[FRONT COVER]
OPPENHEIMER NEW JERSEY MUNICIPAL FUND
Annual Report July 31, 1997
[LOGO]
OPPENHEIMERFUNDS/SM/
THE RIGHT WAY TO INVEST
<PAGE>
This Fund is for NEW JERSEY residents who need a source of income that's EXEMPT
from current TAXES.
- -----
YIELD
- -----
STANDARDIZED YIELDS(4)
For the 30 Days Ended 7/31/97:
Class A
3.91%
Class B
3.37%
Class C
3.37%
- ----------------
BEAT THE AVERAGE
- ----------------
Total Return for the 1-Year Period
Ended 7/31/97:
Oppenheimer New Jersey
Municipal Fund Class A shares
(at net asset value)(2)
- -----
9.99%
- -----
Lipper New Jersey Municipal Debt
Fund Average for 57 New Jersey
Municipal Debt Funds as of 7/31/97(5)
- -----
9.18%
- -----
- ------------------------
HOW YOUR FUND IS MANAGED
- ------------------------
Oppenheimer New Jersey Municipal 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.
- -----------
PERFORMANCE
- -----------
Total returns for the twelve months ended 7/31/97 were 9.99% for Class A shares,
9.18% for Class B shares and 9.11% for Class C shares, without deducting sales
charges.(2)
Your Fund's average annual total returns for Class A shares for the 1-year
period ended 6/30/97 and since inception on 3/1/94 were 2.70% and 3.75%,
respectively. For Class B shares, average annual total returns for the 1-year
period ended 6/30/97 and since inception on 3/1/94 were 1.92% and 3.63%,
respectively. For Class C shares, average annual total returns for the 1-year
period ended 6/30/97 and since inception on 8/29/95 were 5.84% and 6.26%,
respectively.(3)
- -------
OUTLOOK
- -------
"We believe the Fund should continue to be a relatively high yield, low
volatility tax-exempt investment vehicle for New Jersey investors."
Caryn Halbrecht, Portfolio Manager
July 31, 1997
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
IN REVIEWING PERFORMANCE AND RANKINGS, PLEASE REMEMBER THAT PAST PERFORMANCE
DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
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. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account.
3. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A returns include the current maximum initial sales charge of
4.75%. Class A shares were first publicly offered on 3/1/94. Class B returns
include the applicable contingent deferred sales charge of 5% (1-year) and 3%
(since inception on 3/1/94). Class C returns include the contingent deferred
sales charge of 1% for the 1-year result. Class C shares were first offered on
8/29/95. An explanation of the different performance calculations is in the
Fund's prospectus.
4. Standardized yield is based on net investment income for the 30-day period
ended 7/31/97. Falling net asset values will tend to artificially raise yields.
5. Source: Lipper Analytical Services, 7/31/97. The Lipper average is shown
for comparative purposes only. Oppenheimer New Jersey Municipal Fund is
characterized by Lipper as a New Jersey municipal debt fund. Lipper performance
is based on total return and does not take sales charges into account.
2 Oppenheimer New Jersey Municipal Fund
<PAGE>
BRIDGET A. MACASKILL
President
Oppenheimer
New Jersey Municipal Fund
DEAR SHAREHOLDER,
As we consider the world's financial markets over the past twelve months, some
global trends emerge. For example, inflation has hit its lowest level in three
decades worldwide, which has helped spur many bullish financial markets. The
United States has been a beneficiary of this low-inflation environment, as well
as a strong dollar, robust corporate earnings and a healthy economy. However,
many financial analysts are now concerned that the United States has reached a
point in the business cycle where earnings could decline because companies are
unable to further reduce costs.
On the other hand, a wave of corporate restructuring throughout Europe
has resulted in some exciting changes and opportunities. Because a similar
restructuring took place in the United States ten years ago, European companies
have been able to enjoy the benefit of hindsight by following our footsteps.
Latin America, too, has begun to shift its economies more toward the U.S.
capitalist model and has reported positive earnings growth along the way.
With major changes occurring in today's economies around the globe,
it's more important than ever to maintain a diversified portfolio across
different countries and market sectors. Now is the time to speak to your
financial adviser to ensure that your assets are allocated properly, so you have
the opportunity to benefit from investments in both domestic and international
funds. It's important to remember that investing abroad can involve greater risk
and expenses including political and economic uncertainties and should be
undertaken with a long-term approach in mind.
To keep in touch with our views on the markets, visit our website,
WWW.OPPENHEIMERFUNDS.COM, where you can access your account information and fund
performance data, 24 hours a day. The site also features prospectuses, timely
market updates and insightful commentaries. Our new shareholder reports and
presence on the Internet are just two examples of our commitment to keeping you
well informed.
Thank you for your confidence in OppenheimerFunds, THE RIGHT WAY TO
INVEST. We look forward to helping you reach your investment goals in the
future.
/s/Bridget A. Macaskill
Bridget A. Macaskill
August 21, 1997
3 Oppenheimer New Jersey Municipal Fund
<PAGE>
CARYN HALBRECHT
Portfolio Manger
Q+A
AN INTERVIEW WITH YOUR FUND'S MANAGERS.
HOW HAS THE FUND PERFORMED?
