<PAGE>
--------------------------------
ANNUAL REPORT JULY 31, 1999
--------------------------------
OPPENHEIMER
NEW JERSEY
MUNICIPAL FUND
[GRAPHIC]
[LOGO]
OPPENHEIMERFUNDS-Registered Trademark-
THE RIGHT WAY TO INVEST
<PAGE>
Report HIGHLIGHTS
- --------------------------------------------------------------------------------
CONTENTS
3 President's Letter
5 An Interview with Your Fund's Manager
10 Fund Performance
- --------------------------------------------------
14 Financial Statements
35 Independent Auditors' Report
- --------------------------------------------------
36 Federal Income Tax Information
37 Shareholder Meeting
38 Officers and Trustees
40 Information and Services
- - IN STARK CONTRAST TO U.S. TREASURY SECURITIES, municipal bond prices were
remarkably stable throughout the reporting period.
- - OUR RESEARCH-INTENSIVE SECURITY SELECTION STRATEGY helped us find areas of
opportunity and avoid potential problems.
- - AS OF JULY 31, LONG-TERM NEW JERSEY MUNICIPAL BONDS PROVIDED MORE THAN 90% of
the yield of long-term U.S. Treasury securities, making them attractive values
by historical measures.
AVG ANNUAL TOTAL RETURNS
For the 1-Year Period
Ended 7/31/99
<TABLE>
<CAPTION>
CLASS A
Without With
Sales Chg.(1) Sales Chg.(2)
- ------------------------------------
<S> <C>
1.57% -3.26%
- ------------------------------------
<CAPTION>
CLASS B
Without With
Sales Chg.(1) Sales Chg.(2)
- ------------------------------------
<S> <C>
0.81% -4.03%
- ------------------------------------
<CAPTION>
CLASS C
Without With
Sales Chg.(1) Sales Chg.(2)
- ------------------------------------
<S> <C>
0.81% -0.16%
- ------------------------------------
</TABLE>
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. THE FUND'S
PERFORMANCE MAY FROM TIME TO TIME BE SUBJECT TO SUBSTANTIAL SHORT-TERM CHANGES,
PARTICULARLY DURING PERIODS OF MARKET OR INTEREST RATE VOLATILITY. FOR UPDATES
ON THE FUND'S PERFORMANCE, PLEASE CONTACT YOUR FINANCIAL ADVISOR, CALL US AT
1-800-525-7048 OR VISIT OUR WEBSITE, www.oppenheimerfunds.com.
1. Includes changes in net asset value per share without deducting any sales
charges.
2. Class A returns include the current maximum initial sales charge of 4.75%.
Class B returns include the applicable contingent deferred sales charge of 5%.
Class C returns include the contingent deferred sales charge of 1%. Class B and
C shares are subject to an annual 0.75% asset-based sales charge. An explanation
of the different performance calculations is in the Fund's prospectus.
2 Oppenheimer New Jersey Municipal Fund
<PAGE>
Dear SHAREHOLDER,
- --------------------------------------------------------------------------------
[PHOTO]
BRIDGET A. MACASKILL
President
Oppenheimer
New Jersey
Municipal Fund
In many ways, the 1999 investment environment has, so far, unfolded as many
expected it would, producing both attractive opportunities and formidable
challenges for investors.
On the economic front, early worries about the effects of global weakness
in the wake of last year's credit and currency crises have abated. Instead, as
many economies around the world begin to strengthen, concerns now center around
whether the U.S. economy may be growing too quickly. Throughout the year,
consumers in the United States have continued to spend and borrow heavily, more
than offsetting any temporary slowdown in the industrial and export sectors.
The economy's strength has not gone unnoticed by the nation's monetary
policymakers. In an effort to ward off emerging inflationary pressures, the
Federal Reserve Board increased short-term interest rates this past summer.
Market reaction to robust economic growth has been mixed. The U.S. bond
market has generally declined, as fixed income investors became increasingly
concerned about the effects of rising interest rates.
In the stock market, the performance of large-capitalization growth
stocks, which has driven the market's advance over the past few years, has begun
to moderate, and many previously out-of-favor value-oriented, mid-cap and
small-cap stocks have rallied. At the same time, a healthy percentage of
actively managed, diversified-portfolios have once again begun to outperform
unmanaged stock indices such as Standard & Poor's 500.
(OVER, PLEASE)
3 Oppenheimer New Jersey Municipal Fund
<PAGE>
At OppenheimerFunds, we applaud the Fed's pre-emptive strike against inflation.
In our view, history has repeatedly demonstrated that most financial assets do
best in a low-inflation environment. What's more, we believe that the move to
higher interest rates should be temporary.
One recent development IS quite troublesome to us however: the increasing
popularity of "day trading" among individuals seeking to make fast money in a
volatile stock market. In our opinion, day trading is not investing, it is
gambling. Experience proves that without extensive research and analysis,
attempting to time short-term price swings is a fool's errand. Instead, we
continue to encourage investors to maintain a long-term perspective that is
measured in years, not days.
Finally, while we remain alert to the potential impact of the Y2K issue, we
are encouraged by the progress made in addressing the matter. At
OppenheimerFunds, our shareholder accounting systems are already Y2K compliant,
and we have successfully participated in all required industry-wide tests. We
intend to continue re-testing our systems in order to help further protect
against any potential problems. After all, whether in our computer accounting
systems or the financial markets, managing risk is an important part of what
makes OppenheimerFunds THE RIGHT WAY TO INVEST.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
August 20, 1999
4 Oppenheimer New Jersey Municipal Fund
<PAGE>
An INTERVIEW with your Fund's manager
- --------------------------------------------------------------------------------
HOW DID OPPENHEIMER NEW JERSEY MUNICIPAL FUND PERFORM DURING THE ONE-YEAR PERIOD
THAT ENDED JULY 31, 1999?
We are pleased with the Fund's performance over the fiscal year. We attribute
the Fund's performance to our conservative investment strategy in a rapidly
changing investment environment. In fact, market conditions during the final six
months of 1998 and the first half of 1999 were, in many respects, direct
opposites of each other. The final six months of 1998 were generally
characterized by recessionary economic conditions throughout much of the world,
declining interest rates in the United States and less restrictive monetary
policies worldwide. In contrast, the first half of 1999 saw signs of global
economic recovery, rising domestic interest rates and, ultimately, a tighter
monetary policy in the United States.
[PHOTO]
PORTFOLIO MANAGEMENT TEAM (L TO R)
Bob Patterson
Caryn Halbrecht
(Portfolio Manager)
Jerry Webman
HOW DID THESE ECONOMIC CONDITIONS AFFECT NEW JERSEY'S MUNICIPAL BOND MARKET?
In stark contrast to the volatile prices of U.S. Treasury securities, municipal
bonds were remarkably stable throughout the one-year reporting period. In the
first half of the period, global economic uncertainty triggered a "flight to
quality" among U.S. and foreign investors.
5 Oppenheimer New Jersey Municipal Fund
<PAGE>
An INTERVIEW with your Fund's manager
- --------------------------------------------------------------------------------
"Municipal bonds endured SIGNIFICANTLY LESS VOLATILITY than other high-quality,
fixed income securities over the past year."
- -------------------------------------------------------------------------------
This created unprecedented demand for U.S. Treasury securities, driving their
prices up and their yields down (prices and yields move in opposite directions).
However, because municipal bonds do not provide tax advantages to foreign
investors, municipals did not benefit to the same extent. As a result, U.S.
Treasury securities significantly outperformed triple-A-rated municipal bonds
with comparable maturities.
