[LOGO] ROCHESTER
FUND
MUNICIPALS Tax-Fee Income for New York Investors
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[ARTWORK]
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Annual Report
[LOGO] OppenheimerFunds(R) December 31, 1995
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To Fellow Shareholders
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[PHOTOGRAPH]
February 8, 1996
Dear Fellow Shareholder,
What a year it was! The U.S. stock market soared, as evidenced by the
returns of almost all domestic stock indices. Even more important for investors
of Rochester Fund Municipals, bonds rebounded from 1994's general market decline
to rack up significant returns.
We are extremely pleased to report that Rochester Fund Municipals had one
of its best years ever, providing a total return of 13.83%, which reflects
payment of the maximum sales charge of 4.00% and includes reinvestment of
dividends. Not only did the Fund continue to provide an attractive level of
tax-free income for the year(1), but its net asset value increased from $16.31
on January 1st to $18.18 on December 29th.
We are optimistic as we enter 1996. Inflation remains low, economic growth
is forecast to continue at a substantial rate, and Governor Pataki and the U.S.
Congress seem dedicated to lower government spending and regulation. We believe
that in 1996 we can continue to provide good returns to our shareholders.
Sincerely,
/s/ Ronald Fielding
Ronald H. Fielding
Portfolio Manager
1. A portion of the Fund's income may be subject to income taxes. Capital gains
distributions, if any, are taxable as capital gains. For investors subject to
the alternative minimum tax, some of the Fund's distributions may increase that
tax.
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Tax-Free Income [MAP OF NY]
For New York Investors
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STANDARDIZED YIELD
For the 30 days ended 12/31/95(1)
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5.50%
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According to Lipper Analytical Services, Inc., Rochester Fund Municipals is the
#1 performing New York State municipal debt fund for the 10-Year period ended
12/31/95.(2)
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MORNINGSTAR(3)
4 star ranking
1. Standardized yield is net investment income calculated on a yield-to-maturity
basis for the 30-day period ended 12/31/95, divided by the maximum offering
price at the end of the period, compounded semi-annually and then annualized.
Falling net asset values will tend to artificially raise yields.
2. Source: Lipper Analytical Services, Inc., 12/31/95, an independent mutual
fund monitoring service. Rochester Fund Municipals is characterized by Lipper as
a New York State Municipal Debt Fund. The Lipper total return rankings for the
10-year period included 17 New York State Municipal Debt Funds. Within the same
category, the Fund was also ranked 14th out of 88 funds for the 1-year period
and 5th out of 40 funds for the 5-year period. Lipper performance does not take
sales charges into consideration and assumes the reinvestment of dividends and
capital gains distributions. The Fund's management rates were increased on
5/1/95.
3. Source: Morningstar Mutual Funds, 12/31/95. Morningstar, Inc., an independent
mutual fund monitoring service, produces proprietary monthly rankings of funds
in broad investment categories based on risk-adjusted investment returns, after
considering sales charges and expenses. Investment return measures a fund's
3-,5- and 10-year average annual total returns in excess of 90 day U.S. Treasury
bill returns. Risk measures a fund's performance below 90-day Treasury bill
returns. Risk and returns are combined to produce star rankings, reflecting
performance relative to the average fund in a fund category. Five stars is the
"highest" ranking (top 10%), 4 stars is "above average" (next 22.5%) and 1 star
is the lowest (bottom 10%). ROCHESTER FUND MUNICIPALS IS CATEGORIZED AS A
TAX-EXEMPT BOND FUND. THE 4-STAR CURRENT RANKING IS A WEIGHTED AVERAGE OF THE
FUND'S 3- AND 5-YEAR RANKINGS, WHICH WERE 4 STARS AND 5 STARS RESPECTIVELY,
WEIGHTED 40%/60%. 770 AND 499 MUNICIPAL BOND FUNDS WERE RATED FOR THE 3- AND
5-YEAR PERIODS RESPECTIVELY. THIS MORNINGSTAR PROPRIETARY RATING REFLECTS
HISTORICAL RISK-ADJUSTED PERFORMANCE AS OF DECEMBER 31, 1995. The ratings are
subject to change every month.
Past performance is not predictive of future investment results. Investment
return and principal value on an investment in the Fund will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost.
ROCHESTER FUND MUNICIPALS
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Management's Discussion of Fund Performance
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February 8, 1996
The primary goal of Rochester Fund Municipals is to earn a high level of
income exempt from Federal, New York State and New York City personal income
taxes for its investors, and the Fund continued throughout the year to
accomplish that goal.(1) The Fund's 30-day SEC yield as of 12/31/95 was 5.50%,
and during 1995 has consistently been significantly higher than that of the
long-term New York municipal debt fund average as reported by the Lipper
Analytical Yield Survey.(2) The Fund's 30-day SEC yield is based on earnings of
the Fund's portfolio during the 30 days ended 12/31/95 and the maximum offering
price, which reflects payment of the maximum 4% sales charge. While we attempt
to keep the monthly dividend as stable as is both prudent and consistent with
our policy of preserving shareholders' capital (the Fund's net asset value per
share), dividend adjustments are made periodically. During 1995 the monthly
dividend was lowered from 9.5 cents to 9.0 cents per share in February, and
raised to 9.1 cents in September.
As we reflect over the past year, we are reminded of our message to you at
this time last year: that during uncertain market conditions, shareholders
should remember their long-term financial goals and exercise discipline and
patience. Those who managed to stay the course in 1994 in view of one of the
worst bond markets in recent memory and the corresponding short-term pressures
to sell, have been well rewarded.
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TOTAL RETURN (12/31/95)
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AVERAGE ANNUAL CUMULATIVE
NAV MOP NAV MOP
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1 Year 18.58% 13.83% 18.58% 13.83%
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5 Year 9.33% 8.44% 56.20% 49.93%
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10 Year 10.22% 9.78% 164.68% 154.15%
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For periods ending 12/31/95. NAV stands for Net Asset Value and returns at NAV
do not reflect payment of sales charge. The inception date of the Fund as an
open-end Fund was 5/15/86. MOP stands for Maximum Offering Price, and
calculations at MOP include the Fund's 4.00% maximum initial sales charge. All
returns include change in share price, assume reinvestment of dividends and
capital gains at net asset value and reflect payment of the Fund's initial
maximum sales charge. Your investment return and principal value will fluctuate
with market conditions, and as an investor, your shares may be worth more or
less than their original value upon redemption.
THE VALUE OF $10,000 INVESTED IN YOUR FUND COMPARED TO
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX AND THE CPI
[The following table was represented by a graph in the printed material.]
The Value of $10,000 Invested in Rochester Fund Municipals, the Lehman Brothers
Municipal Bond Index and the CPI
Rochester Fund Municipals $25,413
Lehman Brothers Municipal Bond Index $26,511
Consumer Price Index (CPI) $14,023
This graph shows the performance of a hypothetical $10,000 investment in shares
of the Fund held for the 10-year period ended December 31, 1995. The Fund's
performance is compared to the performance of the Lehman Brothers Municipal Bond
Index, an unmanaged index of a broad range of investment grade municipal bonds,
widely regarded as a measure of the performance of the general municipal bond
market. However, this broad index differs from the actual investment of real
dollars in the Fund in several important respects. First, while the Lehman Index
reflects the performance of securities on which the interest income is exempt
from Federal taxes, it includes mostly municipal bonds whose interest is subject
to New York State and New York City personal income taxes, and thus would not be
purchased by the Fund. The unmanaged Index also has no ongoing management
expenses and incurs no transaction costs or operating expenses, which are an
integral part of mutual fund operations. None of the data shown considers the
effect of taxes. Moreover, the Index performance data does not reflect any
assessment of the risk of investments included in the Index. The Fund's total
return figure assumes payment of the 4.00% maximum sales charge and reflects all
Fund expenses. It assumes that dividends and capital gains have been reinvested.
Past performance is not predictive of future investment results. An investor
cannot purchase the index directly.
The graph also compares the Fund's performance to the Consumer Price Index
(CPI), a measure of inflation. It indicates that, for the period referenced, the
Fund has kept the purchasing power of your investment (on a total return basis)
well ahead of inflation, which should be an important consideration for
investors.
ROCHESTER FUND MUNICIPALS
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Management's Discussion of Fund Performance (continued)
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The single most important reason behind 1995's strong performance was the
reversal of last year's Federal Reserve policy regarding interest rates.
Throughout 1994, the Fed raised rates aggressively to stem potential
inflationary pressures and to slow the growth of the economy. As it became
evident that the economy was indeed slowing, the Fed stopped raising rates, and
in early 1995, slightly lowered short term rates. The resulting bond market
rallies benefited bonds generally, but in particular, municipal bonds and
municipal bond funds such as Rochester Fund Municipals.
In addition, the prospect of tax reform has been a major influence in the
municipal bond market in 1995, specifically for the past six months. Depending
on the maturity of a bond, talk of tax reform may have been as important to its
total return as the changes in the general levels of interest rates. Even though
it is just talk at this point, the concept of significant tax reform helped to
keep 1995 total returns for municipal bonds below those on Treasury Bonds, which
had returns that approached those of the stock market.(3)
We believe that this has, however, made municipal bonds very attractive
relative to taxable bonds and Treasuries, and that fears of tax reform that
would harm municipal bonds are both overblown and exaggerated. With New York
municipal bonds currently yielding more than 90% of the comparable maturity
Treasury bonds, we believe the tax-exempt sector has become quite attractive. In
the very remote chance that a flat tax does pass in this decade, New York
municipal bonds should be a better value than other states' because of the high
state and local tax rates. New York's Governor George Pataki has made some
inroads into his campaign promises of lower taxes and lower state spending and
regulation, creating hopes that the business environment will improve in the
years ahead.
With nearly 700 different bonds (as of 12/31/95), the Fund's investment
strategy considered issues across a broad range of market sectors, maturities,
coupons and call features. In addition, we continued our longstanding policy of
selling popular sectors of the municipal bond market (which in 1995 included
housing and general obligation bonds) and adding to sectors which are currently
"cheap" because of their unpopularity or perceived risks. In 1995, this meant
taking larger positions in electric and gas utility bonds, and in resource
recovery and pollution control bonds. There was a very slight improvement in the
average dollar weighted credit rating during 1995 and a slight lowering of its
duration.(4)
We continue to manage the portfolio with an eye to reducing overall
portfolio risk and adding value to the investment process. We believe that
investors will benefit from our well balanced portfolio. Going forward, we
foresee more stable interest rates, modest economic growth, low inflation and
relatively attractive values for municipal securities.
1. A portion of the Fund's income distributions may be subject to income taxes.
Capital gains distributions, if any, are taxable as capital gains. For investors
subject to the alternative minimum tax, some of the Fund's distributions may
increase that tax.
2. Lipper Analytical Yield Survey is published monthly, and contains the SEC
30-day yields reported by each respective fund. The yield of Rochester Fund
Municipals, in each of the twelve months through 12/31/95, has exceeded the
average of the other 88 funds in the category by more than 0.75%.
3. Please note that, unlike an investment in the Fund, Treasury Bonds are
interest bearing instruments which are guaranteed as to timely payment of
interest and principal by the U.S. Government. However, the income on Treasury
Bonds is subject to Federal taxes.
4. Duration is a measure of the Fund's volatility in response to changes in
interest rates.
