[LOGO] ROCHESTER
FUND
MUNICIPALS
TAX-FREE INCOME FOR NEW YORK INVESTORS
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ANNUAL REPORT
December 31, 1998
[LOGO] OPPENHEIMER FUNDS(R)
THE RIGHT WAY TO INVEST
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"(THE FUND) REMAINS A FAVORED CHOICE. MANAGEMENT AT ROCHESTER GETS IT RIGHT
TIME-AND-TIME AGAIN. THIS IS ONE OF THE FEW FUNDS IN ANY EQUITY OR DEBT CATEGORY
THAT HAS FARED WELL IN BOTH BULL AND BEAR MARKETS."
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ROCHESTER FUND MUNICIPALS HAS BEEN LISTED IN THE 1999 EDITION OF THE 100 BEST
MUTUAL FUNDS YOU CAN BUY BY GORDON K. WILLIAMSON
Inclusion of any Oppenheimer fund in The 100 Best Mutual Funds You Can Buy
should not be construed as an offer to sell or a solicitation of an offer to buy
shares of any such fund. Past performance is no guarantee of future results.
ROCHESTER FUND MUNICIPALS IS THE #1 PERFORMING NEW YORK STATE MUNICIPAL DEBT
FUND FOR THE 10-YEAR PERIOD ENDED 12/31/98 AS RATED BY LIPPER.
THESE RANKINGS INCLUDED 30 FUNDS FOR THE 10-YEAR PERIOD. WITHIN THE SAME
CATEGORY, THE FUND ALSO RANKED 12TH OUT OF 99 FUNDS FOR THE 1-YEAR PERIOD AND
5TH OUT OF 58 FUNDS FOR THE 5-YEAR PERIOD.*
*Lipper Analytical Services, Inc. is 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 results.
"ROCHESTER FUND MUNICIPALS HAS FEW REAL
COMPETITORS...THERE ARE FEW FUNDS THAT CAN MATCH THIS
ONE'S INTENSITY OF RESEARCH AND ITS SUCCESS."
MORNINGSTAR'S ROCHESTER FUND MUNICIPALS ANALYSIS
NOVEMBER 6, 1998
ROCHESTER FUND MUNICIPALS (CLASS A SHARES) HAS RECEIVED MORNINGSTAR'S HIGHEST
5-STAR OVERALL RANKING AS OF DECEMBER 31, 1998. THE 3-YEAR, 5-YEAR AND 10-YEAR
MORNINGSTAR RANKINGS FOR THE PERIOD ENDED 12/31/98 ARE FIVE STARS, FOUR STARS
AND FIVE STARS, RESPECTIVELY. 1577, 1040, AND 370 MUNICIPAL BOND FUNDS WERE
RATED FOR THESE 3-, 5- AND 10-YEAR PERIODS, RESPECTIVELY.*
* Overall star rankings are based on a weighted average of the Fund's 3-, 5- and
10-year rankings. Ten percent of the funds in an investment category receive
five stars (highest), 22.5% receive four stars (above average), 35% receive
three stars (average), 22.5% receive two stars (below average), and 10% receive
one star (lowest). Morningstar, Inc. is a nationally recognized independent
mutual fund rating service. Morningstar proprietary star rankings reflect
historical risk-adjusted total return as of December 31, 1998. The rankings are
subject to change every month. Rankings are based on past performance, after
considering sales charges and costs, and are no guarantee of future results.
Morningstar rankings are calculated from the fund's three-, five-, and ten-year
average annual returns in excess of 90-day Treasury bill returns with
appropriate fee adjustments, and a risk factor that reflects fund performance
below 90-day T-bill returns. 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.
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DEAR SHAREHOLDER,
[PHOTO OF BRIDGET A. MACASKILL]
President
Rochester Fund Municipals
In retrospect, 1998 has been an unsettling year for the financial
markets. Around the world, stock and bond markets experienced considerable
instability, with particular tumult being felt in Southeast Asia, Russia and
Latin America. The U.S. stock market was not immune from the extreme volatility,
as it climbed to record levels through July before correcting sharply in the
third quarter and rebounding to new highs in the fourth quarter. In the bond
market, yields on U.S. Treasury securities declined to record lows before rising
modestly late in the year.
Does the swift recovery of the U.S. stock market and the favorable
economic environment for the bond market mean that domestic stocks and bonds
will continue to prosper? We are optimistic over the long term, but we do expect
that concerns about corporate earnings growth in a slow-growth economy will
contribute to more stock market volatility in 1999. In the bond market, the
Federal Reserve Board's decisions to reduce short-term interest rates should
help create a positive climate for fixed-income securities. While lower interest
rates are generally good for bond prices, it will become more difficult for bond
funds to maintain their dividends at current levels if yields decline further.
As an Oppenheimer fund shareholder, you may wonder how this potential
volatility will affect you. If you maintain a long-term perspective, as we do,
short-term volatility over the coming months should have little bearing on your
ability to achieve your future financial goals. That's why we continue to
suggest that you adhere to your long-term investment plan. In fact, we are very
encouraged that most of our shareholders stayed the course during last summer's
stock market correction, avoiding the temptation of selling into a temporarily
declining market.
Finally, I would like to thank those shareholders that contacted us about
our revised account statement. Response has been very positive, and we are
pleased that many of you find the new format easier to read and more
informative. If you have any questions about the new statement or any other
matter, please don't hesitate to call us at 1-800-525-7048. In the meantime,
thank you for choosing OppenheimerFunds, The Right Way to Invest.
Sincerely,
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/s/ Bridget A. Macaskill
Bridget A. Macaskill
January 20, 1999
1 ROCHESTER FUND MUNICIPALS
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THE ROCHESTER WAY
Founded in 1959, OppenheimerFunds, Inc. is one of the most respected
mutual fund managers nationwide today. Including subsidiaries, the firm manages
more than $95 billion in assets (as of December 31, 1998), including more than
65 funds with more than 4 million shareholder accounts.
The Rochester Division of OppenheimerFunds, Inc. located in Rochester, New
York, is dedicated to the investment management and distribution of regional
municipal bond funds. These Funds - Rochester Fund Municipals, the Limited Term
New York Municipal Fund, and, as of January 1, 1999, the Oppenheimer
Pennsylvania Municipal Fund, pursue an investment approach that is intentionally
limited to specific sectors and regions of the municipal market.1
Refined since the inception of Rochester Fund Municipals in May of 1986,
the unique investment approach of these Rochester Funds has proven to be
beneficial. By conducting intensive research within the universe of either New
York or Pennsylvania municipal bonds, the portfolio management team has been
able to apply unique strategies relating to the municipal bond market.
DIVERSITY ACROSS NEW YORK STATE
In addition to the more conventional municipal bonds available throughout
New York, the `Rochester style' of management includes researching small issues,
"story" bonds, unrated bonds, and callable bonds.2 If, through diligent credit
research and active portfolio management, we believe these bonds can enhance
fund performance and/or yield, we attempt to include them in the portfolio.
While it is true that these types of bonds are often not considered by
other funds, Rochester Fund Municipals is not your typical fund.
In essence, it is our opinion that a portfolio of 40 AAA insured bonds of
similar maturities issued by four or five entities may look great, but it offers
little real world diversification. Similarly, while unrated bonds may not appeal
to an individual investor, there can be a significant total return advantage to
carefully researched unrated bonds when part of a broadly diversified portfolio.
We believe there are great, often overlooked, opportunities available and
that there can be a place for such "alternative" holdings in a well-diversified
fund. In fact, as of December 31, 1998, the Rochester Fund Municipals portfolio
consisted of more than 1000 different securities.
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(1) The Oppenheimer Pennsylvania Municipal Fund is not available in all states.
Please consult your financial advisor for more details.
(2) Small issues are typically less liquid than equivalent quality large issues.
However, buyers of small debt issues are often better able to negotiate terms
from the issuer. And, while lower rated and unrated bonds generally involve
greater risk than bonds in the higher rated categories as determined by S&P and
Moody's rating services, in a well diversified fund, we believe the credit risk
is justified by the higher yields obtained.
2 ROCHESTER FUND MUNICIPALS
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COMMUNITY SUPPORT
When you invest in municipal securities through a mutual fund, your
dollars are being put to work primarily in your state's communities - buildings
and school systems, hospitals and fire districts. To encourage and reward
resident support of these municipal activities, the interest paid on them is
often exempt from federal and state personal income taxes. For residents of New
York State, the interest is also free from any applicable New York City income
taxes.
Many investors consider this the primary advantage of a municipal bond
fund like Rochester Fund Municipals. But it should also be acknowledged that
municipal bonds provide financing for much of the infrastructure of the
communities in which we live.
During 1998, your investment in Rochester Fund Municipals helped provide
financing for a wide variety of worthwhile projects in New York State. Public
and private colleges, primary schools for special education and mortgages for
first-time home buyers are just a few of the programs that benefit from your
investment.
When you review the enclosed listing of the Fund's portfolio of issues,
you're likely to find many projects that help to improve the standard of living
in your community. It's one of the--admittedly few--advantages of the current
tax code: the ability to earn tax-free income and be supportive of the great
state of New York.1
(1) A portion of the Fund's income may be subject to income taxes. Capital gains
distributions, if any, are taxable as capital gains. For investors subject to
the alternative minimum tax, a portion of the Fund's distributions may increase
that tax.
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THE FUND'S DIVERSIFIED PORTFOLIO*
BY MUNICIPAL SECTOR ON 12/31/98 AS A PERCENTAGE OF INVESTMENTS
Hospital/Healthcare 15.8%
General Obligation 11.6%
Electric Utilities 10.0%
Multi-Family Housing 9.5%
Resource Recovery 8.0%
Municipal Leases 7.2%
Single-Family Housing 5.9%
Marine/Aviation Facilities 4.1%
Water Utilities 3.7%
Non Profit Organization 3.2%
Manufacturing,
Non-Durable Goods 3.0%
Higher Education 2.7%
Manufacturing,
Durable Goods 2.5%
Highways/Railways 2.5%
Adult Living Facilities 2.4%
Corporate Backed 2.3%
Education 1.9%
Sales Tax Revenue 1.3%
Other 2.4%
Total 100.0%
* Portfolio data are as of 12/31/98, and are subject to change. Portfolio data
are dollar-weighted based on total market value of investments.
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3 ROCHESTER FUND MUNICIPALS
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TO FELLOW SHAREHOLDERS,
[PHOTO OF RONALD H. FIELDING, CFA]
Senior Vice President OppenheimerFunds, Inc.
Portfolio Manager, Rochester Fund Municipals, since Fund inception May 15, 1986
We are pleased to provide shareholders of Rochester Fund Municipals
with this 1998 Annual Report and announce that the Fund was able to meet its
goal of high tax-free income during the year.(1) Even with the slight downward
adjustment in the dividend rate during 1998 -- a reality we spoke of in my
annual letter last year -- we believe the Fund's yield remains very compelling
when compared to other New York municipal funds.
How compelling? According to Lipper Analytical Services, Inc., ROCHESTER
FUND MUNICIPALS' (CLASS A SHARES) 30-DAY SEC YIELD OF 4.47% RANKED HIGHEST AMONG
99 NEW YORK STATE MUNICIPAL DEBT FUNDS AS OF DECEMBER 31, 1998.(2) The dividend
yield at Net Asset Value on 12/31/98 was 5.43%.(3) For those investors in the
top combined New York City, New York State and federal tax bracket, that return
is equivalent to 10.11% from a taxable investment!
In addition, Lipper Analytical Services declares Rochester Fund Municipals
(Class A Shares) the top performing New York State municipal debt fund for the
ten year period (among 30 funds in the category). The Fund also ranked 5th for
five-year return and 12th for one-year return, among 58 and 99 funds,
respectively.
Shareholders should also be aware that the Fund preserved its price per
share during the course of 1998: the Fund's Net Asset Value exhibited a modest
increase from $18.67 on December 31, 1997 to $18.81 at year end 1998, reflecting
the boring but otherwise respectable performance of the municipal bond market.
Of greater interest to investors wondering about the future should be the
current ratio of municipal bond yields to U.S. Treasury yields. During the more
volatile moments of 1998's equity markets, the "flight to quality" by American
investors impacted the yields on U.S Treasuries to such a degree that the yields
of municipal bonds, New York issues included, became relatively more attractive
than they have in many years. And this yield comparison is on a pre-tax basis -
the after tax implications of such an environment can be more rewarding still.
(This issue is discussed elsewhere within this report, but we urge you to
revisit the advantages of municipal bond and bond fund investing with your
financial advisor.)
All told, we are optimistic as we enter 1999. We believe conditions for
investing in municipal bonds should remain hospitable as very low inflation,
economic growth and government surpluses appear likely to continue. We will
continue to adhere to the Fund's goal of offering long-term investors high
tax-free yields and monitoring the New York municipal market carefully in an
attempt to provide our investors with relatively low share price volatility.
In this, our 12th year, we continue to appreciate your support, and look
forward to serving your investment needs in the years ahead.
Sincerely,
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/s/ Ronald H. Fielding
February 1, 1999
(1) A portion of the Fund's income may be subject to income taxes. Capital gains
distributions, if any, are taxable as capital gains. For investors subject to
the alternative minimum tax, a portion of the Fund's distributions may increase
that tax. See page 42 for details.
(2) As calculated by Lipper Analytical Services, Inc. Standardized yield for
Class A shares is based on the Class A net income for a 30-day period ended
12/31/98 and the maximum offering price at the end of the period. Falling net
asset values will tend to artificially raise yields. Lipper calculations of
performance rankings do not reflect sales charges, but do assume the
reinvestment of dividends and capital gains distributions.
(3) As of 12/31/98. Calculation of dividend yield based on last distribution
does not include sales charges, which if included, would change performance
results. All performance information provided represents past performance and is
not predictive of future investment performance. The investment return and
principal value of an investment in the fund will fluctuate with market
conditions, so that shares, on any given day or when redeemed, may be worth more
or less than their original cost.
4 ROCHESTER FUND MUNICIPALS
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MANAGEMENT'S DISCUSSION & ANALYSIS
The primary goal of Rochester Fund Municipals is to earn a high level of
income exempt from federal, New York State and New York City personal income tax
for its investors, and the Fund continued throughout the year to accomplish that
goal.(1) While we attempt to keep the monthly dividend as high and consistent as
is prudent, dividend adjustments are made periodically.(2) The Fund's policy of
seeking to maintain a steady dividend for its Class A shares did not materially
affect portfolio management strategies during its last fiscal year.
The Fund's Class A total return at Net Asset Value for the 1998 year was
6.52%.(3) For Class A shareholders, the Fund's 12 monthly distributions totaling
$1.052 represented approximately 88% of the Fund's total return, with the 14
cent gain in share value comprising the remainder. Once again, we feel that we
have been successful in providing investors with relatively strong total returns
by managing specifically for yield.
More than ever before, 1998 was the year that investors learned the power
behind the nuances of interest rates. Long-term municipal rates rose during
early 1998, fell from May through September, and declined slightly in the last
quarter. While short-term rates remained stable early in the year, the actions
of the Federal Reserve Board, under the leadership of Chairman Alan Greenspan,
directed three distinct twenty-five basis point reductions in short-term
interest rates during the fourth quarter in an effort to bolster both world and
U.S. economies. These actions were generally viewed positively, and bond prices
rose, as bond yields became more attractive relative to short-term interest
rates.
The New York economy continues to gain strength. Both the City and State
recorded a surplus for their respective fiscal years. And New York City was
buoyed by strong tax revenues through the year, driven in part by the profits
registered by yet another strong year on Wall Street. This gave a particular
boost to New York City general obligation bonds which were upgraded to A3 from
Baa1 by Moody's Investors Service, and to A- from BBB+ by Standard & Poor's
Ratings Services. Credit upgrades were prevalent throughout the state during the
past year, as issues we have always believed in, such as Long Island Lighting
and Niagara Mohawk, were also upgraded, benefiting the Fund's performance.
1998 saw a large supply of new issues in the New York municipal bond
market, a cause for concern quickly alleviated by a matching level of demand.
However, voters may remember numerous election campaign attacks on the State's
increase in debt caused by such new issuance. Investors in the Fund should be
aware that we find no cause for alarm in these electioneering platforms. Debt is
more accurately weighted when compared to the borrower's ability to pay, and the
level of New York State's personal income--ultimately the source for taxation to
service this debt--is higher than ever before.
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YIELDS
FOR THE 30 DAYS ENDED 12/31/98
DIVIDEND YIELD STANDARDIZED
NAV MOP YIELD
CLASS A 5.43% 5.17% 4.47%
CLASS B 4.43% 4.43% 3.83%
CLASS C 4.45% 4.45% 3.84%
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Dividend yield at MOP (based on last distribution) and standardized yield (based
on net investment income for the 30-day period ended 12/31/98) are annualized
and divided by period-end offering price. Dividend yield at NAV does not include
sales charges. Falling share prices may artificially increase yields.
TOTAL RETURN (AS OF 12/31/98)
Cumulative Average Annual
NAV MOP NAV MOP
CLASS A SHARES
1 YEAR 6.52% 1.46% 6.52% 1.46%
5 YEARS 34.45% 28.06% 6.10% 5.07%
10 YEARS 125.42% 114.70% 8.47% 7.94%
LIFE(5/15/86) 179.22% 165.96% 8.47% 8.05%
CLASS B SHARES
1 YEAR 5.61% 0.61% 5.61% 0.61%
LIFE(3/17/97) 14.84% 10.84% 8.04% 5.92%
CLASS C SHARES
1 YEAR 5.56% 4.56% 5.56% 4.56%
LIFE(3/17/97) 14.85% 14.85% 8.05% 8.05%
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
MOP stands for Maximum Offering Price, and calculations for Class A returns at
MOP include the 4.75% maximum initial sales charge. Class B returns at MOP
include the applicable contingent deferred sales charge of 5% (1-year) and 4%
(life of class). Class C returns for the 1-year period include the contingent
deferred sales charge of 1%. An explanation of the different performance
calculations is in the Fund's prospectus. Class B and C shares are subject to an
annual 0.75% asset-based sales charge. NAV stands for Net Asset Value, and
returns at NAV do not reflect payment of any sales charge.
The Fund's performance may from time to time be subject to substantial
short-term changes, particularly during periods of market or interest rate
volatility. For updates on the fund's performance, please contact your financial
adviser, call us at 1-800-525-7048 or visit our website,
www.oppenheimerfunds.com.
(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, a portion of the Fund's distributions
may increase that tax.
(2) The Fund attempts to pay dividends on Class A shares at a constant level.
There is no assurance that it will be able to do so. The Board of Trustees may
change the targeted dividend rate at any time without prior notice to
shareholders. Additionally, the amount of those dividends and the dividends paid
on Class B and Class C shares may vary over time, depending upon market
conditions, the composition of the Fund's portfolio, and expenses borne by the
particular class of shares. Dividends and distributions paid on Class A shares
will generally be higher than dividends for Class B and Class C shares, which
normally have higher expenses than Class A. The Fund cannot guarantee that it
will pay any dividends or distributions.
(3) Please refer to the table for the Fund's standardized performance figures.
5 ROCHESTER FUND MUNICIPALS
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During the past year, the Fund eclipsed four billion dollars in assets and
held over 1000 different bonds (1086 as of 12/31/98). There was a slight
improvement in the average dollar weighted credit rating of the Fund's portfolio
during 1998 and a slight lowering of its duration.(4)
Remaining fully invested throughout the year, the Fund's investment
strategy continued to consider issues across a broad range of market sectors,
maturities, coupons and call features. For the past several years, we pursued
utility tax-exempt bonds aggressively, believing that fears of deregulation
created numerous buying opportunities. (The credit upgrades of Long Island
Lighting and Niagara Mohawk referenced earlier give tangible support to our
opinion.) And, while healthcare bonds continue to be the Fund's largest
municipal sector, investors should be relieved to know that over 85% of these
holdings have a "belt and suspenders" credit support of both the hospital's
revenues and backup guarantees of U.S. government FHA insurance, bank letters of
credit, or New York State appropriations.
As we look towards 1999, we anticipate world markets, the impending Year
2000 event and "irrational exuberance" will continue to create fluctuations in
the nation's economy, but believe it is unlikely that any of these events will
lead to crisis. We believe the general strength of the New York State economy to
be excellent, that taxes, necessary to repay debt, will continue, and that
municipal bonds will offer investors good after-tax yields and returns on a
relative basis.
