[LOGO] ROCHESTER
FUND
MUNICIPALS
TAX-FREE INCOME FOR CAUTIOUS NEW YORK INVESTORS
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[GRAPHICS TO COME]
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Annual Report
December 31, 1996
[LOGO] OppenheimerFunds(SM)
THE RIGHT WAY TO INVEST
<PAGE>
To Fellow Shareholders
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February 8, 1997
Dear Fellow Shareholder,
We are pleased to bring you Rochester Fund Municipals' 1996 year end
review. Because this was a year in which the stock market averages surpassed
even the most bullish analyst's predictions for the year, many have forgotten
all about boring old bond funds.
Well, they may be boring, but this is one old bond fund which was able to
meet its objective of high tax-free income during the year.(1) In addition,
according to Lipper Analytical Services, Inc., Rochester Fund Municipals was the
top performing New York State municipal debt fund for the year (among 96 funds
in the category).(2) The Fund also ranked second for five-year return among 44
funds and first for ten-year return, among 22 funds.
In addition, the Fund experienced a dividend increase, from 9.1 cents to
9.2 cents per share, in April of this year. Our stated policy of attempting to
maintain as much consistency in the dividend as possible on a month-to-month
basis continues, but it is necessary sometimes to make gradual adjustments to
reflect changes in market conditions.
The 12-month distribution yield as of 12/31/96 is 6.15%.(3) For New York
City taxpayers earning more than $99,600 on joint returns ($59,750 for single
filers), this yield is equal to 9.98% on a taxable investment. Clearly,
municipal bonds continue to offer superior value to tax-weary New Yorkers.
Overall, municipal securities performed respectably for the year,
outperforming several other types of fixed income investments even before
considering their inherent tax advantage.(4) Bond prices were anything but
stable, despite the Federal Reserve Board's inaction over interest rates during
most of the year. We took advantage of the swings in the market, as we
continually do, to readjust the portfolio and enhance performance. Overall,
however, an investor's returns in 1996 were attributable mostly to income.
As we enter 1997, we believe conditions for investing in municipal bonds
should remain hospitable. Very low inflation, a benign interest rate environment
and slow economic growth seem likely to prevail. We will continue to monitor the
New York municipal market carefully in an attempt to provide our investors with
high, current tax-free income.
Thank you for your confidence.
Sincerely,
/s/ Ronald H. Fielding
Ronald H. Fielding
Portfolio Manager
1. As noted in the Fund's prospectus, the Fund's investment objective is "to
provide as high a level of income exempt from federal, New York State and
New York City personal income taxes as is consistent with its investment
policies and prudent investment management while seeking preservation of
shareholders' capital". A portion of the Fund's income may be subject to
federal, state and city income taxes. Capital gains distributions, if any,
are taxable as capital gains. For investors subject to the alternative
minimum tax, a portion of the Fund's distributions may increase that tax.
2. Based on total return as calculated by Lipper Analytical Services, Inc. for
the one, five and ten year periods ended 12/31/96. Lipper calculations do
not include sales charges, which, if included, would reduce performance
results. For more information, please turn this page to reveal the Lipper
rankings.
3. Lipper Analytical Services, Inc. distribution yield is calculated by
dividing the dividends derived from net investment income and distributions
during a stated period, by the maximum offering price on the last day of
the period, which includes the maximum initial sales charge.
4. Data Source: The Wall Street Journal, January 2, 1997
[PHOTO OF RONALD H. FIELDING]
Ronald H. Fielding, CFA;
Senior Vice President,
OppenheimerFunds, Inc.
and Chairman of the
Rochester Division
================================================
TOTAL RETURN (12/31/96)
- ------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
NAV MOP NAV MOP
- ------------------------------------------------
1 Year 5.37% 1.15%
5 Year 7.86% 6.98% 45.96% 40.12%
10 Year 8.52% 8.07% 126.44% 117.39%
================================================
For periods ending 12/31/96. NAV stands for
Net Asset Value and returns at NAV do not
reflect payment of a 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 show results of
hypothetical investments on 12/31/95,
12/31/91 and 12/31/86 and include change in
share price, assume reinvestment of dividends
and capital gains at net asset value and
reflect payment of the Fund's maximum initial
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.
================================
STANDARDIZED YIELD
For the 30 days ended 12/31/96
- --------------------------------
5.42%
================================
Standardized yield is net investment income
calculated on a yield-to-maturity basis for
the 30-day period ended 12/31/96, divided by
the maximum offering price at the end of the
period, compounded semiannually and then
annualized. Falling net asset values will
tend to artificially raise yields.
<PAGE>
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Rochester Fund Municipals
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The "Value-Added" Investment Team
[PHOTO OF ANTHONY A. TANNER]
Anthony A. Tanner, CFA; Vice President and Assistant Portfolio Manager,
Rochester Division The primary goals for our management of Rochester Fund
Municipals have always been 1) below average volatility and 2) above average
triple tax-exempt yield for New Yorkers. We select our holdings and manage our
portfolio with these goals ever in mind.
However, this alone does not make Rochester Fund Municipals unique. Nor
does it explain the degree of success we have been able to obtain for our
shareholders.
We believe that it is our investment approach that offers municipal bond
fund investors something different. For, 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, selected for their potential and included,
these issues not only broaden the Fund's portfolio, but may have the potential
to increase the yield as well.
We call this pursuit "value-added" management.
[PHOTO OF RICHARD A. STEIN]
Richard A. Stein, CFA; Vice President-Credit Analysis, Rochester Division We
analyze potentially rewarding yet unrated issues to determine both the true
risks involved and their value as an addition to the portfolio. In fact, some
issuers which are highly credit worthy actually choose to forego the expense of
obtaining a credit rating.
Our desire to review and include these issues helps us take significant
yield advantages, often with no appreciable increase in credit risk. It's a
"hands-on" level of credit research that we believe provides a safer overall
portfolio than one that defines risk solely in the terms of the ratings provided
by nationally recognized statistical rating organizations.
[PHOTO OF DANIEL G. LOUGHRAN]
Daniel G. Loughran, Research Analyst, Rochester Division Small issues can also
provide the Fund with significant yield contributions. We analyze and 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 are often more flexible in their ability to negotiate terms.
For example, we sometimes seek a graduated payment of principal, or sinking
fund payment, that reduces the debt and shortens the effective maturity of the
bond. Shortening the maturity of individual issues, without sacrificing current
yield, is another way to reduce the Fund's volatility.
[PHOTO OF MICHAEL S. ROSEN]
Michael S. Rosen, CFA; President, Rochester Division We apply our "value-added"
management style into the secondary markets as well. Our understanding of the
political and economic subtleties within New York State enables us to target
certain premium, callable bonds (that can offer significant yield advantages)
with the potential to remain outstanding long after their call date. And we
aren't above purchasing odd-lots if it can strengthen our holdings and add value
to the portfolio.
Evaluating unique investment opportunities takes time and effort, but we
hold that, if you're paying for portfolio management, even indirectly, you
should receive the extra effort and resourcefulness necessary to potentially
enhance the portfolio.
As we begin a new year, we believe Rochester Fund Municipals to be a solid,
well-balanced municipal securities portfolio. As Ron notes, it may be just a
"boring municipal bond fund", but we find that, through its somewhat unique
management style, we have created a Fund designed to seek the high yields that
benefit today's tax-conscious investor.
[GRAPHIC OMITTED]
Rochester Fund Municipals
<PAGE>
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All That New York Has To Offer
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From Lake Erie to Long Island, the diversity of New York State municipal
bonds helps the Fund's management consider a spectrum of regional holdings that,
when combined in an investment portfolio, can also reduce overall volatility.
Further, by considering bonds from a wide variety of industries and maturities,
the Fund can reduce the impact of adverse conditions in any one particular
sector.
While the sector weightings noted here are subject to change each day the
portfolio is traded, the variety of Rochester Fund Municipals' holdings (698 as
of 12/31/96) is a key component of the Fund's investment strategy.
================================
MATURITY CONCENTRATION
(PERCENT OF TOTAL NET ASSETS
AS OF 12/31/96)
- --------------------------------
Less than 1 Year 0.3%
1 to 5 Years 0.6%
5 to 10 Years 5.6%
10 to 20 Years 33.4%
20 to 30 Years 50.1%
Over 30 Years 9.7%
================================
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INDUSTRY CONCENTRATION
(PERCENT OF TOTAL NET ASSETS AS OF 12/31/96)
- --------------------------------------------
Hospital/Healthcare 13.8%
Multiple Family Housing 13.1%
General Obligation 12.9%
Electric Utilities 9.2%
Resource Recovery 9.0%
Single Family Housing 7.6%
Marine/Aviation Facilities 5.8%
Lease Rental 4.0%
Manufacturing, Durable Goods 3.3%
Water Utilities 3.1%
Higher Education 3.0%
Adult Living Facilities 2.9%
NonProfit Organizations 2.7%
Education 2.4%
Corporate Backed 1.9%
Telephone Utilities 1.4%
Manufacturing, Non-Durable Goods 1.1%
Highways, Commuter Facilities 1.1%
Gas Utilities 1.0%
Other 0.5%
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[GRAPHIC OMITTED]
Rochester Fund Municipals is listed in the 1997
edition of The 100 Best Mutual Funds You Can Buy
by Gordon K. Williamson. To be considered, all
stock and bond funds which have managers for less
than five years were excluded. Any fund that
placed in the bottom 25% of its category's risk
ranking was excluded. Third, the fund must have
performed well for the last three and five years
(ending 3/31/96). Finally, the fund must either
have had an excellent risk-adjusted return or have
had superior returns with acceptable levels of
risk. In selecting the nine municipal bond funds
listed, the author graded a universe of over 900
municipal bond funds based on risk-adjusted total
return (without sales charges) over the last five
years through 3/31/96. Past performance is not
predictive of future investment results.
==================================================
Rochester Fund Municipals is the #1 performing New
York State municipal debt fund for the 1-and
10-Year periods ended 12/31/96.
These rankings included 96 New York State
Municipal Debt Funds for the 1-year period and 22
funds for the 10-year period . Within the same
category, the Fund was also second out of 44 funds
for the 5-year period.
==================================================
Source: Lipper Analytical Services, Inc. 12/31/96,
an independent mutual fund monitoring service.
Rochester Fund Municipals is characterized by
Lipper as a New York State Municipal Debt Fund.
Lipper performance does not take sales charges
into consideration and assumes the reinvestment of
dividends and capital gains distributions. Sales
charges, if included would affect results. 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.
MORNINGSTAR
* * * * *
Source: Morningstar Mutual Funds, 12/31/96. The
5-star current ranking is a weighted average of
the Fund's 3-, 5- and 10-year rankings, which were
3, 5 and 5 stars respectively, weighted
20%/30%/50%. A total of 1129, 580 and 257
municipal bond funds were rated for the 3-, 5- and
10-year periods, respectively. Of 1739 municipal
bond funds ranked for the 1-year period, the Fund
is ranked 4 Stars. This Morning-star proprietary
rating reflects historical risk-adjusted
performance as of Dec- ember 31, 1996. The ratings
are subject to change every month.
Morningstar, Inc., an independent mutual fund
monitoring service, produces proprietary monthly
rankings of funds in broad investment categories
(domestic equity, international equity, taxable
bond, or municipal) based on risk-adjusted
investment returns, after considering sales
charges and expenses. Investment return measures a
fund's 1-, 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. Top 10%: 5 stars. Next 22.5%: 4 stars.
Middle 35%: 3 stars. Next 22.5%: 2 stars. Bottom
10%: 1 star.