In the second half of the reporting period, while municipal bonds remained
stable, prices of U.S. Treasury securities declined sharply, giving back all of
their previous gains. As the economy grew stronger, investors regained their
confidence and sold their Treasury bonds in order to return to riskier financial
assets such as stocks and corporate bonds. Consequently, municipal bonds
provided higher total returns than U.S. Treasuries.
In our opinion, municipal bonds' relative stability is the result of
supply-and-demand factors. Strong economic conditions in New Jersey reduced many
municipalities' need to borrow, leading to a modestly diminished supply of
tax-exempt bonds. Yet, demand remained high from investors seeking to minimize
their income tax liabilities. This supply-and-demand relationship helped support
the stability of New Jersey's municipal bond prices and yields.
6 Oppenheimer New Jersey Municipal Fund
<PAGE>
DID YOU FIND COMPELLING VALUES IN THIS MARKET ENVIRONMENT?
Yes. Long-term, tax-exempt municipal bond yields have been high relative to
yields of long-term, taxable U.S. Treasury securities. As a result, we believe
that New Jersey municipal bonds have provided excellent after-tax values
compared to historical norms.
HOW DID YOU MANAGE THE FUND IN THIS ENVIRONMENT?
We attempted to manage the risks of changing interest rates and emphasized those
sectors of the municipal bond market that we expected to benefit most from
prevailing economic and market conditions. This strategy led us to areas of
opportunity such as adult living facilities. Adult living facilities are
residential housing projects designed to meet the specialized demands of a
growing population of aging Americans who want amenities tailored to their
lifestyles.
Our strategy also led us to avoid certain issuers, such as hospitals, which
have been subject to financial pressures because of an unfavorable regulatory
and legislative environment, including cutbacks in Medicaid and Medicare. We
also tended to avoid bonds related to solid waste disposal, due to unresolved
political and legal issues.
7 Oppenheimer New Jersey Municipal Fund
<PAGE>
An INTERVIEW with your Fund's manager
- --------------------------------------------------------------------------------
AVG ANNUAL TOTAL RETURNS
For the Periods Ended 6/30/99(1)
<TABLE>
<CAPTION>
CLASS A
Since
1 year 5 year Inception
- -------------------------------
<S> <C> <C>
- -3.15% 5.44% 4.28%
- -------------------------------
<CAPTION>
CLASS B
Since
1 year 5 year Inception
- -------------------------------
<S> <C> <C>
- -3.84% 5.37% 4.28%
- -------------------------------
<CAPTION>
CLASS C
Since
1 year 5 year Inception
- -------------------------------
<S> <C> <C>
0.03% N/A 5.30%
- -------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARDIZED YIELDS(2)
For the 30 Days Ended 7/31/99
- -------------------------------
<S> <C>
Class A 4.72%
- -------------------------------
Class B 4.19
- -------------------------------
Class C 4.19
- -------------------------------
</TABLE>
Throughout the reporting period, we mostly targeted a neutral AVERAGE
DURATION--which is a measure of sensitivity to changes in interest rates. When
interest rates declined in 1998, our neutral position constrained performance
slightly compared to portfolios with longer durations. However, when interest
rates rose in 1999, our neutral position helped shelter the portfolio from some
of the impact affecting investors who had previously adopted a longer, more
aggressive duration strategy.
WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET AND THE FUND?
We remain cautiously optimistic. First, we believe that municipal bonds are
attractively valued relative to comparable taxable securities, and should
benefit as that relationship returns to more normal levels. Second, New Jersey
has benefited greatly from the recent strength of the U.S. economy, which has
enabled many of its municipalities to put their fiscal houses in good order.
This should help reduce the risk of credit downgrades.
1. 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 and B shares were first publicly offered on 3/1/94. Class B
returns include the applicable contingent deferred sales charge of 5% (1-year)
and 1% (since inception). Class C returns for the one-year result include the
contingent deferred sales charge of 1%. Class C shares have an inception date of
8/29/95. Class B and C shares are subject to an annual 0.75% asset-based sales
charge. An explanation of the different performance calculations is in the
Fund's prospectus.
2. Standardized yield is based on net investment income for the 30-day period
ended July 31, 1999. Falling share prices will tend to artificially raise
yields.
8 Oppenheimer New Jersey Municipal Fund
<PAGE>
On the other hand, we remain concerned about rising interest rates. Accordingly,
we intend to continue to monitor the economic environment carefully. If the
economy continues to grow at an unsustainable rate, we may position the
portfolio to reduce the adverse effects of potentially higher interest rates. We
believe that these credit-conscious, risk management strategies make Oppenheimer
New Jersey Municipal Fund an important part of THE RIGHT WAY TO INVEST.
CREDIT ALLOCATION(3)
[PIE CHART]
<TABLE>
<S> <C>
/ / AAA 52.5%
/ / AA 5.6
/ / A 10.2
/ / BBB 19.1
BB 10.6
B 2.0
</TABLE>
<TABLE>
<CAPTION>
TOP 5 INDUSTRIES(4)
(Percentage of invested assets)
- --------------------------------------------------------------
<S> <C>
Highways 20.1%
- --------------------------------------------------------------
Hospital/Healthcare 13.9
- --------------------------------------------------------------
Adult Living Facilities 11.7
- --------------------------------------------------------------
Marine/Aviation Facilities 7.9
- --------------------------------------------------------------
Municipal Leases 7.8
- --------------------------------------------------------------
</TABLE>
3. Portfolio data are as of July 31, 1999, are dollar-weighted based on invested
assets and are subject to change. The Fund may invest up to 25% of its assets in
below-investment-grade securities which carry greater risk of default. Average
credit quality and ratings allocations include securities rated by national
ratings organizations as well as unrated securities (currently 15.4% of total
investments) which have ratings assigned by the Manager in categories equivalent
to those of ratings organizations.
4. Industry weightings are as of July 31, 1999, and are subject to change.
9 Oppenheimer New Jersey Municipal Fund
<PAGE>
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, 1999, 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, 1999, Oppenheimer New Jersey Municipal Fund performed
relatively well, despite a weak bond market. We attempted to manage the risks
of changing interest rates and emphasized those sectors of the municipal bond
market that we expected to benefit most from prevailing economic and market
conditions. This strategy led us to areas of opportunity such as adult living
facilities. We also avoided certain issuers, such as hospitals and solid
waste disposal facilities. We maintained a neutral average duration
throughout the period, which constrained performance slightly when interest
rates declined in 1998. However, as interest rates rose in 1999, our neutral
position helped to shelter the portfolio. Over the past year, the Fund
continued to adhere to its longstanding strategy of holding a diversified
portfolio of municipal bonds selected after extensive research into their
issuers' credit quality. The Fund's portfolio holdings, allocations and
strategies are subject to change.
10 Oppenheimer New Jersey Municipal Fund
<PAGE>
/ / 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 from the inception of the class until July 31, 1999. In
the case of Class A and Class B shares, performance is measured from the
inception of the classes on March 1, 1994, and in the case of Class C shares,
from the inception of the class on August 29, 1995. The Fund's performance
reflects the deduction of the maximum initial sales charge on Class A shares and
the applicable contingent deferred sales charge for Class B and Class C shares.
The graphs assume that all dividends and capital gains distributions were
reinvested in additional shares.
Because the Fund invests in a variety of municipal securities, 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 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.
