<PAGE>
OPPENHEIMER PENNSYLVANIA TAX-EXEMPT FUND
SEMI-ANNUAL REPORT JUNE 30, 1994
[Logo] OPPENHEIMER FUNDS
"WITH TODAY'S HIGHER TAXES WE WORRIED THAT THE INCOME FROM OUR INVESTMENTS
WOULD NOT BE ENOUGH.
"THIS FUND HAS GIVEN US WHAT WE NEED-TAX-FREE INCOME.
"WE CAN KEEP MORE OF WHAT WE EARN, WHILE OUR INVESTMENT HELPS BUILD
PENNSYLVANIA."
<PAGE>
FUND FACTS
IN THIS REPORT:
ANSWERS TO THREE TIMELY QUESTIONS YOU SHOULD ASK YOUR FUND'S MANAGERS.
/ / DID THE FEDERAL RESERVE'S MOVES TO RAISE INTEREST RATES OVER THE PAST SIX
MONTHS AFFECT THE FUND'S INVESTMENT STRATEGY AND RETURNS?
/ / HOW ARE PENNSYLVANIA'S ECONOMY AND BUDGET SHAPING UP, AND WHAT'S THE OUTLOOK
FOR THE STATE'S BONDS?
/ / WHAT'S THE LONGER-TERM OUTLOOK FOR THE PENNSYLVANIA MUNICIPAL MARKET, AND
PHILADELPHIA ISSUES IN PARTICULAR?
FACTS EVERY SHAREHOLDER SHOULD KNOW ABOUT
OPPENHEIMER PENNSYLVANIA TAX-EXEMPT FUND
1 The Fund seeks high, current income exempt from federal and Pennsylvania
state income taxes.
2 Standardized yield for the 30 days ended June 30, 1994 was 5.00% for Class
A shares and 4.45% for Class B shares.(1)
3 Under the new, higher federal tax rates, the value of tax-free income has
increased.
HERE IS THE TAXABLE EQUIVALENT OF THE FUND'S YIELD
FOR A PENNSYLVANIA RESIDENT, FILING A JOINT RETURN
WITH TAXABLE INCOME OF:
--------------------------------------------------
FUND YIELD
ON 6/30/941 $92,000 $150,000 $260,000
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CLASS A 5.00% 7.46% 8.04% 8.52%
CLASS B 4.45% 6.64% 7.15% 7.58%
This table assumes that an investor's highest effective tax bracket
(combined federal and state) applies to the change in taxable income
resulting from a switch between taxable and non-taxable investments. A
portion of the Fund's distributions may be subject to income taxes. For
investors subject to alternative minimum tax, a portion of the Fund's
distributions may increase that tax.
4 Total return at net asset value for the Fund's Class A shares for the
The Fund's Class B shares total return at net asset value for the same
periods were -6.95% and -2.71%, respectively.(2)
5 Average annual total returns for Class A shares for the 1-year period and
since inception on September 18, 1989 were -6.66% and 6.07%, respectively.
Average annual total returns for Class B shares for the 1-year period ended
June 30, 1994 and since inception on May 1, 1993 were -7.58% and -4.06%,
respectively.(3)
6 "While the state faces challenges, Pennsylvania has been making a strong
effort to diversify its economy, and this has begun to yield results. With
its focus on quality, call protection and diversification, the Fund is
well positioned for what we think will be a strong Pennsylvania market in
the months ahead."
PORTFOLIO MANAGER BOB PATTERSON, JUNE 30, 1994
(1) Standardized yield is net investment income calculated on a yield-to-
maturity basis for the 30-day period ended 6/30/94, divided by the maximum
offering price at the end of the period, compounded semi-annually and then
annualized. Falling net asset values will tend to artificially raise yields.
(2) Based on the change in net asset value from 12/31/93 and 6/30/93 to 6/30/94,
without deducting any sales charges.
(3) Average annual total returns are based on a hypothetical investment held
until 6/30/94, after deducting the maximum initial sales charge of 4.75% for
Class A shares and the contingent deferred sales charge of 5% (1 year) and 4%
(since inception) for Class B shares.
All figures assume reinvestment of dividends and capital gains distributions.
Past performance is not indicative of future results. The principal value and
return of an investment in the Fund will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
2 Oppenheimer Pennsylvania Tax-Exempt Fund
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REPORT TO SHAREHOLDERS
Over the past six months, Oppenheimer Pennsylvania Tax-Exempt Fund met its
objective of providing income exempt from federal and state taxes.
The Fund's total return over the last six months was, of course, affected
by the broad declines in bond prices that followed four increases in short-term
interest rates by the Federal Reserve Board from early February through mid-May.
