<PAGE>
OPPENHEIMER NEW JERSEY TAX-EXEMPT FUND
Annual Report December 31, 1995
/LOGO/OPPENHEIMERFUNDS/r/
<PAGE>
This Fund is for people who need INCOME that's EXEMPT from taxes.
YIELD
STANDARDIZED YIELD
For the 30 Days Ended 12/31/95:(4)
Class A
3.96%
Class B
3.40%
Class C
2.95%
HOW YOUR FUND IS MANAGED
Oppenheimer New Jersey Tax-Exempt Fund invests in a diversified portfolio of New
Jersey municipal bonds. As a Fund shareholder, you receive income that is free
from federal and New Jersey income taxes.(1) Your dividends don't increase your
taxable income the way taxable investments do, so you can keep more of what you
earn.
New Jersey Tax-Exempt Fund is managed by an experienced team of municipal bond
specialists who research investments throughly before they are included in the
Fund's portfolio.
PERFORMANCE
Total return at net asset value for the 12 months ended 12/31/95 was 14.42% for
Class A shares and 13.59% for Class B shares.(2)
Your Fund's average annual total returns at maximum offering price for Class A
shares for the 1-year period ended 12/31/95 and since inception of the Class on
3/1/94 were 8.98% and 2.13%, respectively. For Class B shares, average annual
total returns for the 1-year period ended 12/31/95 and since inception of the
Class on 3/1/94 were 8.59% and 1.91%, respectively.(3)
OUTLOOK
"Our outlook remains positive. We believe that with favorable economic
fundamentals such as moderate growth and low inflation, the coming year should
be a good environment for municipal bonds."
Robert Patterson, Portfolio Manager
December 31, 1995
Total returns include change in share price and reinvestment of dividends and
capital gains distributions. 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. For more complete information, please review the
prospectus carefully before you invest.
1. A portion of the distributions paid by the Fund may be subject to federal and
state income taxes. For investors subject to federal and/or state alternative
minimum tax (AMT), the Fund's distributions may increase this tax. Capital gains
distributions, if any, are taxed as capital gains.
2. Based on the change in net asset value per share for the period shown, with-
out deducting any sales charges. Such performance would have been lower if sales
charges were taken into account.
3. Class A returns show results of hypothetical investments on 12/31/94 and
3/1/94 (inception of class), after deducting the current maximum initial sales
charge of 4.75%. Class B returns show results of hypothetical investments on
12/31/94 and 3/1/94 (inception of class), and the deduction of the applicable
contingent deferred sales charge of 5% (1-year) and 4% (since inception). Class
C cumulative total return since inception (8/29/95) was 3.07%. An explanation of
the different performance calculations is in the Fund's prospectus.
4. Standardized yield is net investment income calculated on a yield-to-maturity
basis for the 30-day period ended 12/31/95, divided by the maximum offering
price at the end of the period, compounded semiannually and then annualized.
Falling net asset values will tend to artificially raise yields.
2 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
JAMES C. SWAIN
Chairman
Oppenheimer New-Jersey Tax-Exempt Fund
BRIDGET A. MACASKILL
President
Oppenheimer New-Jersey Tax-Exempt Fund
DEAR OPPENHEIMERFUNDS SHAREHOLDER,
This has been a year in which performance has been strong for municipal bonds
because potential obstacles became great opportunities for municipal bonds
investors.
Like most fixed-income securities, municipal bonds have enjoyed the benefits of
declining long-term interest rates in 1995. When interest rates fall,
outstanding municipal bonds generally appreciate in value. But what
distinguished municipal bonds in 1995 was the relationship between their yields
and taxable U.S. government bonds. Normally, a municipal bond yields about 80%
of its taxable counterpart. For example, if a 30-year Treasury yields 6%, then a
long-term municipal bond could be expected to yield about 4.80%. In 1995, that
same municipal bond would yield as much as 5.50%.
For taxpayers in the 36% income bracket, a 5.50% tax-free yield is the
equivalent of receiving more than 8.5% on a taxable investment. At the same
time, inflation is less than 3%. Indeed, municipal bonds are producing some of
the best real, inflation-adjusted tax-free yields for some time.
The reason for this opportunity is a potential obstacle to the municipal bond
marketplace. There are several proposals in Congress for a "flat" tax, which
would diminish the current advantage of municipal bonds because ordinary income
would be taxed at a lower rate. While we can't be certain where these proposals
will lead, we believe that the odds of significant tax reform adversely
affecting municipal bonds in the near future are quite low. Indeed, the recent
battles over the federal budget deficit suggest that passing sweeping tax
legislation impacting so many different parties is a difficult proposition. In
any case, the matter will almost certainly not be resolved until well after the
November presidential election.