Oppenheimer New Jersey Municipal Fund's Class A shares continued to deliver
strong performance, providing a total rate of return, before sales charges, of
9.99% for the one-year period ended July 31, 1997.(1) This placed the Fund's
Class A shares in the top quartile of its peers--9th among the 57 New Jersey
municipal debt funds ranked by Lipper Analytical Services for the one-year
period ended July 31, 1997.(2)
This high-ranking performance was the result of our successful management of
duration (a measure of sensitivity to interest rate changes) in the face of the
changing market.
WHAT FACTORS AFFECTED THE PERFORMANCE OF THE FUND?
In March, we shortened the Fund's durations in anticipation of a short-term
interest rate tightening by the Federal Reserve. This rate hike did occur and
resulted in several subsequent market setbacks. By mid-April, many investors
were concerned that economic growth might spur inflation and, as a result, bond
yields began to rise steadily. However, by mid-May, inflation appeared to be
held in check, and yields dropped by 60 basis points--despite strong growth in
the first quarter.
As the muni market stabilized in April and rallied in May, we began lengthening
durations accordingly. By shifting our durations we were in a good
position to take advantage of both the rise and fall in rates.
WHAT AREAS ARE YOU CURRENTLY TARGETING?
We continue to concentrate on "cushion bonds," which offer relatively high
coupons, high current yield and low price volatility. By definition, cushion
bonds are callable bonds that earn a coupon above current market interest rates
and are selling for a premium. As interest rates rise, these bonds lose less of
their value and as rates fall, they gain less in value, making them suitable for
conservative investors interested in high income.
We are also currently pursuing "story bonds," where available--and where the
spread compensates investors adequately for the risk. Story bonds are so named
because they are securities with values or features so complex that usually a
"story" is required to explain their merits to investors.
WHAT SIGNIFICANT TRENDS COULD AFFECT THE NEW JERSEY MUNICIPAL BOND MARKET?
At the end of 1997, a New Jersey state law that subsidizes hospitals providing
charity care will expire. Fortunately, because the Fund's healthcare exposure
is concentrated in well-managed financially sound hospitals, we will be less
vulnerable to this state cutback as well as other similar governmental
cost-saving measures.
In addition, New Jersey hasn't decided how it will address the recent court
decision that deemed "flow control" for sewer utilities as unconstitutional.
Prior to this ruling, the Fund successfully avoided the whole solid waste sector
in New Jersey. Going forward, as the state further clarifies its intentions, we
will carefully watch for potential opportunities in this sector.
WHAT IS YOUR OVERALL OUTLOOK FOR THE FUND?
We are very optimistic about the Fund for the remainder of 1997. Positive
factors for the Fund include the current record-low inflation, a shrinking
federal budget deficit and a manageable municipal supply.
Due to its generally conservative posture, we believe the Fund should continue
to be a relatively high yield, low volatility tax-exempt investment vehicle for
New Jersey investors.//
1. Includes change in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account.
2. Source: Lipper Analytical Services, 7/31/97. The Lipper average is shown
for comparative purposes only. Oppenheimer New Jersey Municipal Fund is
characterized by Lipper as a New Jersey municipal debt fund. Lipper performance
is based on total return and does not take sales charges into account.
4 Oppenheimer New Jersey Municipal Fund
<PAGE>
======================================
STATEMENT OF INVESTMENTS JULY 31, 1997
<TABLE>
<CAPTION>
RATINGS: MOODY'S/
S&P/FITCH FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
===============================================================================================================================
MUNICIPAL BONDS AND NOTES - 99.1%
- -------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 90.3%
<S> <C> <C> <C>
Bayonne, NJ GOB, FGIC Insured, 6%, 5/1/13 Aaa/AAA/AAA $ 100,000 $ 106,803
- -------------------------------------------------------------------------------------------------------------------------------
Bergen Cnty., NJ MUAU Water PC RB, Prerefunded,
Series A, FGIC Insured, 6.50%, 12/15/12 Aaa/AAA/AAA 400,000 447,136
- -------------------------------------------------------------------------------------------------------------------------------
Camden Cnty., NJ MUAU Sewer RB, Unrefunded Balance,
FGIC Insured, 8.125%, 12/1/07 Aaa/AAA 245,000 253,759
- -------------------------------------------------------------------------------------------------------------------------------
DE River Joint Toll Bridge Commission RB, Interstate 78,
Prerefunded, FGIC Insured, 7.80%, 7/1/18 Aaa/AAA/AAA 175,000 184,732
- -------------------------------------------------------------------------------------------------------------------------------
DE River Port Authority RB, FGIC Insured, 5.50%, 1/1/26 Aaa/AAA/AAA 1,000,000 1,019,810
- -------------------------------------------------------------------------------------------------------------------------------