ROCHESTER FUND MUNICIPALS
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<TABLE>
<CAPTION>
Rochester Fund Municipals
Portfolio of Investments
December 31, 1995
Face Amount
Description Coupon Maturity (000) Omitted Market Value
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<S> <C> <C> <C> <C>
Housing, Albany Hsg. Auth. 0.000% 10/01/02(p) $ 560 $ 115,830
Multi-Family Albany IDA (HHRH) 9.500 09/01/96 3,005 2,974,950
15.0% Albany IDA (MARA Mansion Rehab.) 6.500 02/01/23 1,715 1,764,735
$322,024,202 Batavia Hsg. Auth. (Washington Towers) 6.500 01/01/23 515 532,891
Battery Park City Auth. 10.000 06/01/23 700 712,250
Bayshore HDC 7.500 02/01/23 1,475 1,596,702
Bleeker Terrace HDC 8.100 07/01/01 35 35,700
Bleeker Terrace HDC 8.350 07/01/04 45 45,900
Bleeker Terrace HDC 8.750 07/01/07 900 916,731
Elmira HDC 7.500 08/01/07 25 26,428
Guam Economic Devel. 9.375 11/01/18 3,025 3,165,027
Guam Economic Devel. 9.500 11/01/18 2,515 2,631,419
Hamilton Elderly Hsg. 11.250 01/01/15 710 758,742
Holiday Square HDC 5.800 01/15/24 2,000 1,999,940
Macleay Hsg. (Larchmont Woods) 8.500 01/01/31 3,965 4,364,989
Monroe HDC 7.000 08/01/21 300 314,334
New Hartford HDC 7.375 01/01/24 20 21,769
North Tonawanda HDC 6.800 12/15/07 585 634,415
North Tonawanda HDC 7.375 12/15/21 3,295 3,786,647
NYC HDC (Albert Einstein) 6.500 12/15/17 337 343,951
NYC HDC (Amsterdam) 6.500 08/15/18 942 961,175
NYC HDC (Atlantic Plaza) 7.034 02/15/19 1,456 1,503,396
NYC HDC (Boulevard) 6.500 08/15/17 2,936 2,994,395
NYC HDC (Bridgeview) 6.500 12/15/17 506 515,927
NYC HDC (Cadman Plaza) 6.500 11/15/18 1,355 1,382,192
NYC HDC (Cadman Plaza) 7.000 12/15/18 491 500,401
NYC HDC (Candia) 6.500 06/15/18 199 203,419
NYC HDC (Clinton) 6.500 07/15/17 3,825 3,900,835
NYC HDC (Contello III) 7.000 12/15/18 301 310,978
NYC HDC (Cooper Gram) 6.500 08/15/17 1,590 1,621,006
NYC HDC (Court Plaza) 6.500 08/15/17 1,213 1,237,083
NYC HDC (Crown Gardens) 7.250 01/15/19 1,646 1,723,761
NYC HDC (Esplanade Gardens) 7.000 01/15/19 3,408 3,518,127
NYC HDC (Essex) 6.500 07/15/18 87 89,217
NYC HDC (Forest Park) 6.500 12/15/17 543 553,850
NYC HDC (General Hsg.) 6.500 05/01/22 15 15,390
NYC HDC (Gouverneur Gardens) 7.034 02/15/19 1,624 1,676,208
NYC HDC (Heywood) 6.500 10/15/17 387 394,921
NYC HDC (Hudsonview) 6.500 09/15/17 4,364 4,450,388
NYC HDC (Janel) 6.500 09/15/17 1,234 1,258,885
NYC HDC (Kings Arms) 6.500 11/15/18 245 249,481
NYC HDC (Kingsbridge) 6.500 08/15/17 431 439,440
NYC HDC (Leader) 6.500 03/15/18 1,314 1,340,527
NYC HDC (Lincoln Amsterdam) 7.250 11/15/18 1,684 1,763,215
NYC HDC (Middagh) 6.500 11/15/18 221 225,840
NYC HDC (Montefiore) 6.500 10/15/17 2,893 2,950,198
NYC HDC (Multi-Family) 5.600 11/01/20 5 4,500
NYC HDC (Multi-Family) 6.500 05/01/06 80 80,866
NYC HDC (Multi-Family) 6.600 04/01/30 38,880 40,626,101
NYC HDC (Multi-Family) 7.300 06/01/10 30 35,041
NYC HDC (Multi-Family) 7.350 06/01/19 1,145 1,237,722
NYC HDC (Multi-Family) 7.500 05/01/23 1,830 1,873,060
NYC HDC (Multi-Family) 8.250 01/01/11 1,415 1,450,375
NYC HDC (Multi-Family) 9.000 05/01/22 200 208,000
NYC HDC (New Amsterdam) 6.500 08/15/18 922 940,281
NYC HDC (Residential Charter) 7.375 04/01/17 3,295 3,471,315
NYC HDC (Riverbend) 6.500 11/15/18 1,152 1,175,195
NYC HDC (Riverside Park) 7.250 11/15/18 6,338 6,638,270
NYC HDC (RNA House) 7.000 12/15/18 469 483,955
</TABLE>
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<TABLE>
<CAPTION>
Rochester Fund Municipals
Portfolio of Investments
December 31, 1995
Face Amount
Description Coupon Maturity (000) Omitted Market Value
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<S> <C> <C> <C> <C>
NYC HDC (Robert Fulton) 6.500% 12/15/17 $ 729 $ 743,365
NYC HDC (Rosalie Manning) 7.034 11/15/18 244 251,703
NYC HDC (Scott Tower) 7.000 12/15/18 648 668,901
NYC HDC (Seaview) 6.500 01/15/18 958 977,390
NYC HDC (Sky View) 6.500 11/15/18 1,787 1,823,460
NYC HDC (South Bronx) 8.100 09/01/23 3,275 3,588,254
NYC HDC (Stevenson) 6.500 05/15/18 1,816 1,852,121
NYC HDC (Stryckers Bay) 7.034 11/15/18 484 499,603
NYC HDC (St. Martin) 6.500 11/15/18 396 404,291
NYC HDC (Tivoli) 6.500 01/15/18 1,824 1,860,635
NYC HDC (Towers) 6.500 08/15/17 393 400,696
NYC HDC (Townhouse) 6.500 11/15/18 248 252,705
NYC HDC (Tri-Faith House) 7.000 01/15/19 353 364,297
NYC HDC (University) 6.500 08/15/17 1,622 1,653,622
NYC HDC (Washington Square) 7.000 01/15/19 450 464,318
NYC HDC (West Side) 6.500 11/15/17 438 447,298
NYC HDC (West Village) 6.500 11/15/13 4,986 5,145,468
NYC HDC (Westview) 6.500 10/15/17 116 118,268
NYC HDC (Woodstock Terrace) 7.034 02/15/19 600 619,052
NYS HFA (Admiral Halsey Sr. Village) 8.000 05/01/19 355 356,576
NYS HFA (Baptist Manor) 8.000 05/01/19 150 153,600
NYS HFA (Children's Rescue) 7.625 05/01/18 3,555 3,862,116
NYS HFA (Clinton Plaza) 7.625 11/01/19 1,375 1,276,358
NYS HFA (Dominican Village) 6.600 08/15/27 2,000 2,094,560
NYS HFA (Ft. Schulyer) 7.750 11/01/18 15 15,826
NYS HFA (HELP/Bronx) 7.850 05/01/99 1,040 1,110,897
NYS HFA (HELP/Bronx) 7.850 11/01/99 1,080 1,171,692
NYS HFA (HELP/Bronx) 8.050 11/01/05 13,080 14,161,324
NYS HFA (HELP/Suffolk) 8.100 11/01/05 1,210 1,307,853
NYS HFA (Henry Phipps) 8.000 05/01/18 3,620 3,715,025
NYS HFA (Keeler Park) 8.000 05/01/19 50 51,000
NYS HFA (Marble Hall) 8.000 05/01/16 5 5,050
NYS HFA (Meadow Manor) 7.750 11/01/19 10 10,210
NYS HFA (Multi-Family) 0.000 11/01/13 17,985 6,644,738
NYS HFA (Multi-Family) 0.000 11/01/17 12,695 3,558,155
NYS HFA (Multi-Family) 0.000 11/01/14 15,730 5,398,693
NYS HFA (Multi-Family) 0.000 11/01/12 15,000 5,886,600
NYS HFA (Multi-Family) 0.000 11/01/15 14,590 4,707,901
NYS HFA (Multi-Family) 6.300 08/15/26 5,000 5,204,600
NYS HFA (Multi-Family) 6.500 08/15/24 2,750 2,863,850
NYS HFA (Multi-Family) 6.700 08/15/25 11,980 12,527,486
NYS HFA (Multi-Family) 6.750 11/15/36 5,775 6,069,525
NYS HFA (Multi-Family) 6.950 08/15/12 75 79,659
NYS HFA (Multi-Family) 6.950 08/15/24 2,940 3,109,491
NYS HFA (Multi-Family) 7.050 08/15/24 5,350 5,701,281
NYS HFA (Multi-Family) 7.450 11/01/28 5,375 5,746,681
NYS HFA (Multi-Family) 10.000 11/15/25 1,025 1,050,666
NYS HFA (Multi-Family) 10.000 11/15/25 2,205 2,298,713
NYS HFA (Multi-Family) 10.000 11/15/25 370 379,380
NYS HFA (Non-Profit) 6.400 11/01/10 5 4,900
NYS HFA (Non-Profit) 6.400 11/01/13 25 24,750
NYS HFA (Non-Profit) 6.600 11/01/08 20 20,300
NYS HFA (Non-Profit) 6.600 11/01/13 20 19,960
NYS HFA (Non-Profit) 6.600 11/01/10 25 25,300
NYS HFA (Pepper Tree) 7.750 11/01/09 2,640 2,698,423
NYS HFA (Phillips Village) 7.750 08/15/17 5,000 5,624,450
NYS HFA (SE Tower) 7.750 11/01/18 425 431,991
NYS HFA (Service Contract) 6.500 03/15/25 9,195 9,747,620
NYS HFA (Service Contract) 7.700 03/15/06 150 169,316
</TABLE>
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<TABLE>
<CAPTION>
Rochester Fund Municipals
Portfolio of Investments
December 31, 1995
Face Amount
Description Coupon Maturity (000) Omitted Market Value
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<S> <C> <C> <C> <C>
NYS HFA (Shorehill Hsg.) 7.500% 05/01/08 $ 1,350 $ 1,379,592
NYS HFA (Urban Rent) 8.250 11/01/19 1,760 1,818,854
Pilgrim Village HDC 6.800 02/01/21 1,150 1,258,940
Portchester CDC (Southport) 7.300 08/01/11 60 68,408
Portchester CDC (Southport) 7.375 08/01/22 25 27,357
Puerto Rico HB&F 7.500 10/01/15 210 229,100
Puerto Rico HFA 7.300 10/01/06 10 10,966
Puerto Rico HFC 7.500 04/01/22 8,665 9,270,250
Rensselaer Hsg. Auth. (Renwyck) 7.650 01/01/11 25 28,849
Riverhead HDC 8.250 08/01/10 45 47,250
Rochester Hsg. Auth. (Crossroads) 7.700 01/01/17 20,890 22,890,426
Rochester Hsg. Auth. (Stonewood) 5.900 09/01/09 715 720,563
Scotia Hsg. Auth. (Holyrood House) 7.000 06/01/09 175 191,387
Sunnybrook EHC 11.250 12/01/14 3,100 3,284,047
Syracuse IDA (James Square) 0.000 08/01/25 50,685 9,775,616
Syracuse Senior Citizens Hsg. 8.000 12/01/10 375 394,639
Tonawanda HDC 10.000 05/01/03 25 26,125
Tonawanda Senior Citizens Hsg. 7.875 02/01/11 555 581,712
Tupper Lake HDC 8.125 10/01/10 75 78,750
Union Elderly Hsg. 10.000 04/01/13 1,890 1,946,700
Union Hsg. Auth. (Methodist Homes) 7.625 11/01/16 1,585 1,725,082
Union Hsg. Auth. (Methodist Homes) 8.050 04/01/99 105 113,312
Union Hsg. Auth. (Methodist Homes) 8.150 04/01/00 110 120,164
Union Hsg. Auth. (Methodist Homes) 8.250 04/01/01 120 130,852
Union Hsg. Auth. (Methodist Homes) 8.350 04/01/02 150 164,492
Union Hsg. Auth. (Methodist Homes) 8.500 04/01/12 2,010 2,280,988
Utica Senior Citizen Hsg. 0.000 07/01/02 25 14,774
Utica Senior Citizen Hsg. 0.000 07/01/26 2,110 225,243
V. I. HFA 8.100 12/01/18 30 34,478
White Plains HDC (Armory Plaza) 9.000 02/01/25 960 983,539
White Plains (Battle Hill) 9.875 04/01/25 30 31,500
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Health Care Albany IDA (Albany Medical Center) 8.250 08/01/04 3,065 3,307,564
13.9% Cayuga County COP (Auburn Hospital) 6.000 01/01/21 15,000 15,694,500
$299,064,252 Clifton Springs Hospital & Clinic 8.000 01/01/20 4,260 4,420,133
Erie IDA (Hospital Lease) 8.400 08/01/96 1,046 1,056,695
Erie IDA (Mercy Hospital) 6.250 06/01/10 1,355 1,375,230
Groton Community Health 7.450 07/15/21 2,095 2,382,015
Lyons Community Health 6.800 09/01/24 3,685 3,834,869
Monroe IDA (Genesee Hospital) 7.000 11/01/18 14,525 14,885,946
Newark/Wayne Community Hospital 5.875 01/15/33 4,750 4,766,340
NYC Health & Hospital 6.300 02/15/20 4,525 4,599,889
NYC Health & Hospital LEVRRS 6.662(f) 02/15/11 12,500 12,781,250
NYS Dorm (Bethel Springvale) 6.000 02/01/35 10,420 10,575,987
NYS Dorm (Brookhaven) 8.700 07/01/06 245 249,422
NYS Dorm (Cornwall Hospital) 8.750 07/01/07 885 884,920
NYS Dorm (Crouse Irving Hospital) 10.500 07/01/17 2,270 2,332,198
NYS Dorm (Department of Health) 6.625 07/01/24 250 267,248
NYS Dorm (Department of Health) 7.250 07/01/11 3,750 4,108,275
NYS Dorm (Department of Health) 7.350 08/01/29 90 95,991
NYS Dorm (Episcopal) 7.550 08/01/29 95 104,815