The other potential concern in the municipal bond market was the bankruptcy of
Orange County, California. Except for a few weeks early in 1995, most of the
municipal bond market shrugged off these developments as an isolated incident.
Nevertheless, Orange County had a positive side for municipal bond investors:
there was a demand for additional financial disclosure by professional
investors, and a tightening of credit requirements by the major rating agencies.
The Orange County episode is a good reminder of the importance of
diversification.
With a stable economy, falling long-term interest rates, low inflation, and the
high ratio of tax-free municipal bond yields to taxable U.S. government
securities, we believe that municipal bonds continue to offer an attractive
package to income-oriented investors. And a municipal bond fund offers the
additional advantage of diversification, a goal that is difficult for most
individual investors to accomplish by buying individual securities.
Your portfolio manager discusses the outlook for your Fund in light of these
broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds, and we look forward to helping you reach your investment goals
in the future.
/s/JAMES C. SWAIN
James C. Swain
/s/BRIDGET A. MACASKILL
Bridget A. Macaskill
January 22, 1996
3 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
Q + A
ROBERT PATTERSON
Portfolio Manager
AN INTERVIEW WITH YOUR FUND'S MANAGER.
HOW HAS THE FUND PERFORMED?
1995 was a great year for municipal bonds, which has translated into a great
year for the Fund. We were able to capture appreciation as the market rallied,
as well as to continue to pay tax-exempt income at a competitive rate.
WHAT FACTORS MADE POSITIVE CONTRIBUTIONS TO YOUR PERFORMANCE?
One of the ways we benefited was through the favorable supply and demand
relationship that characterized the period. While demand remained relatively
high--both from investors seeking tax-free income and those who were simply
interested in potential price appreciation--there were less new municipal bond
offerings brought to market in 1995. This relationship supported prices over the
past six months and should continue to work in favor of bondholders going
forward.
WERE THERE ANY FACTORS THAT LIMITED PERFORMANCE?
Throughout the year, the overriding theme has been the possibility of tax
reform. Tax reform, if it were dramatic, would have the potential to limit
municipal bonds' tax advantages. The fact that it's being discussed in
Washington has limited the rally of bond prices. And longer-term bonds have felt
pricing pressures more because they would be affected more by any such changes.
We continue to believe that any reforms that may pass in the near term will be
limited in scope, so we've viewed this period of nervousness as a buying
opportunity.
WHAT AREAS OF THE MARKET ARE YOU CURRENTLY TARGETING?
In response to tax reform talks, we've focused on buying both bonds with shorter
maturities and prerefunded bonds. Because of the time it would take to change
the tax laws, both of these sectors have been less vulnerable to price
pressures. We've also been buying bonds with maturities of 15-20 years. This
area of the market already reflects the negative impact of tax reform fears to
the point where we think they are selling at compelling values. Due to the
current yield curve, these bonds are paying nearly as much income as longer
bonds, but with less susceptibility to price pressures.(1)
Beyond our strategy for managing tax reform, as bonds rallied over the year,
we've been selling par bonds, or bonds that we bought at a discount, that have
realized their potential. And we're continuing to emphasize call protection, a
feature that limits an issuer's ability to pay off a bond before its maturity
date, to help us maintain our income.
WHAT IS YOUR OUTLOOK FOR THE FUND?
