------
Net assets $394,860,126
==============
==================================================================================
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$271,115,987 and 28,029,768 shares of beneficial interest outstanding) $9.67
Maximum offering price per share (net asset value plus sales charge of
4.75% of offering price) $10.15
- ----------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $109,713,187 and 11,338,844
shares of beneficial interest outstanding) $9.68
- ----------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$14,030,952 and 1,452,580 shares of beneficial interest outstanding) $9.66
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer California Municipal Fund
<PAGE> 20
STATEMENT OF OPERATIONS Unaudited
<TABLE>
<S> <C>
For the Six Months Ended January 31, 2000
- -----------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $13,592,960
===================================================================================
EXPENSES
Management fees 1,223,433
- -----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 364,279
Class B 616,706
Class C 79,122
- -----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 115,799
- -----------------------------------------------------------------------------------
Custodian fees and expenses 27,005
- -----------------------------------------------------------------------------------
Trustees' compensation 15,213
- -----------------------------------------------------------------------------------
Other 62,772
-------------
Total expenses 2,504,329
Less expenses paid indirectly (7,503)
Less reimbursement of expenses (3,807)
-------------
Net expenses 2,493,019
===================================================================================
NET INVESTMENT INCOME 11,099,941
===================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments (13,551,568)
Closing of futures contracts 542,847
-------------
Net realized loss (13,008,721)
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments (25,859,618)
-------------
Net realized and unrealized loss (38,868,339)
===================================================================================
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(27,768,398)
=============
</TABLE>
See accompanying Notes to Financial Statements.
18 Oppenheimer California Municipal Fund
<PAGE> 21
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JANUARY 31, 2000 YEAR ENDED
(UNAUDITED) JULY 31, 1999
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income $ 11,099,941 $ 20,869,032
- ------------------------------------------------------------------------------------------------------
Net realized gain (loss) (13,008,721) 366,714
- ------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (25,859,618) (16,235,114)
---------------------------------
Net increase (decrease) in net assets resulting from operations (27,768,398) 5,000,632
======================================================================================================
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (7,884,363) (15,214,034)
Class B (2,726,647) (5,284,436)
Class C (350,954) (600,129)
======================================================================================================
BENEFICIAL STOCK TRANSACTIONS
Net increase (decrease) in net assets resulting from beneficial
interest transactions:
Class A (18,774,924) 26,403,170
Class B (12,177,286) 22,044,556
Class C (1,446,946) 6,138,090
======================================================================================================
NET ASSETS
Total increase (decrease) (71,129,518) 38,487,849
- ------------------------------------------------------------------------------------------------------
Beginning of period 465,989,644 427,501,795
---------------------------------
End of period (including overdistributed net investment income of
$950,895 and $1,088,872, respectively) $394,860,126 $465,989,644
=================================
</TABLE>
See accompanying Notes to Financial Statements.
19 Oppenheimer California Municipal Fund
<PAGE> 22
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS YEAR YEAR
ENDED ENDED ENDED
JAN. 31, 2000 JULY 31, DEC. 31,
CLASS A (UNAUDITED) 1999 1998 1997 1996(1) 1995
=================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $10.57 $ 10.92 $ 10.94 $ 10.39 $ 10.69 $ 9.45
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .27 .53 .54 .58 .33 .58
Net realized and unrealized gain (loss) (.90) (.35) .06 .54 (.30) 1.25
-----------------------------------------------------------------
Total income (loss) from investment
operations (.63) .18 .60 1.12 .03 1.83
- -----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.27) (.53) (.54) (.57) (.33) (.58)
Dividends in excess of net investment
income -- -- -- -- -- (.01)
Distributions from net realized gain -- -- (.08) -- -- --
-----------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.27) (.53) (.62) (.57) (.33) (.59)
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.67 $10.57 $10.92 $10.94 $10.39 $10.69
=================================================================
=================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) (6.07)% 1.59% 5.66% 11.11% 0.34% 19.76%
=================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $271,116 $316,363 $300,717 $298,162 $286,033 $285,307
- -----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $297,257 $314,094 $297,372 $289,439 $279,796 $250,188
- -----------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 5.32% 4.79% 4.91% 5.49% 5.53% 5.64%
Expenses .90% 0.91% 0.92%(4) 0.94%(4) 0.97%(4) 0.95%(4)
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 25% 35% 31% 31% 14% 23%
</TABLE>
1. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31.