NYS Dorm (H&N) 5.750 07/01/14 750 750,938
NYS Dorm (KMH Homes) 6.950 08/01/31 25 26,291
NYS Dorm (Manhattan E,E&T) 11.500 07/01/09 1,170 1,199,250
NYS Dorm (Montefiore) 8.625 07/01/10 100 102,200
NYS Dorm (Presbyterian) 6.500 08/01/34 2,200 2,348,258
NYS Dorm (RGH) RITES 5.089(f) 08/15/33(c) 12,750 12,192,188
NYS Dorm (Wesley Garden) 6.125 08/01/35 2,000 2,052,880
NYS HFA (Health Facilities) 8.000 11/01/08 2,920 3,326,581
NYS HFA (H&N) 6.875 11/01/10 9 9,180
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Rochester Fund Municipals
Portfolio of Investments
December 31, 1995
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NYS HFA (H&N) 6.875% 11/01/11 $ 5 $ 5,100
NYS HFA (H&N) 7.000 11/01/17 535 545,882
NYS Medcare (Bronx Leb) 7.100 02/15/27 2,050 2,148,093
NYS Medcare (Bronx Leb) 7.100 02/15/27 4,915 5,095,725
NYS Medcare (Brookdale Hospital) 6.375 02/15/35 1,650 1,751,541
NYS Medcare (Brookdale Hospital) 6.375 08/15/34 4,000 4,228,680
NYS Medcare (Brookdale Hospital) 6.850 02/15/17 4,600 4,898,310
NYS Medcare (Central Suffolk) 6.125 11/01/16 3,310 3,265,613
NYS Medcare (Downtown Hospital) 6.800 02/15/20 2,240 2,376,282
NYS Medcare (H&N) 6.200 02/15/23 95 98,323
NYS Medcare (H&N) 6.375 08/15/33 1,000 1,068,340
NYS Medcare (H&N) 6.500 02/15/34 2,250 2,405,633
NYS Medcare (H&N) 6.600 02/15/31 250 267,748
NYS Medcare (H&N) 6.650 08/15/32 9,020 9,631,646
NYS Medcare (H&N) 7.250 02/15/12 25 26,377
NYS Medcare (H&N) 7.400 11/01/16 5,025 5,137,962
NYS Medcare (H&N) 7.700 02/15/18 45 48,711
NYS Medcare (H&N) 7.900 02/15/08 5 5,546
NYS Medcare (H&N) 8.000 02/15/97(p) 5 5,417
NYS Medcare (H&N) 9.000 02/15/26 2,120 2,170,498
NYS Medcare (H&N) 9.375 11/01/16 5,075 5,349,152
NYS Medcare (H&N) 10.000 11/01/06 4,100 4,323,573
NYS Medcare (Insured Mtg. Nursing) 9.500 01/15/24 1,040 1,055,714
NYS Medcare (Insured Mtg.) 6.450 08/15/34 4,000 4,267,560
NYS Medcare (Kingston Hospital) 8.875 11/15/17 7,220 7,394,363
NYS Medcare (Mental Health) 0.000 08/15/18 130 24,514
NYS Medcare (Mental Health) 6.500 02/15/19 190 201,362
NYS Medcare (Mental Health) 7.500 02/15/21 810 907,435
NYS Medcare (Mental Health) 7.625 08/15/17 810 919,180
NYS Medcare (Mental Health) 7.750 08/15/01(p) 240 283,044
NYS Medcare (Mental Health) 7.750 08/15/11 95 107,716
NYS Medcare (Mental Health) 7.875 08/15/15 705 775,930
NYS Medcare (Nyack) 8.200 11/01/04 3,000 3,272,910
NYS Medcare (Nyack) 8.300 11/01/13 2,835 3,110,505
NYS Medcare (N. General) 7.150 02/15/01 10 10,640
NYS Medcare (N. General) 7.350 08/15/09 4,600 4,916,112
NYS Medcare (N. General) 7.400 02/15/19 1,935 2,054,486
NYS Medcare (N. General) 10.250 01/01/24 1,485 1,535,490
NYS Medcare (Richmond) 9.125 02/15/25 425 435,153
NYS Medcare (St. Luke) IVRC 5.866(f) 02/15/29 22,000 21,670,000
NYS Medcare (St. Luke) RITES 5.089(f) 02/15/29 5,750 5,563,125
NYS Medcare (St. Luke) RITES 5.089(f) 02/15/29 8,400 8,127,000
NYS Medcare (St. Luke) RITES 5.327(f) 02/15/29 12,500 12,093,750
NYS Medcare (Vassar Brothers) 8.250 11/01/13 4,590 4,896,291
NYS Medcare (Wychoff) 7.350 08/15/11 50 55,927
NYS Medcare (Wychoff) 7.400 08/15/21 5,240 5,678,955
Oneida Healthcare Corp. 7.100 08/01/11 10 11,541
Onondaga IDA (CGH) 6.625 01/01/18 3,650 3,735,593
Onondaga IDA (Crouse Irving Hospital) 7.800 01/01/03 220 244,244
Puerto Rico ITEME (Ryder Hospital) 6.400 05/01/09 1,045 1,102,287
Puerto Rico ITEME (Ryder Hospital) 6.700 05/01/24 5,250 5,476,118
Rensselaer Municipal Leasing Corp. 6.900 06/01/24 15,000 15,831,600
Syracuse IDA (St. Joseph's Hospital) 7.500 06/01/18 3,770 4,035,860
Tompkins Health Care 5.875 02/01/33 2,800 2,809,996
Tompkins Health Care 10.800 02/01/28 25 31,618
UFA Devel. Corp. (Loretta Utica) 5.950 07/01/35 4,870 4,936,427
Valley Health Devel. 11.300 02/01/23 105 135,433
Valley Health Devel. 7.850 08/01/35 20 22,545
Westchester IDA (Beth Abraham Hospital) 8.375 12/01/25 1,870 1,942,463
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Rochester Fund Municipals
Portfolio of Investments
December 31, 1995
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Yonkers IDA (St. Joseph's Hospital) 7.500% 12/30/03 $ 1,345 $ 1,400,199
Yonkers IDA (St. Joseph's Hospital) 8.500 12/30/13 3,270 3,405,967
- ------------------------------------------------------------------------------------------------------------------------------------
Municipal Tax Lowville GO 7.200 09/15/12 100 121,069
Obligations Lowville GO 7.200 09/15/13 100 121,839
11.6% Lowville GO 7.200 09/15/07 75 87,415
$248,900,859 Lowville GO 7.200 09/15/14 100 122,570
Lowville GO 7.200 09/15/05 100 115,625
Newburgh GO 7.100 09/15/08 185 203,951
Newburgh GO 7.100 09/15/07 185 204,262
Newburgh GO 7.150 09/15/09 180 197,791
Newburgh GO 7.150 09/15/10 150 164,201
Newburgh GO 7.200 09/15/12 155 169,381
Newburgh GO 7.200 09/15/11 155 169,641
Newburgh GO 7.250 09/15/13 160 175,205
Newburgh GO 7.250 09/15/14 155 169,474
NYC GO 0.000 05/15/14 1,690 1,115,130
NYC GO 0.000 08/01/14 500 318,240
NYC GO 0.000 05/15/12 200 76,864
NYC GO 0.000 08/15/16 70 53,565
NYC GO 0.000 10/15/15 1,000 601,100
NYC GO 0.000 05/15/11 270 111,661
NYC GO 0.000 11/15/11 4,990 1,970,002
NYC GO 5.750 02/01/20 250 244,098
NYC GO 6.125 02/01/25 12,500 12,530,875
NYC GO 6.500 08/01/14 500 519,570
NYC GO 6.600 02/15/10 2,000 2,108,580
NYC GO 6.625 02/15/25 8,030 8,450,933
NYC GO 6.625 08/01/25 2,000 2,112,580
NYC GO 7.000 02/01/15 30 30,336
NYC GO 7.000 02/01/22 4,600 4,968,736
NYC GO 7.000 02/01/10 25 26,234
NYC GO 7.000 02/01/20 650 702,104
NYC GO 7.000 10/01/12 625 678,750
NYC GO 7.100 02/01/11 1,765 1,916,419
NYC GO 7.100 02/01/09 1,000 1,087,410
NYC GO 7.100 02/01/10 4,000 4,343,160
NYC GO 7.200 02/01/15 2,800 3,051,468
NYC GO 7.200 02/01/14 4,000 4,370,040
NYC GO 7.250 08/15/24 13,820 15,014,048
NYC GO 7.400 02/01/02 330 364,561
NYC GO 7.500 02/01/03 2,000 2,238,140
NYC GO 7.500 02/01/18 1,500 1,674,885
NYC GO 7.500 08/01/21 1,000 1,123,550
NYC GO 7.500 08/01/20 7,500 8,426,625
NYC GO 7.500 02/01/16 3,000 3,349,770
NYC GO 7.500 08/01/19 1,865 2,095,421
NYC GO 7.500 08/15/20 6,180 7,088,027
NYC GO 7.625 02/01/13 3,845 4,352,117
NYC GO 7.625 02/01/14 270 303,955
NYC GO 7.750 08/15/13 1,000 1,132,350
NYC GO 7.750 08/15/12 1,000 1,132,350
NYC GO 7.750 08/15/17 2,050 2,321,318
NYC GO 7.750 02/01/10 1,500 1,702,455
NYC GO 7.750 02/01/13 6,000 6,809,820
NYC GO 8.000 08/15/20 10 11,470
NYC GO 8.000 08/15/01(p) 245 294,397
NYC GO 8.000 08/01/18 45 51,582
NYC GO 8.000 08/15/01(p) 1,390 1,670,252
NYC GO 8.000 08/15/21 5 5,735
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Rochester Fund Municipals
Portfolio of Investments
December 31, 1995
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NYC GO 8.250% 08/01/01(p) $ 1,590 $ 1,924,854
NYC GO 8.250 11/15/18 240 280,169
NYC GO 8.250 11/15/15 80 93,168
NYC GO 8.250 08/01/12 40 46,331
NYC GO 8.250 11/15/01(p) 2,760 3,372,334
NYC GO 8.250 11/15/01(p) 920 1,124,111
NYC GO 8.250 08/01/14 35 40,539
NYC GO 8.250 08/01/13 30 34,748
NYC GO 8.250 11/15/20 20 23,292
NYC GO 8.250 08/01/01(p) 1,420 1,717,476
NYC GO CARS 7.520(f) 08/12/10 16,387 18,066,668
NYC GO CARS 7.520(f) 09/01/11 8,387 9,194,249
NYC GO RIBS 6.775(f) 08/01/10 4,200 4,058,250
NYC GO RIBS 6.775(f) 08/01/09 6,200 5,998,500
NYC GO RIBS 6.873(f) 08/22/13 5,400 5,197,500
NYC GO RIBS 6.873(f) 08/01/15 3,050 2,928,000
NYC GO RIBS 7.510(f) 08/08/13 13,150 13,297,938
NYC GO RITES 5.730(f) 10/01/11 15,000 16,151,400
Puerto Rico GO RITES 4.412(f) 07/01/22 1,600 1,718,000
Puerto Rico GO YCN 7.382(f) 07/01/20 11,750 12,381,563
Puerto Rico GO YCN 7.468(f) 07/01/15 1,000 1,062,500
Suffolk GO 6.375 11/01/16 725 750,658
Suffolk GO (Sewer) 6.750 08/01/10 15 15,300
V. I. Public Finance Auth. 7.125 10/01/04 1,135 1,229,194
V. I. Public Finance Auth. 7.250 10/01/18 28,725 31,218,905
V. I. Public Finance Auth. 7.375 10/01/10 1,735 1,945,820
V. I. (GO/HUGO) 7.750 10/01/06 415 456,288
- ------------------------------------------------------------------------------------------------------------------------------------
Resource Babylon IDA (Res Rec) 8.875(d) 03/01/11 1,395 627,750
Recovery, Dutchess Res Rec (Solid Waste) 6.800 01/01/10 1,700 1,791,137
Pollution Control Dutchess Res Rec (Solid Waste) 7.000 01/01/10 1,805 1,874,511
Revenue Franklin SWMA 6.125 06/01/09 2,150 2,198,483
9.9% Franklin SWMA 6.250 06/01/15 3,255 3,247,546
$212,766,534 Hemstead IDA (Resco) 7.400 12/01/10 4,110 4,281,058
Islip Res Rec 6.250 07/01/06 2,725 3,042,081
Islip Res Rec 6.500 07/01/09 2,000 2,258,740
NYS Environ. (Huntington) 7.500 10/01/12 58,860 62,744,760
Onondaga Res Rec 6.875 05/01/06 27,850 28,855,107
Onondaga Res Rec 7.000 05/01/15 68,640 71,194,094
Peekskill IDA (Karta) 9.000 07/01/10 2,024 2,130,549
Ulster County Res Rec 6.000 03/01/14 1,250 1,251,625
Warren/Washington IDA (Res Rec) 8.000 12/15/12 8,730 9,045,764
Warren/Washington IDA (Res Rec) 8.200 12/15/10 8,965 9,354,260
Warren/Washington IDA (Res Rec) 8.200 12/15/10 8,500 8,869,070
- ------------------------------------------------------------------------------------------------------------------------------------
Electric and American Samoa Power Auth. 6.800 09/01/00 400 424,100
Gas Utilities American Samoa Power Auth. 6.850 09/01/01 400 425,808
8.2% American Samoa Power Auth. 6.900 09/01/02 400 427,388
$174,808,561 American Samoa Power Auth. 6.950 09/01/03 500 535,595
American Samoa Power Auth. 7.000 09/01/04 500 537,215
American Samoa Power Auth. 7.100 09/01/01 800 860,560
American Samoa Power Auth. 7.200 09/01/02 800 867,128
Guam Power Auth. 6.750 10/01/24 4,780 5,101,551
NYS ERDA (Brooklyn Union Gas) 9.000 05/15/15 175 179,212
NYS ERDA (Brooklyn Union Gas) 7.125 12/01/20 100 104,093
NYS ERDA (Brooklyn Union Gas) 8.750 07/01/15 360 368,590
NYS ERDA (Brooklyn Union Gas) RIBS 6.951(f) 07/08/26 3,000 3,041,250
NYS ERDA (Brooklyn Union Gas) RIBS 8.295(f) 04/01/20 7,000 7,971,250
NYS ERDA (Brooklyn Union Gas) RIBS 9.481(f) 07/01/26 10,300 12,797,750
