<PAGE> 1
ANNUAL REPORT JULY 31,1998
OPPENHEIMER
FLORIDA
MUNICIPAL FUND
[PHOTO]
[OPPENHEIMERFUNDS LOGO]
THE RIGHT WAY TO INVEST
<PAGE> 2
CONTENTS
3 President's Letter
4 An Interview
with Your Fund's
Manager
9 Fund Performance
13 Financial
Statements
32 Independent
Auditors' Report
33 Federal
Income Tax
Information
34 Officers and
Trustees
35 Information and
Services
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
- - THE FUND'S CLASS A SHARES HAVE AN OVERALL 4-STAR RANKING (****) FROM
MORNINGSTAR for the 3-year period ended June 30, 1998, among 1,549 municipal
funds.(1)
- - A RESILIENT DOMESTIC ECONOMY AND LOW INFLATION have been good for U.S. bonds
of all kinds.
- - FLORIDA HAS THE FASTEST GROWING POPULATION IN THE COUNTRY. That fact, combined
with the aging of America, makes it likely that demand for senior housing will
remain high, enhancing the appeal of investments in this area.
AVG ANNUAL TOTAL RETURNS
For the 1-Year Period
Ended 7/31/98
CLASS A
Without With
Sales Chg.(2) Sales Chg.(3)
6.52% 1.46%
CLASS B
Without With
Sales Chg.(2) Sales Chg.(3)
5.71% 0.71%
CLASS C
Without With
Sales Chg.(2) Sales Chg.(3)
5.72% 4.72%
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. TOTAL RETURNS AS OF
7/31/98 DO NOT REFLECT SUBSTANTIAL CHANGES THAT OCCURRED AS A RESULT OF MARKET
VOLATILITY IN AUGUST AND SEPTEMBER 1998.
1. Source: Morningstar, Inc. 6/30/98. Morningstar ranks mutual funds in broad
investment classes, based on risk-adjusted returns after considering sales
charges and expenses. Return and risk are measured as performance above and
below 90-day U.S. Treasury bill returns, respectively. Overall star ranking is
subject to change monthly. Top 10% are ranked 5 stars, next 22.5% are 4 stars,
middle 35% are 3 stars, next 22.5% are 2 stars and bottom 10% are 1 star. Past
performance does not guarantee future results.
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. Class A return includes the current maximum initial sales charge of 4.75%.
Class B return includes the applicable contingent deferred sales charge of 5%
(1-year) and 2% (since inception on 10/1/93). Class C return includes the
contingent deferred sales charge of 1%. An explanation of the different
performance calculations is in the Fund's prospectus. Class B and C shares are
subject to an annual 0.75% asset-based sales charge.
2 Oppenheimer Florida Municipal Fund
<PAGE> 3
[PHOTO]
BRIDGET A. MACASKILL
President
Oppenheimer
Florida Municipal Fund
DEAR SHAREHOLDER,
- --------------------------------------------------------------------------------
The performance of the financial markets over the past several months could be
viewed as "A Tale of Two Markets." Until mid-July, the excitement surrounding
the stock market's continued ascent to new record highs overshadowed the
favorable economic environment that existed for bonds: low inflation and
declining interest rates. However, since that time, stocks have declined sharply
amid heightened volatility. Yet, the bond market remains poised to benefit from
the same positive economic conditions that existed earlier in the year.
Why have stocks faltered lately? The financial crises in Asia and Russia
have negatively affected the earnings of some large U.S. corporations and have
contributed to a slow-down in U.S. economic growth. Although slower economic
growth has been negative for stocks, it should not adversely impact bonds.
That's because slower economic growth generally means fewer inflationary
pressures and less likelihood that interest rates will rise.
What should you do during this period of relative uncertainty? If you have
well-defined long-term financial goals and an investment strategy designed to
achieve them, we encourage you to stay the course. However, if you feel your
financial plan is out-of-date or incomplete, now is the time to make
improvements. The best way to cope with short-term volatility is to adhere to a
long-term plan that contains proven strategies, such as diversification among
various financial markets, geographic regions, investment styles and individual
securities. A long-term plan will give you the focus and perspective you need to
put short-term volatility in its proper context.
As longstanding advocates of financial planning, we have been encouraged
by our shareholders' rational responses to the latest market events. Many of you
tell us that you have a long-term strategy in place, which includes diversifying
your investment portfolio among a number of different asset classes in
accordance with your tolerance for risk. At OppenheimerFunds, our portfolio
management teams include seasoned professionals who have encountered extreme
market volatility in the past, giving them the perspective required to address
risks and take advantage of opportunities in turbulent markets. In our view,
having a well-defined set of financial goals, a disciplined long-term strategy
and the help of experienced investment professionals are all fundamental parts
of The Right Way to Invest.
Sincerely,
/s/ BRIDGET A. MACASKILL
Bridget A. Macaskill
August 21, 1998
3 Oppenheimer Florida Municipal Fund
<PAGE> 4
"LOWER BORROWING COSTS HAVE CAUSED STATES AND MUNICIPALITIES TO RUSH TO FINANCE
NEW PROJECTS..."
AN INTERVIEW WITH YOUR FUND'S MANAGER
- --------------------------------------------------------------------------------
HOW HAS OPPENHEIMER FLORIDA MUNICIPAL FUND PERFORMED OVER THE PAST 12 MONTHS?
The Fund's Class A shares provided an average annual total return, without
deducting sales charges, of 6.52% for the one-year period that ended July 31,
1998.1 These results reflect both income payments and capital appreciation of
the tax-exempt fixed income securities in which the Fund invests.
HOW HAVE POSITIVE U.S. ECONOMIC CONDITIONS OVER THE PAST YEAR AFFECTED FLORIDA'S
MUNICIPAL BONDS?
A resilient U.S. economy and low inflation have been good for domestic bonds of
all kinds, including those from Florida issuers. The state and national
economies have continued to expand, despite concerns that the Asian financial
crisis might cause growth to slow. So far, consumers appear to have picked up
any slack created by weak demand from Asia, spending freely for major purchases
such as cars, boats and second homes. Yet, inflation has remained at
historically low levels. Even the nation's record-high employment has failed to
rekindle inflationary pressures.
These economic influences, which have prevailed in Florida as well as the
rest of the country, have allowed longer-term interest rates to move lower
relative to short-term interest rates. Because bond prices rise when interest
rates decline, most sectors of the U.S. bond market provided above-average total
returns over the past year. Taxable bonds, such as U.S. Treasury securities,
generally provided higher returns than tax-exempt bonds.
4 Oppenheimer Florida Municipal Fund
<PAGE> 5
[PHOTO]
PORTFOLIO MANAGEMENT
TEAM (L TO R)
Jerry Webman
Bob Patterson
(Portfolio Manager)
WHY DID TAXABLE BONDS OUTPERFORM MUNICIPAL BONDS?