Rochester Fund Municipals
<PAGE>
Rochester Fund Municipals
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Hospital/Healthcare Albany IDA (Albany Medical Center) 8.250 % 08/01/2004 $ 2,825 $ 3,015,603
13.8% Beacon IDA (Craig House) 9.000 07/01/2011 225 230,063
$318,408,582 Bethany Retirement Home 7.450 02/01/2024 1,000 1,122,490
Cayuga County COP (Auburn Hospital) 6.000 01/01/2021 8,400 8,490,132
Clifton Springs Hospital & Clinic 8.000 01/01/2020 3,870 3,988,616
Erie IDA (Mercy Hospital) 6.250 06/01/2010 1,355 1,365,122
Groton Community Health 7.450 07/15/2021 2,080 2,356,598
Lyons Community Health 6.800 09/01/2024 3,470 3,636,005
Monroe IDA (Genesee Hospital) 7.000 11/01/2018 14,525 14,612,876
Newark/Wayne Community Hospital 5.875 01/15/2033 4,750 4,789,188
NYC Health & Hospital LEVRRS 7.040 (f) 02/15/2011 26,500 26,135,625
NYS Dorm (Brookhaven Hospital) 8.700 07/01/2006 220 222,886
NYS Dorm (Cornwall Hospital) 8.750 07/01/2007 775 774,876
NYS Dorm (Department of Health) 6.625 07/01/2024 250 268,390
NYS Dorm (Department of Health) 7.250 07/01/2011 3,750 4,105,088
NYS Dorm (Department of Health) 7.350 08/01/2029 95 99,892
NYS Dorm (Episcopal Health Services) 7.550 08/01/2029 95 102,195
NYS Dorm (German Masonic Home) 5.950 08/01/2026 1,130 1,135,096
NYS Dorm (German Masonic Home) 6.000 08/01/2036 2,500 2,509,175
NYS Dorm (Grace Manor Health Care) 6.150 07/01/2018 1,000 1,025,280
NYS Dorm (Hebrew Hospital) 5.900 08/01/2036 15,535 15,553,487
NYS Dorm (Insured Mtg. Nursing) 6.125 02/01/2036 2,250 2,315,700
NYS Dorm (KMH Homes) 6.950 08/01/2031 25 26,080
NYS Dorm (L.I. Medical Center) 7.750 08/15/2027 25 26,468
NYS Dorm (Manhattan E,E&T) 11.500 07/01/2009 1,125 1,153,125
NYS Dorm (Menorah Campus) 7.300 08/01/2016 20 21,678
NYS Dorm (Montefiore Hospital) 8.625 07/01/2010 95 97,090
NYS Dorm (Presbyterian Hospital) 6.500 08/01/2034 2,200 2,325,950
NYS Dorm (RGH) RITES (e) 6.222 (f) (c) 08/01/2033 12,750 11,985,000
NYS Dorm (St. Vincent Hospital) 7.400 08/01/2030 5 5,450
NYS HFA (H&N) 6.875 11/01/2010 9 9,225
NYS HFA (H&N) 6.875 11/01/2011 5 5,103
NYS HFA (H&N) 7.000 11/01/2017 455 468,650
NYS HFA (H&N) 8.000 11/01/2000 (p) 2,420 2,772,860
NYS HFA (H&N) 8.000 11/01/2008 500 560,240
NYS Medcare 7.300 02/15/2021 5 5,506
NYS Medcare (BLH) 7.100 02/15/2027 5,300 5,414,480
NYS Medcare (BLH) 7.100 02/15/2027 2,295 2,348,221
NYS Medcare (Brookdale Hospital) 6.850 02/15/2017 4,600 4,849,090
NYS Medcare (Downtown Hospital) 6.800 02/15/2020 2,240 2,335,446
NYS Medcare (H&N) 6.200 02/15/2023 95 96,841
NYS Medcare (H&N) 6.375 08/15/2033 1,000 1,061,660
NYS Medcare (H&N) 6.500 02/15/2034 2,250 2,374,020
NYS Medcare (H&N) 6.600 02/15/2031 250 266,873
NYS Medcare (H&N) 6.650 08/15/2032 12,820 13,526,895
NYS Medcare (H&N) 7.250 02/15/2024 50 52,634
NYS Medcare (H&N) 7.250 02/15/2012 6,570 6,813,813
NYS Medcare (H&N) 7.400 11/01/2016 5,205 5,322,269
NYS Medcare (H&N) 7.625 02/15/2023 1,650 1,736,427
NYS Medcare (H&N) 7.700 02/15/2018 50 52,756
NYS Medcare (H&N) 9.000 02/15/2026 2,120 2,132,317
NYS Medcare (H&N) 9.375 11/01/2016 4,390 4,583,599
NYS Medcare (H&N) 10.000 11/01/2006 3,500 3,701,250
NYS Medcare (Insured Mtg. Nursing) 6.450 08/15/2034 4,000 4,205,920
NYS Medcare (Insured Mtg. Nursing) 6.500 11/01/2015 75 77,702
NYS Medcare (Insured Mtg. Nursing) 6.900 08/15/2034 15 16,188
NYS Medcare (Insured Mtg. Nursing) 9.500 01/15/2024 2,320 2,389,600
NYS Medcare (Kingston Hospital) 8.875 11/15/2017 7,700 7,808,339
NYS Medcare (Mental Health) 0.000 08/15/2018 145 29,120
NYS Medcare (Mental Health) 6.500 02/15/2019 190 196,490
NYS Medcare (Mental Health) 7.500 02/15/2021 810 899,505
NYS Medcare (Mental Health) 7.625 08/15/2017 805 901,689
NYS Medcare (Mental Health) 7.750 08/15/2011 95 106,562
NYS Medcare (Mental Health) 7.875 08/15/2015 705 756,444
NYS Medcare (Nyack) 8.300 11/01/98 (p) 2,835 3,096,245
</TABLE>
<PAGE>
Rochester Fund Municipals
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NYS Medcare (N. General) 7.150 02/15/2001 $ 10 $ 10,510
NYS Medcare (N. General) 7.350 08/15/2009 4,600 4,850,930
NYS Medcare (N. General) 7.400 02/15/2019 1,965 2,061,128
NYS Medcare (N. General) 10.250 01/01/2024 1,465 1,514,810
NYS Medcare (St. Charles) 6.375 08/15/2034 1,350 1,410,264
NYS Medcare (St. Charles) 6.375 02/15/2035 1,650 1,723,656
NYS Medcare (St. Luke) IVRC (e) 6.663 (f) 02/15/2029 22,000 20,845,000
NYS Medcare (St. Luke) RITES (e) 6.164 (f) 02/15/2029 12,500 11,843,750
NYS Medcare (St. Luke) RITES (e) 6.222 (f) 02/15/2029 8,400 7,959,000
NYS Medcare (St. Luke) RITES (e) 6.222 (f) 02/15/2029 10,000 9,475,000
NYS Medcare (St. Luke) RITES (e) 6.222 (f) 02/15/2029 5,750 5,448,125
NYS Medcare (Vassar Brothers) 8.250 11/01/2013 4,590 4,777,685
NYS Medcare (Wyckoff Heights Medical Center 7.350 08/15/2011 50 53,98
NYS Medcare (Wyckoff Heights Medical Center 7.400 08/15/2021 5,255 5,677,87
Oneida Healthcare Corp. 7.100 08/01/2011 10 10,733
Oneida Healthcare Corp. 7.200 08/01/2031 130 142,279
Onondaga IDA (CGH) 6.625 01/01/2018 3,650 3,748,988
Onondaga IDA (Crouse Irving Hospital) 7.800 01/01/2003 220 239,842
Puerto Rico ITEME (Ryder Hospital) 6.400 05/01/2009 1,045 1,096,121
Puerto Rico ITEME (Ryder Hospital) 6.700 05/01/2024 5,250 5,397,735
Puerto Rico TEMEC (Mennonite Hospital) 6.500 07/01/2026 3,000 3,098,640
Rensselaer Municipal Leasing Corp. 6.900 06/01/2024 15,000 15,679,650
Syracuse IDA (St. Joseph's Hospital) 7.500 06/01/2018 3,770 4,016,671
Tompkins Healthcare 5.875 02/01/2033 1,000 1,003,950
Tompkins Healthcare 10.800 02/01/2028 25 32,843
Tompkins Healthcare 10.800 02/01/2007 140 191,631
UFA Devel. Corp. (Loretto Utica) 5.950 07/01/2035 4,870 4,888,214
Valley Health Devel. 7.850 08/01/2035 20 22,305
Valley Health Devel. 11.300 02/01/2023 175 212,525
Westchester IDA (Beth Abraham Hospital) 8.375 12/01/2025 1,870 1,932,458
Yonkers IDA (St. Joseph's Hospital) 7.500 12/30/2003 1,125 1,162,541
Yonkers IDA (St. Joseph's Hospital) 8.500 12/30/2013 3,270 3,410,545
- ------------------------------------------------------------------------------------------------------------------------------------
Housing, Albany Hsg. Auth. 0.000 10/01/2002 (p) 560 144,539
Multi-Family Albany IDA (MARA Mansion Rehab.) 6.500 02/01/2023 1,715 1,742,560
13.1% Batavia Hsg. Auth. (Washington Towers) 6.500 01/01/2023 515 527,860
$302,128,643 Battery Park City Auth. 10.000 06/01/2023 700 738,500
Bayshore HDC 7.500 02/01/2023 1,470 1,570,974
Bleeker Terrace HDC 8.100 07/01/2001 35 35,700
Bleeker Terrace HDC 8.350 07/01/2004 45 45,900
Bleeker Terrace HDC 8.750 07/01/2007 900 904,158
Elmira HDC 7.500 08/01/2007 25 26,250
Guam Economic Devel. 9.375 11/01/2018 3,010 3,117,909
Guam Economic Devel. 9.500 11/01/2018 2,505 2,594,779
Hamilton Elderly Hsg. 11.250 01/01/2015 695 729,792
Macleay Hsg. (Larchmont Woods) 8.500 01/01/2031 3,950 4,271,293
Mechanicsville HDC 6.900 08/01/2022 2,500 2,638,800
Monroe HDC 7.000 08/01/2021 295 304,605
New Hartford HDC 7.375 01/01/2024 20 21,612
North Tonawanda HDC 6.800 12/15/2007 585 629,957
North Tonawanda HDC 7.375 12/15/2021 3,295 3,719,462
NYC HDC (Albert Einstein) 6.500 12/15/2017 331 332,202
NYC HDC (Amsterdam) 6.500 08/15/2018 927 927,107
NYC HDC (Atlantic Plaza) 7.034 02/15/2019 1,546 1,571,442
NYC HDC (Barclay Avenue) 6.450 04/01/2017 1,045 1,059,045
NYC HDC (Barclay Avenue) 6.600 04/01/2033 4,055 4,138,371
NYC HDC (Boulevard) 6.500 08/15/2017 2,884 2,897,237
NYC HDC (Bridgeview) 6.500 12/15/2017 496 498,305
NYC HDC (Cadman Plaza) 6.500 11/15/2018 1,331 1,336,789
NYC HDC (Cadman Plaza) 7.000 12/15/2018 520 531,564
NYC HDC (Candia) 6.500 06/15/2018 196 196,631
NYC HDC (Clinton) 6.500 07/15/2017 3,756 3,772,805
NYC HDC (Contello III) 7.000 12/15/2018 320 326,441
NYC HDC (Cooper Gram) 6.500 08/15/2017 1,558 1,565,011
NYC HDC (Court Plaza) 6.500 08/15/2017 1,189 1,194,236
NYC HDC (Crown Gardens) 7.250 01/15/2019 1,752 1,820,909
</TABLE>
<PAGE>
Rochester Fund Municipals
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NYC HDC (Esplanade Gardens) 7.000 % 01/15/2019 $ 3,616 $ 3,693,227
NYC HDC (Essex) 6.500 07/15/2018 86 86,402
NYC HDC (Forest Park) 6.500 12/15/2017 533 534,979
NYC HDC (Gouverneur Gardens) 7.034 02/15/2019 1,723 1,758,718
NYC HDC (Heywood) 6.500 10/15/2017 380 382,092
NYC HDC (Hudsonview) 6.500 09/15/2017 4,288 4,306,612
NYC HDC (Janel) 6.500 09/15/2017 1,213 1,217,858
NYC HDC (Kings Arms) 6.500 11/15/2018 240 241,279
NYC HDC (Kingsbridge) 6.500 08/15/2017 423 425,194
NYC HDC (Leader) 6.500 03/15/2018 1,292 1,298,115
NYC HDC (Lincoln Amsterdam) 7.250 11/15/2018 1,791 1,861,361
NYC HDC (Middagh) 6.500 01/15/2018 217 218,047
NYC HDC (Montefiore) 6.500 10/15/2017 2,836 2,848,529
NYC HDC (Multi-Family) 6.600 04/01/2030 38,880 40,324,781