Our outlook remains positive. We believe that with favorable economic
fundamentals such as moderate growth and low inflation, the coming year should
be a good environment for municipal bonds. We expect that the coming year will
be a more typical period for municipal bond investors--where bonds will continue
to perform well, but where the majority of returns will come from income.//
1. The Fund's portfolio is subject to change.
4 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS December 31, 1995
RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES - 98.0%
- ----------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 81.9%
--------------------------------------------------------------------------------------------------------------------------
Bayonne, New Jersey General Obligation Bonds, FGIC
Insured, 6%, 5/1/13 Aaa/AAA/AAA $100,000 $106,079
--------------------------------------------------------------------------------------------------------------------------
Bergen County, New Jersey Utilities Authority Water
Pollution Control Revenue Bonds, Series A, FGIC Insured,
6.50%, 12/15/12 Aaa/AAA/AAA 400,000 433,729
--------------------------------------------------------------------------------------------------------------------------
Camden County, New Jersey Municipal Utilities Authority
Sewer Revenue Bonds, Series A, FGIC Insured, Zero
Coupon, 5.919%, 9/1/15(1) Aaa/AAA/AAA 250,000 88,654
--------------------------------------------------------------------------------------------------------------------------
Camden County, New Jersey Municipal Utilities Authority
Sewer Revenue Refunding Bonds, FGIC Insured, 8.125%,
12/1/07 Aaa/AAA/AAA 750,000 818,583
--------------------------------------------------------------------------------------------------------------------------
Cape May County, New Jersey Municipal Utilities Authority
Revenue Bonds, Prerefunded, MBIA Insured, 6.80%,
8/1/09 Aaa/AAA 200,000 217,037
--------------------------------------------------------------------------------------------------------------------------
Cape May County, New Jersey Municipal Utilities
Authority Revenue Refunding Bonds, Series A, MBIA
Insured, 5.75%, 1/1/16 Aaa/AAA 250,000 259,423
--------------------------------------------------------------------------------------------------------------------------
Delaware River Joint Toll Bridge Commission Revenue
Bonds, Interstate 78, Prerefunded, FGIC Insured, 7.80%,
7/1/18 Aaa/AAA/AAA 175,000 193,696
--------------------------------------------------------------------------------------------------------------------------
Delaware River Port Authority, Delaware River Bridges
Revenue Refunding Bonds, AMBAC Insured, 7.375%,
1/1/07 Aaa/AAA/AAA 750,000 827,469
--------------------------------------------------------------------------------------------------------------------------
Essex County, New Jersey Improvement Authority Revenue
Bonds, Irvington Township School District, Prerefunded,
FSA Insured, 6.55%, 10/1/09 Aaa/AAA 60,000 68,018
--------------------------------------------------------------------------------------------------------------------------
Essex County, New Jersey Improvement Authority Revenue
Bonds, Prerefunded, AMBAC Insured, 7%, 12/1/20 Aaa/AAA/AAA 150,000 170,293
--------------------------------------------------------------------------------------------------------------------------
Hoboken, Union City & Weehawken, New Jersey Sewer
Authority Revenue Refunding Bonds, MBIA Insured,
6.20%, 8/1/19 Aaa/AAA 85,000 90,702
--------------------------------------------------------------------------------------------------------------------------
Hudson County, New Jersey Certificates of Participation,
Correctional Facility Improvements, Prerefunded, BIG
Insured, 7.60%, 12/1/21 Aaa/AAA 500,000 557,473
--------------------------------------------------------------------------------------------------------------------------
Hudson County, New Jersey Utilities Authority System
Revenue Bonds, Prerefunded, 11.875%, 7/1/06 Aaa/AAA 520,000 691,150
--------------------------------------------------------------------------------------------------------------------------
Mercer County, New Jersey Improvement Authority
Revenue Bonds, Justice Complex Project, 6.05%, 1/1/11 Aa/AA- 250,000 251,108
--------------------------------------------------------------------------------------------------------------------------
Monmouth County, New Jersey Improvement Authority
Revenue Bonds, Millston Township Board of Education
Project, 5.55%, 2/15/18 NR/AA 85,000 86,825
--------------------------------------------------------------------------------------------------------------------------
New Brunswick, New Jersey Parking Authority Revenue
Refunding Bonds, Series A, FGIC Insured, 6.50%, 9/1/19 Aaa/AAA 150,000 163,258
--------------------------------------------------------------------------------------------------------------------------
New Jersey Economic Development Authority Pollution Control
Revenue Bonds, Public Service Electric & Gas Co.