It's a matter of supply and demand. When the supply of municipal bonds issued is
high relative to demand from investors, higher yields may be required to attract
a limited number of investors. Conversely, when supply is low, issuers can offer
bonds with lower yields because there are more than enough buyers.
Particularly over the past six months, states and
municipalities--including Florida--have rushed to take advantage of lower
borrowing costs by financing new projects and refinancing existing debt at lower
rates. As a result, the supply of municipal bonds nationally during the first
half of 1998 was about 60% higher than it was in the first half of 1997.
In contrast, the supply of U.S. Treasury securities fell because of the
federal government's progress toward achieving a balanced budget. The strong
economy has bolstered tax revenues, requiring the government to borrow less.
Yet, demand for U.S. Treasury securities has remained high, especially from
overseas investors seeking a safe haven from volatile foreign markets.
1. 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.
5 Oppenheimer Florida Municipal Fund
<PAGE> 6
"WE BELIEVE FLORIDA'S ECONOMY IS LIKELY TO REMAIN ONE OF THE STRONGEST IN THE
NATION."
AN INTERVIEW WITH YOUR FUND'S MANAGER
- --------------------------------------------------------------------------------
WHERE DID YOU FIND ATTRACTIVE INVESTMENT OPPORTUNITIES UNDER THESE MARKET
CONDITIONS?
We've invested in bonds that support a wide variety of purposes, ranging from
airports to water works. Over the past year, however, we have found particularly
attractive values in certain industries. For example, the growing need for
senior citizen housing in Florida has spurred development of adult living
facilities in many parts of the state. Florida has the fastest growing
population in the country, and the aging of America indicates that demand for
senior housing should remain high, enhancing these projects' ability to meet
their debt obligations.
We also have found attractive opportunities for income and
diversification from bonds issued by U.S. territories such as Puerto Rico and
Guam. Under federal law, income from these bonds is exempt from personal income
taxes for residents of all states. Most significantly, we established a position
in insured tax-exempt bonds issued by housing projects in Guam during the past
six months. These projects were built in response to a housing shortage for U.S.
military personnel, tourists and retirees. As a result, these residences are
100% occupied.
HAVE YOU AVOIDED ANY AREAS OF THE MUNICIPAL BOND MARKET?
We have tended to favor revenue bonds over general obligation bonds. Revenue
bonds are repaid from income generated by the underlying facility, such as sewer
systems or highways supported by fees and tolls. General obligation bonds, on
the other hand, are repaid from general tax revenues, making them more
vulnerable to credit-rating downgrades if economic conditions deteriorate.
6 Oppenheimer Florida Municipal Fund
<PAGE> 7
STANDARDIZED YIELDS(2)
For the 30 Days Ended 7/31/98
CLASS A
4.35%
CLASS B
3.81%
CLASS C
3.81%
We have also been careful with regard to electric utilities because deregulation
is changing the entire power- generation industry. We are waiting for the
competitive picture to become clearer before we invest more substantially in
this area.
WHAT IS YOUR OUTLOOK FOR FLORIDA'S MUNICIPAL BOND MARKET?
We are optimistic. First, on a national level, tax-exempt bonds are inexpensive
relative to comparable taxable securities because of high supply. On average,
municipal bonds have historically provided about 85% of the pretax yield of U.S.
Treasury securities. As of July 31, 1998, municipal bonds provided almost 95% of
taxable bonds' yield. We expect municipal bond prices to rise as yields fall
when the relationship between taxable and tax-exempt bonds returns to more
normal levels. Second, we expect demand for municipal bonds to increase when
common stocks lose their luster. Many individuals, including Florida residents,
have happily remained invested in equities because stocks have generated stellar
returns over the past three years. If the stock market corrects, we think many
of these investors will turn to the relative safety and stability of tax-exempt
bonds.
In addition, we are optimistic about the future of the U.S. economy. We
expect the slowdown in Asia to constrain U.S. economic growth, preventing the
Federal Reserve from raising short-term interest rates in an effort to forestall
an acceleration of inflation, which probably would be good for bonds. However,
even in a slowdown, Florida's economy is likely to remain one of the strongest
in the nation because of its growing population and success in attracting
businesses from other states. Over the
2. Standardized yield is based on net investment income for the 30-day period
ended July 31, 1998. Falling share prices will tend to artificially raise
yields.
7 Oppenheimer Florida Municipal Fund
<PAGE> 8
CREDIT ALLOCATION(3)
[PIE CHART]
- - AAA 49.8%
- - AA 1.9
- - A 19.6
- - BBB 18.4
- - BB 10.3
past decade, in fact, Florida's economy has evolved from depending primarily on
tourism for support, to benefiting from a diversified mix of industries.
No matter what the future brings, however, we intend to continue to search for
Florida municipal bonds that provide high levels of income exempt from federal
income taxes, while attempting to preserve capital.
<TABLE>
<CAPTION>
TOP 10 INDUSTRIES
<S> <C>
Percentage of invested assets(4)
- ------------------------------------------------------------------------------
Special Assessment 16.7%
- ------------------------------------------------------------------------------
Single Family Housing 15.3
- ------------------------------------------------------------------------------
Hospital/Healthcare 11.6
- ------------------------------------------------------------------------------
Multi-Family Housing 10.7
- ------------------------------------------------------------------------------
Sales Tax 9.9
- ------------------------------------------------------------------------------
Adult Living Facilities 6.9
- ------------------------------------------------------------------------------
Electric Utilities 6.3
- ------------------------------------------------------------------------------
Corporate Backed 4.1
- ------------------------------------------------------------------------------
Lease Rental 4.1
- ------------------------------------------------------------------------------
General Obligation 3.4
- -------------------------------------------------------------------------------
</TABLE>
3. Portfolio data is as of July 31, 1998, is dollar-weighted based on invested
assets and subject to change. The Fund may invest up to 25% of its assets in
below-investment-grade securities which carry greater risk that an issuer may
default on repayment of principal or interest. Securities rated by any rating
organization are included in the equivalent Standard & Poor's rating category.
Average credit quality and allocation include rated securities and those not
rated by a national rating organization (currently 12.6% of total investments)
but to which the Manager in its judgment has assigned ratings as securities
comparable to those rated by a rating agency in the same category.
4. Industry weightings are as of July 31, 1998 and are subject to change.
8 Oppenheimer Florida Municipal Fund
<PAGE> 9
FUND PERFORMANCE
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED? Below is a discussion by the Manager of the Fund's
performance during its fiscal year ended July 31, 1998, followed by a graphical
comparison of the Fund's performance to an appropriate broad-based market index.