NYC HDC (Multi-Family) 7.300 06/01/2010 30 32,562
NYC HDC (Multi-Family) 7.350 06/01/2019 1,145 1,217,627
NYC HDC (Multi-Family) 8.250 01/01/2011 1,360 1,394,000
NYC HDC (New Amsterdam) 6.500 08/15/2018 907 911,026
NYC HDC (Residential Charter) 7.375 04/01/2017 3,440 3,570,204
NYC HDC (Riverbend) 6.500 11/15/2018 1,131 1,136,591
NYC HDC (Riverside Park) 7.250 11/15/2018 6,894 7,165,990
NYC HDC (RNA House) 7.000 12/15/2018 495 505,218
NYC HDC (Robert Fulton) 6.500 12/15/2017 715 717,974
NYC HDC (Rosalie Manning) 7.034 11/15/2018 259 262,964
NYC HDC (Scott Tower) 7.000 12/15/2018 687 702,129
NYC HDC (Seaview) 6.500 01/15/2018 942 946,253
NYC HDC (Sky View) 6.500 11/15/2018 1,756 1,763,562
NYC HDC (South Bronx) 8.100 09/01/2023 3,240 3,486,110
NYC HDC (Stevenson) 6.500 05/15/2018 1,786 1,793,904
NYC HDC (Stryckers Bay) 7.034 11/15/2018 513 522,073
NYC HDC (St. Martin) 6.500 11/15/2018 389 391,010
NYC HDC (Tivoli) 6.500 01/15/2018 1,793 1,801,183
NYC HDC (Towers) 6.500 08/15/2017 386 387,706
NYC HDC (Townhouse) 6.500 01/15/2018 244 244,652
NYC HDC (Tri-Faith House) 7.000 01/15/2019 374 382,491
NYC HDC (University) 6.500 08/15/2017 1,593 1,600,205
NYC HDC (Washington Square) 7.000 01/15/2019 477 487,426
NYC HDC (West Side) 6.500 11/15/2018 431 432,605
NYC HDC (West Village) 6.500 11/15/2013 4,845 4,913,800
NYC HDC (Westview) 6.500 10/15/2017 278 279,338
NYC HDC (Woodstock Terrace) 7.034 02/15/2019 636 647,111
NYS HFA 6.125 11/01/2020 1,385 1,428,849
NYS HFA (Children's Rescue) 7.625 05/01/2018 3,555 3,803,957
NYS HFA (Dominican Village) 6.600 08/15/2027 2,000 2,084,620
NYS HFA (Fulton Manor) 6.100 11/15/2025 2,955 3,004,703
NYS HFA (HELP/Bronx) 7.850 11/01/99 1,080 1,142,726
NYS HFA (HELP/Bronx) 7.850 05/01/99 1,040 1,090,398
NYS HFA (HELP/Bronx) 8.050 11/01/2005 13,080 14,024,114
NYS HFA (HELP/Suffolk) 8.100 11/01/2005 1,210 1,278,377
NYS HFA (Meadow Manor) 7.750 11/01/2019 5 5,105
NYS HFA (Multi-Family) 0.000 11/01/2017 12,695 3,855,472
NYS HFA (Multi-Family) 0.000 11/01/2015 14,590 4,827,247
NYS HFA (Multi-Family) 0.000 11/01/2014 15,730 5,567,162
NYS HFA (Multi-Family) 6.100 11/15/2036 1,285 1,293,520
NYS HFA (Multi-Family) 6.300 08/15/2026 5,000 5,124,050
NYS HFA (Multi-Family) 6.350 08/15/2023 100 103,260
NYS HFA (Multi-Family) 6.400 11/15/2027 1,175 1,208,370
NYS HFA (Multi-Family) 6.500 08/15/2024 2,750 2,844,765
NYS HFA (Multi-Family) 6.700 08/15/2025 11,980 12,441,709
NYS HFA (Multi-Family) 6.750 11/15/2036 5,755 6,002,925
NYS HFA (Multi-Family) 6.950 08/15/2024 2,905 3,055,276
NYS HFA (Multi-Family) 6.950 08/15/2012 75 78,987
NYS HFA (Multi-Family) 7.050 08/15/2024 5,350 5,658,963
NYS HFA (Multi-Family) 7.450 11/01/2028 5,330 5,612,437
NYS HFA (NonProfit) 6.400 11/01/2010 5 4,900
</TABLE>
<PAGE>
Rochester Fund Municipals
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NYS HFA (NonProfit) 6.400 % 11/01/2013 $ 25 $ 24,750
NYS HFA (NonProfit) 6.600 11/01/2008 20 20,300
NYS HFA (NonProfit) 6.600 11/01/2013 20 19,960
NYS HFA (NonProfit) 6.600 11/01/2010 25 25,300
NYS HFA (Phillips Village) 7.750 08/15/2017 5,000 5,552,500
NYS HFA (Service Contract) 6.000 03/15/2026 2,400 2,400,744
NYS HFA (Service Contract) 6.125 03/15/2020 25 24,707
NYS HFA (Service Contract) 6.500 03/15/2025 9,265 9,825,162
NYS HFA (Service Contract) 7.700 03/15/2006 150 163,758
NYS HFA (Shorehill Hsg.) 7.500 05/01/2008 1,285 1,313,000
Pilgrim Village HDC 6.800 02/01/2021 1,115 1,149,755
Portchester CDC (Southport) 7.300 08/01/2011 60 64,194
Portchester CDC (Southport) 7.375 08/01/2022 25 26,645
Puerto Rico HB&F 7.500 10/01/2015 210 222,997
Puerto Rico HFA 7.300 10/01/2006 10 10,515
Puerto Rico HFC 7.500 04/01/2022 8,180 8,648,959
Rensselaer Hsg. Auth. (Renwyck) 7.650 01/01/2011 25 28,751
Riverhead HDC 8.250 08/01/2010 45 47,250
Rochester Hsg. Auth. (Crossroads) 7.700 01/01/2017 20,890 22,518,376
Schenectady IDA (ASSC) 6.400 05/01/2014 500 513,725
Schenectady IDA (ASSC) 6.450 05/01/2024 2,655 2,737,252
Scotia Hsg. Auth. (Holyrood House) 7.000 06/01/2009 175 189,350
Sunnybrook EHC 11.250 12/01/2014 3,045 3,225,782
Syracuse IDA (James Square) 0.000 08/01/2025 47,725 9,205,675
Syracuse Senior Citizens Hsg. 8.000 12/01/2010 375 392,906
Tonawanda HDC 10.000 05/01/2012 315 322,380
Tonawanda HDC 10.000 05/01/2011 410 419,606
Tonawanda HDC 10.000 05/01/2010 375 383,786
Tonawanda HDC 10.000 05/01/2009 340 347,966
Tonawanda HDC 10.000 05/01/2003 25 26,125
Tonawanda Senior Citizens Hsg. 7.875 02/01/2011 535 556,512
Tupper Lake HDC 8.125 10/01/2010 75 78,750
Union Elderly Hsg. 10.000 04/01/2013 2,140 2,225,600
Utica Senior Citizen Hsg. 0.000 07/01/2002 25 18,211
Utica Senior Citizen Hsg. 0.000 07/01/2026 2,460 290,870
V. I. HFA 8.100 12/01/2018 25 26,415
Watervliet Elderly Hsg. 8.000 11/15/2003 100 103,270
Watervliet Elderly Hsg. 8.000 11/15/2004 95 98,107
Watervliet Elderly Hsg. 8.000 11/15/2005 95 98,107
Watervliet Elderly Hsg. 8.000 11/15/2007 100 103,270
Watervliet Elderly Hsg. 8.000 11/15/2008 100 103,270
Watervliet Elderly Hsg. 8.000 11/15/2009 100 103,270
Watervliet Elderly Hsg. 8.000 11/15/2006 100 103,270
- ------------------------------------------------------------------------------------------------------------------------------------
General Obligation Lowville GO 7.200 09/15/2005 100 109,853
12.9% Lowville GO 7.200 09/15/2014 100 114,103
$296,640,296 Lowville GO 7.200 09/15/2007 75 83,633
Lowville GO 7.200 09/15/2013 100 113,864
Lowville GO 7.200 09/15/2012 100 113,801
Newburgh GO 7.100 09/15/2008 185 181,098
Newburgh GO 7.100 09/15/2007 185 181,317
Newburgh GO 7.150 09/15/2010 150 146,529
Newburgh GO 7.150 09/15/2009 180 176,740
Newburgh GO 7.200 09/15/2012 155 150,865
Newburgh GO 7.200 09/15/2011 155 151,278
Newburgh GO 7.250 09/15/2014 155 150,769
Newburgh GO 7.250 09/15/2013 160 156,051
NYC GO 0.000 08/01/2014 500 330,850
NYC GO 0.000 05/15/2014 1,690 1,153,949
NYC GO 0.000 08/15/2016 70 54,825
NYC GO 0.000 05/15/2011 270 116,413
NYC GO 0.000 05/15/2012 200 80,604
NYC GO 0.000 11/15/2011 4,990 2,080,381
NYC GO 5.750 02/01/2020 250 238,185
NYC GO 6.000 02/01/2011 6,000 6,023,700
NYC GO 6.000 02/15/2024 1,550 1,514,381
</TABLE>
<PAGE>
Rochester Fund Municipals
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NYC GO 6.000 % 10/15/2026 $ 8,000 $ 7,798,800
NYC GO 6.125 02/01/2025 18,500 18,351,815
NYC GO 6.500 08/01/2014 500 516,380
NYC GO 6.500 08/01/2015 2,000 2,065,520
NYC GO 6.600 02/15/2010 2,000 2,075,280
NYC GO 6.625 08/01/2025 2,000 2,070,600
NYC GO 6.625 02/15/2025 15,580 16,112,369
NYC GO 7.000 02/01/2022 4,600 4,936,490
NYC GO 7.000 02/01/2020 650 697,548
NYC GO 7.000 10/01/2012 625 674,425
NYC GO 7.000 02/01/2015 15 15,168
NYC GO 7.000 02/01/2010 20 20,551
NYC GO 7.100 02/01/2011 1,765 1,901,011
NYC GO 7.100 02/01/2010 4,000 4,308,240
NYC GO 7.100 02/01/2009 1,000 1,077,060
NYC GO 7.200 02/01/2015 2,800 3,044,832
NYC GO 7.200 02/01/2014 4,000 4,349,760
NYC GO 7.250 08/15/2001 (p) 355 396,169
NYC GO 7.250 08/15/2024 13,465 14,496,419
NYC GO 7.400 02/01/2002 330 362,168
NYC GO 7.500 08/01/2021 1,000 1,115,500
NYC GO 7.500 08/15/2020 6,180 6,995,884
NYC GO 7.500 02/01/2002 (p) 1,110 1,272,648
NYC GO 7.500 02/01/2016 1,890 2,093,440
NYC GO 7.500 08/01/2019 1,865 2,080,408
NYC GO 7.500 08/01/2001 (p) 7,500 8,366,250
NYC GO 7.500 02/01/2018 1,500 1,660,755
NYC GO 7.500 02/01/2003 2,000 2,214,820
NYC GO 7.625 02/01/2014 270 300,551
NYC GO 7.625 02/01/2013 3,845 4,280,062
NYC GO 7.750 08/15/2001 (p) 1,885 2,171,652
NYC GO 7.750 08/15/2013 750 837,315
NYC GO 7.750 08/15/2012 750 837,315
NYC GO 7.750 08/15/2001 (p) 250 287,223
NYC GO 7.750 08/15/2001 (p) 250 287,223
NYC GO 7.750 02/01/2010 1,500 1,680,825
NYC GO 7.750 02/01/2013 6,000 6,726,120
NYC GO 7.750 08/15/2017 165 184,209
NYC GO 8.000 08/15/2021 5 5,602
NYC GO 8.000 08/15/2021 245 284,457
NYC GO 8.000 08/01/2018 45 50,386
NYC GO 8.000 08/15/2020 10 11,204
NYC GO 8.250 08/01/2001 (p) 1,590 1,855,260
NYC GO 8.250 11/15/2001 (p) 2,760 3,253,378
NYC GO 8.250 08/01/2012 5 5,649
NYC GO 8.250 11/15/2018 240 274,320
NYC GO 8.250 11/15/2020 20 22,721
NYC GO 8.250 08/01/2014 35 39,541
NYC GO 8.250 11/15/2015 80 90,884
NYC GO 8.250 11/15/2001 (p) 920 1,084,459
NYC GO 8.250 08/01/2013 30 33,892
NYC GO 8.500 08/01/2013 30 30,750
NYC GO CARS 8.280 (f) 09/01/2011 8,387 8,974,090
NYC GO CARS 8.280 (f) 08/12/2010 16,387 17,636,509
NYC GO RIBS 6.977 (f) 08/01/2009 6,200 5,835,750
NYC GO RIBS 7.075 (f) 08/22/2013 5,400 4,961,250
NYC GO RIBS 7.075 (f) 08/01/2015 3,050 2,760,250
NYC GO RIBS 7.079 (f) 08/01/2010 4,200 3,927,000
NYC GO RIBS 8.107 (f) 08/01/2013 13,150 12,821,250
NYC GO RITES 7.569 (f) 10/01/2011 15,000 15,907,650
Puerto Rico GO RITES (e) 7.690 (f) 07/01/2022 1,600 1,686,000
Puerto Rico GO YCN 8.132 (f) 07/01/2020 29,000 29,870,000