Project, Series A, MBIA Insured, 6.40%, 5/1/32 Aaa/AAA 500,000 537,531
</TABLE>
5 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Continued)
RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
- ----------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY (CONTINUED)
--------------------------------------------------------------------------------------------------------------------------
New Jersey Health Care Facilities Financing Authority
Revenue Bonds, Centrastate Medical Center, Series A,
AMBAC Insured, 6%, 7/1/21 Aaa/AAA/AAA $ 100,000 $ 104,603
--------------------------------------------------------------------------------------------------------------------------
New Jersey Health Care Facilities Financing Authority
Revenue Bonds, Columbus Hospital, Series A, 7.50%,
7/1/21 Baa/BB- 600,000 633,008
--------------------------------------------------------------------------------------------------------------------------
New Jersey Health Care Facilities Financing Authority
Revenue Bonds, St. Peter's Medical Center, Prerefunded,
Series C, 8.60%, 7/1/17 Aaa/AAA 620,000 673,524
--------------------------------------------------------------------------------------------------------------------------
New Jersey Sports & Exposition Authority Revenue
Bonds, Convention Center Luxury Tax, Series A, MBIA
Insured, 6.25%, 7/1/20 Aaa/AAA 80,000 85,870
--------------------------------------------------------------------------------------------------------------------------
New Jersey State Government Revenue Refunding Bonds,
Series D, 8%, 2/15/07 Aa1/AA+ 400,000 508,133
--------------------------------------------------------------------------------------------------------------------------
New Jersey State Housing & Mtg. Finance Agency
Revenue Bonds, Home Buyer, Series J, MBIA Insured,
6.20%, 10/1/25 Aaa/AAA 200,000 206,409
--------------------------------------------------------------------------------------------------------------------------
New Jersey State Housing & Mtg. Finance Agency
Revenue Refunding Bonds, Series 1, 6.70%, 11/1/28 NR/A+ 150,000 158,263
--------------------------------------------------------------------------------------------------------------------------
New Jersey State Turnpike Authority Revenue Bonds,
Series C, 6.50%, 1/1/16 Baa1/BBB+/A- 600,000 677,748
--------------------------------------------------------------------------------------------------------------------------
Ocean County, New Jersey Utilities Authority Wastewater
Revenue Refunding Bonds, Series A, 5.75%, 1/1/18 Aa/AA- 390,000 402,354
--------------------------------------------------------------------------------------------------------------------------
Passaic County, New Jersey General Obligation Bonds,
FGIC Insured, 5.70%, 3/1/15 Aaa/AAA/AAA 100,000 103,304
--------------------------------------------------------------------------------------------------------------------------
Passaic Valley, New Jersey Community Water Supply
Revenue Bonds, Prerefunded, FGIC Insured, 6.40%,
12/15/22 Aaa/AAA/AAA 200,000 225,553
--------------------------------------------------------------------------------------------------------------------------
Pennsauken Township, New Jersey Board of Education
Certificates of Participation, BIG Insured, 7.70%,7/15/09 Aaa/AAA 500,000 561,283
--------------------------------------------------------------------------------------------------------------------------
Port Authority of New York & New Jersey Consolidated
Revenue Bonds, Ninety-Fourth Series, 6%, 12/1/14 A1/AA-/AA- 200,000 210,658
--------------------------------------------------------------------------------------------------------------------------
Port Authority of New York & New Jersey Consolidated
Revenue Bonds, Sixty-Ninth Series, 7.125%, 6/1/25 A1/AA-/AA- 600,000 663,237
--------------------------------------------------------------------------------------------------------------------------
Sussex County, New Jersey General Obligation Bonds,
General Improvement, AMBAC Insured, 6%, 4/1/07 Aaa/AAA/AAA 135,000 145,052
--------------------------------------------------------------------------------------------------------------------------
University of New Jersey Medicine & Dentistry Revenue
Bonds, Series C, 7.20%, 12/1/19 A/AA 500,000 556,994
--------------------------------------------------------------------------------------------------------------------------
University of New Jersey Medicine & Dentistry Revenue
Bonds, Series E, 5.75%, 12/1/21 A/AA 50,000 50,950
-----------
11,527,971
- ----------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS - 16.1%
--------------------------------------------------------------------------------------------------------------------------
Guam Power Authority Revenue Bonds, Series A, 6.30%,
10/1/22 NR/BBB 185,000 188,212
--------------------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth General Obligation Refunding
Bonds, 5.50%, 7/1/13 Baa1/A 100,000 99,666
</TABLE>
6 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Continued)
RATINGS: MOODY'S/
S&P'S/FITCH'S FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
- ----------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS (CONTINUED)
--------------------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway & Transportation
Authority Revenue Refunding Bonds, Series V, 6.625%,
7/1/12 Baa1/A $300,000 $ 323,378
--------------------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway & Transportation
Authority Revenue Refunding Bonds, Series W, 5.25%,
7/1/20 Baa1/A 50,000 48,394
--------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Revenue Bonds,
Unrefunded Balance, Series O, 7.125%, 7/1/14 Baa1/A- 540,000 586,657
--------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Revenue Refunding
Bonds, Series U, 6%, 7/1/14 Baa1/A- 200,000 207,253
--------------------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Bank & Finance Agency Single
Family Mtg. Revenue Bonds, Affordable Housing Mtg. -
Portfolio I, 6.25%, 4/1/29 Aaa/AAA 400,000 411,020
--------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Buildings Authority Guaranteed Public
Education & Health Facilities Revenue Refunding Bonds,
Series M, 5.75%, 7/1/15 Baa1/A 50,000 50,768
--------------------------------------------------------------------------------------------------------------------------
Virgin Islands Housing Finance Authority Single Family
Revenue Refunding Bonds, Series A, 6.50%, 3/1/25 NR/AAA 350,000 358,902
-----------
2,274,250
--------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $13,395,854) 98.0% 13,802,221
--------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 2.0 275,748
------ -----------
NET ASSETS 100.0% $14,077,969
====== ===========
</TABLE>
1. For zero coupon bonds, the interest rate shown is the effective
yield on the date of purchase.