NYS ERDA (Con Ed) 6.000 03/15/28 1,920 1,990,560
NYS ERDA (Con Ed) 7.125 03/15/22 245 256,405
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Rochester Fund Municipals
Portfolio of Investments
December 31, 1995
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NYS ERDA (Con Ed) 7.250% 11/01/24 $ 8,485 $ 9,083,023
NYS ERDA (Con Ed) 7.375 07/01/24 20,500 21,969,440
NYS ERDA (Con Ed) 7.500 11/15/21 760 792,558
NYS ERDA (Con Ed) 7.500 07/01/25 25 27,332
NYS ERDA (Con Ed) 7.750 01/01/24 4,000 4,286,360
NYS ERDA (LILCO) 6.900 08/01/22 5,440 5,533,731
NYS ERDA (LILCO) 7.150 12/01/20 7,000 7,205,660
NYS ERDA (LILCO) 7.150 02/01/22 15,920 16,387,730
NYS ERDA (LILCO) 7.150 02/01/22 2,000 2,058,760
NYS ERDA (LILCO) 7.150 09/01/19 15,000 15,440,700
NYS ERDA (LILCO) 7.150 06/01/20 5,000 5,146,900
NYS ERDA (LILCO) 7.150 09/01/19 17,540 18,055,325
NYS ERDA (Niagara Power) 8.875 11/01/25 11,950 12,261,656
NYS ERDA (RG&E) 8.375 12/01/28 95 103,949
Puerto Rico Electric 6.000 07/01/14 60 58,800
Puerto Rico Electric LEVRRS 7.926(f) 07/01/23 12,800 13,472,000
V. I. Water & Power Auth. 7.400 07/01/11 6,465 7,036,183
- ------------------------------------------------------------------------------------------------------------------------------------
NonProfit, Albany IDA (Albany Rehab.) 8.375 06/01/23 1,045 1,111,023
Other Batavia Hsg. Auth. (Trocaire Place) 8.750 04/01/25 3,850 4,113,956
8.0% Beacon IDA (Craig House) 9.000 07/01/11 225 230,063
$171,476,268 Bethany Retirement Home 7.450 02/01/24 1,000 1,112,820
Brookhaven IDA (Interdisciplinary School) 8.500 12/01/04 640 693,139
Brookhaven IDA (Interdisciplinary School) 9.500 12/01/19 3,220 3,591,266
Columbia IDA (ARC) 7.750 06/01/05 820 886,518
Columbia IDA (ARC) 8.650 06/01/18 2,610 2,789,072
Columbia IDA (Berkshire Farms) 6.900 12/15/04 830 882,888
Columbia IDA (Berkshire Farms) 7.500 12/15/14 1,855 2,025,308
Geneva IDA (FLCP) 8.250 11/01/04 835 912,605
Islip IDA (Leeway School) 9.000 08/01/21 980 1,054,343
Middleton IDA (Southwinds) 8.375 03/01/18 3,740 3,785,703
Monroe IDA (Al Sigl Center) 7.250 12/15/15 1,590 1,623,660
Monroe IDA (DePaul CF) 6.450 02/01/14 880 942,260
Monroe IDA (DePaul CF) 6.500 02/01/24 1,285 1,367,497
Monroe IDA (DePaul Properties) 8.300 09/01/02 530 576,285
Monroe IDA (DePaul Properties) 8.800 09/01/21 4,605 4,932,922
Montgomery IDA (New Dimension) 8.900 05/01/16 1,130 1,238,695
Nassau IDA (ACLDD) 8.125 10/01/22 2,725 2,831,302
NYC IDA (BHMS) 8.400 09/01/02 260 269,586
NYC IDA (BHMS) 8.900 09/01/11 660 708,220
NYC IDA (BHMS) 9.200 09/01/21 1,690 1,850,584
NYC IDA (Blood Bank) 7.200 05/01/04(p) 500 580,505
NYC IDA (Blood Center) 7.250 05/01/04(p) 3,000 3,538,380
NYC IDA (Eden II) 7.750 06/01/04 490 517,572
NYC IDA (Eden II) 8.750 06/01/19 2,505 2,707,128
NYC IDA (EPG) 7.500 07/30/03 10,355 11,449,006
NYC IDA (Fund for NYC Project) 7.625 07/01/10 1,000 1,074,950
NYC IDA (Graphic Artists) 8.250 12/30/23 1,295 1,370,628
NYC IDA (Hebrew Academy) 10.000 03/01/21 2,335 2,679,623
NYC IDA (JBFS) 6.750 12/15/12 6,040 6,307,753
NYC IDA (Lighthouse) 6.500 07/01/22 1,000 1,047,160
NYC IDA (NY Hostel Co.) 6.750 01/01/04 1,300 1,320,033
NYC IDA (NY Hostel Co.) 7.600 01/01/17 4,400 4,501,992
NYC IDA (OHEL) 8.250 03/15/23 3,435 3,557,355
NYC IDA (PRFFP) 7.000 10/01/16 815 878,480
NYC IDA (Psycho Therapy) 9.625 04/01/10 780 866,026
NYC IDA (St. Christoper Ottilie) 7.500 07/01/21 4,100 4,383,966
NYC IDA (Summit School) 7.250 12/01/04 205 211,689
NYC IDA (Summit School) 8.250 12/01/24 1,485 1,547,830
NYC IDA (UN School) 6.350 12/01/15 500 501,325
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Rochester Fund Municipals
Portfolio of Investments
December 31, 1995
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Orange IDA (Glen Arden) 8.250% 01/01/02 $ 18,025 $ 18,781,149
Orange IDA (Glen Arden) 8.875 01/01/25 23,985 26,116,067
Orange IDA (Mental) 7.800 07/01/11 495 555,103
Saratoga IDA (ARC) 8.400 03/01/13 1,395 1,460,021
Schenectady IDA (ASSC) 6.400 05/01/14 500 512,870
Schenectady IDA (ASSC) 6.450 05/01/24 2,655 2,733,429
Suffolk IDA (Devel. Disabilities) 7.375 03/01/03 1,145 1,180,415
Suffolk IDA (Devel. Disabilities) 8.750 03/01/23 9,675 10,410,203
Tompkins IDA (Kendall at Ithaca) 7.625 06/01/09 925 933,334
Tompkins IDA (Kendall at Ithaca) 7.875 06/01/15 2,790 2,874,704
Tompkins IDA (Kendall at Ithaca) 7.875 06/01/24 5,465 5,545,991
Wayne IDA (ARC) 7.250 03/01/03 575 596,005
Wayne IDA (ARC) 8.375 03/01/18 2,925 3,052,676
Westchester IDA (Clearview School) 9.375 01/01/21 1,530 1,690,053
Westchester IDA (JBFS) 6.750 12/15/12 2,220 2,316,859
Yonkers IDA (Westchester) 7.375 12/30/03 475 495,805
Yonkers IDA (Westchester) 8.750 12/30/23 3,375 3,650,468
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation Albany IDA (Port of Albany) 7.250 02/01/24 1,395 1,504,856
7.6% Guam Airport 6.600 10/01/10 3,675 3,831,482
$161,940,052 Guam Airport 6.700 10/01/23 55,730 57,925,762
MTA YCR 6.675(f) 07/01/13 9,400 9,435,250
MTA YCR 6.675(f) 07/01/22 3,000 2,955,000
MTA (Transit) IVRC 5.589(f) 07/01/11 10,000 10,287,500
NYC IDA (Amer. Airlines) 6.900 08/01/24 14,185 15,462,076
NYC IDA (Amer. Airlines) 7.750 07/01/19 1,795 1,939,103
NYC IDA (Amer. Airlines) 8.000 07/01/20 7,110 7,729,423
NYC IDA (TOGA) 6.000 01/01/19 4,500 4,528,575
NYC IDA (TOGA) 6.125 01/01/24 5,000 5,070,900
NYS Thruway 0.000 01/01/03 1,000 682,860
NYS Thruway 0.000 01/01/04 2,000 1,283,300
NYS Thruway 0.000 01/01/05 260 157,490
Port Auth. NY/NJ 7.000 09/01/24 25 25,625
Port Auth. NY/NJ 0.000(c) 12/01/14 25 23,298
Port Auth. NY/NJ 7.875 03/01/24 2,025 2,090,246
Port Auth. NY/NJ (US Air) 9.000 12/01/10 475 537,458
Port Auth. NY/NJ (US Air) 9.000 12/01/06 7,005 7,913,408
Port Auth. NY/NJ (US Air) 9.125 12/01/15 22,310 25,350,184
Port Auth. NY/NJ, 76th Series 6.500 11/01/26 60 61,603
Puerto Rico IME (Amer. Airlines) 8.750 12/01/25 1,265 1,306,113
Puerto Rico Port Auth. 7.300 07/01/07 30 30,600
V. I. Port Auth. (CEK Airport) 8.100 10/01/05 1,670 1,807,942
- ------------------------------------------------------------------------------------------------------------------------------------
Government and Albany IDA (Upper Hudson Library) 8.750 05/01/22 955 1,049,421
Public Facilities Albany IDA (Upper Hudson Library) 8.750 05/01/07 240 253,550
6.6% Albany Parking Auth. 0.000 11/01/17 1,770 530,965
$140,700,760 Babylon IDA (WWH Ambulance) 7.375 09/15/08 1,330 1,450,365
Carnegie Redevelopment Corp. 7.000 09/01/21 500 528,580
Clifton Park COP (Clifton Commons) 8.500 08/01/08 15 15,600
Monroe COP 8.050 01/01/11 500 551,875
NYS COP (BOCES) 7.875 10/01/00 1,120 1,195,141
NYS COP (Hanson Redevelopment) 8.250 11/01/01 250 271,183
NYS COP (John Jay College) 7.250 08/15/07 70 72,951
NYS Dorm (Suffolk-Judicial) 9.500 04/15/14 31,550 36,815,695
NYS UDC 0.000 01/01/11 97,960 42,087,534
NYS UDC 0.000 01/01/11 80 36,438
NYS UDC 0.000 01/01/03 15 10,243
NYS UDC 0.000 01/01/09 1,250 581,625
NYS UDC 0.000 01/01/10 1,250 583,838
NYS UDC 0.000 01/01/08 900 469,737
NYS UDC 0.000 01/01/10 33,590 15,582,401
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Rochester Fund Municipals
Portfolio of Investments
December 31, 1995
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NYS UDC 7.000% 05/01/14 $ 545 $ 557,050
NYS UDC 7.500 01/01/01(p) 4,000 4,663,200
NYS UDC 7.500 07/01/00(p) 10,725 12,500,095
NYS UDC 7.500 04/01/01(p) 305 355,481
NYS UDC 7.750 01/01/01(p) 385 443,123
NYS UDC 9.375 09/01/99 555 562,881
Schroon Lake Fire District 7.250 03/01/09 606 633,785
Troy IDA (City of Troy) 8.000 03/15/12 3,250 3,506,198
Troy IDA (City of Troy) 8.000 03/15/22 13,250 14,371,878
Vigilant EHL (Thomatson) 7.500 11/01/12 950 1,019,930
- ------------------------------------------------------------------------------------------------------------------------------------
Housing, NYS (SONYMA) Mortgage, 1st Series 0.000 10/01/98 95 75,390
Single Family NYS (SONYMA) Mortgage, 1st Series 0.000 10/01/14 40 7,107
6.3% NYS (SONYMA) Mortgage, 2nd Series 0.000 10/01/14 13,260 2,280,587
$134,138,407 NYS (SONYMA) Mortgage, 5th Series 0.000 10/01/99 90 64,431
NYS (SONYMA) Mortgage, 5th Series 0.000 04/01/00 25 17,015
NYS (SONYMA) Mortgage, 5th Series 0.000 04/01/99 80 59,878
NYS (SONYMA) Mortgage, 5th Series 9.625 10/01/05 15 15,435
NYS (SONYMA) Mortgage, 5th Series 9.750 10/01/10 160 164,000
NYS (SONYMA) Mortgage, 6th Series 0.000(c) 04/01/10 2,575 2,509,569
NYS (SONYMA) Mortgage, 7th Series 0.000(c) 10/01/14 1,915 1,616,509
NYS (SONYMA) Mortgage, 8th Series A 6.875 04/01/17 115 118,421
NYS (SONYMA) Mortgage, 8th Series C 8.300 10/01/06 35 36,620
NYS (SONYMA) Mortgage, 8th Series C 8.400 10/01/17 170 178,145
NYS (SONYMA) Mortgage, 8th Series D 8.200 10/01/06 100 104,725
NYS (SONYMA) Mortgage, 8th Series E 8.100 10/01/17 80 83,760
NYS (SONYMA) Mortgage, 8th Series F 8.000 10/01/17 70 73,254
NYS (SONYMA) Mortgage, 9th Series A 7.300 04/01/17 185 191,198
NYS (SONYMA) Mortgage, 9th Series B 8.300 10/01/17 25 26,123
NYS (SONYMA) Mortgage, 9th Series E 8.375 04/01/18 20 20,989
NYS (SONYMA) Mortgage, Series 12 0.000(c) 04/01/17 680 608,348
NYS (SONYMA) Mortgage, Series 27 6.450 04/01/04 25 27,530
NYS (SONYMA) Mortgage, Series 28 7.050 10/01/23 8,615 9,172,994
NYS (SONYMA) Mortgage, Series 30-A 4.375 10/01/23 15 12,000
NYS (SONYMA) Mortgage, Series 30-B 6.650 10/01/25 14,005 14,598,392
NYS (SONYMA) Mortgage, Series 36-A 6.625 04/01/25 11,500 12,014,625
NYS (SONYMA) Mortgage, Series 38 RITES 5.766(f) 04/01/25 14,020 14,230,300
NYS (SONYMA) Mortgage, Series 40-A 6.700 04/01/25 6,435 6,759,581
NYS (SONYMA) Mortgage, Series 40-B 6.600 04/01/25 5,720 5,981,175
NYS (SONYMA) Mortgage, Series 42 6.650 04/01/26 13,600 14,244,096
NYS (SONYMA) Mortgage, Series 44 7.500 04/01/26 12,000 12,708,000
NYS (SONYMA) Mortgage, Series 46 6.650 10/01/25 3,750 3,915,638
NYS (SONYMA) Mortgage, Series 50 6.625 04/01/25 7,550 7,877,293