Puerto Rico GO YCN (e) 4.747 (f) 07/01/2015 1,000 1,038,750
Suffolk GO 6.375 11/01/2016 725 739,225
Suffolk GO (Sewer) 6.750 08/01/2010 15 15,300
</TABLE>
<PAGE>
Rochester Fund Municipals
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Utica BANS 8.250 % 05/22/97 $ 7,000 $ 7,011,130
V. I. Public Finance Auth. 7.125 10/01/2004 1,135 1,221,805
V. I. Public Finance Auth. 7.250 10/01/2018 28,750 30,787,225
V. I. Public Finance Auth. 7.375 10/01/2010 1,735 1,895,505
V. I. (GO/HUGO) 7.750 10/01/2006 388 423,110
- ------------------------------------------------------------------------------------------------------------------------------------
Electric Utilities American Samoa Power Auth. 6.800 09/01/2000 400 419,040
9.2% American Samoa Power Auth. 6.850 09/01/2001 400 422,256
$212,477,669 American Samoa Power Auth. 6.900 09/01/2002 400 424,632
American Samoa Power Auth. 6.950 09/01/2003 500 532,105
American Samoa Power Auth. 7.000 09/01/2004 500 534,110
American Samoa Power Auth. 7.100 09/01/2001 800 852,648
American Samoa Power Auth. 7.200 09/01/2002 800 860,776
Guam Power Auth. 6.750 10/01/2024 4,780 5,035,730
NYS ERDA (Con Ed) 6.375 12/01/2027 11,000 11,373,450
NYS ERDA (Con Ed) 7.125 03/15/2022 985 1,007,468
NYS ERDA (Con Ed) 7.125 03/15/2022 3,250 3,334,175
NYS ERDA (Con Ed) 7.250 11/01/2024 15,485 16,264,205
NYS ERDA (Con Ed) 7.375 07/01/2024 27,500 28,822,200
NYS ERDA (Con Ed) 7.500 07/01/2025 325 348,169
NYS ERDA (Con Ed) 7.500 11/15/2021 1,795 1,834,723
NYS ERDA (Con Ed) 7.750 01/01/2024 6,000 6,264,480
NYS ERDA (LILCO) 7.150 02/01/2022 10,920 11,716,505
NYS ERDA (LILCO) 7.150 09/01/2019 14,810 15,853,661
NYS ERDA (LILCO) 7.150 02/01/2022 15,250 16,362,335
NYS ERDA (LILCO) 7.150 12/01/2020 11,075 11,882,811
NYS ERDA (LILCO) 7.150 06/01/2020 15,200 16,308,688
NYS ERDA (LILCO) 7.150 09/01/2019 16,515 17,719,604
NYS ERDA (NIMO) 8.875 11/01/2025 18,140 18,638,850
NYS ERDA (RG&E) 8.375 12/01/2028 120 128,179
Puerto Rico Electric 6.000 07/01/2014 60 58,800
Puerto Rico Electric LEVRRS 8.338 (f) 07/01/2023 17,800 18,578,750
V. I. Water & Power Auth. 7.400 07/01/2011 6,465 6,899,319
- ------------------------------------------------------------------------------------------------------------------------------------
Resource Recovery Dutchess Res Rec (Solid Waste) 6.800 01/01/2010 1,700 1,760,537
9.0% Dutchess Res Rec (Solid Waste) 7.000 01/01/2010 1,805 1,874,511
$208,097,231 Hempstead IDA (Amer. Ref-Fuel Co.) 7.400 12/01/2010 4,110 4,212,750
Islip Res Rec 6.250 07/01/2006 1,725 1,905,021
Islip Res Rec 6.500 07/01/2009 2,000 2,212,140
NYS Environ. (Huntington) 7.500 10/01/2012 58,860 62,283,298
Onondaga Res Rec 6.875 05/01/2006 27,850 29,124,416
Onondaga Res Rec 7.000 05/01/2015 74,035 77,518,347
Ulster County Res Rec 6.000 03/01/2014 1,250 1,219,563
Warren/Washington IDA (Res Rec) 8.000 12/15/2012 8,730 8,545,273
Warren/Washington IDA (Res Rec) 8.200 12/15/2010 8,535 8,506,408
Warren/Washington IDA (Res Rec) 8.200 12/15/2010 8,965 8,934,967
- ------------------------------------------------------------------------------------------------------------------------------------
Housing, NYS (SONYMA) Mortgage, 1st Series 0.000 10/01/2014 30 5,772
Single Family NYS (SONYMA) Mortgage, 1st Series 0.000 10/01/98 95 81,405
7.6% NYS (SONYMA) Mortgage, 2nd Series 0.000 10/01/2014 13,275 2,509,506
$175,182,518 NYS (SONYMA) Mortgage, 6th Series 9.375 04/01/2010 2,585 2,695,871
NYS (SONYMA) Mortgage, 7th Series GAINS 0.000 (c) 10/01/2014 1,255 1,158,880
NYS (SONYMA) Mortgage, 8th Series A 6.875 04/01/2017 260 265,569
NYS (SONYMA) Mortgage, 8th Series C 8.300 10/01/2006 35 36,058
NYS (SONYMA) Mortgage, 8th Series C 8.400 10/01/2017 170 173,698
NYS (SONYMA) Mortgage, 8th Series D 8.200 10/01/2006 100 103,231
NYS (SONYMA) Mortgage, 8th Series E 8.100 10/01/2017 80 82,655
NYS (SONYMA) Mortgage, 8th Series F 8.000 10/01/2017 15 15,377
NYS (SONYMA) Mortgage, 9th Series A 7.300 04/01/2017 240 245,760
NYS (SONYMA) Mortgage, 9th Series B 8.300 10/01/2017 25 25,675
NYS (SONYMA) Mortgage, 9th Series E 8.375 04/01/2018 20 20,692
NYS (SONYMA) Mortgage, Series 12 0.000 (c) 04/01/2017 790 762,927
NYS (SONYMA) Mortgage, Series 2 0.000 10/01/2014 265 50,562
NYS (SONYMA) Mortgage, Series 27 6.450 04/01/2004 25 26,654
NYS (SONYMA) Mortgage, Series 28 6.650 04/01/2022 10,000 10,390,100
NYS (SONYMA) Mortgage, Series 28 7.050 10/01/2023 8,615 9,123,888
NYS (SONYMA) Mortgage, Series 30-A 4.375 10/01/2023 15 13,125
NYS (SONYMA) Mortgage, Series 30-B 6.650 10/01/2025 16,005 16,719,783
</TABLE>
<PAGE>
Rochester Fund Municipals
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NYS (SONYMA) Mortgage, Series 36-A 6.625 % 04/01/2025 $ 11,500 $ 12,053,495
NYS (SONYMA) Mortgage, Series 38 RITES (e) 6.899 (f) 04/01/2025 13,940 14,131,675
NYS (SONYMA) Mortgage, Series 40-A 6.700 04/01/2025 6,560 6,905,581
NYS (SONYMA) Mortgage, Series 40-B 6.600 04/01/2025 5,745 6,027,252
NYS (SONYMA) Mortgage, Series 42 6.650 04/01/2026 13,600 14,321,480
NYS (SONYMA) Mortgage, Series 44 7.500 04/01/2026 11,990 12,984,690
NYS (SONYMA) Mortgage, Series 46 6.600 10/01/2019 35 36,752
NYS (SONYMA) Mortgage, Series 46 6.650 10/01/2025 24,715 26,082,975
NYS (SONYMA) Mortgage, Series 50 6.625 04/01/2025 7,535 7,950,781
NYS (SONYMA) Mortgage, Series 58 6.400 04/01/2027 6,200 6,394,618
NYS (SONYMA) Mortgage, Series BB-2 7.950 10/01/2015 150 155,646
NYS (SONYMA) Mortgage, Series EE-1 8.000 10/01/2010 45 46,900
NYS (SONYMA) Mortgage, Series EE-2 7.450 10/01/2010 95 100,241
NYS (SONYMA) Mortgage, Series EE-2 7.500 04/01/2016 40 42,314
NYS (SONYMA) Mortgage, Series EE-3 7.700 10/01/2010 270 286,543
NYS (SONYMA) Mortgage, Series EE-3 7.750 04/01/2016 15 16,010
NYS (SONYMA) Mortgage, Series EE-4 7.750 10/01/2010 95 102,184
NYS (SONYMA) Mortgage, Series HH-2 7.600 10/01/2021 40 40,900
NYS (SONYMA) Mortgage, Series HH-2 7.700 10/01/2009 410 427,097
NYS (SONYMA) Mortgage, Series HH-2 7.850 04/01/2022 40 42,652
NYS (SONYMA) Mortgage, Series HH-3 7.600 10/01/2021 15 15,511
NYS (SONYMA) Mortgage, Series HH-3 7.875 10/01/2009 285 302,981
NYS (SONYMA) Mortgage, Series HH-3 7.950 04/01/2022 490 519,542
NYS (SONYMA) Mortgage, Series HH-4 8.050 04/01/2022 65 67,425
NYS (SONYMA) Mortgage, Series II 0.000 04/01/2005 100 55,539
NYS (SONYMA) Mortgage, Series II 0.000 10/01/2009 180 70,110
NYS (SONYMA) Mortgage, Series II 0.000 10/01/2007 100 45,522
NYS (SONYMA) Mortgage, Series II 0.000 10/01/2008 120 50,530
NYS (SONYMA) Mortgage, Series II 0.000 04/01/2008 170 74,428
NYS (SONYMA) Mortgage, Series II 0.000 04/01/2006 90 46,258
NYS (SONYMA) Mortgage, Series II 0.000 04/01/2020 1,285 210,714
NYS (SONYMA) Mortgage, Series JJ 7.500 10/01/2017 425 448,107
NYS (SONYMA) Mortgage, Series KK 7.650 04/01/2019 130 138,067
NYS (SONYMA) Mortgage, Series KK 7.800 10/01/2020 255 268,143
NYS (SONYMA) Mortgage, Series MM-1 7.500 04/01/2013 80 84,629
NYS (SONYMA) Mortgage, Series MM-1 7.750 10/01/2005 25 26,640
NYS (SONYMA) Mortgage, Series MM-2 7.700 04/01/2005 100 109,261
NYS (SONYMA) Mortgage, Series NN 7.550 10/01/2017 60 63,865
NYS (SONYMA) Mortgage, Series RR 7.700 10/01/2010 105 112,766
NYS (SONYMA) Mortgage, Series RR 7.750 10/01/2017 80 85,910
NYS (SONYMA) Mortgage, Series SS 7.500 10/01/2019 250 258,068
NYS (SONYMA) Mortgage, Series TT 6.950 10/01/2002 5 5,411
NYS (SONYMA) Mortgage, Series UU 7.150 10/01/2022 100 104,270
NYS (SONYMA) Mortgage, Series UU 7.750 10/01/2023 1,365 1,442,341
NYS (SONYMA) Mortgage, Series VV 0.000 10/01/2023 115,222 16,378,807
NYS (SONYMA) Mortgage, Series VV 7.375 10/01/2011 195 208,525
Puerto Rico HFA 0.000 08/01/2026 8,690 1,164,808
Puerto Rico HFA 7.650 10/15/2022 60 64,142
V. I. HFA 6.450 03/01/2016 100 103,224
- ------------------------------------------------------------------------------------------------------------------------------------
Marine/Aviation Albany IDA (Port of Albany) 7.250 02/01/2024 1,395 1,484,601
Facilities Guam Airport 6.600 10/01/2010 3,675 3,801,494
5.8% Guam Airport 6.700 10/01/2023 60,730 62,977,617
$135,086,117 Monroe County Airport 7.250 01/01/2019 20 20,934
NYC IDA (Amer. Airlines) 6.900 08/01/2024 16,685 18,018,799
NYC IDA (Amer. Airlines) 7.750 07/01/2019 1,795 1,894,910
NYC IDA (Amer. Airlines) 8.000 07/01/2020 7,110 7,538,946
NYC IDA (Japan Airlines) 6.000 11/01/2015 3,500 3,575,530
Port Auth. NY/NJ (US Air) 9.000 12/01/2010 495 557,662
Port Auth. NY/NJ (US Air) 9.000 12/01/2006 7,025 7,914,295
Port Auth. NY/NJ (US Air) 9.125 12/01/2015 22,310 25,260,051
Port Auth. NY/NJ, 68th Series 7.250 02/15/2025 30 31,955
Port Auth. NY/NJ, 68th Series 7.250 02/15/2025 80 87,286
Port Auth. NY/NJ, 70th Series 7.250 08/01/2025 15 16,356
Port Auth. NY/NJ, 70th Series 7.250 08/01/2025 20 21,570