2. Assumes a $1,000 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.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended January 31, 2000, were $107,856,860 and $145,553,349,
respectively.
See accompanying Notes to Financial Statements.
20 Oppenheimer California Municipal Fund
<PAGE> 23
<TABLE>
<CAPTION>
SIX MONTHS YEAR YEAR
ENDED ENDED ENDED
JAN. 31, 2000 JULY 31, DEC. 31,
CLASS B (UNAUDITED) 1999 1998 1997 1996(1) 1995
===========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $10.57 $10.92 $10.94 $10.39 $10.69 $ 9.44
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .23 .45 .46 .49 .28 .51
Net realized and unrealized gain (loss) (.89) (.35) .06 .55 (.30) 1.25
-------------------------------------------------------------------
Total income (loss) from investment
operations (.66) .10 .52 1.04 (.02) 1.76
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.23) (.45) (.46) (.49) (.28) (.50)
Dividends in excess of net investment income -- -- -- -- -- (.01)
Distributions from net realized gain -- -- (.08) -- -- --
-------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.23) (.45) (.54) (.49) (.28) (.51)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.68 $10.57 $10.92 $10.94 $10.39 $10.69
===================================================================
===========================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) (6.34)% 0.82% 4.86% 10.27% (0.12)% 18.97%
===========================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $109,713 $132,763 $115,444 $82,474 $52,038 $41,224
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $122,265 $129,538 $ 99,266 $65,192 $46,422 $29,918
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 4.55% 4.03% 4.21% 4.70% 4.74% 4.82%
Expenses 1.66% 1.67% 1.67%(4) 1.70%(4) 1.74%(4) 1.72%(4)
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 25% 35% 31% 31% 14% 23%
</TABLE>
1. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31.
2. Assumes a $1,000 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.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended January 31, 2000, were $107,856,860 and $145,553,349,
respectively.
See accompanying Notes to Financial Statements.
21 Oppenheimer California Municipal Fund
<PAGE> 24
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
JAN. 31, 2000 JULY 31, DEC. 31,
CLASS C (UNAUDITED) 1999 1998 1997 1996(1) 1995(6)
=======================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $10.55 $ 10.91 $ 10.93 $ 10.38 $ 10.68 $ 10.46
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .23 .45 .46 .49 .27 .08
Net realized and unrealized gain (loss) (.89) (.36) .06 .55 (.30) .22
----------------------------------------------------------------
Total income (loss) from investment
operations (.66) .09 .52 1.04 (.03) .30
- -----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.23) (.45) (.46) (.49) (.27) (.07)
Dividends in excess of net investment income -- -- -- -- -- (.01)
Distributions from net realized gain -- -- (.08) -- -- --
----------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.23) (.45) (.54) (.49) (.27) (.08)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.66 $10.55 $10.91 $10.93 $10.38 $10.68
================================================================
=======================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) (6.35)% 0.73% 4.87% 10.26% (0.19)% 2.90%
=======================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $14,031 $16,864 $11,340 $5,969 $2,171 $125
- -----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 15,688 $14,672 $ 8,614 $3,869 $1,156 $ 91
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 4.56% 4.03% 4.24% 4.66% 4.54% 4.56%
Expenses 1.66% 1.67% 1.66%(4) 1.70%(4) 1.80%(4) 1.68%(4)
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 25% 35% 31% 31% 14% 23%
</TABLE>
1. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31.
2. Assumes a $1,000 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.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended January 31, 2000, were $107,856,860 and $145,553,349,
respectively.
6. For the period from November 1, 1995 (inception of offering) to December 31,
1995.
See accompanying Notes to Financial Statements.
22 Oppenheimer California Municipal Fund
<PAGE> 25
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 as
high a level of current interest income exempt from federal and California
income taxes for individual investors as is consistent with preservation of
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 at their offering price, which is normally net asset value plus an initial
sales charge. Class B and Class C shares are sold without an initial sales
charge but may be subject to a contingent deferred sales charge (CDSC). All
classes of shares have identical rights to earnings, assets and voting
privileges, except that each class has its own expenses directly attributable
to that class and exclusive voting rights with respect to matters affecting
that class. Classes A, B and C shares have separate distribution and/or service
plans. Class B shares will automatically convert to Class A shares six years
after the date of purchase. The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. Securities for which quotations are readily available are
valued at the last sale price, or if in the absence of a sale, at the last sale
price on the prior trading day if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are
valued primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at cost
(or last determined market value) and adjusted for amortization or accretion 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, 1999, the
Fund had available for federal tax purposes an unused capital loss carryover of
approximately $650,000, which expires in 2006.