NYS (SONYMA) Mortgage, Series 52 6.100 04/01/26 2,000 2,014,040
NYS (SONYMA) Mortgage, Series BB-2 7.950 10/01/15 150 158,364
NYS (SONYMA) Mortgage, Series EE-1 8.000 10/01/10 45 47,326
NYS (SONYMA) Mortgage, Series EE-2 7.450 10/01/10 100 104,082
NYS (SONYMA) Mortgage, Series EE-2 7.500 04/01/16 40 42,835
NYS (SONYMA) Mortgage, Series EE-3 7.700 10/01/10 275 295,449
NYS (SONYMA) Mortgage, Series EE-3 7.750 04/01/16 15 15,760
NYS (SONYMA) Mortgage, Series EE-4 7.750 10/01/10 95 100,304
NYS (SONYMA) Mortgage, Series GG 7.600 10/01/18 20 20,600
NYS (SONYMA) Mortgage, Series GG 8.125 10/01/17 295 310,322
NYS (SONYMA) Mortgage, Series GG 8.125 04/01/20 130 135,520
NYS (SONYMA) Mortgage, Series HH-2 7.600 10/01/21 35 35,875
NYS (SONYMA) Mortgage, Series HH-2 7.700 10/01/09 430 453,500
NYS (SONYMA) Mortgage, Series HH-2 7.850 04/01/22 40 42,218
NYS (SONYMA) Mortgage, Series HH-3 7.600 10/01/21 245 255,351
NYS (SONYMA) Mortgage, Series HH-3 7.875 10/01/09 295 319,069
NYS (SONYMA) Mortgage, Series HH-3 7.950 04/01/22 490 520,429
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Rochester Fund Municipals
Portfolio of Investments
December 31, 1995
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NYS (SONYMA) Mortgage, Series HH-4 7.700% 10/01/21 $ 40 $ 42,153
NYS (SONYMA) Mortgage, Series HH-4 8.050 04/01/22 65 69,002
NYS (SONYMA) Mortgage, Series II 0.000 10/01/07 100 42,067
NYS (SONYMA) Mortgage, Series II 0.000 04/01/20 1,285 189,512
NYS (SONYMA) Mortgage, Series II 0.000 10/01/08 120 48,647
NYS (SONYMA) Mortgage, Series II 0.000 04/01/05 100 53,513
NYS (SONYMA) Mortgage, Series II 0.000 04/01/08 170 67,920
NYS (SONYMA) Mortgage, Series II 0.000 10/01/09 180 67,518
NYS (SONYMA) Mortgage, Series II 0.000 01/01/06 90 44,641
NYS (SONYMA) Mortgage, Series JJ 7.500 10/01/17 375 401,190
NYS (SONYMA) Mortgage, Series KK 7.625 04/01/19 160 167,757
NYS (SONYMA) Mortgage, Series KK 7.800 10/01/20 230 242,077
NYS (SONYMA) Mortgage, Series MM-1 7.500 04/01/13 75 78,437
NYS (SONYMA) Mortgage, Series MM-1 7.750 10/01/05 25 29,012
NYS (SONYMA) Mortgage, Series MM-2 7.700 04/01/05 100 113,182
NYS (SONYMA) Mortgage, Series NN 7.550 10/01/17 60 62,969
NYS (SONYMA) Mortgage, Series RR 7.700 10/01/10 90 94,844
NYS (SONYMA) Mortgage, Series RR 7.750 10/01/17 80 84,299
NYS (SONYMA) Mortgage, Series SS 7.500 10/01/19 380 392,274
NYS (SONYMA) Mortgage, Series TT 6.950 10/01/02 5 5,619
NYS (SONYMA) Mortgage, Series UU 7.150 10/01/22 135 137,970
NYS (SONYMA) Mortgage, Series UU 7.750 10/01/23 1,365 1,456,660
NYS (SONYMA) Mortgage, Series VV 0.000 10/01/23 115,222 14,278,310
NYS (SONYMA) Mortgage, Series VV 7.375 10/01/11 195 208,531
Puerto Rico HFA 0.000 08/01/26 8,690 1,062,961
Puerto Rico HFA 7.650 10/15/22 30 33,173
- ------------------------------------------------------------------------------------------------------------------------------------
Water and Erie County Water Revenue 4th Series 0.000 12/01/17 12,590 2,629,925
Telephone Utilities Montgomery IDA (Amsterdam) 7.250 01/15/19 5,860 6,140,108
4.5% NYC Municipal Water Finance Auth. IVRC 6.476(f) 06/15/17 30,000 32,587,500
$96,245,721 NYS Environ. (Consolidated Water) 7.150 11/01/14 1,840 1,986,832
NYS Environ. (Jamaica Water) 11.000 08/01/03 1,970 2,068,500
NYS Environ. (L.I. Water) 10.000 10/01/17 500 552,855
NYS Environ. (NYS Water Services) 8.375 01/15/20 7,500 8,400,375
Puerto Rico Telephone Auth. RIBS 6.434(f) 01/01/15 16,550 16,591,375
Puerto Rico Telephone Auth. RIBS 7.478(f) 01/01/20 10,000 10,525,000
St. Lawrence County (Solid Waste) 8.250 01/01/02 10 10,875
St. Lawrence County (Solid Waste) 8.875 01/01/08 100 109,139
Suffolk IDA (Ocean Park Water ) 7.500 11/01/22 715 781,059
V.I. Water & Power Auth. 7.600 01/01/12 6,850 7,586,992
V.I. Water & Power Auth. 8.500 01/01/10 5,700 6,275,187
- ------------------------------------------------------------------------------------------------------------------------------------
NonProfit, Allegany IDA (Alfred University) 7.500 09/01/11 10,070 11,052,429
Higher Education Brookhaven IDA (Dowling College) 6.750 03/01/23 6,965 7,328,643
3.1% Cattaraugus IDA (St. Bonaventure) 8.300 12/01/10 9,155 10,273,009
$66,487,059 Dutchess IDA (Bard College) 7.000 11/01/17 3,500 3,785,145
Erie IDA (Medaille College) 8.000 12/30/22 3,230 3,552,839
Monroe IDA (Roberts Wesleyan) 6.700 09/01/11 2,625 2,705,063
New Rochelle IDA (CNR) 6.750 07/01/22 3,000 3,218,490
NYC IDA (MMC) 7.000 07/01/23 3,700 3,889,847
NYS Dorm (City University) 7.875 07/01/00(p) 425 497,662
NYS Dorm (State University) 0.000 05/15/07 50 27,089
NYS Dorm (State University) 7.000 05/15/16 165 179,871
Puerto Rico ITEME (Polytech University) 5.700 08/01/13 5 4,750
Rockland IDA (DC) 8.000 03/01/13 2,090 2,294,841
Suffolk IDA (Dowling College) 6.625 06/01/24 2,000 2,128,400
Suffolk IDA (Dowling College) 8.250 12/01/20 980 1,106,155
University of V. I. 7.250 10/01/04 1,205 1,257,646
University of V. I. 7.700 10/01/19 3,570 3,965,128
University of V. I. 7.750 10/01/24 5,175 5,746,424
Yates IDA (Keuka College) 8.750 08/01/15 2,000 2,252,080
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Rochester Fund Municipals
Portfolio of Investments
December 31, 1995
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Yates IDA (Keuka College) 9.000% 08/01/11 $ 1,095 $ 1,221,549
- ------------------------------------------------------------------------------------------------------------------------------------
Manufacturing, Brookhaven IDA (Farber) 6.563(e) 12/01/02 870 870,000
Durable Goods Brookhaven IDA (Farber) 6.563(e) 12/01/04 490 490,000
3.0% Brookhaven IDA (Modular Devices) 7.375 11/01/96 235 238,772
$65,253,567 Broome IDA (Simulator) 8.250 01/01/02 895 961,543
Cattaraugus IDA (Cherry Creek) 9.800 09/01/10 2,045 2,264,285
Chautauqua IDA (Dunkirk Glass) 11.500 12/01/10 7,900 8,199,726
City of Port Jervis (Future Home Tech.) 10.000 11/01/08 750 754,943
Cortland IDA (Paul Bunyon Products) 8.000 07/01/00 140 152,659
Erie IDA (Great Lakes Orthodontic) 12.099 05/01/00 149 167,432
Monroe IDA (Brazill Merk) 7.900 12/15/14 3,080 3,356,615
Monroe IDA (Melles Griot) 9.500 12/01/09 1,620 1,743,541
Montgomery IDA (Breton Industries) 8.150 04/01/10 590 647,749
Nassau IDA (RJS Scientific) 8.050 12/01/05 355 381,593
Nassau IDA (RJS Scientific) 9.050 12/01/25 2,700 2,961,009
Nassau IDA (Structural Industries) 7.750 02/01/12 500 533,505
NYC IDA (Display Creations) 9.250 06/01/97(b) 2,100 2,161,194
NYC IDA (HiTech Res Rec) 8.750 08/01/00 400 426,388
NYC IDA (HiTech Res Rec) 9.250 08/01/08 695 754,965
NYC IDA (House of Spices) 9.000 10/15/01 565 623,817
NYC IDA (House of Spices) 9.250 10/15/11 2,140 2,347,773
NYC IDA (Koenig Iron Works) 8.375 12/01/25 1,675 1,697,345
NYC IDA (Nekboh) 9.625 05/01/11 6,135 6,262,547
NYC IDA (Penguin Air Conditioning) 12.222 12/01/99 222 234,597
NYC IDA (Pop Display) 6.750 12/15/04 1,260 1,289,673
NYC IDA (Pop Display) 7.900 12/15/14 2,645 2,804,758
NYC IDA (Priority Mailers) 9.000 03/01/10 1,855 2,019,353
NYC IDA (Sequins International) 8.500 04/30/00 485 516,283
NYC IDA (Sequins International) 8.950 01/30/16 4,555 5,122,781
NYC IDA (Ultimate Display) 8.750 10/15/00 365 395,302
NYC IDA (Ultimate Display) 9.000 10/15/11 1,910 2,073,133
Onondaga IDA (Coltec) 7.250 06/01/08 525 530,250
Onondaga IDA (Coltec) 9.875 10/01/10 710 736,625
Onondaga IDA (Gear Motion) 8.400 12/15/01 730 756,076
Onondaga IDA (Gear Motion) 8.900 12/15/11 1,760 1,881,774
Peekskill IDA (Wenco) 8.875 12/01/08 1,085 1,130,581
Rensselaer IDA (MMP) 8.500 12/15/02 20 21,244
Suffolk IDA (Fil-Coil) 9.000 12/01/15 445 454,612
Suffolk IDA (Fil-Coil) 9.250 12/01/25 1,060 1,082,599
Suffolk IDA (Marbar Assoc.) 8.300 03/01/08 190 199,498
Suffolk IDA (Marbar Assoc.) 8.300 03/01/09 190 196,616
Suffolk IDA (Microwave Power) 7.750 06/30/02 385 401,101
Suffolk IDA (Microwave Power) 8.500 06/30/22 4,320 4,635,922
Syracuse IDA (Piscitell Stone) 8.400 12/01/11 705 773,392
- ------------------------------------------------------------------------------------------------------------------------------------
Private Lease Albany IDA (100 State Street) 8.750 12/31/10 2,500 2,525,000
Revenue Albany IDA (Kenwood Assoc.) 9.250(d) 09/01/10 2,735 2,752,641
1.4% Broome IDA (Industrial Park) 7.550 12/01/00 190 195,700
$29,890,552 Broome IDA (Industrial Park) 7.600 12/01/01 195 200,850
Erie IDA (Air Cargo) 8.250 10/01/07 1,535 1,601,650
Erie IDA (Air Cargo) 8.500 10/01/15 2,380 2,513,780
Fulton IDA (Crossroads Incubator) 8.500 12/15/98(a) 160 162,400
Hudson IDA (Northside) 9.000 12/01/09 475 526,580
Islip IDA (WJL Realty) 7.800 03/01/03 50 54,054
Islip IDA (WJL Realty) 7.850 03/01/04 100 108,289
Islip IDA (WJL Realty) 7.900 03/01/05 100 108,472
Islip IDA (WJL Realty) 7.950 03/01/10 500 541,535
Monroe IDA (Canal Ponds) 7.000 06/15/13 900 969,921
Monroe IDA (Cottrone Devel.) 9.500 12/01/10 2,436 2,681,376
Monroe IDA (Morrell/Morrell) 7.000 12/01/07 2,284 2,342,836
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Rochester Fund Municipals
Portfolio of Investments
December 31, 1995
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Monroe IDA (West End Business) 6.750% 12/01/04 $ 625 $ 643,938
Monroe IDA (West End Business) 6.750 12/01/04 80 82,422
Monroe IDA (West End Business) 6.750 12/01/04 155 160,448
Monroe IDA (West End Business) 8.000 12/01/14 1,375 1,482,608
Monroe IDA (West End Business) 8.000 12/01/14 345 372,000
Monroe IDA (West End Business) 8.000 12/01/14 515 555,304
Monroe IDA (West End Business) 8.000 12/01/14 170 183,297
Niagara IDA (Maryland Maple) 10.250 11/15/09 1,130 1,254,571
NYC IDA (ALA Realty) 7.500 12/01/10 1,035 1,059,178
NYC IDA (ALA Realty) 8.375 12/01/15 1,450 1,487,932
Suffolk IDA (Rimland Facilities) 6.563(e) 12/01/09 1,670 1,636,600
Syracuse IDA (Rockwest Center I) 8.000 06/01/13 1,150 1,221,703
Syracuse IDA (Rockwest Center II) 7.625 12/01/10 980 986,399