Port Auth. NY/NJ, 76th Series 6.500 11/01/2026 60 61,261
</TABLE>
<PAGE>
Rochester Fund Municipals
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Port Auth. NY/NJ, Series 51 0.000 % (c) 12/01/2014 $ 25 $ 24,488
Puerto Rico Port Auth. 7.300 07/01/2007 30 30,600
V. I. Port Auth. (CEK Airport) 8.100 10/01/2005 1,670 1,767,762
- ------------------------------------------------------------------------------------------------------------------------------------
Lease Rental Albany IDA (Upper Hudson Library) 8.750 05/01/2007 230 238,296
4.0% Albany IDA (Upper Hudson Library) 8.750 05/01/2022 955 1,031,419
$92,024,662 Albany Parking Auth. 0.000 11/01/2017 1,770 510,291
Babylon IDA (WWH Ambulance) 7.375 09/15/2008 1,330 1,428,859
Carnegie Redevelopment Corp. 7.000 09/01/2021 500 523,755
Clifton Park COP (Clifton Commons) 8.500 08/01/2008 10 10,422
Monroe COP 8.050 01/01/2011 480 520,190
NYS COP (BOCES) (e) 7.875 10/01/2000 1,120 1,180,995
NYS COP (Hanson Redevelopment) 8.250 11/01/2001 250 268,720
NYS Dorm (Suffolk-Judicial) 9.500 04/15/2014 31,750 37,050,663
NYS LGSC (SCSB) 7.375 12/15/2016 810 820,903
NYS UDC 0.000 01/01/2011 98,090 43,047,777
NYS UDC 0.000 01/01/2003 15 10,819
NYS UDC 0.000 01/01/2011 80 36,992
NYS UDC 0.000 01/01/2008 900 487,611
NYS UDC 7.500 01/01/2003 (p) 2,000 2,262,300
Schroon Lake Fire District (e) 7.250 03/01/2009 580 599,175
Vigilant EHL (Thomatson) 7.500 11/01/2012 950 1,005,328
Yonkers Parking Auth. 7.750 12/01/2004 950 990,147
- ------------------------------------------------------------------------------------------------------------------------------------
Manufacturing, Brookhaven IDA (Farber) 6.188 (v) 12/01/2002 870 870,000
Durable Goods Brookhaven IDA (Farber) 6.188 (v) 12/01/2004 490 490,000
3.3% Broome IDA (Simulator) 8.250 01/01/2002 775 810,921
$76,895,126 Cattaraugus IDA (Cherry Creek) 9.800 09/01/2010 1,980 2,210,987
Chautauqua IDA (Dunkirk Glass) 11.500 12/01/2010 7,900 8,501,427
City of Port Jervis (Future Home Tech.) 10.000 11/01/2008 720 752,940
Cortland IDA (Paul Bunyon Products) 8.000 07/01/2000 120 125,996
Erie IDA (Great Lakes Orthodontic) 12.099 05/01/2000 115 123,414
Monroe IDA (Brazill Merk) 7.900 12/15/2014 3,080 3,301,113
Monroe IDA (Melles Griot) 9.500 12/01/2009 1,560 1,627,907
Monroe IDA (RTM Turbine) 7.750 12/01/2006 3,490 3,508,148
Monroe IDA (RTM Turbine) 8.000 12/01/2011 3,060 3,117,436
Monroe IDA (RTM Turbine) 8.500 12/01/2016 770 805,174
Nassau IDA (RJS Scientific) 8.050 12/01/2005 330 355,697
Nassau IDA (RJS Scientific) 9.050 12/01/2025 2,700 2,979,315
Nassau IDA (Structural Industries) 7.750 02/01/2012 500 537,260
NYC IDA (Display Creations) 9.250 06/01/97 (b) 2,000 2,014,600
NYC IDA (HiTech Res Rec) 8.750 08/01/2000 320 335,107
NYC IDA (HiTech Res Rec) 9.250 08/01/2008 695 728,701
NYC IDA (House of Spices) 9.000 10/15/2001 490 534,281
NYC IDA (House of Spices) 9.250 10/15/2011 2,140 2,358,301
NYC IDA (Koenig Iron Works) 8.375 12/01/2025 1,675 1,785,031
NYC IDA (Nekboh) 9.625 05/01/2011 5,955 6,314,563
NYC IDA (Novelty Cord & Tassel) 8.663 (v) 12/01/2006 645 655,863
NYC IDA (Penguin Air Conditioning) 12.222 12/01/99 165 172,597
NYC IDA (Pop Display) 6.750 12/15/2004 1,150 1,163,961
NYC IDA (Pop Display) 7.900 12/15/2014 2,645 2,765,982
NYC IDA (Priority Mailers) 9.000 03/01/2010 1,795 1,956,460
NYC IDA (Sequins International) 8.500 04/30/2000 405 433,172
NYC IDA (Sequins International) 8.950 01/30/2016 4,555 5,081,467
NYC IDA (Ultimate Display) 8.750 10/15/2000 305 326,036
NYC IDA (Ultimate Display) 9.000 10/15/2011 1,910 2,077,431
Onondaga IDA (Coltec) 7.250 06/01/2008 535 540,350
Onondaga IDA (Coltec) 9.875 10/01/2010 750 778,125
Onondaga IDA (Gear Motion) 8.400 12/15/2001 610 627,818
Onondaga IDA (Gear Motion) 8.900 12/15/2011 1,700 1,827,908
Peekskill IDA (Wenco) 8.875 12/01/2008 1,035 1,067,561
Rensselaer IDA (MMP) 8.500 12/15/2002 30 31,056
Suffolk IDA (Fil-Coil) 9.000 12/01/2015 445 460,495
Suffolk IDA (Fil-Coil) 9.250 12/01/2025 1,060 1,104,456
Suffolk IDA (Marbar Assoc.) 8.300 03/01/2009 190 196,213
Suffolk IDA (Marbar Assoc.) 8.300 03/01/2008 190 197,600
Suffolk IDA (Microwave Power) 7.750 06/30/2002 345 357,851
</TABLE>
<PAGE>
Rochester Fund Municipals
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Suffolk IDA (Microwave Power) 8.500 % 06/30/2022 $ 4,320 $ 4,593,024
Suffolk IDA (Wireless Boulevard Realty) 7.875 12/01/2012 1,410 1,423,437
Suffolk IDA (Wireless Boulevard Realty) 8.625 12/01/2026 4,005 4,129,596
Syracuse IDA (Piscitell Stone) 8.400 12/01/2011 685 738,348
- ------------------------------------------------------------------------------------------------------------------------------------
Water Utilities Erie County Water Revenue, 4th Series 0.000 12/01/2017 13,590 3,041,714
3.1% NYC Municipal Water Finance Auth. IRS 6.715 (f) 06/15/2013 12,500 11,828,125
$70,334,005 NYC Municipal Water Finance Auth. IVRC (e) 7.492 (f) 06/15/2017 30,000 30,712,500
NYS Environ. (Consolidated Water) 7.150 11/01/2014 1,840 1,956,454
NYS Environ. (L.I. Water) 10.000 10/01/2017 500 526,800
NYS Environ. (NYS Water Services) 8.375 01/15/2020 7,500 8,235,300
Suffolk IDA (Ocean Park Water ) 7.500 11/01/2022 715 770,241
V.I. Water & Power Auth. 7.600 01/01/2012 6,850 7,394,096
V.I. Water & Power Auth. 8.500 01/01/2010 5,500 5,868,775
- ------------------------------------------------------------------------------------------------------------------------------------
Higher Education Allegany IDA (Alfred University) 7.500 09/01/2011 10,070 10,909,939
3.0% Brookhaven IDA (Dowling College) 6.750 03/01/2023 6,965 7,267,978
$70,081,514 Cattaraugus IDA (St. Bonaventure) 8.300 12/01/2010 8,825 9,722,061
Dutchess IDA (Bard College) 7.000 11/01/2017 3,500 3,785,285
Erie IDA (Medaille College) 8.000 12/30/2022 3,230 3,501,772
Monroe IDA (Roberts Wesleyan) 6.700 09/01/2011 2,625 2,672,749
New Rochelle IDA (CNR) 6.750 07/01/2022 3,000 3,113,250
NYC IDA (MMC) 7.000 07/01/2023 3,600 3,745,908
NYS Dorm (City University) 6.000 07/01/2026 3,350 3,351,374
NYS Dorm (State University) 0.000 05/15/2007 50 27,533
NYS Dorm (State University) 7.000 05/15/2016 225 243,358
Puerto Rico ITEME (Polytech University) 5.700 08/01/2013 5 4,745
Rockland IDA (DC) 8.000 03/01/2013 2,090 2,260,022
Suffolk IDA (Dowling College) 6.625 06/01/2024 2,000 2,081,500
Suffolk IDA (Dowling College) 6.700 12/01/2020 1,870 1,926,362
Suffolk IDA (Dowling College) 8.250 12/01/2000 (p) 965 1,107,820
University of V. I. 7.250 10/01/2004 1,205 1,287,892
University of V. I. 7.700 10/01/2019 3,570 3,926,822
University of V. I. 7.750 10/01/2024 5,175 5,691,155
Yates IDA (Keuka College) 8.750 08/01/2015 1,960 2,236,360
Yates IDA (Keuka College) 9.000 08/01/2011 1,095 1,217,629
- ------------------------------------------------------------------------------------------------------------------------------------
Adult Living Batavia Hsg. Auth. (Trocaire Place) 8.750 04/01/2025 3,850 4,072,030
Facilities Middleton IDA (Southwinds) 8.375 03/01/2018 3,740 3,803,243
2.9% Orange IDA (Glen Arden) 8.250 01/01/2002 18,025 18,578,187
$67,130,572 Orange IDA (Glen Arden) 8.875 01/01/2025 23,985 25,884,852
Tompkins IDA (Kendall at Ithaca) 7.625 06/01/2009 925 935,721
Tompkins IDA (Kendall at Ithaca) 7.875 06/01/2024 5,465 5,573,262
Tompkins IDA (Kendall at Ithaca) 7.875 06/01/2015 2,790 2,858,690
Union Hsg. Auth. (Methodist Homes) 7.625 11/01/2016 2,470 2,662,586
Union Hsg. Auth. (Methodist Homes) 8.050 04/01/99 105 110,921
Union Hsg. Auth. (Methodist Homes) 8.150 04/01/2000 110 116,889
Union Hsg. Auth. (Methodist Homes) 8.250 04/01/2001 120 127,660
Union Hsg. Auth. (Methodist Homes) 8.350 04/01/2002 150 159,753
Union Hsg. Auth. (Methodist Homes) 8.500 04/01/2012 2,010 2,246,778
- ------------------------------------------------------------------------------------------------------------------------------------
NonProfit Albany IDA (Albany Rehab.) 8.375 06/01/2023 1,035 1,084,307
Organization Columbia IDA (Berkshire Farms) 6.900 12/15/2004 760 796,769
2.7% Columbia IDA (Berkshire Farms) 7.500 12/15/2014 1,855 1,993,272
$61,600,756 Geneva IDA (FLCP) 8.250 11/01/2004 770 828,482
Monroe IDA (Al Sigl Center) 7.250 12/15/2015 1,590 1,628,748
Monroe IDA (DePaul CF) 6.450 02/01/2014 880 940,738
Monroe IDA (DePaul CF) 6.500 02/01/2024 1,285 1,365,929
Monroe IDA (DePaul Properties) 8.300 09/01/2002 470 502,604
Monroe IDA (DePaul Properties) 8.800 09/01/2021 4,605 4,870,662
NYC IDA (Blood Center) 7.200 05/01/2004 (p) 500 571,905
NYC IDA (Blood Center) 7.250 05/01/2004 (p) 3,000 3,480,750
NYC IDA (CCM) 7.875 12/01/2016 1,770 1,815,064
NYC IDA (CCM) 8.000 12/01/2011 2,055 2,098,402
NYC IDA (EPG) 7.500 07/30/2003 10,355 11,240,870
NYC IDA (Fund for NYC Project) 7.625 07/01/2010 1,000 1,066,360