We will continue to manage the portfolio with an eye to reducing overall
portfolio risk and adding value to the investment process. We believe that
investors will benefit from our well-balanced portfolio. Going forward, we see
modest but continued economic growth, very low inflation and the potential for
more stable interest rates, if not further modest reductions--all combining to
create attractive values for municipal securities.
Naturally, as we uncover new opportunities, the Fund's portfolio holdings
and allocations are subject to change.
(4) Duration is a measure of the Fund's volatility in response to changes in
interest rates. Duration is directly related to price sensitivity to interest
rate changes.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET.
These graphs detail the performance of a hypothetical $10,000 investment
in each class of shares of the Fund held until December 31, 1998. In the case of
Class A shares, performance is measured over a 10-year period. In the case of
Class B and Class C shares, performance is measured from inception of the
respective class on March 17, 1997. The Fund's performance reflects the
deduction of the 4.75% maximum initial sales charge on Class A shares, and the
applicable contingent deferred sales charge for Class B and Class C shares. The
graphs assume that all dividends and capital gains distributions, if any, were
reinvested in additional shares.
The Fund's performance is compared to the performance of that of the
Lehman Brothers Municipal Bond Index, an unmanaged index of a broad range of
investment-grade municipal bonds that is widely regarded as a measure of the
performance of the general municipal bond market, i.e. municipal bonds that are
exempt from federal tax but not necessarily New York State or City taxes. Index
performance reflects the reinvestment of dividends but does not consider the
effect of capital gains or transaction costs, and none of the data in the graphs
that follow shows the effect of taxes. The Fund's performance reflects the
effects of Fund business and operating expenses. While index comparisons may be
useful to provide a benchmark for the Fund's performance, it must be noted that
the Fund's investments are not limited to the securities in the index. The
performance of the Fund is also compared to the Consumer Price Index, a
non-securities index which measures changes in the inflation rate.
COMPARISON OF CHANGE IN VALUE OF $10,000
HYPOTHETICAL INVESTMENTS IN ROCHESTER FUND MUNICIPALS AND LEHMAN BROTHERS
MUNICIPAL BOND INDEX
CLASS A SHARES
[Line graph omitted]
Average Annual Total Return of Class A Shares of the Fund at 12/31/98(1)
1 Year 1.46% 5 Year 5.07% 10 Year 7.94%
CLASS B SHARES
[Line graph omitted]
Average Annual Total Return of Class B Shares of the Fund at 12/31/98(2)
1 Year 0.61% Life of Class 5.92%
CLASS C SHARES
[Line graph omitted]
Average Annual Total Return of Class C Shares of the Fund at 12/31/983(3)
1 Year 4.56% Life of Class 8.05%
(1) The average annual total returns are shown net of the applicable 4.75%
maximum initial sales charge.
(2) Class B shares of the Fund were first publicly offered on 3/17/97. The
average annual total returns are shown net of the applicable 5% and 4%
contingent deferred sales charges, respectively, for the one-year period and the
life of the class. The ending account value in the graph is net of the
applicable 4% contingent deferred sales charge.
(3) Class C shares of the Fund were first publicly offered on 3/17/97. The
average annual total returns are shown net of the applicable 1% contingent
deferred sales charge for the one-year period. Past performance is not
predictive of future performance. Please note: graphs are not drawn to the same
scale.
6 ROCHESTER FUND MUNICIPALS
<PAGE>
THE ROCHESTER PORTFOLIO MANAGEMENT TEAM
[Photo of Portfolio Management Team (l to r)]
ANTHONY A. TANNER, CFA
Vice President and Portfolio Manager, Rochester Division
Joined the Rochester Funds Investment Team in June, 1991
RONALD H. FIELDING, CFA
Senior Vice President, Portfolio Manager and Chief Strategist, Rochester
Division
Founded the Rochester Funds Investment Team in May, 1983
[Photo of Portfolio Management Team (l to r)]
DANIEL G. LOUGHRAN, CFA
Vice President and Senior Research Analyst, Rochester Division
Joined the Rochester Funds Investment Team in October, 1994
RICHARD A. STEIN, CFA
Vice President - Credit Analysis, Rochester Division
Joined the Rochester Funds Investment Team in May, 1993
Most investors recognize that the greatest advantage of fund investing is
professional management: the devotion of an investment team to direct the fund's
portfolio, reduce the impact of adversity, and create an investment with the
potential to earn strong yields.
The strengths of our portfolio management -- our `Rochester style'--
support this potential. In addition to reviewing the broad spectrum of New York
municipal issues generally available, the management team pursues special
situations that are often overlooked by the market. When properly investigated,
and selected, these issues not only broaden the Fund's portfolio, but can also
help to increase yield as well.
For example, small issues often provide the Fund with significant yield
contributions. We include bonds of small issuers, many from the Upstate region,
because they typically provide higher yields than larger, better-known credits.
In addition, while small issues may be less liquid than equivalent quality large
issues, issuers of comparatively smaller debt may offer graduated payment of
principal, a feature that reduces the debt, and may reduce the volatility, on an
accelerated schedule.
Other circumstances exist where highly credit-worthy issuers choose to
forego the expense and delay of obtaining a credit rating from a nationally
recognized statistical rating organization. We analyze these unrated issues to
determine the true risks involved and their value as an addition to the
portfolio. In our opinion, some of these issues offer significant yield
advantages, often with no appreciable increase in credit risk.
Evaluating these unique opportunities takes time and effort, but we
believe that, if you're paying for portfolio management, you should receive the
extra effort and resources necessary to enhance the portfolio and produce
potentially greater returns.
Ron Fielding, the Fund's Portfolio Manager since inception in May of 1986,
directs the long term investment strategies and overall composition of the
portfolio. Under his management, the Fund's Portfolio Management Team researches
investment opportunity and responds to the variety of issues presented in the
New York State market.
7 ROCHESTER FUND MUNICIPALS
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WHY NOW IS A GOOD TIME FOR TAXABLE EQUIVALENT YIELD
As of December 31, 1998, the opinion of many municipal bond fund managers
- - including us - is that municipal bonds are "cheap to Treasuries." And, while
that may be a convoluted turn of phrase, it means good news to municipal bond
and bond fund investors as they ponder investment outcomes in 1999 and beyond.
During the later months of 1998, demand for municipal bonds did not keep
pace with the demand for U.S. Treasury bonds, as global investors sought
guaranteed investment returns secure from growing international instabilities.
This demand served, in part, to decrease the yield on Treasury bonds, making
Treasuries `rich' and narrowing the spread, or difference, between their yields
and the yields on municipal bonds of comparative maturities.
Consider the example: On December 31, 1998, 30-year insured New York City
municipal bonds yielded 4.9%, while the 30-year Treasury yielded 5.1%. But,
while a highly rated municipal bond yields only 95% of its comparative Treasury,
this is before any tax implications. On a pre-tax basis, the taxable equivalent
yield on such a hypothetical investment could jump to 9.1%.
Nearly 80% more yield than the comparable maturity Treasury bond for
investors in the highest possible tax bracket.(1)
Municipal bonds aren't typically this cheap relative to Treasuries, as the
spread between the two yields tends to be considerably wider, because both
investors and issuers of municipal debt recognize the significance of tax
equivalent yields.
To highlight the significance, please refer to the chart below. It will
help you determine what you would need to earn from a taxable investment to
match the hypothetical tax-free yields shown. (The specific yields depicted are
not intended to be representative of any Rochester Fund, and are shown for
illustrative purposes only.)
(1) The value of Treasuries, if held to maturity, is fixed; principal is
guaranteed and interest is fixed.
YIELD PERCENTAGE COMPARISON
AS OF 12/31/98
30-Year Treasury Yield 5.1
30-Year Insured New York City Bond Yield 4.9
Taxable Equivalent Yield 9.1
Data Source: Bloomberg Business News Taxable equivalent yield assumes the
maximum combined federal, New York State and New York City income tax bracket.
All figures are calculated as of 12/31/98.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
TAX EXEMPT VS. TAXABLE YIELDS
-------------------------------------------------------------------------------
EFFECTIVE EFFECTIVE
TAX THIS TAXABLE RATE TAX TAXABLE RATE
BRACKET NEEDED TO EQUAL BRACKET NEEDED TO EQUAL
1999 TAXABLE INCOME NYC RESIDENTS CURRENT TAX-FREE RATE NYS RESIDENTS CURRENT TAX-FREE RATE
- ---------------------------------------------------------------------------------------------------------------------------
SINGLE RETURN JOINT RETURN 4.5% 5.0% 5.5% 4.5% 5.0% 5.5%
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$25,001 - $25,750 $40,001 - $43,050 24.0% 5.9% 6.6% 7.2% 20.8% 5.7% 6.3% 7.0%
$25,751 - $62,450 $43,051 - $104,050 35.7% 7.0% 7.8% 8.6% 32.9% 6.7% 7.5% 8.2%
$62,451 - $130,250 $104,051 - $158,550 38.4% 7.3% 8.1% 8.9% 35.7% 7.0% 7.8% 8.6%
$130,251-$283,150 $158,551-$283,150 42.8% 7.9% 8.8% 9.6% 40.4% 7.6% 8.4% 9.2%
over $283,150 over $283,150 46.0% 8.3% 9.3% 10.2% 43.7% 8.0% 8.9% 9.8%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
The tax information and brackets listed above are believed to be current. The
table assumes that an investor's highest tax bracket applies to the change in
taxable income resulting from a switch between taxable and non-taxable
investments, that the investor is not subject to the alternative minimum tax and
that state tax payments are fully deductible from federal tax payments. Your
actual tax 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.
8 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
MUNICIPAL BONDS AND NOTES--102.5%
================================================================================================================================
NEW YORK--93.6%
<S> <C> <C> <C> <C>
$ 200,000 Albany County IDA (Upper Hudson Library) 8.750% 05/01/2007 $ 204,414
955,000 Albany County IDA (Upper Hudson Library) 8.750 05/01/2022 1,015,537
409,336 Albany Hsg. Authority 0.000 10/01/2012 (p) 112,224
620,000 Albany Hsg. Authority (Lark Drive) 5.500 12/01/2028 622,362
2,275,000 Albany IDA (Albany Medical Center) 8.250 08/01/2004 2,418,279
400,000 Albany IDA (Albany Municipal Golf Course Clubhouse) 7.500 05/01/2012 436,940
1,015,000 Albany IDA (Albany Rehab.) 8.375 06/01/2023 1,120,966
1,715,000 Albany IDA (MARA Mansion Rehab.) 6.500 02/01/2023 1,782,725
1,395,000 Albany IDA (Port of Albany) 7.250 02/01/2024 1,512,389
1,770,000 Albany Parking Authority 0.000 11/01/2017 683,078
10,070,000 Allegany County IDA (Alfred University) 7.500 09/01/2011 10,904,400
4,200,000 Allegany County IDA (Houghton College) 5.250 01/15/2024 4,191,180
4,190,000 Amherst IDA (Amherst Rink) 5.650 10/01/2022 4,366,189
1,010,000 Babylon IDA (JFB & Sons Lithographers) 7.625 12/01/2006 1,065,409
2,570,000 Babylon IDA (JFB & Sons Lithographers) 8.625 12/01/2016 2,755,991
1,330,000 Babylon IDA (WWH Ambulance) 7.375 09/15/2008 1,464,091
3,850,000 Batavia Hsg. Authority (Trocaire Place) (a) 8.750 04/01/2025 3,869,250
515,000 Batavia Hsg. Authority (Washington Towers) 6.500 01/01/2023 540,307
800,000 Battery Park City Authority 5.750 06/01/2023 817,800
1,050,000 Battery Park City Authority 5.800 11/01/2022 1,122,954
700,000 Battery Park City Authority 10.000 06/01/2023 736,575
1,445,000 Bayshore HDC 7.500 02/01/2023 1,561,221
335,000 Beacon IDA (Craig House) 9.000 07/01/2011 335,951
1,000,000 Bethany Retirement Home 7.450 02/01/2024 1,166,420
1,065,000 Blauvelt Volunteer Fire Company 6.250 10/15/2017 1,085,970
35,000 Bleeker Terrace HDC 8.100 07/01/2001 35,365
45,000 Bleeker Terrace HDC 8.350 07/01/2004 45,524
900,000 Bleeker Terrace HDC 8.750 07/01/2007 912,240
6,965,000 Brookhaven IDA (Dowling College) 6.750 03/01/2023 7,492,111
870,000 Brookhaven IDA (Farber) (a) 6.000(v) 12/01/2002 870,000
490,000 Brookhaven IDA (Farber) (a) 6.000(v) 12/01/2004 490,000
475,000 Brookhaven IDA (Interdisciplinary School) 8.500 12/01/2004 518,819
3,220,000 Brookhaven IDA (Interdisciplinary School) 9.500 12/01/2019 3,638,278
645,000 Broome County IDA (Binghamton Simulator) 8.250 01/01/2002 653,275
190,000 Broome County IDA (Industrial Park) 7.550 12/01/2000 191,469
195,000 Broome County IDA (Industrial Park) 7.600 12/01/2001 196,626
600,000 Capital District Youth Center 6.000 02/01/2017 644,820
500,000 Carnegie Redevelopment Corp. (a) 7.000 09/01/2021 547,025
6,250,000 Castle Rest Residential Health Care Facility 5.750 08/01/2037 6,644,500
1,830,000 Cattaraugus County IDA (Cherry Creek) 9.800 09/01/2010 1,996,182
1,250,000 Cattaraugus County IDA (Olean General Hospital) 5.250 08/01/2023 1,253,712
8,075,000 Cattaraugus County IDA (St. Bonaventure University) 8.300 12/01/2010 (p) 8,929,981
8,600,000 Cayuga County COP (Auburn Hospital) 6.000 01/01/2021 9,148,078
2,900,000 Chautauqua County IDA (Jamestown Devel. Corp.) 5.250 08/01/2028 2,880,454
1,700,000 Chautauqua County IDA (Jamestown Devel. Corp.) 7.125 11/01/2008 1,704,403
3,395,000 Chautauqua County IDA (Jamestown Devel. Corp.) 7.125 11/01/2018 3,406,984
4,255,000 City of Port Jervis IDA (FHP) 5.500 11/01/2016 4,285,721
640,000 City of Port Jervis IDA (FHT) 10.000 11/01/2008 662,419
3,115,000 Clifton Springs Hospital & Clinic 8.000 01/01/2020 3,467,805
</TABLE>
9 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 35,000 Cohoes GO 6.200% 03/15/2012 $ 36,050
25,000 Cohoes GO 6.200 03/15/2013 25,595
25,000 Cohoes GO 6.250 03/15/2014 25,555
25,000 Cohoes GO 6.250 03/15/2015 25,555
25,000 Cohoes GO 6.250 03/15/2016 25,450
595,000 Columbia County IDA (ARC) 7.750 06/01/2005 650,383
2,650,000 Columbia County IDA (ARC) 8.650 06/01/2018 3,001,019
605,000 Columbia County IDA (Berkshire Farms) 6.900 12/15/2004 649,304
1,855,000 Columbia County IDA (Berkshire Farms) 7.500 12/15/2014 2,052,706
60,000 Cortland County IDA (Paul Bunyon Products) 8.000 07/01/2000 61,325
3,500,000 Dutchess County IDA (Bard College) 7.000 11/01/2017 3,882,865
1,700,000 Dutchess County Res Rec (Solid Waste) 6.800 01/01/2010 1,915,832
1,805,000 Dutchess County Res Rec (Solid Waste) 7.000 01/01/2010 2,047,448
2,420,000 Dutchess County Res Rec (Solid Waste) (w) 5.150 01/01/2010 2,483,452
1,700,000 Dutchess County Res Rec (Solid Waste) (w) 5.400 01/01/2013 1,743,384
1,000,000 Dutchess County Res Rec (Solid Waste) (w) 5.450 01/01/2014 1,024,040
1,540,000 Dutchess County Water & Waste 0.000 06/01/2025 390,914
1,540,000 Dutchess County Water & Waste 0.000 06/01/2026 370,940
1,000,000 Dutchess County Water & Waste 0.000 06/01/2027 228,690
3,000,000 Dutchess County Water & Waste 5.375 06/01/2019 3,077,130
2,000,000 East Rochester Hsg. Authority (Linden Knoll) 5.350 02/01/2038 2,028,300