DE River Port Authority RRB, Delaware River Bridges,
AMBAC Insured, 7.375%, 1/1/07 Aaa/AAA/AAA 750,000 799,102
- -------------------------------------------------------------------------------------------------------------------------------
East Orange, NJ GOB, FSA Insured, 8.40%, 8/1/06 Aaa/AAA 1,000,000 1,281,400
- -------------------------------------------------------------------------------------------------------------------------------
Essex Cnty., NJ Improvement Authority Lease RB,
Prerefunded, AMBAC Insured, 7%, 12/1/20 Aaa/AAA/AAA 150,000 166,407
- -------------------------------------------------------------------------------------------------------------------------------
Essex Cnty., NJ Improvement Authority RB, Utility System-
Orange Franchise, Series A, MBIA Insured, 5.75%, 7/1/27 Aaa/AAA 1,000,000 1,044,480
- -------------------------------------------------------------------------------------------------------------------------------
Hoboken, Union City & Weehawken, NJ Sewer Authority
RB, Prerefunded, MBIA Insured, 7.25%, 8/1/19 Aaa/AAA 1,770,000 1,914,910
- -------------------------------------------------------------------------------------------------------------------------------
Hoboken, Union City & Weehawken, NJ Sewer Authority
RRB, MBIA Insured, 6.20%, 8/1/19 Aaa/AAA 85,000 92,090
- -------------------------------------------------------------------------------------------------------------------------------
Hudson Cnty., NJ COP, Correctional Facility
Improvements, Prerefunded, BIG Insured, 7.60%, 12/1/21 Aaa/AAA 900,000 960,516
- -------------------------------------------------------------------------------------------------------------------------------
Hudson Cnty., NJ MUAU System RB, Prerefunded,
11.875%, 7/1/06 Aaa/AAA 520,000 670,514
- -------------------------------------------------------------------------------------------------------------------------------
Lacey, NJ MUAU Water RB, Prerefunded, BIG Insured,
7%, 12/1/16 Aaa/AAA 500,000 542,940
- -------------------------------------------------------------------------------------------------------------------------------
Mercer Cnty., NJ Improvement Authority RB, Justice
Complex Project, 6.05%, 1/1/11 Aa/AA- 250,000 250,125
- -------------------------------------------------------------------------------------------------------------------------------
New Brunswick, NJ Parking Authority RRB, Series A,
FGIC Insured, 6.50%, 9/1/19 Aaa/AAA 150,000 166,243
- -------------------------------------------------------------------------------------------------------------------------------
Newark, NJ GOB, Additional State School Building
Aid, 10%, 6/1/03 A/AA 720,000 920,254
- -------------------------------------------------------------------------------------------------------------------------------
NJ EDAU PC RB, Public Service Electric & Gas Co.
Project, Series A, MBIA Insured, 6.40%, 5/1/32 Aaa/AAA 500,000 545,900
- -------------------------------------------------------------------------------------------------------------------------------
NJ EDAU RB, Market Transition Facility, Series A,
MBIA Insured, 7%, 7/1/03 Aaa/AAA 1,250,000 1,419,712
- -------------------------------------------------------------------------------------------------------------------------------
NJ EDAU Water Facilities RB, American Water Co., Inc.
Project, Series A, FGIC Insured, 6.875%, 11/1/34 Aaa/AAA/AAA 500,000 564,675
- -------------------------------------------------------------------------------------------------------------------------------
NJ Educational FA RRB, Monmouth University, Series C,
5.80%, 7/1/22 Baa2/BBB 1,000,000 1,020,660
- -------------------------------------------------------------------------------------------------------------------------------
NJ GOB, Series D, 8%, 2/15/07 Aa1/AA+/AA+ 400,000 507,600
</TABLE>
5 Oppenheimer New Jersey Municipal Fund
<PAGE>
<TABLE>
<CAPTION>
====================================
STATEMENT OF INVESTMENTS (CONTINUED)
RATINGS: MOODY'S/
S&P/FITCH FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY (CONTINUED)
NJ HCF FAU RB:
<S> <C> <C> <C>
Centrastate Medical Center, Series A, AMBAC Insured,
6%, 7/1/21 Aaa/AAA/AAA $ 100,000 $ 103,118
Columbus Hospital, Series A, 7.50%, 7/1/21 Baa3/BBB- 1,000,000 1,077,380
Southern Ocean Cnty. Hospital, Series A, 6.25%, 7/1/23 Baa/NR/BBB 1,000,000 1,042,090
St. Elizabeth Hospital Obligation Group, 6%, 7/1/20 Baa3/BBB 1,000,000 1,033,510
St. Josephs Hospital & Medical Center, Series A,
Connie Lee Insured, 6%, 7/1/26 NR/AAA/A- 750,000 799,462
- -------------------------------------------------------------------------------------------------------------------------------
NJ HFAU RRB, Dover General Hospital & Medical Center,
MBIA Insured, 7%, 7/1/03 Aaa/AAA 1,000,000 1,138,560
- -------------------------------------------------------------------------------------------------------------------------------
NJ Mtg. & HFA MH RB, Series A, AMBAC Insured,
6.25%, 5/1/28 Aaa/AAA 1,000,000 1,042,010
- -------------------------------------------------------------------------------------------------------------------------------
NJ Mtg. & HFA RB:
Home Buyer, Series J, MBIA Insured, 6.20%, 10/1/25 Aaa/AAA 200,000 207,992
Series S, MBIA Insured, 6.05%, 10/1/28 Aaa/AAA 1,000,000 1,037,210