Syracuse IDA (Rockwest Center II) 8.625 12/01/15 1,470 1,479,070
- ------------------------------------------------------------------------------------------------------------------------------------
Service Albany IDA (Albany Golf) 7.500 05/01/12 400 424,176
Companies Auburn IDA (Wegmans) 7.250 12/01/98 185 187,548
0.7% Dutchess IDA (Merchants Press) 7.950 06/30/02 1,800 1,809,180
$15,780,611 Dutchess IDA (Merchants Press) 9.000 06/30/22 4,590 4,628,051
Erie IDA (Affordable Hospitality) 9.250 12/01/15 3,690 3,804,796
Monroe IDA (De Carolis) 7.500 01/30/05 436 436,311
Niagara IDA (Sevenson Hotel) 6.600 05/01/07 1,900 1,954,093
NYC IDA (Loehmann's) 9.500 12/31/04 745 767,909
Syracuse IDA (Genesee Inn) 10.000(d) 05/01/05 2,701 675,183
Yonkers Parking Auth. 7.750 12/01/04 1,035 1,093,364
- ------------------------------------------------------------------------------------------------------------------------------------
Manufacturing, Herkimer IDA (Burrows Paper) 8.000 01/01/09 1,440 1,549,872
Non-Durable Monroe IDA (Cohber) 7.550 12/01/01 10 10,849
Goods Monroe IDA (Cohber) 7.650 12/01/02 10 10,791
0.5% Monroe IDA (Cohber) 7.700 12/01/03 10 10,804
$11,689,289 Monroe IDA (Cohber) 7.850 12/01/09 170 185,798
NYC IDA (Amster Novelty) 8.000 12/01/10 530 531,367
NYC IDA (Amster Novelty) 8.375 12/01/15 790 792,267
NYC IDA (Promotional Slideguide) 7.500 12/01/10 710 712,435
NYC IDA (Promotional Slideguide) 7.875 12/01/15 1,065 1,069,952
NYC IDA (Visy Paper) 7.950 01/01/28 4,000 4,092,520
Ulster IDA (Brooklyn Bottling) 7.800 06/30/02 660 690,914
Ulster IDA (Brooklyn Bottling) 8.600 06/30/22 1,915 2,031,719
- ------------------------------------------------------------------------------------------------------------------------------------
Total municipal bond investments (cost $2,027,738,427) - 100.3% $ 2,151,166,694
- ------------------------------------------------------------------------------------------------------------------------------------
Other assets and liabilities (net) - (0.3%) (5,902,737)
-------------------
Net assets at market - 100.0% $ 2,145,263,957
===================
(a) Date of mandatory put; final maturity 12/15/08. (f) Interest rate is subject to change periodically and
(b) Date of mandatory put; final maturity 06/01/08. inversely to the prevailing market rate. The interest
(c) Security will convert to a fixed coupon at a future rate shown is the rate in effect at December 31,1995.
date prior to maturity. (p) Date of pre-refunded call.
(d) Non-income accruing security.
(e) Variable rate security that fluctuates as a percentage
of prime rate.
See accompanying notes to financial statements.
</TABLE>
12
<PAGE>
Portfolio Abbreviations
To simplify the listings of Rochester Fund Municipals' holdings in the Portfolio
of Investments, we have abbreviated the descriptions of many of the securities
per the table below:
<TABLE>
<S> <C> <C> <C>
ACLDD Adults and Children with Learning IDA Industrial Development Authority
and Developmental Disabilities IME Industrial Medical and Environmental
ARC Association of Retarded Citizens ITEME Industrial Tourist Educational Medical
ASSC Annie Schaffer Senior Center and Environmental
BHMS Brooklyn Heights Montessori School IVRC Inverse Variable Rate Certificate
BOCES Board of Cooperative Educational Services JBFS Jewish Board of Family Services
CARS Complimentary Auction Rate Security LEVRRS Leveraged Reverse Rate Security
CDC Community Development Corporation L.I. Long Island
CEK Cyril E. King LILCO Long Island Lighting Corporation
CF Community Facilities MMC Marymount Manhattan College
CGH Community General Hospital MMP Millbrook Millwork Project
CNR College of New Rochelle MTA Metropolitan Transit Authority
COP Certificate of Participation PRFFP Puerto Rico Family Foundation Project
DC Dominican College Res Rec Resource Recovery Facility
EHC Elderly Housing Corporation RGH Rochester General Hospital
EHL Engine Hook and Ladder RG&E Rochester Gas & Electric
EPG Elmhurst Parking Garage RIBS Residual Interest Bonds
ERDA Energy Research and RITES Residual Interest Tax Exempt Security
Development Authority SONYMA State of New York Mortgage Agency
E,E&T Ear, Eye and Throat SWMA Solid Waste Management Authority
FLCP Finger Lakes Cerebral Palsy TOGA Terminal One Group Association
GO General Obligation UDC Urban Development Corporation
HB&F Housing Bank and Finance UFA Utica Free Academy
HDC Housing Development Corporation UN United Nations
HELP Homeless Economic Loan Program WWH Wyandach/Wheatley Heights
HFA Housing Finance Agency YCN Yield Curve Note
HFC Housing Finance Corporation YCR Yield Curve Receipt
HHRH Historic Hudson River Heritage V.I. United States Virgin Islands
H&N Hospital and Nursing
</TABLE>
================================================================================
Asset Composition Table
December 31, 1995 (Unaudited)
(As a percentage of total investments)
<TABLE>
<CAPTION>
Percentage
Rating of Investments
-------------------------
<S> <C> <C>
AAA 18.4% All unrated bonds are backed by mortgage liens and guarantees by the issuer.
AA 13.5% Bonds which are backed by a letter of credit or by other financial institutions or
A 23.2% agencies may be assigned an investment grade rating by the Investment
BBB 25.3% Policy Committee of the Board of Trustees, which reflects the quality of the
BB 5.2% guarantor, institution or agency. Unrated bonds may also be assigned a rating
B 2.3% when the issuer has rated bonds outstanding with comparable credit
CCC 0.0% characteristics which allow for rating. The unrated bonds in the portfolio are
CC 0.0% predominantly smaller issuers which have not applied for a bond rating. Only
C 0.0% those unrated bonds which subsequent to purchase have not been designated
Not Rated 12.1% investment grade are included in the "Not Rated" category. For further
----------- information see "Credit Quality" in the Prospectus.
Total 100.0%
===========
</TABLE>
13
<PAGE>
Rochester Fund Municipals
<TABLE>
<CAPTION>
====================================================================================================================================
Statement of Assets and Liabilities - December 31, 1995
<S> <C> <C> <C>
Assets Represented by
Investments at market Paid in capital $ 2,074,930,655
(Cost $2,027,738,427) $ 2,151,166,694 Undistributed net investment
Cash and cash equivalents 58,592 income 2,633,000
Interest receivable 35,911,013 Accumulated net realized loss on
Receivable for capital investment transactions (55,727,965)
shares sold 5,295,741 Net unrealized appreciation
Receivable for of investments 123,428,267
investments sold 1,107,071 ---------------
Other assets 767,512 Total - Representing net assets applicable
--------------- to capital shares outstanding $ 2,145,263,957
Total assets 2,194,306,623 ===============
--------------- Computation of net asset value and offering price
Net asset value and redemption
Liabilities price per share ($2,145,263,957
Payable for investments purchased 27,739,518 divided by 118,019,143 shares) $18.18
Payable for capital shares ===============
repurchased 2,741,660 Offering price per share (100/96 of $18.18)* $18.94
Demand note payable to Bank ===============
(Interest rate 6.5% at 12/31/95) 17,930,000
Other liabilities 631,488
---------------
Total liabilities 49,042,666 * On single retail sales of less than $100,000. On sales of $100,000
--------------- or more and on group sales the offering price is reduced.
Net Assets $ 2,145,263,957
===============
</TABLE>
================================================================================
Statement of Operations
Year Ended December 31, 1995
Investment Income:
Interest $ 141,470,850
-------------
Expenses:
Management fees 9,128,887
Distribution fees 3,452,348
Shareholder servicing agent fees 1,267,856
Accounting and auditing 668,262
Trustees' compensation 371,000
Shareholder communications 297,930
Custodian fees 238,373
Registration fees 105,396
Legal fees 68,806
Miscellaneous 116,294
Interest 630,993
-------------
Total expenses 16,346,145
Expenses paid indirectly (Note 4) (62,231)
-------------
Net expenses 16,283,914
-------------
Net investment income 125,186,936
-------------
Realized and unrealized
gain (loss) on investments:
Net realized loss on
investments (10,724,838)
Net increase in unrealized
appreciation of investments 222,374,949
-------------
Net gain on investments 211,650,111
-------------
Net increase in net assets
resulting from operations $ 336,837,047
=============
================================================================================
Statement of Changes in Net Assets
Year Ended December 31, 1995 1994
---- ----
Increase (decrease) in net assets-
Operations:
Net investment income $ 125,186,936 $ 118,882,777
Net realized loss
from security transactions (10,724,838) (40,072,783)
Increase (decrease) in unrealized
appreciation 222,374,949 (243,302,977)
--------------- ---------------
Increase (decrease) in net assets
resulting from operations 336,837,047 (164,492,983)
--------------- ---------------
Distributions to shareholders from:
Net investment income (124,417,144) (120,341,434)
--------------- ---------------
Fund share transactions:
Net proceeds from shares sold 292,964,245 476,656,393
Value of shares issued in
reinvestment of distributions 67,511,771 61,703,204
Cost of shares repurchased (218,931,015) (256,321,686)
--------------- ---------------
Increase in net assets derived
from Fund share transactions 141,545,001 282,037,911
--------------- ---------------
Increase (decrease) in net assets 353,964,904 (2,796,506)
Net assets:
Beginning of year 1,791,299,053 1,794,095,559
--------------- ---------------
End of year (including undistributed
net investment income of $2,633,000 -
1995 and $1,863,208 - 1994) $ 2,145,263,957 $ 1,791,299,053
=============== ===============
See accompanying notes to financial statements.