- MANAGEMENT'S DISCUSSION OF PERFORMANCE. During the Fund's fiscal year
that ended July 31, 1998, Oppenheimer Florida Municipal Fund performed
relatively well. The primary drivers of the Fund's performance were the effects
of positive domestic economic conditions and low inflation in a declining
interest-rate environment.
These economic influences have allowed longer-term interest rates to
move lower relative to short-term interest rates. Because bond prices rise when
interest rates decline, most sectors of the U.S. bond market provided
above-average total returns over the past year. However, this has also caused
yields on most fixed income securities, including many of the Fund's
investments, to decline during the period. As a result, the Fund reduced its
dividend in December of 1997. The Manager's investments in bonds that support
senior citizen housing projects and its investments in Puerto Rico and Guam were
contributing factors to the Fund's performance. The Fund's portfolio holdings,
allocations and strategies are subject to change.
During the Fund's fiscal year ended July 31,1998, the Fund maintained
the practice, to the extent consistent with the amount of the Fund's net
investment income and other distributable income, of attempting to pay dividends
on Class A shares at a constant level. This practice required the Manager,
consistent with the Fund's investment objectives and investment restrictions, to
monitor the Fund's portfolio and select higher yielding securities when deemed
appropriate to maintain necessary net investment income levels.
- COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow
show the performance of a hypothetical $10,000 investment in each class of
shares of the Fund held until July 31, 1998. In the case of Class A and Class B
shares, performance is measured from the Fund's inception on October 1, 1993,
and in the case of Class C shares, from the inception of the Class on August 29,
1995.
The Fund's performance is compared to that of the Lehman Brothers
Municipal Bond Index, an unmanaged index of a broad range of investment grade
municipal bonds that is widely regarded as a measure of the performance of the
general municipal bond market. Index performance reflects the reinvestment of
income but does not consider the effect of capital gains or transaction costs,
and none of the data below shows the effect of taxes. Also, the Fund's
performance data reflects the effect of Fund business and operating expenses.
While index comparisons may be useful to provide a benchmark for the Fund's
performance, it must be noted that the Fund's investments are not limited to the
securities in any one index. Moreover, the index performance data does not
reflect an assessment of the risk of the investments included in the index.
9 Oppenheimer Florida Municipal Fund
<PAGE> 10
FUND PERFORMANCE
- --------------------------------------------------------------------------------
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Florida Municipal Fund (Class A) and Lehman Brothers Municipal Bond
Index
[The following table was originally a line graph in the printed materials.]
<TABLE>
<CAPTION>
Oppenheimer Florida Lehman Brothers
Date Municipal Fund Class A Municipal Bond Index
<S> <C> <C>
10.1.93 9525 10000
12.31.93 9944 10140
12.31.94 9182 9616
12.31.95 10798 11296
7.31.96 10825 11347
7.31.97 11841 12512
7.31.98 12614 13260
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS A SHARES OF THE FUND AT 7/31/98(1)
1 Year 1.46% Life 4.92%
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Florida Municipal Fund (Class B) and Lehman Brothers Municipal Bond
Index
[The following table was originally a line graph in the printed materials.]
<TABLE>
<CAPTION>
Oppenheimer Florida Lehman Brothers
Date Municipal Fund Class B Municipal Bond Index
<S> <C> <C>
10.1.93 10000 10000
12.31.93 10434 10140
12.31.94 9556 9616
12.31.95 11162 11296
7.31.96 11141 11347
7.31.97 12095 12512
7.31.98 12585 13260
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS B SHARES OF THE FUND AT 7/31/98(2)
1 Year 0.71% Life 4.87%
10 Oppenheimer Florida Municipal Fund
<PAGE> 11
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Florida Municipal Fund (Class C) and Lehman Brothers Municipal Bond
Index
[The following table was originally a line graph in the printed materials.]
<TABLE>
<CAPTION>
Oppenheimer Florida Lehman Brothers
Date Municipal Fund Class C Municipal Bond Index
<S> <C> <C>
8.29.95 10000 10000
12.31.95 10586 10478
7.31.96 10563 10525
7.31.97 11452 11606
7.31.98 12106 12299
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS C SHARES OF THE FUND AT 7/31/98(3)
1 Year 4.72% Life 6.76%
Total returns and the ending account values in the graph show change in share
value and include reinvestment of all dividends and capital gains distributions.
1. The inception of the Fund (Class A and B shares) was 10/1/93. Class A returns
are shown net of the current applicable 4.75% maximum initial sales charge.
2. The average annual total returns reflect reinvestment of all dividends and
capital gains distributions and are shown net of the applicable 5% and 2%
contingent deferred sales charges, respectively, for the one year period and
life-of-the-class. The ending account value in the graph is net of the
applicable 2% contingent deferred sales charge.
3. Class C shares of the Fund were first publicly offered on 8/29/95. The one
year period is shown net of the applicable 1% contingent deferred sales charge.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.