As of December 31, 1995, securities subject to the alternative minimum
tax amounted to $1,513,862 or 10.75% 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>
Utilities:
Sewer $ 2,350,866 17.0%
Electric 982,121 7.1
Water 659,282 4.8
Solid Waste 217,037 1.6
---------------------------------------------------------------------------------------------------------------------------
Transportation 3,107,837 22.5
---------------------------------------------------------------------------------------------------------------------------
General Obligation Bonds 1,808,785 13.1
---------------------------------------------------------------------------------------------------------------------------
Hospitals 1,411,136 10.2
---------------------------------------------------------------------------------------------------------------------------
Education 1,256,053 9.2
---------------------------------------------------------------------------------------------------------------------------
Housing 1,134,595 8.2
----------------------------------------------------------------------------------------------------------------------------
Pollution Control 537,531 3.9
---------------------------------------------------------------------- ----------------------------------------------------
Lease/Rental 251,108 1.8
---------------------------------------------------------------------------------------------------------------------------
Special Tax Bonds 85,870 0.6
----------- -----
$13,802,221 100.0%
=========== =====
</TABLE>
See accompanying Notes to Financial Statements.
7 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES December 31, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS Investments, at value (cost $13,395,854) - see accompanying statement $13,802,221
----------------------------------------------------------------------------------------------------
Cash 308,726
----------------------------------------------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 305,555
Interest 301,050
----------------------------------------------------------------------------------------------------
Other 7,409
-------------------
Total assets 14,724,961
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES Payables and other liabilities:
Investments purchased 519,523
Shares of beneficial interest redeemed 48,863
Dividends 40,336
Trustees' fees 15,908
Distribution and service plan fees 4,771
Transfer and shareholder servicing agent fees 680
Other 16,911
-------------------
Total liabilities 646,992
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $14,077,969
-------------------
-------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF Paid-in capital $13,674,640
----------------------------------------------------------------------------------------------------
NET ASSETS Overdistributed net investment income (4)
----------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (3,034)
----------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments - Note 3 406,367
-------------------
Net assets $14,077,969
-------------------
-------------------
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on
net assets of $8,805,684 and 782,274 shares of beneficial interest outstanding) $11.26
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $11.82
----------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $5,222,107 and 464,094 shares of beneficial interest outstanding) $11.25
----------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $50,178 and 4,460 shares of beneficial interest outstanding) $11.25
</TABLE>
See accompanying Notes to Financial Statements.
8 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Year Ended December 31, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME Interest $667,864
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES Management fees - Note 4 63,400
----------------------------------------------------------------------------------------------------
Distribution and service plan fees - Note 4:
Class A 16,259
Class B 40,713
Class C 2
----------------------------------------------------------------------------------------------------
Trustees' fees and expenses 24,854
----------------------------------------------------------------------------------------------------
Shareholder reports 24,819
----------------------------------------------------------------------------------------------------
Legal and auditing fees 22,706
----------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees - Note 4 12,207
----------------------------------------------------------------------------------------------------
Insurance expenses 5,014
----------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 1,572
Class B 650
----------------------------------------------------------------------------------------------------
Custodian fees and expenses 313
----------------------------------------------------------------------------------------------------
Other 3,725
-----------
Total expenses 216,234
-----------
Less reimbursement of expenses by OppenheimerFunds,
Inc. - Note 4 (102,282)
-----------
Net expenses 113,952
- ------------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 553,912
- ------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND Net realized gain on investments 14,709
UNREALIZED GAIN ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 698,858
-----------
Net realized and unrealized gain 713,567
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,267,479
-----------
-----------
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1995 DECEMBER 31,
1994(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS Net investment income $ 553,912 $ 190,459
----------------------------------------------------------------------------------------------------
Net realized gain (loss) 14,709 (5,176)
----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 698,858 (292,491)
-------------------------------
Net increase (decrease) in net assets resulting
from operations 1,267,479 (107,208)
- ------------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income:
TO SHAREHOLDERS Class A (359,044) (116,609)
Class B (195,257) (73,850)
Class C (18) --
----------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (7,650) --
Class B (4,513) --
Class C (1) --
- ------------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST Net increase in net assets resulting from
TRANSACTIONS beneficial interest transactions - Note 2:
Class A 4,506,035 4,048,476
Class B 1,958,383 3,111,768
Class C 49,978 --
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS Total increase 7,215,392 6,862,577
----------------------------------------------------------------------------------------------------
Beginning of period 6,862,577 --
-------------------------------
End of period [including undistributed (overdistributed) net
investment income of $(4) and $403, respectively] $14,077,969 $6,862,577
-------------------------------
-------------------------------
</TABLE>
1. For the period from March 1, 1994 (commence-
ment of operations) to December 31, 1994.