3,125,000 East Rochester Hsg. Authority (St. John's Meadows) 5.250 08/01/2038 3,119,656
3,250,000 East Rochester Hsg. Authority (St. John's Meadows) 5.675 08/01/2022 3,424,330
4,250,000 East Rochester Hsg. Authority (St. John's Meadows) 5.700 08/01/2027 4,504,532
1,885,000 East Rochester Hsg. Authority (St. John's Meadows) 5.750 08/01/2037 2,005,583
4,095,000 East Rochester Hsg. Authority (St. John's Meadows) 5.950 08/01/2027 4,323,583
25,000 Elmira HDC 7.500 08/01/2007 25,780
3,425,000 Erie County IDA (Affordable Hospitality) (b) 9.250 12/01/2015 3,425,000
1,275,000 Erie County IDA (Air Cargo) 8.250 10/01/2007 1,319,880
2,380,000 Erie County IDA (Air Cargo) 8.500 10/01/2015 2,509,924
35,000,000 Erie County IDA (Canfibre Lackawanna) 9.050 12/01/2025 35,054,600
300,000 Erie County IDA (Episcopal Church Home) 6.000 02/01/2028 305,820
3,230,000 Erie County IDA (Medaille College) 8.000 12/30/2022 3,540,048
1,355,000 Erie County IDA (Mercy Hospital) 6.250 06/01/2010 1,396,707
1,850,000 Essex County IDA (International Paper Co.) 5.500 08/15/2022 1,847,447
3,800,000 Franklin County IDA (Alice Hyde Hospital) 4.750 10/01/2018 3,642,224
4,245,000 Franklin County SWMA 6.250 06/01/2015 4,404,018
620,000 Geneva IDA (FLCP) 8.250 11/01/2004 671,410
1,000,000 Geneva IDA (FLCP) 8.500 11/01/2016 1,085,540
925,000 Glen Cove IDA (SLCD) 6.875 07/01/2008 920,144
3,775,000 Glen Cove IDA (SLCD) 7.375 07/01/2023 3,742,799
15,000,000 Glen Cove IDA (The Regency at Glen Cove) 0.000 10/15/2019 (p) 4,954,650
2,375,000 Grand Central BID (Grand Central District Management) 5.250 01/01/2022 2,390,889
2,045,000 Groton Community Health Care Center 7.450 07/15/2021 2,402,118
690,000 Hamilton Elderly Hsg. Corp. 11.250 01/01/2015 718,918
5,210,000 Hempstead IDA (Franklin Hospital Medical Center) 5.750 11/01/2008 5,233,237
9,375,000 Hempstead IDA (Franklin Hospital Medical Center) 6.375 11/01/2018 9,423,750
1,015,000 Herkimer County IDA (Burrows Paper) 7.250 01/01/2001 1,039,248
14,440,000 Herkimer County IDA (Burrows Paper) 8.000 01/01/2009 15,674,331
60,000 Housing NY Corp. 5.500 11/01/2020 61,400
6,595,000 Housing NY Corp. 5.500 11/01/2020 6,737,452
</TABLE>
10 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 990,000 Hudson IDA (Have, Inc.) 8.125% 12/01/2017 $ 1,067,943
1,300,000 Hudson IDA (Wittcomm, Inc.) 7.125 11/01/2009 1,298,206
950,000 Islip IDA (Leeway School) 9.000 08/01/2021 1,033,495
50,000 Islip IDA (WJL Realty) 7.800 03/01/2003 51,786
100,000 Islip IDA (WJL Realty) 7.850 03/01/2004 103,574
100,000 Islip IDA (WJL Realty) 7.900 03/01/2005 103,585
500,000 Islip IDA (WJL Realty) 7.950 03/01/2010 521,945
2,000,000 Islip Res Rec 6.500 07/01/2009 2,303,440
20,600,000 L.I. Power Authority 5.250 12/01/2026 20,695,790
21,450,000 L.I. Power Authority 5.500 12/01/2029 22,149,484
10,000,000 L.I. Power Authority 5.750 12/01/2024 10,725,400
5,905,000 L.I. Power Authority RITES (a) 5.357(f) 12/01/2022 5,913,917
12,500,000 L.I. Power Authority RITES (a) 5.857(f) 12/01/2026 13,617,875
3,725,000 L.I. Power Authority RITES (a) 7.590(f) 12/01/2026 4,058,127
2,650,000 Lockport HDC 6.000 10/01/2018 2,790,291
100,000 Lowville GO 7.200 09/15/2005 116,774
75,000 Lowville GO 7.200 09/15/2007 89,907
100,000 Lowville GO 7.200 09/15/2012 124,085
100,000 Lowville GO 7.200 09/15/2013 124,098
100,000 Lowville GO 7.200 09/15/2014 124,192
5,350,000 Lyons Community Health Initiatives Corp. 6.800 09/01/2024 5,886,551
4,610,000 Macleay Hsg. Corp. (Larchmont Woods) 8.500 01/01/2031 4,856,358
2,485,000 Mechanicsville HDC 6.900 08/01/2022 2,597,620
200,000 Middleton IDA (Flanagan) 7.000 11/01/2006 200,198
690,000 Middleton IDA (Flanagan) 7.500 11/01/2018 692,070
905,000 Middleton IDA (Fleurchem) 8.000 12/01/2016 1,000,269
3,740,000 Middleton IDA (Southwinds) 8.375 03/01/2018 4,147,473
660,000 Middletown IDA (YMCA) 6.250 11/01/2009 659,003
1,255,000 Middletown IDA (YMCA) 7.000 11/01/2019 1,252,352
75,000 Monroe County Airport Authority (GRIA) 7.250 01/01/2019 78,971
440,000 Monroe County COP 8.050 01/01/2011 458,520
4,260,000 Monroe County IDA (Al Sigl Center) 6.600 12/15/2017 4,566,464
1,590,000 Monroe County IDA (Al Sigl Center) 7.250 12/15/2015 1,749,238
3,080,000 Monroe County IDA (Brazill Merk) 7.900 12/15/2014 3,238,558
900,000 Monroe County IDA (Canal Ponds) 7.000 06/15/2013 989,775
10,000 Monroe County IDA (Cohber) 7.550 12/01/2001 10,237
10,000 Monroe County IDA (Cohber) 7.650 12/01/2002 10,270
10,000 Monroe County IDA (Cohber) 7.700 12/01/2003 10,275
170,000 Monroe County IDA (Cohber) 7.850 12/01/2009 175,180
2,186,291 Monroe County IDA (Cottrone Devel.) 9.500 12/01/2010 2,351,662
5,750,000 Monroe County IDA (DePaul CF) 5.950 08/01/2028 5,752,012
880,000 Monroe County IDA (DePaul CF) 6.450 02/01/2014 980,250
1,285,000 Monroe County IDA (DePaul CF) 6.500 02/01/2024 1,429,922
335,000 Monroe County IDA (DePaul Properties) 8.300 09/01/2002 363,468
4,605,000 Monroe County IDA (DePaul Properties) 8.800 09/01/2021 5,022,673
14,565,000 Monroe County IDA (Genesee Hospital) 7.000 11/01/2018 15,338,110
1,000,000 Monroe County IDA (Jewish Home) 6.875 04/01/2017 1,059,310
4,945,000 Monroe County IDA (Jewish Home) 6.875 04/01/2027 5,200,904
1,425,000 Monroe County IDA (Melles Groit) 9.500 12/01/2009 1,463,418
1,926,000 Monroe County IDA (Morrell/Morrell) 7.000 12/01/2007 2,015,212
500,000 Monroe County IDA (Nazareth College) 5.250 04/01/2023 511,695
</TABLE>
11 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 4,330,000 Monroe County IDA (Piano Works) 7.625% 11/01/2016 $ 4,766,897
2,625,000 Monroe County IDA (Roberts Wesleyan College) 6.700 09/01/2011 2,708,632
3,490,000 Monroe County IDA (RTM Turbine) (a) (d) 7.750 12/01/2006 1,570,500
3,060,000 Monroe County IDA (RTM Turbine) (a) (d) 8.000 12/01/2011 1,377,031
770,000 Monroe County IDA (RTM Turbine) (a) (d) 8.500 12/01/2016 346,500
1,310,000 Monroe County IDA (St. Joseph's Parking Garage) 7.000 11/01/2008 1,310,419
4,345,000 Monroe County IDA (St. Joseph's Parking Garage) 7.500 11/01/2022 4,346,608
915,000 Monroe County IDA (Volunteers of America) 5.700 08/01/2018 903,370
2,610,000 Monroe County IDA (Volunteers of America) 5.750 08/01/2028 2,569,728
465,000 Monroe County IDA (West End Business) 6.750 12/01/2004 492,003
110,000 Monroe County IDA (West End Business) 6.750 12/01/2004 116,388
65,000 Monroe County IDA (West End Business) 6.750 12/01/2004 68,775
1,375,000 Monroe County IDA (West End Business) 8.000 12/01/2014 1,512,981
345,000 Monroe County IDA (West End Business) 8.000 12/01/2014 379,621
170,000 Monroe County IDA (West End Business) 8.000 12/01/2014 187,059
515,000 Monroe County IDA (West End Business) 8.000 12/01/2014 566,680
285,000 Monroe HDC (Multi-Family) 7.000 08/01/2021 296,679
5,860,000 Montgomery County IDA (Amsterdam) (a) 7.250 01/15/2019 4,102,000
1,015,000 Montgomery County IDA (New Dimensions in Living) 8.900 05/01/2016 1,094,596
3,800,000 MTA Dedicated Tax Fund RITES (a) 5.030(f) 04/01/2023 3,609,544
10,000,000 MTA IVRC (a) 6.784(f) 07/01/2011 11,375,000
3,125,000 MTA RITES (a) 4.030(f) 07/01/2026 2,535,187
1,000,000 MTA Service Contract, Series 8 5.375 07/01/2021 1,015,240
1,000,000 MTA Service Contract, Series R 5.500 07/01/2012 1,071,940
1,270,000 MTA Service Contract, Series R 5.500 07/01/2012 1,361,364
815,000 MTA Service Contract, Series R 5.500 07/01/2013 867,804
2,500,000 MTA Service Contract, Series R 5.500 07/01/2014 2,652,125
3,320,000 MTA Service Contract, Series R 5.500 07/01/2017 3,476,638
4,360,000 MTA Service Contract, Series R 5.500 07/01/2017 4,565,705
9,400,000 MTA YCR (a) 7.203(f) 07/01/2013 10,297,230
3,000,000 MTA YCR (a) 7.203(f) 07/01/2022 3,193,650
9,690,000 MTA, Series C1 5.500 07/01/2022 9,934,769
13,480,000 MTA, Series C1 5.625 07/01/2027 14,093,744
5,000,000 MTA, Series C2 5.375 07/01/2027 5,174,450
802,824 Municipal Assistance Corp. for Troy, NY 0.000 07/15/2021 258,477
1,218,573 Municipal Assistance Corp. for Troy, NY 0.000 01/15/2022 382,425
2,725,000 Nassau County IDA (ACLDD) 8.125 10/01/2022 3,000,852
275,000 Nassau County IDA (RJS Scientific) 8.050 12/01/2005 302,940
2,700,000 Nassau County IDA (RJS Scientific) 9.050 12/01/2025 3,111,426
2,850,000 Nassau County IDA (Sharp International) 7.375 12/01/2007 3,039,610
1,810,000 Nassau County IDA (Sharp International) 7.375 12/01/2007 1,930,419
2,610,000 Nassau County IDA (Sharp International) 7.875 12/01/2012 2,774,952
1,650,000 Nassau County IDA (Sharp International) 7.875 12/01/2012 1,760,797
500,000 Nassau County IDA (Structural Industries) 7.750 02/01/2012 566,080
20,000 New Hartford HDC (Village Point) 7.375 01/01/2024 21,402
1,505,000 New Hartford Sunset Wood Project 5.950 08/01/2027 1,609,823
3,000,000 New Rochelle IDA (CNR) 6.750 07/01/2022 3,230,700
4,950,000 Newark/Wayne Community Hospital 5.875 01/15/2033 5,171,958
2,340,000 Newark/Wayne Community Hospital 7.600 09/01/2015 2,531,646
185,000 Newburgh GO 7.100 09/15/2007 201,650
185,000 Newburgh GO 7.100 09/15/2008 200,891
</TABLE>
12 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 180,000 Newburgh GO 7.150% 09/15/2009 $ 195,298
150,000 Newburgh GO 7.150 09/15/2010 162,520
155,000 Newburgh GO 7.200 09/15/2011 167,577
155,000 Newburgh GO 7.200 09/15/2012 166,949
160,000 Newburgh GO 7.250 09/15/2013 172,048
155,000 Newburgh GO 7.250 09/15/2014 166,048
2,310,000 Newburgh IDA (ARMA Textile Printers) 7.125 11/01/2007 2,392,190
4,880,000 Newburgh IDA (ARMA Textile Printers) 8.000 11/01/2017 5,113,264
995,000 Niagara County IDA (Maryland Maple) 10.250 11/15/2009 1,028,492
1,000,000 Niagara County IDA (Niagara University) 5.375 10/01/2023 1,033,390
1,900,000 Niagara County IDA (Sevenson Hotel) 6.600 05/01/2007 1,941,952
1,700,000 Niagara Falls COP (High School Facility) 5.375 06/15/2028 1,712,971
715,000 North Babylon Volunteer Fire Co. 5.750 08/01/2022 756,842
585,000 North Tonawanda HDC (Bishop Gibbons Assoc.) 6.800 12/15/2007 645,150
3,295,000 North Tonawanda HDC (Bishop Gibbons Assoc.) 7.375 12/15/2021 3,911,132
270,000 NYC GO 0.000 05/15/2011 147,801
4,990,000 NYC GO 0.000 11/15/2011 2,665,858
200,000 NYC GO 0.000 05/15/2012 103,196
40,000 NYC GO 0.000 10/01/2012 20,257
9,025,000 NYC GO 5.000 08/01/2023 8,794,050
12,125,000 NYC GO 5.000 08/01/2023 11,814,721
8,900,000 NYC GO 5.000 08/15/2028 8,638,518
1,285,000 NYC GO 5.125 02/01/2011 1,344,444
1,250,000 NYC GO 5.125 08/01/2013 1,285,525
855,000 NYC GO 5.125 08/01/2025 842,748
12,250,000 NYC GO 5.125 08/01/2025 12,074,457
2,060,000 NYC GO 5.250 02/01/2012 2,163,268
16,265,000 NYC GO 5.250 08/01/2020 16,428,789
26,970,000 NYC GO 5.250 08/01/2021 27,219,472
1,015,000 NYC GO 5.250 08/15/2023 1,020,643
500,000 NYC GO 5.250 08/01/2024 502,270
5,910,000 NYC GO 5.300 08/01/2024 5,968,332
570,000 NYC GO 5.375 08/01/2019 582,392
1,170,000 NYC GO 5.375 08/01/2027 1,192,078
13,170,000 NYC GO 5.375 11/15/2027 13,386,120
85,000 NYC GO 5.500 10/01/2018 87,231
4,380,000 NYC GO 5.500 02/15/2026 4,501,414
15,015,000 NYC GO 5.500 11/15/2037 15,441,126
20,000 NYC GO 5.625 08/01/2016 20,774
35,000 NYC GO 5.750 02/01/2020 37,101
2,000,000 NYC GO 5.875 08/01/2024 2,144,940
4,865,000 NYC GO 5.875 08/01/2024 5,207,934
6,000,000 NYC GO 6.000 02/01/2011 6,626,940
10,000 NYC GO 6.000 08/01/2015 10,024
50,000 NYC GO 6.000 10/15/2016 54,605
15,000 NYC GO 6.000 02/15/2020 (p) 16,726
55,000 NYC GO 6.000 02/15/2020 58,798
90,000 NYC GO 6.000 05/15/2020 (p) 99,048
180,000 NYC GO 6.000 05/15/2020 191,453
15,000 NYC GO 6.000 02/15/2024 (p) 16,975
75,000 NYC GO 6.000 02/15/2024 81,007
</TABLE>
13 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 65,000 NYC GO 6.000% 02/15/2025 (p) $ 72,591
610,000 NYC GO 6.000 02/15/2025 654,804
80,000 NYC GO 6.000 10/15/2026 (p) 91,670
8,180,000 NYC GO 6.000 10/15/2026 8,908,838
4,920,000 NYC GO 6.125 02/01/2025 (p) 5,602,798
13,680,000 NYC GO 6.125 02/01/2025 14,873,443
8,735,000 NYC GO 6.125 08/01/2025 9,595,922
55,000 NYC GO 6.250 04/01/2021 (p) 63,187
15,000 NYC GO 6.250 04/01/2021 16,511
5,870,000 NYC GO 6.250 04/15/2027 (p) 6,794,877
6,330,000 NYC GO 6.250 04/15/2027 6,955,024
103,000 NYC GO 6.500 08/01/2014 (p) 118,648
397,000 NYC GO 6.500 08/01/2014 447,725
420,000 NYC GO 6.500 08/01/2015 (p) 483,806
1,580,000 NYC GO 6.500 08/01/2015 1,751,841
1,630,000 NYC GO 6.600 02/15/2010 (p) 1,873,017
370,000 NYC GO 6.600 02/15/2010 418,807
15,580,000 NYC GO 6.625 02/15/2025 (p) 17,923,855
420,000 NYC GO 6.625 08/01/2025 (p) 486,822
1,580,000 NYC GO 6.625 08/01/2025 1,783,393
5,000 NYC GO 7.000 02/01/2010 5,040
610,000 NYC GO 7.000 10/01/2012 (p) 688,153
15,000 NYC GO 7.000 10/01/2012 16,722
25,000 NYC GO 7.000 02/01/2018 27,427
625,000 NYC GO 7.000 02/01/2020 (p) 693,469
25,000 NYC GO 7.000 02/01/2020 27,427
10,000 NYC GO 7.000 02/01/2020 10,953
190,000 NYC GO 7.000 02/01/2022 208,447
4,410,000 NYC GO 7.000 02/01/2022 (p) 4,893,115
875,000 NYC GO 7.100 02/01/2009 (p) 973,280
125,000 NYC GO 7.100 02/01/2009 137,927
3,525,000 NYC GO 7.100 02/01/2010 (p) 3,920,928
475,000 NYC GO 7.100 02/01/2010 524,124
1,555,000 NYC GO 7.100 02/01/2011 (p) 1,729,658
210,000 NYC GO 7.100 02/01/2011 231,622
3,520,000 NYC GO 7.200 02/01/2014 (p) 3,925,082
480,000 NYC GO 7.200 02/01/2014 530,357
2,465,000 NYC GO 7.200 02/01/2015 (p) 2,748,672
335,000 NYC GO 7.200 02/01/2015 369,448
13,800,000 NYC GO 7.250 08/15/2024 (p) 15,061,596
20,000 NYC GO 7.250 08/15/2024 21,599
300,000 NYC GO 7.400 02/01/2002 (p) 332,217
30,000 NYC GO 7.400 02/01/2002 33,106
1,825,000 NYC GO 7.500 02/01/2003 (p) 2,050,734
175,000 NYC GO 7.500 02/01/2003 195,447
2,955,000 NYC GO 7.500 02/01/2016 (p) 3,323,252
45,000 NYC GO 7.500 02/01/2016 50,014
1,470,000 NYC GO 7.500 02/01/2018 (p) 1,653,191
30,000 NYC GO 7.500 02/01/2018 33,343
45,000 NYC GO 7.500 08/01/2019 50,653
1,820,000 NYC GO 7.500 08/01/2019 (p) 2,074,290
</TABLE>
14 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 180,000 NYC GO 7.500% 08/01/2020 $ 202,612
7,320,000 NYC GO 7.500 08/01/2020 (p) 8,342,750
6,180,000 NYC GO 7.500 08/15/2020 (p) 7,343,879
975,000 NYC GO 7.500 08/01/2021 (p) 1,111,227
25,000 NYC GO 7.500 08/01/2021 28,140
3,790,000 NYC GO 7.625 02/01/2013 (p) 4,276,030
55,000 NYC GO 7.625 02/01/2013 61,493
265,000 NYC GO 7.625 02/01/2014 (p) 298,984
5,000 NYC GO 7.625 02/01/2014 5,586
1,380,000 NYC GO 7.750 02/01/2010 1,559,359
120,000 NYC GO 7.750 02/01/2010 134,653
135,000 NYC GO 7.750 08/15/2012 (p) 150,862
15,000 NYC GO 7.750 08/15/2012 16,626
6,000,000 NYC GO 7.750 02/01/2013 (p) 6,785,460
985,000 NYC GO 7.750 08/15/2013 (p) 1,100,737
15,000 NYC GO 7.750 08/15/2013 16,626
115,000 NYC GO 7.750 08/15/2017 (p) 128,512
15,000 NYC GO 7.750 08/15/2017 16,587
250,000 NYC GO 8.000 08/15/2021 (p) 280,925
5,000 NYC GO 8.250 08/01/2012 (p) 5,641
1,620,000 NYC GO 8.250 08/01/2014 (p) 1,826,890
5,000 NYC GO 8.250 08/01/2014 5,584
1,000,000 NYC GO 8.250 11/15/2015 (p) 1,140,260
3,000,000 NYC GO 8.250 11/15/2018 (p) 3,420,780
20,000 NYC GO 8.250 11/15/2020 (p) 22,805
1,750,000 NYC GO CAB 0.000(c) 05/15/2014 1,497,597
500,000 NYC GO CAB 0.000(c) 08/01/2014 414,625
16,387,000 NYC GO CARS 8.120(f) 08/12/2010 18,763,115
8,387,000 NYC GO CARS 8.120(f) 09/01/2011 9,540,212
70,000 NYC GO DIAMONDS 0.000(c) 08/15/2016 63,143
100,000 NYC GO DIAMONDS 0.000(c) 08/01/2025 64,990
13,640,000 NYC GO Indexed Inverse Floater 5.375(c) (f) 08/01/2014 14,435,212
6,200,000 NYC GO RIBS 7.383(f) 08/13/2009 6,990,500
4,200,000 NYC GO RIBS 7.383(f) 07/29/2010 4,730,250
5,400,000 NYC GO RIBS 7.481(f) 08/22/2013 6,041,250
3,050,000 NYC GO RIBS 7.481(f) 08/01/2015 3,408,375
13,150,000 NYC GO RIBS 8.564(f) 08/01/2013 15,188,250
15,000,000 NYC GO RITES 7.063(f) 10/01/2011 16,486,650
3,375,000 NYC GO RITES (a) 4.857(f) 05/15/2023 3,205,609
3,500,000 NYC GO RITES (a) 4.857(f) 05/15/2028 3,324,335
2,285,000 NYC HDC 5.250 11/01/2031 2,304,902