NYC IDA (Graphic Artists) 8.250 12/30/2023 1,280 1,336,717
NYC IDA (JBFS) 6.750 12/15/2012 6,040 6,265,050
NYC IDA (Lighthouse) 6.500 07/01/2022 1,000 1,057,950
</TABLE>
<PAGE>
Rochester Fund Municipals
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NYC IDA (NY Hostel Co.) 6.750 % 01/01/2004 $ 1,175 $ 1,181,427
NYC IDA (NY Hostel Co.) 7.600 01/01/2017 4,400 4,450,292
NYC IDA (OHEL) 8.250 03/15/2023 3,435 3,527,779
NYC IDA (PRFFP) 7.000 10/01/2016 815 872,694
NYC IDA (Psycho Therapy) 9.625 04/01/2010 755 820,526
NYC IDA (St. Christoper Ottilie) 7.500 07/01/2021 4,140 4,451,990
UCP Chemung County 6.600 08/01/2022 1,000 1,050,150
Westchester IDA (JBFS) 6.750 12/15/2012 2,220 2,301,319
- ---------------------------------------------------------------------------------------------------------------------------------
Education Brookhaven IDA (Interdisciplinary School) 8.500 12/01/2004 590 629,353
2.4% Brookhaven IDA (Interdisciplinary School) 9.500 12/01/2019 3,220 3,539,585
$56,401,753 Columbia IDA (ARC) 7.750 06/01/2005 715 762,405
Columbia IDA (ARC) 8.650 06/01/2018 2,660 2,814,918
Islip IDA (Leeway School) 9.000 08/01/2021 970 1,031,343
Montgomery IDA (New Dimension) 8.900 05/01/2016 1,095 1,183,848
Nassau IDA (ACLDD) 8.125 10/01/2022 2,725 2,806,832
NYC IDA (BHMS) 8.400 09/01/2002 230 234,924
NYC IDA (BHMS) 8.500 01/01/2027 3,075 3,082,565
NYC IDA (BHMS) 8.900 09/01/2011 660 698,999
NYC IDA (BHMS) 9.200 09/01/2021 1,690 1,827,532
NYC IDA (Eden II) 7.750 06/01/2004 450 468,990
NYC IDA (Eden II) 8.750 06/01/2019 2,505 2,669,453
NYC IDA (Hebrew Academy) 10.000 03/01/2021 2,315 2,551,500
NYC IDA (St. Bernard's School) 7.000 12/01/2021 5,115 5,243,642
NYC IDA (Summit School) 7.250 12/01/2004 190 195,696
NYC IDA (Summit School) 8.250 12/01/2024 1,485 1,528,303
NYC IDA (UN School) 6.350 12/01/2015 1,000 997,860
Orange IDA (Mental) 7.800 07/01/2011 495 561,360
Saratoga IDA (ARC) 8.400 03/01/2013 1,395 1,447,592
Suffolk IDA (Devel. Disabilities) 7.375 03/01/2003 1,035 1,059,995
Suffolk IDA (Devel. Disabilities) 8.750 03/01/2023 9,675 10,320,806
Wayne IDA (ARC) 7.250 03/01/2003 515 529,178
Wayne IDA (ARC) 8.375 03/01/2018 2,925 3,011,873
Westchester IDA (Clearview School) 9.375 01/01/2021 1,469 1,602,005
Westchester IDA (JDAM) 6.750 04/01/2016 1,560 1,596,192
Yonkers IDA (Westchester) 7.375 12/30/2003 395 407,241
Yonkers IDA (Westchester) 8.750 12/30/2023 3,375 3,597,763
- ------------------------------------------------------------------------------------------------------------------------------------
Corporate Backed Albany IDA (Albany Golf) 7.500 05/01/2012 400 420,908
1.9% Albany IDA (Kenwood Assoc.) 9.250 (d) 09/01/2010 2,735 2,193,990
$44,042,633 Auburn IDA (Wegmans) 7.250 12/01/98 125 126,534
Broome IDA (Industrial Park) 7.550 12/01/2000 190 195,700
Broome IDA (Industrial Park) 7.600 12/01/2001 195 200,850
Dutchess IDA (Merchants Press) 7.950 (d) 06/30/2002 1,800 1,706,346
Dutchess IDA (Merchants Press) 9.000 (d) 06/30/2022 4,590 4,255,068
Erie IDA (Affordable Hospitality) 9.250 12/01/2015 3,610 3,685,377
Erie IDA (Air Cargo) 8.250 10/01/2007 1,455 1,505,037
Erie IDA (Air Cargo) 8.500 10/01/2015 2,380 2,493,740
Fulton IDA (Crossroads Incubator) 8.500 12/15/98 (a) 160 162,400
Hudson IDA (Northside) 9.000 12/01/2009 455 494,212
Islip IDA (WJL Realty) 7.800 03/01/2003 50 53,166
Islip IDA (WJL Realty) 7.850 03/01/2004 100 106,474
Islip IDA (WJL Realty) 7.900 03/01/2005 100 106,616
Islip IDA (WJL Realty) 7.950 03/01/2010 500 532,450
Monroe IDA (Canal Ponds) 7.000 06/15/2013 900 964,782
Monroe IDA (Cottrone Devel.) 9.500 12/01/2010 2,358 2,552,746
Monroe IDA (De Carolis) 7.500 01/30/2005 402 402,199
Monroe IDA (Morrell/Morrell) 7.000 12/01/2007 2,172 2,203,559
Monroe IDA (Piano Works) 7.625 11/01/2016 4,330 4,368,450
Monroe IDA (West End Business) 6.750 12/01/2004 575 585,471
Monroe IDA (West End Business) 6.750 12/01/2004 140 142,549
Monroe IDA (West End Business) 6.750 12/01/2004 75 76,366
Monroe IDA (West End Business) 8.000 12/01/2014 515 547,172
Monroe IDA (West End Business) 8.000 12/01/2014 1,375 1,460,896
Monroe IDA (West End Business) 8.000 12/01/2014 170 180,618
Monroe IDA (West End Business) 8.000 12/01/2014 345 366,552
Niagara IDA (Maryland Maple) 10.250 11/15/2009 1,090 1,162,943
</TABLE>
<PAGE>
Rochester Fund Municipals
Statement of Investments
December 31, 1996
<TABLE>
<CAPTION>
Face Amount
Description Coupon Maturity (000) Omitted Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Niagara IDA (Sevenson Hotel) 6.600 % 05/01/2007 $ 1,900 $ 1,934,561
NYC IDA (ALA Realty) 7.500 12/01/2010 1,035 1,065,450
NYC IDA (ALA Realty) 8.375 12/01/2015 1,450 1,569,553
NYC IDA (Loehmann's) 9.500 12/31/2004 845 863,320
Suffolk IDA (Rimland Facilities) 6.188 (v) 12/01/2009 1,670 1,619,900
Syracuse IDA (Rockwest Center II) 7.625 12/01/2010 980 994,906
Syracuse IDA (Rockwest Center II) 8.625 12/01/2015 1,470 1,536,503
Syracuse IDA (Rockwest Center I) 8.000 06/01/2013 1,150 1,205,269
- ------------------------------------------------------------------------------------------------------------------------------------
Telephone Utilities Puerto Rico Telephone Auth. RIBS 7.067 (f) 01/01/2015 16,550 16,156,938
1.4%, $32,075,688 Puerto Rico Telephone Auth. RIBS (e) 7.936 (f) 01/01/2020 15,000 15,918,750
- ---------------------------------------------------------------------------------------------------------------------------------
Manufacturing, Babylon IDA (JFB & Sons Lithographers) 7.625 12/01/2006 1,180 1,182,655
Non-Durable Babylon IDA (JFB & Sons Lithographers) 8.625 12/01/2016 2,570 2,576,451
Goods Herkimer IDA (Burrows Paper) 7.250 01/01/2001 2,295 2,237,900
1.1% Herkimer IDA (Burrows Paper) 8.000 01/01/2009 2,440 2,402,985
$24,716,112 Middleton IDA (Fleurchem) 8.000 12/01/2016 905 938,349
Monroe IDA (Cohber) 7.550 12/01/2001 10 10,507
Monroe IDA (Cohber) 7.650 12/01/2002 10 10,525
Monroe IDA (Cohber) 7.700 12/01/2003 10 10,533
Monroe IDA (Cohber) 7.850 12/01/2009 170 179,365
NYC IDA (Amster Novelty) 8.000 12/01/2010 530 539,476
NYC IDA (Amster Novelty) 8.375 12/01/2015 790 820,755
NYC IDA (Atlantic Veal & Lamb) 8.375 12/01/2016 1,160 1,164,965
NYC IDA (Promotional Slideguide) 7.500 12/01/2010 710 705,839
NYC IDA (Promotional Slideguide) 7.875 12/01/2015 1,065 1,077,908
NYC IDA (Streamline Plastics) 7.750 12/01/2015 585 599,648
NYC IDA (Streamline Plastics) 8.125 12/01/2025 1,275 1,329,047
NYC IDA (Visy Paper) 7.950 01/01/2028 4,000 4,266,360
Putnam IDA (Brewster Plastics) 8.500 12/01/2016 1,990 2,042,496
Ulster IDA (Brooklyn Bottling) 7.800 06/30/2002 595 615,171
Ulster IDA (Brooklyn Bottling) 8.600 06/30/2022 1,915 2,005,177
- ------------------------------------------------------------------------------------------------------------------------------------
Highways, MTA YCR (e) 3.882 (f) 07/01/2013 9,400 9,353,000
Commuter Facilities MTA YCR (e) 3.882 (f) 07/01/2022 3,000 2,823,750
1.1% MTA (Transit) IVRC (e) 6.360 (f) 07/01/2011 10,000 9,987,500
$24,407,149 NYS Thruway 0.000 01/01/2003 1,000 720,450
NYS Thruway 0.000 01/01/2004 2,000 1,356,860
NYS Thruway 0.000 01/01/2005 260 165,589
- ------------------------------------------------------------------------------------------------------------------------------------
Gas Utilities NYS ERDA (Brooklyn Union Gas) 7.000 12/01/2020 70 71,407
1.0% NYS ERDA (Brooklyn Union Gas) RIBS 7.538 (f) 07/08/2026 3,000 2,752,500
$23,089,907 NYS ERDA (Brooklyn Union Gas) RIBS 8.721 (f) 04/01/2020 7,000 7,700,000
NYS ERDA (Brooklyn Union Gas) RIBS 9.868 (f) 07/01/2026 10,300 12,566,000
- ------------------------------------------------------------------------------------------------------------------------------------
Other Franklin SWMA 6.250 06/01/2003 (p) 1,060 1,169,954
0.5% Franklin SWMA 6.250 06/01/2015 2,195 2,183,937
$11,850,704 Montgomery IDA (Amsterdam) 7.250 01/15/2019 5,860 6,060,822
Municipal Assistance Corp. for Troy, NY 0.000 01/15/2022 1,021 248,679
Municipal Assistance Corp. for Troy, NY 0.000 07/15/2021 673 168,927
Peekskill IDA (Karta) 9.000 07/01/2010 1,834 1,901,211
St. Lawrence County (SWDA) 8.250 01/01/99 (p) 10 10,882
St. Lawrence County (SWDA) 8.875 01/01/98 (p) 100 $ 106,292
- ------------------------------------------------------------------------------------------------------------------------------------
Total municipal bond investments, at value (cost $2,194,470,034) - 99.8% $ 2,302,671,637
- ------------------------------------------------------------------------------------------------------------------------------------
Other assets and liabilities (net) - 0.2% 5,178,542
---------------
Net assets - 100.0% $ 2,307,850,179
===============
</TABLE>
(a) Date of mandatory put; final maturity 12/15/2008.