See accompanying Notes to Financial Statements.
10 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------
FINANCIAL HIGHLIGHTS
CLASS A CLASS B CLASS C
------------------ ------------------ ------------
YEAR ENDED YEAR ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994(2) 1995 1994(2) 1995(1)
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.41 $11.43 $10.40 $11.43 $11.01
- -------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .61 .49 .53 .41 .19
Net realized and unrealized gain (loss) .86 (1.02) .86 (1.02) .25
- -------------------------------------------------------------------------------------------------------------
Total income (loss) from investment
operations 1.47 (.53) 1.39 (.61) .44
- -------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.61) (.49) (.53) (.42) (.19)
Distributions from net realized gain (.01) -- (.01) -- (.01)
- -------------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.62) (.49) (.54) (.42) (.20)
========================================================
Net asset value, end of period $11.26 $10.41 $11.25 $10.40 $11.25
========================================================
- -------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(3) 14.42% (4.63)% 13.59% (5.39)% 4.07%
- -------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $8,806 $3,877 $5,222 $2,986 $50
- -------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $6,504 $2,506 $4,080 $1,841 $3
- -------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.51% 5.57%(4) 4.79% 4.76%(4) -- (6)
Expenses, before voluntary reimbursement
by the Manager or Distributor 1.75% 1.46%(4) 2.49% 2.29%(4) -- (6)
Expenses, net of voluntary reimbursement
by the Manager or Distributor 0.80% 0.31%(4) 1.53% 1.14%(4) -- (6)
- -------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 7.4% 17.3% 7.4% 17.3% 7.4%
<FN>
1. For the period from August 29, 1995 (inception of offering) to December 31, 1995.
2. For the period from March 1, 1994 (commencement of operations) to December 31, 1994.
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. Total returns are not annualized for
periods of less than one full year.
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 period
ended December 31, 1995 were $7,051,635 and $751,378, respectively.
6. Ratios during this period would not be indicative of future results.
See accompanying Notes to Financial Statements.
</FN>
</TABLE>
11 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer New Jersey 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 objective is to seek as high a
level of current income exempt from federal and New
Jersey income taxes for individual investors that 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 with a front-end
sales charge. Class B and Class C shares may be
subject to a contingent deferred sales charge. All
classes of shares have identical rights to earnings,
assets and voting privileges, except that each class
has its own distribution and/or service plan,
expenses directly attributable to a particular class
and exclusive voting rights with respect to matters
affecting a single class. Class B shares will
automatically convert to Class A shares six years
after the date of purchase. The following is a
summary of significant accounting policies
consistently followed by the Fund.
INVESTMENT VALUATION. Portfolio securities are valued
at the close of the New York Stock Exchange on each
trading day. Listed and unlisted securities for which
such information is regularly reported are valued at
the last sale price of the day or, in the absence of
sales, at values based on the closing bid or asked
price or the last sale price on the prior trading
day. Long-term and short-term "non-money market" debt
securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities
which cannot be valued by the approved portfolio
pricing service are valued using dealer-supplied
valuations provided the Manager is satisfied that the
firm rendering the quotes is reliable and that the
quotes reflect current market value, or are valued
under consistently applied procedures established by
the Board of Trustees to determine fair value in good
faith. Short-term "money market type" debt securities
having a remaining maturity of 60 days or less are
valued at cost (or last determined market value)
adjusted for amortization to maturity of any premium
or discount.
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES.
Income, expenses (other than those attributable to a
specific class) and gains and losses are allocated
daily to each class of shares based upon the relative
proportion of net assets represented by such class.
Operating expenses directly attributable to a
specific class are charged against the operations of
that class.