316,251 NYC HDC (Albert Einstein Staff Hsg.) 6.500 12/15/2017 332,181
1,484,986 NYC HDC (Atlantic Plaza Towers) 7.034 02/15/2019 1,559,547
1,045,000 NYC HDC (Barclay Avenue) 6.450 04/01/2017 1,109,111
4,055,000 NYC HDC (Barclay Avenue) 6.600 04/01/2033 4,302,112
370,337 NYC HDC (Bay Towers) 6.500 08/15/2017 388,991
2,767,497 NYC HDC (Boulevard Towers) 6.500 08/15/2017 2,906,398
474,378 NYC HDC (Bridgeview III) 6.500 12/15/2017 498,273
499,761 NYC HDC (Cadman Plaza North) 7.000 12/15/2018 524,909
1,277,325 NYC HDC (Cadman Towers) 6.500 11/15/2018 1,341,459
187,595 NYC HDC (Candia House) 6.500 06/15/2018 197,010
</TABLE>
15 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 3,599,745 NYC HDC (Clinton Towers) 6.500% 07/15/2017 $ 3,780,416
306,895 NYC HDC (Contello III) 7.000 12/15/2018 322,322
1,487,950 NYC HDC (Cooper Gramercy) 6.500 08/15/2017 1,562,630
1,135,295 NYC HDC (Court Plaza) 6.500 08/15/2017 1,192,480
1,692,684 NYC HDC (Crown Gardens) 7.250 01/15/2019 1,778,401
3,604,488 NYC HDC (East Midtown Plaza) 6.500 11/15/2018 3,787,452
3,473,244 NYC HDC (Esplanade Gardens) 7.000 01/15/2019 3,648,504
82,826 NYC HDC (Essex Terrace) 6.500 07/15/2018 86,984
509,321 NYC HDC (Forest Park Crescent) 6.500 12/15/2017 534,884
1,655,820 NYC HDC (Gouverneur Gardens) 7.034 02/15/2019 1,739,357
364,982 NYC HDC (Heywood Towers) 6.500 10/15/2017 383,300
4,115,193 NYC HDC (Hudsonview Terrace) 6.500 09/15/2017 4,321,735
1,162,909 NYC HDC (Janel Towers) 6.500 09/15/2017 1,221,275
406,146 NYC HDC (Kingsbridge Arms) 6.500 08/15/2017 426,530
230,553 NYC HDC (Kingsbridge Arms) 6.500 11/15/2018 242,130
1,242,868 NYC HDC (Leader House) 6.500 03/15/2018 1,305,248
1,730,090 NYC HDC (Lincoln-Amsterdam) 7.250 11/15/2018 1,817,079
207,646 NYC HDC (Middagh St. Studio Apartments) 6.500 01/15/2018 218,068
2,709,305 NYC HDC (Montefiore Hospital Hsg. Sec. II) 6.500 10/15/2017 2,845,285
4,390,000 NYC HDC (Multi-Family) 5.850 05/01/2026 4,587,682
38,880,000 NYC HDC (Multi-Family) 6.600 04/01/2030 41,908,363
30,000 NYC HDC (Multi-Family) 7.300 06/01/2010 32,062
1,145,000 NYC HDC (Multi-Family) 7.350 06/01/2019 1,224,978
100,000 NYC HDC (Multi-Family), Series A 5.850 05/01/2025 104,282
1,735,000 NYC HDC (Multi-Family), Series B 5.850 05/01/2026 1,809,293
873,586 NYC HDC (New Amsterdam House) 6.500 08/15/2018 917,449
892,999 NYC HDC (New Amsterdam House) 6.500 08/15/2018 893,677
1,086,032 NYC HDC (Riverbend) 6.500 11/15/2018 1,140,561
6,658,308 NYC HDC (Riverside Park Community) 7.250 11/15/2018 6,995,817
474,991 NYC HDC (RNA House) 7.000 12/15/2018 498,959
683,500 NYC HDC (Robert Fulton Terrace) 6.500 12/15/2017 717,928
248,260 NYC HDC (Rosalie Manning Apartments) 7.034 11/15/2018 260,725
660,089 NYC HDC (Scott Tower) 7.000 12/15/2018 693,271
905,320 NYC HDC (Seaview Towers) 6.500 01/15/2018 950,758
1,685,114 NYC HDC (Sky View Towers) 6.500 11/15/2018 1,769,723
3,175,000 NYC HDC (South Bronx Cooperatives) 8.100 09/01/2023 3,372,866
373,537 NYC HDC (St. Martin Tower) 6.500 11/15/2018 392,292
1,718,603 NYC HDC (Stevenson Commons) 6.500 05/15/2018 1,804,859
492,878 NYC HDC (Strycker's Bay Apartments) 7.034 11/15/2018 528,626
1,723,163 NYC HDC (Tivoli Towers) 6.500 01/15/2018 1,809,752
234,072 NYC HDC (Town House West) 6.500 01/15/2018 245,803
359,684 NYC HDC (Tri-Faith House) 7.000 01/15/2019 377,765
1,528,331 NYC HDC (University River View) 6.500 08/15/2017 1,605,313
458,362 NYC HDC (Washington Square Southeast) 7.000 01/15/2019 481,408
413,362 NYC HDC (West Side Manor) 6.500 11/15/2018 434,116
4,601,987 NYC HDC (West Village) 6.500 11/15/2013 4,833,651
265,804 NYC HDC (Westview Apartments) 6.500 10/15/2017 279,193
611,509 NYC HDC (Woodstock Terrace) 7.034 02/15/2019 642,213
5,235,000 NYC HDC, Series B 5.875 11/01/2018 5,527,165
800,000 NYC Health & Hospital Corp. 5.750 02/15/2022 841,800
26,500,000 NYC Health & Hospital Corp. LEVRRS 7.252(f) 02/15/2011 29,580,625
</TABLE>
16 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 3,600,000 NYC IDA (Acme Architectural Products) 6.375% 11/01/2019 $ 3,609,648
1,035,000 NYC IDA (ALA Realty) 7.500 12/01/2010 1,128,005
1,355,000 NYC IDA (ALA Realty) 8.375 12/01/2015 1,542,938
680,000 NYC IDA (A-Lite Vertical Products) 6.750 11/01/2009 677,593
1,330,000 NYC IDA (A-Lite Vertical Products) 7.500 11/01/2019 1,324,241
440,000 NYC IDA (Allied Metal) 6.375 12/01/2014 445,575
940,000 NYC IDA (Allied Metal) 7.125 12/01/2027 951,402
16,685,000 NYC IDA (American Airlines) 6.900 08/01/2024 18,499,661
1,795,000 NYC IDA (American Airlines) 7.750 07/01/2019 1,836,016
11,445,000 NYC IDA (American Airlines) 8.000 07/01/2020 11,708,922
1,255,000 NYC IDA (Amplaco Group) 7.250 11/01/2008 1,313,157
2,645,000 NYC IDA (Amplaco Group) 8.125 11/01/2018 2,804,917
530,000 NYC IDA (Amster Novelty) (d) 8.000 12/01/2010 344,500
790,000 NYC IDA (Amster Novelty) (d) 8.375 12/01/2015 513,500
1,160,000 NYC IDA (Atlantic Veal & Lamb) 8.375 12/01/2016 1,256,338
11,480,000 NYC IDA (Berkeley Carroll School) 6.100 11/01/2028 11,456,122
165,000 NYC IDA (BHMS) 8.400 09/01/2002 165,431
3,075,000 NYC IDA (BHMS) 8.500 01/01/2027 3,430,531
660,000 NYC IDA (BHMS) 8.900 09/01/2011 717,229
1,690,000 NYC IDA (BHMS) 9.200 09/01/2021 1,879,348
500,000 NYC IDA (Blood Center) 7.200 05/01/2012 (p) 575,865
3,000,000 NYC IDA (Blood Center) 7.250 05/01/2022 (p) 3,462,030
45,285,000 NYC IDA (Brooklyn Navy Yard Cogeneration Partners) 5.650 10/01/2027 46,339,235
86,910,000 NYC IDA (Brooklyn Navy Yard Cogeneration Partners) 5.750 10/01/2036 89,370,422
3,975,000 NYC IDA (CCM) 6.375 11/01/2028 3,995,749
1,575,000 NYC IDA (CCM) 6.375 11/01/2028 1,577,567
1,770,000 NYC IDA (CCM) 7.875 12/01/2016 1,981,568
1,900,000 NYC IDA (CCM) 8.000 12/01/2011 2,102,369
1,500,000 NYC IDA (CNR) 5.800 09/01/2026 1,567,230
6,390,000 NYC IDA (College of Aeronautics) 5.500 05/01/2028 6,532,880
3,990,000 NYC IDA (Community Hospital of Brooklyn) 6.875 11/01/2010 4,047,975
5,750,000 NYC IDA (Crowne Plaza-LaGuardia) 6.000 11/01/2028 5,736,775
1,700,000 NYC IDA (Display Creations) 9.250 06/01/2008 1,840,896
360,000 NYC IDA (Eden II School) 7.750 06/01/2004 383,105
2,505,000 NYC IDA (Eden II School) 8.750 06/01/2019 2,760,310
10,255,000 NYC IDA (EPG) 7.500 07/30/2003 11,273,116
3,705,000 NYC IDA (Friends Seminary School) 7.000 12/01/2017 4,017,072
1,000,000 NYC IDA (Fund for NYC Project) 7.625 07/01/2010 1,051,340
3,280,000 NYC IDA (Gabrielli Truck Sales) 8.125 12/01/2017 3,474,340
1,250,000 NYC IDA (Graphic Artists) 8.250 12/30/2023 1,346,712
845,000 NYC IDA (Gutmann Plastics) 7.750 12/01/2007 880,236
2,265,000 NYC IDA (Hebrew Academy) 10.000 03/01/2021 2,526,041
735,000 NYC IDA (Herbert G. Birch Childhood Project) 7.375 02/01/2009 794,395
2,195,000 NYC IDA (Herbert G. Birch Childhood Project) 8.375 02/01/2022 2,437,482
160,000 NYC IDA (HiTech Res Rec) 8.750 08/01/2000 164,918
695,000 NYC IDA (HiTech Res Rec) 9.250 08/01/2008 743,594
5,000,000 NYC IDA (Holiday Inn/JFK Airport) 6.000 11/01/2028 4,988,500
320,000 NYC IDA (House of Spices) 9.000 10/15/2001 341,386
2,140,000 NYC IDA (House of Spices) 9.250 10/15/2011 2,331,894
3,280,000 NYC IDA (Japan Airlines) 6.000 11/01/2015 3,514,684
6,040,000 NYC IDA (JBFS) 6.750 12/15/2012 6,458,693
</TABLE>
17 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 1,675,000 NYC IDA (Koenig Iron Works) 8.375% 12/01/2025 $ 1,805,918
2,600,000 NYC IDA (L&M Optical Disc) 7.125 11/01/2010 2,615,652
1,000,000 NYC IDA (Lighthouse) 6.500 07/01/2022 (p) 1,105,410
3,025,000 NYC IDA (Little Red Schoolhouse) 6.750 11/01/2018 3,028,751
845,000 NYC IDA (Loehmann's) 9.500 12/31/2004 856,898
3,500,000 NYC IDA (MMC) 7.000 07/01/2023 3,762,360
5,550,000 NYC IDA (Nekboh) 9.625 05/01/2011 5,876,395
11,600,000 NYC IDA (Northwest Airlines) 6.000 06/01/2027 11,989,528
514,583 NYC IDA (Novelty Cord & Tassel) 6.000(v) 12/01/2006 518,700
895,000 NYC IDA (NY Hostel Co.) 6.750 01/01/2004 924,723
4,400,000 NYC IDA (NY Hostel Co.) 7.600 01/01/2017 4,631,924
695,000 NYC IDA (NY Vanities & Manufacturing) 7.000 11/01/2009 692,567
1,405,000 NYC IDA (NY Vanities & Manufacturing) 7.500 11/01/2019 1,398,916
3,435,000 NYC IDA (Ohel Children's Home and Family Services) 8.250 03/15/2023 3,770,290
1,045,000 NYC IDA (Paradise Products) 7.125 11/01/2007 1,079,339
4,475,000 NYC IDA (Paradise Products) 8.250 11/01/2022 4,689,755
56,536 NYC IDA (Penguin Air Conditioning) 12.222 12/01/1999 58,509
1,660,000 NYC IDA (Petrocelli Electric) 7.250 11/01/2007 1,728,342
460,000 NYC IDA (Petrocelli Electric) 7.250 11/01/2008 477,089
3,780,000 NYC IDA (Petrocelli Electric) 8.000 11/01/2017 3,979,093
940,000 NYC IDA (Petrocelli Electric) 8.000 11/01/2018 988,034
915,000 NYC IDA (Pop Display) 6.750 12/15/2004 965,746
2,645,000 NYC IDA (Pop Display) 7.900 12/15/2014 2,915,531
2,240,000 NYC IDA (Precision Gear) 6.375 11/02/2024 2,242,083
815,000 NYC IDA (PRFF) 7.000 10/01/2016 878,480
1,655,000 NYC IDA (Priority Mailers) 9.000 03/01/2010 1,785,066
710,000 NYC IDA (Promotional Slideguide) 7.500 12/01/2010 771,692
1,065,000 NYC IDA (Promotional Slideguide) 7.875 12/01/2015 1,176,612
700,000 NYC IDA (Psycho Therapy) 9.625 04/01/2010 739,200
220,000 NYC IDA (Sequins International) 8.500 04/30/2000 228,884
4,555,000 NYC IDA (Sequins International) 8.950 01/30/2016 4,993,237
5,115,000 NYC IDA (St. Bernard's School) 7.000 12/01/2021 5,590,951
4,140,000 NYC IDA (St. Christopher Ottilie) 7.500 07/01/2021 4,469,171
585,000 NYC IDA (Streamline Plastics) 7.750 12/01/2015 627,810
1,275,000 NYC IDA (Streamline Plastics) 8.125 12/01/2025 1,385,453
150,000 NYC IDA (Summit School) 7.250 12/01/2004 159,174
1,485,000 NYC IDA (Summit School) 8.250 12/01/2024 1,618,695
15,050,000 NYC IDA (Terminal One Group Assoc.) 6.000 01/01/2019 16,009,136
6,715,000 NYC IDA (Terminal One Group Assoc.) 6.125 01/01/2024 7,145,902
170,000 NYC IDA (Ultimate Display) 8.750 10/15/2000 179,081
1,910,000 NYC IDA (Ultimate Display) 9.000 10/15/2011 2,088,967
10,465,000 NYC IDA (United Air Lines) 5.650 10/01/2032 10,497,441
1,000,000 NYC IDA (United Nations School) 6.350 12/01/2015 1,061,420
255,000 NYC IDA (Utleys) 6.625 11/01/2006 254,220
1,335,000 NYC IDA (Utleys) 7.375 11/01/2023 1,330,114
1,285,000 NYC IDA (Van Blarcom Closures) 7.125 11/01/2007 1,317,690
2,965,000 NYC IDA (Van Blarcom Closures) 8.000 11/01/2017 3,056,915
1,125,000 NYC IDA (Visual Display) 7.250 11/01/2008 1,128,904
2,375,000 NYC IDA (Visual Display) 8.325 11/01/2018 2,389,464
8,000,000 NYC IDA (Visy Paper) 7.800 01/01/2016 8,892,400
24,750,000 NYC IDA (Visy Paper) 7.950 01/01/2028 27,569,767
</TABLE>
18 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 5,000,000 NYC Municipal Water Finance Authority 5.000% 06/15/2021 $ 4,949,950
3,500,000 NYC Municipal Water Finance Authority 5.125 06/15/2021 3,505,110
40,200,000 NYC Municipal Water Finance Authority 5.125 06/15/2030 40,198,794
1,200,000 NYC Municipal Water Finance Authority 5.500 06/15/2019 1,249,848
65,000 NYC Municipal Water Finance Authority 5.500 06/15/2027 68,298
40,000 NYC Municipal Water Finance Authority 5.750 06/15/2020 42,638
12,500,000 NYC Municipal Water Finance Authority IRS 6.720(f) 06/15/2013 13,500,000
30,000,000 NYC Municipal Water Finance Authority IVRC (a) 7.460(f) 06/15/2017 34,162,500
10,000,000 NYC Municipal Water Finance Authority LEVVRS 7.645(f) 06/15/2019 11,012,500
4,775,000 NYC Municipal Water Finance Authority RITES (a) 5.030(f) 06/15/2021 4,545,991
2,805,000 NYC Municipal Water Finance Authority RITES (a) 5.030(f) 06/15/2027 2,653,754
5,000,000 NYC Municipal Water Finance Authority RITES (a) 5.530(f) 06/15/2030 4,860,500
4,030,000 NYC Municipal Water Finance Authority RITES (a) 5.530(f) 06/15/2030 3,917,482
2,500,000 NYC TFA RITES (a) 4.030(f) 11/15/2023 2,009,350
21,747,332 NYS Certificate of Lease (a) 5.875 01/02/2023 21,933,924
600,000 NYS COP (BOCES) (a) 7.875 10/01/2000 618,816
200,000 NYS COP (Hanson Redevelopment) 8.250 11/01/2001 210,350
10,000 NYS Dorm (Bethel Springvale Home) 6.000 02/01/2035 10,771
1,000,000 NYS Dorm (Brookdale Hospital) 5.200 02/15/2013 1,033,060
1,355,000 NYS Dorm (Brookdale Hospital) 5.300 02/15/2017 1,386,842
9,660,000 NYS Dorm (Buena Vida) 5.250 07/01/2028 9,705,595
1,120,000 NYS Dorm (Cardinal Cooke) 5.000 07/01/2018 1,106,941
8,435,000 NYS Dorm (Center for Nursing) 5.550 08/01/2037 8,789,776
1,100,000 NYS Dorm (Chapel Oaks) 5.375 07/01/2017 1,136,234
2,855,000 NYS Dorm (Chapel Oaks) 5.450 07/01/2026 2,914,955
11,485,000 NYS Dorm (City University) 5.000 07/01/2028 11,115,183
21,180,000 NYS Dorm (City University) 5.250 07/01/2025 21,279,970
13,400,000 NYS Dorm (City University) 5.375 07/01/2024 13,588,940
20,000 NYS Dorm (Cornell University) 7.375 07/01/2030 21,458
215,000 NYS Dorm (Court Facility) 5.375 05/15/2016 218,988
495,000 NYS Dorm (Court Facility) 5.500 05/15/2023 504,949
4,750,000 NYS Dorm (Dept. of Health) 5.000 07/01/2024 4,587,360
5,000,000 NYS Dorm (Dept. of Health) 5.500 08/15/2017 5,214,550
410,000 NYS Dorm (Dept. of Health) 5.500 07/01/2020 418,708
525,000 NYS Dorm (Dept. of Health) 5.500 07/01/2021 538,261
150,000 NYS Dorm (Dept. of Health) 5.500 07/01/2025 154,075
250,000 NYS Dorm (Dept. of Health) 6.625 07/01/2024 (p) 291,180
3,750,000 NYS Dorm (Dept. of Health) 7.250 07/01/2011 (p) 4,237,987
265,000 NYS Dorm (Episcopal Health Services) 7.550 08/01/2029 278,589
2,500,000 NYS Dorm (German Masonic Home) 6.000 08/01/2036 2,701,150
1,000,000 NYS Dorm (Grace Manor Health Care Facility) 6.150 07/01/2018 1,112,620
10,285,000 NYS Dorm (Hebrew Hospital) 5.900 08/01/2036 10,986,540
125,010,000 NYS Dorm (Insured Hospital) 0.000 08/15/2036 16,446,316
10,735,000 NYS Dorm (Interfaith Medical Center) 5.300 02/15/2019 10,801,557
36,500,000 NYS Dorm (Interfaith Medical Center) 5.400 02/15/2028 36,939,095
35,000 NYS Dorm (KMH Homes) 6.950 08/01/2031 37,625
4,380,000 NYS Dorm (Lakeside Home) 6.000 02/01/2037 4,746,694
25,000 NYS Dorm (Lakeside Memorial Hospital) 6.000 02/01/2021 26,704
9,650,000 NYS Dorm (LSSUNY) RITES (a) 5.595(f) 02/01/2038 10,051,150
7,400,000 NYS Dorm (Menorah Campus) 6.100 02/01/2037 8,068,368
20,000 NYS Dorm (Menorah Campus) 7.300 08/01/2016 (p) 22,160
</TABLE>
19 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 120,000 NYS Dorm (Mental Health) 5.000% 02/15/2023 $ 118,750
7,500,000 NYS Dorm (Mental Health) 5.250 02/15/2019 7,590,975
4,625,000 NYS Dorm (Mental Health) RITES (a) 5.030(f) 02/15/2023 4,394,259
2,810,000 NYS Dorm (Mental Health) RITES (a) 5.030(f) 02/15/2028 2,656,658
7,230,000 NYS Dorm (Methodist Hospital) 6.050 02/01/2034 7,984,089
85,000 NYS Dorm (MHMC) 8.625 07/01/2010 85,292
3,465,000 NYS Dorm (Millard Hospital) 5.375 02/01/2032 3,546,289
2,850,000 NYS Dorm (Municipal Health Facilities) RITES (a) 5.030(f) 01/15/2023 2,708,497
2,400,000 NYS Dorm (Niagara Nursing Home) 5.600 08/01/2037 2,512,104
4,100,000 NYS Dorm (North General Hospital) 5.200 02/15/2015 4,226,977
4,800,000 NYS Dorm (North General Hospital) 5.300 02/15/2019 4,829,760
3,500,000 NYS Dorm (North Shore Hospital) 5.250 11/01/2019 3,585,050
2,200,000 NYS Dorm (NY & Presbyterian Hospital) 6.500 08/01/2034 2,407,548
4,860,000 NYS Dorm (NY & Presbyterian Hospital) RITES (a) 4.030(f) 08/01/2027 3,841,587
3,780,000 NYS Dorm (NY & Presbyterian Hospital) RITES (a) 5.030(f) 08/01/2032 3,395,347
10,700,000 NYS Dorm (NY Downtown Hospital) 5.300 02/15/2020 10,824,013
25,000 NYS Dorm (NY Medical College) 6.875 07/01/2021 28,028
855,000 NYS Dorm (Park Ridge Hsg.) 7.850 02/01/2029 874,528
12,750,000 NYS Dorm (RGH) RITES (a) 6.279(f) 08/01/2033 13,695,030
4,725,000 NYS Dorm (Rosalind & Joseph Gurwin Geriatric Home) 5.600 02/01/2027 4,941,452
3,230,000 NYS Dorm (Rosalind & Joseph Gurwin Geriatric Home) 5.700 02/01/2037 3,403,289
600,000 NYS Dorm (Sarah Neumann Home) 5.450 08/01/2027 620,208