11 Oppenheimer New Jersey Municipal Fund
<PAGE>
FUND PERFORMANCE
- --------------------------------------------------------------------------------
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer New Jersey Municipal Fund (Class A) and Lehman Brothers Municipal
Bond Index
[GRAPH]
<TABLE>
<S> <C>
Oppenheimer New Jersey Municipal Fund Class A $13,653
Lehman Brothers Municipal Bond Index $12,525
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN OF CLASS A SHARES OF THE FUND AT 7/31/99(2)
<S> <C> <C>
1 YEAR -3.26% 5 YEAR 4.97% LIFE 4.24%
</TABLE>
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer New Jersey Municipal Fund (Class B) and Lehman Brothers Municipal
Bond Index
[GRAPH]
<TABLE>
<S> <C>
Oppenheimer New Jersey Municipal Fund Class B $13,653
Lehman Brothers Municipal Bond Index $12,516
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN OF CLASS B SHARES OF THE FUND AT 7/31/99(3)
<S> <C> <C>
1 YEAR -4.03% 5 YEAR 4.89% LIFE 4.23%
</TABLE>
12 Oppenheimer New Jersey Municipal Fund
<PAGE>
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer New Jersey Municipal Fund (Class C) and Lehman Brothers Municipal
Bond Index
[GRAPH]
<TABLE>
<S> <C>
Oppenheimer New Jersey Municipal Fund Class C $12,655
Lehman Brothers Municipal Bond Index $12,203
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN OF CLASS C SHARES OF THE FUND AT 7/31/99(4)
<S> <C>
1 YEAR -0.16% LIFE 5.21%
</TABLE>
Total returns and the ending account values in the graphs show change in share
value and include reinvestment of all dividends and capital gains distributions.
The performance information for the Lehman Brothers Municipal Bond Index in the
graphs begins on 2/28/94 for Class A and Class B, and 8/31/95 for Class C.
1. The Fund changed its fiscal year end from December 31 to July 31.
2. The inception of the Fund (Class A and B shares) was 3/1/94. Class A average
annual total returns are shown net of the applicable 4.75% maximum initial sales
charge.
3. Class B average annual total returns are shown net of the applicable 5%
(1-year) and 1% (since inception) contingent deferred sales charges. The
ending account value in the graph is net of the applicable contingent deferred
1% sales charge.
4. Class C shares of the Fund were first publicly offered on 8/29/95. The 1-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 the same scale.
13 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS July 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS:
MOODY'S/
S&P/FITCH FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--102.4%
- ----------------------------------------------------------------------------------------------------------------
NEW JERSEY--77.3%
Atlantic City, NJ GOUN, AMBAC Insured,
5%, 8/15/15(1) Aaa/AAA/AAA $2,500,000 $2,434,050
- ----------------------------------------------------------------------------------------------------------------
East Orange, NJ BOE COP, FSA Insured,
5%, 2/1/13 Aaa/AAA 2,000,000 1,928,640
- ----------------------------------------------------------------------------------------------------------------
East Orange, NJ BOE COP, FSA Insured,
5.50%, 8/1/12 Aaa/AAA 1,250,000 1,292,887
- ----------------------------------------------------------------------------------------------------------------
Essex Cnty., NJ Improvement Authority RB,
Utility System-Orange Franchise, Series A,
MBIA Insured, 5.75%, 7/1/27 Aaa/AAA 1,000,000 1,025,530
- ----------------------------------------------------------------------------------------------------------------
Essex Cnty., NJ Utilities Authority RRB, Series A,
FSA Insured, 5%, 4/1/22 Aaa/NR/AAA 1,500,000 1,436,160
- ----------------------------------------------------------------------------------------------------------------
Hudson Cnty., NJ MUAU System RB,
Prerefunded, 11.875%, 7/1/06 Aaa/AAA 520,000 612,232
- ----------------------------------------------------------------------------------------------------------------
Hudson Cnty., NJ Solid Waste System
Improvement Authority RRB, Series 1,
6%, 1/1/29 NR/BBB- 1,000,000 994,330
- ----------------------------------------------------------------------------------------------------------------
Mercer Cnty., NJ Improvement Authority RB,
Justice Complex Project, 6.05%, 1/1/11(1) Aa/AA- 250,000 250,475
- ----------------------------------------------------------------------------------------------------------------
Middlesex, NJ Improvement Authority Utilities
Systems CAP RB, Series B, Zero Coupon,
5.63%, 9/1/21(2) Aaa/AAA/AAA 6,000,000 1,777,440
- ----------------------------------------------------------------------------------------------------------------
Newark, NJ GOB, School Qualified Bond Act,
MBIA Insured, 5.30%, 9/1/08 Aaa/AAA 1,000,000 1,034,830
- ----------------------------------------------------------------------------------------------------------------
NJ Casino Reinvestment DAU Parking Fee RB,
Series A, FSA Insured, 5.20%, 10/1/08 Aaa/AAA/AAA 1,000,000 1,028,400
- ----------------------------------------------------------------------------------------------------------------
NJ Casino Reinvestment DAU Parking Fee RB,
Series A, FSA Insured, 5.25%, 10/1/13 Aaa/AAA/AAA 1,000,000 1,005,530
- ----------------------------------------------------------------------------------------------------------------
NJ COP, Series A, AMBAC Insured, 5%, 6/15/12 Aaa/AAA/AAA 1,000,000 980,880
- ----------------------------------------------------------------------------------------------------------------
NJ EDAU ED RB, United Methodist Homes,
5.75%, 7/1/29 NR/BBB- 2,000,000 1,898,880
- ----------------------------------------------------------------------------------------------------------------
NJ EDAU PC RB, Public Service Electric &
Gas Co. Project, Series A, MBIA Insured,
6.40%, 5/1/32 Aaa/AAA 500,000 535,940
- ----------------------------------------------------------------------------------------------------------------
NJ EDAU RRB, First Mtg. Franciscan Oaks
Project, 5.70%, 10/1/17 NR/NR 2,235,000 2,202,503
- ----------------------------------------------------------------------------------------------------------------
NJ EDAU RRB, First Mtg. Keswick Pines,
5.60%, 1/1/12 NR/NR 600,000 586,392
- ----------------------------------------------------------------------------------------------------------------
NJ EDAU RRB, First Mtg. Keswick Pines,
5.70%, 1/1/18 NR/NR 2,350,000 2,282,109
- ----------------------------------------------------------------------------------------------------------------
NJ EDAU RRB, Sr. Mtg., Arbor Glen, Series A,
5.875%, 5/15/16 NR/NR 3,000,000 2,892,780
14 Openheimer New Jersey Municipal Fund
<PAGE>
<CAPTION>
RATINGS:
MOODY'S/
S&P/FITCH FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NEW JERSEY (CONTINUED)
NJ EDAU RRB, United Methodist Homes,
5.125%, 7/1/25 NR/BBB- $2,000,000 $1,759,340
- ----------------------------------------------------------------------------------------------------------------
NJ EDAU Water Facilities RB, American
Water Co., Inc. Project, Series A, FGIC Insured,
6.875%, 11/1/34 Aaa/AAA/AAA 500,000 551,360
- ----------------------------------------------------------------------------------------------------------------
NJ EDAU Water Facilities RB, American
Water Co., Inc. Project, Series B, FGIC Insured,
5.375%, 5/1/32 Aaa/AAA 2,000,000 1,975,520
- ----------------------------------------------------------------------------------------------------------------
NJ Educational FA RRB, Institute of Advanced
Study, Series F, 5%, 7/1/11 Aaa/AA+ 1,130,000 1,130,350
- ----------------------------------------------------------------------------------------------------------------
NJ Educational FA RRB, Monmouth University,
Series C, 5.80%, 7/1/22 Baa2/BBB 1,000,000 1,001,060
- ----------------------------------------------------------------------------------------------------------------
NJ Educational FA RRB, Stevens Institute of
Technology, Series 1, 5%, 7/1/18 A3/A 1,095,000 1,039,089
- ----------------------------------------------------------------------------------------------------------------
NJ HCF FAU RB, Centrastate Medical Center,
Series A, AMBAC Insured, 6%, 7/1/21(1) Aaa/AAA/AAA 100,000 103,647
- ----------------------------------------------------------------------------------------------------------------
NJ HCF FAU RB, Columbus Hospital, Series A,
7.50%, 7/1/21 B2/B 2,000,000 1,988,120
- ----------------------------------------------------------------------------------------------------------------
NJ HCF FAU RB, Meridian Health System
Obligation Group, FSA Insured, 5.25%, 7/1/19 NR/AAA/AAA 3,000,000 2,950,740
- ----------------------------------------------------------------------------------------------------------------
NJ HCF FAU RB, Southern Ocean Cnty.