- -------------------------------------------------------------------------------------------------------------------------------
NJ Mtg. & HFA RRB, Series 1, 6.70%, 11/1/28 NR/A+ 150,000 159,502
- -------------------------------------------------------------------------------------------------------------------------------
NJ Sports & Exposition Authority RB, Convention Center
Luxury Tax, Series A, MBIA Insured, 6.25%, 7/1/20 Aaa/AAA 80,000 86,767
- -------------------------------------------------------------------------------------------------------------------------------
NJ Transportation Trust Fund Authority RB,
Transportation System, Series B, 5%, 6/15/17 Aa3/A+/AA 1,000,000 981,420
- -------------------------------------------------------------------------------------------------------------------------------
NJ Turnpike Authority RRB, Series C:
6.50%, 1/1/16 Baa1/BBB+/A- 950,000 1,095,170
MBIA Insured, 6.50%, 1/1/09 Aaa/AAA 1,000,000 1,171,130
- -------------------------------------------------------------------------------------------------------------------------------
NJ Wastewater Treatment Trust RRB, Series A,
MBIA Insured, 7%, 9/1/07(1) Aaa/AAA/AAA 810,000 972,656
- -------------------------------------------------------------------------------------------------------------------------------
North Brunswick Township, NJ GOB, 6.40%, 5/15/08 A1/A+ 500,000 545,385
- -------------------------------------------------------------------------------------------------------------------------------
North Jersey District Water Supply RRB, Wanaque North
Project, Series A, MBIA Insured, 5.125%, 11/15/21 Aaa/AAA 1,000,000 986,930
- -------------------------------------------------------------------------------------------------------------------------------
Ocean Cnty., NJ GOB:
7.40%, 10/15/00 Aa2/AA-/AA 1,400,000 1,541,316
7.50%, 10/15/01 Aa2/AA-/AA 500,000 565,530
- -------------------------------------------------------------------------------------------------------------------------------
PAUNYNJ Consolidated RB:
69th Series, 7.125%, 6/1/25 A1/AA-/AA- 600,000 651,372
94th Series, 6%, 12/1/14 A1/AA-/AA- 200,000 214,038
- -------------------------------------------------------------------------------------------------------------------------------
PAUNYNJ RRB, Prerefunded, Seventy-Second Series,
7.35%, 10/1/27 A1/AA- 470,000 543,179
- -------------------------------------------------------------------------------------------------------------------------------
PAUNYNJ Special Obligation RB, JFK International Air
Terminal, Series 6, MBIA Insured, 7%, 12/1/12 Aaa/AAA 2,000,000 2,431,900
- -------------------------------------------------------------------------------------------------------------------------------
PAUNYNJ Special Obligation RRB, KIAC-4 Project, 5th
Installment, 6.75%, 10/1/19 NR/NR 900,000 977,184
- -------------------------------------------------------------------------------------------------------------------------------
Pennsauken Township, NJ BOE COP, BIG Insured,
Prerefunded, 7.70%, 7/15/09 Aaa/AAA 500,000 544,450
- -------------------------------------------------------------------------------------------------------------------------------
Sussex Cnty., NJ General Improvement GOB, AMBAC
Insured, 6%, 4/1/07 Aaa/AAA/AAA 135,000 145,800
------------
35,974,829
</TABLE>
6 Oppenheimer New Jersey Municipal Fund
<PAGE>
<TABLE>
<CAPTION>
====================================
STATEMENT OF INVESTMENTS (CONTINUED)
RATINGS: MOODY'S/
S&P/FITCH FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS - 8.8%
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Guam PAU RB, Series A, 6.30%, 10/1/22 NR/BBB $ 185,000 $ 193,096
- -------------------------------------------------------------------------------------------------------------------------------
PR Commonwealth Aqueduct & Sewer Authority RB,
Escrowed to Maturity, 10.25%, 7/1/09 Aaa/AAA 460,000 649,874
- -------------------------------------------------------------------------------------------------------------------------------
PR Commonwealth HTAU RB, Series Y, 5%, 7/1/36 Baa1/A 1,000,000 957,080
- -------------------------------------------------------------------------------------------------------------------------------
PR Commonwealth HTAU RRB, Series V, 6.625%, 7/1/12 Baa1/A 300,000 330,183
- -------------------------------------------------------------------------------------------------------------------------------
PR EPAU RB, Unrefunded Balance, Series O, 7.125%,
7/1/14 Baa1/BBB+ 540,000 579,674
- -------------------------------------------------------------------------------------------------------------------------------
PR Industrial Tourist Educational Medical &
Environmental Control Facilities RB, Polytechnic
University Project, Series A, 6.50%, 8/1/24 NR/BBB- 415,000 451,346
- -------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Housing FAU Single Family RRB, Series A,
6.50%, 3/1/25 NR/AAA 350,000 368,323
------------
3,529,576
------------
Total Municipal Bonds and Notes (Cost $38,067,160) 39,504,405
</TABLE>
<TABLE>
DATE STRIKE CONTRACTS
===============================================================================================================================
CALL OPTIONS PURCHASED - 0.1%
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Bonds, 30 yr. Futures, 12/97 Call Opt.
