UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21881
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OPPENHEIMER ROCHESTER MINNESOTA MUNICIPAL FUND
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(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
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(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
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Date of fiscal year end: MARCH 31
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Date of reporting period: 03/31/2007
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ITEM 1. REPORTS TO STOCKHOLDERS.
MARCH 31, 2007
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Management
Oppenheimer Rochester(TM) Commentaries
State Specific Municipal and
Funds Annual Report
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Oppenheimer Rochester(TM) Arizona Municipal Fund
Oppenheimer Rochester(TM) Maryland Municipal Fund
Oppenheimer Rochester(TM) Massachusetts Municipal Fund
Oppenheimer Rochester(TM) Michigan Municipal Fund [GRAPHIC]
Oppenheimer Rochester(TM) Minnesota Municipal Fund
Oppenheimer Rochester(TM) North Carolina Municipal Fund
Oppenheimer Rochester(TM) Ohio Municipal Fund
Oppenheimer Rochester(TM) Virginia Municipal Fund
"IT'S A GREAT HONOR TO WIN INDUSTRY AWARDS--AND OUR INVESTMENT TEAM HAS
WON MANY ACROSS THE YEARS--BUT THE REAL REWARD HAS COME FROM USING OUR
CONTRARIAN, VALUE-BASED 'ROCHESTER STYLE' OF FUND MANAGEMENT TO CREATE
TAX-ADVANTAGED INCOME FOR INVESTORS."
-RONALD H. FIELDING, Chief Strategist, Senior Vice President
and Senior Portfolio Manager, OPPENHEIMERFUNDS/ROCHESTER
[LOGO] OPPENHEIMERFUNDS(R)
The Right Way to Invest
TOP HOLDINGS AND ALLOCATIONS
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OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
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TOP TEN CATEGORIES
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Highways/Railways 13.8%
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Tobacco Settlement Payments 9.1
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Marine/Aviation Facilities 9.1
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Special Tax 8.0
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Hospital/Health Care 7.4
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Education 7.0
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Multifamily Housing 6.5
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Manufacturing, Non-Durable Goods 6.2
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Single Family Housing 5.2
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Higher Education 4.2
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are based on the total market value of investments.
CREDIT ALLOCATION
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AAA 37.2%
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AA 4.2
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A 4.5
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BBB 34.5
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BB 4.2
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CCC 1.2
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Not Rated 14.2
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are dollar-weighted based on the total market value of
investments. As of that date, no securities held by the Fund were rated lower
than CCC. Securities rated by any rating organizations are included in the
equivalent Standard & Poor's rating category. The allocation includes rated
securities and those not rated by a national rating organization but to which
the ratings above have been assigned by the Manager for internal purposes as
being comparable, in the Manager's judgment, to securities rated by a rating
agency in the same category.
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18 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
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OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED MARCH 31, 2007, FOLLOWED BY
A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. We are pleased to report that
Oppenheimer Rochester Arizona Municipal Fund has distributed high levels of
tax-free income to its shareholders during this reporting period, outperforming
many fixed-income alternatives on an after-tax basis. As of March 31, 2007,
Oppenheimer Rochester Arizona Municipal Fund's Class A shares provided a
distribution yield of 4.53% at net asset value. 1 Lipper Inc.--an independent
mutual fund rating service--reported an average distribution yield of 3.74%
among the 32 funds in its Arizona Municipal Debt Funds category as of the same
date. 2
Oppenheimer Rochester Arizona Municipal Fund had approximately 115 holdings in
its portfolio at the end of this reporting period and led its Lipper category in
total return for the quarter. 3 Since inception, the Fund's Class A shares
generated a cumulative total return of 5.61% at net asset value. 4 During this
reporting period, the monthly dividend was raised to 5.4 cents per Class A
share, from 5 cents per share, starting with the January 2007 distribution;
distributions for other share classes were adjusted accordingly. In all, the
Fund distributed 26.2 cents per Class A share in the reporting period ended
March 31.
The Fund's holdings in Master Settlement Agreement (MSA) bonds, or "tobacco
bonds," continued to provide significant shareholder benefit in this reporting
period and accounted for about 9% of Fund investments as of March 31, 2007.
Since the Fund's inception, prices in this sector have firmed up amid favorable
court decisions.
The Fund's airline-backed bonds also performed well this reporting period,
generally increasing in price and generating above-average yields. In
particular, holdings backed by American Airlines (less than 2% of total assets)
helped drive total return this reporting period.
The Fund's holdings this reporting period included municipal bonds issued to
finance the infrastructure of new real estate development projects. We believe
that the credit structure of these Special Tax and Special Assessment bonds
(known as "dirt bonds") can be especially advantageous in a soft U.S. housing
market, because the payments that secure the Fund's bonds are on parity with
real estate taxes. Additionally, the responsibility for servicing the debt
passes to all subsequent property owners as the land is developed and
subdivided. Thus, as the number of owners increases, the risk bondholders face
decreases. Further, the fear of foreclosure leads most property owners to stay
current with their debt service payments--to the benefit of our shareholders. In
all, Special Tax and Special Assessment bonds constituted about 12% of the
portfolio's market value as of March 31, 2007, and included many attractive
holdings. For example, during this reporting period the Fund invested in a
non-rated bond to finance the infrastructure for a residential community in
Prescott, Arizona. The currently callable bond provided a tax-free yield of 5.5%
as of March 31, 2007, and the yield is set to rise sharply if the bond remains
uncalled after July 1, 2007. Shareholders should note that refinancings are not
common in this sector because they
1. Distribution yield at net asset value (NAV), as shown, is annualized based on
the last distribution and divided by the Fund's NAV on March 31, 2007; the
calculation does not include sales charges, which would reduce results. The
Fund's distribution yield at maximum offering price (or with sales charge) was
4.31% for Class A shares on the same date. Falling share prices may artificially
increase yields.
2. Lipper Inc. Lipper calculations do not include sales charges which, if
included, would reduce results.
3. Lipper Inc. Lipper Inc. ranked Oppenheimer Rochester Arizona Municipal Fund
1st among 32 funds for the quarter ended March 31, 2007, in its Arizona
Municipal Debt Funds category. Lipper rankings are based on total returns, but
do not consider sales charges. Lipper rankings are for the A share class only;
other classes may have different performance characteristics. PAST PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS.
4. Total return at NAV, as shown, does not include sales charge; as of March 31,
2007, cumulative total return from inception was 0.60% after sales charge for
Class A shares.
19 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
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OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
often require carefully coordinated efforts among many property owners and
because individual reductions in debt service payments are generally modest.
"Credit spread tightening"--which occurs when the difference between yields on
low-rated municipal bonds and higher-rated bonds decreases, as it did this
reporting period--also contributed to the Fund's strong performance. With
spreads becoming narrower, prices of lower-rated municipal bonds generally
performed better than those of high-grade bonds. This development was good news
for the credit-sensitive areas of our portfolios, including hospital/health
care, education and adult living facilities. However, credit spread tightening
also means less opportunity and potentially greater risk on new purchases, so
our recent purchases have included more bonds with higher ratings. As of March
31, 2007, AAA- and AA-rated paper represented more than 40% of the portfolio's
market value, and the average credit quality for the Fund was A. BBB-rated bonds
constituted nearly 35% of the Fund's market value on that date.
The Fund's portfolio this reporting period included municipal
inverse-floating-rate securities, which are tax-exempt securities whose interest
payments move inversely to changes in short-term interest rates. 5 During this
reporting period, even as short-term interest rates and the prices of these
securities increased, the income levels of these securities remained higher than
the market average.
In keeping with the "Rochester style" of municipal bond fund management, our
investment team continues to focus on scouring the market to unearth value in
bonds added to the Fund's portfolio. Our approach to municipal bond investing is
flexible and responsive to market conditions; our strategies are intended to
balance many different types of risk to reduce overall portfolio risk.
Shareholders should note that market conditions during this reporting period did
not affect the Fund's overall investment strategies or cause it to pay any
capital gain distributions. In closing, we believe that the Fund's structure and
composition as well as our time-tested strategies will continue to benefit
long-term investors through interest rate and economic cycles.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until March 31, 2007. Performance is measured from the inception date
of all Classes on October 10, 2006. The Fund's performance reflects the
deduction of the maximum initial sales charge on Class A shares, the applicable
contingent deferred sales charge on Class B and Class C shares, and
reinvestments of all dividends and capital gains distributions. Past performance
cannot guarantee future results.
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. 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 indices.
5. See page 147 for further information regarding inverse-floating-rate
securities.
20 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Arizona Municipal Fund (Class A)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Lehman Brothers
Arizona Municipal Fund (Class A) Municipal Bond Index
10/10/2006 $ 9,525 $ 10,000
12/31/2006 $ 9,954 $ 10,111
03/31/2007 $ 10,060 $ 10,193
CUMULATIVE TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (10/10/06) 0.60%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 24 FOR FURTHER
INFORMATION.
21 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Arizona Municipal Fund (Class B)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Lehman Brothers
Arizona Municipal Fund (Class B) Municipal Bond Index
10/10/2006 $ 10,000 $ 10,000
12/31/2006 $ 10,423 $ 10,111
03/31/2007 $ 10,016 $ 10,193
CUMULATIVE TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (10/10/06) 0.16%
22 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Arizona Municipal Fund (Class C)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Arizona Lehman Brothers
Municipal Fund (Class C) Municipal Bond Index
10/10/2006 $ 10,000 $ 10,000
12/31/2006 $ 10,437 $ 10,111
03/31/2007 $ 10,418 $ 10,193
CUMULATIVE TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (10/10/06) 4.18%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 24 FOR FURTHER
INFORMATION.
23 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES
OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. THIS ANNUAL REPORT MUST BE
PRECEDED OR ACCOMPANIED BY THE CURRENT PROSPECTUS OF THE OPPENHEIMER ROCHESTER
ARIZONA MUNICIPAL FUND.
BEFORE INVESTING IN ANY OF THE OPPENHEIMER FUNDS, INVESTORS SHOULD CAREFULLY
CONSIDER A FUND'S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES. FUND
PROSPECTUSES CONTAIN THIS AND OTHER INFORMATION ABOUT THE FUNDS. FOR MORE
INFORMATION, ASK YOUR FINANCIAL ADVISOR, CALL US AT 1.800.525.7048, OR VISIT OUR
WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ PROSPECTUSES CAREFULLY BEFORE
INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 10/10/06. The
cumulative total returns are shown net of the applicable 4.75% maximum initial
sales charge.
CLASS B shares of the Fund were first publicly offered on 10/10/06. The
cumulative total returns are shown net of the applicable contingent deferred
sales charge of 5% (1-year). Class B shares are subject to an annual 0.75%
asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 10/10/06. The
cumulative total returns are shown net of the applicable 1% contingent deferred
sales charge for the 1-year period. Class C shares are subject to an annual
0.75% asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
24 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
TOP HOLDINGS AND ALLOCATIONS
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OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
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TOP TEN CATEGORIES
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Highways/Railways 20.9%
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Single Family Housing 15.8
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Tobacco Settlement Payments 13.2
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Multifamily Housing 9.1
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Higher Education 9.0
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Adult Living Facilities 6.9
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Airlines 5.2
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Special Assessment 5.0
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Hospital/Health Care 4.9
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Special Tax 2.3
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are based on the total market value of investments.
CREDIT ALLOCATION
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AAA 28.0%
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AA 18.5
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A 3.4
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BBB 33.7
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BB 1.5
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B 0.1
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CCC 5.7
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Not Rated 9.1
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are dollar-weighted based on the total market value of
investments. As of that date, no securities held by the Fund were rated lower
than CCC. Securities rated by any rating organizations are included in the
equivalent Standard & Poor's rating category. The allocation includes rated
securities and those not rated by a national rating organization but to which
the ratings above have been assigned by the Manager for internal purposes as
being comparable, in the Manager's judgment, to securities rated by a rating
agency in the same category.
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25 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED MARCH 31, 2007, FOLLOWED BY
A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. We are pleased to report that
Oppenheimer Rochester Maryland Municipal Fund has distributed high levels of
tax-free income to its shareholders during this reporting period, outperforming
many fixed-income alternatives on an after-tax basis. As of March 31, 2007,
Oppenheimer Rochester Maryland Municipal Fund's Class A shares provided a
distribution yield of 4.62% at net asset value. 1 Lipper Inc.--an independent
mutual fund rating service--reported an average distribution yield of 3.58%
among the 40 funds in its Maryland Municipal Debt Funds category as of the same
date. 2
Oppenheimer Rochester Maryland Municipal Fund had approximately 120 holdings in
its portfolio at the end of this reporting period and led its Lipper category in
total return for the quarter at net asset value. 3 Since inception, the Fund's
Class A shares generated a cumulative total return of 4% at net asset value. 4
During this reporting period, the monthly dividend for Class A shares was raised
twice. The Fund distributed 4.6 cents per Class A share in November and December
2006, raised the distribution to 4.8 cents per share for the January and
February 2007 payments, and increased the dividend to 5 cents per share starting
with the March 2007 distribution. Distributions for other share classes were
adjusted accordingly. In all, the Fund distributed 23.8 cents per Class A share
in the reporting period ended March 31.
The Fund's holdings in Master Settlement Agreement (MSA) bonds, or "tobacco
bonds," continued to provide significant shareholder benefit in this reporting
period and accounted for about 13% of Fund investments as of March 31, 2007.
Since the Fund's inception, prices in this sector have firmed up amid favorable
court decisions.
The Fund's airline-backed bonds also performed well this reporting period,
generally increasing in price and generating above-average yields. In
particular, holdings backed by American Airlines (about 6% of total assets)
helped drive total return this reporting period.
Investments in the single-family-housing sector represented about 16% of the
portfolio's market value at the end of this reporting period. The Fund's
holdings in this category are primarily rated AA or better, and payments on
these holdings are secured by pools of mortgages issued by state mortgage
agencies. As such, the Fund effectively safeguarded shareholders from the recent
developments in the national housing market, and the sector contributed to Fund
performance this reporting period. Additionally, the Fund's premium-coupon bonds
in this sector serve as a hedge against rising interest rates: should long-term
rates rise and cause prepayments of the underlying mortgages to slow,
single-family mortgage bonds would provide tax-free income for a longer time
period.
1. Distribution yield at net asset value (NAV), as shown, is annualized based on
the last distribution and divided by the Fund's NAV on March 31, 2007; the
calculation does not include sales charges, which would reduce results. The
Fund's distribution yield at maximum offering price (or with sales charge) was
4.40% for Class A shares on the same date. Falling share prices may artificially
increase yields.
2. Lipper Inc. Lipper calculations do not include sales charges which, if
included, would reduce results.
3. Lipper Inc. Lipper Inc. ranked Oppenheimer Rochester Maryland Municipal Fund
1st among 40 funds for the quarter ended March 31, 2007, in its Maryland
Municipal Debt Funds category. Lipper rankings are based on total returns, but
do not consider sales charges. Lipper rankings are for the A share class only;
other classes may have different performance characteristics. PAST PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS.
4. Total return at NAV, as shown, does not include sales charge; as of March 31,
2007, cumulative total return from inception was -0.94% after sales charge for
Class A shares.
26 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
"Credit spread tightening"--which occurs when the difference between yields on
low-rated municipal bonds and higher-rated bonds decreases, as it did this
reporting period--also contributed to the Fund's strong performance. With
spreads becoming narrower, prices of lower-rated municipal bonds generally
performed better than those of high-grade bonds. This development was good news
for the credit-sensitive areas of our portfolios, including higher education,
adult living facilities and hospital/health care. However, credit spread
tightening also means less opportunity and potentially greater risk on new
purchases, so our recent purchases have included more bonds with higher ratings.
As of March 31, 2007, AAA- and AA-rated paper represented nearly half of the
portfolio's market value, and the average credit quality for the Fund was A.
BBB-rated bonds constituted about one-third of the Fund's market value on that
date.
The Fund's portfolio this reporting period included municipal
inverse-floating-rate securities, which are tax-exempt securities whose interest
payments move inversely to changes in short-term interest rates. 5 During this
reporting period, even as short-term interest rates and the prices of these
securities increased, the income levels of these securities remained higher than
the market average.
In keeping with the "Rochester style" of municipal bond fund management, our
investment team continues to focus on scouring the market to unearth value in
bonds added to the Fund's portfolio. In October 2006, the Fund bought bonds
issued to support the North Locust Point Project, a fully occupied office
building in a prime location overlooking Baltimore's Inner Harbor. The bonds
have a tax-free yield of 5% until a 2016 par call, and the payments that secure
the bonds are on parity with property taxes. This purchase demonstrates how our
in-house research of small, non-rated deals creates opportunities for the Fund
to benefit from holdings with low price volatility and little credit risk.
Our approach to municipal bond investing is flexible and responsive to market
conditions; our strategies are intended to balance many different types of risk
to reduce overall portfolio risk. Shareholders should note that market
conditions during this reporting period did not affect the Fund's overall
investment strategies or cause it to pay any capital gain distributions. In
closing, we believe that the Fund's structure and composition as well as our
time-tested strategies will continue to benefit long-term investors through
interest rate and economic cycles.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until March 31, 2007. Performance is measured from the inception date
of all Classes on October 10, 2006. The Fund's performance reflects the
deduction of the maximum initial sales charge on Class A shares, the applicable
contingent deferred sales charge on Class B and Class C shares, and
reinvestments of all dividends and capital gains distributions. Past performance
cannot guarantee future results.
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. 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 indices.
5. See page 147 for further information regarding inverse-floating-rate
securities.
27 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Maryland Municipal Fund (Class A)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester
Maryland Municipal Fund Lehman Brothers
(Class A) Municipal Bond Index
10/10/2006 $9,525 $10,000
12/31/2006 $9,774 $10,111
03/31/2007 $9,906 $10,193
CUMULATIVE TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (10/10/06) -0.94%
28 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Maryland Municipal Fund (Class B)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester
Maryland Municipal Fund Lehman Brothers
(Class B) Municipal Bond Index
10/10/2006 $10,000 $10,000
12/31/2006 $10,230 $10,111
03/31/2007 $ 9,850 $10,193
CUMULATIVE TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (10/10/06) -1.50%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 31 FOR FURTHER
INFORMATION.