1,900,000 NYS Dorm (Sarah Neumann Home) 5.500 08/01/2037 1,968,552
3,045,000 NYS Dorm (Special Surgery) RITES (a) 5.030(f) 02/01/2028 2,806,637
2,650,000 NYS Dorm (Special Surgery) RITES (a) 5.030(f) 02/01/2038 2,348,456
4,500,000 NYS Dorm (St. Agnes Hospital) 5.300 02/15/2019 4,527,900
9,000,000 NYS Dorm (St. Agnes Hospital) 5.400 02/15/2025 9,115,830
3,000,000 NYS Dorm (St. Barnabas Hospital) 5.450 08/01/2035 3,079,830
1,500,000 NYS Dorm (St. Clare's Hospital) 5.300 02/15/2019 1,509,300
2,970,000 NYS Dorm (St. Clare's Hospital) 5.400 02/15/2025 3,008,224
2,580,000 NYS Dorm (St. James Mercy Hospital) 5.400 02/01/2038 2,654,717
1,500,000 NYS Dorm (St. Thomas Aquinas College) 5.250 07/01/2028 1,503,210
75,000 NYS Dorm (St. Thomas Aquinas College) 6.250 07/01/2014 (p) 84,882
3,885,000 NYS Dorm (St. Vincent's Hospital) 5.300 07/01/2018 3,926,686
5,000 NYS Dorm (St. Vincent's Hospital) 7.400 08/01/2030 5,469
50,000 NYS Dorm (State University) 0.000 05/15/2007 34,759
5,000 NYS Dorm (State University) 6.000 05/15/2017 (p) 5,181
30,000 NYS Dorm (State University) 6.000 05/15/2017 30,846
50,000 NYS Dorm (State University) 6.000 05/15/2022 (p) 55,345
225,000 NYS Dorm (State University) 7.000 05/15/2016 239,060
32,865,000 NYS Dorm (Suffolk-Judicial) 9.500 04/15/2014 38,366,930
3,990,000 NYS Dorm (Teresian House) 5.250 07/01/2017 4,010,788
50,000 NYS Dorm (UCC) 5.700 07/01/2021 52,405
1,700,000 NYS Dorm (Vassar Brothers) 5.375 07/01/2025 1,761,455
4,200,000 NYS Dorm (W.K. Nursing Home) 6.125 02/01/2036 4,570,818
32,915,000 NYS Dorm (WHMC) 5.300 08/15/2021 33,091,424
1,840,000 NYS Environ. (Consolidated Water) 7.150 11/01/2014 2,013,770
58,860,000 NYS Environ. (Huntington Res Rec) 7.500 10/01/2012 61,608,173
7,500,000 NYS Environ. (NYS Water Services) 8.375 01/15/2020 7,968,450
6,120,000 NYS Environ. (Occidental Petroleum) 5.700 09/01/2028 6,209,536
9,000,000 NYS Environ. (Occidental Petroleum) 6.100 11/01/2030 9,454,590
</TABLE>
20 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 7,000,000 NYS ERDA (Brooklyn Union Gas) RIBS 7.751% (f) 07/08/2026 $ 7,472,500
7,000,000 NYS ERDA (Brooklyn Union Gas) RIBS 8.655(f) 04/01/2020 9,135,000
10,300,000 NYS ERDA (Brooklyn Union Gas) RIBS 10.324(f) 07/01/2026 13,673,250
2,215,000 NYS ERDA (Central Hudson G&E) 8.375 12/01/2028 2,268,116
11,040,000 NYS ERDA (Con Ed) 6.375 12/01/2027 11,595,864
290,000 NYS ERDA (Con Ed) 6.375 12/01/2027 309,908
15,630,000 NYS ERDA (Con Ed) 7.250 11/01/2024 15,971,359
9,350,000 NYS ERDA (Con Ed) RITES (a) 5.495(f) 08/15/2020 9,623,861
440,000 NYS ERDA (LILCO) 6.900 08/01/2022 497,222
845,000 NYS ERDA (LILCO) 6.900 08/01/2022 941,169
15,465,000 NYS ERDA (LILCO) 7.150 09/01/2019 17,388,846
16,760,000 NYS ERDA (LILCO) 7.150 09/01/2019 18,385,720
17,090,000 NYS ERDA (LILCO) 7.150 06/01/2020 18,747,730
13,285,000 NYS ERDA (LILCO) 7.150 12/01/2020 14,731,338
10,975,000 NYS ERDA (LILCO) 7.150 02/01/2022 12,340,290
15,360,000 NYS ERDA (LILCO) 7.150 02/01/2022 17,032,243
3,485,000 NYS ERDA (NIMO) RITES (a) 5.629(f) 11/01/2025 3,557,593
400,000 NYS ERDA (NYSEG) 5.700 12/01/2028 418,920
30,000 NYS ERDA (NYSEG) 5.950 12/01/2027 31,949
12,500,000 NYS ERDA (RG&E) 5.950 09/01/2033 13,579,500
3,555,000 NYS HFA (Children's Rescue) 7.625 05/01/2018 3,807,405
2,200,000 NYS HFA (Dominican Village) 6.600 08/15/2027 2,401,806
4,205,000 NYS HFA (Fulton Manor) 6.100 11/15/2025 4,568,312
2,000 NYS HFA (H&NH) 6.875 11/01/2010 (p) 2,189
205,000 NYS HFA (H&NH) 7.000 11/01/2017 249,231
1,040,000 NYS HFA (HELP/Bronx) 7.850 05/01/1999 1,049,464
1,080,000 NYS HFA (HELP/Bronx) 7.850 11/01/1999 1,104,613
13,080,000 NYS HFA (HELP/Bronx) 8.050 11/01/2005 13,602,284
1,210,000 NYS HFA (HELP/Suffolk) 8.100 11/01/2005 1,235,761
5,000 NYS HFA (Meadow Manor) 7.750 11/01/2019 5,061
15,730,000 NYS HFA (Multi-Family) 0.000 11/01/2014 6,787,495
14,590,000 NYS HFA (Multi-Family) 0.000 11/01/2015 5,906,470
50,000 NYS HFA (Multi-Family) 0.000 11/01/2016 18,905
12,695,000 NYS HFA (Multi-Family) 0.000 11/01/2017 4,310,079
745,000 NYS HFA (Multi-Family) 5.250 11/15/2028 745,603
1,700,000 NYS HFA (Multi-Family) 5.300 11/15/2039 1,701,377
2,075,000 NYS HFA (Multi-Family) 5.500 08/15/2030 2,122,974
85,000 NYS HFA (Multi-Family) 5.950 08/15/2024 89,026
2,000,000 NYS HFA (Multi-Family) 6.050 08/15/2032 2,138,840
1,285,000 NYS HFA (Multi-Family) 6.100 11/15/2036 1,387,749
4,700,000 NYS HFA (Multi-Family) 6.125 08/15/2038 5,015,605
50,000 NYS HFA (Multi-Family) 6.200 08/15/2012 53,262
100,000 NYS HFA (Multi-Family) 6.250 08/15/2027 108,213
5,000,000 NYS HFA (Multi-Family) 6.300 08/15/2026 5,396,100
4,170,000 NYS HFA (Multi-Family) 6.350 08/15/2023 4,516,527
1,175,000 NYS HFA (Multi-Family) 6.400 11/15/2027 1,283,934
2,905,000 NYS HFA (Multi-Family) 6.500 08/15/2024 3,091,123
11,980,000 NYS HFA (Multi-Family) 6.700 08/15/2025 12,685,263
5,695,000 NYS HFA (Multi-Family) 6.750 11/15/2036 6,214,555
75,000 NYS HFA (Multi-Family) 6.950 08/15/2012 81,763
2,830,000 NYS HFA (Multi-Family) 6.950 08/15/2024 2,998,838
</TABLE>
21 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 5,375,000 NYS HFA (Multi-Family) 7.050% 08/15/2024 $ 5,817,954
1,566,000 NYS HFA (Multi-Family) 7.450 11/01/2028 1,625,915
2,460,000 NYS HFA (Multi-Family) 7.550 11/01/2029 2,556,727
1,020,000 NYS HFA (Multi-Family) 7.750 11/01/2020 1,087,085
50,000 NYS HFA (Multi-Family) 7.850 02/15/2030 54,389
500,000 NYS HFA (Multi-Family) 8.000 11/01/2008 540,780
3,035,000 NYS HFA (NH&HC) RITES (a) 5.619(f) 11/01/2016 3,256,069
15,000 NYS HFA (Non Profit) 6.400 11/01/2010 15,328
25,000 NYS HFA (Non Profit) 6.400 11/01/2013 25,545
20,000 NYS HFA (Non Profit) 6.600 11/01/2008 20,448
25,000 NYS HFA (Non Profit) 6.600 11/01/2010 25,563
20,000 NYS HFA (Non Profit) 6.600 11/01/2013 20,451
5,000,000 NYS HFA (Phillips Village) 7.750 08/15/2017 5,580,150
35,000 NYS HFA (Service Contract) 5.375 03/15/2023 35,370
4,185,000 NYS HFA (Service Contract) 5.500 09/15/2022 4,260,497
5,600,000 NYS HFA (Service Contract) 5.500 09/15/2022 5,748,008
5,525,000 NYS HFA (Service Contract) 5.500 03/15/2025 5,661,578
25,000 NYS HFA (Service Contract) 6.125 03/15/2020 26,740
9,010,000 NYS HFA (Service Contract) 6.500 03/15/2025 (p) 10,461,421
255,000 NYS HFA (Service Contract) 6.500 03/15/2025 289,020
145,000 NYS HFA (Service Contract) 7.700 03/15/2006 (p) 160,205
5,000 NYS HFA (Service Contract) 7.700 03/15/2006 5,486
1,095,000 NYS HFA (Shorehill Hsg.) 7.500 05/01/2008 1,108,436
1,395,000 NYS HFA, Series A 6.125 11/01/2020 1,513,254
80,000 NYS LGAC 5.500 04/01/2023 82,523
810,000 NYS LGSC (SCSB) (a) 7.375 12/15/2016 882,949
22,230,000 NYS Medcare (Brookdale Hospital) 5.900 08/15/2033 23,453,539
4,600,000 NYS Medcare (Brookdale Hospital) 6.850 02/15/2017 (p) 5,389,406
1,015,000 NYS Medcare (Central Suffolk Hospital) 6.125 11/01/2016 1,022,775
500,000 NYS Medcare (Downtown Hospital) 6.700 02/15/2012 (p) 581,760
2,255,000 NYS Medcare (Downtown Hospital) 6.800 02/15/2020 (p) 2,635,892
45,000 NYS Medcare (H&NH) 5.750 08/15/2019 46,645
4,690,000 NYS Medcare (H&NH) 5.850 02/15/2033 4,988,143
10,000 NYS Medcare (H&NH) 6.200 08/15/2022 10,654
95,000 NYS Medcare (H&NH) 6.200 02/15/2023 101,755
60,000 NYS Medcare (H&NH) 6.375 08/15/2029 64,687
1,000,000 NYS Medcare (H&NH) 6.375 08/15/2033 1,073,290
160,000 NYS Medcare (H&NH) 6.500 02/15/2019 (p) 177,418
30,000 NYS Medcare (H&NH) 6.500 02/15/2019 32,771
2,170,000 NYS Medcare (H&NH) 6.500 02/15/2034 2,372,244
250,000 NYS Medcare (H&NH) 6.600 02/15/2031 272,958
590,000 NYS Medcare (H&NH) 6.650 08/15/2032 (p) 658,906
12,230,000 NYS Medcare (H&NH) 6.650 08/15/2032 13,420,713
385,000 NYS Medcare (H&NH) 6.875 02/15/2032 (p) 427,697
2,615,000 NYS Medcare (H&NH) 6.875 02/15/2032 2,861,281
50,000 NYS Medcare (H&NH) 7.250 02/15/2024 51,252
4,505,000 NYS Medcare (H&NH) 7.400 11/01/2016 4,610,192
5,000 NYS Medcare (H&NH) 7.600 02/15/2029 5,127
5,000 NYS Medcare (H&NH) 7.600 02/15/2029 5,124
12,600,000 NYS Medcare (H&NH) 8.000 02/15/2027 12,766,950
25,000 NYS Medcare (H&NH) 8.000 02/15/2028 25,581
</TABLE>
22 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 3,560,000 NYS Medcare (H&NH) 9.375% 11/01/2016 $ 3,719,915
1,740,000 NYS Medcare (H&NH) (a) 9.000 02/15/2026 1,796,202
2,865,000 NYS Medcare (H&NH) (a) 10.000 11/01/2006 3,053,804
2,000,000 NYS Medcare (Insured Mortgage Nursing) 6.375 08/15/2024 2,283,440
4,000,000 NYS Medcare (Insured Mortgage Nursing) 6.450 08/15/2034 (p) 4,581,880
70,000 NYS Medcare (Insured Mortgage Nursing) 6.500 11/01/2015 77,118
7,725,000 NYS Medcare (Kingston Hospital) 8.875 11/15/2017 7,951,343
1,650,000 NYS Medcare (M.G. Nursing Home) 6.375 02/15/2035 1,817,459
630,000 NYS Medcare (Mental Health) 0.000 08/15/2018 142,128
600,000 NYS Medcare (Mental Health) 5.250 08/15/2023 609,756
8,000,000 NYS Medcare (Mental Health) 5.250 08/15/2023 8,130,080
250,000 NYS Medcare (Mental Health) 5.500 08/15/2024 257,625
14,515,000 NYS Medcare (Mental Health) 5.800 08/15/2022 15,280,086
5,000 NYS Medcare (Mental Health) 5.900 08/15/2022 5,415
65,000 NYS Medcare (Mental Health) 5.900 08/15/2022 70,953
505,000 NYS Medcare (Mental Health) 7.500 02/15/2021 (p) 554,995
305,000 NYS Medcare (Mental Health) 7.500 02/15/2021 331,273
545,000 NYS Medcare (Mental Health) 7.625 08/15/2017 (p) 609,097
250,000 NYS Medcare (Mental Health) 7.625 08/15/2017 275,933
3,370,000 NYS Medcare (Mental Health) 7.700 02/15/2018 3,448,656
35,000 NYS Medcare (Mental Health) 7.750 05/15/2011 38,316
220,000 NYS Medcare (Mental Health) 7.875 08/15/2015 225,168
1,725,000 NYS Medcare (Mental Health) 8.875 08/15/2007 1,749,840
25,000 NYS Medcare (Montefiore Medical Center) 5.750 02/15/2025 26,331
10,000 NYS Medcare (North Shore University Hospital) 7.200 11/01/2020 (p) 10,870
15,000 NYS Medcare (NY Hospital) 6.900 08/15/2034 (p) 17,615
25,000 NYS Medcare (Secured Hospital) 6.250 02/15/2024 26,573
1,350,000 NYS Medcare (St. Charles Memorial Hospital) 6.375 08/15/2034 1,487,012
10,850,000 NYS Medcare (St. Francis Hospital) 7.625 11/01/2021 11,104,433
1,000,000 NYS Medcare (St. Luke's Hospital) 5.700 02/15/2029 1,040,990
10,000 NYS Medcare (St. Luke's Hospital) 7.375 02/15/2019 10,590
22,000,000 NYS Medcare (St. Luke's Hospital) IVRC (a) 6.213(f) 02/15/2029 23,705,000
8,400,000 NYS Medcare (St. Luke's Hospital) RITES (a) 6.222(f) 02/15/2029 9,054,108
12,500,000 NYS Medcare (St. Luke's Hospital) RITES (a) 6.222(f) 02/15/2029 13,473,375
5,750,000 NYS Medcare (St. Luke's Hospital) RITES (a) 6.279(f) 02/15/2029 6,197,753
10,000,000 NYS Medcare (St. Luke's Hospital) RITES (a) 6.279(f) 02/15/2029 10,778,700
5,255,000 NYS Medcare (WHMC) 7.400 08/15/2021 (p) 5,847,922
5,925,000 NYS Medcare RITES (a) 5.495(f) 02/15/2019 6,078,576
10,000,000 NYS Medcare RITES (a) 5.745(f) 02/15/2025 10,407,100
10,000 NYS Power Authority 6.750 01/01/2018 10,818
1,000,000 NYS Thruway Authority 0.000 01/01/2003 845,500
2,000,000 NYS Thruway Authority 0.000 01/01/2004 1,617,560
260,000 NYS Thruway Authority 0.000 01/01/2005 200,364
25,000,000 NYS Thruway Authority Convertible INFLOS 4.595(f) 01/01/2024 24,062,500
15,000 NYS UDC (Correctional Facilities) 0.000 01/01/2003 12,843
900,000 NYS UDC (Correctional Facilities) 0.000 01/01/2008 597,699
3,500,000 NYS UDC (Correctional Facilities) 5.000 01/01/2019 3,407,250
12,845,000 NYS UDC (Correctional Facilities) 5.000 01/01/2020 12,479,174
13,270,000 NYS UDC (Correctional Facilities) 5.000 01/01/2028 12,845,891
4,080,000 NYS UDC (Correctional Facilities) 5.250 01/01/2021 4,090,649
10,250,000 NYS UDC (Correctional Facilities) 5.375 01/01/2023 10,363,160
</TABLE>
23 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 5,590,000 NYS UDC (Correctional Facilities) 5.375% 01/01/2025 $ 5,665,633
500,000 NYS UDC (Correctional Facilities) 5.500 01/01/2018 516,615
1,000,000 NYS UDC (Correctional Facilities) 5.500 01/01/2025 1,045,710
2,000,000 NYS UDC (Correctional Facilities) 7.500 01/01/2018 (p) 2,191,980
3,200,000 NYS UDC (Correctional Facilities) RITES (a) 5.030(f) 01/01/2028 3,026,304
101,280,000 NYS UDC (South Mall) 0.000 01/01/2011 52,507,603
85,000 NYS UDC (South Mall) 0.000 01/01/2011 44,326
1,265,000 Oneida County IDA (MCC) 8.000 11/01/2008 1,343,772
2,825,000 Oneida County IDA (MCC) 8.750 11/01/2018 3,001,224
1,190,000 Oneida County IDA (Presbyterian Home) 5.250 03/01/2019 1,187,703
10,000 Oneida Healthcare Corp. 7.100 08/01/2011 10,772
130,000 Oneida Healthcare Corp. 7.200 08/01/2031 140,366
1,825,000 Onondaga County IDA (CGH) 5.500 11/01/2018 1,826,332
7,000,000 Onondaga County IDA (CGH) 6.625 01/01/2018 7,491,120
575,000 Onondaga County IDA (Coltec) 7.250 06/01/2008 587,823
770,000 Onondaga County IDA (Coltec) 9.875 10/01/2010 805,497
220,000 Onondaga County IDA (Crouse Irving Hospital) 7.800 01/01/2003 (p) 243,936
370,000 Onondaga County IDA (Gear Motion) 8.400 12/15/2001 374,917
1,580,000 Onondaga County IDA (Gear Motion) 8.900 12/15/2011 1,655,303
5,000,000 Onondaga County IDA (Solvay Paperboard) 6.800 11/01/2014 5,031,650
16,400,000 Onondaga County IDA (Solvay Paperboard) 7.000 11/01/2030 16,603,032
750,000 Onondaga County IDA (Syracuse Home) 5.200 12/01/2018 743,993
27,850,000 Onondaga County Res Rec 6.875 05/01/2006 29,571,687
67,435,000 Onondaga County Res Rec 7.000 05/01/2015 72,371,242
1,083,000 Ontario County IDA (Ontario Design) 6.500 11/01/2005 1,091,317
3,250,000 Orange County IDA (Glen Arden) 5.625 01/01/2018 3,234,985
4,590,000 Orange County IDA (Glen Arden) 5.700 01/01/2028 4,580,315
22,450,000 Orange County IDA (Glen Arden) 8.875 01/01/2025 (p) 28,392,291
7,600,000 Orange County IDA (Kingston Manufacturing) 8.000 11/01/2017 7,896,476
495,000 Orange County IDA (Mental Retardation Project) 7.800 07/01/2011 526,769
4,750,000 Oswego County IDA (SLRHF) 5.400 02/01/2038 4,859,203
3,260,000 Oswego IDA (Seneca Hill Manor) 5.650 08/01/2037 3,430,987
2,970,000 Otsego County IDA (Bassett Healthcare Project) 5.350 11/01/2020 3,065,812
1,280,000 Otsego County IDA (Bassett Healthcare Project) 5.375 11/01/2020 1,325,286
10,900,000 Peekskill IDA (Drum Hill) 6.375 10/01/2028 10,907,521
1,403,659 Peekskill IDA (Karta) 9.000 07/01/2010 1,432,925
1,090,000 Pilgrim Village HDC (Multi-Family) 6.800 02/01/2021 1,126,308
465,000 Port Authority NY/NJ (KIAC) 6.750 10/01/2019 515,434
7,340,000 Port Authority NY/NJ (US Airways) 9.000 12/01/2006 8,041,557
520,000 Port Authority NY/NJ (US Airways) 9.000 12/01/2010 569,702
22,390,000 Port Authority NY/NJ (US Airways) 9.125 12/01/2015 24,579,518
45,000 Port Authority NY/NJ, 67th Series 6.875 01/01/2025 46,944
220,000 Port Authority NY/NJ, 68th Series 7.250 02/15/2025 230,204
70,000 Port Authority NY/NJ, 69th Series 7.125 06/01/2025 74,114
85,000 Port Authority NY/NJ, 70th Series 7.250 08/01/2025 89,595
15,000 Port Authority NY/NJ, 70th Series 7.250 08/01/2025 15,890
40,000 Port Authority NY/NJ, 71st Series 6.500 01/15/2026 42,570
70,000 Port Authority NY/NJ, 73rd Series 6.750 04/15/2026 74,337
15,000 Port Authority NY/NJ, 73rd Series 6.750 04/15/2026 15,982
15,000 Port Authority NY/NJ, 74th Series 6.750 08/01/2026 16,258
60,000 Port Authority NY/NJ, 76th Series 6.500 11/01/2026 64,005
</TABLE>
24 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 60,000 Portchester CDC (Southport) 7.300% 08/01/2011 $ 62,262
25,000 Portchester CDC (Southport) 7.375 08/01/2022 25,979
1,990,000 Putnam County IDA (Brewster Plastics) 8.500 12/01/2016 2,152,086
25,000 Rensselaer Hsg. Authority (Renwyck) 7.650 01/01/2011 27,218
30,000 Rensselaer IDA (MMP) 8.500 12/15/2002 30,400
15,000,000 Rensselaer Municipal Leasing Corp. 6.900 06/01/2024 16,589,250
45,000 Riverhead HDC 8.250 08/01/2010 47,846
20,990,000 Rochester Hsg. Authority (Crossroads) 7.700 01/01/2017 23,594,019
6,790,000 Rochester Museum & Science Center 6.125 12/01/2015 6,938,701