Throughout the period, however, the Fund's management team held to a steady
course. Rather than trying to track temporary turns in the market, your managers
continued to focus on bond quality, call protection and diversification-all
factors that help moderate price fluctuations and have contributed to the Fund's
long-term performance.
As a result, the Fund today is well positioned to take advantage of what
your managers expect to be a strong Pennsylvania municipal market in the months
ahead, a belief supported by three factors.
levels and long-term bond values-remains subdued. Barring a sudden shift in the
economy, interest rates are likely to remain relatively steady, making tax-free
bonds more attractive to investors.
Second, the municipal market's supply and demand characteristics are
positive.The supply of municipal bonds is running well below last year's pace,
while demand for tax-free securities is rising. This combination of shrinking
supply and mounting demand should provide support for Pennsylvania bond prices.
Third, the state's finances are in good shape overall. Fiscal 1994 marked
the third consecutive year in which the state reported a budget surplus, and the
budget for fiscal 1995 seems sound.
Still, for the state to thrive, its major cities must contribute, and
developments in both Philadelphia and Pittsburgh are positive. Philadelphia was
recently upgraded, while Pittsburgh has diversified away from its traditional
dependence on manufacturing. Your managers remain cautious in their approach to
bonds issued by both cities, but are encouraged by these developments.
To take advantage of conditions in the Pennsylvania market, your
managers continue to focus on essential-service issues which are bonds backed by
stable, predictable, revenue streams such as toll roads. We also continue to
invest in transportation, housing, and education bonds-the market sectors likely
to turn in the best performance over time.
Looking ahead, your managers believe that the Pennsylvania municipal bond
market offers real value to investors. The fundamentals for long-term
performance are in place, and your managers will look for opportunities to buy
value at attractive prices-the best way to produce long-term investment gains.
We appreciate your trust in Oppenheimer Pennsylvania Tax-Exempt Fund, and
we look forward to helping you meet your investment goals in the future.
Donald W. Spiro
President, Oppenheimer Pennsylvania Tax-Exempt Fund
July 22, 1994
3 Oppenheimer Pennsylvania Tax-Exempt Fund
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Statement of Investments June 30, 1994 (Unaudited)
Ratings: Moody's/ Face Market Value
S&P's/Fitch's Amount See Note 1
- ------
Municipal Bonds and Notes--97.9%
- ------
Pennsylvania--95.2% Allegheny County, Pennsylvania Hospital
Development Authority Revenue Bonds:
Magee Women's Hospital, FGIC Insured,
5.375%, 10/1/13 Aaa/AAA/AAA $2,000,000 $1,759,550
Presbyterian University Hospital, Prerefunded,
Series A, MBIA Insured, 7.60%, 3/1/08 Aaa/AAA 600,000 643,865
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Beaver County, Pennsylvania Hospital Authority
Revenue Bonds, Medical Center Beaver,
Pennsylvania, Inc., AMBAC Insured,
6.625%, 7/1/10 Aaa/AAA/AAA 1,000,000 1,033,970
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Berks County, Pennsylvania General Obligation
Bonds, FGIC Insured, 9.125%, 11/15/20(1) Aaa/AAA/AAA 1,000,000
1,026,920
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Hospital Revenue Bonds, Reading Hospital Medical
Center Project, MBIA Insured, 5.70%, 10/1/14 Aaa/AAA 1,250,000
1,140,749
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Blair County, Pennsylvania Hospital Authority
Revenue Bonds, Altoona Hospital Project, AMBAC
Insured, 9.486%, 7/1/14(1) Aaa/AAA/AAA 700,000 719,213
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Dauphin County, Pennsylvania General Authority
Hospital Revenue Bonds, Hapsco-Western
Pennsylvania Hospital Project, Series A-1, MBIA
Insured, 5.50%, 7/1/13 Aaa/AAA 1,000,000 894,781
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Dauphin County, Pennsylvania Hospital Authority
Revenue Refunding Bonds, Polyclinic Medical Center
Project, MBIA Insured, 5.40%, 8/15/03 Aaa/AAA 2,500,000 2,221,220
- ------
Delaware County, Pennsylvania Authority Revenue
Bonds, Villanova University, MBIA Insured,
6.90%, 8/1/16 Aaa/AAA 1,000,000 1,037,261
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Delaware County, Pennsylvania Industrial
Development Authority Revenue Refunding Bonds,
Resource Recovery Project, Series A,
8.10%, 12/1/13 Aa3/A+ 630,000 677,622
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Lehigh County, Pennsylvania General Purpose
Authority Revenue Bonds, Lehigh Valley Hospital,
Inc., Series A, MBIA Insured, 7%, 7/1/16 Aaa/AAA 1,250,000 1,336,343
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Lehigh County, Pennsylvania Industrial
Development Authority Pollution Control Revenue
Refunding Bonds, Pennsylvania Power and Light Co.