11 Oppenheimer Florida Municipal Fund
<PAGE> 12
FINANCIALS
- --------------------------------------------------------------------------------
12 Oppenheimer Florida Municipal Fund
<PAGE> 13
STATEMENT OF INVESTMENTS July 31, 1998
<TABLE>
<CAPTION>
RATINGS:
MOODY'S/
S&P/FITCH FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
================================================================================================================
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--99.5%
- ----------------------------------------------------------------------------------------------------------------
FLORIDA--81.1%
Alachua Cnty., FL HFAU RRB, Santa Fe HCF
Project, Escrowed to Maturity, 6%, 11/15/09 Baa1/AAA $1,000,000 $1,080,150
- ----------------------------------------------------------------------------------------------------------------
Brevard Cnty., FL Housing FAU MH RRB,
Windover Oaks Project, Series A, 6.90%, 2/1/27 NR/AAA 1,000,000 1,135,270
- ----------------------------------------------------------------------------------------------------------------
Brevard Cnty., FL Housing FAU SFM RB,
6.70%, 9/1/27 Aaa/NR 830,000 887,444
- ----------------------------------------------------------------------------------------------------------------
Broward Cnty., FL Housing FAU MH RB,
Pembroke Park Apts. Project, 5.70%, 10/1/33 NR/NR/A 1,000,000 1,011,290
- ----------------------------------------------------------------------------------------------------------------
Broward Cnty., FL Housing FAU MH RB,
Pembroke Park Apts. Project, 5.75%, 4/1/38 NR/NR/A 1,000,000 1,011,260
- ----------------------------------------------------------------------------------------------------------------
Broward Cnty., FL Housing FAU MH RB,
Stirling Apts. Project, 5.75%, 4/1/38 NR/NR/A 855,000 864,627
- ----------------------------------------------------------------------------------------------------------------
Broward Cnty., FL Housing FAU SFM RRB,
Series B, 5.40%, 4/1/29 NR/NR/AAA 2,000,000 2,014,360
- ----------------------------------------------------------------------------------------------------------------
Clay Cnty., FL Housing FAU SFM RB, 6.55%,
3/1/28 Aaa/NR 800,000 852,872
- ----------------------------------------------------------------------------------------------------------------
Collier Cnty., FL HFAU RRB,
The Moorings, Inc. Project, 7%, 12/1/19 NR/BBB+/A- 1,000,000 1,108,710
- ----------------------------------------------------------------------------------------------------------------
Dade Cnty., FL Aviation RB, Series B,
MBIA Insured, 6.60%, 10/1/22 Aaa/AAA/AA- 1,000,000 1,094,110
- ----------------------------------------------------------------------------------------------------------------
Dade Cnty., FL IDAU RB, Miami Cerebral Palsy
Services Project, 8%, 6/1/22 NR/NR 1,170,000 1,317,186
- ----------------------------------------------------------------------------------------------------------------
Dade Cnty., FL Professional Sports Franchise
Facilities Tax & CAP RB, MBIA Insured,
Zero Coupon, 5.85%, 10/1/26(1) Aaa/AAA 3,200,000 761,792
- ----------------------------------------------------------------------------------------------------------------
Dade Cnty., FL SPO RRB, Prerefunded,
Series B, AMBAC Insured, Zero Coupon,
9.159%, 10/1/14(1) Aaa/AAA/AAA 4,755,000 2,165,712
- ----------------------------------------------------------------------------------------------------------------
Escambia Cnty., FL HFAU RB, Azalea Trace,
Inc., 6%, 1/1/15 NR/NR/BBB- 2,000,000 2,061,580
</TABLE>
13 Oppenheimer Florida Municipal Fund
<PAGE> 14
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
RATINGS:
MOODY'S/
S&P/FITCH FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
================================================================================================================
<S> <C> <C> <C>
FLORIDA(CONTINUED)
Escambia Cnty., FL HFAU RRB, Baptist Hospital,
Inc. & Manor, Prerefunded, 5.125%, 10/1/19 A3/BBB+ $2,500,000 $2,427,525
- ----------------------------------------------------------------------------------------------------------------
Escambia Cnty., FL HFAU RRB,
Baptist Hospital, Inc., Prerefunded,
Series A, 8.70%, 10/1/14 NR/BBB+/BBB- 1,000,000 1,028,180
- ----------------------------------------------------------------------------------------------------------------
Fishhawk, FL CDD SPAST RB, 7.625%, 5/1/18 NR/NR 1,000,000 1,077,270
- ----------------------------------------------------------------------------------------------------------------
FL Heritage Harbor CDD SPAST RB,
Series B, 6%, 5/1/03 NR/NR 1,000,000 994,720
- ----------------------------------------------------------------------------------------------------------------
FL HFA RB, Maitland Club Apts. Project,
Series B-1, AMBAC Insured, 6.75%, 8/1/14 Aaa/AAA/AAA 1,000,000 1,095,410
- ----------------------------------------------------------------------------------------------------------------
FL HFA RB, Riverfront Apts., Series A,
AMBAC Insured, 6.25%, 4/1/37 Aaa/AAA/AAA 1,400,000 1,500,100
- ----------------------------------------------------------------------------------------------------------------
Grand Haven, FL CDD SPAST RB,
Series A, 6.30%, 5/1/02 NR/NR 1,645,000 1,687,194
- ----------------------------------------------------------------------------------------------------------------
Grand Haven, FL CDD SPAST RB,
Series B, 6.90%, 5/1/19 NR/NR 750,000 775,028
- ----------------------------------------------------------------------------------------------------------------
Hillsborough Cnty., FL Utility RRB,
Series A, FSA Insured, 7%, 8/1/14 Aaa/AAA 500,000 547,310
- ----------------------------------------------------------------------------------------------------------------
Lee Cnty., FL Housing FAU SFM RB,
Series A-2, 6.85%, 3/1/29 Aaa/NR 1,000,000 1,129,640
- ----------------------------------------------------------------------------------------------------------------
Martin Cnty., FL IDAU RRB,
Indiantown Cogeneration Project,
Series A, 7.875%, 12/15/25 Baa3/BBB-/BBB 2,000,000 2,342,740
- ----------------------------------------------------------------------------------------------------------------
Miami Beach, FL RA Tax Increment RB,
City Center Historic Convention,
Series B, 6.25%, 12/1/16 Baa2/BBB 500,000 531,040
- ----------------------------------------------------------------------------------------------------------------
Miami Beach, FL RA Tax Increment RB,
City Center Historic Convention,
Series B, 6.35%, 12/1/22 Baa2/BBB 500,000 531,290
- ----------------------------------------------------------------------------------------------------------------
Miami, FL HFAU RRB, AMBAC Insured,
Inverse Floater, 6.75%, 8/15/15(2) Aaa/AAA/AAA 2,000,000 2,052,500
- ----------------------------------------------------------------------------------------------------------------
Miami, FL Sanitation & Sewer Systems GOB,
FGIC Insured, 6.50%, 1/1/14 Aaa/AAA 1,750,000 1,909,688
</TABLE>
14 Oppenheimer Florida Municipal Fund
<PAGE> 15
<TABLE>
<CAPTION>
RATINGS:
MOODY'S/
S&P/FITCH FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
================================================================================================================
<S> <C> <C> <C>
FLORIDA(CONTINUED)
Miami-Dade Cnty., FL SPO RB, Sub. Lien,
Series B, MBIA Insured, Zero Coupon,
5.495%, 10/1/28(1) Aaa/AAA/AAA $4,500,000 $ 879,975
- ----------------------------------------------------------------------------------------------------------------
Miami-Dade Cnty., FL SPO RB, Sub. Lien,
Series B, MBIA Insured, Zero Coupon,
5.533%, 10/1/34(1) Aaa/AAA/AAA 3,170,000 441,866
- ----------------------------------------------------------------------------------------------------------------
Miami-Dade Cnty., FL SPO RRB, Sub. Lien,
Series A, MBIA Insured, Zero Coupon,
5.52%, 10/1/17(1) Aaa/AAA/AAA 5,425,000 1,977,304
- ----------------------------------------------------------------------------------------------------------------
Orlando, FL Utilities Commission
Water & Electric RB, Inverse Floater,
7.225%, 10/1/17(2) Aa/AA- 1,000,000 1,087,500
- ----------------------------------------------------------------------------------------------------------------
Palm Beach Cnty., FL Housing FAU MH RB,
Windsor Park Apts. Project,
Series A, 5.90%, 6/1/38 NR/NR/A 500,000 511,935
- ----------------------------------------------------------------------------------------------------------------
Plantation, FL HFAU RRB, Covenant
Village of Florida, Inc., 5.125%, 12/1/22 NR/A- 750,000 734,625
- ----------------------------------------------------------------------------------------------------------------