29 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Maryland Municipal Fund (Class C)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester
Maryland Municipal Fund Lehman Brothers
(Class C) Municipal Bond Index
10/10/2006 $10,000 $10,000
12/31/2006 $10,227 $10,111
03/31/2007 $10,247 $10,193
CUMULATIVE TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (10/10/06) 2.47%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 31 FOR FURTHER
INFORMATION.
30 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. THIS ANNUAL REPORT MUST BE
PRECEDED OR ACCOMPANIED BY THE CURRENT PROSPECTUS OF THE OPPENHEIMER ROCHESTER
MARYLAND MUNICIPAL FUND.
BEFORE INVESTING IN ANY OF THE OPPENHEIMER FUNDS, INVESTORS SHOULD CAREFULLY
CONSIDER A FUND'S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES. FUND
PROSPECTUSES CONTAIN THIS AND OTHER INFORMATION ABOUT THE FUNDS. FOR MORE
INFORMATION, ASK YOUR FINANCIAL ADVISOR, CALL US AT 1.800.525.7048, OR VISIT OUR
WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ PROSPECTUSES CAREFULLY BEFORE
INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 10/10/06. The
cumulative total returns are shown net of the applicable 4.75% maximum initial
sales charge.
CLASS B shares of the Fund were first publicly offered on 10/10/06. The
cumulative total returns are shown net of the applicable contingent deferred
sales charge of 5% (1-year). Class B shares are subject to an annual 0.75%
asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 10/10/06. The
cumulative total returns are shown net of the applicable 1% contingent deferred
sales charge for the 1-year period. Class C shares are subject to an annual
0.75% asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
31 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
- --------------------------------------------------------------------------------
TOP TEN CATEGORIES
- --------------------------------------------------------------------------------
Highways/Railways 19.6%
- --------------------------------------------------------------------------------
Higher Education 13.5
- --------------------------------------------------------------------------------
Tobacco Settlement Payments 11.7
- --------------------------------------------------------------------------------
Airlines 11.0
- --------------------------------------------------------------------------------
Hospital/Health Care 9.8
- --------------------------------------------------------------------------------
Single Family Housing 9.6
- --------------------------------------------------------------------------------
General Obligation 5.4
- --------------------------------------------------------------------------------
Marine/Aviation Facilities 4.7
- --------------------------------------------------------------------------------
Multifamily Housing 3.9
- --------------------------------------------------------------------------------
Education 1.9
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are based on the total market value of investments.
CREDIT ALLOCATION
- --------------------------------------------------------------------------------
AAA 39.7%
- --------------------------------------------------------------------------------
AA 13.2
- --------------------------------------------------------------------------------
A 10.7
- --------------------------------------------------------------------------------
BBB 28.0
- --------------------------------------------------------------------------------
BB 1.3
- --------------------------------------------------------------------------------
CCC 7.1
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are dollar-weighted based on the total market value of
investments. As of that date, no securities held by the Fund were rated lower
than CCC. Securities rated by any rating organizations are included in the
equivalent Standard & Poor's rating category. The allocation includes rated
securities and those not rated by a national rating organization but to which
the ratings above have been assigned by the Manager for internal purposes as
being comparable, in the Manager's judgment, to securities rated by a rating
agency in the same category.
- --------------------------------------------------------------------------------
32 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED MARCH 31, 2007, FOLLOWED BY
A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. We are pleased to report that
Oppenheimer Rochester Massachusetts Municipal Fund has distributed high levels
of tax-free income to its shareholders during this reporting period,
outperforming many fixed-income alternatives on an after-tax basis. As of March
31, 2007, Oppenheimer Rochester Massachusetts Municipal Fund's Class A shares
provided a distribution yield of 4.51% at net asset value. 1 Lipper Inc.--an
independent mutual fund rating service--reported an average distribution yield
of 3.59% among the 55 funds in its Massachusetts Municipal Debt Funds category
as of the same date. 2
Oppenheimer Rochester Massachusetts Municipal Fund had approximately 130
holdings in its portfolio at the end of this reporting period and was ranked in
the top 4% of its Lipper category in total return for the quarter. 3 Since
inception, the Fund's Class A shares generated a cumulative total return of
7.73% at net asset value. 4 During this reporting period, the monthly dividend
for Class A shares was raised to 5.4 cents, from 4.9 cents, starting with the
December 2006 distribution; distributions for other share classes were adjusted
accordingly. In all, the Fund distributed 41.2 cents per Class A share in the
reporting period ended March 31.
The Fund's holdings in Master Settlement Agreement (MSA) bonds, or "tobacco
bonds," continued to provide significant shareholder benefit in this reporting
period and accounted for about 12% of Fund investments as of March 31, 2007.
Since the Fund's inception, prices in this sector have firmed up amid favorable
court decisions.
The Fund's airline-backed bonds also performed well this reporting period,
generally increasing in price and generating above-average yields. In
particular, holdings backed by American Airlines (about 7% of total assets)
helped drive total return this reporting period.
Investments in the single-family-housing sector represented about 10% of the
portfolio's market value at the end of this reporting period. The Fund's
holdings in this category are primarily rated AA or better, and payments on
these holdings are secured by pools of mortgages issued by state mortgage
agencies. As such, the Fund effectively safeguarded shareholders from the recent
developments in the national housing market, and the sector contributed to Fund
performance this reporting period. Additionally, the Fund's premium-coupon bonds
in this sector serve as a hedge against rising interest rates: should long-term
rates rise and cause prepayments of the underlying mortgages to slow,
single-family mortgage bonds would provide tax-free income for a longer time
period.
Shareholders also benefited this reporting period from our investment team's
conclusions about the yield advantages of the bonds issued by the Commonwealth
of Puerto Rico. Early in this reporting period, deficit spending in Puerto Rico
led to a legislative impasse, resulting in a temporary shuttering of schools and
a brief shutdown of non-essential government agencies. When prices grew
increasingly volatile in advance of the government's proposed solutions, our
Fund managers carefully assessed the situation, stayed focused on yield, and
took advantage of short-term market weakness to increase holdings in these
triple-tax-free bonds at favorable prices. During this reporting period, the
portfolio included a long-term, 5% coupon bond issued by Puerto Rico's Highway
and Transportation Authority. The Fund's holdings in this issue were
pre-refunded in February 2007, proving our carefully researched hypothesis that
our out-of-favor investments in Puerto Rico would ultimately deliver significant
benefit to shareholders.
1. Distribution yield at net asset value (NAV), as shown, is annualized based on
the last distribution and divided by the Fund's NAV on March 31, 2007; the
calculation does not include sales charges, which would reduce results. The
Fund's distribution yield at maximum offering price (or with sales charge) was
4.29% for Class A shares on the same date. Falling share prices may artificially
increase yields.
2. Lipper Inc. Lipper calculations do not include sales charges which, if
included, would reduce results.
3. Lipper Inc. Lipper Inc. ranked Oppenheimer Rochester Massachusetts Municipal
Fund 2nd among 55 funds for the quarter ended March 31, 2007, in its
Massachusetts Municipal Debt Funds category. Lipper rankings are based on total
returns, but do not consider sales charges. Lipper rankings are for the A share
class only; other classes may have different performance characteristics. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
4. Total return at NAV, as shown, does not include sales charge; as of March 31,
2007, cumulative total return from inception was 2.62% after sales charge for
Class A shares.
33 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
"Credit spread tightening"--which occurs when the difference between yields on
low-rated municipal bonds and higher-rated bonds decreases, as it did this
reporting period--also contributed to the Fund's strong performance. With
spreads becoming narrower, prices of lower-rated municipal bonds generally
performed better than those of high-grade bonds. This development was good news
for the credit-sensitive areas of our portfolios, including higher education and
hospital/health care. However, credit spread tightening also means less
opportunity and potentially greater risk on new purchases, so our recent
purchases have included more bonds with higher ratings. As of March 31, 2007,
AAA- and AA-rated paper represented more than half of the portfolio's market
value, and the average credit quality for the Fund was A-plus. BBB-rated bonds
constituted 28% of the Fund's market value on that date.
The Fund's portfolio this reporting period included municipal
inverse-floating-rate securities, which are tax-exempt securities whose interest
payments move inversely to changes in short-term interest rates. 5 During this
reporting period, even as short-term interest rates and the prices of these
securities increased, the income levels of these securities remained higher than
the market average.
In keeping with the "Rochester style" of municipal bond fund management, our
investment team continues to focus on scouring the market to unearth value in
bonds added to the Fund's portfolio. In July 2006, the Fund bought Nichols
College bonds in the secondary market with a tax-free yield of 5.625%.
Originally issued to finance a new residence hall and recreation facility for
the school's campus in western Massachusetts, this bond represents the type of
investment many other Fund managers might overlook. The issuer had a troubled
past--at times, it looked as if the small business college might not
survive--but the school has executed a turnaround in enrollment and financial
management that made this bond an attractive investment for the Fund. This
purchase demonstrates how our in-house research and scavenger hunts create
opportunities for the Fund to benefit from holdings with low price volatility
and little credit risk.
Our approach to municipal bond investing is flexible and responsive to market
conditions; our strategies are intended to balance many different types of risk
to reduce overall portfolio risk. Shareholders should note that market
conditions during this reporting period did not affect the Fund's overall
investment strategies or cause it to pay any capital gain distributions. In
closing, we believe that the Fund's structure and composition as well as our
time-tested strategies will continue to benefit long-term investors through
interest rate and economic cycles.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until March 31, 2007. Performance is measured from the inception date
of all Classes on July 18, 2006. The Fund's performance reflects the deduction
of the maximum initial sales charge on Class A shares, the applicable contingent
deferred sales charge on Class B and Class C shares, and reinvestments of all
dividends and capital gains distributions. Past performance cannot guarantee
future results.
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. 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 indices.
5. See page 147 for further information regarding inverse-floating-rate
securities.
34 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Massachusetts Municipal Fund (Class A)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester
Massachusetts Municipal Fund Lehman Brothers Municipal
(Class A) Bond Index
07/18/2006 $ 9,525 $10,000
09/30/2006 $ 9,871 $10,219
12/31/2006 $10,154 $10,332
03/31/2007 $10,262 $10,416
CUMULATIVE TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (7/18/06) 2.62%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 38 FOR FURTHER
INFORMATION.
35 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Massachusetts Municipal Fund (Class B)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester
Massachusetts Municipal Fund Lehman Brothers Municipal
(Class B) Bond Index
07/18/2006 $10,000 $10,000
09/30/2006 $10,337 $10,219
12/31/2006 $10,621 $10,332
03/31/2007 $10,213 $10,416
CUMULATIVE TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (7/18/06) 2.13%
36 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Massachusetts Municipal Fund (Class C)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester
Massachusetts Municipal Fund Lehman Brothers Municipal
(Class C) Bond Index
07/18/2006 $10,000 $10,000
09/30/2006 $10,340 $10,219
12/31/2006 $10,612 $10,332
03/31/2007 $10,605 $10,416
CUMULATIVE TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (7/18/06) 6.05%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 38 FOR FURTHER
INFORMATION.
37 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. THIS ANNUAL REPORT MUST BE
PRECEDED OR ACCOMPANIED BY THE CURRENT PROSPECTUS OF THE OPPENHEIMER ROCHESTER
MASSACHUSETTS MUNICIPAL FUND.
BEFORE INVESTING IN ANY OF THE OPPENHEIMER FUNDS, INVESTORS SHOULD CAREFULLY
CONSIDER A FUND'S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES. FUND
PROSPECTUSES CONTAIN THIS AND OTHER INFORMATION ABOUT THE FUNDS. FOR MORE
INFORMATION, ASK YOUR FINANCIAL ADVISOR, CALL US AT 1.800.525.7048, OR VISIT OUR
WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ PROSPECTUSES CAREFULLY BEFORE
INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 7/18/06. The
cumulative total returns are shown net of the applicable 4.75% maximum initial
sales charge.
CLASS B shares of the Fund were first publicly offered on 7/18/06. The
cumulative total returns are shown net of the applicable contingent deferred
sales charge of 5% (1-year). Class B shares are subject to an annual 0.75%
asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 7/18/06. The
cumulative total returns are shown net of the applicable 1% contingent deferred
sales charge for the 1-year period. Class C shares are subject to an annual
0.75% asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
38 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
- --------------------------------------------------------------------------------
TOP TEN CATEGORIES
- --------------------------------------------------------------------------------
Highways/Railways 12.6%
- --------------------------------------------------------------------------------
Tobacco Settlement Payments 11.8
- --------------------------------------------------------------------------------
Hospital/Health Care 11.4
- --------------------------------------------------------------------------------
Sewer Utilities 10.0
- --------------------------------------------------------------------------------
Special Tax 7.7
- --------------------------------------------------------------------------------
General Obligation 7.1
- --------------------------------------------------------------------------------
Education 6.8
- --------------------------------------------------------------------------------
Marine/Aviation Facilities 5.1
- --------------------------------------------------------------------------------
Higher Education 3.6
- --------------------------------------------------------------------------------
Manufacturing, Durable Goods 3.4
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are based on the total market value of investments.
CREDIT ALLOCATION
- --------------------------------------------------------------------------------
AAA 46.7%
- --------------------------------------------------------------------------------
AA 1.3
- --------------------------------------------------------------------------------
A 5.7
- --------------------------------------------------------------------------------
BBB 30.1
- --------------------------------------------------------------------------------
BB 5.8
- --------------------------------------------------------------------------------
B 0.6
- --------------------------------------------------------------------------------
CCC 5.6
- --------------------------------------------------------------------------------
Not Rated 4.2
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are dollar-weighted based on the total market value of
investments. As of that date, no securities held by the Fund were rated lower
than CCC. Securities rated by any rating organizations are included in the
equivalent Standard & Poor's rating category. The allocation includes rated
securities and those not rated by a national rating organization but to which
the ratings above have been assigned by the Manager for internal purposes as
being comparable, in the Manager's judgment, to securities rated by a rating
agency in the same category.
- --------------------------------------------------------------------------------
39 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED MARCH 31, 2007, FOLLOWED BY
A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. We are pleased to report that
Oppenheimer Rochester Michigan Municipal Fund has distributed high levels of
tax-free income to its shareholders during this reporting period, outperforming
many fixed-income alternatives on an after-tax basis. As of March 31, 2007,
Oppenheimer Rochester Michigan Municipal Fund's Class A shares provided a
distribution yield of 4.57% at net asset value. 1 Lipper Inc.--an independent
mutual fund rating service--reported an average distribution yield of 3.63%
among the 33 funds in its Michigan Municipal Debt Funds category as of the same
date. 2
Oppenheimer Rochester Michigan Municipal Fund had approximately 185 holdings in
its portfolio at the end of this reporting period and led its Lipper category in
total return for the most recent quarter. 3 Since inception, the Fund's Class A
shares generated a cumulative total return of 9.62% at net asset value. 4 During
this reporting period, the monthly dividend for Class A shares was raised three
times: after three months with distributions of 4.8 cents per share, the Fund
raised its dividend to 4.9 cents starting with the October 2006 distribution, to
5.3 cents starting with the December 2006 distribution, and then to 5.5 cents
starting with the March 2007 distribution. Distributions for other share classes
were adjusted accordingly. In all, the Fund distributed 45.6 cents per Class A
share in the reporting period ended March 31.
The Fund's holdings in Master Settlement Agreement (MSA) bonds, or "tobacco
bonds," continued to provide significant shareholder benefit in this reporting
period and accounted for about 12% of Fund investments as of March 31, 2007.
Since the Fund's inception, prices in this sector have firmed up amid favorable
court decisions.
The Fund's airline-backed bonds also performed well this reporting period,
generally increasing in price and generating above-average yields. In
particular, holdings backed by American Airlines (less than 3% of total assets)
helped drive total return this reporting period.
Shareholders also benefited this reporting period from our investment team's
conclusions about the yield advantages of the bonds issued by the Commonwealth
of Puerto Rico. Early in this reporting period, deficit spending in Puerto Rico
led to a legislative impasse, resulting in a temporary shuttering of schools and
a brief shutdown of non-essential government agencies. When prices grew
increasingly volatile in advance of the government's proposed solutions, our
Fund managers carefully assessed the situation, stayed focused on yield, and
took advantage of short-term market weakness to increase holdings in these
triple-tax-free bonds at favorable prices. During this reporting period, the
portfolio included a long-term, 5% coupon bond issued by Puerto Rico's Highway
and Transportation Authority. The Fund's holdings in this issue were
pre-refunded in February 2007, proving our carefully researched hypothesis that
our out-of-favor investments in Puerto Rico would ultimately deliver significant
benefit to shareholders.
"Credit spread tightening"--which occurs when the difference between yields on
low-rated municipal bonds and higher-rated bonds decreases, as it did this
reporting period--also contributed to the Fund's strong performance. With
spreads becoming narrower, prices of lower-rated municipal bonds generally
performed better than those of high-grade bonds. This development was good news
for the credit-sensitive areas of our portfolios, including hospital/health care
and higher education.
1. Distribution yield at net asset value (NAV), as shown, is annualized based on
the last distribution and divided by the Fund's NAV on March 31, 2007; the
calculation does not include sales charges, which would reduce results. The
Fund's distribution yield at maximum offering price (or with sales charge) was
4.35% for Class A shares on the same date. Falling share prices may artificially
increase yields.
2. Lipper Inc. Lipper calculations do not include sales charges which, if
included, would reduce results.