(b) Date of mandatory put; final maturity 06/01/2008.
(c) Security will convert to a fixed coupon at a future date prior to maturity.
(d) Non-income accruing security.
(e) Illiquid security.
(f) Interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
December 31, 1996.
(p) Date of pre-refunded call.
(v) Variable rate security that fluctuates as a percentage of prime rate.
See accompanying Notes to Financial Statements.
<PAGE>
Portfolio Abbreviations
To simplify the listings of Rochester Fund Municipals' holdings in the Statement
of Investments, we have abbreviated the descriptions of many of the securities
per the table below:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ACLDD Adults and Children with Learning IRS Inverse Rate Security
and Developmental Disabilities ITEME Industrial Tourist Educational Medical
ARC Association of Retarded Citizens and Environmental
ASSC Annie Schaffer Senior Center IVRC Inverse Variable Rate Certificate
BANS Bond Anticipation Notes JBFS Jewish Board of Family Services
BHMS Brooklyn Heights Montessori School JDAM Julia Dyckman Angus Memorial
BLH Bronx Lebanon Hospital LEVRRS Leveraged Reverse Rate Security
BOCES Board of Cooperative Educational Services LGSC Local Government Services Corporation
CARS Complimentary Auction Rate Security L.I. Long Island
CCM Comprehensive Care Management LILCO Long Island Lighting Corporation
CDC Community Development Corporation MMC Marymount Manhattan College
CEK Cyril E. King MMP Millbrook Millwork Project
CF Community Facilities MTA Metropolitan Transit Authority
CGH Community General Hospital NIMO Niagara Mohawk Power Corporation
CNR College of New Rochelle PRFFP Puerto Rico Family Foundation Project
Con Ed Consolidated Edison Co. Res Rec Resource Recovery Facility
COP Certificate of Participation RGH Rochester General Hospital
DC Dominican College RG&E Rochester Gas & Electric
EHC Elderly Housing Corporation RIBS Residual Interest Bonds
EHL Engine Hook and Ladder RITES Residual Interest Tax Exempt Security
EPG Elmhurst Parking Garage SCSB Schuyler Community Services Board
ERDA Energy Research and SONYMA State of New York Mortgage Agency
Development Authority SWDA Solid Waste Disposal Authority
E,E&T Ear, Eye and Throat SWMA Solid Waste Management Authority
FLCP Finger Lakes Cerebral Palsy TEMEC Tourist, Educational, Medical and
GAINS Growth and Income Securities Environmental Control
GO General Obligation UCP United Cerebral Palsy
HB&F Housing Bank and Finance UDC Urban Development Corporation
HDC Housing Development Corporation UFA Utica Free Academy
HELP Homeless Economic Loan Program UN United Nations
HFA Housing Finance Agency WWH Wyandach/Wheatley Heights
HFC Housing Finance Corporation YCN Yield Curve Note
H&N Hospital and Nursing YCR Yield Curve Receipt
IDA Industrial Development Authority V. I. United States Virgin Islands
======================================================================================================
</TABLE>
Asset Composition Table - December 31, 1996
(Unaudited) (As a percentage of total investments)
Percentage
Rating of Investments
- ------------------------
AAA 18.5%
AA 15.0%
A 23.3%
BBB 23.5%
BB 6.0%
B 2.4%
CCC 0.0%
CC 0.0%
C 0.0%
Not Rated 11.3%
--------------
Total 100.0%
==============
All unrated bonds are backed by mortgage liens and guarantees by the issuer.
Bonds which are backed by a letter of credit or by other financial institutions
or agencies may be assigned an investment grade rating by the Manager, which
reflects the quality of the guarantor, institution or agency. Unrated bonds may
also be assigned a rating when the issuer has rated bonds outstanding with
comparable credit characteristics which allow for rating. The unrated bonds in
the portfolio are predominantly smaller issuers which have not applied for a
bond rating. Only those unrated bonds which subsequent to purchase have not been
designated investment grade are included in the "Not Rated" category. For
further information see "Credit Quality" in the Prospectus.
<PAGE>
Rochester Fund Municipals
================================================================================
Statement of Assets and Liabilities - December 31, 1996
Assets
Investments, at value
(Cost $2,194,470,034) $ 2,302,671,637
Receivables:
Interest 38,260,232
Shares of beneficial interest sold 2,809,607
Investments sold 1,045,994
Other 2,811,075
---------------
Total assets 2,347,598,545
---------------
Liabilities
Payables and other liabilities:
Bank overdraft 252,728
Demand note payable to bank
(interest rate 7.60% at 12/31/96) 27,100,000
Investments purchased 8,952,318
Dividends 786,842
Shares of beneficial interest redeemed 2,043,236
Trustees' fees 509,500
Other 103,742
---------------
Total liabilities 39,748,366
---------------
Net Assets $ 2,307,850,179
===============
Composition of Net Assets
Paid-in capital $ 2,256,905,794
Undistributed net investment income 1,979,870
Accumulated net realized loss on
investment transactions (59,237,088)
Net unrealized appreciation on investments 108,201,603
---------------
Net assets $ 2,307,850,179
===============
Net Asset Value Per Share
Net asset value and redemption price per share
(based on net assets of $2,307,850,179 and
128,245,804 shares of beneficial interest
outstanding) $ 18.00
===============
Maximum offering price per share (net asset
value plus sales charge of 4.00% of offering
price) $ 18.75
===============
================================================================================
Statement of Operations
For the Year Ended December 31, 1996
Investment Income:
Interest $ 153,669,200
-------------
Expenses:
Management fees 10,418,738
Distribution and service plan fees 3,245,654
Transfer and shareholder servicing agent fees 1,242,719
Accounting service fees 660,089
Shareholder reports 412,478
Trustees' fees and expenses 327,250
Custodian fees and expenses 269,909
Legal and auditing fees 92,094
Registration and filing fees 89,860
Other 208,281
Interest 890,390
-------------
Total expenses 17,857,462
Less expenses paid indirectly (23,621)
-------------
Total net expenses 17,833,841
-------------
Net Investment Income 135,835,359
-------------
Realized and Unrealized Loss:
Net realized loss on investments (3,568,327)
Net change in unrealized appreciation
or depreciation on investments (15,226,664)
-------------
Net realized and unrealized loss (18,794,991)
-------------
Net Increase in Net Assets
Resulting From Operations $ 117,040,368
=============
Statements of Changes in Net Assets
Year Ended December 31, 1996 1995
---- ----
Increase in Net Assets -
Operations:
Net investment income $ 135,835,359 $ 125,186,936
Net realized loss (3,568,327) (10,724,838)
Net change in unrealized appreciation
or depreciation (15,226,664) 222,374,949
--------------- ---------------
Net increase in net assets
resulting from operations 117,040,368 336,837,047
--------------- ---------------
Dividends to Shareholders From:
Net investment income (136,511,912) (124,417,144)
--------------- ---------------
Beneficial Interest Transactions:
Sold 355,593,044 292,964,245
Dividends and distributions reinvested 71,854,295 67,511,771
Redeemed (245,389,573) (218,931,015)
--------------- ---------------
Net increase in net assets resulting from
beneficial interest transactions 182,057,766 141,545,001
--------------- ---------------
Net Assets:
Total increase 162,586,222 353,964,904
Beginning of period 2,145,263,957 1,791,299,053
--------------- ---------------
End of period (including undistributed
net investment income of $1,979,870
and $2,633,000, respectively) $ 2,307,850,179 $ 2,145,263,957
=============== ===============
See accompanying Notes to Financial Statements.
<PAGE>
Rochester Fund Municipals
Financial Highlights
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1995 1994 1993 1992
------------ ---------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $18.18 $16.31 $19.00 $17.65 $17.01
--------- --------- --------- --------- -------
Income (loss) from investment operations:
Net investment income 1.10 1.10 1.13 1.17 1.20
Net realized and unrealized gain (loss) (0.18) 1.86 (2.68) 1.35 0.64
--------- --------- --------- --------- -------
Total income from investment operations 0.92 2.96 (1.55) 2.52 1.84
--------- --------- --------- --------- -------
Dividends and distributions to shareholders:
Dividends from net investment income (1.10) (1.09) (1.13) (1.17) (1.20)
Undistributed net investment income -
prior year -- -- (0.01) -- --
Distributions from net realized gain -- -- -- -- --
--------- --------- --------- --------- -------
Total dividends and distributions to shareholders (1.10) (1.09) (1.14) (1.17) (1.20)
--------- --------- --------- --------- -------
Net asset value, end of period $18.00 $18.18 $16.31 $19.00 $17.65
========= ========= ========= ========= =======
Total Return, at Net Asset Value (a) 5.37% 18.58% (8.35%) 14.60% 11.19%
Ratios/Supplemental Data:
Net assets, end of period (in millions) $2,308 $2,145 $1,791 $1,794 $997
Average net assets (in millions) $2,191 $2,005 $1,847 $1,449 $717
Ratios to average net assets:
Net investment income 6.20% 6.25% 6.43% 6.21% 6.79%
Expenses (b) 0.82% 0.82% 0.84% 0.75% 0.84%
Expenses (excluding interest) (b) (c) 0.77% 0.78% 0.73% 0.64% 0.70%
Portfolio turnover rate (d) 13.34% 14.59% 34.39% 18.27% 29.99%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal
period. Sales charges are not reflected in the total returns. Total returns
are not annualized for periods of less than one full year.
(b) Beginning in fiscal 1995, the expense ratios reflect the effect of gross
expenses paid indirectly by the Fund. Prior year expense ratios have not
been adjusted.
(c) 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.
(d) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (excluding
short-term securities) for the period ended December 31, 1996 were
$449,938,295 and $290,605,385, respectively.
Per share information has been determined based on average shares
outstanding for the period.
See accompanying Notes to Financial Statements.
<PAGE>
Rochester Fund Municipals
Notes to Financial Statements
December 31, 1996
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.
On January 4, 1996, Rochester Capital Advisors, L.P. (RCA, L.P.), the Fund's
investment adviser, Rochester Fund Distributors, Inc., (RFD), the Fund's
principal underwriter, and Rochester Fund Services, Inc. (RFS), the Fund's
shareholder servicing, accounting and pricing agent, consummated a transaction
with OppenheimerFunds, Inc. (the Manager), which resulted in the sale to the
Manager 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."
The following is a summary of significant accounting policies consistently
followed by the Fund.
Investment Valuation and Transactions. Portfolio securities are valued at the
close of the New York Stock Exchange on each trading day. Long-term debt
securities are valued at the mean between the bid and asked price using
information available from a portfolio pricing service approved by the Board of
Trustees, dealer-supplied valuations, provided the Manager is satisfied that the
firm rendering the quotes is reliable and that the quotes reflect current value,
or analysis of various relationships between comparable securities. Securities
for which market quotations are not readily available are valued at fair value
under consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Investment transactions are accounted for on
the date the investments are purchased or sold (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. Delivery and payment for securities
that have been purchased by the Fund on a forward commitment or when-issued
basis can take place a month or more after the transaction date. During this
period, such securities do not earn interest, are subject to market fluctuation
and may increase or decrease in value prior to their delivery. The Fund
maintains, in a segregated account with its custodian, assets with a market
value equal to the amount of its purchase commitments. The purchase of
securities on a when-issued or forward commitment basis may increase the
volatility of the Fund's net asset value to the extent the Fund makes such
purchases while remaining substantially fully invested. As of December 31, 1996,
the Fund had no outstanding when-issued or forward commitments.