FEDERAL TAXES. The Fund intends to continue to comply
with provisions of the Internal Revenue Code
applicable to regulated investment companies and to
distribute all of its taxable income, including any
net realized gain on investments not offset by loss
carryovers, to shareholders. Therefore, no federal
income or excise tax provision is required.
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a
nonfunded retirement plan for the Fund's independent
trustees. Benefits are based on years of service and
fees paid to each trustee during the years of
service. During the year ended December 31, 1995, a
provision of $12,698 was made for the Fund's
projected benefit obligations, and a payment of $422
was made to a retired trustee, resulting in an
accumulated liability of $12,276 at December 31,
1995.
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to
declare dividends separately for Class A, Class B and
Class C shares from net investment income each day
the New York Stock Exchange is open for business and
pay such dividends monthly. Distributions from net
realized gains on investments, if any, will be
declared at least once each year.
12 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net
investment income (loss) and net realized gain (loss)
may differ for financial statement and tax purposes
primarily because of premium amortization for tax
purposes. The character of the distributions made
during the year from net investment income or net
realized gains may differ from their ultimate
characterization for federal income tax purposes.
Also, due to timing of dividend distributions, the
fiscal year in which amounts are distributed may
differ from the year that the income or realized gain
(loss) was recorded by the Fund.
OTHER. Investment transactions are accounted for on
the date the investments are purchased or sold (trade
date). Original issue discount on securities
purchased is amortized over the life of the
respective securities, in accordance with federal
income tax requirements. For bonds acquired after
April 30, 1993, on disposition or maturity, taxable
ordinary income is recognized to the extent of the
lesser of gain or market discount that would have
accrued over the holding period. Realized gains and
losses on investments and unrealized appreciation and
depreciation are determined on an identified cost
basis, which is the same basis used for federal
income tax purposes. The Fund concentrates its
investments in New Jersey and, therefore, may have
more credit risks related to the economic conditions
of New Jersey than a portfolio with a broader
geographical diversification.
The preparation of financial statements in conformity
with generally accepted accounting principles
requires management to make estimates and assumptions
that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements
and the reported amounts of income and expenses
during the reporting period. Actual results could
differ from those estimates.
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par
value shares of beneficial interest of each class.
Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1995(2) DECEMBER 31, 1994(1)
-------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
Class A:
<S> <C> <C> <C> <C>
Sold 491,477 $ 5,411,078 447,660 $4,853,160
Dividends reinvested 21,117 233,177 6,784 72,067
Redeemed (102,930) (1,138,220) (81,834) (876,751)
--------- ------------ --------- -----------
Net increase 409,664 $ 4,506,035 372,610 $4,048,476
========= ============ ========= ===========
Class B:
Sold 257,922 $ 2,845,886 294,677 $3,191,135
Dividends reinvested 11,729 129,351 4,335 45,898
Redeemed (92,736) (1,016,854) (11,833) (125,265)
--------- ------------ --------- -----------
Net increase 176,915 $ 1,958,383 287,179 $3,111,768
========= ============ ========= ===========
Class C:
Sold 4,551 $ 51,000 -- $ --
Dividends reinvested -- -- -- --
Redeemed (91) (1,022) --
--------- ------------ --------- ----------
Net increase 4,460 $ 49,978 -- $ --
========= ============ ========= ==========
</TABLE>
1. For the period from March 1, 1994 (commencement of
operations) to December 31, 1994 for both Class A and
Class B Shares.
2. For the year ended December 31, 1995 for Class A
and Class B shares, and for the period from August
29, 1995 (inception of offering), to December 31,
1995, for Class C shares.
13 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At December 31, 1995, net unrealized appreciation on
investments of $406,367 was composed of gross
appreciation of $442,274, and gross depreciation of
$35,907.
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
billion. The Manager has agreed to assume Fund
expenses (with specified exceptions) in excess of the
most stringent applicable regulatory limit on Fund
expenses. In addition, the Manager has voluntarily
undertaken to assume Fund expenses to the level
needed to maintain a stable dividend.
For the year ended December 31, 1995, commissions
(sales charges paid by investors) on sales of Class A
shares totaled $146,598, of which $34,262 was
retained by OppenheimerFunds Distributor, Inc.
(OFDI), a subsidiary of the Manager, as general
distributor, and by an affiliated broker/dealer.
Sales charges advanced to broker/dealers by OFDI on
sales of the Fund's Class B and Class C shares
totaled $57,273, of which $2,132 was paid to an
affiliated broker/dealer. During the year ended
December 31, 1995, OFDI received contingent deferred
sales charges of $27,816 upon redemption of Class B
shares as reimbursement for sales commissions
advanced by OFDI at the time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the
Manager, is the transfer and shareholder servicing
agent for the Fund, and for other registered
investment companies. OFS's total costs of providing
such services are allocated ratably to these
companies.