3. Lipper Inc. Lipper Inc. ranked Oppenheimer Rochester Michigan Municipal Fund
1st among 33 funds for the quarter ended March 31, 2007, in its Michigan
Municipal Debt Funds category. Lipper rankings are based on total returns, but
do not consider sales charges. Lipper rankings are for the A share class only;
other classes may have different performance characteristics. PAST PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS.
4. Total return at NAV, as shown, does not include sales charge; as of March 31,
2007, cumulative total return from inception was 4.41% after sales charge for
Class A shares.
40 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
However, credit spread tightening also means less opportunity and potentially
greater risk on new purchases, so our recent purchases have included more bonds
with higher ratings. As of March 31, 2007, AAA- and AA-rated paper represented
nearly half of the portfolio's market value, and the average credit quality for
the Fund was A-plus. BBB-rated bonds constituted about 30% of the Fund's market
value on that date.
The Fund's portfolio this reporting period included municipal
inverse-floating-rate securities, which are tax-exempt securities whose interest
payments move inversely to changes in short-term interest rates. 5 During this
reporting period, even as short-term interest rates and the prices of these
securities increased, the income levels of these securities remained higher than
the market average.
In other developments this reporting period, Fund managers continued to monitor
the ongoing economic challenges facing the State of Michigan. Standard & Poor's,
which had downgraded the state's credit rating to AA in March 2005, changed its
outlook for the state to negative in August 2006. In January 2007, Moody's also
revised its outlook to negative, leaving the state's credit rating at Aa2. In
the same month, Fitch Ratings downgraded the state to AA-minus and, in a
reversal of an April 2006 decision, reverted to a stable outlook. As this
reporting period ended, the state government remained under pressure to
restructure its tax system as a means to accelerate revenues and reduce the
state's long-standing structural deficit. We believe that some of these
difficulties are likely to be persistent, given the degree to which the state's
economy is tied to the financial well being of the U.S. automotive industry.
We believe shareholders will continue to be well served by the Rochester
investment team's deep experience managing funds in states with declining
manufacturing sectors. Our credit research team, for example, recently
identified state-supported bonds that we believe will provide superior,
risk-adjusted returns for the Fund, and in June 2006 we purchased the bonds,
which were issued by Highland Park, Michigan, to finance the construction of a
Child and Family Services facility. We bought the non-callable bonds at a slight
premium for a tax-free yield of 7.47% to the average life in 2014. The state has
provided debt service on these bonds for nearly a decade, and we believe this
investment demonstrates the yield advantages our research often uncovers amid
small, non-rated offerings.
In keeping with the "Rochester style" of municipal bond fund management, our
investment team continues to focus on scouring the market to unearth value in
bonds added to the Fund's portfolio. Our approach to municipal bond investing is
flexible and responsive to market conditions; our strategies are intended to
balance many different types of risk to reduce overall portfolio risk.
Shareholders should note that market conditions during this reporting period did
not affect the Fund's overall investment strategies or cause it to pay any
capital gain distributions. In closing, we believe that the Fund's structure and
composition as well as our time-tested strategies will continue to benefit
long-term investors through interest rate and economic cycles.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until March 31, 2007. Performance is measured from the inception date
of all Classes on June 21, 2006. The Fund's performance reflects the deduction
of the maximum initial sales charge on Class A shares, the applicable contingent
deferred sales charge on Class B and Class C shares, and reinvestments of all
dividends and capital gains distributions. Past performance cannot guarantee
future results.
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. 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 indices.
5. See page 147 for further information regarding inverse-floating-rate
securities.
41 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Michigan Municipal Fund (Class A)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester
Michigan Municipal Lehman Brothers
Fund (Class A) Municipal Bond Index
06/21/2006 $ 9,525 $10,000
06/30/2006 $ 9,545 $10,000
09/30/2006 $10,047 $10,341
12/31/2006 $10,333 $10,455
03/31/2007 $10,441 $10,540
CUMULATIVE TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (6/21/06) 4.41%
42 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Michigan Municipal Fund (Class B)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester
Michigan Municipal Lehman Brothers
Fund (Class B) Municipal Bond Index
06/21/2006 $10,000 $10,000
06/30/2006 $10,028 $10,000
09/30/2006 $10,537 $10,341
12/31/2006 $10,809 $10,455
03/31/2007 $10,403 $10,540
CUMULATIVE TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (6/21/06) 4.03%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 45 FOR FURTHER
INFORMATION.
43 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Michigan Municipal Fund (Class C)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester
Michigan Municipal Lehman Brothers
Fund (Class C) Municipal Bond Index
06/21/2006 $10,000 $10,000
06/30/2006 $10,028 $10,000
09/30/2006 $10,532 $10,341
12/31/2006 $10,801 $10,455
03/31/2007 $10,794 $10,540
CUMULATIVE TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (6/21/06) 7.94%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 45 FOR FURTHER
INFORMATION.
44 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. THIS ANNUAL REPORT MUST BE
PRECEDED OR ACCOMPANIED BY THE CURRENT PROSPECTUS OF THE OPPENHEIMER ROCHESTER
MICHIGAN MUNICIPAL FUND.
BEFORE INVESTING IN ANY OF THE OPPENHEIMER FUNDS, INVESTORS SHOULD CAREFULLY
CONSIDER A FUND'S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES. FUND
PROSPECTUSES CONTAIN THIS AND OTHER INFORMATION ABOUT THE FUNDS. FOR MORE
INFORMATION, ASK YOUR FINANCIAL ADVISOR, CALL US AT 1.800.525.7048, OR VISIT OUR
WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ PROSPECTUSES CAREFULLY BEFORE
INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered 6/21/06. The cumulative
total returns are shown net of the applicable 4.75% maximum initial sales
charge.
CLASS B shares of the Fund were first publicly offered on 6/21/06. The
cumulative total returns are shown net of the applicable contingent deferred
sales charge of 5% (1-year). Class B shares are subject to an annual 0.75%
asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 6/21/06. The
cumulative total returns are shown net of the applicable 1% contingent deferred
sales charge for the 1-year period. Class C shares are subject to an annual
0.75% asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
45 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
- --------------------------------------------------------------------------------
TOP TEN CATEGORIES
- --------------------------------------------------------------------------------
Marine/Aviation Facilities 17.1%
- --------------------------------------------------------------------------------
Hospital/Health Care 15.4
- --------------------------------------------------------------------------------
Special Assessment 13.9
- --------------------------------------------------------------------------------
Single Family Housing 9.9
- --------------------------------------------------------------------------------
Adult Living Facilities 9.5
- --------------------------------------------------------------------------------
Multifamily Housing 9.0
- --------------------------------------------------------------------------------
General Obligation 6.0
- --------------------------------------------------------------------------------
Municipal Leases 3.3
- --------------------------------------------------------------------------------
Tobacco Settlement Payments 3.1
- --------------------------------------------------------------------------------
Not-for-Profit Organization 2.3
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are based on the total market value of investments.
CREDIT ALLOCATION
- --------------------------------------------------------------------------------
AAA 16.6%
- --------------------------------------------------------------------------------
AA 10.6
- --------------------------------------------------------------------------------
A 10.3
- --------------------------------------------------------------------------------
BBB 38.8
- --------------------------------------------------------------------------------
BB 1.3
- --------------------------------------------------------------------------------
B 0.8
- --------------------------------------------------------------------------------
CCC 1.0
- --------------------------------------------------------------------------------
Not Rated 20.6
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are dollar-weighted based on the total market value of
investments. As of that date, no securities held by the Fund were rated lower
than CCC. Securities rated by any rating organizations are included in the
equivalent Standard & Poor's rating category. The allocation includes rated
securities and those not rated by a national rating organization but to which
the ratings above have been assigned by the Manager for internal purposes as
being comparable, in the Manager's judgment, to securities rated by a rating
agency in the same category.
- --------------------------------------------------------------------------------
46 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED MARCH 31, 2007, FOLLOWED BY
A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. We are pleased to report that
Oppenheimer Rochester Minnesota Municipal Fund has distributed high levels of
tax-free income to its shareholders during this reporting period, outperforming
many fixed-income alternatives on an after-tax basis. As of March 31, 2007,
Oppenheimer Rochester Minnesota Municipal Fund's Class A shares provided a
distribution yield of 4.34% at net asset value. 1 Lipper Inc.--an independent
mutual fund rating service--reported an average distribution yield of 3.62%
among the 51 funds in its Minnesota Municipal Debt Funds category as of the same
date. 2
Oppenheimer Rochester Minnesota Municipal Fund had 90 holdings in its portfolio
at the end of this reporting period and led its Lipper category in total return
for the most recent quarter. 3 Nearly half of the Fund's total return in this
reporting period came from tax-free income generated by the Fund's portfolio, a
significant benefit to our yield-oriented investors; price appreciation
contributed the balance. During this reporting period, the monthly dividend for
Class A shares was raised from 4.9 cents to 5.0 cents, beginning with the March
distribution; distributions for other share classes were adjusted accordingly.
In all, the Fund distributed 19.7 cents per Class A share in the reporting
period ended March 31.
Investments in the single-family-housing sector represented about 10% of the
portfolio's market value at the end of this reporting period. The Fund's
holdings in this category are primarily rated AA or better, and payments on
these holdings are secured by pools of mortgages issued by state mortgage
agencies. As such, the Fund effectively safeguarded shareholders from the recent
developments in the national housing market, and the sector contributed to Fund
performance this reporting period. Additionally, the Fund's premium-coupon bonds
in this sector serve as a hedge against rising interest rates: should long-term
rates rise and cause prepayments of the underlying mortgages to slow,
single-family mortgage bonds would provide tax-free income for a longer time
period.
The Fund's holdings in Master Settlement Agreement (MSA) bonds, or "tobacco
bonds," continued to provide significant shareholder benefit in this reporting
period and accounted for about 3% of Fund investments as of March 31, 2007.
Since the Fund's inception, prices in this sector have firmed up amid favorable
court decisions.
"Credit spread tightening"--which occurs when the difference between yields on
low-rated municipal bonds and higher-rated bonds decreases, as it did this
reporting period--also contributed to the Fund's strong performance. With
spreads becoming narrower, prices of lower-rated municipal bonds generally
performed better than those of high-grade bonds. This development was good news
for the credit-sensitive areas of our portfolios, including hospital/health care
and adult living facilities. However, credit spread tightening also means less
opportunity and potentially greater risk on new purchases, so our recent
purchases have included more bonds with higher ratings. As of March 31, 2007,
AAA- and AA-rated paper represented more than one-quarter of the portfolio's
market value, and the average credit quality for the Fund was A-minus. BBB-rated
bonds constituted about 40% of the Fund's market value on that date.
1. Distribution yield at net asset value (NAV), as shown, is annualized based on
the last distribution and divided by the Fund's NAV on March 31, 2007; the
calculation does not include sales charges, which would reduce results. The
Fund's distribution yield at maximum offering price (or with sales charge) was
4.14% for Class A shares on the same date. Falling share prices may artificially
increase yields.
2. Lipper Inc. Lipper calculations do not include sales charges which, if
included, would reduce results.
3. Lipper Inc. Lipper Inc. ranked Oppenheimer Rochester Minnesota Municipal Fund
1st among 51 funds for the quarter ended March 31, 2007, in its Minnesota
Municipal Debt Funds category. Lipper rankings are based on total returns, but
do not consider sales charges. Lipper rankings are for the A share class only;
other classes may have different performance characteristics. PAST PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS.
47 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
In keeping with the "Rochester style" of municipal bond fund management, our
investment team continues to focus on scouring the market to unearth value in
bonds added to the Fund's portfolio. In November 2006, the Fund bought bonds
that financed the Briarcliff of Mahtomedi, a 70-apartment project about 15 miles
north of St. Paul. These currently callable, premium-coupon bonds offer an
attractive tax-free yield of 5.14% to June 1, 2007. In addition, the bonds are
secured by a first mortgage lien on the project, which caters to seniors and has
historically had low turnover and high occupancy rates. The yield is scheduled
to rise if these bonds remain outstanding beyond June 1, and we believe the
probability they will be called is low.
Our approach to municipal bond investing is flexible and responsive to market
conditions; our strategies are intended to balance many different types of risk
to reduce overall portfolio risk. Shareholders should note that market
conditions during this reporting period did not affect the Fund's overall
investment strategies or cause it to pay any capital gain distributions. In
closing, we believe that the Fund's structure and composition as well as our
time-tested strategies will continue to benefit long-term investors through
interest rate and economic cycles.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until March 31, 2007. Performance is measured from the inception date
of all Classes on November 7, 2006. The Fund's performance reflects the
deduction of the maximum initial sales charge on Class A shares, the applicable
contingent deferred sales charge on Class B and Class C shares, and
reinvestments of all dividends and capital gains distributions. Past performance
cannot guarantee future results.
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. 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 indices.
48 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Minnesota Municipal Fund (Class A)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Lehman Brothers
Minnesota Municipal Municipal Bond
Fund (Class A) Index
11/07/2006 $9,525 $10,000
12/31/2006 $9,636 $10,048
03/31/2007 $9,796 $10,129
CUMULATIVE TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (11/7/06) -2.04%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 52 FOR FURTHER
INFORMATION.
49 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Minnesota Municipal Fund (Class B)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Lehman Brothers
Minnesota Municipal Municipal Bond
Fund (Class B) Index
11/07/2006 $10,000 $10,000
12/31/2006 $10,099 $10,048
03/31/2007 $ 9,748 $10,129
CUMULATIVE TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (11/7/06) -2.52%
50 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Minnesota Municipal Fund (Class C)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Lehman Brothers
Minnesota Municipal Municipal Bond
Fund (Class C) Index
11/07/2006 $10,000 $10,000
12/31/2006 $10,095 $10,048
03/31/2007 $10,147 $10,129
CUMULATIVE TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (11/7/06) 1.47%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 52 FOR FURTHER
INFORMATION.
51 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. THIS ANNUAL REPORT MUST BE
PRECEDED OR ACCOMPANIED BY THE CURRENT PROSPECTUS OF THE OPPENHEIMER ROCHESTER
MINNESOTA MUNICIPAL FUND.
BEFORE INVESTING IN ANY OF THE OPPENHEIMER FUNDS, INVESTORS SHOULD CAREFULLY
CONSIDER A FUND'S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES. FUND
PROSPECTUSES CONTAIN THIS AND OTHER INFORMATION ABOUT THE FUNDS. FOR MORE
INFORMATION, ASK YOUR FINANCIAL ADVISOR, CALL US AT 1.800.525.7048, OR VISIT OUR
WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ PROSPECTUSES CAREFULLY BEFORE
INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 11/7/06. The
cumulative total returns are shown net of the applicable 4.75% maximum initial
sales charge.
CLASS B shares of the Fund were first publicly offered on 11/7/06. The
cumulative total returns are shown net of the applicable contingent deferred
sales charge of 5% (1-year). Class B shares are subject to an annual 0.75%
asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 11/7/06. The
cumulative total returns are shown net of the applicable 1% contingent deferred
sales charge for the 1-year period. Class C shares are subject to an annual
0.75% asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
52 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
- --------------------------------------------------------------------------------
TOP TEN CATEGORIES
- --------------------------------------------------------------------------------
Tobacco Settlement Payments 18.8%
- --------------------------------------------------------------------------------
Highways/Railways 17.7
- --------------------------------------------------------------------------------
Hospital/Health Care 10.8
- --------------------------------------------------------------------------------
Electric Utilities 9.4
- --------------------------------------------------------------------------------
Single Family Housing 8.4
- --------------------------------------------------------------------------------
Adult Living Facilities 7.2
- --------------------------------------------------------------------------------
Airlines 4.8
- --------------------------------------------------------------------------------
Higher Education 4.6
- --------------------------------------------------------------------------------
Manufacturing, Durable Goods 4.2
- --------------------------------------------------------------------------------
General Obligation 3.6
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are based on the total market value of investments.
CREDIT ALLOCATION
- --------------------------------------------------------------------------------
AAA 28.1%
- --------------------------------------------------------------------------------
AA 13.1
- --------------------------------------------------------------------------------
A 4.6
- --------------------------------------------------------------------------------
BBB 42.5
- --------------------------------------------------------------------------------
BB 0.9
- --------------------------------------------------------------------------------
B 1.3
- --------------------------------------------------------------------------------
CCC 3.7
- --------------------------------------------------------------------------------
Not Rated 5.8
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are dollar-weighted based on the total market value of
investments. As of that date, no securities held by the Fund were rated lower
than CCC. Securities rated by any rating organizations are included in the
equivalent Standard & Poor's rating category. The allocation includes rated
securities and those not rated by a national rating organization but to which
the ratings above have been assigned by the Manager for internal purposes as
being comparable, in the Manager's judgment, to securities rated by a rating
agency in the same category.
- --------------------------------------------------------------------------------
53 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED MARCH 31, 2007, FOLLOWED BY
A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. We are pleased to report that
Oppenheimer Rochester North Carolina Municipal Fund has distributed high levels
of tax-free income to its shareholders during this reporting period,
outperforming many fixed-income alternatives on an after-tax basis. As of March
31, 2007, Oppenheimer Rochester North Carolina Municipal Fund's Class A shares
provided a distribution yield of 4.26% at net asset value. 1 Lipper Inc.--an
independent mutual fund rating service--reported an average distribution yield
of 3.53% among the 32 funds in its North Carolina Municipal Debt Funds category
as of the same date. 2
Oppenheimer Rochester North Carolina Municipal Fund had approximately 125
holdings in its portfolio at the end of this reporting period and led its Lipper
category in total return for the most recent quarter. 3 More than half of the
Fund's total return in this reporting period came from tax-free income generated
by the Fund's portfolio, a significant benefit to our yield-oriented investors;
price appreciation contributed the balance. In all, the Fund distributed 26
cents per Class A share in the reporting period ended March 31, based on a
steady dividend of 5.2 cents per share.
The Fund's holdings in Master Settlement Agreement (MSA) bonds, or "tobacco
bonds," continued to provide significant shareholder benefit in this reporting
period and accounted for about one-fifth of Fund investments as of March 31,
2007. Since the Fund's inception, prices in this sector have firmed up amid
favorable court decisions.