23 Oppenheimer California Municipal Fund
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS Unaudited/Continued
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES Continued
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for
the Fund's independent Board of 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, 2000, a provision of $4,012 was made for the
Fund's projected benefit obligations, resulting in an accumulated liability of
$163,174 as of January 31, 2000.
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 compensation 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 Board of Trustees in shares of one
or more Oppenheimer funds selected by the trustee. The amount paid to the Board
of Trustees 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 investment income per share.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
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 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.
- --------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENTS. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for as of trade date. Original
issue discount is accreted and premium is amortized in accordance with federal
income tax requirements. For municipal 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.
There are certain risks arising from geographic concentration in any
state. Certain revenue or tax related events in a state may impair the ability
of certain issuers of municipal securities to pay principal and interest on
their obligations.
24 Oppenheimer California Municipal Fund
<PAGE> 27
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 JAN. 31, 2000 YEAR ENDED JULY 31, 1999
----------------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Sold 2,265,606 $ 23,026,874 6,301,987 $ 69,153,860
Dividends and/or
distributions reinvested 460,699 4,664,291 818,090 8,975,978
Redeemed (4,637,740) (46,466,089) (4,716,845) (51,726,668)
---------------------------------------------------------------
Net increase (decrease) (1,911,435) $(18,774,924) 2,403,232 $26,403,170
===============================================================
- ---------------------------------------------------------------------------------------------------
CLASS B
Sold 726,465 $ 7,357,035 3,406,294 $ 37,480,696
Dividends and/or
distributions reinvested 167,716 1,698,985 301,331 3,307,444
Redeemed (2,115,668) (21,233,306) (1,715,264) (18,743,584)
---------------------------------------------------------------
Net increase (decrease) (1,221,487) $(12,177,286) 1,992,361 $22,044,556
===============================================================
- ---------------------------------------------------------------------------------------------------
CLASS C
Sold 218,864 $ 2,206,041 856,519 $ 9,406,000
Dividends and/or
distributions reinvested 22,306 225,194 37,673 412,830
Redeemed (386,780) (3,878,181) (335,760) (3,680,740)
---------------------------------------------------------------
Net increase (decrease) (145,610) $ (1,446,946) 558,432 $ 6,138,090
===============================================================
</TABLE>
================================================================================
3. UNREALIZED GAINS AND LOSSES ON SECURITIES
As of January 31, 2000, net unrealized depreciation on securities of $13,879,576
was composed of gross appreciation of $8,304,108, and gross depreciation of
$22,183,684.
25 Oppenheimer California Municipal Fund
<PAGE> 28
NOTES TO FINANCIAL STATEMENTS Unaudited/Continued
================================================================================
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. 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 over $1
billion. Effective January 1, 2000, the Manager has voluntarily undertaken to
waive a portion of its management fee, whereby the Fund pays a fee not to
exceed 0.55% of average annual net assets. The Fund's management fees for the
six months ended January 31, 2000, was 0.55% of the average annual net assets
of each class of shares, annualized for periods of less than one full year.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. 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.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FEES. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale
of shares or on the redemption of shares is shown in the table below for the
period indicated.
<TABLE>
<CAPTION>
AGGREGATE CLASS A COMMISSIONS COMMISSIONS COMMISSIONS
FRONT-END FRONT-END ON CLASS A ON CLASS B ON CLASS C
SALES CHARGES SALES CHARGES SHARES SHARES SHARES
ON CLASS A RETAINED BY ADVANCED BY ADVANCED BY ADVANCED BY
SIX MONTHS ENDED SHARES DISTRIBUTOR DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
January 31, 2000 $227,179 $52,614 $10,710 $210,820 $20,724
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
CONTINGENT DEFERRED CONTINGENT DEFERRED CONTINGENT DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES
SIX MONTHS ENDED RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
January 31, 2000 $-- $250,571 $6,172
</TABLE>
The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B and Class C shares under Rule 12b-1 of the Investment
Company Act. Under those plans the Fund pays the Distributor for all or a
portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
26 Oppenheimer California Municipal Fund
<PAGE> 29
- --------------------------------------------------------------------------------
CLASS A SERVICE PLAN FEES. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements
to the Distributor at a rate of up to 0.25% of average annual net assets of
Class A shares purchased. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.25% of the average annual net
assets consisting of Class A shares of the Fund. For the six months ended
January 31, 2000, payments under the Class A Plan totaled $364,279, all of
which was paid by the Distributor to recipients. That included $13,351 paid to
an affiliate of the Manager. Any unreimbursed expenses the Distributor incurs
with respect to Class A shares in any fiscal year cannot be recovered in
subsequent years.