Port St. Lucie, FL Utility RB, Prerefunded,
Series A, FGIC Insured, Zero Coupon,
6.25%, 9/1/16(1) Aaa/AAA 1,045,000 411,814
- ----------------------------------------------------------------------------------------------------------------
St. Petersburg, FL Public Improvement RRB,
MBIA Insured, 6.375%, 2/1/12 Aaa/AAA 750,000 811,080
- ----------------------------------------------------------------------------------------------------------------
Tampa Palms, FL Open Space & Transition
CDD SPAST RB, Capital Improvement-Area 7
Phase Two Project, 7.50%, 5/1/18 NR/NR 1,200,000 1,269,432
- ----------------------------------------------------------------------------------------------------------------
Village CDD No. 3, FL SPAST RB,
MBIA Insured, 5%, 5/1/19 Aaa/AAA 1,000,000 977,820
-----------
46,099,349
</TABLE>
15 Oppenheimer Florida Municipal Fund
<PAGE> 16
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
RATINGS:
MOODY'S/
S&P/FITCH FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
================================================================================================================
<S> <C> <C> <C>
U.S. POSSESSIONS--18.4%
Guam Housing Corp. SFM RB, Series A,
5.75%, 9/1/31 NR/AAA $2,500,000 $ 2,658,250
- ----------------------------------------------------------------------------------------------------------------
PR CMWLTH Aqueduct & Sewer Authority RB,
Escrowed to Maturity, 10.25%, 7/1/09 Aaa/AAA 540,000 729,000
- ----------------------------------------------------------------------------------------------------------------
PR CMWLTH HTAU RB, Series W,
Inverse Floater, 6.93%, 7/1/10(2) Baa1/A 1,000,000 1,095,000
- ----------------------------------------------------------------------------------------------------------------
PR CMWLTH Infrastructure FAU Special RRB,
Unrefunded Balance, Series A, 7.90%, 7/1/07 Baa1/BBB+ 130,000 132,997
- ----------------------------------------------------------------------------------------------------------------
PR Public Buildings Authority RB, Series B,
5.25%, 7/1/21 Baa1/A 2,300,000 2,298,367
- ----------------------------------------------------------------------------------------------------------------
PR Telephone Authority RB, MBIA Insured,
Inverse Floater, 7.118%, 1/16/15(2) Aaa/AAA 1,000,000 1,063,750
- ----------------------------------------------------------------------------------------------------------------
Virgin Islands Water & PAU Electric Systems
RRB, 5.30%, 7/1/18 NR/NR/BBB 1,500,000 1,495,365
- ----------------------------------------------------------------------------------------------------------------
Virgin Islands Water & PAU Electric Systems
RRB, 5.30%, 7/1/21 NR/NR/BBB 1,000,000 992,740
-----------
10,465,469
- ----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $53,944,108) 99.5% 56,564,818
- ----------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.5 292,015
----------- -----------
NET ASSETS 100.0% $56,856,833
=========== ===========
</TABLE>
To simplify the listings of securities, abbreviations are used per the table
below:
<TABLE>
<S> <C>
CAP --Capital Appreciation IDAU --Industrial Development Authority
CDD --Community Development District MH --Multifamily Housing
CMWLTH --Commonwealth PAU --Power Authority
FAU --Finance Authority RA --Redevelopment Agency
GOB --General Obligation Bonds RB --Revenue Bonds
HCF --Health Care Facilities RRB --Revenue Refunding Bonds
HFA --Housing Finance Agency SFM --Single Family Mortgage
HFAU --Health Facilities Authority SPAST --Special Assessment
HTAU --Highway & Transportation Authority SPO --Special Obligations
</TABLE>
1. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
2. Represents the current interest rate for a variable rate bond known as an
"inverse floater" which pays interest at a rate that varies inversely with
short-term interest rates. As interest rates rise, inverse floaters produce less
current income. Their price may be more volatile than the price of a comparable
fixed-rate security. Inverse floaters amount to $5,298,750 or 9.32% of the
Fund's net assets as of July 31, 1998.
16 Oppenheimer Florida Municipal Fund
<PAGE> 17
- --------------------------------------------------------------------------------
As of July 31, 1998, securities subject to the alternative minimum tax amount to
$15,473,939 or 27.22% of the Fund's net assets.
Distribution of investments by industry, as a percentage of total investments at
value, is as follows:
<TABLE>
<CAPTION>
INDUSTRY MARKET VALUE PERCENT
- --------------------------------------------------------------------------------
<S> <C> <C>
Special Assessment $ 9,416,666 16.7%
- --------------------------------------------------------------------------------
Single Family Housing 8,637,976 15.3
- --------------------------------------------------------------------------------
Hospital/Healthcare 6,588,355 11.6
- --------------------------------------------------------------------------------
Multi-Family Housing 6,034,482 10.7
- --------------------------------------------------------------------------------
Sales Tax 5,597,854 9.9
- --------------------------------------------------------------------------------
Adult Living Facilities 3,904,915 6.9
- --------------------------------------------------------------------------------
Electric Utilities 3,575,605 6.3
- --------------------------------------------------------------------------------
Corporate Backed 2,342,740 4.1
- --------------------------------------------------------------------------------
Lease Rental 2,298,367 4.1
- --------------------------------------------------------------------------------
General Obligation 1,909,688 3.4
- --------------------------------------------------------------------------------
Water Utilities 1,688,124 3.0
- --------------------------------------------------------------------------------
Not-for-Profit Organization 1,317,186 2.3
- --------------------------------------------------------------------------------
Highways 1,095,000 1.9
- --------------------------------------------------------------------------------
Marine/Aviation Facilities 1,094,110 1.9
- --------------------------------------------------------------------------------
Telephone Utilities 1,063,750 1.9
----------- -----
$56,564,818 100.0%
=========== =====
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer Florida Municipal Fund
<PAGE> 18
STATEMENT OF ASSETS AND LIABILITIES July 31, 1998
<TABLE>
=============================================================================================
<S> <C>
ASSETS
Investments, at value (cost $53,944,108)--see accompanying statement $56,564,818
- ---------------------------------------------------------------------------------------------
Receivables:
Interest 754,489
Investments sold 143,659
Shares of beneficial interest sold 7,557
- ---------------------------------------------------------------------------------------------
Other 4,044
----------
Total assets 57,474,567
=============================================================================================
LIABILITIES
Bank overdraft 43,863
- ---------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 311,309
Dividends 143,527
Trustees' fees--Note 1 67,480
Shareholder reports 29,376
Distribution and service plan fees 5,905
Transfer and shareholder servicing agent fees 5,719
Other 10,555
----------
Total liabilities 617,734
=============================================================================================
NET ASSETS $56,856,833
===========
- ---------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $55,135,922
- ---------------------------------------------------------------------------------------------
Overdistributed net investment income (210,725)
- ---------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (689,074)
- ---------------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Note 3 2,620,710
-----------
Net assets $56,856,833
===========
</TABLE>
18 Oppenheimer Florida Municipal Fund
<PAGE> 19
<TABLE>
================================================================================================
<S> <C>
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$35,073,532 and 3,018,984 shares of beneficial interest outstanding) $11.62
Maximum offering price per share (net asset value plus sales charge of
4.75% of offering price) $12.20
- ------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $19,344,405
and 1,662,582 shares of beneficial interest outstanding) $11.64
- ------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $2,438,896
and 210,126 shares of beneficial interest outstanding) $11.61
</TABLE>
See accompanying Notes to Financial Statements.