2,000,000 Rockland County IDA (DC) 6.250 05/01/2028 2,042,960
2,090,000 Rockland County IDA (DC) 8.000 03/01/2013 2,456,356
1,395,000 Saratoga County IDA (ARC) 8.400 03/01/2013 1,535,728
500,000 Schenectady IDA (ASSC) 6.400 05/01/2014 545,670
2,655,000 Schenectady IDA (ASSC) 6.450 05/01/2024 2,903,667
522,000 Schroon Lake Fire District (a) 7.250 03/01/2009 548,340
175,000 Scotia Hsg. Authority (Holyrood House) 7.000 06/01/2009 187,329
20,000 SONYMA, Series 1 0.000 10/01/2014 4,636
685,000 SONYMA, Series 12 8.250 04/01/2017 695,501
4,510,000 SONYMA, Series 2 0.000 10/01/2014 1,020,884
95,000 SONYMA, Series 2 0.000 10/01/2014 21,621
25,000 SONYMA, Series 27 6.450 04/01/2004 26,596
5,350,000 SONYMA, Series 28 6.450 10/01/2020 5,548,860
10,000,000 SONYMA, Series 28 6.650 04/01/2022 10,561,900
8,830,000 SONYMA, Series 28 7.050 10/01/2023 9,428,321
605,000 SONYMA, Series 30 5.800 10/01/2025 626,611
15,000 SONYMA, Series 30-A 4.375 10/01/2023 15,024
16,005,000 SONYMA, Series 30-B 6.650 10/01/2025 17,102,623
100,000 SONYMA, Series 30-C1 5.850 10/01/2025 104,113
15,000 SONYMA, Series 30-C2 5.800 10/01/2025 15,599
11,510,000 SONYMA, Series 36-A 6.625 04/01/2025 12,433,908
13,500,000 SONYMA, Series 38 RITES (a) 7.029(f) 04/01/2025 15,121,620
80,000 SONYMA, Series 40-A 6.350 04/01/2021 84,255
7,560,000 SONYMA, Series 40-A 6.700 04/01/2025 8,192,243
75,000 SONYMA, Series 40-B 6.400 10/01/2012 81,080
5,885,000 SONYMA, Series 40-B 6.600 04/01/2025 6,358,919
13,605,000 SONYMA, Series 42 6.650 04/01/2026 14,743,739
110,000 SONYMA, Series 42 6.650 04/01/2026 119,603
11,990,000 SONYMA, Series 44 7.500 04/01/2026 13,119,578
100,000 SONYMA, Series 46 6.500 04/01/2013 108,911
65,000 SONYMA, Series 46 6.600 10/01/2019 70,771
24,300,000 SONYMA, Series 46 6.650 10/01/2025 26,467,074
515,000 SONYMA, Series 48 6.100 04/01/2025 550,875
7,260,000 SONYMA, Series 50 6.625 04/01/2025 7,928,283
160,000 SONYMA, Series 52 6.100 04/01/2026 171,680
915,000 SONYMA, Series 52 6.100 04/01/2026 985,144
25,000 SONYMA, Series 54 6.200 10/01/2026 27,026
45,000 SONYMA, Series 54 6.200 10/01/2026 48,789
6,170,000 SONYMA, Series 58 6.400 04/01/2027 6,752,818
835,000 SONYMA, Series 6 9.375 04/01/2010 860,217
540,000 SONYMA, Series 60 6.000 10/01/2022 577,265
345,000 SONYMA, Series 60 6.050 04/01/2026 370,985
</TABLE>
25 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 9,750,000 SONYMA, Series 63 6.125% 04/01/2027 $ 10,555,350
10,205,000 SONYMA, Series 65 5.850 10/01/2028 10,855,467
3,000,000 SONYMA, Series 67 5.700 10/01/2017 3,159,060
11,665,000 SONYMA, Series 67 5.800 10/01/2028 12,378,781
200,000 SONYMA, Series 69 5.400 10/01/2019 204,362
4,725,000 SONYMA, Series 69 RITES (a) 5.960(f) 10/01/2028 4,913,858
1,255,000 SONYMA, Series 7 (a) 9.250 10/01/2014 1,288,458
940,000 SONYMA, Series 71 5.350 10/01/2018 954,532
10,150,000 SONYMA, Series 71 RITES (a) 5.760(f) 04/01/2029 10,392,585
5,500,000 SONYMA, Series 73 RITES (a) 6.126(f) 10/01/2028 5,574,305
450,000 SONYMA, Series 8-A 6.875 04/01/2017 464,513
665,000 SONYMA, Series 8-E 8.100 10/01/2017 679,963
95,000 SONYMA, Series EE-2 7.450 10/01/2010 98,259
190,000 SONYMA, Series EE-2 7.500 04/01/2016 196,582
255,000 SONYMA, Series EE-3 7.700 10/01/2010 267,230
15,000 SONYMA, Series EE-3 7.750 04/01/2016 15,720
90,000 SONYMA, Series EE-4 7.750 10/01/2010 94,606
370,000 SONYMA, Series HH-2 7.700 10/01/2009 381,366
40,000 SONYMA, Series HH-2 7.850 04/01/2022 41,501
250,000 SONYMA, Series HH-3 7.875 10/01/2009 261,345
515,000 SONYMA, Series HH-3 7.950 04/01/2022 538,463
100,000 SONYMA, Series II 0.000 04/01/2005 64,003
90,000 SONYMA, Series II 0.000 04/01/2006 53,294
100,000 SONYMA, Series II 0.000 10/01/2007 52,496
170,000 SONYMA, Series II 0.000 04/01/2008 85,821
120,000 SONYMA, Series II 0.000 10/01/2008 58,264
180,000 SONYMA, Series II 0.000 10/01/2009 80,825
455,000 SONYMA, Series JJ 7.500 10/01/2017 472,063
50,000 SONYMA, Series KK 7.650 04/01/2019 51,628
285,000 SONYMA, Series KK 7.800 10/01/2020 295,038
180,000 SONYMA, Series MM-1 7.500 04/01/2013 187,830
25,000 SONYMA, Series MM-1 7.750 10/01/2005 26,079
100,000 SONYMA, Series MM-2 7.700 04/01/2005 103,947
60,000 SONYMA, Series NN 7.550 10/01/2017 62,479
5,000 SONYMA, Series OO 7.900 10/01/2011 5,167
20,000 SONYMA, Series QQ 7.700 10/01/2012 20,814
105,000 SONYMA, Series RR 7.700 10/01/2010 110,466
80,000 SONYMA, Series RR 7.750 10/01/2017 84,094
5,000 SONYMA, Series TT 6.950 10/01/2002 5,258
1,265,000 SONYMA, Series UU 7.750 10/01/2023 1,331,058
115,222,000 SONYMA, Series VV 0.000 10/01/2023 18,623,332
195,000 SONYMA, Series VV 7.375 10/01/2011 207,911
725,000 Suffolk County GO 6.375 11/01/2016 804,206
1,310,000 Suffolk County IDA (ACLDD) 6.500 03/01/2018 1,312,699
425,000 Suffolk County IDA (Community Program Ctr. of L.I.) 7.250 11/01/2007 447,572
1,825,000 Suffolk County IDA (Community Program Ctr. of L.I.) 8.250 11/01/2010 1,938,205
1,505,000 Suffolk County IDA (DDI) 6.250 03/01/2009 1,503,164
5,270,000 Suffolk County IDA (DDI) 7.250 03/01/2024 5,263,149
790,000 Suffolk County IDA (DDI) 7.375 03/01/2003 824,239
9,675,000 Suffolk County IDA (DDI) 8.750 03/01/2023 10,940,393
2,000,000 Suffolk County IDA (Dowling College) 6.625 06/01/2024 2,123,540
</TABLE>
26 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 2,870,000 Suffolk County IDA (Dowling College) 6.700% 12/01/2020 $ 3,101,753
935,000 Suffolk County IDA (Dowling College) 8.250 12/01/2020 (p) 1,034,933
1,060,000 Suffolk County IDA (Fil-Coil) 9.250 12/01/2025 1,079,440
445,000 Suffolk County IDA (Fil-Coil) (a) 9.000 12/01/2015 452,788
3,860,000 Suffolk County IDA (HFAS) 6.650 11/01/2017 3,879,493
8,545,000 Suffolk County IDA (Huntington Res Rec) (w) 5.550 10/01/2004 8,996,860
9,180,000 Suffolk County IDA (Huntington Res Rec) (w) 5.650 10/01/2005 9,759,717
9,875,000 Suffolk County IDA (Huntington Res Rec) (w) 5.750 10/01/2006 10,604,466
10,615,000 Suffolk County IDA (Huntington Res Rec) (w) 5.800 10/01/2007 11,492,436
11,410,000 Suffolk County IDA (Huntington Res Rec) (w) 5.850 10/01/2008 12,448,082
12,265,000 Suffolk County IDA (Huntington Res Rec) (w) 5.950 10/01/2009 13,588,639
13,190,000 Suffolk County IDA (Huntington Res Rec) (w) 6.000 10/01/2010 14,693,924
14,170,000 Suffolk County IDA (Huntington Res Rec) (w) 6.150 10/01/2011 15,946,210
17,155,000 Suffolk County IDA (Huntington Res Rec) (w) 6.250 10/01/2012 19,473,155
190,000 Suffolk County IDA (Marbar Assoc.) 8.300 03/01/2008 190,089
190,000 Suffolk County IDA (Marbar Assoc.) 8.300 03/01/2009 190,089
250,000 Suffolk County IDA (Microwave Power) 7.750 06/30/2002 261,748
4,320,000 Suffolk County IDA (Microwave Power) 8.500 06/30/2022 4,591,555
715,000 Suffolk County IDA (OBPWC) 7.500 11/01/2022 779,157
1,670,000 Suffolk County IDA (Rimland Facilities) (a) 6.000(v) 12/01/2009 1,670,000
1,315,000 Suffolk County IDA (Wireless Boulevard Realty) 7.875 12/01/2012 1,396,254
4,005,000 Suffolk County IDA (Wireless Boulevard Realty) 8.625 12/01/2026 4,328,644
2,960,000 Sunnybrook EHC 11.250 12/01/2014 3,166,460
9,590,000 Syracuse Hsg. Authority (LRRHCF) 5.800 08/01/2037 10,240,490
625,000 Syracuse Hsg. Authority (LRRHCF) 7.500 08/01/2010 646,569
1,990,000 Syracuse Hsg. Authority (Seneca Heights) 7.500 12/01/2007 2,047,491
4,720,000 Syracuse Hsg. Authority (Seneca Heights) 8.500 12/01/2017 4,874,202
510,000 Syracuse IDA (Anoplate Corp.) 7.250 11/01/2007 535,362
2,195,000 Syracuse IDA (Anoplate Corp.) 8.000 11/01/2022 2,306,155
42,920,000 Syracuse IDA (James Square) 0.000 08/01/2025 8,118,747
635,000 Syracuse IDA (Piscitell Stone & Supply) 8.400 12/01/2011 675,672
1,150,000 Syracuse IDA (Rockwest Center I) (a) 8.000 06/01/2013 1,178,750
980,000 Syracuse IDA (Rockwest Center II) 7.625 12/01/2010 980,000
1,470,000 Syracuse IDA (Rockwest Center II) 8.625 12/01/2015 1,470,000
3,770,000 Syracuse IDA (St. Joseph's Hospital) 7.500 06/01/2018 (p) 4,169,733
3,750,000 Tompkins County IDA (Ithacare Center) 6.200 02/01/2037 4,121,363
50,000 Tompkins County IDA (Kendall at Ithaca) 7.250 06/01/2003 50,945
2,790,000 Tompkins County IDA (Kendall at Ithaca) 7.875 06/01/2015 2,988,174
5,735,000 Tompkins County IDA (Kendall at Ithaca) 7.875 06/01/2024 6,119,532
240,000 Tompkins Healthcare Corp. 10.800 02/01/2007 293,566
45,000 Tompkins Healthcare Corp. 10.800 02/01/2028 57,983
505,000 Tonawanda Senior Citizens Hsg. 7.875 02/01/2011 520,493
70,000 Tupper Lake HDC 8.125 10/01/2010 70,317
1,000,000 UCP/HCA of Chemung County 6.600 08/01/2022 1,125,620
4,870,000 UFA Devel. Corp. (Loretto-Utica Corp.) 5.950 07/01/2035 5,192,199
445,000 Ulster County IDA (Brooklyn Bottling) 7.800 06/30/2002 464,794
1,915,000 Ulster County IDA (Brooklyn Bottling) 8.600 06/30/2022 2,045,948
1,465,000 Ulster County IDA (Mid-Hsg. Family Health) 5.350 07/01/2023 1,487,019
2,250,000 Ulster County Res Rec 6.000 03/01/2014 2,361,263
2,470,000 Union Hsg. Authority (Methodist Homes) 7.625 11/01/2016 2,740,267
105,000 Union Hsg. Authority (Methodist Homes) 8.050 04/01/1999 105,811
</TABLE>
27 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 110,000 Union Hsg. Authority (Methodist Homes) 8.150% 04/01/2000 $ 113,843
120,000 Union Hsg. Authority (Methodist Homes) 8.250 04/01/2001 127,504
150,000 Union Hsg. Authority (Methodist Homes) 8.350 04/01/2002 163,416
2,010,000 Union Hsg. Authority (Methodist Homes) 8.500 04/01/2012 2,256,567
23,140,000 United Nations Devel. Corp., Series B 5.600 07/01/2026 23,307,765
13,450,000 United Nations Devel. Corp., Series C 5.600 07/01/2026 13,547,513
100,000 Utica GO 5.900 12/01/2002 101,075
580,000 Utica GO 6.000 01/15/2006 581,792
560,000 Utica GO 6.250 01/15/2007 568,630
500,000 Utica IDA (Utica College) 5.750 08/01/2028 512,515
25,000 Utica Sr. Citizen Hsg. Corp. (Brook Apartments) 0.000 07/01/2002 17,985
3,410,000 Utica Sr. Citizen Hsg. Corp. (Brook Apartments) 0.000 07/01/2026 308,571
20,000 Valley Health Devel. Corp. 7.850 08/01/2035 22,023
420,000 Valley Health Devel. Corp. 11.300 02/01/2007 495,793
170,000 Valley Health Devel. Corp. 11.300 02/01/2023 200,029
950,000 Vigilant EHL (Thomaston Volunteer Fire Dept.) 7.500 11/01/2012 1,020,395
8,440,000 Warren & Washington Counties IDA (Res Rec) 8.000 12/15/2012 8,498,489
8,535,000 Warren & Washington Counties IDA (Res Rec) 8.200 12/15/2010 8,641,005
8,965,000 Warren & Washington Counties IDA (Res Rec) 8.200 12/15/2010 9,076,345
100,000 Watervliet Elderly Hsg. Corp. 8.000 11/15/2003 101,382
95,000 Watervliet Elderly Hsg. Corp. 8.000 11/15/2004 96,313
95,000 Watervliet Elderly Hsg. Corp. 8.000 11/15/2005 96,313
100,000 Watervliet Elderly Hsg. Corp. 8.000 11/15/2006 101,382
100,000 Watervliet Elderly Hsg. Corp. 8.000 11/15/2007 101,382
100,000 Watervliet Elderly Hsg. Corp. 8.000 11/15/2008 101,382
100,000 Watervliet Elderly Hsg. Corp. 8.000 11/15/2009 101,382
385,000 Wayne County IDA (ARC) 7.250 03/01/2003 402,090
2,925,000 Wayne County IDA (ARC) 8.375 03/01/2018 3,221,975
1,870,000 Westchester County IDA (BAH) 8.375 12/01/2025 2,160,168
1,346,400 Westchester County IDA (Clearview School) 9.375 01/01/2021 1,497,937
2,220,000 Westchester County IDA (JBFS) 6.750 12/15/2012 2,373,069
1,560,000 Westchester County IDA (JDAM) 6.750 04/01/2016 1,675,627
3,250,000 Westchester County IDA (Lawrence Hospital) 5.000 01/01/2028 3,122,665
65,000 Westchester County IDA (Westchester Airport) 5.950 08/01/2024 66,397
1,865,000 Yates County IDA (Keuka College) 8.750 08/01/2015 2,192,326
1,095,000 Yates County IDA (Keuka College) 9.000 08/01/2011 1,211,924
865,000 Yonkers IDA (St. Joseph's Hospital) 7.500 12/30/2003 918,232
3,270,000 Yonkers IDA (St. Joseph's Hospital) 8.500 12/30/2013 3,688,397
2,200,000 Yonkers IDA (St. Joseph's Hospital), Series 98-A 6.150 03/01/2015 2,223,980
2,100,000 Yonkers IDA (St. Joseph's Hospital), Series 98-B 6.150 03/01/2015 2,122,890
1,000,000 Yonkers IDA (St. Joseph's Hospital), Series 98-C 6.200 03/01/2020 1,010,870
300,000 Yonkers IDA (Westchester School) 7.375 12/30/2003 315,852
3,375,000 Yonkers IDA (Westchester School) 8.750 12/30/2023 3,758,400
760,000 Yonkers Parking Authority 7.750 12/01/2004 811,201
--------------
3,842,326,875
--------------
- ---------------------------------------------------------------------------------------------------------------------------------
U.S. Possessions--8.9%
400,000 American Samoa Power Authority 6.800 09/01/2000 418,220
400,000 American Samoa Power Authority 6.850 09/01/2001 426,592
400,000 American Samoa Power Authority 6.900 09/01/2002 434,140
500,000 American Samoa Power Authority 6.950 09/01/2003 551,780
</TABLE>
28 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 500,000 American Samoa Power Authority 7.000% 09/01/2004 $ 559,935
800,000 American Samoa Power Authority 7.100 09/01/2001 857,640
800,000 American Samoa Power Authority 7.200 09/01/2002 875,760
5,375,000 Guam Airport Authority, Series B 6.600 10/01/2010 5,877,724
60,730,000 Guam Airport Authority, Series B 6.700 10/01/2023 66,312,302
2,525,000 Guam Economic Devel. Authority 9.500 11/01/2018 2,570,854
2,995,000 Guam Economic Devel. Authority (d) 9.375 11/01/2018 2,852,588
45,000 Guam Power Authority 5.250 10/01/2023 45,110
10,000 Guam Power Authority 6.300 10/01/2022 10,714
450,000 Guam Power Authority 6.625 10/01/2014 498,488
4,780,000 Guam Power Authority 6.750 10/01/2024 5,324,777
1,215,000 Puerto Rico Commonwealth Infrastructure 7.500 07/01/2009 1,243,139
660,000 Puerto Rico Commonwealth Infrastructure 7.750 07/01/2008 675,418
165,000 Puerto Rico Commonwealth Infrastructure 7.900 07/01/2007 168,874
1,010,034 Puerto Rico Dept. of Corrections Equipment Lease (a) 8.000 04/17/2003 1,044,930
17,800,000 Puerto Rico Electric LEVRRS 8.178(f) 07/01/2023 20,692,500
9,935,000 Puerto Rico Electric Power Authority (w) 5.250 07/01/2014 10,369,855
1,005,800 Puerto Rico Family Dept. Furniture Lease (a) 8.000 08/18/2003 1,047,963
3,124,020 Puerto Rico Family Dept. Furniture Lease (a) 12.725 08/12/2003 3,554,541
4,150,000 Puerto Rico GO 5.000 07/01/2027 4,072,727
5,000,000 Puerto Rico GO 5.375 07/01/2025 5,130,300
30,000 Puerto Rico GO 5.875 07/01/2018 32,649
1,600,000 Puerto Rico GO RITES (a) 7.790(f) 07/01/2022 1,830,000
40,250,000 Puerto Rico GO YCN 8.332(f) 07/01/2020 45,583,125
1,000,000 Puerto Rico GO YCN (a) 8.113(f) 07/01/2015 (p) 1,172,790
6,766,263 Puerto Rico Health Dept. Computer Lease (a) 7.438 03/26/2003 6,926,759
385,000 Puerto Rico HFA (Affordable Hsg.) 6.250 04/01/2029 407,276
8,690,000 Puerto Rico HFC 0.000 08/01/2026 1,324,617
10,000 Puerto Rico HFC 7.300 10/01/2006 10,554
210,000 Puerto Rico HFC 7.500 10/01/2015 222,136
5,240,000 Puerto Rico HFC 7.500 04/01/2022 5,546,750
70,000 Puerto Rico HFC 7.650 10/15/2022 73,884
25,000 Puerto Rico HFC 7.800 10/15/2021 25,461
1,000,000 Puerto Rico Highway & Transportation Authority 5.500 07/01/2017 1,036,720
185,000 Puerto Rico IMEPCF (Instituto Medico) 9.500 04/01/2003 193,005
4,075,000 Puerto Rico IMEPCF (Upjohn) 7.500 12/01/2023 4,210,249
672,600 Puerto Rico Industrial Commission Computer Lease (a) 8.000 03/26/2003 696,901
500,000 Puerto Rico ITEMECF (MGH) 5.625 07/01/2017 513,425
985,000 Puerto Rico ITEMECF (MGH) 5.625 07/01/2027 1,007,192
3,000,000 Puerto Rico ITEMECF (MGH) 6.500 07/01/2026 3,245,430
5,000 Puerto Rico ITEMECF (Polytech University) 5.700 08/01/2013 5,162
5,250,000 Puerto Rico ITEMECF (RMH) 6.700 05/01/2024 5,710,005
190,780 Puerto Rico Medical Services Equipment Lease (a) 7.300 02/27/2003 195,340
735,018 Puerto Rico Medical Services Ventilator Lease (a) 7.500 04/01/2003 756,510
950,000 Puerto Rico Municipality of Rio Grande Computer Lease (a) 8.000 09/02/2003 989,748
2,247,808 Puerto Rico Municipality of Rio Grande Equipment Lease (a) 8.800 10/13/2003 2,390,499