(Cost $21,044) 11/97 $120 36 31,500
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $38,088,205) 99.2% 39,535,905
- -------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.8 299,812
---------- ------------
NET ASSETS 100.0% $39,835,717
========== ============
</TABLE>
<TABLE>
To simplify the listings of securities abbreviations are used per the table
below:
<S> <C>
BOE - Board of Education HFAU - Health Facilities Authority
COP - Certificates of Participation HTAU - Highway & Transportation Authority
EDAU -Economic Development Authority MH - Multifamily Housing
EPAU - Electric Power Authority MUAU - Municipal Utilities Authority
FA - Facilities Authority PAUNYNJ - Port Authority of New York & New Jersey
FAU - Finance Authority PAU - Power Authority
GOB - General Obligation Bonds PC - Pollution Control
HCF - Health Care Facilities RB - Revenue Bonds
HFA - Housing Finance Agency RRB - Revenue Refunding Bonds
</TABLE>
1. Securities with an aggregate market value of $120,081 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 of Notes to Financial Statements.
As of July 31, 1997, securities subject to the alternative minimum tax amount to
$7,175,194 or 18.01% of the Fund's net assets.
7 Oppenheimer New Jersey Municipal Fund
<PAGE>
<TABLE>
<CAPTION>
====================================
STATEMENT OF INVESTMENTS (CONTINUED)
Distribution of investments by industry, as a percentage of total investments at
value, is as follows:
INDUSTRY MARKET VALUE PERCENT
- -------- ------------ -------
<S> <C> <C>
Highways $ 6,704,870 17.0%
Hospital/Healthcare 5,194,121 13.0
Marine/Aviation Facilities 4,817,673 12.1
General Obligation 4,693,834 11.9
Sewer Utilities 3,233,415 8.2
Telephone Utilities 2,478,546 6.3
Lease Rental 1,921,498 4.9
Water Utilities 1,863,328 4.7
Single Family Housing 1,613,525 4.1
Special Assessment 1,419,712 3.6
Higher Education 1,371,599 3.5
Multi-Family Housing 1,201,513 3.0
Education 1,020,660 2.6
Electric Utilities 772,769 2.0
Corporate Backed 564,675 1.4
Pollution Control 545,900 1.4
Sales Tax 86,767 0.2
Options-Treasury 31,500 0.1
------------ -----
$39,535,905 100.0%
============ =====
</TABLE>
See accompanying Notes to Financial Statements.
8 Oppenheimer New Jersey Municipal Fund
<PAGE>
<TABLE>
<CAPTION>
=================================================
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1997
=================================================================================================================
ASSETS
<S> <C>
Investments, at value (cost $38,088,205) - see accompanying statement $39,535,905
- -----------------------------------------------------------------------------------------------------------------
Cash 456,805
- -----------------------------------------------------------------------------------------------------------------
Receivables:
Interest 515,020
Shares of beneficial interest sold 442,768
Daily variation on futures contracts - Note 5 15,000
- -----------------------------------------------------------------------------------------------------------------
Other 4,523
------------
Total assets 40,970,021
=================================================================================================================
LIABILITIES
Payables and other liabilities:
Investments purchased 967,221
Dividends 106,683
Trustees' fees - Note 1 25,682
Distribution and service plan fees 4,470
Transfer and shareholder servicing agent fees 1,492
Shares of beneficial interest redeemed 145
Other 28,611
------------
Total liabilities 1,134,304
=================================================================================================================
NET ASSETS $39,835,717
============
=================================================================================================================
COMPOSITION OF NET ASSETS
Paid-in capital $38,271,428
- -----------------------------------------------------------------------------------------------------------------
Overdistributed net investment income (33,116)
- -----------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 113,767
- -----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments - Notes 3 and 5 1,483,638
------------
Net assets $39,835,717
============
=================================================================================================================
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$19,108,824 and 1,656,413 shares of beneficial interest outstanding) $11.54
Maximum offering price per share (net asset value plus sales charge of 4.75% of
offering price) $12.12
- -----------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $18,646,741 and
1,617,360 shares of beneficial interest outstanding) $11.53
- -----------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $2,080,152 and
180,396 shares of beneficial interest outstanding) $11.53
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer New Jersey Municipal Fund
<PAGE>
========================================================
STATEMENT OF OPERATIONS FOR THE YEAR ENDED JULY 31, 1997
<TABLE>
=================================================================================================================
INVESTMENT INCOME
<S> <C>
Interest $1,775,867
=================================================================================================================
EXPENSES
Management fees - Note 4 168,116
- -----------------------------------------------------------------------------------------------------------------
Distribution and service plan fees - Note 4:
Class A 32,884
Class B 131,200
Class C 7,431
- -----------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees - Note 4 25,142
- -----------------------------------------------------------------------------------------------------------------
Shareholder reports 17,245
- -----------------------------------------------------------------------------------------------------------------
Legal and auditing fees 10,117
- -----------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 6,076
- -----------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 2,280
Class B 2,661
Class C 403
- -----------------------------------------------------------------------------------------------------------------
Insurance expenses 3,482
- -----------------------------------------------------------------------------------------------------------------
Other 1,059
-----------
Total expenses 408,096
-----------
Less expenses paid indirectly - Note 4 (6,097)
Less reimbursement of expenses by OppenheimerFunds, Inc. - Note 4 (51,835)
-----------
Net expenses 350,164
=================================================================================================================
NET INVESTMENT INCOME 1,425,703
=================================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments (70,226)
Closing of futures contracts 220,854
-----------