19 Oppenheimer Florida Municipal Fund
<PAGE> 20
STATEMENT OF OPERATIONS For the Year Ended July 31, 1998
<TABLE>
==========================================================================================
<S> <C>
INVESTMENT INCOME
Interest $2,828,683
==========================================================================================
EXPENSES
Management fees--Note 4 304,671
- ------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 76,860
Class B 170,129
Class C 16,343
- ------------------------------------------------------------------------------------------
Trustees' fees and expenses--Note 1 59,856
- ------------------------------------------------------------------------------------------
Shareholder reports 29,739
- ------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 27,616
- ------------------------------------------------------------------------------------------
Custodian fees and expenses 16,505
- ------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 13,598
- ------------------------------------------------------------------------------------------
Registration and filing fees 3,790
- ------------------------------------------------------------------------------------------
Other 4,746
----------
Total expenses 723,853
Less reimbursement of expenses by OppenheimerFunds, Inc.--Note 4 (78,705)
Less expenses paid indirectly--Note 4 (16,216)
----------
Net expenses 628,932
==========================================================================================
NET INVESTMENT INCOME 2,199,751
==========================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments 70,132
Closing of futures contracts--Note 5 (81,462)
----------
Net realized loss (11,330)
==========================================================================================
Net change in unrealized appreciation or depreciation on investments 841,381
==========
Net realized and unrealized gain 830,051
==========================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $3,029,802
==========
See accompanying Notes to Financial Statements.
</TABLE>
20 Oppenheimer Florida Municipal Fund
<PAGE> 21
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
1998 1997
================================================================================================================
<S> <C> <C>
OPERATIONS
Net investment income $ 2,199,751 $ 2,087,380
- ----------------------------------------------------------------------------------------------------------------
Net realized loss (11,330) (440,924)
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 841,381 1,685,747
------------ ------------
Net increase in net assets resulting from operations 3,029,802 3,332,203
================================================================================================================
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income:
Class A (1,597,270) (1,321,674)
Class B (717,925) (645,872)
Class C (68,196) (17,307)
================================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial
interest transactions--Note 2:
Class A 7,211,018 7,261,833
Class B 3,780,983 1,975,456
Class C 1,468,391 862,016
================================================================================================================
NET ASSETS
Total increase 13,106,803 11,446,655
- ----------------------------------------------------------------------------------------------------------------
Beginning of period 43,750,030 32,303,375
------------ ------------
End of period (including overdistributed net investment
income of $210,725 and $9,345, respectively) $56,856,833 $43,750,030
============ =============
</TABLE>
See accompanying Notes to Financial Statements.
21 Oppenheimer Florida Municipal Fund
<PAGE> 22
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------
YEAR
ENDED
YEAR ENDED JULY 31, DEC. 31,
1998 1997 1996(2) 1995
================================================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $11.47 $11.07 $11.40 $10.26
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .54 .64 .36 .63
Net realized and unrealized gain (loss) .19 .37 (.34) 1.14
-------- -------- -------- --------
Total income (loss) from investment operations .73 1.01 .02 1.77
- ----------------------------------------------------------------------------------------------------------------
Dividends to shareholders:
Dividends from net investment income (.58) (.61) (.35) (.63)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.62 $11.47 $11.07 $11.40
======== ======== ======== ========
================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(4) 6.52% 9.39% 0.25% 17.60%
================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $35,074 $27,446 $19,366 $19,377
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $32,153 $24,333 $18,415 $14,508
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.61% 5.70% 5.50%(5) 5.71%
Expenses, before reimbursement and voluntary
assumption by the Manager or Distributor(6) 1.15% 1.02% 1.23%(5) 1.36%
Expenses, net of reimbursement and voluntary
assumption by the Manager or Distributor 0.96% 0.87% 1.09%(5) 0.53%
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 35.3% 42.5% 21.2% 18.4%
</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 October 1, 1993 (commencement of operations) to December
31, 1993.
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.
5. Annualized.
22 Oppenheimer Florida Municipal Fund
<PAGE> 23
<TABLE>
<CAPTION>
CLASS B
- ----------------------- ----------------------------------------------------------------------------------
YEAR ENDED JULY 31, YEAR ENDED DECEMBER 31,
1994 1993(3) 1998 1997 1996(2) 1995 1994 1993(3)
===============================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
$11.79 $11.43 $11.49 $11.09 $11.42 $10.27 $11.81 $11.43
- ---------------------------------------------------------------------------------------------------------------
.64 .14 .46 .55 .31 .55 .56 .12
(1.53) .36 .18 .37 (.34) 1.15 (1.54) .38
- -------- --------- -------- -------- --------- --------- --------- --------
(.89) .50 .64 .92 (.03) 1.70 (.98) .50
- ---------------------------------------------------------------------------------------------------------------
(.64) (.14) (.49) (.52) (.30) (.55) (.56) (.12)
- ---------------------------------------------------------------------------------------------------------------
$10.26 $11.79 $11.64 $11.49 $11.09 $11.42 $10.27 $11.81
======== ========= ======== ======== ========= ========= ========= ========
===============================================================================================================
(7.66)% 4.39% 5.71% 8.56% (0.19)% 16.81% (8.42)% 4.35%
===============================================================================================================
$11,992 $7,062 $19,344 $15,348 $12,865 $12,658 $7,992 $4,874
- ---------------------------------------------------------------------------------------------------------------
$ 9,741 $2,471 $17,024 $13,812 $12,843 $10,772 $6,987 $2,304
- ---------------------------------------------------------------------------------------------------------------
5.90% 5.08%(5) 3.85% 4.93% 4.75%(5) 4.92% 5.13% 4.20%(5)
1.25% 1.89%(5) 1.91% 1.79% 1.97%(5) 2.11% 1.99% 2.20%(5)
0.29% -- 1.72% 1.64% 1.83%(5) 1.29% 1.03% 0.38%(5)
- ---------------------------------------------------------------------------------------------------------------
30.4% -- 35.3% 42.5% 21.2% 18.4% 30.4% --
</TABLE>
6. 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.