Hospital, Series A, 6.25%, 7/1/23 Baa1/NR 1,000,000 1,033,330
- ----------------------------------------------------------------------------------------------------------------
NJ HCF FAU RB, St. Elizabeth Hospital
Obligation Group, 6%, 7/1/20 Baa2/BBB 1,000,000 1,003,650
- ----------------------------------------------------------------------------------------------------------------
NJ HCF FAU RB, St. Joseph's Hospital & Medical
Center, Series A, 6%, 7/1/26 NR/AAA 750,000 779,063
- ----------------------------------------------------------------------------------------------------------------
NJ HCF FAU RRB, Capital Health System
Obligation Group, 5.125%, 7/1/12 Baa2/BBB- 3,000,000 2,791,710
- ----------------------------------------------------------------------------------------------------------------
NJ HCF FAU RRB, Dover General Hospital &
Medical Center, MBIA Insured, 7%, 7/1/03 Aaa/AAA 1,000,000 1,093,940
- ----------------------------------------------------------------------------------------------------------------
NJ HCF FAU RRB, St. Barnabas Health, Series B,
5.25%, 7/1/14 Aaa/AAA/AAA 1,000,000 1,000,350
- ----------------------------------------------------------------------------------------------------------------
NJ HCF FAU RRB, Virtua Health Issue, FSA
Insured, 5.25%, 7/1/14 Aaa/AAA/AAA 1,000,000 994,330
- ----------------------------------------------------------------------------------------------------------------
NJ Mtg. & HFA MH RB, Series A, AMBAC
Insured, 6.25%, 5/1/28 Aaa/AAA 1,000,000 1,050,030
- ----------------------------------------------------------------------------------------------------------------
NJ Mtg. & HFA RB, Home Buyer, Series J, MBIA
Insured, 6.20%, 10/1/25 Aaa/AAA 200,000 208,390
- ----------------------------------------------------------------------------------------------------------------
NJ Mtg. & HFA RB, Home Buyer, Series S, MBIA
Insured, 6.05%, 10/1/28 Aaa/AAA 1,000,000 1,045,310
- ----------------------------------------------------------------------------------------------------------------
NJ Mtg. & HFA RRB, Series 1, 6.70%, 11/1/28 NR/A+ 85,000 90,095
15 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Continued)
- --------------------------------------------------------------------------------
<CAPTION>
RATINGS:
MOODY'S/
S&P/FITCH FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NEW JERSEY (CONTINUED)
NJ Sports & Exposition Authority Convention
Center Luxury Tax RB, Series A, MBIA Insured,
6.25%, 7/1/20 Aaa/AAA $ 80,000 $ 86,094
- ----------------------------------------------------------------------------------------------------------------
NJ Transportation Trust Fund Authority RB,
Drivers, Series 49, 5.373%, 6/15/18(3) Aaa/NR 5,000,000 4,684,900
- ----------------------------------------------------------------------------------------------------------------
NJ Transportation Trust Fund Authority RB,
Series PA-499, Inverse Floater,
6.617%, 6/15/18(4)(5) NR/NR 5,000,000 4,684,900
- ----------------------------------------------------------------------------------------------------------------
NJ Transportation Trust Fund Authority RB,
Transportation System, Series A, 5.75%, 6/15/16(6) Aa2/AA-/AA 1,000,000 1,054,100
- ----------------------------------------------------------------------------------------------------------------
NJ Transportation Trust Fund Authority RB,
Transportation System, Series A,
5.75%, 6/15/17(6) Aa2/AA-/AA 2,000,000 2,104,280
- ----------------------------------------------------------------------------------------------------------------
NJ TUAU RRB, Series C, 6.50%, 1/1/16 Baa1/BBB+/A- 950,000 1,062,784
- ----------------------------------------------------------------------------------------------------------------
NJ TUAU RRB, Series C, MBIA Insured,
6.50%, 1/1/09 Aaa/AAA/AAA 1,000,000 1,119,920
- ----------------------------------------------------------------------------------------------------------------
North Jersey District Water Supply RRB,
Wanaque North Project, Series A, MBIA Insured,
5.125%, 11/15/21 Aaa/AAA 1,000,000 971,460
- ----------------------------------------------------------------------------------------------------------------
PAUNYNJ Consolidated RB, 94th Series,
6%, 12/1/14 A1/AA-/AA- 200,000 211,604
- ----------------------------------------------------------------------------------------------------------------
PAUNYNJ Consolidated RB, 112th Series,
5%, 12/1/16 A1/AA-/AA- 2,000,000 1,900,800
- ----------------------------------------------------------------------------------------------------------------
PAUNYNJ RB, FGIC Insured, 4.75%, 11/15/16 Aaa/AAA/AAA 1,500,000 1,371,465
- ----------------------------------------------------------------------------------------------------------------
PAUNYNJ SPO RB, JFK International Air
Terminal Project, Series 6, MBIA Insured,
5.75%, 12/1/25 Aaa/AAA/AAA 2,000,000 2,037,580
- ----------------------------------------------------------------------------------------------------------------
PAUNYNJ SPO RB, JFK International Air
Terminal Project, Series 6, MBIA Insured,
7%, 12/1/12 Aaa/AAA/AAA 2,000,000 2,352,520
- ----------------------------------------------------------------------------------------------------------------
PAUNYNJ SPO RRB, KIAC-4 Project, Fifth
Installment, 6.75%, 10/1/19 NR/NR 900,000 979,533
-----------
74,411,352
16 Oppenheimer New Jersey Municipal Fund
<PAGE>
<CAPTION>
RATINGS:
MOODY'S/
S&P/FITCH FACE MARKET VALUE
(UNAUDITED) AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. POSSESSIONS--25.1%
Guam Housing Corp. SFM RB, Series A,
5.75%, 9/1/31 NR/AAA $2,000,000 $ 2,023,420
- ----------------------------------------------------------------------------------------------------------------
Guam PAU RB, Series A, 5.125%, 10/1/29 Baa3/BBB/BBB 2,500,000 2,332,975
- ----------------------------------------------------------------------------------------------------------------
Guam PAU RB, Series A, 6.30%, 10/1/22 NR/BBB 185,000 199,878
- ----------------------------------------------------------------------------------------------------------------
PR CMWLTH GOB, 5%, 7/1/27 Baa1/A 3,000,000 2,777,040
- ----------------------------------------------------------------------------------------------------------------
PR CMWLTH HTAU RB, Puerto Rico
Infrastructure Bank, Sub. Lien, 5%, 7/1/28 Baa1/A- 1,000,000 924,580
- ----------------------------------------------------------------------------------------------------------------
PR CMWLTH HTAU RB, Series 88, MBIA
Insured, Inverse Floater, 6.84%, 7/1/28(4) NR/AAA 3,125,000 2,765,313
- ----------------------------------------------------------------------------------------------------------------
PR CMWLTH HTAU RB, Series Y, 5%, 7/1/36 Baa1/A 1,000,000 927,980
- ----------------------------------------------------------------------------------------------------------------
PR CMWLTH HTAU RRB, Series A, AMBAC
Insured, 5.50%, 7/1/13 Aaa/AAA/AAA 500,000 524,065
- ----------------------------------------------------------------------------------------------------------------
PR CMWLTH Infrastructure FAU Special RB,
Series A, AMBAC Insured, 5%, 7/1/11 Aaa/AAA 1,000,000 1,003,590
- ----------------------------------------------------------------------------------------------------------------
PR EPAU RB, Series DD, 5%, 7/1/28 Baa1/BBB+/NR 2,000,000 1,843,760