The Fund's airline-backed bonds also performed well this reporting period,
generally increasing in price and generating above-average yields. In
particular, holdings backed by American Airlines (about 4% of total assets)
helped drive total return this reporting period. Additionally, holdings backed
by U.S. Airways, which uses Charlotte as a central hub, helped increase total
return this period.
Investments in the single-family-housing sector represented less than 10% of the
portfolio's market value at the end of this reporting period. The Fund's
holdings in this category are primarily rated AA or better, and payments on
these holdings are secured by pools of mortgages issued by state mortgage
agencies. As such, the Fund effectively safeguarded shareholders from the recent
developments in the national housing market, and the sector contributed to Fund
performance this reporting period. Additionally, the Fund's premium-coupon bonds
in this sector serve as a hedge against rising interest rates: should long-term
rates rise and cause prepayments of the underlying mortgages to slow,
single-family mortgage bonds would provide tax-free income for a longer time
period.
Shareholders also benefited this reporting period from our investment team's
conclusions about the yield advantages of the bonds issued by the Commonwealth
of Puerto Rico. Early in this reporting period, deficit spending in Puerto Rico
led to a legislative impasse, resulting in a temporary shuttering of schools and
a brief shutdown of non-essential government agencies. When prices grew
increasingly volatile in advance of the government's proposed solutions, our
Fund managers carefully assessed the situation, stayed focused on yield, and
took advantage of short-term market weakness to increase holdings in these
triple-tax-free bonds at favorable prices. During this
1. Distribution yield at net asset value (NAV), as shown, is annualized based on
the last distribution and divided by the Fund's NAV on March 31, 2007; the
calculation does not include sales charges, which would reduce results. The
Fund's distribution yield at maximum offering price (or with sales charge) was
4.06% for Class A shares on the same date. Falling share prices may artificially
increase yields.
2. Lipper Inc. Lipper calculations do not include sales charges which, if
included, would reduce results.
3. Lipper Inc. Lipper Inc. ranked Oppenheimer Rochester North Carolina Municipal
Fund 1st among 32 funds for the quarter ended March 31, 2007, in its North
Carolina Municipal Debt Funds category. Lipper rankings are based on total
returns, but do not consider sales charges. Lipper rankings are for the A share
class only; other classes may have different performance characteristics. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
54 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
reporting period, the portfolio included a long-term, 5% coupon bond issued by
Puerto Rico's Highway and Transportation Authority. The Fund's holdings in this
issue were pre-refunded in February 2007, proving our carefully researched
hypothesis that our out-of-favor investments in Puerto Rico would ultimately
deliver significant benefit to shareholders.
"Credit spread tightening"--which occurs when the difference between yields on
low-rated municipal bonds and higher-rated bonds decreases, as it did this
reporting period--also contributed to the Fund's strong performance. With
spreads becoming narrower, prices of lower-rated municipal bonds generally
performed better than those of high-grade bonds. This development was good news
for the credit-sensitive areas of our portfolios, including hospital/health
care, electric utilities, adult living facilities and higher education. However,
credit spread tightening also means less opportunity and potentially greater
risk on new purchases, so our recent purchases have included more bonds with
higher ratings. As of March 31, 2007, AAA- and AA-rated paper represented about
40% of the portfolio's market value, and the average credit quality for the Fund
was A. BBB-rated bonds also constituted about 40% of the Fund's market value on
that date.
The Fund's portfolio this reporting period included municipal
inverse-floating-rate securities, which are tax-exempt securities whose interest
payments move inversely to changes in short-term interest rates. 4 During this
reporting period, even as short-term interest rates and the prices of these
securities increased, the income levels of these securities remained higher than
the market average.
In keeping with the "Rochester style" of municipal bond fund management, our
investment team continues to focus on scouring the market to unearth value in
bonds added to the Fund's portfolio. In December 2006, the Fund bought insured
callable bonds secured by revenues of the North Carolina Eastern Municipal power
system. The bonds, purchased at a slight premium, represent a significant
benefit to the Fund, we believe, because they provide a tax-free yield of 5.5%
without any price volatility. This purchase, we believe, also exemplifies the
benefits of our dedication to in-house credit research.
Our approach to municipal bond investing is flexible and responsive to market
conditions; our strategies are intended to balance many different types of risk
to reduce overall portfolio risk. Shareholders should note that market
conditions during this reporting period did not affect the Fund's overall
investment strategies or cause it to pay any capital gain distributions. In
closing, we believe that the Fund's structure and composition as well as our
time-tested strategies will continue to benefit long-term investors through
interest rate and economic cycles.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until March 31, 2007. Performance is measured from the inception date
of all Classes on October 10, 2006. The Fund's performance reflects the
deduction of the maximum initial sales charge on Class A shares, the applicable
contingent deferred sales charge on Class B and Class C shares, and
reinvestments of all dividends and capital gains distributions. Past performance
cannot guarantee future results.
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. 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 indices.
4. See page 147 for further information regarding inverse-floating-rate
securities.
55 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester North Carolina Municipal Fund (Class A)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Lehman Brothers
North Carolina Municipal Municipal Bond
Fund (Class A) Index
10/10/2006 $9,525 $10,000
12/31/2006 $9,746 $10,111
03/31/2007 $9,856 $10,193
CUMULATIVE TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (10/10/06) -1.44%
56 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester North Carolina Municipal Fund (Class B)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Lehman Brothers
North Carolina Municipal Municipal Bond
Fund (Class B) Index
10/10/2006 $10,000 $10,000
12/31/2006 $10,209 $10,111
03/31/2007 $ 9,813 $10,193
CUMULATIVE TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (10/10/06) -1.87%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 59 FOR FURTHER
INFORMATION.
57 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester North Carolina Municipal Fund (Class C)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Lehman Brothers
North Carolina Municipal Municipal Bond
Fund (Class C) Index
10/10/2006 $10,000 $10,000
12/31/2006 $10,206 $10,111
03/31/2007 $ 9,802 $10,193
CUMULATIVE TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (10/10/06) -1.98%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 59 FOR FURTHER
INFORMATION.
58 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. THIS ANNUAL REPORT MUST BE
PRECEDED OR ACCOMPANIED BY THE CURRENT PROSPECTUS OF THE OPPENHEIMER ROCHESTER
NORTH CAROLINA MUNICIPAL FUND.
BEFORE INVESTING IN ANY OF THE OPPENHEIMER FUNDS, INVESTORS SHOULD CAREFULLY
CONSIDER A FUND'S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES. FUND
PROSPECTUSES CONTAIN THIS AND OTHER INFORMATION ABOUT THE FUNDS. FOR MORE
INFORMATION, ASK YOUR FINANCIAL ADVISOR, CALL US AT 1.800.525.7048, OR VISIT OUR
WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ PROSPECTUSES CAREFULLY BEFORE
INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 10/10/06. The
cumulative total returns are shown net of the applicable 4.75% maximum initial
sales charge.
CLASS B shares of the Fund were first publicly offered on 10/10/06. The
cumulative total returns are shown net of the applicable contingent deferred
sales charge of 5% (1-year). Class B shares are subject to an annual 0.75%
asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 10/10/06. The
cumulative total returns are shown net of the applicable 1% contingent deferred
sales charge for the 1-year period. Class C shares are subject to an annual
0.75% asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
59 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
- --------------------------------------------------------------------------------
TOP TEN CATEGORIES
- --------------------------------------------------------------------------------
Highways/Railways 17.1%
- --------------------------------------------------------------------------------
Special Assessment 12.7
- --------------------------------------------------------------------------------
Tobacco Settlement Payments 8.9
- --------------------------------------------------------------------------------
Higher Education 7.8
- --------------------------------------------------------------------------------
Single Family Housing 7.3
- --------------------------------------------------------------------------------
Hospital/Health Care 7.2
- --------------------------------------------------------------------------------
General Obligation 6.3
- --------------------------------------------------------------------------------
Marine/Aviation Facilities 6.1
- --------------------------------------------------------------------------------
Manufacturing, Durable Goods 4.9
- --------------------------------------------------------------------------------
Multifamily Housing 4.4
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are based on the total market value of investments.
CREDIT ALLOCATION
- --------------------------------------------------------------------------------
AAA 41.2%
- --------------------------------------------------------------------------------
AA 3.3
- --------------------------------------------------------------------------------
A 5.2
- --------------------------------------------------------------------------------
BBB 39.5
- --------------------------------------------------------------------------------
BB 2.1
- --------------------------------------------------------------------------------
B 2.4
- --------------------------------------------------------------------------------
CCC 2.6
- --------------------------------------------------------------------------------
Not Rated 3.7
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are dollar-weighted based on the total market value of
investments. As of that date, no securities held by the Fund were rated lower
than CCC. Securities rated by any rating organizations are included in the
equivalent Standard & Poor's rating category. The allocation includes rated
securities and those not rated by a national rating organization but to which
the ratings above have been assigned by the Manager for internal purposes as
being comparable, in the Manager's judgment, to securities rated by a rating
agency in the same category.
- --------------------------------------------------------------------------------
60 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED MARCH 31, 2007, FOLLOWED BY
A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. We are pleased to report that
Oppenheimer Rochester Ohio Municipal Fund has distributed high levels of
tax-free income to its shareholders during this reporting period, outperforming
many fixed-income alternatives on an after-tax basis. As of March 31, 2007,
Oppenheimer Rochester Ohio Municipal Fund's Class A shares provided a
distribution yield of 4.59% at net asset value. 1 Lipper Inc.--an independent
mutual fund rating service--reported an average distribution yield of 3.67%
among the 46 funds in its Ohio Municipal Debt Funds category as of the same
date. 2
Oppenheimer Rochester Ohio Municipal Fund had approximately 165 holdings
in its portfolio at the end of this reporting period and led its Lipper category
in total return for the most recent quarter. 3 Since inception, the Fund's Class
A shares generated a cumulative total return of 9.78% at net asset value. 4
During this reporting period, the monthly dividend per Class A share was raised
twice: following three distributions of 4.6 cents per share, the Fund's dividend
was increased to 4.7 cents per share starting with the October 2006 distribution
and then to 5.2 cents starting with the December 2006 distribution;
distributions for other share classes were adjusted accordingly. In all, the
Fund distributed 44 cents per Class A share in the reporting period ended March
31.
The Fund's holdings in Master Settlement Agreement (MSA) bonds, or "tobacco
bonds," continued to provide significant shareholder benefit in this reporting
period and accounted for about 9% of Fund investments as of March 31, 2007.
Since the Fund's inception, prices in this sector have firmed up amid favorable
court decisions.
The Fund's airline-backed bonds also performed well this reporting period,
generally increasing in price and generating above-average yields. In
particular, holdings backed by American Airlines (less than 3% of total assets)
helped drive total return this reporting period.
Investments in the single-family-housing sector represented about 7% of the
portfolio's market value at the end of this reporting period. The Fund's
holdings in this category are primarily rated AA or better, and payments on
these holdings are secured by pools of mortgages issued by state mortgage
agencies. As such, the Fund effectively safeguarded shareholders from the recent
developments in the national housing market, and the sector contributed to Fund
performance this reporting period. Additionally, the Fund's premium-coupon bonds
in this sector serve as a hedge against rising interest rates: should long-term
rates rise and cause prepayments of the underlying mortgages to slow,
single-family mortgage bonds would provide tax-free income for a longer time
period.
Shareholders also benefited this reporting period from our investment team's
conclusions about the yield advantages of the bonds issued by the Commonwealth
of Puerto Rico. Early in this reporting period, deficit spending in Puerto Rico
led to a legislative impasse, resulting in a temporary shuttering of schools and
a brief shutdown of
1. Distribution yield at net asset value (NAV), as shown, is annualized based on
the last distribution and divided by the Fund's NAV on March 31, 2007; the
calculation does not include sales charges, which would reduce results. The
Fund's distribution yield at maximum offering price (or with sales charge) was
4.37% for Class A shares on the same date. Falling share prices may artificially
increase yields.
2. Lipper Inc. Lipper calculations do not include sales charges which, if
included, would reduce results.
3. Lipper Inc. Lipper Inc. ranked Oppenheimer Rochester Ohio Municipal Fund 1st
among 46 funds for the quarter ended March 31, 2007, in its Ohio Municipal Debt
Funds category. Lipper rankings are based on total returns, but do not consider
sales charges. Lipper rankings are for the A share class only; other classes may
have different performance characteristics. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS.
4. Total return at NAV, as shown, does not include sales charge; as of March 31,
2007, cumulative total return from inception was 4.57% after sales charge for
Class A shares.
61 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
non-essential government agencies. When prices grew increasingly volatile in
advance of the government's proposed solutions, our Fund managers carefully
assessed the situation, stayed focused on yield, and took advantage of
short-term market weakness to increase holdings in these triple-tax-free bonds
at favorable prices. During this reporting period, the portfolio included a
long-term, 5% coupon bond issued by Puerto Rico's Highway and Transportation
Authority. The Fund's holdings in this issue were pre-refunded in February 2007,
proving our carefully researched hypothesis that our out-of-favor investments in
Puerto Rico would ultimately deliver significant benefit to shareholders.
"Credit spread tightening"--which occurs when the difference between yields on
low-rated municipal bonds and higher-rated bonds decreases, as it did this
reporting period--also contributed to the Fund's strong performance. With
spreads becoming narrower, prices of lower-rated municipal bonds generally
performed better than those of high-grade bonds. This development was good news
for the credit-sensitive areas of our portfolios, including hospital/health care
and higher education. However, credit spread tightening also means less
opportunity and potentially greater risk on new purchases, so our recent
purchases have included more bonds with higher ratings. As of March 31, 2007,
AAA- and AA-rated paper represented about 45% of the portfolio's market value,
and the average credit quality for the Fund was A. BBB-rated bonds constituted
about 40% of the Fund's market value on that date.
The Fund's portfolio this reporting period included municipal
inverse-floating-rate securities, which are tax-exempt securities whose interest
payments move inversely to changes in short-term interest rates. 5 During this
reporting period, even as short-term interest rates and the prices of these
securities increased, the income levels of these securities remained higher than
the market average.
In keeping with the "Rochester style" of municipal bond fund management, our
investment team continues to focus on scouring the market to unearth value in
bonds added to the Fund's portfolio. The Fund has invested in non-rated bonds
issued in 2006 by Grove City, Ohio, to finance the infrastructure for the
Parkway Center, a "big box" retail plaza that is close to Columbus. The bonds
yield 5.375% and bond payments are being made using the incremental property tax
revenue the plaza's construction is already generating. This purchase, we
believe, demonstrates the expertise of our in-house credit research team, which
determined that Grove City had sufficient cash flow to service the debt by the
time construction was 50 percent complete. We believe the Fund will continue to
benefit from this purchase, as the bonds are providing above-average yields with
low price volatility and little credit risk.
Our approach to municipal bond investing is flexible and responsive to market
conditions; our strategies are intended to balance many different types of risk
to reduce overall portfolio risk. Shareholders should note that market
conditions during this reporting period did not affect the Fund's overall
investment strategies or cause it to pay any capital gain distributions. In
closing, we believe that the Fund's structure and composition as well as our
time-tested strategies will continue to benefit long-term investors through
interest rate and economic cycles.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until March 31, 2007. Performance is measured from the inception date
of all Classes on June 21, 2006. The Fund's performance reflects the deduction
of the maximum initial sales charge on Class A shares, the applicable contingent
deferred sales charge on Class B and Class C shares, and reinvestments of all
dividends and capital gains distributions. Past performance cannot guarantee
future results.
5. See page 147 for further information regarding inverse-floating-rate
securities.
62 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
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. 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 indices.
63 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Ohio Municipal Fund (Class A)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Lehman Brothers
Ohio Municipal Fund Municipal Bond
(Class A) Index
06/21/2006 $ 9,525 $10,000
06/30/2006 $ 9,561 $10,000
09/30/2006 $10,053 $10,341
12/31/2006 $10,323 $10,455
03/31/2007 $10,457 $10,540
CUMULATIVE TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (6/21/06) 4.57%
64 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Ohio Municipal Fund (Class B)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Lehman Brothers
Ohio Municipal Fund Municipal Bond
(Class B) Index
06/21/2006 $10,000 $10,000
06/30/2006 $10,037 $10,000
09/30/2006 $10,531 $10,341
12/31/2006 $10,793 $10,455
03/31/2007 $10,413 $10,540
CUMULATIVE TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (6/21/06) 4.13%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 67 FOR FURTHER
INFORMATION.
65 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Ohio Municipal Fund (Class C)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Lehman Brothers
Ohio Municipal Fund Municipal Bond
(Class C) Index
06/21/2006 $10,000 $10,000
06/30/2006 $10,037 $10,000
09/30/2006 $10,531 $10,341
12/31/2006 $10,782 $10,455
03/31/2007 $10,801 $10,540
CUMULATIVE TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (6/21/06) 8.01%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 67 FOR FURTHER
INFORMATION.
66 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. THIS ANNUAL REPORT MUST BE
PRECEDED OR ACCOMPANIED BY THE CURRENT PROSPECTUS OF THE OPPENHEIMER ROCHESTER
OHIO MUNICIPAL FUND.
BEFORE INVESTING IN ANY OF THE OPPENHEIMER FUNDS, INVESTORS SHOULD CAREFULLY
CONSIDER A FUND'S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES. FUND
PROSPECTUSES CONTAIN THIS AND OTHER INFORMATION ABOUT THE FUNDS. FOR MORE
INFORMATION, ASK YOUR FINANCIAL ADVISOR, CALL US AT 1.800.525.7048, OR VISIT OUR
WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ PROSPECTUSES CAREFULLY BEFORE
INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered 6/21/06. The cumulative
total returns are shown net of the applicable 4.75% maximum initial sales
charge.