7. 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, 1998 were $30,270,075 and $17,352,208, respectively.
23 Oppenheimer Florida Municipal Fund
<PAGE> 24
FINANCIAL HIGHLIGHTS(Continued)
<TABLE>
<CAPTION>
CLASS C
---------------------------------------------------
PERIOD
ENDED
YEAR ENDED JULY 31, DEC. 31,
1998 1997 1996(2) 1995(1)
===============================================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $11.46 $11.07 $11.40 $10.96
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .46 .53 .31 .20
Net realized and unrealized gain (loss) .18 .38 (.34) .44
------ ------ ------ ------
Total income (loss) from investment operations .64 .91 (.03) .64
- ---------------------------------------------------------------------------------------------------------------
Dividends to shareholders:
Dividends from net investment income (.49) (.52) (.30) (.20)
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.61 $11.46 $11.07 $11.40
====== ====== ====== ======
===============================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(4) 5.72% 8.41% (0.22)% 5.86%
===============================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $2,439 $956 $72 $39
- ---------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,638 $380 $78 $ 5
- ---------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 3.82% 4.87% 4.68%(5) 4.68%(5)
Expenses, before reimbursement and voluntary
assumption by the Manager or Distributor(6) 1.91% 1.75% 1.99%(5) 1.92%(5)
Expenses, net of reimbursement and voluntary
assumption by the Manager or Distributor 1.72% 1.60% 1.87%(5) 1.43%(5)
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 35.3% 42.5% 21.2% 18.4%
</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 October 1, 1993 (commencement of operations) to December
31, 1993.
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.
5. Annualized.
6. 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.
7. 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, 1998 were $30,270,075 and $17,352,208, respectively.
See accompanying Notes to Financial Statements.
24 Oppenheimer Florida Municipal Fund
<PAGE> 25
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Florida 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
interest income exempt from Federal income tax for individual investors as is
available from Municipal Securities and 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 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, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
25 Oppenheimer Florida Municipal Fund
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
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. At July 31, 1998, the Fund
had available for federal income tax purposes an unused capital loss carryover
of approximately $689,000, which expires between 2002 and 2006.
- --------------------------------------------------------------------------------
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, 1998, a provision of $44,250 was made for the Fund's projected benefit
obligations, and payments of $3,017 were made to retired trustees, resulting in
an accumulated liability of $67,402 at July 31, 1998.
The Board of Trustees had adopted a deferred compensation
plan for independent Trustees that enables Trustees to elect to defer receipt of
all or a portion of annual fees they are entitled to receive from the Fund.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the Trustee in shares of one or more
Oppenheimer funds selected by the Trustee. The amount paid to the Trustee under
the plan will be determined based upon the performance of the selected funds.
Deferral of Trustees' fees under the plan will not affect the net assets of the
Fund, and will not materially affect the Fund's assets, liabilities or net
income per share.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to declare dividends separately
for Class A, Class B and Class C shares from net investment income each day the
New York Stock Exchange is open for business and pay such dividends monthly.
Distributions from net realized gains on investments, if any, will be declared
at least once each year.
- --------------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
26 Oppenheimer Florida Municipal Fund
<PAGE> 27
================================================================================
The Fund adjusts 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, 1998, amounts have been reclassified to reflect an increase in
overdistributed net investment income of $17,740, a decrease in accumulated net
realized loss of $29,371, and a decrease in paid-in capital of $11,631.
- --------------------------------------------------------------------------------
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. As of November
4, 1997, in order to conform book and tax bases, the Fund began amortization of
premiums on securities for book purposes. Such cumulative change was limited to
a reclassification adjustment and had no impact on net assets or total increase
(decrease) in net assets. Accordingly, during the year ended July 31, 1998,
amounts have been reclassified to reflect an increase in net unrealized
appreciation of investments of $209,684. Paid-in capital was decreased for the
same amount. 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 Florida and,
therefore, may have more credit risks related to the economic conditions of
Florida 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.
27 Oppenheimer Florida Municipal Fund
<PAGE> 28
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
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, 1998 YEAR ENDED JULY 31, 1997
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 1,195,905 $13,813,731 1,262,441 $14,136,662
Dividends reinvested 63,562 733,601 50,145 560,600
Redeemed (633,408) (7,336,314) (668,800) (7,435,429)
--------- ----------- --------- -----------
Net increase 626,059 $ 7,211,018 643,786 $ 7,261,833
========= =========== ========= ===========
- ----------------------------------------------------------------------------------------------------------------
Class B:
Sold 693,496 $ 8,039,313 403,666 $ 4,529,195
Dividends reinvested 22,676 262,010 19,283 215,875
Redeemed (389,687) (4,520,340) (247,008) (2,769,614)
--------- ----------- --------- -----------
Net increase 326,485 $ 3,780,983 175,941 $ 1,975,456
========= =========== ========= ===========
- ----------------------------------------------------------------------------------------------------------------
Class C:
Sold 149,594 $ 1,731,405 78,461 $ 879,529
Dividends reinvested 4,135 47,808 1,066 11,932
Redeemed (27,020) (310,822) (2,638) (29,445)
--------- ----------- --------- -----------
Net increase 126,709 $ 1,468,391 76,889 $ 862,016
========= =========== ========= ===========
================================================================================================================
</TABLE>
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At July 31, 1998, net unrealized appreciation on investments of $2,620,710 was
composed of gross appreciation of $2,649,374, and gross depreciation of $28,664.
28 Oppenheimer Florida Municipal Fund
<PAGE> 29
================================================================================
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.60% of the first
$200 million of average annual net assets, 0.55% of the next $100 million, 0.50%
of the next $200 million, 0.45% of the next $250 million, 0.40% of the next $250
million and 0.35% of average annual net assets in excess of $1 billion.
Effective January 1, 1997, the Manager has voluntarily undertaken to waive a
portion of its management fee, whereby the Fund pays a fee not to exceed 0.545%
of average annual net assets.
For the year ended July 31, 1998, commissions (sales charges
paid by investors) on sales of Class A shares totaled $231,974, of which $35,950
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 $245,210 and $15,018, respectively. During the year ended
July 31, 1998, OFDI received contingent deferred sales charges of $71,658 and
$1,061, respectively, upon redemption of Class B and Class C shares as
reimbursement for sales commissions advanced by OFDI at the time of sale of such
shares.