Project, Series A, MBIA Insured,
6.40%, 11/1/21 Aaa/AAA 1,000,000 984,668
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Lehigh County, Pennsylvania Revenue Bonds,
Prerefunded, FGIC Insured,
6.90%, 8/1/11 Aaa/AAA/AAA 2,000,000 2,204,790
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North Allegheny, Pennsylvania School District
General Obligation Refunding Bonds, Series A,
AMBAC Insured, 6.35%, 11/1/12 Aaa/AAA/AAA 1,500,000 1,522,108
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Northampton County, Pennsylvania Hospital
Authority Revenue Bonds, Easton Hospital, Series A,
MBIA Insured, 6.25%, 1/1/19 Aaa/AAA 1,000,000 969,559
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Northcumberland County, Pennsylvania
Commonwealth Lease Authority Revenue Bonds,
MBIA Insured, 6.25%, 10/15/09 Aaa/AAA 2,000,000 2,113,684
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Pennsylvania Convention Center Authority
Revenue Bonds, Escrowed to Maturity, Series A,
FGIC Insured, 6.70%, 9/1/16 Aaa/AAA/AAA 1,850,000 1,933,017
4 Oppenheimer Pennsylvania Tax-Exempt Fund
<PAGE>
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Ratings: Moody's/ Face Market Value
S&P's/Fitch's Amount See Note 1
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Pennsylvania
(continued)
Pennsylvania Housing Finance Agency Revenue
Bonds, Single Family Mtg.:
Series 31C, 10.677%, 10/1/23(1) Aa/AA $1,000,000 $1,012,472
Series 36, 5.45%, 10/1/14 Aa/AA 1,000,000 916,208
Series 40, 6.80%, 10/1/15 Aa/AA 2,000,000 2,004,186
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Pennsylvania Housing Finance Agency Revenue
Refunding Bonds, Rental Housing:
6.40%, 7/1/12 Aaa/AAA 2,400,000 2,405,260
5.80%, 7/1/18 Aaa/AAA 2,000,000 1,877,080
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Pennsylvania Intergovernmental Cooperative
Revenue Bonds, City of Philadelphia Funding
Program, MBIA Insured,
5.60%, 6/15/15 Aaa/AAA/BBB+ 1,500,000 1,367,349
Revenue Refunding Bonds, City of Philadelphia
Funding Program, MBIA Insured,
5.60%, 6/15/16 Aaa/AAA 1,000,000 909,591
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Pennsylvania State Higher Education Assistance
Agency Student Loan Revenue Bonds, Series B,
AMBAC Insured, 9.019%, 3/1/22(1) Aaa/AAA/AAA 1,250,000 1,091,816
- ------
Pennsylvania State Higher Educational Facilities
Authority College and University Revenue Bonds:
Hahnemann University Project, MBIA Insured,
7.20%, 7/1/19 Aaa/AAA 1,500,000 1,620,073
RIDC Regional Growth Fund-Carnegie,
9%, 11/1/09 NR/A+ 1,250,000 1,330,215
Thomas Jefferson University, Series A,
6.625%, 8/15/09 Aa/A+ 750,000 788,906
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Pennsylvania State Higher Educational Facilities
Authority Health Services Revenue Bonds,
University of Pennsylvania, Series A,
6%, 1/1/10 Aa/AA- 2,000,000 1,976,182
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Pennsylvania State Industrial Development
Authority Economic Development Revenue
Bonds, Prerefunded, Series A,
7%, 1/1/11 A/A-/AAA 1,000,000 1,112,544
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Pennsylvania State Turnpike Commission Revenue Bonds,
Series N, 6.50%, 12/1/13 A1/A 1,000,000 1,013,979
Series P, AMBAC Insured, 6%, 12/1/17 Aaa/AAA/AAA 2,000,000 1,894,194
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Pennsylvania State University Revenue
Refunding Bonds:
Series B, 5.50%, 8/15/16 A1/AA- 2,500,000 2,230,052
5.50%, 8/15/16 A1/AA- 1,000,000 892,021
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Philadelphia, Pennsylvania Gas Works
Revenue Bonds:
14th Series, 6.375%, 7/1/26 Baa1/BBB/A- 1,800,000 1,706,272
15th Series, 5.25%, 8/1/15 Baa1/BBB/A- 1,000,000 823,771
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Philadelphia, Pennsylvania Hospitals and Higher
Educational Facilities Authority Revenue Bonds,
Albert Einstein Medical Center,
7.625%, 4/1/11 A/BBB 3,500,000 3,753,774
Temple University Hospital, Series A,
6.625%, 11/15/23 Baa1/BBB+ 3,800,000 3,671,046
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Philadelphia, Pennsylvania Municipal Authority Justice
Lease Revenue Refunding Bonds, Series A, FGIC Insured,
5.625%, 11/15/14 Aaa/AAA/AAA 3,000,000 2,770,677
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Philadelphia, Pennsylvania Regional Port Authority
Lease Revenue Bonds, MBIA Insured,
9.04%, 9/1/20(1) Aaa/AAA 2,100,000 2,100,000
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Philadelphia, Pennsylvania School District Revenue
Bonds, Series A, MBIA Insured, 5.85%, 7/1/09 Aaa/AAA 500,000 486,869
5 Oppenheimer Pennsylvania Tax-Exempt Fund
<PAGE>
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Statement of Investments (Unaudited) (Continued)
Ratings: Moody's/ Face Market Value
S&P's/Fitch's Amount See Note 1
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Pennsylvania
(continued)
Philadelphia, Pennsylvania Water and Sewer