14
<PAGE>
Rochester Fund Municipals
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993 1992 1991
------------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $16.31 $19.00 $17.65 $17.01 $16.24
------------- ------------- ------------- ------------- ------------
Income from investment operations:
Net investment income 1.10 1.13 1.17 1.20 1.20
Net realized and unrealized gain
(loss) on investments 1.86 (2.68) 1.35 0.64 0.81
------------- ------------- ------------- ------------- ------------
Total from investment operations 2.96 (1.55) 2.52 1.84 2.01
------------- ------------- ------------- ------------- ------------
Less distributions to shareholders from:
Net investment income (1.09) (1.13) (1.17) (1.20) (1.20)
Undistributed net investment income -
prior year -- (0.01) -- -- --
Capital gains -- -- -- -- (0.04)
------------- ------------- ------------- ------------- ------------
Total distributions (1.09) (1.14) (1.17) (1.20) (1.24)
------------- ------------- ------------- ------------- ------------
Net asset value, end of year $18.18 $16.31 $19.00 $17.65 $17.01
============= ============= ============= ============= ============
Total return (excludes sales load) 18.58% (8.35%) 14.60% 11.19% 12.79%
Ratios/supplemental data:
Net assets, end of year
(000 omitted) $2,145,264 $1,791,299 $1,794,096 $997,030 $497,440
Ratio of total expenses
to average net assets 0.82%** 0.84% 0.75% 0.84% 0.87%
Ratio of total expenses (excluding
interest) to average net assets* 0.78%** 0.73% 0.64% 0.70% 0.74%
Ratio of net investment income to
average net assets 6.25% 6.43% 6.21% 6.79% 7.12%
Portfolio turnover rate 14.59% 34.39% 18.27% 29.99% 48.54%
</TABLE>
- --------------------------------------------------------------------------------
* During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on
bonds purchased with borrowed funds.
** Effective in 1995, the ratios do not include reductions from custodian
fee offset arrangements. The 1995 ratio of total expenses and the
ratio of total expenses (excluding interest) to average net assets are
0.81% and 0.78%, respectively, after including this reduction. See
Note 4.
Per share information has been determined on the basis of the
weighted average number of shares outstanding during the period.
15
<PAGE>
Rochester Fund Municipals
Notes to Financial Statements
December 31, 1995
Note 1. Significant Accounting Policies:
Rochester Fund Municipals (the "Fund"), which is organized as a business trust
under the laws of the Commonwealth of Massachusetts, conducted operations as a
closed-end investment company from December, 1982 until May 15, 1986, at which
time it commenced operations as an open-end investment company. The Fund's
investment objective is to provide as high a level of interest income exempt
from federal, New York State and New York City personal income taxes as is
consistent with prudent investing while seeking preservation of shareholders'
capital. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements:
Security valuation and transactions. Investments are valued at market value
using information available from an approved pricing service, quotations from
bond dealers, market transactions in comparable securities, and various
relationships between securities. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by the
Board of Trustees. Security transactions are accounted for on the trade date.
Cost is determined and realized gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes. Interest income is recorded on the accrual basis. In computing net
investment income, the Fund amortizes premiums and accretes original issue
discount. For municipal bonds purchased after April 30, 1993 and subsequently
sold at a gain, market discount is accreted at the time of sale (to the extent
of the lesser of the accrued market discount or the disposition gain) and is
treated as taxable income, rather than capital gain.
Securities purchased on a when issued basis. The Fund may purchase portfolio
securities on a when issued or delayed delivery basis. These securities have
been registered by a municipality or government agency, but have not been issued
to the public. The Fund may contract to purchase these securities in advance of
issuance. Delivery of the security and payment therefor may take place a month
or more after the date of the transaction. At the time of purchase, the Fund
sets aside sufficient investment securities as collateral to meet such purchase
commitments. Such securities are subject to market fluctuations during this
period. The current value of these securities is determined in the same manner
as for other portfolio securities.
Distributions to shareholders. Income distributions are declared and recorded
each day based on the projected net investment income for a period, usually one
month, calculated as if earned pro rata throughout the period on a daily basis.
Such distributions are paid monthly. Capital gain distributions, if any, are
recorded on the ex-dividend date and paid annually. The amount and character of
income and gains to be distributed are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of wash sales. Reclassifications are
made to the Fund's capital accounts to reflect income and gains available for
distribution (or available capital loss carryovers) under income tax
regulations.
Federal income taxes. During any particular year, the Fund is required to
distribute certain minimum amounts of net realized capital gains and net
investment income in order to avoid a federal income or excise tax. It is the
Fund's intention to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
taxable and tax-exempt income to shareholders. Therefore, the Fund is not
required to record a liability for either federal income or excise tax.
Concentration in New York Issuers. 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.
Other. The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
16
<PAGE>
Note 2. Management Fee and Other Transactions with Affiliated Parties:
Ronald H. Fielding, President and a trustee of the Fund, is also an officer,
director and controlling shareholder of Rochester Fund Distributors, Inc.
("RFD"), the Fund's principal underwriter and an officer, director and
controlling shareholder of Rochester Fund Services, Inc. ("RFS"), the Fund's
shareholder servicing, accounting and pricing agent. The Fund's investment
adviser is Rochester Capital Advisors, L.P. ("RCA, L.P."). RCA, L.P. is managed
by Rochester Capital Advisors, Inc. ("RCA"), which serves as the general partner
of RCA, L.P. Mr. Fielding is President, director and controlling shareholder of
RCA. See Note 6.
Effective May 1, 1995, the management fee payable to RCA, L.P. is based on an
annual rate of .54% of average daily net assets up to $100 million, .52% of
average daily net assets in excess of $100 million to $250 million, .47% of
average daily net assets in excess of $250 million to $2 billion, .46% of
average daily net assets in excess of $2 billion to $5 billion, and .45% of
average daily net assets in excess of $5 billion. For the year ended December
31, 1995, RCA, L.P. received fees of $9,128,887 for management and investment
advisory services. Prior to May 1, 1995, RCA, L.P. was entitled to receive
management fees based on an annual rate of .50% of average daily net assets up
to $100 million, .45% of average daily net assets on the next $150 million, .40%
of average daily net assets in excess of $250 million but less than $2 billion,
and .39% of average daily net assets in excess of $2 billion.
The Fund has adopted a distribution plan pursuant to Rule 12b-1 of the
Investment Company Act of 1940, as amended. Effective May 1, 1995, the
distribution plan was amended to permit the Fund to pay only a service fee of up
to .25% per annum of its average daily net assets for expenses incurred in
connection with the maintenance of shareholder accounts. Currently, the Board of
Trustees has limited the service fee to .15% per annum of average daily net
assets. Prior to May 1, 1995, the Fund's distribution plan permitted the Fund to
pay an asset based sales charge of up to .10% per annum of its average daily net
assets for certain sales related distribution expenses in addition to the
service fee. For the year ended December 31, 1995, the Fund paid distribution
fees of $3,452,348 to RFD. From this amount, RFD made service fee payments of
$2,698,619 to broker dealers and financial institutions.
For the year ended December 31, 1995, RFD, acting as an underwriter, received
$1,086,283 as its portion of the sales charge on sales of the Fund.
For the year ended December 31, 1995, RFS received $1,874,881 in shareholder
servicing agent, pricing and accounting fees from the Fund. The shareholder
servicing agent fee charged by RFS to the Fund is based on an annual maintenance
fee of $24.12 for each shareholder account. During 1995, the Fund was charged
$607,025 for pricing and accounting services.
In January, 1995, the Board of Trustees of the Fund adopted a retirement plan
for its independent trustees. Upon retirement, eligible trustees receive annual
payments based upon their years of service. The plan is not funded. In
connection with the sale of certain assets of RCA, L.P. and other affiliates to
OppenheimerFunds, Inc. (see Note 6), all but one of the independent trustees
retired effective January 4, 1996. The retirement plan expense, which is
included in trustees' compensation, amounted to $262,000 for the year ended
December 31, 1995. No payments have been made under the plan. The retirement
plan, as amended and restated on October 16, 1995, provides that no independent
trustee of the Fund who is elected after September 30, 1995 may be eligible to
receive benefits thereunder.
Note 3. Portfolio Information:
Purchases at cost and proceeds from sales of investment securities for the year
ended December 31, 1995 were $424,608,164 and $289,514,285, respectively.
The Fund held $296,376,056 in inverse floating rate municipal bonds at December
31, 1995, comprising approximately 13.82% of net assets.
During 1995, 10.86% of interest income was derived from investments in U.S.
territories which are exempt from federal, all states, and New York City income
taxes.
17
<PAGE>
Unrealized appreciation (depreciation) at December 31, 1995 based on cost of
securities for federal income tax purposes of $2,027,868,234 was:
Gross unrealized appreciation $130,385,919
Gross unrealized depreciation (7,087,459)
------------
Net unrealized appreciation $123,298,460
============
At December 31, 1995, capital loss carryovers available (to the* extent
provided in regulations) to offset future realized gains were approximately as
follows:
Year of Expiration Capital Loss Carryover
- ------------------ ----------------------
2000 $ 564,400
2001 1,954,100
2002 42,293,600
2003 10,726,200
---- -----------
$55,538,300
===========
The availability of these loss carryovers may be limited in a given year but
will be used to the extent possible to offset any future realized gains.
Note 4. Bank Borrowings and Expense Offset Arrangements:
The Fund may borrow up to 5% of its total assets from a bank to purchase
portfolio securities, or for temporary and emergency purposes. The Fund has
entered into an agreement which enables it to participate with other funds
managed by RCA, L.P. or an affiliate of RCA, L.P., in an unsecured line of
credit with a bank which permits borrowings up to $70 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the New York Interbank Offer Rate (NIBOR) plus .75%. Borrowings are payable on
demand.
The Fund had borrowings of $17,930,000 outstanding at December 31, 1995. For the
year ended December 31, 1995, the average monthly loan balance was $8,217,334 at
a weighted average interest rate of 7.592%. The maximum amount of borrowings
outstanding at any month-end was $26,550,000.
The Fund's custodian bank has agreed to reduce its fees when the Fund maintains
cash on deposit in the non-interest bearing custody account. For the year ended
December 31, 1995, custodian fee offset arrangements reduced expenses by
$62,231.
Note 5. Shares of Beneficial Interest:
The Agreement and Declaration of Trust permits the Fund to issue an unlimited
number of shares of beneficial interest, par value $.01 per share. Transactions
in Fund shares were as follows:
Year ended December 31, 1995 1994
- ----------------------- ---- ----
Shares sold 16,778,524 26,972,429
Shares issued on reinvestment of distributions 3,857,323 3,569,917
Shares repurchased (12,475,987) (15,115,012)
------------ ------------
Net increase in shares outstanding 8,159,860 15,427,334
Shares outstanding, beginning of year 109,859,283 94,431,949
------------ ------------
Shares outstanding, end of year 118,019,143 109,859,283
============ ============
Note 6. Subsequent Event:
On January 4, 1996, RCA, L.P. (the Fund's investment adviser), RFD (the Fund's
principal underwriter) and RFS (the Fund's shareholder servicing, accounting and
pricing agent) consummated a transaction with OppenheimerFunds, Inc. ("OFI"),
which resulted in the sale to OFI of certain assets of RCA, L.P., RFD and RFS,
including the transfer of the investment advisory agreement and other contracts
with the Fund and the use of the name "The Rochester Funds". This transaction
received approval by the Fund's shareholders on December 20, 1995.
18
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Trustees of Rochester Fund Municipals
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Rochester Fund Municipals (the
"Fund") at December 31, 1995, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the period
then ended, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 1995 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Rochester, New York
January 30, 1996
19
<PAGE>
[THIS PAGE LEFT INTENTIONALLY BLANK]
20
<PAGE>
FEDERAL TAX INFORMATION (Unaudited)
In early 1996, shareholders received information regarding all dividends and
distributions paid to them by the Fund during calendar year 1995. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
None of the dividends paid by the Fund during the year ended December 31, 1995
are eligible for the corporate dividend-received deduction. 99.98% of the
dividends were derived from interest on municipal bonds and are not subject to
federal, New York State and New York City income taxes. For the state income tax
reporting purposes of non-New York State shareholders, the distribution breaks
down as follows: New York State (89.14%), Guam (2.91%), Puerto Rico (4.52%),
Virgin Islands (3.24%), American Samoa (0.19%).
During 1995, 32.89% of this tax-exempt income was derived from "private activity
bonds". These are municipal bonds used to finance privately operated facilities.
The interest on these bonds is not taxable for most investors. For the few
investors subject to the alternative minimum tax, the interest from these bonds
is considered a preference item.
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.