- ----------------------------------------------------------------------------------------------------------------
PR EPAU RRB, Series Z, 5.50%, 7/1/16 Baa1/BBB+ 2,000,000 2,012,020
- ----------------------------------------------------------------------------------------------------------------
PR Industrial Tourist Educational Medical &
Environmental Control Facilities RB, Polytechnic
University Project, Series A, 6.50%, 8/1/24 NR/BBB- 405,000 429,740
- ----------------------------------------------------------------------------------------------------------------
PR Public Buildings Authority RB, Series B,
5.25%, 7/1/21(1) Baa1/A 3,390,000 3,263,858
- ----------------------------------------------------------------------------------------------------------------
Virgin Islands Housing FAU SFM RRB, Series A,
6.50%, 3/1/25 NR/AAA 135,000 141,653
- ----------------------------------------------------------------------------------------------------------------
Virgin Islands PFAU RB, Sub. Lien, Series E,
6%, 10/1/22 NR/NR 1,500,000 1,542,915
- ----------------------------------------------------------------------------------------------------------------
Virgin Islands Water & PAU Electric
Systems RRB, 5.375%, 7/1/10 NR/NR/BBB 1,470,000 1,482,377
-----------
24,195,164
- ----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $99,875,216) 102.4% 98,606,516
- ----------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (2.4) (2,264,223)
--------- -----------
NET ASSETS 100.0% $96,342,293
--------- -----------
--------- -----------
</TABLE>
17 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
To simplify the listings of securities, abbreviations are used per the table below:
<S> <C>
BOE -- Board of Education HTAU -- Highway & Transportation
CAP -- Capital Appreciation Authority
CMWLTH -- Commonwealth MH -- Multifamily Housing
COP -- Certificates of Participation MUAU -- Municipal Utilities Authority
DAU -- Development Authority PAU -- Power Authority
ED -- Economic Development PAUNYNJ -- Port Authority of New York &
EDAU -- Economic Development Authority New Jersey
EPAU -- Electric Power Authority PC -- Pollution Control
FA -- Facilities Authority PFAU -- Public Finance Authority
FAU -- Finance Authority RB -- Revenue Bonds
GOB -- General Obligation Bonds RRB -- Revenue Refunding Bonds
GOUN -- General Obligation SFM -- Single Family Mortgage
Unlimited Notes SPO -- Special Obligations
HCF -- Health Care Facilities TUAU -- Turnpike Authority
HFA -- Housing Finance Agency
</TABLE>
1. Securities with an aggregate market value of $1,352,835 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 of Notes to Financial Statements.
2. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
3. Represents the current interest rate for a variable rate security.
4. 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 $7,450,213 or 7.73% of the
Fund's net assets as of July 31, 1999.
5. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $4,684,900 or 4.86% of the Fund's net
assets as of July 31, 1999.
6. When-issued security to be delivered and settled after July 31, 1999.
As of July 31, 1999, securities subject to the alternative minimum tax amount to
$16,173,521 or 16.79% of the Fund's net assets.
18 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
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>
Highways $19,852,821 20.1%
- -----------------------------------------------------------------------------
Hospital/Healthcare 13,738,880 13.9
- -----------------------------------------------------------------------------
Adult Living Facilities 11,622,003 11.7
- -----------------------------------------------------------------------------
Marine/Aviation Facilities 7,873,968 7.9
- -----------------------------------------------------------------------------
Municipal Leases 7,716,741 7.8
- -----------------------------------------------------------------------------
General Obligation 7,682,080 7.8
- -----------------------------------------------------------------------------
Electric Utilities 7,368,166 7.5
- -----------------------------------------------------------------------------
Water Utilities 5,869,040 6.0
- -----------------------------------------------------------------------------
Higher Education 3,600,240 3.7
- -----------------------------------------------------------------------------
Single Family Housing 3,418,773 3.5
- -----------------------------------------------------------------------------
Sales Tax 2,632,599 2.7
- -----------------------------------------------------------------------------
Corporate Backed 2,526,880 2.6
- -----------------------------------------------------------------------------
Parking Fee Revenue 2,033,930 2.1
- -----------------------------------------------------------------------------
Multifamily Housing 1,140,125 1.2
- -----------------------------------------------------------------------------
Resource Recovery 994,330 1.0
- -----------------------------------------------------------------------------
Pollution Control 535,940 0.5
----------- -----
Total $98,606,516 100.0%
----------- -----
----------- -----
</TABLE>
See accompanying Notes to Financial Statements.
19 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES July 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $99,875,216)--see accompanying statement $98,606,516
- ----------------------------------------------------------------------------------------------------------------
Cash 211,599
- ----------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest 960,762
Shares of beneficial interest sold 84,160
Daily variation on futures contracts--Note 5 53,281
Other 62
-----------
Total assets 99,916,380
- ----------------------------------------------------------------------------------------------------------------
LIABILITIES
Payables and other liabilities:
Investments purchased (including $3,130,886 purchased on a when-issued basis)--Note 1 3,130,886
Dividends 238,378
Shares of beneficial interest redeemed 76,842
Trustees' compensation--Note 1 61,522
Shareholder reports 29,787
Distribution and service plan fees 11,830
Transfer and shareholder servicing agent fees 7,399
Other 17,443
-----------
Total liabilities 3,574,087
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS $96,342,293
-----------
-----------
- ----------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $97,685,023
- ----------------------------------------------------------------------------------------------------------------
Overdistributed net investment income (160,072)
- ----------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 79,011
- ----------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments--Notes 3 and 5 (1,261,669)
-----------
Net assets $96,342,293
-----------
-----------
</TABLE>
20 Oppenheimer New Jersey Municipal Fund
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
<S> <C>
Class A Shares:
Net asset value and redemption price per share (based
on net assets of $42,288,925 and 3,770,918 shares of
beneficial interest outstanding) $11.21
Maximum offering price per share (net asset value
plus sales charge of 4.75% of offering price) $11.77
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $44,321,641 and
3,954,416 shares of beneficial interest outstanding) $11.21
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $9,731,727 and 868,078
shares of beneficial interest outstanding) $11.21
</TABLE>
See accompanying Notes to Financial Statements.