CLASS B shares of the Fund were first publicly offered on 6/21/06. The
cumulative total returns are shown net of the applicable contingent deferred
sales charge of 5% (1-year). Class B shares are subject to an annual 0.75%
asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 6/21/06. The
cumulative total returns are shown net of the applicable 1% contingent deferred
sales charge for the 1-year period. Class C shares are subject to an annual
0.75% asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
67 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) VIRGINIA MUNICIPAL FUND
- --------------------------------------------------------------------------------
TOP TEN CATEGORIES
- --------------------------------------------------------------------------------
Highways/Railways 15.3%
- --------------------------------------------------------------------------------
Higher Education 12.9
- --------------------------------------------------------------------------------
Tobacco Settlement Payments 12.6
- --------------------------------------------------------------------------------
Multifamily Housing 8.4
- --------------------------------------------------------------------------------
Marine/Aviation Facilities 7.1
- --------------------------------------------------------------------------------
Hotels, Restaurants & Leisure 5.5
- --------------------------------------------------------------------------------
Special Assessment 5.3
- --------------------------------------------------------------------------------
Hospital/Health Care 4.4
- --------------------------------------------------------------------------------
Electric Utilities 4.4
- --------------------------------------------------------------------------------
Airlines 3.6
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are based on the total market value of investments.
CREDIT ALLOCATION
- --------------------------------------------------------------------------------
AAA 28.9%
- --------------------------------------------------------------------------------
AA 6.5
- --------------------------------------------------------------------------------
A 15.6
- --------------------------------------------------------------------------------
BBB 28.6
- --------------------------------------------------------------------------------
BB 0.2
- --------------------------------------------------------------------------------
B 6.2
- --------------------------------------------------------------------------------
CCC 3.6
- --------------------------------------------------------------------------------
Not Rated 10.4
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are dollar-weighted based on the total market value of
investments. As of that date, no securities held by the Fund were rated lower
than CCC. Securities rated by any rating organizations are included in the
equivalent Standard & Poor's rating category. The allocation includes rated
securities and those not rated by a national rating organization but to which
the ratings above have been assigned by the Manager for internal purposes as
being comparable, in the Manager's judgment, to securities rated by a rating
agency in the same category.
- --------------------------------------------------------------------------------
68 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) VIRGINIA MUNICIPAL FUND
HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED MARCH 31, 2007, FOLLOWED BY
A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. We are pleased to report that
Oppenheimer Rochester Virginia Municipal Fund has distributed high levels of
tax-free income to its shareholders during this reporting period, outperforming
many fixed-income alternatives on an after-tax basis. As of March 31, 2007,
Oppenheimer Rochester Virginia Municipal Fund's Class A shares provided a
distribution yield of 4.35% at net asset value. 1 Lipper Inc.--an independent
mutual fund rating service--reported an average distribution yield of 3.64%
among the 37 funds in its Virginia Municipal Debt Funds category as of the same
date. 2
Oppenheimer Rochester Virginia Municipal Fund had approximately 115 holdings in
its portfolio at the end of this reporting period and led its Lipper category in
total return for the most recent quarter. 3 Since inception, the Fund's Class A
shares generated a cumulative total return of 7.81% at net asset value. 4 During
this reporting period, the monthly dividend per Class A share was raised twice:
after four distributions of 4.5 cents per share, the Fund's dividend was
increased to 4.7 cents starting with the December 2006 distribution and then to
4.8 cents starting with the March payment; distributions for other share classes
were adjusted accordingly. In all, the Fund distributed 36.9 cents per Class A
share in the reporting period ended March 31.
The Fund's holdings in Master Settlement Agreement (MSA) bonds, or "tobacco
bonds," continued to provide significant shareholder benefit in this reporting
period and accounted for about 13% of Fund investments as of March 31, 2007.
Since the Fund's inception, prices in this sector have firmed up amid favorable
court decisions.
The Fund's airline-backed bonds also performed well this reporting period,
generally increasing in price and generating above-average yields. In
particular, holdings backed by American Airlines (about 4% of total assets)
helped drive total return this reporting period.
"Credit spread tightening"--which occurs when the difference between yields on
low-rated municipal bonds and higher-rated bonds decreases, as it did this
reporting period--also contributed to the Fund's strong performance. With
spreads becoming narrower, prices of lower-rated municipal bonds generally
performed better than those of high-grade bonds. This development was good news
for the credit-sensitive areas of our portfolios, including higher education,
hospital/health care and adult living facilities. However, credit spread
tightening also means less opportunity and potentially greater risk on new
purchases, so our recent purchases have included more bonds with higher ratings.
As of March 31, 2007, AAA- and AA-rated paper represented about 35% of the
portfolio's market value, and the average credit quality for the Fund was
A-minus. BBB-rated bonds constituted less than 30% of the Fund's market value on
that date.
1. Distribution yield at net asset value (NAV), as shown, is annualized based on
the last distribution and divided by the Fund's NAV on March 31, 2007; the
calculation does not include sales charges, which would reduce results. The
Fund's distribution yield at maximum offering price (or with sales charge) was
4.15% for Class A shares on the same date. Falling share prices may artificially
increase yields.
2. Lipper Inc. Lipper calculations do not include sales charges which, if
included, would reduce results.
3. Lipper Inc. Lipper Inc. ranked Oppenheimer Rochester Virginia Municipal Fund
1st among 37 funds for the quarter ended March 31, 2007, in its Virginia
Municipal Debt Funds category. Lipper rankings are based on total returns, but
do not consider sales charges. Lipper rankings are for the A share class only;
other classes may have different performance characteristics. PAST PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS.
4. Total return at NAV, as shown, does not include sales charge; as of March 31,
2007, cumulative total return from inception was 2.69% after sales charge for
Class A shares.
69 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) VIRGINIA MUNICIPAL FUND
The Fund's portfolio this reporting period included municipal
inverse-floating-rate securities, which are tax-exempt securities whose interest
payments move inversely to changes in short-term interest rates. 5 During this
reporting period, even as short-term interest rates and the prices of these
securities increased, the income levels of these securities remained higher than
the market average.
In keeping with the "Rochester style" of municipal bond fund management, our
investment team continues to focus on scouring the market to unearth value in
bonds added to the Fund's portfolio. In July 2006, the Fund bought MBIA-insured
bonds to finance various capital projects in Norfolk's water system. The
currently callable bonds provided a tax-free yield of 4.86% at the end of this
reporting period, with low price volatility and no credit risk. If these bonds
remain uncalled after November 1, 2007, the rate will jump significantly and
provide even greater benefits to the Fund.
Our approach to municipal bond investing is flexible and responsive to market
conditions; our strategies are intended to balance many different types of risk
to reduce overall portfolio risk. Shareholders should note that market
conditions during this reporting period did not affect the Fund's overall
investment strategies or cause it to pay any capital gain distributions. In
closing, we believe that the Fund's structure and composition as well as our
time-tested strategies will continue to benefit long-term investors through
interest rate and economic cycles.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until March 31, 2007. Performance is measured from the inception date
of all Classes on July 18, 2006. The Fund's performance reflects the deduction
of the maximum initial sales charge on Class A shares, the applicable contingent
deferred sales charge on Class B and Class C shares, and reinvestments of all
dividends and capital gains distributions. Past performance cannot guarantee
future results.
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. 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 indices.
5. See page 147 for further information regarding inverse-floating-rate
securities.
70 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) VIRGINIA MUNICIPAL FUND
- --------------------------------------------------------------------------------
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Virginia Municipal Fund (Class A)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Lehman Brothers
Virginia Municipal Municipal Bond
Fund (Class A) Index
07/18/2006 $ 9,525 $10,000
09/30/2006 $ 9,879 $10,219
12/31/2006 $10,161 $10,332
03/31/2007 $10,269 $10,416
CUMULATIVE TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (7/18/06) 2.69%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 74 FOR FURTHER
INFORMATION.
71 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) VIRGINIA MUNICIPAL FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Virginia Municipal Fund (Class B)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Lehman Brothers
Virginia Municipal Municipal Bond
Fund (Class B) Index
07/18/2006 $10,000 $10,000
09/30/2006 $10,348 $10,219
12/31/2006 $10,622 $10,332
03/31/2007 $10,213 $10,416
CUMULATIVE TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (7/18/06) 2.13%
72 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) VIRGINIA MUNICIPAL FUND
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Rochester Virginia Municipal Fund (Class C)
Lehman Brothers Municipal Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Rochester Lehman Brothers
Virginia Municipal Municipal Bond
Fund (Class C) Index
07/18/2006 $10,000 $10,000
09/30/2006 $10,330 $10,219
12/31/2006 $10,601 $10,332
03/31/2007 $10,595 $10,416
CUMULATIVE TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
3/31/07 Since Inception (7/18/06) 5.95%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR); AND FOR CLASS C SHARES, THE 1%
CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 74 FOR FURTHER
INFORMATION.
73 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) VIRGINIA MUNICIPAL FUND
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. THIS ANNUAL REPORT MUST BE
PRECEDED OR ACCOMPANIED BY THE CURRENT PROSPECTUS OF THE OPPENHEIMER ROCHESTER
VIRGINIA MUNICIPAL FUND.
BEFORE INVESTING IN ANY OF THE OPPENHEIMER FUNDS, INVESTORS SHOULD CAREFULLY
CONSIDER A FUND'S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES. FUND
PROSPECTUSES CONTAIN THIS AND OTHER INFORMATION ABOUT THE FUNDS. FOR MORE
INFORMATION, ASK YOUR FINANCIAL ADVISOR, CALL US AT 1.800.525.7048, OR VISIT OUR
WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ PROSPECTUSES CAREFULLY BEFORE
INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 7/18/06. The
cumulative total returns are shown net of the applicable 4.75% maximum initial
sales charge.
CLASS B shares of the Fund were first publicly offered on 7/18/06. The
cumulative total returns are shown net of the applicable contingent deferred
sales charge of 5% (1-year). Class B shares are subject to an annual 0.75%
asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 7/18/06. The
cumulative total returns are shown net of the applicable 1% contingent deferred
sales charge for the 1-year period. Class C shares are subject to an annual
0.75% asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
74 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Funds, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and service fees;
and other Fund expenses. These examples are intended to help you understand your
ongoing costs (in dollars) of investing in the Funds and to compare these costs
with the ongoing costs of investing in other mutual funds.
The examples for Actual Expenses for Oppenheimer Rochester Massachusetts
Municipal Fund, Oppenheimer Rochester Michigan Municipal Fund, Oppenheimer
Rochester Ohio Municipal Fund and Oppenheimer Rochester Virginia Municipal Fund
are based on an investment of $1,000.00 invested at the beginning of the period
and held for the entire 6-month period ended March 31, 2007.
The examples for Actual Expenses for Oppenheimer Rochester Arizona Municipal
Fund, Oppenheimer Rochester Maryland Municipal Fund and Oppenheimer Rochester
North Carolina Municipal Fund are based on an investment of $1,000.00 invested
at the beginning of the period, October 10, 2006 (commencement of operations)
and held for the period ended March 31, 2007.
The examples for Actual Expenses for Oppenheimer Rochester Minnesota Municipal
Fund are based on an investment of $1,000.00 invested at the beginning of the
period, November 7, 2006 (commencement of operations) and held for the period
ended March 31, 2007.
The Hypothetical Examples for Comparison Purposes are based on an investment of
$1,000.00 invested on October 1, 2006 and held for the six months ended March
31, 2007.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line for the class of shares you hold, together with the amount you invested, to
estimate the expense that you paid over the period. Simply divide your account
value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00
= 8.60), then multiply the result by the number in the "actual" line under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Funds' actual expense ratio for each class of shares, and
an assumed rate of return of 5% per year before expenses, which is not the
Funds' actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Funds and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds. Please note that the expenses shown
in the table are meant to highlight your ongoing costs only and do not reflect
any transactional costs, such as front-end or contingent deferred sales charges
(loads), or a $12.00
75 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND EXPENSES Continued
- --------------------------------------------------------------------------------
fee imposed annually on accounts valued at less than $500.00 (subject to
exceptions described in the Statement of Additional Information). Therefore, the
"hypothetical" lines of the table are useful in comparing ongoing costs only,
and will not help you determine the relative total costs of owning different
funds. In addition, if these transactional costs were included, your costs would
have been higher.
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
ENDING EXPENSES
BEGINNING ACCOUNT PAID DURING
ACCOUNT VALUE PERIOD ENDED
VALUE (3/31/07) MARCH 31, 2007 1,2
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,056.10 $ 3.91
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,020.94 4.04
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,051.60 7.56
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,017.20 7.83
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,051.80 7.56
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,017.20 7.83
Hypothetical assumes 5% annual return before expenses.
1. Actual expenses paid are equal to the Fund's annualized expense ratio for
that class, multiplied by the average account value over the period, multiplied
by 173/365 [to reflect the period from October 10, 2006 (commencement of
operations) to March 31, 2007].
2. Hypothetical expenses paid are equal to the Fund's annualized expense ratio
for that class, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period).
The annualized expense ratios are as follows:
CLASS EXPENSE RATIOS
- -------------------------
Class A 0.80%
- -------------------------
Class B 1.55
- -------------------------
Class C 1.55
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager and Transfer Agent that can be terminated at any time,
without advance notice. The "Financial Highlights" tables in the Fund's
financial statements, included in this report, also show the gross expense
ratios, without such waivers or reimbursements.
- --------------------------------------------------------------------------------
76 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
ENDING EXPENSES
BEGINNING ACCOUNT PAID DURING
ACCOUNT VALUE PERIOD ENDED
VALUE (3/31/07) MARCH 31, 2007 1,2
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,040.00 $ 3.87
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,020.94 4.04
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,035.00 7.50
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,017.20 7.83
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,034.70 7.50
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,017.20 7.83
Hypothetical assumes 5% annual return before expenses.
1. Actual expenses paid are equal to the Fund's annualized expense ratio for
that class, multiplied by the average account value over the period, multiplied
by 173/365 [to reflect the period from October 10, 2006 (commencement of
operations) to March 31, 2007].
2. Hypothetical expenses paid are equal to the Fund's annualized expense ratio
for that class, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period).
The annualized expense ratios are as follows:
CLASS EXPENSE RATIOS
- -----------------------------
Class A 0.80%
- -----------------------------
Class B 1.55
- -----------------------------
Class C 1.55
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager that can be terminated at any time, without advance notice.
The "Financial Highlights" tables in the Fund's financial statements, included
in this report, also show the gross expense ratios, without such waivers or
reimbursements.
- --------------------------------------------------------------------------------
77 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND EXPENSES Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(10/1/06) (3/31/07) MARCH 31, 2007
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,039.60 $ 4.08
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,020.94 4.04
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,036.40 7.90
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,017.20 7.83
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,035.30 7.90
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,017.20 7.83
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 182/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended March 31, 2007 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------
Class A 0.80%
- -----------------------------
Class B 1.55
- -----------------------------
Class C 1.55
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager that can be terminated at any time, without advance notice.
The "Financial Highlights" tables in the Fund's financial statements, included
in this report, also show the gross expense ratios, without such waivers or
reimbursements.
- --------------------------------------------------------------------------------
78 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(10/1/06) (3/31/07) MARCH 31, 2007
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,039.20 $ 4.08
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,020.94 4.04
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,034.80 7.89
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,017.20 7.83
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,034.40 7.89
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,017.20 7.83
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 182/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended March 31, 2007 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------
Class A 0.80%
- -----------------------------
Class B 1.55
- -----------------------------
Class C 1.55
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager and Transfer Agent that can be terminated at any time,
without advance notice. The "Financial Highlights" tables in the Fund's
financial statements, included in this report, also show the gross expense
ratios, without such waivers or reimbursements.
- --------------------------------------------------------------------------------
79 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND EXPENSES Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
ENDING EXPENSES
BEGINNING ACCOUNT PAID DURING
ACCOUNT VALUE PERIOD ENDED
VALUE (3/31/07) MARCH 31, 2007 1,2
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,028.50 $ 3.23
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,020.94 4.04
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,024.80 6.25
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,017.20 7.83
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,024.70 6.25
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,017.20 7.83
Hypothetical assumes 5% annual return before expenses.
1. Actual expenses paid are equal to the Fund's annualized expense ratio for
that class, multiplied by the average account value over the period, multiplied
by 145/365 [to reflect the period from November 7, 2006 (commencement of
operations) to March 31, 2007].
2. Hypothetical expenses paid are equal to the Fund's annualized expense ratio
for that class, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period).
The annualized expense ratios are as follows:
CLASS EXPENSE RATIOS
- -----------------------------
Class A 0.80%
- -----------------------------
Class B 1.55
- -----------------------------
Class C 1.55
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager that can be terminated at any time, without advance notice.
The "Financial Highlights" tables in the Fund's financial statements, included
in this report, also show the gross expense ratios, without such waivers or
reimbursements.
- --------------------------------------------------------------------------------
80 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
ENDING EXPENSES
BEGINNING ACCOUNT PAID DURING
ACCOUNT VALUE PERIOD ENDED
VALUE (3/31/07) MARCH 31, 2007 1,2
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,034.80 $ 3.86
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,020.94 4.04
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,031.40 7.49
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,017.20 7.83
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,030.20 7.48
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,017.20 7.83
Hypothetical assumes 5% annual return before expenses.
1. Actual expenses paid are equal to the Fund's annualized expense ratio for
that class, multiplied by the average account value over the period, multiplied
by 173/365 [to reflect the period from October 10, 2006 (commencement of
operations) to March 31, 2007].
2. Hypothetical expenses paid are equal to the Fund's annualized expense ratio
for that class, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period).
The annualized expense ratios are as follows:
CLASS EXPENSE RATIOS
- -----------------------------
Class A 0.80%
- -----------------------------
Class B 1.55
- -----------------------------
Class C 1.55
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager that can be terminated at any time, without advance notice.
The "Financial Highlights" tables in the Fund's financial statements, included
in this report, also show the gross expense ratios, without such waivers or
reimbursements.