Net realized gain 150,628
- -----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 1,262,319
-----------
Net realized and unrealized gain 1,412,947
=================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,838,650
===========
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer New Jersey Municipal Fund
<PAGE>
===================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED
YEAR ENDED JULY 31, DECEMBER 31,
1997 1996(1) 1995
===================================================================================================================================
OPERATIONS
<S> <C> <C> <C>
Net investment income $ 1,425,703 $ 535,517 $ 553,912
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 150,628 (22,035) 14,709
- -----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 1,262,319 (185,048) 698,858
------------------------------------------------
Net increase in net assets resulting
from operations 2,838,650 328,434 1,267,479
===================================================================================================================================
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (767,546) (320,924) (359,044)
Class B (624,119) (212,582) (195,257)
Class C (34,038) (2,007) (18)
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (22,656) -- (7,650)
Class B (21,623) -- (4,513)
Class C (684) -- (1)
===================================================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial interest transactions
- Note 2:
Class A 7,082,671 2,672,488 4,506,035
Class B 8,269,186 4,601,865 1,958,383
Class C 1,889,520 81,113 49,978
===================================================================================================================================
NET ASSETS
Total increase 18,609,361 7,148,387 7,215,392
- -----------------------------------------------------------------------------------------------------------------------------------
Beginning of period 21,226,356 14,077,969 6,862,577
------------------------------------------------
End of period (including overdistributed net investment income of $33,116,
$17,852 and $4, respectively) $39,835,717 $21,226,356 $14,077,969
================================================
</TABLE>
1. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31.
See accompanying Notes to Financial Statements.
11 Oppenheimer New Jersey Municipal Fund
<PAGE>
====================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS B
--------------------------------------- ----------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
YEAR ENDED JULY 31, DECEMBER 31, JULY 31, DECEMBER 31,
1997 1996(2) 1995 1994(3) 1997 1996(2) 1995 1994(3)
====================================================================================================================================
PER SHARE OPERATING DATA:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.10 $11.26 $10.41 $11.43 $11.09 $11.25 $10.40 $11.43
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .62 .36 .61 .49 .53 .31 .53 .41
Net realized and unrealized gain (loss) .45 (.16) .86 (1.02) .46 (.16) .86 (1.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from investment
operations 1.07 .20 1.47 (.53) .99 .15 1.39 (.61)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.61) (.36) (.61) (.49) (.53) (.31) (.53) (.42)
Distributions from net realized gain (.02) -- (.01) -- (.02) -- (.01) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.63) (.36) (.62) (.49) (.55) (.31) (.54) (.42)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.54 $11.10 $11.26 $10.41 $11.53 $11.09 $11.25 $10.40
===================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(4) 9.99% 1.80% 14.42% (4.63)% 9.18% 1.34% 13.59% (5.39)%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $19,109 $11,354 $8,806 $3,877 $18,647 $9,740 $5,222 $2,986
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $14,072 $10,036 $6,504 $2,506 $13,278 $7,774 $4,080 $1,841
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.45% 5.49%(6) 5.51% 5.57%(6) 4.70% 4.70% 4.79% 4.76%(6)
Expenses, before reimbursement and voluntary
assumption by the Manager or Distributor(7) 1.08% 1.64%(6) 1.75% 1.46%(6) 1.83% 2.40% 2.49% 2.29%(6)
Expenses, net of reimbursement and voluntary
assumption by the Manager or Distributor 0.88% 0.97%(6) 0.80% 0.31%(6) 1.62% 1.74% 1.53% 1.14%(6)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 11.9% 33.1% 7.4% 17.3% 11.9% 33.1% 7.4% 17.3%
</TABLE>
1. For the period from August 29, 1995 (inception of offering) to December 31,
1995.
2. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31.
3. For the period from March 1, 1994 (commencement of operations) to December
31, 1994.
4. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
12 Oppenheimer New Jersey Municipal Fund
<PAGE>
================================
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
CLASS C
---------------------------------------
PERIOD ENDED
YEAR ENDED JULY 31, DECEMBER 31,
1997 1996(2) 1995(1)
========================================================================================
PER SHARE OPERATING DATA:
<S> <C> <C> <C>
Net asset value, beginning of period $11.09 $11.25 $11.01
- ----------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .53 .30 .19
Net realized and unrealized gain (loss) .45 (.16) .25
- ----------------------------------------------------------------------------------------
Total income (loss) from investment
operations .98 .14 .44
- ----------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.52) (.30) (.19)
Distributions from net realized gain (.02) -- (.01)
- ----------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.54) (.30) (.20)
- ----------------------------------------------------------------------------------------
Net asset value, end of period $11.53 $11.09 $11.25
=======================================
========================================================================================
TOTAL RETURN, AT NET ASSET VALUE(4) 9.11% 1.29% 4.07%
========================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $2,080 $132 $50
- --------------------------------------------------------------------------------------
Average net assets (in thousands) $ 747 $ 74 $3
- --------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.56% 4.66% -- (5)
Expenses, before reimbursement and voluntary
assumption by the Manager or Distributor(7) 1.79% 2.48% -- (5)
Expenses, net of reimbursement and voluntary
assumption by the Manager or Distributor 1.60% 1.81% -- (5)
- ----------------------------------------------------------------------------------------
Portfolio turnover rate(8) 11.9% 33.1% 7.4%
</TABLE>
5. Ratios during this period would not be indicative of future results.
6. Annualized.
7. Beginning in fiscal 1995, the expense ratio reflects the effect of expenses
paid indirectly by the Fund. Prior year expense ratios have not been adjusted.