Revenue Bonds, Escrowed to Maturity, Tenth Series,
7.35%, 9/1/04 NR/AAA/BBB $245,000 $272,047
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Revenue Bonds, 5.75%, 6/15/13 Baa/BBB/BBB 1,000,000 896,848
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Schuylkill County Pennsylvania Industrial
Development Authority Resource Recovery
Revenue Refunding Bonds, Schuylkill Energy
Resources, Inc., 6.50%, 1/1/10 NR/NR/BBB- 2,500,000 2,309,640
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St. Mary Hospital Authority Langhorne,
Pennsylvania Hospital Revenue Refunding Bonds,
Franciscan Health Project, Series B, BIG Insured,
7%, 7/1/14 Aaa/AAA 500,000 526,789
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Washington County, Pennsylvania Municipal Facility
Lease Authority Revenue Bonds, Prerefunded,
AMBAC Insured, 7.45%, 12/15/12 Aaa/AAA/AAA 1,000,000 1,136,181
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67,115,362
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U.S. Possessions--2.7% Puerto Rico Commonwealth Public Improvement
General Obligation Bonds, YCNS, MBIA Insured,
8.314%, 7/1/08(1) Aaa/AAA 1,000,000 1,011,842
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Puerto Rico Electric Power Authority Revenue
Refunding Bonds, Series N, 5%, 7/1/12 Baa1/A- 1,000,000 867,018
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1,878,860
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Total Municipal Bonds and Notes (Cost $71,106,566) 68,994,222
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Short-Term Tax-Exempt Obligations--0.3%
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Philadelphia, Pennsylvania Authority for Industrial
Development Revenue Bonds, Franklin Institute Project,
2.65%(2) (Cost $200,000) 200,000 200,000
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Total Investments, at Value (Cost $71,306,566) 98.2% 69,194,222
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Other Assets Net of Liabilities 1.8 1,268,819
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Net Assets 100.0% $70,463,041
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- ------ ------
1. Represents the current interest rate for a variable rate bond. Variable rate
bonds known as ``inverse floaters'' pay interest at a rate that varies inversely
with short-term interest rates. As interest rates rise, inverse floaters produce
less current income. Their price may be more volatile than the price of a
comparable fixed-rate security.
2. Floating or variable rate obligation maturing in more than one year. The
interest rate, which is based on specific, or an index of, market interest
rates, is subject to change periodically and is the effective rate on June 30,
1994. A demand feature allows the recovery of principal at any time, or at
specified intervals not exceeding one year, on up to 30 days' notice.
See accompanying Notes to Financial Statements.
6 Oppenheimer Pennsylvania Tax-Exempt Fund
<PAGE>
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Statement of Assets and Liabilities June 30, 1994 (Unaudited)
- ------
Assets
Investments, at value (cost $71,306,566)--see accompanying statement $69,194,222
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Cash 256,046
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Receivables:
Interest 1,265,852
Shares of beneficial interest sold 225,576
Deferred organization costs 1,436
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Other 6,714
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Total assets 70,949,846
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Liabilities Payables and other liabilities:
Dividends 218,003
Shares of beneficial interest redeemed 155,044
Distributions and service plan fees--Note 4 25,905
Other 87,853
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- ------
Net Assets $70,463,041
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- ------
- ------
Composition of
Net Assets
Paid-in capital 73,368,536
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Undistributed net investment income 23,053
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Accumulated net realized loss from investment transactions (816,204)
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Net unrealized depreciation on investments--Note 3 (2,112,344)
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Net assets $70,463,041
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- ------
- ------
Net Asset Value
Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$63,229,710
and 5,424,328 shares of beneficial interest outstanding) $11.66
Maximum offering price per share (net asset value plus sales charge of 4.75% of
offering price) $12.24
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Class B Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $7,233,331 and 620,577 shares of beneficial interest outstanding)
$11.66
See accompanying Notes to Financial Statements.