OppenheimerFunds Services (OFS), a division of the Manager,
is the transfer and shareholder servicing agent for the Fund and for other
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 maintenance of accounts of their customers that hold Class
A shares. During the year ended July 31, 1998, OFDI paid $1,132 to an affiliated
broker/dealer as reimbursement for Class A personal service and maintenance
expenses.
29 Oppenheimer Florida Municipal Fund
<PAGE> 30
NOTES TO FINANCIAL STATEMENTS(Continued)
================================================================================
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES(CONTINUED)
The Fund has adopted a Distribution and Service Plan for Class B shares to
reimburse OFDI for its 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 for its services rendered in distributing Class B shares. OFDI
also receives a service fee of 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. Each fee is 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, 1998, OFDI retained $134,852 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, 1998,
OFDI had incurred excess distribution and servicing costs of $539,083 for Class
B.
The Fund has adopted a Distribution and Service Plan for
Class C shares to compensate OFDI for its 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 of 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. Each fee is 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, 1998, OFDI retained $12,106 as compensation 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, 1998, OFDI had incurred excess
distribution and servicing costs of $24,960 for Class C.
30 Oppenheimer Florida Municipal Fund
<PAGE> 31
================================================================================
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 than
actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required
to deposit either cash or securities (initial margin) in an amount equal to a
certain percentage of the contract value. Subsequent payments (variation margin)
are made or received by the Fund each day. The variation margin payments are
equal to the daily changes in the contract value and are recorded as unrealized
gains and losses. The Fund recognizes a realized gain or loss when the contract
is closed or expires.
Risks of entering into futures contracts (and related
options) include the possibility that there may be an illiquid market and that a
change in the value of the contract or option may not correlate with changes in
the value of the underlying securities.
- --------------------------------------------------------------------------------
6. BANK BORROWINGS
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the year ended
July 31, 1998.
31 Oppenheimer Florida Municipal Fund
<PAGE> 32
INDEPENDENT AUDITORS' REPORT
================================================================================
The Board of Trustees and Shareholders of
Oppenheimer Florida Municipal Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Florida Municipal Fund (a series of Oppenheimer
Multi-State Municipal Trust) as of July 31, 1998, the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the years in the two-year period then ended, the
seven-month period ended July 31, 1996, and each of the years in the two-year
period ended December 31, 1995 and the period from October 1, 1993 (commencement
of operations) to December 31, 1993. 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, 1998, by correspondence with the custodian and brokers; and
where confirms were not received, 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 Florida Municipal Fund as of July 31, 1998,
the results of its operations for the year then ended, the changes in its net
assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the two-year period then ended,
the seven-month period ended July 31, 1996, each of the years in the two-year
period ended December 31, 1995 and the period from October 1, 1993 (commencement
of operations) to December 31, 1993, in conformity with generally accepted
accounting principles.
KPMG PEAT MARWICK LLP
Denver, Colorado
August 21, 1998
32 Oppenheimer Florida Municipal Fund
<PAGE> 33
FEDERAL INCOME TAX INFORMATION (Unaudited)
================================================================================
In early 1999, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1998. 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, 1998 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.
33 Oppenheimer Florida Municipal Fund
<PAGE> 34
OPPENHEIMER FLORIDA 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
Robert E. Patterson, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
================================================================================
INVESTMENT ADVISOR OppenheimerFunds, Inc.
================================================================================
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
================================================================================
TRANSFER AND OppenheimerFunds Services
SHAREHOLDER
SERVICING AGENT
================================================================================
CUSTODIAN OF Citibank, N.A.
PORTFOLIO SECURITIES
================================================================================
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
================================================================================
LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein
This is a copy of a report to shareholders of
Oppenheimer Florida Municipal Fund. This
report must be preceded or accompanied by a
Prospectus of Oppenheimer Florida 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.
34 Oppenheimer Florida Municipal Fund
<PAGE> 35
OPPENHEIMERFUNDS FAMILY
<TABLE>
=========================================================================================================
<S> <C> <C>
REAL ASSET FUNDS
- ---------------------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
=========================================================================================================
GLOBAL STOCK FUNDS
- ---------------------------------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Quest Global Value Fund
International Small Global Fund Global Growth & Income Fund
Company Fund
=========================================================================================================
STOCK FUNDS
- ---------------------------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Disciplined Value Fund
Quest Small Cap Value Fund Quest Capital Value Fund Quest Value Fund
=========================================================================================================
STOCK & BOND FUNDS
- ---------------------------------------------------------------------------------------------------------
Main Street Income & Total Return Fund Disciplined Allocation Fund
Growth Fund Quest Balanced Multiple Strategies Fund
Quest Opportunity Value Fund(1) Convertible Securities Fund(2)
Value Fund Equity Income Fund
=========================================================================================================
TAXABLE BOND FUNDS
- ---------------------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield Fund Bond Fund
=========================================================================================================
MUNICIPAL BOND FUNDS
- ---------------------------------------------------------------------------------------------------------
California Municipal Fund(3) Pennsylvania Municipal Fund(3) Rochester Division:
Florida Municipal Fund(3) Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund(3) Insured Municipal Fund Limited Term New York
New York Municipal Fund(3) Intermediate Municipal Fund Municipal Fund
=========================================================================================================
MONEY MARKET FUNDS(4)
- ---------------------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
</TABLE>
1. On 5/18/98, the Fund's name was changed from "Quest Growth & Income Value
Fund."
2. On 4/28/98, the Fund's name was changed from "Bond Fund for Growth."
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1998 OppenheimerFunds, Inc. All rights reserved.
35 Oppenheimer Florida Municipal Fund
<PAGE> 36
INTERNET
24-hr access to account
information. Online
transactions now available
WWW.OPPENHEIMERFUNDS.COM
GENERAL INFORMATION
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
1-800-525-7048
ACCOUNT TRANSACTIONS
Mon-Fri 8:30am-8pm ET
1-800-852-8457
PHONELINK
24-hr automated information
and automated transactions
1-800-533-3310
TELECOMMUNICATION DEVICE
FOR THE DEAF (TDD)
Mon-Fri 8:30am-2pm ET
1-800-843-4461
OPPENHEIMERFUNDS
INFORMATION HOTLINE
24 hours a day, timely and
insightful messages on the
economy and issues that
affect your investments
1-800-835-3104
INFORMATION and services
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number or by visiting our website. And, by
enrolling in AccountLink, a convenient service that "links" your Oppenheimer
funds accounts and your bank checking or savings account, you can use the
Telephone Transactions number or website to make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at
www.oppenheimerfunds.com--we're here to help.
[OPPENHEIMERFUNDS LOGO]
RA0795.001.0798 September 29, 1998