Under separate approved plans, each class may expend
up to .25% (voluntarily reduced to .15% by the Fund's
Board) of its net assets annually to compensate 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 and Class C shares are subject to an
asset-based sales charge of .75% of net assets
annually, to compensate 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 or Class
C plan, the Board of Trustees may allow the Fund to
continue payment of the asset-based sales charge to
OFDI for distribution expenses incurred on Class B or
Class C shares sold prior to termination or
discontinuance of the plan. At December 31, 1995,
OFDI had incurred unreimbursed expenses of $200,879
for Class B and $843 for Class C. During the year
ended December 31, 1995, OFDI paid $411 and $45,
respectively, to an affiliated broker/dealer as
compensation for Class A and Class B personal service
and maintenance expenses, and retained $34,481 as
compensation for Class B sales commissions and
service fee advances, as well as financing costs.
14 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of Oppenheimer
Multi-State Tax-Exempt Trust:
We have audited the accompanying statements of
investments and assets and liabilities of Oppenheimer
New Jersey Tax-Exempt Fund (a series of Oppenheimer
Multi-State Tax- Exempt Trust) as of December 31,
1995, the related statement of operations for the
year then ended and the statements of changes in net
assets and financial highlights for the year then
ended and the period from March 1, 1994 (commencement
of operations) to December 31, 1994. These financial
statements and financial highlights are the
responsibility of the Fund's management. Our
responsibility is to express an opinion on these
financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements and financial highlights are free of
material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our
procedures included confirmation of securities owned
as of December 31, 1995, by correspondence with the
custodian and brokers; where replies were not
received from brokers, we performed other auditing
procedures. An audit also includes assessing the
accounting principles used and significant estimates
made by management, as well as evaluating the overall
financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and
financial highlights referred to above present
fairly, in all material respects, the financial
position of Oppenheimer New Jersey Tax-Exempt Fund as
of December 31, 1995, the results of its operations
for the year then ended, and the changes in its net
assets and financial highlights for the year then
ended and the period from March 1, 1994 (commencement
of operations) to December 31, 1994, in conformity
with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Denver, Colorado
January 22, 1996
15 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
FEDERAL INCOME TAX INFORMATION (Unaudited)
In early 1996, shareholders will receive information
regarding all dividends and distributions paid to
them by the Fund during calendar year 1995.
Regulations of the U.S. Treasury Department require
the Fund to report this information to the Internal
Revenue Service.
Distributions of $.0610, $.0545, and $.0612 per share
were paid to Class A, Class B and Class C
shareholders, respectively, on December 8, 1995, of
which, for each class of shares, $.0058 was
designated as a "capital gain distribution" for
federal income tax purposes. Whether received in
stock or cash, the capital gain distribution should
be treated by shareholders as a gain from the sale of
capital assets held for more than one year (long-term
capital gains).
None of the dividends paid by the Fund during the
fiscal year ended December 31, 1995 are eligible for
the corporate dividend-received deduction. The
dividends were derived from interest on municipal
bonds and are not subject to federal income tax. To
the extent a shareholder is subject to any state or
local tax laws, some or all of the dividends received
may be taxable.
The foregoing information is presented to assist
shareholders in reporting distributions received from
the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may
affect your individual tax return and the many
variations in state and local tax regulations, we
recommend that you consult your tax advisor for
specific guidance.
16 Oppenheimer New Jersey Tax-Exempt Fund
<PAGE>
OPPENHEIMER NEW JERSEY TAX-EXEMPT FUND
A Series of Oppenheimer Multi-State Tax-Exempt Trust
OFFICERS AND TRUSTEES Leon Levy, Chairman of the Board of Trustees
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Bridget A. Macaskill, Trustee and President
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
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 OppenheimerFunds, Inc.
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
TRANSFER AND OppenheimerFunds Services
SHAREHOLDER SERVICING
AGENT
CUSTODIAN OF Citibank, N.A.
PORTFOLIO SECURITIES
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein
This is a copy of a report to shareholders of
Oppenheimer New Jersey Tax-Exempt Fund. This report
must be preceded or accompanied by a Prospectus of
Oppenheimer New Jersey Tax-Exempt Fund. For material
information concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, and are not insured by the FDIC or any other
agency, and involve investment risks, including
possible loss of the principal amount invested.
17 Oppenheimer New Jersey Tax-Exempt Fund