8. 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 July 31, 1997 were $20,800,606 and $3,300,275, respectively.
See accompanying Notes to Financial Statements.
13 Oppenheimer New Jersey Municipal Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer New Jersey Municipal Fund (the Fund) is a separate series of
Oppenheimer Multi-State Municipal 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
as is available from municipal securities and that is consistent with
preservation of capital. The Fund's investment adviser is OppenheimerFunds, Inc.
(the Manager). The Fund offers Class A, Class B and Class C shares. Class A
shares are sold with a front-end sales charge. Class B and Class C shares may be
subject to a contingent deferred sales charge. All classes of shares have
identical rights to earnings, assets and voting privileges, except that each
class has its own distribution and/or service plan, expenses directly
attributable to that class and exclusive voting rights with respect to matters
affecting that class. Class B shares will automatically convert to Class A
shares six years after the date of purchase. The following is a summary 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
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount.
ALLOCATION OF INCOME, EXPENSES, 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
July 31, 1997, a credit of $11,644 was made for the Fund's projected benefit
obligations, and payments of $1,509 were made to retired trustees, resulting in
an accumulated liability of $25,682 at July 31, 1997.
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to declare dividends separately
for Class A, Class B and Class C shares from net investment income each day the
New York Stock Exchange is open for business and pay such dividends monthly.
Distributions from net realized gains on investments, if any, will be declared
at least once each year.
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of premium amortization on long-term bonds for tax purposes.
The character of the distributions made during the year from net investment
income or net realized gains may differ from its ultimate characterization for
federal income tax purposes. Also, due to timing of dividend distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or realized gain was recorded by the Fund.
During the year ended July 31, 1997, the Fund adjusted the classification of
distributions to shareholders to reflect the differences between financial
statement amounts and distributions determined in accordance with income tax
regulations. Accordingly, during the year ended July 31, 1997, amounts have been
reclassified to reflect an increase in overdistributed net investment income of
$15,264. Accumulated net realized gain on investments was increased by the same
amount.
14 Oppenheimer New Jersey Municipal Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (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 using the effective
yield method, 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 JULY 31, PERIOD ENDED JULY 31, YEAR ENDED DECEMBER 31,
1997 1996(2) 1995(1)
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Class A:
<S> <C> <C> <C> <C> <C> <C>
Sold 837,412 $ 9,364,872 325,900 $3,619,573 491,477 $ 5,411,078
Dividends reinvested 46,887 524,696 19,711 217,924 21,117 233,177
Redeemed (251,097) (2,806,897) (104,674) (1,165,009) (102,930) (1,138,220)
--------- ------------ --------- ----------- --------- ------------
Net increase 633,202 $ 7,082,671 240,937 $2,672,488 409,664 $ 4,506,035
========= ============ ========= =========== ========= ============
Class B:
Sold 837,497 $ 9,367,955 458,042 $5,089,081 257,922 $ 2,845,886
Dividends reinvested 36,119 404,040 12,354 136,326 11,729 129,351
Redeemed (134,448) (1,502,809) (56,298) (623,542) (92,736) (1,016,854)
--------- ------------ --------- ----------- --------- ------------
Net increase 739,168 $ 8,269,186 414,098 $4,601,865 176,915 $ 1,958,383
========= ============ ========= =========== ========= ============
Class C:
Sold 185,940 $ 2,083,594 11,763 $ 130,464 4,551 $ 51,000
Dividends reinvested 2,216 24,849 144 1,592 -- --
Redeemed (19,626) (218,923) (4,501) (50,943) (91) (1,022)
--------- ------------ --------- ----------- --------- ------------
Net increase 168,530 $ 1,889,520 7,406 $ 81,113 4,460 $ 49,978
========= ============ ========= =========== ========= ============
</TABLE>
1. 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.
2. The Fund changed its fiscal year end from December 31 to July 31.
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At July 31, 1997, net unrealized appreciation on investments of $1,447,700 was
composed of gross appreciation of $1,579,868, and gross depreciation of
$132,168.
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 0.60% on
the first $200 million of average annual net assets, 0.55% on the next $100
million, 0.50% on the next $200 million, 0.45% on the next $250 million, 0.40%
on the next $250 million and 0.35% on average annual net assets in excess of $1
billion. The Manager has voluntarily undertaken to assume Fund expenses to the
level needed to maintain a stable dividend.
15 Oppenheimer New Jersey Municipal Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (continued)
For the year ended July 31, 1997, commissions (sales charges paid by investors)
on sales of Class A shares totaled $229,892, of which $42,671 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 $359,680 and $16,662, respectively, of which $3,320 and $1,019 was paid
to an affiliated broker/dealer for Class B and Class C shares, respectively.