157,218 Puerto Rico Municipality of Rio Grande Vehicle Lease (a) 9.000 01/23/2003 168,475
600,000 Puerto Rico Municipality of San Sebastian Garage Lease (a) 10.000 09/16/2005 659,112
20,000 Puerto Rico Port Authority 7.300 07/01/2007 20,040
7,000,000 Puerto Rico Public Buildings Authority 5.700 07/01/2016 7,396,830
15,124,297 Puerto Rico Public Buildings Authority Computer Lease (a) 6.528 05/01/2004 15,303,520
</TABLE>
29 ROCHESTER FUND MUNICIPALS
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Face Market
Amount Description Coupon Maturity Value
================================================================================================================================
<S> <C> <C> <C> <C>
$ 427,962 Puerto Rico State Courts Vehicle Lease (a) 8.000% 03/26/2003 $ 443,690
16,550,000 Puerto Rico Telephone Authority RIBS 7.320(f) 01/16/2015 17,832,625
15,000,000 Puerto Rico Telephone Authority RIBS (a) 7.806(f) 01/01/2022 16,786,650
1,205,000 University of V.I. 7.250 10/01/2004 1,314,727
3,570,000 University of V.I. 7.700 10/01/2019 4,085,401
5,175,000 University of V.I. 7.750 10/01/2024 5,934,897
328,000 V.I. GO (Hugo Insurance Claims Program) 7.750 10/01/2006 362,020
70,000 V.I. HFA 6.450 03/01/2016 75,118
1,000,000 V.I. Public Finance Authority 5.500 10/01/2022 1,017,680
7,500,000 V.I. Public Finance Authority 5.625 10/01/2025 7,695,300
5,500,000 V.I. Public Finance Authority 6.000 10/01/2022 5,752,120
1,135,000 V.I. Public Finance Authority 7.125 10/01/2004 (p) 1,268,851
28,750,000 V.I. Public Finance Authority 7.250 10/01/2018 (p) 32,819,275
1,735,000 V.I. Public Finance Authority 7.375 10/01/2010 (p) 2,074,505
75,000 V.I. Water & Power Authority 5.300 07/01/2018 75,676
1,515,000 V.I. Water & Power Authority 5.300 07/01/2021 1,524,726
2,500,000 V.I. Water & Power Authority 5.500 07/01/2017 2,464,350
5,945,000 V.I. Water & Power Authority 7.400 07/01/2011 6,524,994
6,850,000 V.I. Water & Power Authority 7.600 01/01/2012 7,753,995
4,930,000 V.I. Water & Power Authority 8.500 01/01/2010 5,176,254
--------------
364,253,889
--------------
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $3,959,930,558)--102.5% 4,206,580,764
LIABILITIES IN EXCESS OF OTHER ASSETS--(2.5%) (103,903,752)
--------------
NET ASSETS--100.0% $4,102,677,012
==============
</TABLE>
(a) Illiquid security--See Note 5 of Notes to Financial Statements.
(b) Non-income accruing security.
(c) Security will convert to a fixed coupon at a date prior to maturity.
(d) Non-income accruing security--Issuer is in default of interest payment.
(f) Represents the current interest rate for a variable rate bond known as an
"inverse floater" which pays interest at a rate that varies inversely with
short-term interest rates. As interest rates rise, inverse floaters
produce less current income. Their price may be more volatile than the
price of a comparable fixed-rate security. Inverse floaters amount to
$769,069,527, or 17.92% of the Fund's total assets as of December 31,
1998.
(p) This issue has been prerefunded to an earlier date.
(v) Represents the current interest rate for a variable rate security that
fluctuates as a percentage of prime rate.
(w) When-issued security--See Note 3 of Notes to Financial Statements.
See accompanying Notes to Financial Statements.
30 ROCHESTER FUND MUNICIPALS
<PAGE>
================================================================================
PORTFOLIO ABBREVIATIONS
- --------------------------------------------------------------------------------
To simplify the listing of securities in the Statement of Investments,
abbreviations are used per the table below:
ACLDD Adults and Children with Learning and
Developmental Disabilities
ARC Association of Retarded Citizens
ASSC Annie Schaffer Senior Center
BAH Beth Abraham Hospital
BHMS Brooklyn Heights Montessori School
BID Business Improvement District
BOCES Board of Cooperative Educational Services
CAB Capital Appreciation Bond
CARS Complimentary Auction Rate Security
CCM Comprehensive Care Management
CDC Community Development Corporation
CF Community Facilities
CGH Community General Hospital
CNR College of New Rochelle
Con Ed Consolidated Edison Company
COP Certificate of Participation
DC Dominican College
DDI Developmental Disabilities Institute
Devel. Development
DIAMONDS Direct Investment of Accrued Municipals
EHC Elderly Housing Corporation
EHL Engine Hook and Ladder
EPG Elmhurst Parking Garage
ERDA Energy Research and Development Authority
FHP Franciscan Health Partnership
FHT Future Home Technology
FLCP Finger Lakes Cerebral Palsy
G&E Gas and Electric
GO General Obligation
GRIA Greater Rochester International Airport
H&NH Hospital and Nursing Home
HDC Housing Development Corporation
HELP Homeless Economic Loan Program
HFA Housing Finance Agency
HFAS Huntington First Aid Squad
HFC Housing Finance Corporation
Hsg. Housing
IDA Industrial Development Authority
IMEPCF Industrial, Medical and Environmental
Pollution Control Facilities
INFLOS Inverse Floating Rate Securities
IRS Inverse Rate Security
ITEMECF Industrial, Tourist, Educational, Medical
and Environmental Community Facilities
IVRC Inverse Variable Rate Certificate
JBFS Jewish Board of Family Services
JDAM Julia Dyckman Angus Memorial
JFK John Fitzgerald Kennedy
L.I. Long Island
LEVRRS Leveraged Reverse Rate Security
LGAC Local Government Assistance Corporation
LGSC Local Government Services Corporation
LILCO Long Island Lighting Corporation
LRRHCF Loretto Rest Residential Health Care Facility
LSSUNY Lutheran Social Services of Upstate New York
MCC Mobile Climate Control
MGH Mennonite General Hospital
MHMC Montefiore Hospital and Medical Center
MMC Marymount Manhattan College
MMP Millbrook Millwork Project
MTA Metropolitan Transit Authority
NH&HC Nursing Home and Health Care
NIMO Niagara Mohawk Power Corporation
NJ New Jersey
NY New York
NYC New York City
NYS New York State
NYSEG New York State Electric and Gas
OBPWC Ocean Bay Park Water Corporation
PRFF Puerto Rican Family Foundation
Res Rec Resource Recovery Facility
RG&E Rochester Gas and Electric
RGH Rochester General Hospital
RIBS Residual Interest Bonds
RITES Residual Interest Tax Exempt Security
RMH Ryder Memorial Hospital
SCSB Schuyler Community Services Board
SLCD School for Language and Communication
Development
SLRHF St. Luke Residential Healthcare Facility
SONYMA State of New York Mortgage Agency
SWMA Solid Waste Management Authority
TFA Transitional Finance Authority
UCC Upstate Community Colleges
UCP/HCA United Cerebral Palsy and Handicapped
UDC Urban Development Corporation
UFA Utica Free Academy
Children's Association
V.I. United States Virgin Islands
WHMC Wyckoff Heights Medical Center
WWH Wyandach/Wheatley Heights
YCN Yield Curve Note
YCR Yield Curve Receipt
YMCA Young Men's Christian Association
31 ROCHESTER FUND MUNICIPALS
<PAGE>
================================================================================
INDUSTRY CONCENTRATIONS December 31, 1998
- --------------------------------------------------------------------------------
Distribution of investments by industry, as a percentage of total investments at
value, is as follows:
Industry Market Value Percent
---------------------------------------------------------------------------
Hospital/Healthcare $663,320,170 15.8 %
General Obligation 489,559,388 11.6
Electric Utilities 420,009,037 10.0
Multi-Family Housing 400,197,409 9.5
Resource Recovery 336,313,414 8.0
Municipal Leases 304,004,710 7.2
Single-Family Housing 246,597,068 5.9
Marine/Aviation Facilities 171,286,445 4.1
Water Utilities 154,891,014 3.7
Non Profit Organization 132,541,826 3.2
Manufacturing, Non-Durable Goods 126,067,905 3.0
Higher Education 113,943,719 2.7
Manufacturing, Durable Goods 105,289,547 2.5
Highways/Railways 102,987,034 2.5
Adult Living Facilities 102,046,765 2.4
Corporate Backed 98,383,138 2.3
Education 79,662,507 1.9
Sales Tax Revenue 55,447,937 1.3
Other 104,031,731 2.4
============== =====
$4,206,580,764 100.0 %
============== =====
================================================================================
SUMMARY OF RATINGS December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Distribution of investments by rating category, as a percentage of total
investments at value, is as follows:
Rating Percent
- --------------------------------------------------------------------------------
AAA 25.0 %
AA 10.5
A 27.5
BBB 19.1
BB 2.3
B 0.8
CCC 0.0
CC 0.0
C 0.0
Not Rated 14.8
=====
100.0 %
=====
Bonds rated by any nationally recognized statistical rating organization are
included in the equivalent Standard & Poor's rating category. As a general
matter, unrated bonds may be backed by mortgage liens or equipment liens on the
underlying property, and also may be guaranteed. 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, or when, in the opinion of the Manager, the bond itself
possesses 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 by the Manager are included in the "Not Rated"
category. For further information see "Credit Quality" in the Prospectus.
32 ROCHESTER FUND MUNICIPALS
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments, at value (cost $3,959,930,558)-- see accompanying statement $ 4,206,580,764
Cash 1,981,479
Receivables:
Interest 66,017,598
Shares of beneficial interest sold 14,615,045
Investments sold 2,576,340
Other 324,844
---------------
Total assets 4,292,096,070
---------------
LIABILITIES
Payables and other liabilities:
Investments purchased 128,316,105
Note payable to bank (interest rate 5.875% at 12/31/98)--Note 6 56,200,000
Shares of beneficial interest redeemed 3,485,960
Trustees' fees--Note 1 678,579
Dividends 163,066
Other 575,348
---------------
Total liabilities 189,419,058
---------------
Net Assets $ 4,102,677,012
===============
- -------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $ 3,925,416,284
Excess of distributions over net investment income (26,371)
Accumulated net realized loss on investment transactions (69,363,107)
Net unrealized appreciation on investments--Note 3 246,650,206
---------------
Net assets $ 4,102,677,012
===============
- -------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
CLASS A SHARES:
Net asset value and redemption price per share (based on net assets of
$3,434,940,188 and 182,640,976 shares of beneficial interest outstanding) $ 18.81
Maximum offering price per share (net asset value plus sales charge of
4.75% of offering price) $ 19.75
- -------------------------------------------------------------------------------------------------------
CLASS B SHARES:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $493,793,362 and
26,282,156 shares of beneficial interest outstanding) $ 18.79
- -------------------------------------------------------------------------------------------------------
CLASS C SHARES:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $173,943,462 and
9,256,363 shares of beneficial interest outstanding) $ 18.79
- -------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
33 ROCHESTER FUND MUNICIPALS
<PAGE>
================================================================================
STATEMENT OF OPERATIONS For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 225,857,176
-------------
EXPENSES
Management fees--Note 4 16,898,272
Distribution and service plan
fees--Note 4:
Class A 4,738,601
Class B 3,283,860
Class C 1,110,980
Transfer and shareholder servicing agent fees--Note 4:
Class A 1,823,612
Class B 228,432
Class C 61,382
Accounting service fees--Note 4 1,082,541
Shareholder reports 422,000
Registration and filing fees 332,704
Trustees' fees and expenses--Note 1 304,076
Custodian fees and expenses 220,548
Legal, auditing and other professional fees 107,000
Other 245,855
Interest 1,131,409
-------------
Total expenses 31,991,272
-------------
NET INVESTMENT INCOME $ 193,865,904
-------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized loss on investments (4,390,468)
Net change in unrealized appreciation
or depreciation on investments 30,719,166
-------------
Net realized and unrealized gain 26,328,698
-------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 220,194,602
=============
================================================================================
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, 1998 1997
---- ----
<S> <C> <C>
OPERATIONS
Net investment income $ 193,865,904 $ 155,206,919
Net realized loss (4,390,468) (5,735,552)
Net change in unrealized appreciation or depreciation 30,719,166 107,729,438
--------------- ---------------
Net increase in net assets resulting from operations 220,194,602 257,200,805
- ----------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDER
Dividends from net investment income:
Class A (175,270,973) (152,050,014)
Class B (14,972,126) (2,948,096)
Class C (5,050,170) (808,459)
- ----------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A 565,102,760 443,076,063
Class B 320,057,221 168,083,894
Class C 123,988,335 48,222,991
- ----------------------------------------------------------------------------------------------
NET ASSETS
Total increase 1,034,049,649 760,777,184
Beginning of period 3,068,627,363 2,307,850,179
--------------- ---------------
End of period (including excess of distributions over
net investment income of $26,371 and undistributed
net investment income of $1,380,220, respectively) $ 4,102,677,012 $ 3,068,627,363
=============== ===============
</TABLE>
See accompanying Notes to Financial Statements
34 ROCHESTER FUND MUNICIPALS
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------
Year Ended December 31,
1998 1997 1996 (b) 1995 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 18.67 $ 18.00 $ 18.18 $ 16.31 $ 19.00
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income 1.04 1.10(c) 1.10 (c) 1.10(c) 1.13 (c)
Net realized and unrealized gain (loss) 0.15 0.67 (0.18) 1.86 (2.68)
--------- --------- --------- --------- ---------
Total income (loss) from investment operations 1.19 1.77 0.92 2.96 (1.55)
--------- --------- --------- --------- ---------
Dividends and distributions to shareholders:
Dividends from net investment income (1.04) (1.10) (1.10) (1.09) (1.13)
Undistributed net investment income -
prior year (0.01) -- -- -- (0.01)
---------
--------- --------- --------- --------- ---------
Total dividends and distributions to shareholders (1.05) (1.10) (1.10) (1.09) (1.14)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 18.81 $ 18.67 $ 18.00 $ 18.18 $ 16.31
========= ========= ========= ========= =========
TOTAL RETURN, AT NET ASSET VALUE (D) 6.52% 10.20% 5.37% 18.58% (8.35%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $ 3,435 $ 2,848 $ 2,308 $ 2,145 $ 1,791
Average net assets (in millions) $ 3,161 $ 2,539 $ 2,191 $ 2,005 $ 1,847
Ratios to average net assets:
Net investment income 5.50% 5.96% 6.20% 6.25% 6.43%
Expenses 0.78% 0.76%(f) 0.82%(f) 0.82%(f) 0.84%
Expenses (excluding interest) (g) 0.75% 0.75%(f) 0.77%(f) 0.78%(f) 0.73%
Portfolio turnover rate (h) 25.1% 4.6% 13.3% 14.6% 34.4%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) For the period from March 17, 1997 (inception of offering) to December 31,
1997.
(b) On January 4, 1996, OppenheimerFunds, Inc. became the investment advisor
to the Fund.
(c) Based on average shares outstanding for the period.
(d) Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the
reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less
than one full year.
(e) Annualized.
(f) Expense ratio reflects the effect of expenses paid indirectly by the Fund.
(g) 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.
(h) 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, 1998 were
$1,956,460,821 and $932,190,087, respectively.