7 Oppenheimer Pennsylvania Tax-Exempt Fund
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Statement of Operations For the Six Months Ended June 30, 1994 (Unaudited)
- ------
Investment Income Interest $2,225,696
- ------
Expenses
Management fees--Note 4 207,784
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Distribution and service plan fees:
Class A--Note 4 46,732
Class B--Note 4 28,308
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Transfer and shareholder servicing agent fees--Note 4 25,540
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Shareholder reports 12,215
- ------
Legal and auditing fees 11,024
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Trustees' fees and expenses 7,555
- ------
Registration and filing fees:
Class A 1,480
Class B 738
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Other 11,214
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Total expenses 352,590
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Net Investment Income 1,873,106
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Realized and Unrealized
Loss on Investments
Net realized loss on investments (806,022)
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Net change in unrealized appreciation or depreciation on investments
(5,859,547)
- ------
Net realized and unrealized loss on investments (6,665,569)
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Net Decrease in Net Assets Resulting From Operations $(4,792,463)
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See accompanying Notes to Financial Statements.
8 Oppenheimer Pennsylvania Tax-Exempt Fund
<PAGE>
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Statements of Changes in Net Assets
Six Months Ended Year Ended
June 30, 1994 December 31,
(Unaudited) 1993
- ------
Operations
Net investment income $1,873,106 $2,891,932
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Net realized gain (loss) on investments (806,022) 206,077
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Net change in unrealized appreciation or depreciation on investments
(5,859,547) 3,029,967
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Net increase (decrease) in net assets resulting from operations
(4,792,463) 6,127,976
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Dividends and
Distributions to
Shareholders
Dividends from net investment income:
Class A ($.342 and $.702 per share, respectively)
(1,773,182) (2,800,212)
Class B ($.295 and $.368 per share,
respectively) (151,983) (80,782) ------
Distributions from net realized gain on investments:
Class B ($.044 per share) -- (17,419)
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Beneficial Interest
Transactions
Net increase in net assets resulting from Class A beneficial
interest transactions--Note 2 4,705,857 28,394,854
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Net increase in net assets resulting from Class B beneficial interest
transactions--Note 2 2,258,560 5,516,888
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Net Assets
Total increase 246,789 36,926,301
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Beginning of period 70,216,252 33,289,951
- ------ ------
End of period (including undistributed net investment income
of $23,053 and $96,255, respectively) $70,463,041 $70,216,252
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See accompanying Notes to Financial Statements.
9 Oppenheimer Pennsylvania Tax-Exempt Fund
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<TABLE>
<CAPTION>
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Financial Highlights
Class A Class B
- ------ ------
Six Months Six Months
Ended Year Ended Ended Period Ended
June 30, 1994 December 31, June 30, 1994 December 31,
(Unaudited) 1993 1992 1991 1990 1989(2) (Unaudited) 1993(1)
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<S> <C>
Per Share Operating Data
Net asset value, beginning
of period $12.85 $12.05 $11.93 $11.43 $11.58 $11.43 $12.84 $12.44
- ------
Income (loss) from investment
operations:
Net investment income .33 .69 .76 .74 .81 .18 .29 .36
Net realized and unrealized gain
(loss) on investments (1.18) .85 .17 .53 (.15) .15 (1.18) .45
- ------ ------ ------ ------ ------ ------ ------ ------
Total income (loss) from
investment operations (.85) 1.54 .93 1.27 .66 .33 (.89) .81
- ------
Dividends and distributions
to shareholders:
Dividends from net investment
income (.34) (.70) (.73) (.73) (.81) (.18) (.29) (.37)
Distributions from net realized gain
on investments -- (.04) (.08) (.04) -- -- -- (.04)
- ------ ------ ------ ------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (.34) (.74) (.81) (.77) (.81) (.18) (.29) (.41)
- ------
Net asset value, end of period $11.66 $12.85 $12.05 $11.93 $11.43 $11.58 $11.66 $12.84
- ------ ------ ------ ------ ------ ------ ------ ------
- ------ ------ ------ ------ ------ ------ ------ ------
- ------
Total Return, at Net Asset Value(3) (6.66)% 13.12% 8.04 % 11.49% 6.00% 3.25% (6.95)% 6.67%
- ------
Ratios/Supplemental Data:
Net assets, end of period
- ------
Average net assets (in thousands) $63,491 $50,974 $21,936 $10,717 $5,170 $1,231 $6,341 $2,770
- ------
Number of shares outstanding
at end of period (in thousands) 5,424 5,031 2,764 1,156 735 203 621 434
- ------
Ratios to average net assets:
Net investment income 5.48%(4) 5.52% 6.36% 6.30% 7.06% 6.12%(4) 4.68%(4) 4.26%(4)
Expenses, before voluntary
assumption by the Manager .95%(4) 1.06% 1.39% 1.29% 1.77 2.49%(4) 1.72%(4) 1.78%(4)
Expenses, net of voluntary
assumption by the Manager N/A .99% 1.06% N/A .59% .91%(4) N/A 1.78%(4)