During the year ended July 31, 1997, OFDI received contingent deferred sales
charges of $28,809 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.
Expenses paid indirectly represent a reduction of custodian fees for earnings on
cash balances maintained by the Fund.
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI for a
portion of its costs incurred in connection with the personal service and
maintenance of shareholder accounts that hold Class A shares. Reimbursement is
made quarterly at an annual rate that may not exceed 0.25% (voluntarily reduced
to 0.15% by the Fund's Board) of the average annual net assets of Class A shares
of the Fund. OFDI uses the service fee to reimburse brokers, dealers, banks and
other financial institutions quarterly for providing personal service and
maintaining accounts of their customers that hold Class A shares.
The Fund has adopted a Distribution and Service Plan for Class B shares to
reimburse OFDI for its services and costs in distributing Class B shares and
servicing accounts. Under the Plan, the Fund pays OFDI an annual asset-based
sales charge of 0.75% per year on Class B shares. OFDI also receives a service
fee that may not exceed 0.25% (voluntarily reduced to 0.15% by the Fund's Board)
per year to reimburse dealers for providing personal services for accounts that
hold Class B shares. Both fees are computed on the average annual net assets of
Class B shares, determined as of the close of each regular business day. During
the year ended July 31, 1997, OFDI retained $110,009 as reimbursement for Class
B sales commissions and service fee advances, as well as financing costs. If the
Plan is terminated by the Fund, the Board of Trustees may allow the Fund to
continue payments of the asset-based sales charge to OFDI for distributing
shares before the Plan was terminated. As of July 31, 1997, OFDI had incurred
unreimbursed expenses of $673,463 for Class B.
The Fund has adopted a compensation type Distribution and Service Plan for Class
C shares to compensate OFDI for its services and costs in distributing Class C
shares and servicing accounts. Under the Plan, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class C shares. OFDI also receives
a service fee that may not exceed 0.25% (voluntarily reduced to 0.15% by the
Fund's Board) per year to compensate dealers for providing personal services for
accounts that hold Class C shares. Both fees are computed on the average annual
net assets of Class C shares, determined as of the close of each regular
business day. During the year ended July 31, 1997, OFDI retained $6,322 as
reimbursement for Class C sales commissions and service fee advances, as well as
financing costs. If the Plan is terminated by the Fund, the Board of Trustees
may allow the Fund to continue payments of the asset-based sales charge to OFDI
for distributing shares before the Plan was terminated. As of July 31, 1997,
OFDI had incurred unreimbursed expenses of $28,927 for Class C.
5. FUTURES CONTRACTS
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates or for purposes of
duration management. The Fund may also buy or write put or call options on these
futures contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than buying fixed income securities.
16 Oppenheimer New Jersey Municipal Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
5. FUTURES CONTRACTS (continued)
Upon entering into a futures contract, the Fund is required to deposit either
cash or securities (initial margin) in an amount equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Fund each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the contract is closed
or expires.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable or payable for the
daily mark to market for variation margin.
Risk of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
At July 31, 1997, the Fund had outstanding futures contracts to purchase debt
securities as follows:
<TABLE>
<CAPTION>
Number of Valuation as of Unrealized
Expiration Date Futures Contracts July 31, 1997 Appreciation
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Bonds 9/97 40 $4,670,000 $35,938
</TABLE>
17 Oppenheimer New Jersey Municipal Fund
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of Oppenheimer New Jersey Municipal Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer New Jersey Municipal Fund (formerly Oppenheimer New
Jersey Tax-Exempt Fund) (a series of Oppenheimer Multi-State Municipal Trust) as
of July 31, 1997, the related statement of operations for the year then ended,
the statements of changes in net assets for the year then ended, the seven-month
period ended July 31, 1996 and the year ended December 31, 1995, and the
financial highlights for the year ended July 31, 1997, the seven-month period
ended July 31, 1996, the year ended December 31, 1995 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 July
31, 1997, 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 Municipal Fund as of July 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for the year
ended July 31, 1997, the seven-month period ended July 31, 1996, and the year
ended December 31, 1995, and the financial highlights for the year ended July
31, 1997, the seven-month period ended July 31, 1996, the year ended December
31, 1995 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
August 21, 1997
18 Oppenheimer New Jersey Municipal Fund
<PAGE>
FEDERAL INCOME TAX INFORMATION (Unaudited)
In early 1998, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1997. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
None of the dividends paid by the Fund during the fiscal year ended July 31,
1997 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 adviser for specific guidance.
19 Oppenheimer New Jersey Municipal Fund
<PAGE>
OPPENHEIMER NEW JERSEY MUNICIPAL FUND
A Series of Oppenheimer Multi-State Municipal Trust
OFFICERS AND TRUSTEES Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board of
Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Caryn R. Halbrecht, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
INVESTMENT ADVISER 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 Municipal
Fund. This report must be preceded or accompanied by a Prospectus of Oppenheimer
New Jersey Municipal Fund. For material information concerning the Fund, see the
Prospectus.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not
guaranteed by any bank, and are not insured by the FDIC or any other agency, and
involve investment risks, including possible loss of the principal amount
invested.
20 Oppenheimer New Jersey Municipal Fund
<PAGE>
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