See accompanying Notes to Financial Statements.
35 ROCHESTER FUND MUNICIPALS
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS B CLASS C
=========================================================
Year Ended December 31, Year Ended December 31,
1998 1997(a) 1998 1997(a)
------- ------- ------- --------
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 18.65 $ 17.89 $ 18.66 $ 17.89
------- ------- ------- -------
Income from investment operations:
Net investment income 0.89 0.74(c) 0.89 0.74(c)
Net realized and unrealized gain 0.14 0.76 0.13 0.77
------- ------- ------- -------
Total income from investment operations 1.03 1.50 1.02 1.51
------- ------- ------- -------
Dividends and distributions to shareholders:
Dividends from net investment income (0.89) (0.74) (0.89) (0.74)
Total dividends and distributions to shareholders (0.89) (0.74) (0.89) (0.74)
------- ------- ------- -------
Net asset value, end of period $ 18.79 $ 18.65 $ 18.79 $ 18.66
======= ======= ======= =======
TOTAL RETURN, AT NET ASSET VALUE(D) 5.61% 8.74% 5.56% 8.80%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $ 494 $ 172 $ 174 $ 49
Average net assets (in millions) $ 329 $ 76 $ 111 $ 21
Ratios to average net assets:
Net investment income 4.57% 4.91%(e) 4.57% 4.92%(e)
Expenses 1.64% 1.59%(e)(f) 1.63% 1.58%(e)(f)
Expenses (excluding interest)(g) 1.61% 1.58%(e)(f) 1.59% 1.57%(e)(f)
Portfolio turnover rate(h) 25.1% 4.6% 25.1% 4.6%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(a) For the period from March 17, 1997 (inception of offering) to December 31,
1997.
(b) On January 4, 1996, OppenheimerFunds, Inc. became the investment advisor
to the Fund.
(c) Based on average shares outstanding for the period.
(d) Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the
reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less
than one full year.
(e) Annualized.
(f) Expense ratio reflects the effect of expenses paid indirectly by the Fund.
(g) 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.
(h) 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, 1998 were
$1,956,460,821 and $932,190,087, respectively.
See accompanying Notes to Financial Statements.
36 ROCHESTER FUND MUNICIPALS
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
Rochester Fund Municipals (the Fund) is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. The Fund's investment objective is to provide shareholders with 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. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B and Class C shares. Class A shares are sold
with a front-end sales charge. Class B and Class C shares may be subject to a
contingent deferred sales charge. All classes of shares have identical rights to
earnings, assets and voting privileges, except that each class has its own
distribution and/or service plan, expenses directly attributable to that class
and exclusive voting rights with respect to matters affecting that class. Class
B shares will automatically convert to Class A shares six years after the date
of purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.
INVESTMENT VALUATION. Portfolio securities are valued as of the close of the New
York Stock Exchange on each trading day. Long- term debt securities are valued
by a portfolio pricing service approved by the Board of Trustees. Such
securities which cannot be valued by an approved portfolio pricing service are
valued using dealer-supplied valuations provided the Manager is satisfied that
the firm rendering the quotes is reliable and that the quotes reflect current
market value, or are valued under consistently applied procedures established by
the Board of Trustees to determine fair value in good faith.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS. Delivery and payment for securities
that have been purchased by the Fund on a forward commitment or when-issued
basis can take place a month or more after the transaction date. Normally the
settlement date occurs within six months of the purchase of municipal bonds and
notes. However, the Fund may, from time to time, purchase municipal securities
whose settlement date extends beyond six months and possibly as long as two
years or more beyond trade date. During this period, such securities do not earn
interest, are subject to market fluctuation and may increase or decrease in
value prior to their delivery. The Fund maintains, in a segregated account with
its custodian, assets with a market value equal to or greater than the amount of
its purchase commitments. The purchase of securities on a when-issued or forward
commitment basis may increase the volatility of the Fund's net asset value to
the extent the Fund makes such purchases while remaining substantially fully
invested. As of December 31, 1998, the Fund had entered into outstanding
when-issued or forward commitments (see Note 3).
SECURITY CREDIT RISK. The Fund invests in high yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and risk
of loss of income and principal, and may be more sensitive to economic
conditions than lower yielding, higher rated fixed income securities. The Fund
may acquire securities in default, and is not obligated to dispose of securities
whose issuers subsequently default. At December 31, 1998, securities with an
aggregate market value of $7,004,619, representing 0.17% of the Fund's net
assets, were in default.
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
FEDERAL TAXES. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required. At December 31, 1998, the
Fund had available for federal income tax purposes an unused capital loss
carryover of approximately $69,193,000, which expires between 2000 and 2006.
TRUSTEES' FEES AND EXPENSES. In June, 1998, the Board of Trustees of the Fund
adopted a nonfunded retirement plan for the Fund's independent trustees.
Benefits are based on years of service and fees paid to each trustee during the
years of service. During the year ended December 31, 1998, a provision of
$159,076 was made for the Fund's projected benefit obligations. No payments were
made under this plan during 1998. At December 31, 1998, the Fund had recognized
an accumulated liability of $159,076.
37 ROCHESTER FUND MUNICIPALS
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
In January, 1995, the then existing Board of Trustees of the Fund adopted a
nonfunded retirement plan for its independent trustees. The retirement plan, as
amended and restated in October, 1995, provides that no independent trustee of
the Fund who is elected after September, 1995 may be eligible to receive
benefits thereunder. Upon retirement, eligible trustees receive annual payments
based upon their years of service. In connection with the sale of certain assets
of Rochester Capital Advisors, L.P. (the Fund's former investment advisor) to
the Manager, all but one of the existing independent trustees retired effective
January 4, 1996. The retirement plan expense, which is included in trustees'
fees and expenses, amounted to $65,000 for the year ended December 31, 1998.
Payments of $64,125 were made to retired trustees during the year ended December
31, 1998. At December 31, 1998, the Fund had recognized an accumulated liability
of $508,181.
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to declare dividends separately
for Class A, Class B and Class C shares from net investment income each day the
New York Stock Exchange is open for business and pay such dividends monthly.
Distributions from net realized gains on investments, if any, will be declared
at least once each year.
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
The Fund adjusts the classification of distributions to shareholders to reflect
the differences between financial statement amounts and distributions determined
in accordance with income tax regulations. Accordingly, during the year ended
December 31, 1998, amounts have been reclassified to reflect a decrease in
paid-in capital of $20,773, and a decrease in excess of distributions over net
investment income of $20,773.
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. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date). Interest income is accrued on a daily basis. In
computing net investment income, the Fund amortizes premiums and accretes
original issue discount, which is in accordance with federal income tax
requirements. For municipal bonds acquired 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. Realized gains and losses
on investments and unrealized appreciation and depreciation are determined on an
identified cost basis, which is the same basis used for federal income tax
purposes.
The 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.
38 ROCHESTER FUND MUNICIPALS
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
---------- ----------
DECEMBER 31, 1998 DECEMBER 31, 1997 (1)
----------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
===============================================================================================
<S> <C> <C> <C> <C>
CLASS A:
Sold 44,149,177 $ 828,290,736 35,581,801 $ 648,373,849
Dividends and distributions
reinvested 5,034,167 94,396,140 4,372,465 79,564,502
Redeemed (19,054,473) (357,584,116) (15,687,966) (284,862,288)
------------- ------------- ------------- -------------
Net increase 30,128,871 $ 565,102,760 24,266,300 $ 443,076,063
============= ============= ============= =============
===============================================================================================
CLASS B:
Sold 17,637,855 $ 330,613,878 9,239,870 $ 168,687,731
Dividends and distributions
reinvested 514,626 9,646,518 101,107 1,860,790
Redeemed (1,077,120) (20,203,175) (134,182) (2,464,627)
------------- ------------- ------------- -------------
Net increase 17,075,361 $ 320,057,221 9,206,795 $ 168,083,894
============= ============= ============= =============
===============================================================================================
CLASS C:
Sold 7,026,163 $ 131,632,053 2,680,454 $ 49,004,451
Dividends and distributions
reinvested 187,218 3,511,228 28,231 520,244
Redeemed (594,948) (11,154,946) (70,755) (1,301,704)
------------- ------------- ------------- -------------
Net increase 6,618,433 $ 123,988,335 2,637,930 $ 48,222,991
============= ============= ============= =============
</TABLE>
(1) For the year ended December 31, 1997 for Class A shares and for the period
from March 17, 1997 (inception of offering) to December 31, 1997 for Class
B and Class C shares.
NOTE 3. PORTFOLIO INFORMATION
At December 31, 1998, net unrealized appreciation on investments of $246,650,206
was composed of gross appreciation of $258,084,344, and gross depreciation of
$11,434,138.
Unrealized appreciation (depreciation) at December 31, 1998 based on cost of
investments for federal income tax purposes of $3,960,101,097 was:
Gross unrealized appreciation $257,943,762
Gross unrealized depreciation (11,464,095)
------------
Net unrealized appreciation $246,479,667
============
39 ROCHESTER FUND MUNICIPALS
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
At December 31, 1998, investments in securities included issues that were
purchased on a when-issued or delayed delivery basis. The Fund has recorded
these commitments and is valuing the when-issued securities at current market
value on each trading day. In addition, the Fund has segregated sufficient
liquid debt securities with its custodian to cover these commitments. The Fund
intends to invest no more than 10% of its net assets in when-issued or delayed
delivery securities. The aggregate cost of securities purchased on a when-issued
or delayed delivery basis at December 31, 1998 was $121,638,830, which
represents 2.96% of the Fund's net assets. Information concerning these
securities is as follows:
<TABLE>
<CAPTION>
VALUATION PER UNIT
FACE AMOUNT ACQUISITION DELIVERY COST PER AS OF
SECURITY (IN THOUSANDS) DATE DATE UNIT DECEMBER 31, 1998
=============================================================================================
<S> <C> <C> <C> <C> <C>
Dutchess County Res
Rec (Solid Waste):
5.15% due 1/1/10 $2,420 8/07/98 10/15/99 100.000% 102.622%
5.40% due 1/1/13 1,700 8/07/98 10/15/99 100.000 102.552
5.45% due 1/1/14 1,000 8/07/98 10/15/99 100.000 102.404
=============================================================================================
Puerto Rico Electric
Power Authority:
5.25% due 7/1/14 9,935 7/23/98 4/06/99 101.800 104.377
=============================================================================================
Suffolk County IDA
(Huntington Res Rec):
5.55% due 10/1/04 8,545 1/28/97 7/29/99 100.000 105.288
5.65% due 10/1/05 9,180 1/28/97 7/29/99 100.000 106.315
5.75% due 10/1/06 9,875 1/28/97 7/29/99 100.000 107.387
5.80% due 10/1/07 10,615 1/28/97 7/29/99 100.000 108.266
5.85% due 10/1/08 11,410 1/28/97 7/29/99 100.000 109.098
5.95% due 10/1/09 12,265 1/28/97 7/29/99 100.000 110.792
6.00% due 10/1/10 13,190 1/28/97 7/29/99 100.000 111.402
6.15% due 10/1/11 14,170 1/28/97 7/29/99 100.000 112.535
6.25% due 10/1/12 17,155 1/28/97 7/29/99 100.000 113.513
=============================================================================================
</TABLE>
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 of 0.54% of the first
$100 million of the Fund's average annual net assets, 0.52% of the next $150
million, 0.47% of the next $1,750 million, 0.46% of the next $3 billion, and
0.45% of the net assets in excess of $5 billion. During the year ended December
31, 1998, the Fund paid $16,898,272 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 the year ended December 31, 1998, the Fund paid
$1,082,541 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 and for other registered investment
companies. The Fund pays OFS an annual maintenance fee for each Fund shareholder
account and reimburses OFS for its out-of-pocket expenses. During the year ended
December 31, 1998, the Fund paid a total of $2,113,426 to OFS for transfer and
shareholder servicing agent fees.
For the year ended December 31, 1998, commissions (sales charges paid by
investors) on sales of Class A shares totaled $19,163,247, of which $2,805,718
was retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. Sales
charges advanced to brokers/dealers by OFDI on sales of the Fund's Class A,
Class B and Class C shares totaled $1,933,360, $12,869,741 and $1,286,192,
respectively. Amounts paid to an affiliated broker/dealer for Class B and Class
C shares were $46,946 and $5,451, respectively. During the year ended December
31, 1998, OFDI received contingent deferred sales charges of $50,933, $620,222
and $60,471, respectively, upon redemption of Class A, Class B and Class C
shares, as reimbursement for sales commissions advanced by OFDI at the time of
sale of such shares.
40 ROCHESTER FUND MUNICIPALS
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI for a
portion of its costs incurred in connection with the personal service and
maintenance of shareholder accounts that hold Class A shares. Reimbursement is
made quarterly at an annual rate that may not exceed 0.25% of the average annual
net assets of Class A shares of the Fund. Currently, the Board of Trustees has
limited the rate to 0.15% per year on Class A shares. OFDI uses the service fee
to reimburse brokers, dealers, banks and other financial institutions quarterly
for providing personal service and maintenance of accounts of their customers
that hold Class A shares. During the year ended December 31, 1998, OFDI paid
$29,055 to an affiliated broker/dealer as reimbursement for Class A personal
service and maintenance expenses.
The Fund has adopted Distribution and Service Plans for Class B and Class C
shares to compensate OFDI for its costs in distributing Class B and Class C
shares and servicing accounts. Under the Plans, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class B and Class C shares for its
services rendered in distributing Class B and Class C shares. OFDI also receives
a service fee of 0.25% per year to compensate dealers for providing personal
services for accounts that hold Class B and Class C shares. Each fee is computed
on the average annual net assets of Class B or Class C shares, determined as of
the close of each regular business day. During the year ended December 31, 1998,
OFDI paid $1,168 to an affiliated broker/dealer as compensation for Class C
personal service and maintenance expenses and retained $2,946,247 and $979,347,
respectively, as compensation for Class B and Class C sales commissions and
service fee advances, as well as financing costs. If either Plan is terminated
by the Fund, the Board of Trustees may allow the Fund to continue payments of
the asset-based sales charge to OFDI for costs incurred in distributing shares
before the Plan was terminated. At December 31, 1998, OFDI had incurred excess
distribution and servicing costs of $20,508,219 for Class B and $2,161,280 for
Class C.
NOTE 5. ILLIQUID AND RESTRICTED SECURITIES
At December 31, 1998, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily-available
market or if its valuation has not changed for a certain period of time. The
Fund intends to invest no more than 15% of its net assets (determined at the
time of purchase and reviewed periodically) in illiquid securities. Certain
restricted securities, eligible for resale to qualified institutional investors,
are not subject to that limit. The aggregate value of illiquid securities
subject to this limitation at December 31, 1998 was $394,902,244, which
represents 9.63% of the Fund's net assets.
NOTE 6. 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 funds
managed by the Manager in an unsecured line of credit with a bank, which permits
borrowings up to $100 million, collectively. Interest is charged to each fund,
based on its borrowings, at a rate equal to the Federal Funds Rate plus 0.625%.
The Fund also pays a commitment fee equal to its pro rata share of the average
unutilized amount of the credit facility at a rate of 0.07% per annum. The
commitment fee allocated to the Fund for the year ended December 31, 1998 was
$19,547.
The Fund had borrowings outstanding of $56,200,000 at December 31, 1998. For the
year ended December 31, 1998, the average monthly loan balance was $18,832,176
at an average interest rate of 6.007%. The maximum amount of borrowings
outstanding at any month-end was $69,100,000.
41 ROCHESTER FUND MUNICIPALS
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of 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, 1998, 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 periods indicated, 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, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Denver, Colorado
January 22, 1999
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (Unaudited)
In early 1999, shareholders received information regarding all dividends and
distributions paid to them by the Fund during calendar year 1998. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
None of the dividends paid by the Fund during the year ended December 31, 1998
are eligible for the corporate dividend-received deduction. 99.4% 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 (90.6%), Guam (2.3%), Puerto Rico (4.7%), Virgin
Islands (2.3%), American Samoa (0.1%).
During 1998, 34.2% of this tax-exempt income was derived from "private activity
bonds". These are municipal bonds used to finance privately operated facilities.
The interest on these bonds is not taxable for most investors. For the few
investors subject to the alternative minimum tax, the interest from these bonds
is considered a preference item.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
42 ROCHESTER FUND MUNICIPALS
<PAGE>
ROCHESTER FUND MUNICIPALS
OFFICERS AND TRUSTEES Bridget A. Macaskill, Chairman of the
Board of Trustees and President
John Cannon, Trustee
Paul Y. Clinton, Trustee
Thomas W. Courtney, Trustee
Robert G. Galli, Trustee
Lacy B. Herrmann, Trustee
George Loft, Trustee
Ronald H. Fielding, Vice President and Portfolio
Manager
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Adele A. Campbell, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
INVESTMENT ADVISOR OppenheimerFunds, Inc.
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
TRANSFER AND SHAREHOLDER OppenheimerFunds Services
SERVICING AGENT
CUSTODIAN OF Citibank, N.A.
PORTFOLIO SECURITIES
INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP
LEGAL COUNSEL Kirkpatrick & Lockhart LLP
This is a copy of a report to shareholders of Rochester Fund Municipals. This
report must be preceded or accompanied by a Prospectus of Rochester Fund
Municipals. For material information concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the FDIC or any other agency, and
involve investment risks, including the possible loss of the principal amount
invested.
43 ROCHESTER FUND MUNICIPALS
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
OPPENHEIMERFUNDS FAMILY
REAL ASSET FUNDS
- --------------------------------------------------------------------------------
Real Asset Fund
Gold & Special Minerals Fund
GLOBAL STOCK FUNDS
- --------------------------------------------------------------------------------
Developing Markets Fund
International Small Company Fund
International Growth Fund
Global Growth & Income Fund
Global Fund
Quest Global Value Fund
STOCK FUNDS
- --------------------------------------------------------------------------------
Enterprise Fund
Discovery Fund
Quest Small Cap Value Fund
MidCap Fund
Large Cap Growth Fund
Capital Appreciation Fund
Quest Capital Value Fund
Growth Fund
Disciplined Value Fund
Quest Value Fund
STOCK & BOND FUNDS
- --------------------------------------------------------------------------------
Main Street Growth and Income Fund(1)
Quest Opportunity Value Fund
Total Return Fund
Quest Balanced Value Fund
Equity Income Fund
Disciplined Allocation Fund
Multiple Strategies Fund
Convertible Securities Fund
TAXABLE BOND FUNDS
- --------------------------------------------------------------------------------
International Bond Fund
World Bond Fund
High Yield Fund
Champion Income Fund
Strategic Income Fund
Bond Fund
U.S. Government Trust
Limited-Term Government Fund
MUNICIPAL BOND FUNDS
- --------------------------------------------------------------------------------
California Municipal Fund(2)
Florida Municipals Fund(2)
New Jersey Municipal Fund(2)
New York Municipal Fund(2)
Pennsylvania Municipal Fund(2)
Municipal Bond Fund
Insured Municipal Fund
Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York Municipal Fund
MONEY MARKET FUNDS(3)
- --------------------------------------------------------------------------------
Money Market Fund
Cash Reserves
(1) On 12/22/98, the Fund's name was changed from "Main Street Income & Growth
Fund."
(2) Available only to investors in certain states.
(3) An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203
(C) Copyright 1999 OppenheimerFunds, Inc. All rights reserved.
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<PAGE>
[LOGO] ROCHESTER
FUND
MUNICIPALS
THE ROCHESTER FUNDS
A Division of OppenheimerFunds, Inc.
350 Linden Oaks
Rochester, New York 14625-2807
716-383-1300
INVESTMENT ADVISER
OppenheimerFunds, Inc.
Two World Trade Center
New York, NY 10048-0203
DISTRIBUTOR
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, NY 10048-0203
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Denver, CO
CUSTODIAN
Citibank, N.A.
New York, NY
TRANSFER AND SHAREHOLDER SERVICES AGENT
OppenheimerFunds Services
P.O. Box 5270
Denver, CO 80217-5270
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.
Shares of Oppenheimer funds are not deposits or obligations of any bank,
are not guaranteed by any bank, and are not insured by the FDIC or any other
agency and involve investment risks, including the possible loss of the
principal amount invested.
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.
RAO365.001.0199 February 28, 1999
- --------------------------------------------------------------------------------
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--------------