- ------
Portfolio turnover rate(5) 24.1% 14.6% 29.9% 15.5% 5.3% 0.0% 24.1% 14.6%
</TABLE>
1. For the period from May 1, 1993 (inception of offering) to December 31, 1993.
2. For the period from September 18, 1989 (commencement of operations) to
December 31, 1989.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns.
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the six
months ended June 30, 1994 were $24,941,780 and $16,523,354, respectively.
See accompanying Notes to Financial Statements.
10 Oppenheimer Pennsylvania Tax-Exempt Fund
<PAGE>
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Notes to Financial Statements (Unaudited)
- ------
1. Significant
Accounting Policies
Oppenheimer Pennsylvania Tax-Exempt Fund (the Fund) is a separate series of
Oppenheimer Multi-State Tax-Exempt Trust, a non-diversified, open-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's investment advisor is Oppenheimer Management Corporation
(the Manager). The Fund offers both Class A and Class B shares. Class A shares
are sold with a front-end sales charge. Class B shares may be subject to a
contingent deferred sales charge. Both classes of shares have identical rights
to earnings, assets and voting privileges, except that each class has its own
distribution plan, expenses directly attributable to a particular class and
exclusive voting rights with respect to matters affecting a single class. Class
B shares will automatically convert to Class A shares six years after the date
consistently followed by the Fund.
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Investment Valuation. Portfolio securities are valued at 4:00 p.m. (New York
time) on each trading day. Long-term debt securities are valued by a portfolio
pricing service approved by the Board of Trustees. Long-term debt securities
which cannot be valued by the approved portfolio pricing service are valued by
averaging the mean between the bid and asked prices obtained from two active
market makers in such securities. Short-term debt securities having a remaining
maturity of 60 days or less are valued at cost (or last determined market value)
adjusted for amortization to maturity of any premium or discount. Securities for
which market quotes are not readily available are valued under procedures
established by the Board of Trustees to determine fair value in good faith.
- ------
Allocation of Income, Expenses and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- ------
Federal Income Taxes. The Fund intends to continue to comply with provisions of
the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income tax provision is required.
- ------
Trustees' Fees and Expenses. The Fund has adopted a nonfunded retirement plan
for the Fund's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the six months
ended June 30, 1994, a provision of $4,235 was made for the Fund's projected
benefit obligations, resulting in an accumulated liability of $32,979 at June
30, 1994. No payments have been made under the plan.
- ------
Organization Costs. The Manager advanced $22,953 for organization and start-up
costs of the Fund. Such expenses are being amortized over a five-year period
from the date operations commenced. In the event that all or part of the
Manager's initial investment in shares of the Fund is withdrawn during the
amortization period, the redemption proceeds will be reduced to reimburse the
Fund for any unamortized expenses, in the same ratio as the number of shares
redeemed bears to the number of initial shares outstanding at the time of such
redemption.
- ------
Distributions to Shareholders. The Fund intends to declare dividends separately
for Class A and Class B shares from net investment income each day the New York
Stock Exchange is open for business and pay such dividends monthly.
Distributions from net realized gains on investments, if any, will be declared
at least once each year.
- ------
1994, the Fund adopted Statement of Position 93-2: Determination, Disclosure,
and Financial Statement Presentation of Income, Capital Gain, and Return of
Capital Distributions by Investment Companies. As a result, the Fund changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions determined in
accordance with income tax regulations. Accordingly, subsequent to December 31,
1993, amounts have been reclassified to reflect a decrease in paid-in capital of
$22,700, a decrease in undistributed net investment income of $21,143, and an
increase in undistributed capital loss on investments of $43,843.
11 Oppenheimer Pennsylvania Tax-Exempt Fund
<PAGE>
- ------
Notes to Financial Statements (Unaudited) (Continued)
- ------
1. Significant
Accounting Policies
(continued)
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date). Original issue discount on securities purchased
is amortized over the life of the respective securities, in accordance with
federal income tax requirements. Realized gains and losses on investments and
unrealized appreciation and depreciation are determined on an identified cost
basis, which is the same basis used for federal income tax purposes. For bonds
acquired after April 30, 1993, accrued market discount is recognized at maturity
or disposition as taxable ordinary income. Taxable ordinary income is realized
to the extent of the lesser of gain or accrued market discount.