- --------------------------------------------------------------------------------
81 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FUND EXPENSES Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(10/1/06) (3/31/07) MARCH 31, 2007
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,040.20 $ 4.08
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,020.94 4.04
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,036.30 7.90
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,017.20 7.83
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,035.10 7.89
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,017.20 7.83
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 182/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended March 31, 2007 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------
Class A 0.80%
- -----------------------------
Class B 1.55
- -----------------------------
Class C 1.55
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager that can be terminated at any time, without advance notice.
The "Financial Highlights" tables in the Fund's financial statements, included
in this report, also show the gross expense ratios, without such waivers or
reimbursements.
- --------------------------------------------------------------------------------
82 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) VIRGINIA MUNICIPAL FUND
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(10/1/06) (3/31/07) MARCH 31, 2007
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,039.50 $ 4.08
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,020.94 4.04
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,035.30 7.90
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,017.20 7.83
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,035.30 7.90
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,017.20 7.83
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 182/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended March 31, 2007 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------
Class A 0.80%
- -----------------------------
Class B 1.55
- -----------------------------
Class C 1.55
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager that can be terminated at any time, without advance notice.
The "Financial Highlights" tables in the Fund's financial statements, included
in this report, also show the gross expense ratios, without such waivers or
reimbursements.
- --------------------------------------------------------------------------------
83 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS March 31, 2007
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--138.4%
- ------------------------------------------------------------------------------------------------------------------------------------
ARIZONA--98.4%
$ 35,000 Apache County IDA (Tucson Electric Power Company) 5.875% 03/01/2033 $ 35,024
- ------------------------------------------------------------------------------------------------------------------------------------
85,000 AZ Agricultural & Power District (Salt River) 1 5.000 01/01/2020 86,594
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 AZ Game & Fish Department (Administration Building) 1 5.000 07/01/2032 259,070
- ------------------------------------------------------------------------------------------------------------------------------------
300,000 AZ Health Facilities Authority (American Baptist Estates) 1 7.750 11/15/2033 335,862
- ------------------------------------------------------------------------------------------------------------------------------------
110,000 AZ Health Facilities Authority (FMC/SMC Obligated Group) 1 5.250 10/01/2026 112,299
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 AZ Health Facilities Authority (Northern Arizona Healthcare) 5.000 10/01/2023 10,234
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 AZ Health Facilities Authority (Northern Arizona Healthcare) 1 5.250 10/01/2016 20,421
- ------------------------------------------------------------------------------------------------------------------------------------
125,000 AZ Student Loan Acquisition Authority 5.750 05/01/2015 132,226
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 AZ Student Loan Acquisition Authority 1 5.900 05/01/2024 79,453
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Casa Grande IDA (Casa Grande Regional Medical Center) 7.000 12/01/2017 21,832
- ------------------------------------------------------------------------------------------------------------------------------------
300,000 Centerra Community Facilities District 1 5.150 07/15/2031 302,070
- ------------------------------------------------------------------------------------------------------------------------------------
10,052 Central AZ Irrigation & Drain District 6.000 06/01/2016 10,067
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Cochise County IDA (Sierra Vista Community Hospital) 6.750 12/01/2026 10,210
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Cochise County Unified School District No. 21 (St. David) 1 5.000 07/01/2017 10,133
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Festival Ranch Community Facilities District 2 5.000 07/01/2026 100,032
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Festival Ranch Community Facilities District 2 5.000 07/01/2032 99,921
- ------------------------------------------------------------------------------------------------------------------------------------
195,000 Festival Ranch Community Facilities District 1 5.300 07/15/2031 198,492
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Glendale IDA (Midwestern University) 5.375 05/15/2028 5,130
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Glendale IDA (Midwestern University) 6.000 05/15/2026 101,379
- ------------------------------------------------------------------------------------------------------------------------------------
225,000 Goodyear IDA Water & Sewer (Litchfield Park Service Company) 1 6.750 10/01/2031 244,348
- ------------------------------------------------------------------------------------------------------------------------------------
350,000 Hassayampa Community Facilities District (Hassayampa Village
Community) 1 7.750 07/01/2021 362,562
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Maricopa County Hospital (Sun Health Corp.) 5.250 04/01/2019 5,109
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Maricopa County Hospital (Sun Health Corp.) 6.125 04/01/2018 15,320
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Maricopa County IDA (Catholic Healthcare) 5.000 07/01/2016 50,973
- ------------------------------------------------------------------------------------------------------------------------------------
90,000 Maricopa County IDA (Catholic Healthcare) 1 5.000 07/01/2021 91,274
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 Maricopa County IDA (Catholic Healthcare) 1 5.000 07/01/2021 61,021
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Maricopa County IDA (Chaparral City Water Company) 1 5.400 12/01/2022 25,704
- ------------------------------------------------------------------------------------------------------------------------------------
165,000 Maricopa County IDA (Citizens Utilities Company) 1 6.200 05/01/2030 165,087
- ------------------------------------------------------------------------------------------------------------------------------------
495,000 Maricopa County IDA (Sun King Apartments) 1 6.750 05/01/2031 512,018
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Maricopa County IDA (Whispering Palms Apartments) 1 5.900 07/01/2029 51,889
- ------------------------------------------------------------------------------------------------------------------------------------
158,000 Maricopa County IDA Hospital (Mayo Clinic Scottsdale) 1 5.250 11/15/2037 161,726
- ------------------------------------------------------------------------------------------------------------------------------------
110,000 Maricopa County Pollution Control Corp. (Public Service Company of
New Mexico) 1 5.750 11/01/2022 111,258
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Maricopa County Pollution Control Corp. (Public Service Company of
New Mexico) 1 6.300 12/01/2026 10,229
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Mesa IDA (Banner Health System) 1 5.000 01/01/2019 20,381
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 Mesa IDA (Mesa Student Hsg.) 1 6.000 07/01/2025 64,689
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Mesa IDA (Mesa Student Hsg.) 1 6.000 07/01/2032 21,522
- ------------------------------------------------------------------------------------------------------------------------------------
125,000 Mesa IDA (Mesa Student Hsg.) 1 6.000 07/01/2032 132,288
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Mesa IDA (Mesa Student Hsg.) 1 6.250 07/01/2032 54,410
- ------------------------------------------------------------------------------------------------------------------------------------
125,000 Mohave County Elementary School District No. 15 Bullhead 1 5.000 07/01/2010 126,049
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 Navajo County IDA (Stone Container Corp.) 1 7.400 04/01/2026 46,084
84 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
ARIZONA Continued
$ 50,000 Parkway Community Facilities District No. 1 (Prescott Valley) 1 5.350% 07/15/2031 $ 51,079
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Peoria GO 1 5.250 07/01/2016 50,190
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Peoria Improvement District No. 8401 5.300 01/01/2011 40,129
- ------------------------------------------------------------------------------------------------------------------------------------
500,000 Phoenix & Pima County IDA (Single Family) 5.250 08/01/2038 524,410
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Phoenix Airport 1 6.400 07/01/2012 15,028
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 Phoenix Civic Improvement Corp. 5.250 07/01/2021 45,167
- ------------------------------------------------------------------------------------------------------------------------------------
625,000 Phoenix Civic Improvement Corp. 1 5.375 07/01/2029 627,013
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Phoenix Civic Improvement Corp. (Courthouse) 5.250 07/01/2024 25,993
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 Phoenix Civic Improvement Corp. Airport 5.250 07/01/2022 250,740
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 Phoenix Civic Improvement Corp. Airport, Series A 1 5.000 07/01/2025 30,604
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Phoenix Civic Improvement Corp. Airport, Series B 5.250 07/01/2022 20,874
- ------------------------------------------------------------------------------------------------------------------------------------
450,000 Phoenix Civic Improvement Corp. Airport, Series B 1 5.250 07/01/2027 469,557
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Phoenix Civic Improvement Corp. Airport, Series B 5.250 07/01/2032 52,137
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Phoenix GO 5.000 07/01/2011 25,275
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Phoenix GO 1 5.000 07/01/2017 10,154
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Phoenix GO 5.000 07/01/2018 25,385
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Phoenix GO 5.000 07/01/2020 15,224
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Phoenix Hsg. Finance Corp. 6.900 01/01/2023 20,266
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Phoenix IDA (Crossroads Apartments) 1 5.200 12/15/2021 40,634
- ------------------------------------------------------------------------------------------------------------------------------------
350,000 Phoenix IDA (Espiritu Community Devel. Corp.) 1 6.250 07/01/2036 366,275
- ------------------------------------------------------------------------------------------------------------------------------------
1,000,000 Phoenix IDA (Gourmet Boutique West) 5.875 11/01/2037 996,440
- ------------------------------------------------------------------------------------------------------------------------------------
130,000 Phoenix IDA (Single Family Mtg.) 1 6.650 10/01/2029 133,497
- ------------------------------------------------------------------------------------------------------------------------------------
225,000 Phoenix IDA (Summit Apartments) 1 6.550 07/20/2037 246,062
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Phoenix IDA (Ventana Palms Apartments) 1 6.150 10/01/2029 53,884
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Phoenix Street & Highway 6.000 07/01/2007 5,009
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Phoenix Street & Highway 1 6.100 07/01/2011 40,077
- ------------------------------------------------------------------------------------------------------------------------------------
170,000 Pima County IDA (Arizona Charter School) 1 6.500 07/01/2023 183,631
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Pima County IDA (Charter Schools) 1 6.375 07/01/2031 11,400
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Pima County IDA (Charter Schools) 6.375 07/01/2031 16,237
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Pima County IDA (Christian Senior Living) 1 5.050 01/01/2037 196,626
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 Pima County IDA (Global Water Resources) 1 5.750 12/01/2032 150,759
- ------------------------------------------------------------------------------------------------------------------------------------
140,000 Pima County IDA (Healthpartners of Southern Arizona) 1 5.625 04/01/2014 142,985
- ------------------------------------------------------------------------------------------------------------------------------------
85,000 Pima County IDA (Horizon Community Learning Center) 5.250 06/01/2035 85,019
- ------------------------------------------------------------------------------------------------------------------------------------
65,000 Pima County IDA (International Studies Academy) 1 6.750 07/01/2031 72,392
- ------------------------------------------------------------------------------------------------------------------------------------
105,000 Pima County IDA (International Studies Academy) 1 6.750 07/01/2031 112,761
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Pima County IDA (Single Family Mtg.) 5.786 3 11/01/2034 9,921
- ------------------------------------------------------------------------------------------------------------------------------------
125,000 Pima County IDA (Sonoran Science Academy) 1 5.750 12/01/2037 124,720
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 Pima County IDA (Tucson Country Day School) 5.000 06/01/2037 150,644
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Pima County IDA (Tucson Medical Center) 5.000 04/01/2015 10,008
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Pima County Junior College District 1 7.000 07/01/2009 15,262
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 San Luis Civic Improvement Corp. (Excise Tax) 1 5.000 07/01/2038 5,239
85 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
ARIZONA Continued
$ 200,000 San Luis Facility Devel. Corp. (Regional Detention Center) 7.250% 05/01/2027 $ 204,324
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Santa Cruz County Unified School District 1 6.000 07/01/2009 5,029
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Scottsdale IDA Hospital (Scottsdale Memorial Hospitals) 1 6.000 09/01/2012 51,454
- ------------------------------------------------------------------------------------------------------------------------------------
275,000 Show Low IDA (Navapache Regional Medical Center) 1 5.000 12/01/2030 286,468
- ------------------------------------------------------------------------------------------------------------------------------------
125,000 Tolleson IDA (Copper Cove) 5.450 11/20/2032 130,184
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Tucson IDA (Joint Single Family Mtg.) 5.000 01/01/2039 100,337
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 Tucson IDA (Joint Single Family Mtg.) 1 5.350 01/01/2038 79,684
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Tucson Improvement District Special Assessment (Civano Neighborhood
Phase 1) 1 5.000 01/01/2015 5,040
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 Tucson Water 1 5.125 07/01/2020 30,102
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 University AZ Medical Center Corp. (University Medical Center) 1 5.000 07/01/2013 15,013
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 University AZ Medical Center Corp. (University Medical Center) 1 5.000 07/01/2021 35,026
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 University AZ Medical Center Corp. (University Medical Center) 5.000 07/01/2033 5,109
- ------------------------------------------------------------------------------------------------------------------------------------
225,000 Verrado Community Facilities District No. 1 1 6.500 07/15/2027 243,070
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Via Linda Road Community Facilities District Scottsdale 1 5.650 07/15/2018 10,312
- ------------------------------------------------------------------------------------------------------------------------------------
225,000 Vistancia Community Facilities District 1 6.750 07/15/2022 250,486
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 Westpark Community Facilities District 1 5.250 07/15/2031 253,560
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Yuma County Jail District 5.250 07/01/2012 50,061
----------------
11,488,356
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS--40.0%
20,000 Guam Power Authority, Series A 1 5.250 10/01/2023 20,080
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Puerto Rico Aqueduct & Sewer Authority 1 5.000 07/01/2015 25,402
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Puerto Rico Aqueduct & Sewer Authority 1 5.000 07/01/2019 101,980
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Puerto Rico Children's Trust Fund (TASC) 1 5.625 05/15/2043 105,631
- ------------------------------------------------------------------------------------------------------------------------------------
20,000,000 Puerto Rico Children's Trust Fund (TASC) 6.342 3 05/15/2050 1,367,400
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Puerto Rico Commonwealth GO 5.000 07/01/2035 104,398
- ------------------------------------------------------------------------------------------------------------------------------------
175,000 Puerto Rico Highway & Transportation Authority, Series M 5.000 07/01/2046 182,462
- ------------------------------------------------------------------------------------------------------------------------------------
2,000,000 Puerto Rico Highway & Transportation Authority, Series N 4 4.107 5 07/01/2045 2,003,000
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Puerto Rico ITEMECF (Ana G. Mendez University) 5.375 02/01/2019 25,701
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 Puerto Rico ITEMECF (Hospital Auxilio Mutuo) 1 5.500 07/01/2026 76,422
- ------------------------------------------------------------------------------------------------------------------------------------
90,000 Puerto Rico Port Authority (American Airlines), Series A 1 6.250 06/01/2026 90,833
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Puerto Rico Port Authority (American Airlines), Series A 6.300 06/01/2023 100,062
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 University of Puerto Rico 1 5.000 06/01/2026 262,263
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 V.I. Public Finance Authority, Series A 5.625 10/01/2025 205,548
----------------
4,671,182
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $16,029,163)--138.4% 16,159,538
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS--(38.4) (4,487,448)
----------------
NET ASSETS--100.0% $ 11,672,090
================
86 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. All or a portion of the security has been segregated for collateral to cover
borrowings. See Note 6 of accompanying Notes.
2. When-issued security or forward commitment to be delivered and settled after
March 31, 2007. See Note 1 of accompanying Notes.
3. Zero coupon bond reflects effective yield on the date of purchase.
4. Security represents the underlying municipal bond on an inverse floating rate
security. The bond was purchased by the Fund and subsequently segregated and
transferred to a trust. See Note 1 of accompanying Notes.
5. Represents the current interest rate for a variable or increasing rate
security.