- --------------------------------------------------------------------------------
SHAREHOLDER MEETINGS (Unaudited)
On April 25, 1995, a special meeting of shareholders was held at which the
following were approved: (a) amendment to the Investment Advisory Agreement with
Rochester Capital Advisors, L.P., (Proposal 1), (b) reclassification of the
Fund's investment policy relating to investments in other investment companies
from fundamental to non-fundamental (Proposal 2a) (c) amendment of certain of
the Fund's fundamental investment policies (Proposal No.2b). The following is a
report of the votes cast:
Proposal For Against Abstain Total
- -------- --- ------- ------- -----
Proposal 1 52,499,870 3,059,921 2,617,291 58,177,082
Proposal 2a 52,843,607 2,807,080 2,526,395 58,177,082
Proposal 2b 52,625,905 3,009,816 2,541,361 58,177,082
On December 20, 1995, a special meeting of shareholders was held at which the
following were approved: (a) new Investment Advisory Agreement with
OppenheimerFunds, Inc. (Proposal 1), (b) election of the six trustees named
below (Proposal (2), (c) new Amended and Restated Service Plan and Agreement
with OppenheimerFunds Distributor, Inc. (Proposal 3). The following is a report
of the votes cast:
Withheld/
Proposal For Against Abstain Total
- -------- --- ------- ------- -----
Proposal 1 77,239,254 2,417,481 3,189,898 82,846,633
Proposal 2
John Cannon 80,034,823 2,811,810 82,846,633
Paul Clinton 80,042,969 2,803,664 82,846,633
Thomas Courtney 80,051,323 2,795,310 82,846,633
Lacy Herrmann 80,024,843 2,821,790 82,846,633
George Loft 79,913,994 2,932,639 82,846,633
Bridget Macaskill 79,980,913 2,865,720 82,846,633
Proposal 3 76,968,671 2,442,567 3,435,395 82,846,633
<PAGE>
- --------------------------------------------------------------------------------
Rochester Fund Municipals
- --------------------------------------------------------------------------------
- ---------------------------------
The Value of Portfolio Management
- ---------------------------------
Most investors recognize that the greatest advantage of fund investing is
professional management: the devotion of an investment team to direct the fund's
portfolio, reduce the potential impact of adversity, and create an investment
with the potential to earn strong yields.
We believe that the strengths of our portfolio management support this
potential, because in addition to reviewing the broad spectrum of New York
municipal issues generally available, Rochester Fund Municipals pursues special
situations that are often overlooked by the market in general. When properly
investigated and selected for their potential, these issues not only broaden the
Fund's portfolio, but may have the potential to increase the yield as well.
Small issues often provide the Fund with significant yield contributions.
We include bonds of small issuers, many from the Upstate region, because they
typically provide higher yields than larger credits. In addition, while small
issues can be less liquid than equivalent quality large issues, issuers of
comparatively smaller debt may offer graduated payment of principal; a feature
that reduces the debt, and may reduce the volatility, on an accelerated
schedule.
Some issuers which are highly credit worthy choose to forego the expense of
obtaining a credit rating from a nationally recognized statistical rating
organization. We analyze these unrated issues to determine the true risks
involved and their value as an addition to the portfolio. In our opinion, some
of these issues offer significant yield advantages, often with no appreciable
increase in credit risk.
Evaluating these unique opportunities takes time and effort, but we believe
that, if you're paying for portfolio management, you should receive the extra
effort and resourcefulness necessary to potentially enhance the portfolio.
- --------------------------------------
The Rochester Division Investment Team
- --------------------------------------
Under the direction of Ron Fielding, the Fund's investment team is
flexible, responsive, and takes the time and effort to research new issues and
assess their value as a potential addition to the portfolio. This diligence,
when further applied to secondary market considerations, supports a management
style that maximizes the interests of the shareholders.
[PHOTOGRAPH]
Standing: Ted Everett, Rich Stein, Dan Loughran.
Seated: Tony Tanner, Ron Fielding, Mike Rosen.
Ronald H. Fielding, CFA; Chairman, Rochester Division of OppenheimerFunds,
Inc., has directed the long term investment strategies and overall composition
of the portfolio since its inception. He received his MA in Economics and his
MBA in Finance from the University of Rochester. Before establishing Rochester
Capital Advisors, L.P., the prior investment advisor to Rochester Fund
Municipals, he gained extensive banking and investment experience as an officer
of two multi-billion dollar New York State bank holding companies.
The Rochester Division investment team also includes:
Michael S. Rosen, CFA; President, Rochester Division of OppenheimerFunds,
Inc.
Anthony A. Tanner, CFA; Vice President and Assistant Portfolio Manager
Richard A. Stein, CFA; Vice President
Edward N. Everett, Assistant Vice President
Daniel G. Loughran, Junior Research Analyst
ROCHESTER FUND MUNICIPALS
<PAGE>
- --------------------------------------------------
A Broad Portfolio-Across and Within New York State
- --------------------------------------------------
As you thumb through the investment portfolio, you may notice that
Rochester Fund Municipals currently includes nearly 700 issues - a broad
spectrum of bonds from all across New York State.(1)
Portfolio holdings from around the state help to reduce the Fund's
volatility. By also considering bonds from a wide variety of industries and
different maturities, the Fund attempts to reduce the impact of adverse
conditions in any one particular sector.
[ARTWORK]
- --------------------------------------------------------------------------------
INDUSTRY CONCENTRATION
(PERCENT OF TOTAL NET ASSETS)
- --------------------------------------------------------------------------------
Housing, Multi-Family 15.0%
- --------------------------------------------------------------------------------
Health Care 13.9%
- --------------------------------------------------------------------------------
Municipal Tax Obligations 11.6%
- --------------------------------------------------------------------------------
Resource Recovery, Pollution Control Revenue 9.9%
- --------------------------------------------------------------------------------
Electric and Gas Utilities 8.2%
- --------------------------------------------------------------------------------
NonProfit, Other 8.0%
- --------------------------------------------------------------------------------
Transportation 7.6%
- --------------------------------------------------------------------------------
Government and Public Facilities 6.6%
- --------------------------------------------------------------------------------
Housing, Single Family 6.3%
- --------------------------------------------------------------------------------
Water and Telephone Utilities 4.5%
- --------------------------------------------------------------------------------
NonProfit, Higher Education 3.1%
- --------------------------------------------------------------------------------
Manufacturing, Durable Goods 3.0%
- --------------------------------------------------------------------------------
Private Lease Revenue 1.4%
- --------------------------------------------------------------------------------
Service Companies 0.7%
- --------------------------------------------------------------------------------
Manufacturing, Non-Durable Goods 0.5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MATURITY CONCENTRATION
(PERCENT OF TOTAL NET ASSETS)
- --------------------------------------------------------------------------------
Less than 1 Year 4.33%
- --------------------------------------------------------------------------------
1 to 5 Years 17.42%
- --------------------------------------------------------------------------------
5 to 10 Years 33.17%
- --------------------------------------------------------------------------------
10 to 20 Years 30.01%
- --------------------------------------------------------------------------------
20 to 30 Years 15.07%
- --------------------------------------------------------------------------------
[ARTWORK]
- -----------------------------------------------------
Municipal Bonds-Tax Free Income and Community Support
- -----------------------------------------------------
Many investors consider the advantage of a municipal bond fund like
Rochester Fund Municipals to be its potential to provide interest income free
from Federal, New York State and New York City personal income taxes. But the
reality is that municipal bonds provide for much of the infrastructure of the
communities in which we live.
We are proud that the efforts undertaken to strengthen our Rochester Fund
Municipals portfolio also provide financing for a wide variety of worthwhile
projects in New York State. Public and private colleges, primary schools for
special education and mortgages for first-time home buyers are just a few of the
programs that benefit from your investment.
1.Rochester Fund Municipals' portfolio is subject to change.
ROCHESTER FUND MUNICIPALS
<PAGE>
[ARTWORK]
- --------------------------------------------------
Why Percentage Kept is More than Percentage Earned
- --------------------------------------------------
Rochester Fund Municipals provides individual investors with the
opportunity to earn income free of Federal, New York State and New York City
personal income taxes, if applicable.(1)
Yet many investors remain unaware of how advantageous tax-free income can
be.
For example, to match the value of a 5.75% tax-free yield, a resident of
New York City in the 38.3% combined tax bracket, would have to find a taxable
investment yielding 9.32%
Your tax situation, and the specific advantages of tax-free investing, may
be different and we encourage you to develop a long range financial plan with
your financial consultant.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TAX EXEMPT VS. TAXABLE YIELDS
Effective Effective
Tax Taxable Rate Tax Taxable Rate
Bracket Needed to Equal Bracket Needed to Equal
1996 Taxable Income NYC Residents Current Tax-Free Rate NYS Residents Current Tax-Free Rate
- ------------------------------------------------------------------------------------------------------------------------------------
Single Return Joint Return 5.75% 6.25% 5.75% 6.25%
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
$16,001 - $24,000 $27,001 - $40,100 23.9% 7.56% 8.21% 21.1% 7.29% 7.92%
$24,001 - $58,150 $40,101 - $96,900 35.5% 8.91% 9.69% 33.1% 8.59% 9.34%
$58,151 - $121,300 $96,901 - $147,700 38.3% 9.32% 10.13% 35.9% 8.97% 9.75%
$121,301 - $263,750 $147,701 - $263,750 42.7% 10.03% 10.91% 40.6% 9.68% 10.52%
over $263,750 over $263,750 46.0% 10.65% 11.57% 43.9% 10.25% 11.14%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The tax information and brackets listed above are accurate at the present time.
The table assumes that an investor's highest tax bracket applies to the change
in taxable income resulting from a switch between taxable and non-taxable
investments, that the investor is not subject to the alternative minimum tax and
that state tax payments are fully deductible from Federal tax payment. Your
actual bracket will vary depending on your income, investments and deductions.
You should consult your tax advisor regarding current tax legislation and how
tax laws affect your own personal financial situation. These calculations are
for illustrative purposes only and are not intended to show the Fund's
performance.
1. A portion of the Fund's income distributions may be subject to income taxes.
Capital gains distributions, if any, are taxable as capital gains. For investors
subject to the alternative minimum tax, some of the Fund's distributions may
increase that tax.
ROCHESTER FUND MUNICIPALS
<PAGE>
- --------------------------------------------------------------------------------
Welcome to the OppenheimerFunds Family
- --------------------------------------------------------------------------------
[PHOTOGRAPH]
Bridget A. Macaskill, President
and CEO, OppenheimerFunds, Inc.
[PHOTOGRAPH]
Ronald H. Fielding
Chairman, Rochester Division
[PHOTOGRAPH]
Michael S. Rosen
President, Rochester Division
With the recent vote by shareholders to appoint OppenheimerFunds, Inc. as
the investment adviser to Rochester Fund Municipals, we are glad to welcome you
to the OppenheimerFunds family.
Let us first assure you that it is our full intention to maintain The
Rochester Funds' reputation as an innovative force in the management of New York
municipal bond funds. We continue to see Rochester Fund Municipals, with its
research-driven, "bottom-up" style, as an important option to traditionally
managed municipal bond funds, and we are pleased to say that the Fund continues
to be managed by the same portfolio management team and in the same investment
style.
At OppenheimerFunds, our goal is to provide superior investment products
and services to help investors meet their long-term financial goals. With the
completion of The Rochester Funds acquisition, we currently manage (with a
subsidiary) more than $40 billion in assets, including more than 40 mutual
funds. Now, as an Oppenheimer fund shareholder, we invite you to explore this
broad spectrum of investments designed to increase the flexibility and
diversification of your investment portfolio.
Again, all of us at OppenheimerFunds look forward to serving you and to
helping you meet your investment objectives in the years to come.
- -------------------------
OppenheimerFunds Services
- -------------------------
On or about March 11th, shareholders of Rochester Fund Municipals will be
afforded the opportunity to take advantage of the special privileges that
traditional Oppenheimer fund investors have known for years. These services,
designed to keep you in-the-know and on-the-go, are your access to current
account information, informative news, automatic investment plans and more.
o Account transactions and transfers are just a toll-free telephone call
away at 1-800-852-8457 during normal business hours. Plus, enroll in AccountLink
and use our telephone transaction feature to make investments directly from a
bank checking or savings account.
o Automated information on your account or any of the Oppenheimer funds is
available 24 hours a day, 7 days a week with OppenheimerFunds PhoneLink at
1-800-533-3310.
o Insightful information on the economy and issues that affect your
investments is available 24 hours a day on the OppenheimerFunds Information
Hotline - 1-800-835-3104.
Call our Toll-Free Customer Service today at 1-800-525-7048 for more information
on how to take advantage of your new financial relationship with the
OppenheimerFunds family.
[ARTWORK]
- --------------------------------------------------------------------------------
PLEASE NOTE: These services will be made available to
Rochester Fund Municipal shareholders beginning on or about March 11th.
- --------------------------------------------------------------------------------
ROCHESTER FUND MUNICIPALS
<PAGE>
[LOGO] ROCHESTER
FUND
MUNICIPALS
The Rochester Funds
A Division of OppenheimerFunds, Inc.
350 Linden Oaks
Rochester, New York 14625-2807
716-383-1300
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, NY 10048-0203
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, NY 10048-0203
Independent Accountants
Price Waterhouse LLP
Rochester, New York
Transfer and Shareholder
Services Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, CO 80217-5270
800-552-1129
RA0365.001.0196 February 29, 1996
This Annual Report is for the information of shareholders of Rochester Fund
Municipals. It must be preceded or accompanied by a current prospectus for the
Fund. For material information concerning the Fund, please see the prospectus.
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by the FDIC or any other agency, and involve investment risks,
including possible loss of the principal amount involved.
For free copies of a prospectus, please contact OppenheimerFunds Distributor,
Inc. at the address listed. The prospectus contains more complete information
about the Fund, including charges and expenses. Please read the prospectus
carefully before investing or sending money.
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[LOGO] OppenheimerFunds(R) ===============
OppenheimerFunds Distributor, Inc. Bulk Rate
Rochester Division US Postage
350 Linden Oaks PAID
Rochester, NY 14625-2807 Rochester, NY
Permit No. 491
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