- ------
2. Shares of
Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
Six Months Ended June 30, 1994 Year Ended December 31, 1993(1)
- ------ ------
Shares Amount Shares Amount
- ------
Class A:
Sold 966,278 $11,766,288 2,598,125 $32,598,970
Dividends and distributions
reinvested 93,826 1,145,419 156,253 1,972,297
Redeemed (666,415) (8,205,850) (487,470) (6,176,413)
- ------ ------ ------ ------
Net increase 393,689 $4,705,857 2,266,908 $28,394,854
- ------ ------ ------ ------
- ------ ------ ------ ------
- ------
Class B:
Sold 214,396 $2,612,261 441,757 $5,613,333
Dividends and distributions
reinvested 7,842 95,469 4,737 60,779
Redeemed (35,789) (449,170) (12,366) (157,224)
- ------ ------ ------ ------
Net increase 186,449 $2,258,560 434,128 $5,516,888
- ------ ------ ------ ------
- ------ ------ ------ ------
1. For the year ended December 31, 1993 for Class A shares and for the period
from May 1, 1993 (inception of offering) to December 31, 1993 for Class B
- ------
3. Unrealized Gains and
Losses on Investments
At June 30, 1994, net unrealized depreciation on investments of $2,112,344 was
composed of gross appreciation of $476,259, and gross depreciation of
$2,588,603.
12 Oppenheimer Pennsylvania Tax-Exempt Fund
<PAGE>
- ------
- ------
4. Management Fees and
Other Transactions
With Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for an annual fee of .60% on the
first $200 million of net assets, .55% on the next $100 million, .50% on the
next $200 million, .45% on the next $250 million, .40% on the next $250 million
and .35% on net assets in excess of $1.0 billion. The Manager has agreed to
assume Fund expenses (with specified exceptions) in excess of the most stringent
applicable regulatory limit on Fund expenses.
For the six months ended June 30, 1994, commissions (sales charges paid by
investors) on sales of Class A shares totaled $312,960, of which $77,548 was
retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. During the
six months ended June 30, 1994, OFDI received contingent deferred sales charge
of $4,821 upon redemption of Class B shares.
Oppenheimer Shareholder Services (OSS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other registered
investment companies. OSS's total costs of providing such services are allocated
ratably to these companies.
Under separate approved plans, each class may expend up to .15% of its Class
A and .25% (voluntarily reduced to .15% by the Fund's Board) of its Class B net
assets annually to reimburse OFDI for costs incurred in connection with the
personal service and maintenance of accounts that hold shares of the Fund,
including amounts paid to brokers, dealers, banks and other institutions. In
addition, Class B shares are subject to an asset-based sales charge of .75% of
net assets annually, to reimburse OFDI for sales commissions paid from its own
resources at the time of sale and associated financing costs. In the event of
termination or discontinuance of the Class B plan, the Board of trustees may
allow the Fund to continue payment of the asset-based charge to OFDI for
distribution expenses incurred on Class B shares sold prior to termination or
discontinuance of the plan. During the six months ended June 30, 1994, OFDI paid
$3,779 to an affiliated broker/dealer as reimbursement for Class A personal
service and maintenance expenses and retained $28,123 as reimbursement for Class
B sales commissions and service fee advances, as well as financing costs.
13 Oppenheimer Pennsylvania Tax-Exempt Fund
<PAGE>
- ------
Oppenheimer Pennsylvania Tax-Exempt Fund
A Series of Oppenheimer Multi-State Tax-Exempt Trust
- ------
Leo Cherne, Trustee
Edmund T. Delaney, Trustee
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Donald W. Spiro, Trustee and President
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Robert E. Patterson, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
- ------
Investment Advisor Oppenheimer Management Corporation
- ------
Distributor Oppenheimer Funds Distributor, Inc.
- ------
Transfer and Shareholder
Servicing Agent
Oppenheimer Shareholder Services
- ------
Custodian of
Portfolio Securities
Citibank, N.A.
- ------
Independent Auditors KPMG Peat Marwick
- ------
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
The financial statements included herein have been taken from the records of the
Fund without examination by the independent auditors.
This is a copy of a report to shareholders of Oppenheimer Pennsylvania
Tax-Exempt Fund. This report must be preceded or accompanied by a Prospectus of
Oppenheimer Pennsylvania Tax-Exempt Fund. For material information concerning
the Fund, see the Prospectus.
14 Oppenheimer Pennsylvania Tax-Exempt Fund
<PAGE>
- ------
The Family of OppenheimerFunds
- ------
OppenheimerFunds offers over 30 funds designed to fit virtually every investment
goal. Whether you're investing for retirement, your children's education, or
tax-free income, we have the funds to help you seek your objective.