21 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Year Ended July 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $4,659,695
- --------------------------------------------------------------------------------------------
EXPENSES
Distribution and service plan fees--Note 4:
Class A 96,142
Class B 397,838
Class C 84,740
- --------------------------------------------------------------------------------------------
Management fees--Note 4 523,550
- --------------------------------------------------------------------------------------------
Shareholder reports 62,158
- --------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 61,826
- --------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 26,497
- --------------------------------------------------------------------------------------------
Trustees' compensation--Note 1 24,701
- --------------------------------------------------------------------------------------------
Custodian fees and expenses 23,449
- --------------------------------------------------------------------------------------------
Registration and filing fees 7,478
- --------------------------------------------------------------------------------------------
Insurance expenses 3,784
- --------------------------------------------------------------------------------------------
Other 7,295
----------
Total expenses 1,319,458
Less reimbursement of expenses by OppenheimerFunds, Inc.--Note 4 (393,184)
Less expenses paid indirectly--Note 1 (16,576)
----------
Net expenses 909,698
- --------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 3,749,997
- --------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments (20,826)
Closing of futures contracts 159,567
----------
Net realized gain 138,741
- --------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments (3,509,408)
----------
Net realized and unrealized loss (3,370,667)
- --------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 379,330
----------
----------
</TABLE>
See accompanying Notes to Financial Statements.
22 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
1999 1998
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income $3,749,997 $2,449,468
- --------------------------------------------------------------------------------------------------
Net realized gain (loss) 138,741 (137,748)
- --------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (3,509,408) 622,195
----------- -----------
Net increase in net assets resulting from operations 379,330 2,933,915
- --------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (1,835,806) (1,254,458)
Class B (1,578,140) (1,090,385)
Class C (336,025) (152,621)
- --------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (32,211) (80,412)
Class B (34,382) (80,657)
Class C (7,281) (9,067)
- --------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A 10,755,309 13,845,886
Class B 12,814,190 14,274,224
Class C 3,631,472 4,363,695
- --------------------------------------------------------------------------------------------------
NET ASSETS
Total increase 23,756,456 32,750,120
- --------------------------------------------------------------------------------------------------
Beginning of period 72,585,837 39,835,717
----------- -----------
End of period (including overdistributed net investment
income of $160,072 and $86,224, respectively) $96,342,293 $72,585,837
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Financial Statements.
23 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------
YEAR ENDED
YEAR ENDED JULY 31, DECEMBER 31,
1999 1998 1997 1996(1) 1995 1994(2)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $11.58 $11.54 $11.10 $11.26 $10.41 $11.43
- --------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .55 .58 .62 .36 .61 .49
Net realized and
unrealized gain (loss) (.36) .09 .45 (.16) .86 (1.02)
------- ------- ------ ------ ------ ------
Total income (loss) from
investment operations .19 .67 1.07 .20 1.47 (.53)
- --------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from
net investment income (.55) (.59) (.61) (.36) (.61) (.49)
Distributions from net realized gain (.01) (.04) (.02) -- (.01) --
------- ------- ------ ------ ------ ------
Total dividends and distributions
to shareholders (.56) (.63) (.63) (.36) (.62) (.49)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.21 $11.58 $11.54 $11.10 $11.26 $10.41
------- ------- ------ ------ ------ ------
------- ------- ------ ------ ------ ------
- --------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(3) 1.57% 5.96% 9.99% 1.80% 14.42% (4.63)%
- --------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $42,289 $33,060 $19,109 $11,354 $8,806 $3,877
- --------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $38,999 $24,909 $14,072 $10,036 $6,504 $2,506
- --------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income 4.71% 4.94% 5.45% 5.49% 5.51% 5.57%
Expenses, before reimbursement,
voluntary assumption and
indirect expenses 1.10% 1.14%(5) 1.08%(5) 1.64%(5) 1.75%(5) 1.46%
Expenses, after reimbursement,
voluntary assumption and
indirect expenses 0.63% 0.38% 0.88% 0.97% 0.80% 0.31%
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 70% 46% 12% 33% 7% 17%
</TABLE>
1. For the seven months ended July 31, 1996. The Fund changed its fiscal year
end from December 31 to July 31.
2. For the period from March 1, 1994 (commencement of operations) to December
31, 1994.
3. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
24 Oppenheimer New Jersey Municipal Fund
<PAGE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------
YEAR ENDED
YEAR ENDED JULY 31, DECEMBER 31,
1999 1998 1997 1996(1) 1995 1994(2)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $11.58 $11.53 $11.09 $11.25 $10.40 $11.43
- ---------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .47 .50 .53 .31 .53 .41
Net realized and
unrealized gain (loss) (.37) .09 .46 (.16) .86 (1.02)
------- ------- ------ ------ ------ ------
Total income (loss) from
investment operations .10 .59 .99 .15 1.39 (.61)
- ---------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from
net investment income (.46) (.50) (.53) (.31) (.53) (.42)
Distributions from net realized gain (.01) (.04) (.02) -- (.01) --
------- ------- ------ ------ ------ ------
Total dividends and distributions
to shareholders (.47) (.54) (.55) (.31) (.54) (.42)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.21 $11.58 $11.53 $11.09 $11.25 $10.40
------- ------- ------ ------ ------ ------
------- ------- ------ ------ ------ ------
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(3) 0.81% 5.25% 9.18% 1.34% 13.59% (5.39)%
- ---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $44,322 $33,062 $18,647 $9,740 $5,222 $2,986
- ---------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $39,842 $25,556 $13,278 $7,774 $4,080 $1,841
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income 3.96% 4.17% 4.70% 4.70% 4.79% 4.76%
Expenses, before reimbursement,
voluntary assumption and
indirect expenses 1.85% 1.89%(5) 1.83%(5) 2.40%(5) 2.49%(5) 2.29%
Expenses, after reimbursement,
voluntary assumption and
indirect expenses 1.38% 1.14% 1.62% 1.74% 1.53% 1.14%
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 70% 46% 12% 33% 7% 17%
</TABLE>
4. Annualized for periods of less than one year.
5. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
25 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS C
--------------------------------------------------------------------
PERIOD ENDED
YEAR ENDED JULY 31, DECEMBER 31,
1999 1998 1997 1996(1) 1995(2)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $11.58 $11.53 $11.09 $11.25 $11.01
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .46 .50 .53 .30 .19
Net realized and
unrealized gain (loss) (.36) .09 .45 (.16) .25
------- ------- ------ ------ ------
Total income (loss) from
investment operations .10 .59 .98 .14 .44
- --------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from
net investment income (.46) (.50) (.52) (.30) (.19)
Distributions from net realized gain (.01) (.04) (.02) -- (.01)
------- ------- ------ ------ ------
Total dividends and distributions
to shareholders (.47) (.54) (.54) (.30) (.20)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.21 $11.58 $11.53 $11.09 $11.25
------- ------- ------ ------ ------
------- ------- ------ ------ ------
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(3) 0.81% 5.24% 9.11% 1.29% 4.07%
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $9,732 $6,463 $2,080 $132 $50
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $8,483 $3,631 $ 747 $ 74 $ 3
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income 3.96% 4.20% 4.56% 4.66% --(7)
Expenses, before reimbursement,
voluntary assumption and
indirect expenses 1.85% 1.92%(5) 1.79%(5) 2.48%(5) --(7)
Expenses, after reimbursement,
voluntary assumption and
indirect expenses 1.38% 1.12% 1.60% 1.81% --(7)
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 70% 46% 12% 33% 7%
</TABLE>
6. 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, 1999, were $91,033,139 and $60,696,927, respectively.
7. Ratios during this period would not be indicative of future results.
See accompanying Notes to Financial Statements.