- --------------------------------------------------------------------------------
CLASS B AND CLASS C DISTRIBUTION AND SERVICE PLAN FEES. Under each plan,
service fees and distribution fees are computed on the average of the net asset
value of shares in the respective class, determined as of the close of each
regular business day during the period. The Class B and Class C plans provide
for the Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares.
The Distributor retains the asset-based sales charge on Class C shares during
the first year the shares are outstanding. The asset-based sales charges on
Class B and Class C shares allow investors to buy shares without a front-end
sales charge while allowing the Distributor to compensate dealers that sell
those shares.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and asset-based sales charges from the
Fund under the plans. If any plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares before the plan was
terminated. The plans allow for the carry-forward of distribution expenses, to
be recovered from asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the six months ended January 31,
2000, were as follows:
<TABLE>
<CAPTION>
DISTRIBUTOR'S DISTRIBUTOR'S
AGGREGATE UNREIMBURSED
UNREIMBURSED EXPENSES AS %
TOTAL PAYMENTS AMOUNT RETAINED EXPENSES OF NET ASSETS
UNDER PLAN BY DISTRIBUTOR UNDER PLAN OF CLASS
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $616,706 $500,195 $3,637,428 3.32%
Class C Plan 79,122 33,072 211,983 1.51
</TABLE>
27 Oppenheimer California Municipal Fund
<PAGE> 30
NOTES TO FINANCIAL STATEMENTS Unaudited/ Continued
================================================================================
5. FUTURES CONTRACTS
The Fund may buy and sell futures contracts in order to gain exposure to or to
seek to 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 may recognize 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
and/or payable for the daily mark to market for variation margin.
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, 2000, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATE CONTRACTS JANUARY 31, 2000 (DEPRECIATION)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONTRACTS TO SELL
Municipal Bond 3/22/00 280 $25,392,500 $ 485,157
U.S. Long Bond 3/22/00 150 13,832,813 (300,000)
-------------
$185,157
=============
</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 0.45%. 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
0.08% per annum.
The Fund had no borrowings outstanding during the six months ended
January 31, 2000.
28 Oppenheimer California Municipal Fund
<PAGE> 31
<TABLE>
<CAPTION>
OPPENHEIMER CALIFORNIA MUNICIPAL FUND
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
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
Phillip A. Griffiths, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Clayton K. Yeutter, Trustee
Christian D. Smith, Vice President
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
- --------------------------------------------------------------------------------------------------------------------------
INVESTMENT ADVISOR OppenheimerFunds, Inc.
- --------------------------------------------------------------------------------------------------------------------------
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
- --------------------------------------------------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER OppenheimerFunds Services
SERVICING AGENT
- --------------------------------------------------------------------------------------------------------------------------
CUSTODIAN OF Citibank, N.A.
PORTFOLIO SECURITIES
- --------------------------------------------------------------------------------------------------------------------------
INDEPENDENT AUDITORS KPMG LLP
- --------------------------------------------------------------------------------------------------------------------------
LEGAL COUNSEL Mayer, Brown & Platt
The financial statements included herein have been
taken from the records of the Fund without
examination of 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.
</TABLE>
29 Oppenheimer California Municipal Fund
<PAGE> 32
INFORMATION AND SERVICES
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you can benefit from special services
designed to make investing simple. Whether it's automatic investment plans,
timely market updates, or immediate account access, you can count on us
whenever you need assistance. So call us today, or visit our website--we're
here to help.
INTERNET
24-hr access to account information and transactions
WWW.OPPENHEIMERFUNDS.COM
GENERAL INFORMATION
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
TELEPHONE TRANSACTIONS
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
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PHONELINK
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1.800.843.4461
OPPENHEIMERFUNDS INFORMATION HOTLINE
24 hours a day, timely and insightful messages on the
economy and issues that may affect your investments
1.800.835.3104
TRANSFER AND SHAREHOLDER SERVICING AGENT
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
[OPPENHEIMERFUNDS LOGO]
RS0790.001.0100 March 31, 2000