When you invest with OppenheimerFunds, you can feel comfortable knowing that
you are investing with a respected financial institution with over 30 years of
experience in helping people just like you reach their financial goals. And
you're investing with a leader in global, growth stock, and flexible fixed
income investments--with over 1.8 million shareholder accounts and more than $26
billion under Oppenheimer's management and that of our affiliates.
As an OppenheimerFunds shareholder, you can easily exchange shares of
eligible funds of the same class by mail or by telephone for a small
administrative fee.1 For more information on OppenheimerFunds, please contact
your financial advisor or call us at 1-800-525-7048 for a prospectus. You may
also write us at the address shown on the back cover. As always, please read the
prospectus carefully before you invest.
- ------
Specialty Stock Fund Gold & Special Minerals Fund
- ------
Stock Funds Discovery Fund Global Fund
Time Fund Oppenheimer Fund
Target Fund Value Stock Fund
Special Fund
- ------
Stock and Bond Funds
Main Street Income & Growth Fund
Total Return Fund
Global Growth & Income Fund
Equity Income Fund
Asset Allocation Fund
- ------
Bond Funds
High Yield Fund
Champion High Yield Fund
Strategic Income Fund
Strategic Diversified Income Fund
Strategic Investment Grade Bond Fund
Strategic Short-Term Income Fund
Investment Grade Bond Fund
Mortgage Income Fund
U.S. Government Trust
Limited-Term Government2
- ------
Tax-Exempt Funds
New York Tax-Exempt Fund3
California Tax-Exempt Fund3
Pennsylvania Tax-Exempt Fund3
Florida Tax-Exempt Fund3
New Jersey Tax-Exempt Fund3
Tax-Free Bond Fund
Insured Tax-Exempt Bond Fund
Intermediate Tax-Exempt Bond Fund
- ------
Money Market Funds Money Market Fund Cash Reserves
1. The fee is waived for PhoneLink exchanges between existing accounts. Exchange
privileges are subject to change or termination.
2. Formerly Government Securities Fund.
3. Available only to residents of those states.
OppenheimerFunds are distributed by Oppenheimer Funds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1994 Oppenheimer Management Corporation. All rights reserved.
15 Oppenheimer Pennsylvania Tax-Exempt Fund
<PAGE>
"HOW MAY I HELP YOU?"
GENERAL INFORMATION
1-800-525-7048
Talk to a Customer Service Representative.
Monday through Friday from
8:30 a.m. to 8:00 p.m., and Saturday from 10:00 a.m.
to 2:00 p.m. ET.
TELEPHONE TRANSACTIONS
1-800-852-8457
Make account transactions with a Customer Service Representative.
Monday through Friday from
8:30 a.m. to 8:00 p.m. ET.
PHONELINK
1-800-533-3310
Get automated information or make automated transactions.
24 hours a day, 7 days a week.
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DEVICE FOR THE DEAF
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Monday through Friday from
8:30 a.m. to 8:00 p.m. ET.
OPPENHEIMERFUNDS
INFORMATION HOTLINE
1-800-835-3104
Hear timely and insightful messages on the economy and issues that affect your
finances. 24 hours a day, 7 days a week.
"Just as OppenheimerFunds offers over 30 different mutual funds designed to
help meet virtually every investment need, Oppenheimer Shareholder Services
offers a variety of services to satisfy your individual needs. Whenever you
require help, we're only a toll-free phone call away.
"For personalized assistance and account information, call our General
Information number to speak with our knowledgeable Customer Service
Representatives and get the help you need.
"When you want to make account transactions, it's easy for you to redeem
shares, exchange shares, or conduct AccountLink transactions, simply by calling
our Telephone Transactions number.
"And for added convenience, OppenheimerFunds' PhoneLink, an automated voice
response system is available 24 hours a day, 7 days a week. PhoneLink gives you
access to a variety of fund, account, and market information. You can even make
purchases, exchanges and redemptions using your touch-tone phone. Of course,
PhoneLink will always give you the option to speak with a Customer Service
Representative during the hours shown to the left.
customer service. The International Customer Service Association knows it, too,
as it awarded Oppenheimer Shareholder Services a 1993 Award of Excellence for
consistently demonstrating superior customer service.
"Whatever your needs, we're ready to assist you."
[Logo]
1993
AWARD OF EXCELLENCE
ICSA
International Customer Service Association
[Photo]
BARBARA HENNIGAR
CHIEF EXECUTIVE OFFICER
OPPENHEIMER SHAREHOLDER SERVICES
Bulk Rate
U.S. Postage
PAID
Permit No. 469
Denver, CO
[Logo] OPPENHEIMERFUNDS
Oppenheimer Funds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