26 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
interest income exempt from federal and New Jersey income taxes for individual
investors as is consistent with preservation of capital. The Fund's investment
advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class
B and Class C shares. Class A shares are sold with a front-end sales charge, on
investments up to $1 million. Class B and Class C shares may be subject to a
contingent deferred sales charge (CDSC). All classes of shares have identical
rights to earnings, assets and voting privileges, except that each class has its
own expenses directly attributable to that class and exclusive voting rights
with respect to matters affecting that class. Classes A, B and C have separate
distribution and/or service plans. Class B shares will automatically convert to
Class A shares six years after the date of purchase. The following is a summary
of significant accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. 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. Options are valued based upon the last sale price on the
principal exchange on which the option is traded or, in the absence of any
transactions that day, the value is based upon the last sale price on the prior
trading date if it is within the spread between the closing bid and asked
prices. If the last sale price is outside the spread, the closing bid is used.
27 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS. Delivery and payment for securities
that have been purchased by the Fund on a forward commitment or when-issued
basis can take place a month or more after the transaction date. Normally the
settlement date occurs within six months after the transaction date; however,
the fund may, from time to time, purchase securities whose settlement date
extends beyond six months and possibly as long as two years or more beyond trade
date. During this period, such securities do not earn interest, are subject to
market fluctuation and may increase or decrease in value prior to their
delivery. The Fund maintains segregated assets with a market value equal to or
greater than the amount of its purchase commitments. The purchase of securities
on a when-issued or forward commitment basis may increase the volatility of the
Fund's net asset value to the extent the Fund makes such purchases while
remaining substantially fully invested. As of July 31, 1999, the Fund had
entered into outstanding when-issued or forward commitments of $3,130,886.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. 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,
1999, a provision of $5,689 was made for the Fund's projected benefit
obligations and payments of $1,725 were made to retired trustees, resulting in
an accumulated liability of $60,253 as of July 31, 1999.
The Board of Trustees has adopted a deferred compensation plan for
independent Trustees that enables Trustees to elect to defer receipt of all or a
portion of annual compensation they are entitled to receive from the Fund. Under
the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the Trustees 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.
28 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
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, 1999, amounts have been reclassified to reflect an increase
in overdistributed net investment income of $73,874. Accumulated net realized
gain on investments was increased by the same amount.
- --------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENTS. Expenses paid indirectly represent a reduction of
custodian fees and interest expense for earnings on cash balances maintained by
the Fund.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for as of trade date. Original
issue discount is accreted and premium is amortized in accordance with federal
income tax requirements. For municipal bonds acquired after April 30, 1993, on
disposition or maturity, taxable ordinary income is recognized to the extent of
the lesser of gain or market discount that would have accrued over the holding
period. Realized gains and losses on investments and unrealized appreciation and
depreciation are determined on an identified cost basis, which is the same basis
used for federal income tax purposes.
There are certain risks arising from geographic concentration in any state.
Certain revenue- or tax-related events in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
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.
29 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
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, 1999 YEAR ENDED JULY 31, 1998
------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 1,892,611 $ 22,117,140 1,479,153 $17,088,412
Dividends and/or
distributions reinvested 101,593 1,183,876 73,193 843,838
Redeemed (1,077,934) (12,545,707) (354,111) (4,086,364)
---------- ------------ ---------- -----------
Net increase 916,270 $ 10,755,309 1,198,235 $13,845,886
---------- ------------ ---------- -----------
---------- ------------ ---------- -----------
- -----------------------------------------------------------------------------------------------------------------
Class B:
Sold 1,587,888 $ 18,490,151 1,418,500 $16,352,105
Dividends and/or
distributions reinvested 84,751 986,603 63,541 732,272
Redeemed (574,554) (6,662,564) (243,070) (2,810,153)
---------- ------------ ---------- -----------
Net increase 1,098,085 $ 12,814,190 1,238,971 $14,274,224
---------- ------------ ---------- -----------
---------- ------------ ---------- -----------
- -----------------------------------------------------------------------------------------------------------------
Class C:
Sold 461,996 $ 5,398,001 406,603 $ 4,695,990
Dividends and/or
distributions reinvested 23,858 277,644 11,359 131,054
Redeemed (176,024) (2,044,173) (40,110) (463,349)
---------- ------------ ---------- -----------
Net increase 309,830 $ 3,631,472 377,852 $ 4,363,695
---------- ------------ ---------- -----------
---------- ------------ ---------- -----------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON SECURITIES
As of July 31, 1999, net unrealized depreciation on securities of $1,268,700 was
composed of gross appreciation of $1,077,630, and gross depreciation of
$2,346,330.
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund which provides for an annual
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. The Manager has voluntarily undertaken to
assume Fund expenses to the level needed to maintain a stable dividend. The
Fund's management fee for the year ended July 31, 1999, was 0.60% of the
average annual net assets for each class of shares, before the voluntary
waiver by the Manager.
30 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
is the transfer and shareholder servicing agent for the Fund and other
Oppenheimer funds. OFS's total costs of providing such services are allocated
ratably to these funds.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FEES. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
AGGREGATE CLASS A COMMISSIONS COMMISSIONS COMMISSIONS
FRONT-END FRONT-END ON CLASS A ON CLASS B ON CLASS C
SALES CHARGES SALES CHARGES SHARES SHARES SHARES
ON CLASS A RETAINED BY ADVANCED BY ADVANCED BY ADVANCED BY
YEAR ENDED SHARES DISTRIBUTOR DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
July 31, 1999 $274,066 $42,452 $45,803 $686,850 $45,815
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
CONTINGENT DEFERRED CONTINGENT DEFERRED CONTINGENT DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES
YEAR ENDED RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
July 31, 1999 $-- $106,625 $5,619
</TABLE>
The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B and Class C shares under Rule 12b-1 of the Investment
Company Act. Under those plans the Fund pays the Distributor for all or a
portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
- --------------------------------------------------------------------------------
CLASS A SERVICE PLAN FEES. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.15% of average annual net assets of Class A
shares. The Distributor makes payments to plan recipients quarterly at an annual
rate not to exceed 0.15% of the average annual net assets consisting of Class A
shares of the Fund. For the fiscal year ended July 31, 1999, payments under the
Class A Plan totaled $96,142, all of which was paid by the Distributor to
recipients. That included $1,853 paid to an affiliate of the Distributor's
parent company. Any unreimbursed expenses the Distributor incurs with respect to
Class A shares in any fiscal year cannot be recovered in subsequent years.
31 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED)
CLASS B AND CLASS C DISTRIBUTION AND SERVICE PLAN FEES. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and Class C plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The asset-based sales charges on Class B
and Class C shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and from the Fund under the plans. If
either the Class B or the Class C plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales charge
to the Distributor for distributing shares before the plan was terminated. The
plans allow for the carry-forward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the year ended July 31, 1999, were
as follows:
<TABLE>
<CAPTION>
DISTRIBUTOR'S DISTRIBUTOR'S
AGGREGATE UNREIMBURSED
UNREIMBURSED EXPENSES AS
TOTAL PAYMENTS AMOUNT RETAINED EXPENSES % OF NET ASSETS
CLASS UNDER PLAN BY DISTRIBUTOR UNDER PLAN OF CLASS
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $397,838 $323,856 $1,670,505 3.77%
- -----------------------------------------------------------------------------------------------------------------
Class C Plan $ 84,740 $ 54,984 $ 109,332 1.12%
</TABLE>
32 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS
The Fund may buy and sell futures contracts in order to gain exposure to or to
seek to protect against changes in interest rates. The Fund may also buy or
write put or call options on these futures contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund may recognize a realized gain or loss when the contract is
closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable
and/or payable for the daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of July 31, 1999, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
EXPIRATION NUMBER OF VALUATION AS OF UNREALIZED
CONTRACT DESCRIPTION DATE CONTRACTS JULY 31, 1999 APPRECIATION
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONTRACTS TO SELL
- -----------------
U.S. Treasury Bonds 9/21/99 155 $ 17,820,156 $ 7,031
</TABLE>
33 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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, 1999.