TO SIMPLIFY THE LISTINGS OF SECURITIES, ABBREVIATIONS ARE USED PER THE TABLE
BELOW:
FMC Flagstaff Medical Center
GO General Obligation
IDA Industrial Devel. Agency
ITEMECF Industrial, Tourist, Educational, Medical and Environmental
Community Facilities
ROLs Residual Option Longs
SMC Sedona Medical Center
TASC Tobacco Settlement Asset-Backed Bonds
V.I. United States Virgin Islands
DISTRIBUTION OF INVESTMENTS BY INDUSTRY OF ISSUE, AS A PERCENTAGE OF TOTAL
INVESTMENTS AT VALUE, IS AS FOLLOWS:
INDUSTRY MARKET VALUE PERCENT
- --------------------------------------------------------------------------------
Highways/Railways $ 2,225,539 13.8%
Tobacco Settlement Payments 1,473,031 9.1
Marine/Aviation Facilities 1,465,953 9.1
Special Tax 1,298,757 8.0
Hospital/Health Care 1,203,285 7.4
Education 1,123,079 7.0
Multifamily Housing 1,054,937 6.5
Manufacturing, Non-Durable Goods 996,440 6.2
Single Family Housing 847,849 5.2
Higher Education 682,644 4.2
Special Assessment 607,684 3.8
Municipal Leases 584,615 3.6
Adult Living Facilities 532,488 3.3
General Obligation 392,216 2.4
Water Utilities 339,186 2.1
Electric Utilities 317,014 2.0
Sewer Utilities 244,348 1.5
Student Loans 211,679 1.3
Sales Tax Revenue 210,557 1.3
Airlines 190,895 1.2
Pollution Control 111,258 0.7
Paper, Containers & Packaging 46,084 0.3
-----------------------
Total $ 16,159,538 100.0%
=======================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
87 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS March 31, 2007
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--145.3%
- ------------------------------------------------------------------------------------------------------------------------------------
MARYLAND--79.8%
$ 25,000 Allegany County Industrial Devel. (Moran Manor Care Center) 1 12.450% 02/01/2027 $ 29,390
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Anne Arundel County (Consolidated Water & Sewer) 1 5.750 07/15/2010 10,017
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Anne Arundel County GO 1 5.375 04/01/2011 40,053
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Anne Arundel County Solid Waste 1 5.200 09/01/2010 10,113
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Anne Arundel County Solid Waste 1 5.400 09/01/2013 20,226
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Anne Arundel County Solid Waste 1 5.500 09/01/2015 50,564
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Anne Arundel County Solid Waste 1 5.500 09/01/2016 101,123
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Anne Arundel County Solid Waste 1 5.750 07/15/2008 10,017
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Baltimore City Hsg. Corp. 1 7.750 10/01/2009 10,039
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Baltimore Convention Center 1 5.500 09/01/2014 20,878
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Baltimore Convention Center 1 5.875 09/01/2039 53,191
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Baltimore County Mtg. (Shelter Eldercare Foundation) 1 7.000 11/01/2012 20,951
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Baltimore GO 1 5.000 10/15/2015 5,115
- ------------------------------------------------------------------------------------------------------------------------------------
115,000 Baltimore Pollution Control (General Motors Corp.) 1 5.350 04/01/2008 114,897
- ------------------------------------------------------------------------------------------------------------------------------------
936,000 Baltimore Special Obligation (North Locust Point) 1 5.500 09/01/2034 979,009
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Brunswick Special Obligation (Brunswick Crossing) 1 5.500 07/01/2036 205,158
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Calvert County Economic Devel. (Asbury-Solomons) 1 5.000 01/01/2027 41,190
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Frederick (Carrollton Apartments) 1 5.650 09/01/2013 35,444
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Frederick (Carrollton Apartments) 1 5.850 03/01/2028 10,264
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Frederick County Economic Devel. (YMCA of Frederick) 1 6.000 10/01/2023 102,870
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Frederick County Educational Facilities (Mount St. Mary's College) 1 5.625 09/01/2038 214,886
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Frederick County Educational Facilities (Mount St. Mary's College) 1 5.800 09/01/2030 52,155
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 Harford County GO 1 5.000 03/01/2014 30,331
- ------------------------------------------------------------------------------------------------------------------------------------
350,000 Howard County Retirement Community (Vantage House Facility) 1,2 5.250 04/01/2037 358,204
- ------------------------------------------------------------------------------------------------------------------------------------
450,000 MD Community Devel. Administration (Dept. of Hsg. & Community Devel.) 1 4.800 09/01/2042 446,571
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 MD Community Devel. Administration (Dept. of Hsg. & Community Devel.) 1 4.850 09/01/2047 248,323
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 MD Community Devel. Administration (Dept. of Hsg. & Community Devel.) 1 5.125 05/01/2022 41,078
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 MD Community Devel. Administration (Dept. of Hsg. & Community Devel.) 1 5.150 07/01/2028 61,001
- ------------------------------------------------------------------------------------------------------------------------------------
155,000 MD Community Devel. People's Resource Center (Auburn Manor
Apartments) 1 5.300 10/01/2028 158,137
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 MD Community Devel. People's Resource Center (Edgewater Village) 1 5.550 08/01/2014 5,226
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 MD Community Devel. People's Resource Center (Infrastructure
Financing) 1 5.900 06/01/2026 5,058
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 MD Community Devel. People's Resource Center (Residential) 1 5.000 09/01/2012 204,208
- ------------------------------------------------------------------------------------------------------------------------------------
90,000 MD Community Devel. People's Resource Center (Residential) 1 5.150 03/01/2018 91,909
- ------------------------------------------------------------------------------------------------------------------------------------
295,000 MD Community Devel. People's Resource Center (Residential) 1 5.250 09/01/2019 301,531
- ------------------------------------------------------------------------------------------------------------------------------------
270,000 MD Community Devel. People's Resource Center (Residential) 1 5.250 09/01/2029 275,327
- ------------------------------------------------------------------------------------------------------------------------------------
115,000 MD Community Devel. People's Resource Center (Residential) 1 5.300 09/01/2023 117,351
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 MD Community Devel. People's Resource Center (Residential) 1 5.375 09/01/2022 256,055
- ------------------------------------------------------------------------------------------------------------------------------------
90,000 MD Community Devel. People's Resource Center (Residential) 1 5.375 09/01/2024 92,097
- ------------------------------------------------------------------------------------------------------------------------------------
280,000 MD Community Devel. People's Resource Center (Residential) 1 5.450 09/01/2032 287,476
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 MD Community Devel. People's Resource Center (Residential) 1 5.500 09/01/2022 30,962
88 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MARYLAND Continued
$ 250,000 MD Community Devel. People's Resource Center (Waters Landing II
Apartments) 1 5.875% 08/01/2033 $ 261,450
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MD Community Devel. People's Resource Center, Series A 1 5.050 07/01/2047 50,835
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 MD Community Devel. People's Resource Center, Series A 1 5.100 07/01/2023 30,553
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MD Community Devel. People's Resource Center, Series A 1 5.400 07/01/2022 10,321
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 MD Community Devel. People's Resource Center, Series A 1 5.500 07/01/2030 30,582
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 MD Community Devel. People's Resource Center, Series A 1 5.550 07/01/2031 25,810
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 MD Community Devel. People's Resource Center, Series A 1 5.950 07/01/2023 35,637
- ------------------------------------------------------------------------------------------------------------------------------------
70,000 MD Community Devel. People's Resource Center, Series A 1 6.000 07/01/2039 71,563
- ------------------------------------------------------------------------------------------------------------------------------------
175,000 MD Community Devel. People's Resource Center, Series B 1 5.750 07/01/2039 177,968
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 MD Community Devel. People's Resource Center, Series C 1 5.650 07/01/2039 15,340
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MD Community Devel. People's Resource Center, Series C 1 6.150 01/01/2021 10,367
- ------------------------------------------------------------------------------------------------------------------------------------
500,000 MD Community Devel. People's Resource Center, Series D 1 6.250 07/01/2031 518,510
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 MD EDC Student Hsg. (Bowie State University) 1 5.375 06/01/2033 194,510
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MD EDC Student Hsg. (Bowie State University) 1 6.000 06/01/2023 51,433
- ------------------------------------------------------------------------------------------------------------------------------------
650,000 MD EDC Student Hsg. (Collegiate Hsg. Foundation) 1 6.000 06/01/2030 674,629
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 MD Energy Financing Administration Solid Waste Disposal (Wheelabrator
Water) 1 6.450 12/01/2016 25,541
- ------------------------------------------------------------------------------------------------------------------------------------
70,000 MD H&HEFA (Broadmead) 1 5.500 07/01/2017 71,567
- ------------------------------------------------------------------------------------------------------------------------------------
125,000 MD H&HEFA (Edenwald) 1 5.200 01/01/2024 129,400
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MD H&HEFA (Edenwald) 1 5.400 01/01/2031 52,228
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 MD H&HEFA (Edenwald) 1 5.400 01/01/2037 208,212
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 MD H&HEFA (HMH) 1 5.500 01/01/2020 25,551
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 MD H&HEFA (HMH/Fallston General Hospital Obligated Group) 1 5.125 01/01/2033 25,466
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 MD H&HEFA (Johns Hopkins Hospital) 1 5.500 07/01/2026 30,613
- ------------------------------------------------------------------------------------------------------------------------------------
115,000 MD H&HEFA (Johns Hopkins University) 1 5.625 07/01/2027 117,770
- ------------------------------------------------------------------------------------------------------------------------------------
500,000 MD H&HEFA (King Farm Presbyterian Community) 1 5.300 01/01/2037 514,500
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 MD H&HEFA (Loyola College) 1 5.000 10/01/2039 5,118
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 MD H&HEFA (Medstar Health) 1 5.500 08/15/2033 26,642
- ------------------------------------------------------------------------------------------------------------------------------------
110,000 MD H&HEFA (Montgomery General Hospital) 1 5.000 07/01/2023 111,619
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 MD H&HEFA (Montgomery General Hospital) 1 5.625 07/01/2018 45,065
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 MD H&HEFA (Peninsula United Methodist Homes) 1 5.750 10/01/2026 20,323
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MD H&HEFA (Roland Park Place) 1 5.500 07/01/2014 50,102
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MD H&HEFA (Roland Park Place) 1 5.625 07/01/2018 50,054
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 MD H&HEFA (S&EPF/SPHS/SPI/SPPP Obligated Group) 1 5.250 07/01/2035 156,186
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MD H&HEFA (Union Hospital of Cecil County) 1 5.100 07/01/2022 50,847
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 MD H&HEFA (University of Maryland Medical System) 1 5.250 07/01/2034 25,903
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MD H&HEFA (Washington Christian Academy) 1 5.250 07/01/2018 51,087
- ------------------------------------------------------------------------------------------------------------------------------------
300,000 MD H&HEFA (Washington Christian Academy) 1 5.500 07/01/2038 308,988
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 MD Industrial Devel. Financing Authority (Bon Secours Health Systems) 1 5.500 08/15/2020 75,469
- ------------------------------------------------------------------------------------------------------------------------------------
205,000 MD Industrial Devel. Financing Authority (Bon Secours Health Systems) 1 5.500 08/15/2024 206,199
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MD Industrial Devel. Financing Authority (Our Lady of Good Counsel) 1 6.000 05/01/2035 53,754
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 MD Stadium Authority (Ocean City Convention Center) 1 5.125 12/15/2008 150,171
89 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MARYLAND Continued
$ 10,000 MD Stadium Authority (Ocean City Convention Center) 1 5.300% 12/15/2010 $ 10,013
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 MD Stadium Authority (Ocean City Convention Center) 1 5.375 12/15/2012 40,053
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 MD Stadium Authority (Ocean City Convention Center) 1 5.375 12/15/2013 20,027
- ------------------------------------------------------------------------------------------------------------------------------------
55,000 Montgomery County Hsg. Opportunities Commission (Avalon Knoll) 1 6.150 07/01/2026 55,931
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Montgomery County Hsg. Opportunities Commission (MHP Landings Edge) 1 5.050 07/01/2028 50,831
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Montgomery County Hsg. Opportunities Commission (Multifamily Mtg.) 1 6.050 07/01/2026 10,038
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Montgomery County Hsg. Opportunities Commission (Multifamily Mtg.),
Series A 1 6.000 07/01/2020 5,021
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Montgomery County Hsg. Opportunities Commission (Multifamily Mtg.),
Series B 1 5.000 07/01/2023 40,820
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Montgomery County Hsg. Opportunities Commission (Multifamily Mtg.),
Series B 1 6.300 07/01/2016 25,385
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Montgomery County Hsg. Opportunities Commission (Multifamily Mtg.),
Series C 1 7.150 07/01/2023 35,047
- ------------------------------------------------------------------------------------------------------------------------------------
155,000 Montgomery County Hsg. Opportunities Commission (Single Family Mtg.) 1 6.191 3 07/01/2031 34,491
- ------------------------------------------------------------------------------------------------------------------------------------
145,000 Montgomery County Hsg. Opportunities Commission (Single Family Mtg.),
Series A 1 5.509 3 07/01/2028 44,815
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Prince Georges County Hsg. Authority (Langley Gardens Apartments) 1 5.750 08/20/2029 20,665
- ------------------------------------------------------------------------------------------------------------------------------------
70,000 Prince Georges County Hsg. Authority (Langley Gardens Apartments) 1 5.875 02/20/2039 72,330
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Prince Georges County IDA (Hyattsville District Court Facility) 1 5.900 07/01/2007 10,018
- ------------------------------------------------------------------------------------------------------------------------------------
65,000 Prince Georges County Local Government 1 6.050 08/01/2012 65,122
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 Prince Georges County Special District (Victoria Falls) 1 5.250 07/01/2035 254,713
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Prince Georges County Special Obligation (National Harbor) 1 5.200 07/01/2034 51,226
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Prince Georges County Special Obligation (Woodview Village) 1 5.000 07/01/2032 104,691
----------------
10,847,515
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS--65.5%
230,000 Puerto Rico Children's Trust Fund (TASC) 1 5.375 05/15/2033 240,874
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Puerto Rico Children's Trust Fund (TASC) 1 5.500 05/15/2039 36,772
- ------------------------------------------------------------------------------------------------------------------------------------
270,000 Puerto Rico Children's Trust Fund (TASC) 1 5.625 05/15/2043 285,204
- ------------------------------------------------------------------------------------------------------------------------------------
30,000,000 Puerto Rico Children's Trust Fund (TASC) 1 6.342 3 05/15/2050 2,051,100
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Puerto Rico Commonwealth GO 1 5.000 07/01/2035 104,398
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Puerto Rico Electric Power Authority, Series AA 1 5.375 07/01/2027 20,374
- ------------------------------------------------------------------------------------------------------------------------------------
500,000 Puerto Rico HFC, Series B 1 5.300 12/01/2028 516,230
- ------------------------------------------------------------------------------------------------------------------------------------
180,000 Puerto Rico Highway & Transportation Authority 1 5.500 07/01/2036 204,349
- ------------------------------------------------------------------------------------------------------------------------------------
260,000 Puerto Rico Highway & Transportation Authority, Series J 1 5.125 07/01/2043 282,935
- ------------------------------------------------------------------------------------------------------------------------------------
600,000 Puerto Rico Highway & Transportation Authority, Series M 1 5.000 07/01/2046 625,584
- ------------------------------------------------------------------------------------------------------------------------------------
3,000,000 Puerto Rico Highway & Transportation Authority, Series N 4 4.107 5 07/01/2045 3,004,500
- ------------------------------------------------------------------------------------------------------------------------------------
890,000 Puerto Rico IMEPCF (American Airlines) 1 6.450 12/01/2025 908,379
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Puerto Rico ITEMECF (El Nuevo Dia) 1 6.150 12/01/2026 50,061
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Puerto Rico Port Authority (American Airlines), Series A 1 6.250 06/01/2026 50,463
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 Puerto Rico Port Authority (American Airlines), Series A 6.300 06/01/2023 60,029
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 University of Puerto Rico, Series Q 1 5.000 06/01/2030 209,192
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 University of Puerto Rico, Series Q 1 5.000 06/01/2036 260,723
----------------
8,911,167
90 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
VALUE
SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $19,662,542)--145.3% $ 19,758,682
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS--(45.3) (6,162,787)
----------------
NET ASSETS--100.0% $ 13,595,895
================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. All or a portion of the security has been segregated for collateral to cover
borrowings. See Note 6 of accompanying Notes.
2. When-issued security or forward commitment to be delivered and settled after
March 31, 2007. See Note 1 of accompanying Notes.
3. Zero coupon bond reflects effective yield on the date of purchase.
4. Security represents the underlying municipal bond on an inverse floating rate
security. The bond was purchased by the Fund and subsequently segregated and
transferred to a trust. See Note 1 of accompanying Notes.
5. Represents the current interest rate for a variable or increasing rate
security.
TO SIMPLIFY THE LISTINGS OF SECURITIES, ABBREVIATIONS ARE USED PER THE TABLE
BELOW:
EDC Economic Devel. Corp.
GO General Obligation
H&HEFA Hospitals and Higher Education Facilities Authority
HFC Housing Finance Corp.
HMH Hartford Memorial Hospital
IDA Industrial Devel. Agency
IMEPCF Industrial, Medical and Environmental Pollution Control Facilities
ITEMECF Industrial, Tourist, Educational, Medical and Environmental Community
Facilities
MHP Mercy Health Plan
ROLs Residual Option Longs
S&EPF Sheppard & Enoch Pratt Foundation
SPHS Sheppard Pratt Health System
SPI Sheppard Pratt Investments
SPPP Sheppard Pratt Physicians Pennsylvania
TASC Tobacco Settlement Asset-Backed Bonds
YMCA Young Men's Christian Assoc.