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required. At December 31, 1996, the
Fund had available for federal income tax purposes an unused capital loss
carryover of approximately $59,099,600 which expires between 2000 and 2004.
Trustees' Fees and Expenses. 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 the Manager, all but one of the independent trustees
retired effective January 4, 1996. The retirement plan expense, which is
included in trustees' fees and expenses, amounted to $278,000 for the year ended
December 31, 1996. Payments of $40,500 were made to retired trustees during the
year ending December 31, 1996. At December 31, 1996, the Fund had recognized an
accumulated liability of $499,500. 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.
<PAGE>
Distributions to Shareholders. Income dividends are declared and recorded each
day the New York Stock Exchange is open for business 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 dividends are paid monthly.
Distributions from net realized gains on investments, if any, are recorded on
the ex-dividend date and paid annually.
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gain (loss) was recorded by the
Fund.
During the year ended December 31, 1996, the Fund adjusted the classification of
net investment income and net realized gain (loss) to reflect the differences
between financial statement amounts and distributions determined in accordance
with income tax regulations. During the year ended December 31, 1996, amounts
have been reclassified to reflect a decrease in paid-in capital of $82,628, a
decrease in an accumulated net realized loss of $59,204, and an increase in
undistributed net investment income of $23,424.
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.
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
Other. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
Note 2. 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 shares of beneficial interest were as follows:
Year Ended December 31, 1996 1995
---- ----
Sold 20,027,352 16,778,524
Dividends and distributions reinvested 4,049,796 3,857,323
Redeemed (13,850,487) (12,475,987)
------------ ------------
Net increase in shares outstanding 10,226,661 8,159,860
Shares outstanding, beginning of period 118,019,143 109,859,283
------------ ------------
Shares outstanding, end of period 128,245,804 118,019,143
============ ============
Note 3. Portfolio Information:
The Fund held $351,619,487 in inverse floating rate municipal bonds at December
31, 1996, comprising approximately 15.24% of net assets.
During 1996, 10.54% of interest income was derived from investments in U.S.
territories which are exempt from federal, all states, and New York City income
taxes.
At December 31, 1996, net unrealized appreciation on investments of $108,201,603
was composed of gross appreciation of $116,613,463, and gross depreciation of
$8,411,860.
<PAGE>
Unrealized appreciation (depreciation) at December 31, 1996 based on cost of
investments for federal income tax purposes of $2,194,607,522 was:
Gross unrealized appreciation $116,501,348
Gross unrealized depreciation (8,437,234)
----------------
Net unrealized appreciation $108,064,114
================
Note 4. Management Fees and Other Transactions With Affiliates:
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee based on an annual
rate of 0.54% of average daily net assets up to $100 million, 0.52% of average
daily net assets in excess of $100 million to $250 million, 0.47% of average
daily net assets in excess of $250 million to $2 billion, 0.46% of average daily
net assets in excess of $2 billion to $5 billion, and 0.45% of average daily net
assets in excess of $5 billion. During 1996, the Fund paid $113,595 to RCA, L.P.
(the former manager) and $10,305,143 to the Manager for management and
investment advisory services.
Accounting fees paid to the Manager were in accordance with the accounting
services agreement with the Fund which provides for an annual fee of $12,000 for
the first $30 million of net assets and $9,000 for each additional $30 million
of net assets. During 1996, the Fund paid $7,180 to RFS (the former accounting
and pricing agent) and $652,909 to the Manager for accounting and pricing
services.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer and
shareholder servicing agent for the Fund. The transfer and shareholder servicing
agent fee paid by the Fund is based on an annual maintenance fee of $24.12 for
each shareholder account. During 1996, the Fund paid $13,137 to RFS (the former
shareholder servicing agent) and $1,229,582 to OFS.
For the year ended December 31, 1996, commissions (sales charges paid by
investors) totaled $9,802,584, of which $1,377,087 was retained by
OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the Manager, as
general distributor, and by affiliated broker/dealers.
The Fund has adopted a Service Plan to reimburse OFDI for a portion of its costs
incurred in connection with the personal service and maintenance of shareholder
accounts. Reimbursement is made monthly at an annual rate that may not exceed
0.25% per annum of average daily net assets of the Fund. Currently, the Board of
Trustees has limited the rate to 0.15% per annum of average daily net assets.
OFDI uses the service fee to reimburse brokers, dealers, banks and other
financial institutions quarterly for providing personal service and maintenance
of accounts of their customers that hold shares of the Fund. During the year
ended December 31, 1996, OFDI paid $7,818 to an affiliated broker/dealer as
reimbursement for personal service and maintenance expenses.
Note 5. Bank Borrowings:
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 two other
Rochester Division funds managed by the Manager 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 0.75%. Borrowings are payable on demand.
The Fund had borrowings of $27,100,000 outstanding at December 31, 1996. For the
year ended December 31, 1996, the average monthly loan balance was $14,152,424
at an average interest rate of 6.172%. The maximum amount of borrowings
outstanding at any month-end was $49,370,000.
<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 statement 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, 1996, 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, 1996 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Rochester, New York
January 24, 1997
- --------------------------------------------------------------------------------
Federal Tax Information (Unaudited)
In early 1997, shareholders received information regarding all dividends and
distributions paid to them by the Fund during calendar year 1996. 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, 1996
are eligible for the corporate dividend- received deduction. 100% 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 (89.46%), Guam (3.14%), Puerto Rico (4.21%),
Virgin Islands (3.02%), American Samoa (0.17%).
During 1996, 36.75% 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 adviser for specific guidance.
<PAGE>
-------------------------------------
OppenheimerFunds Family
-------------------------------------
<TABLE>
<CAPTION>
===================================================================================================
<S> <C> <C>
OppenheimerFunds offers over 50 funds designed to fit virtually every
investment goal. Whether you're investing for retirement, your children's
education or tax-free income, we have the funds to help you seek your
objective.
When you invest with OppenheimerFunds, you can feel comfortable
knowing that you are investing with a respected financial institution with
over 35 years of experience in helping people just like you reach their
financial goals. And you're investing with a leader in global, growth
stock and flexible fixed-income investments--with over 3 million shareholder
accounts and more than $60 billion under OppenheimerFunds' management and
that of our affiliates.
At OppenheimerFunds we don't charge a fee to exchange shares. And you
can exchange shares easily by mail or by telephone.(1) For more information on
Oppenheimer funds, please contact your financial adviser or call us at
1-800-525-7048 for a prospectus. You may also write us at the address shown
on the back cover. As always, please read the prospectus carefully before
you invest.
===================================================================================================
Stock Funds Developing Markets Funds Growth Fund
Global Emerging Growth Fund Global Fund
Enterprise Fund(2) Quest Global Value Fund
International Growth Fund Disciplined Value Fund
Discovery Fund Oppenheimer Fund
Quest Small Cap Value Fund Value Stock Fund
Gold & Special Minerals Fund Quest Value Fund
Capital Appreciation Fund(3)
===================================================================================================
Stock & Bond Funds Main Street Income & Growth Fund Equity Income Fund
Quest Opportunity Value Fund Disciplined Allocation Fund
Total Return Fund Asset Allocation Fund
Quest Growth & Income Value Fund Strategic Income & Growth Fund
Global Growth & Income Fund Bond Fund for Growth
===================================================================================================
Bond Funds International Bond Fund Bond Fund
High Yield Fund U.S. Government Trust
Champion Income Fund Limited-Term Government Fund
Strategic Income Fund
===================================================================================================
Municipal Funds California Municipal Fund(4) Insured Municipal Fund
Florida Municipal Fund(4) Intermediate Municipal Fund
New Jersey Municipal Fund(4)
New York Municipal Fund(4) Rochester Division
Pennsylvania Municipal Fund(4) Rochester Fund Municipals
Municipal Bond Fund Limited Term New York Municipal Fund
===================================================================================================
Money Market Funds(5) Money Market Fund Cash Reserves
===================================================================================================
LifeSpan Growth Fund Income Fund
Balanced Fund
1. Exchange privileges are subject to change or termination. Shares may be
exchanged only for shares of the same class of eligible funds.
2. Effective 4/1/96, the Fund is closed to new investors.
3. On 12/18/96, the Fund's name was changed from "Target Fund."
4. Available only to investors in certain states.
5. An investment in money market funds is neither insured nor guaranteed by
the U.S. government and there can be no assurance that a money market fund
will be able to maintain a stable net asset value of $1.00 per share.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc.,
Two World Trade Center, New York, NY 10048-0203.
(c) Copyright 1997 OppenheimerFunds, Inc. All rights reserved.
</TABLE>
<PAGE>
- --------------------------------------
TAX-FREE INCOME
- --------------------------------------
Rochester Fund Municipals provides individual investors with the
opportunity to earn income free of federal, New York State and New York City
taxes, if applicable,1 yet many investors remain unaware of how advantageous
tax-free income can be.
For example, to match the after-tax return of a 5.5% tax-free yield, a
resident of New York City in the 38.4% combined tax bracket would have to find a
taxable investment yielding 8.9%.
The specific advantages of tax-free investing for your tax situation may be
different and we encourage you to develop a long range financial plan with your
financial consultant.
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.
<TABLE>
<CAPTION>
===============================================================================================================================
TAX EXEMPT VS. TAXABLE YIELDS
Effective Effective
Tax Taxable Rate Tax Taxable Rate
Bracket Needed to Equal Bracket Needed to Equal
1997 Taxable Income NYC Residents Current Tax-Free Rate NYS Residents Current Tax-Free Rate
- -------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
Single Return Joint Return 5.5% 6.0% 5.5% 6.0%
- -------------------------------------------------------------------------------------------------------------------------------
$20,001 - $24,650 $40,001 - $41,200 24.0% 7.2% 7.9% 20.8% 7.0% 7.6%
$24,651 - $59,750 $41,201 - $99,600 35.7% 8.6% 9.3% 32.9% 8.2% 9.0%
$59,751 - $124,650 $99,601 - $151,750 38.4% 8.9% 9.7% 35.7% 8.6% 9.3%
$124,651 - $271,050 $151,751 - $271,050 42.9% 9.6% 10.5% 40.4% 9.2% 10.1%
over $271,050 over $271,050 46.1% 10.2% 11.1% 43.7% 9.8% 10.7%
===============================================================================================================================
</TABLE>
The tax information and brackets listed above are believed to be current 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 deductable from federal tax
payments. Your actual bracket will vary depending on your income, investments
and deductions. You should consult your tax adviser 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.
--------------------------------
And Community Support
--------------------------------
In addition to the investment advantages of
tax-free income, municipal bonds also provide for
much of the infrastructure of the communities in
which we live. The efforts undertaken to
strengthen our portfolio help us include issues
that provide the 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 in the Rochester Fund
Municipals.
Rochester Fund Municipals
<PAGE>
[LOGO] ROCHESTER
FUND
MUNICIPALS
The Rochester Funds
A Division of OppenheimerFunds, Inc.
350 Linden Oaks
Rochester, NY 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
1100 Bausch & Lomb Place
Rochester, NY 14604-0075
Transfer and Shareholder Services Agent
OppenheimerFunds Services
PO Box 5270
Denver, CO 80217-5270
RAO365.001.0197 February 28, 1997
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 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.
Call our Toll-Free Customer Service today at 1-800-525-7048 for more
information on how to take advantage of your financial relationship with the
OppenheimerFunds family.
[PHOTO OF BRIDGET A. MACASKILL AND RONALD FIELDING]
Bridget A. Macaskill, President and CEO, OppenheimerFunds, Inc. and Portfolio
Manager Ronald Fielding
================================================================================
--------------
[LOGO] OppenheimerFunds(SM) Bulk Rate
US Postage
OppenheimerFunds Distributor, Inc. PAID
Rochester Division Rochester, NY
350 Linden Oaks Permit No. 491
Rochester, NY 14625-2807 --------------