34 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 statement of assets and liabilities, including
the statement of investments, of Oppenheimer New Jersey Municipal Fund as of
July 31, 1999, and 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
three-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. 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, 1999, by correspondence with the custodian and brokers; and where
confirmations 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, 1999, 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 three-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, in conformity with generally accepted accounting principles.
KPMG LLP
Denver, Colorado
August 20, 1999
35 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2000, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1999. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Distributions of $0.0565 per share were paid to Class A, Class B and Class
C shareholders, on December 10, 1998, of which $0.0107 was designated as a
"capital gain distribution" for federal income tax purposes. Whether received in
stock or in cash, the capital gain distribution should be treated by
shareholders as a gain from the sale of capital assets held for more than one
year (long-term capital gains).
None of the dividends paid by the Fund during the fiscal year ended July
31, 1999, 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.
36 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
SHAREHOLDER MEETING (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
On June 18, 1999, a shareholder meeting was held at which the following items
and proposals were approved, as described in the Trust's proxy statement for
that meeting. The following is a report of the votes cast:
<TABLE>
<CAPTION>
BROKER
NOMINEE/PROPOSAL FOR AGAINST WITHHELD/ABSTAIN NON-VOTES TOTAL
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert G. Galli 3,923,294 78,163 4,001,457
Leon Levy 3,925,799 75,658 4,001,457
Benjamin Lipstein 3,928,930 72,527 4,001,457
Bridget A. Macaskill 3,930,234 71,223 4,001,457
Elizabeth B. Moynihan 3,931,082 70,375 4,001,457
Kenneth A. Randall 3,931,082 70,375 4,001,457
Edward V. Regan 3,931,278 70,179 4,001,457
Russell S. Reynolds, Jr. 3,931,278 70,179 4,001,457
Donald W. Spiro 3,931,278 70,179 4,001,457
Pauline Trigere 3,931,278 70,179 4,001,457
Clayton K. Yeutter 3,931,278 70,179 4,001,457
- ----------------------------------------------------------------------------------------------------------------------------
PROPOSAL NO. 1
Ratification of the selection of KPMG LLP as independent auditors of the Fund for the fiscal year beginning August 1, 1998.
3,875,361 48,649 77,447 -- 4,001,457
- -----------------------------------------------------------------------------------------------------------------------------
PROPOSAL NO. 2a
Approval to eliminate the Fund's fundamental policy on purchasing securities on margin.
2,730,837 222,265 132,884 915,471 4,001,457
- -----------------------------------------------------------------------------------------------------------------------------
PROPOSAL NO. 2b
Approval to eliminate the Fund's fundamental policy on selling securities short.
2,728,492 229,995 127,499 915,471 4,001,457
- -----------------------------------------------------------------------------------------------------------------------------
PROPOSAL NO. 2c
Approval to eliminate the Fund's fundamental policy on investing in other investment companies.
2,716,388 249,147 120,451 915,471 4,001,457
- -----------------------------------------------------------------------------------------------------------------------------
PROPOSAL NO. 2d
Approval to eliminate the Fund's fundamental policy on purchasing securities of issuers in which officers or trustees have an
interest.
2,707,546 263,446 114,994 915,471 4,001,457
- -----------------------------------------------------------------------------------------------------------------------------
PROPOSAL NO. 2e
Approval to eliminate the Fund's fundamental policy on restricted securities.
2,688,183 258,959 138,844 915,471 4,001,457
- -----------------------------------------------------------------------------------------------------------------------------
PROPOSAL NO. 3a
Approval to amend the Fund's fundamental policy on borrowing.
2,784,590 150,850 150,546 915,471 4,001,457
- -----------------------------------------------------------------------------------------------------------------------------
PROPOSAL NO. 3b
Approval to amend the Fund's fundamental policy on underwriting securities.
2,758,799 160,110 167,077 915,471 4,001,457
- -----------------------------------------------------------------------------------------------------------------------------
PROPOSAL NO. 3c
Approval to amend the Fund's fundamental policy on lending.
2,773,111 154,741 158,135 915,470 4,001,457
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
37 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
Phillip A. Griffiths, 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
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
- --------------------------------------------------------------------------------
INVESTMENT ADVISOR OppenheimerFunds, Inc.
- --------------------------------------------------------------------------------
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
- --------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER OppenheimerFunds Services
SERVICING AGENT
- --------------------------------------------------------------------------------
CUSTODIAN OF Citibank, N.A.
PORTFOLIO SECURITIES
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS KPMG LLP
- --------------------------------------------------------------------------------
LEGAL COUNSEL Mayer, Brown & Platt
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 the possible loss of the
principal amount invested.
38 Oppenheimer New Jersey Municipal Fund
<PAGE>
- --------------------------------------------------------------------------------
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 Global Growth & Income Fund
International Small Global Fund Europe Fund
Company Fund Quest Global Value Fund
- --------------------------------------------------------------------------------------------------------
STOCK FUNDS
- --------------------------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Large Cap Growth Fund
Quest Small Cap Value Fund Quest Capital Value Fund Disciplined Value Fund
Quest Value Fund
- --------------------------------------------------------------------------------------------------------
STOCK & BOND FUNDS
- --------------------------------------------------------------------------------------------------------
Main Street-Registered Trademark- Total Return Fund Multiple Strategies Fund
Growth & Income Fund(1) Quest Balanced Disciplined Allocation Fund
Quest Opportunity Value Fund Convertible Securities Fund
Value Fund Capital Income Fund(2)
- --------------------------------------------------------------------------------------------------------
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 12/22/98, the Fund's name was changed from "Oppenheimer Main Street Income
& Growth Fund."
2. On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income Fund."
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 1999 OppenheimerFunds, Inc. All rights reserved.
39 Oppenheimer New Jersey Municipal Fund
<PAGE>
-------------------------------
Information and Services
-------------------------------
As an Oppenheimer fund shareholder, you can
benefit from special services designed to make
investing simple. Whether it's automatic
investment plans, timely market updates, or
immediate account access, you can count on
us whenever you need assistance. So call us
today, or visit our website--we're here to help.
INTERNET
24-hr access to account information and transactions
- --------------------------------------------------------------------------------
www.oppenheimerfunds.com
- --------------------------------------------------------------------------------
GENERAL INFORMATION
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
- --------------------------------------------------------------------------------
1-800-525-7048
- --------------------------------------------------------------------------------
TELEPHONE TRANSACTIONS
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
- --------------------------------------------------------------------------------
1-800-852-8457
- --------------------------------------------------------------------------------
PHONELINK
24-hr automated information
and automated transactions
- --------------------------------------------------------------------------------
1-800-533-3310
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD)
Mon-Fri 8:30am-6pm ET
- --------------------------------------------------------------------------------
1-800-843-4461
- --------------------------------------------------------------------------------
OPPENHEIMERFUNDS INFORMATION HOTLINE
24 hours a day, timely and insightful messages on the
economy and issues that may affect your investments
- --------------------------------------------------------------------------------
1-800-835-3104
- --------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER SERVICING AGENT
OppenheimerFunds Services,
P.O. Box 5270, Denver, CO 80217-5270
[LOGO]
OPPENHEIMERFUNDS-Registered Trademark-
Distributor, Inc.
RA0395.001.0799 September 29, 1999