DISTRIBUTION OF INVESTMENTS BY INDUSTRY OF ISSUE, AS A PERCENTAGE OF TOTAL
INVESTMENTS AT VALUE, IS AS FOLLOWS:
INDUSTRY MARKET VALUE PERCENT
- ------------------------------------------------------------------------------------------------------------------------------------
Highways/Railways $ 4,122,426 20.9%
Single Family Housing 3,131,088 15.8
Tobacco Settlement Payments 2,613,950 13.2
Multifamily Housing 1,797,142 9.1
Higher Education 1,780,416 9.0
Adult Living Facilities 1,353,872 6.9
Airlines 1,018,871 5.2
Special Assessment 979,009 5.0
Hospital/Health Care 971,809 4.9
Special Tax 459,871 2.3
Education 413,829 2.1
Hotels, Restaurants & Leisure 294,333 1.5
General Obligation 265,053 1.3
Resource Recovery 207,567 1.0
Manufacturing, Durable Goods 164,958 0.8
Not-for-Profit Organization 102,870 0.5
Marine/Aviation Facilities 51,226 0.3
Electric Utilities 20,374 0.1
Municipal Leases 10,018 0.1
--------------------------------
Total $19,758,682 100.0%
================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
91 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS March 31, 2007
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--164.6%
- ------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS--93.0%
$ 10,000 Billerica GO 1 5.500% 10/15/2016 $ 10,115
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Boxford GO 5.650 06/15/2011 201,774
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Chicopee GO 5.700 08/01/2012 101,153
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 MA Convention Center Authority (Boston Common Parking Garage) 1 5.375 09/01/2013 35,045
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MA Devel. Finance Agency (Boston Biomedical Research) 5.650 02/01/2019 10,391
- ------------------------------------------------------------------------------------------------------------------------------------
160,000 MA Devel. Finance Agency (Boston Biomedical Research) 1 5.750 02/01/2029 165,979
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MA Devel. Finance Agency (Boston University) 1 5.375 05/15/2039 56,219
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 MA Devel. Finance Agency (Curry College) 1 5.000 03/01/2035 154,442
- ------------------------------------------------------------------------------------------------------------------------------------
130,000 MA Devel. Finance Agency (Curry College) 1 5.000 03/01/2036 134,245
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 MA Devel. Finance Agency (Emerson College) 1 5.000 01/01/2023 264,315
- ------------------------------------------------------------------------------------------------------------------------------------
240,000 MA Devel. Finance Agency (Evergreen Center) 1 5.500 01/01/2035 246,761
- ------------------------------------------------------------------------------------------------------------------------------------
240,000 MA Devel. Finance Agency (Loomis House/Loomis Communities Obligated
Group) 1 5.750 07/01/2023 247,308
- ------------------------------------------------------------------------------------------------------------------------------------
765,000 MA Devel. Finance Agency (Nichols College) 1 6.000 10/01/2024 796,748
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 MA Devel. Finance Agency (Ogden Haverhill) 1 5.500 12/01/2019 25,917
- ------------------------------------------------------------------------------------------------------------------------------------
320,000 MA Devel. Finance Agency (Pacific Rim Charter Public School) 1 5.125 06/01/2031 336,592
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 MA Devel. Finance Agency (Pharmacy & Allied Health Sciences) 1 5.750 07/01/2033 107,440
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 MA Devel. Finance Agency (Regis College) 1 5.250 10/01/2018 59,668
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 MA Devel. Finance Agency (The Wheeler School) 1 6.250 12/01/2019 21,029
- ------------------------------------------------------------------------------------------------------------------------------------
225,000 MA Devel. Finance Agency (VOA Ayer) 1 6.200 02/20/2046 255,254
- ------------------------------------------------------------------------------------------------------------------------------------
85,000 MA Educational Financing Authority, Issue E 1 5.550 07/01/2009 85,570
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 MA Educational Financing Authority, Issue E 1 5.850 07/01/2014 40,326
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 MA Educational Financing Authority, Issue G 6.000 12/01/2016 207,002
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 MA Educational Financing Authority, Series C 1 5.200 12/01/2016 15,035
- ------------------------------------------------------------------------------------------------------------------------------------
500,000 MA GO 1 5.250 11/01/2026 572,865
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 MA H&EFA (Bentley College) 5.125 07/01/2028 61,436
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 MA H&EFA (Beverly Hospital Corp.) 1 5.250 07/01/2023 40,038
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MA H&EFA (Boston College) 5.250 06/01/2023 10,012
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 MA H&EFA (Boston Medical Center) 1 5.000 07/01/2029 20,439
- ------------------------------------------------------------------------------------------------------------------------------------
55,000 MA H&EFA (Burbank Hospital) 6.125 08/01/2013 55,150
- ------------------------------------------------------------------------------------------------------------------------------------
260,000 MA H&EFA (CC/SEMCB/CH/VRHS/HFH Obligated Group) 1 5.625 07/01/2020 268,575
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 MA H&EFA (CC/SEMCB/CH/VRHS/HFH Obligated Group) 1 5.700 07/01/2015 103,574
- ------------------------------------------------------------------------------------------------------------------------------------
480,000 MA H&EFA (CC/SEMCB/CH/VRHS/HFH Obligated Group) 1 5.750 07/01/2028 497,659
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MA H&EFA (Covenant Health System/St. Joseph Hospital) 1 6.000 07/01/2031 10,811
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MA H&EFA (Hallmark Heath System) 5.000 07/01/2021 10,199
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 MA H&EFA (Harvard Pilgrim Health Care) 5.000 07/01/2028 5,082
- ------------------------------------------------------------------------------------------------------------------------------------
115,000 MA H&EFA (Holyoke Hospital) 1 6.500 07/01/2015 115,043
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 MA H&EFA (Jordan Hospital) 1 5.250 10/01/2023 151,551
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MA H&EFA (Jordan Hospital) 1 5.375 10/01/2028 50,740
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 MA H&EFA (Learning Center for Deaf Children) 1 6.125 07/01/2029 102,225
92 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS Continued
$ 25,000 MA H&EFA (Lowell General Hospital) 1 5.250% 06/01/2016 $ 25,554
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MA H&EFA (N.E. Health) 5.200 08/01/2028 10,300
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 MA H&EFA (New England Medical Center) 1 5.100 07/01/2008 15,016
- ------------------------------------------------------------------------------------------------------------------------------------
135,000 MA H&EFA (New England Medical Center) 1 5.375 07/01/2024 135,140
- ------------------------------------------------------------------------------------------------------------------------------------
65,000 MA H&EFA (North Adams Regional Hospital) 1 6.750 07/01/2009 65,932
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MA H&EFA (Partners Healthcare System) 1 5.125 07/01/2019 10,289
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 MA H&EFA (Partners Healthcare System) 1 5.375 07/01/2017 152,097
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 MA H&EFA (Partners Healthcare System) 5.375 07/01/2024 45,603
- ------------------------------------------------------------------------------------------------------------------------------------
70,000 MA H&EFA (Saint Memorial Medical Center) 6.000 10/01/2023 70,075
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 MA H&EFA (South Shore Hospital) 5.500 07/01/2013 200,256
- ------------------------------------------------------------------------------------------------------------------------------------
495,000 MA H&EFA (South Shore Hospital) 5.500 07/01/2020 500,856
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 MA H&EFA (UMass Memorial Health Care/UMass Memorial Medical Center
Obligated Group) 5.000 07/01/2028 25,580
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 MA H&EFA (VC/TC/FRS/VCS Obligated Group) 1 5.300 11/15/2028 204,310
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 MA HFA 1 5.050 12/01/2007 20,012
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MA HFA 1 5.200 07/01/2018 10,208
- ------------------------------------------------------------------------------------------------------------------------------------
175,000 MA HFA 1 5.550 07/01/2027 177,224
- ------------------------------------------------------------------------------------------------------------------------------------
500,000 MA HFA (Single Family) 1 5.000 12/01/2031 511,085
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 MA HFA (Single Family) 5.300 12/01/2012 30,028
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 MA HFA, Series A 1 5.375 06/01/2016 30,204
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 MA HFA, Series A 1 5.500 07/01/2030 5,065
- ------------------------------------------------------------------------------------------------------------------------------------
300,000 MA HFA, Series A 5.550 07/01/2032 311,454
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 MA HFA, Series A 1 5.800 07/01/2030 104,439
- ------------------------------------------------------------------------------------------------------------------------------------
95,000 MA HFA, Series B 1 5.400 12/01/2028 97,631
- ------------------------------------------------------------------------------------------------------------------------------------
70,000 MA HFA, Series B 5.550 07/01/2040 71,885
- ------------------------------------------------------------------------------------------------------------------------------------
80,000 MA HFA, Series C 5.450 07/01/2018 80,962
- ------------------------------------------------------------------------------------------------------------------------------------
2,000,000 MA HFA, Series D 2 4.850 06/01/2040 2,002,080
- ------------------------------------------------------------------------------------------------------------------------------------
425,000 MA HFA, Series H 1 5.000 12/01/2028 433,683
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 MA HFA, Series H 6.650 07/01/2041 63,932
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MA HFA, Series P 1 5.000 12/01/2023 10,231
- ------------------------------------------------------------------------------------------------------------------------------------
105,000 MA Industrial Finance Agency (Arbors at Taunton) 1 5.500 06/20/2040 109,428
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 MA Industrial Finance Agency (Avon Associates) 5.375 04/01/2020 20,092
- ------------------------------------------------------------------------------------------------------------------------------------
120,000 MA Industrial Finance Agency (Babson College) 1 5.250 10/01/2027 123,152
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 MA Industrial Finance Agency (Babson College) 5.375 10/01/2017 15,389
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 MA Industrial Finance Agency (Cambridge Friends School) 1 5.800 09/01/2028 102,056
- ------------------------------------------------------------------------------------------------------------------------------------
1,200,000 MA Industrial Finance Agency (Concord Academy) 5.500 09/01/2027 1,231,224
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 MA Industrial Finance Agency (Deerfield Academy) 1 5.000 10/01/2023 15,372
- ------------------------------------------------------------------------------------------------------------------------------------
415,000 MA Industrial Finance Agency (General Motors Corp.) 1 5.550 04/01/2009 416,033
- ------------------------------------------------------------------------------------------------------------------------------------
400,000 MA Industrial Finance Agency (Massachusetts American Water Company) 6.900 12/01/2029 405,516
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 MA Industrial Finance Agency (Nantucket Electric Company) 1 5.875 07/01/2017 102,143
93 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS Continued
$ 80,000 MA Industrial Finance Agency (Orchard Cove) 6.450% 05/01/2011 $ 81,749
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 MA Industrial Finance Agency (Orchard Cove) 1 6.550 05/01/2018 40,864
- ------------------------------------------------------------------------------------------------------------------------------------
145,000 MA Industrial Finance Agency (St. John's High School) 1 5.350 06/01/2028 148,271
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 MA Industrial Finance Authority (Babson College) 5.250 10/01/2027 40,916
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 MA Municipal Wholesale Electric Company Water Supply System 1 5.000 07/01/2010 30,759
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 MA Port Authority (Bosfuel Corp.) 5.500 07/01/2012 30,699
- ------------------------------------------------------------------------------------------------------------------------------------
160,000 MA Port Authority (Bosfuel Corp.) 1 5.500 07/01/2018 163,754
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MA Port Authority (Bosfuel Corp.) 5.625 07/01/2021 10,238
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MA Port Authority (Bosfuel Corp.) 1 5.625 07/01/2022 10,238
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 MA Port Authority (Bosfuel Corp.) 1 5.625 07/01/2023 35,832
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 MA Port Authority (Bosfuel Corp.) 1 5.625 07/01/2027 30,713
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 MA Port Authority (Bosfuel Corp.) 5.750 07/01/2039 40,968
- ------------------------------------------------------------------------------------------------------------------------------------
55,000 MA Port Authority (Delta Air Lines) 1 5.000 01/01/2021 56,552
- ------------------------------------------------------------------------------------------------------------------------------------
1,270,000 MA Port Authority (Delta Air Lines) 1 5.000 01/01/2027 1,300,366
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 MA Port Authority (Delta Air Lines) 5.200 01/01/2020 31,232
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 MA Port Authority (US Airways) 5.625 09/01/2011 15,324
- ------------------------------------------------------------------------------------------------------------------------------------
290,000 MA Port Authority (US Airways) 1 5.875 09/01/2023 296,313
- ------------------------------------------------------------------------------------------------------------------------------------
800,000 MA Port Authority, Series B 1 5.375 07/01/2027 809,432
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 MA Port Authority, Series C 5.125 07/01/2020 15,198
- ------------------------------------------------------------------------------------------------------------------------------------
220,000 MA Port Authority, Series E 1 5.000 07/01/2028 221,496
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MA Port Authority, Series E 1 5.000 07/01/2028 50,660
- ------------------------------------------------------------------------------------------------------------------------------------
110,000 MA Port Authority, Series E 5.000 07/01/2028 111,405
- ------------------------------------------------------------------------------------------------------------------------------------
365,000 MA Turnpike Authority, Series A 1 5.000 01/01/2037 371,033
- ------------------------------------------------------------------------------------------------------------------------------------
55,000 MA Turnpike Authority, Series A 1 5.125 01/01/2023 56,150
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 MA Water Pollution Abatement Trust 1 5.125 08/01/2010 5,056
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 MA Water Pollution Abatement Trust 1 5.375 08/01/2027 5,212
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Mansfield GO 1 5.500 08/15/2010 203,338
- ------------------------------------------------------------------------------------------------------------------------------------
300,000 New England Education Loan Marketing Corp. 1 6.900 11/01/2009 315,723
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Quincy (Quincy Hospital) 1 5.500 01/15/2013 50,064
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Taunton GO 5.000 02/01/2016 102,117
- ------------------------------------------------------------------------------------------------------------------------------------
125,000 Worcester GO 5.700 08/01/2013 126,394
----------------
18,423,329
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS--71.6%
110,000 Puerto Rico Aqueduct & Sewer Authority 1 5.000 07/01/2019 112,178
- ------------------------------------------------------------------------------------------------------------------------------------
1,550,000 Puerto Rico Children's Trust Fund (TASC) 1 5.500 05/15/2039 1,628,477
- ------------------------------------------------------------------------------------------------------------------------------------
430,000 Puerto Rico Children's Trust Fund (TASC) 1 5.625 05/15/2043 454,213
- ------------------------------------------------------------------------------------------------------------------------------------
24,800,000 Puerto Rico Children's Trust Fund (TASC) 1 6.418 3 05/15/2050 1,695,576
- ------------------------------------------------------------------------------------------------------------------------------------
400,000 Puerto Rico Commonwealth GO 5.250 07/01/2032 428,572
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Puerto Rico Electric Power Authority, Series NN 1 5.125 07/01/2029 209,116
- ------------------------------------------------------------------------------------------------------------------------------------
450,000 Puerto Rico HFC, Series B 1 5.300 12/01/2028 464,607
94 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS Continued
$ 100,000 Puerto Rico Highway & Transportation Authority, Series AA 1 5.000% 07/01/2035 $ 103,159
- ------------------------------------------------------------------------------------------------------------------------------------
65,000 Puerto Rico Highway & Transportation Authority, Series J 1 5.125 07/01/2043 70,734
- ------------------------------------------------------------------------------------------------------------------------------------
255,000 Puerto Rico Highway & Transportation Authority, Series K 1 5.000 07/01/2040 277,335
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Puerto Rico Highway & Transportation Authority, Series M 5.000 07/01/2046 104,264
- ------------------------------------------------------------------------------------------------------------------------------------
5,400,000 Puerto Rico Highway & Transportation Authority, Series N 4 4.107 5 07/01/2045 5,408,100
- ------------------------------------------------------------------------------------------------------------------------------------
210,000 Puerto Rico IMEPCF (American Airlines) 1 6.450 12/01/2025 214,337
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Puerto Rico Infrastructure 5.000 07/01/2046 103,927
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 Puerto Rico ITEMECF (Hospital Auxilio Mutuo) 1 5.500 07/01/2026 76,422
- ------------------------------------------------------------------------------------------------------------------------------------
1,240,000 Puerto Rico Port Authority (American Airlines), Series A 6.250 06/01/2026 1,251,470
- ------------------------------------------------------------------------------------------------------------------------------------
425,000 Puerto Rico Port Authority (American Airlines), Series A 6.300 06/01/2023 425,264
- ------------------------------------------------------------------------------------------------------------------------------------
1,000,000 University of Puerto Rico, Series Q 5.000 06/01/2036 1,042,890
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 V.I. Public Finance Authority (Hovensa Refinery) 6.125 07/01/2022 55,181
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 V.I. Tobacco Settlement Financing Corp. (TASC) 1 5.000 05/15/2021 35,544
----------------
14,161,366
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $32,387,708)--164.6% 32,584,695
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS--(64.6) (12,782,491)
----------------
NET ASSETS--100.0% $ 19,802,204
================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. All or a portion of the security has been segregated for collateral to cover
borrowings. See Note 6 of accompanying Notes.
2. When-issued security or forward commitment to be delivered and settled after
March 31, 2007. See Note 1 of accompanying Notes.
3. Zero coupon bond reflects effective yield on the date of purchase.
4. Security represents the underlying municipal bond on an inverse floating rate
security. The bond was purchased by the Fund and subsequently segregated and
transferred to a trust. See Note 1 of accompanying Notes.
5. Represents the current interest rate for a variable or increasing rate
security.
TO SIMPLIFY THE LISTINGS OF SECURITIES, ABBREVIATIONS ARE USED PER THE TABLE
BELOW:
CC Caritas Christi
CH Carney Hospital
FRS Family Rehabilitation Services (Hancock Manor)
GO General Obligation
H&EFA Health and Educational Facilities Authority
HFA Housing Finance Authority
HFC Housing Finance Corp.
HFH Holy Family Hospital
IMEPCF Industrial, Medical and Environmental Pollution Control Facilities
ITEMECF Industrial, Tourist, Educational, Medical and Environmental Community
Facilities
ROLs Residual Option Longs
SEMCB St. Elizabeth's Medical Center of Boston
TASC Tobacco Settlement Asset-Backed Bonds
TC Travis Corp. (People Care)
V.I. United States Virgin Islands
VC VinFen Corp
VCS VinFen Clinical Services
VRHS Valley Regional Health System
95 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
DISTRIBUTION OF INVESTMENTS BY INDUSTRY OF ISSUE, AS A PERCENTAGE OF TOTAL
INVESTMENTS AT VALUE, IS AS FOLLOWS:
INDUSTRY MARKET VALUE PERCENT
- ------------------------------------------------------------------------------------------------------------------------------------
Highways/Railways $ 6,390,775 19.6%
Higher Education 4,413,819 13.5
Tobacco Settlement Payments 3,813,810 11.7
Airlines 3,590,858 11.0
Hospital/Health Care 3,204,527 9.8
Single Family Housing 3,142,482 9.6
General Obligation 1,746,328 5.4
Marine/Aviation Facilities 1,530,633 4.7
Multifamily Housing 1,282,248 3.9
Education 623,320 1.9
Not-for-Profit Organization 525,356 1.6
Water Utilities 522,750 1.6
Adult Living Facilities 446,431 1.4
Manufacturing, Durable Goods 416,033 1.3
Student Loans 347,933 1.1
Electric Utilities 342,018 1.1
Special Tax 103,927 0.3
Pollution Control 60,393 0.2
Parking Fee Revenue 55,137 0.2
Resource Recovery 25,917 0.1
------------------------------------
Total $ 32,584,695 100.0%
====================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
96 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS March 31, 2007
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--147.6%
- ------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN--97.3%
$ 15,000 Anchor Bay School District 1 5.000% 05/01/2030 $ 15,663
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Barry County Building Authority (Medical Care Facility) 6.000 07/01/2016 15,580
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Belleville GO 1 5.400 11/01/2012 15,388
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Benton Harbor Charter COP 8.000 05/01/2032 19,901
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Birch Run Township 1 7.100 05/01/2009 5,014
- ------------------------------------------------------------------------------------------------------------------------------------
85,000 Brandon School District 1 5.000 05/01/2026 85,919
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Byron Center Public Schools 5.000 05/01/2024 25,286
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Calhoun County (Water Supply System) 1 5.750 05/01/2019 15,323
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Center Academy COP 1 7.500 10/01/2029 15,000
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Chelsea EDC (United Methodist Retirement Communities) 1 5.400 11/15/2027 100,965
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Chippewa Valley Schools (School Building & Site) 1 5.000 05/01/2026 10,502
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Clare County Sewer Disposal System 1 5.750 11/01/2019 20,624
- ------------------------------------------------------------------------------------------------------------------------------------
80,000 Clawson City School District 1 5.000 05/01/2024 80,916
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 Coldwater Community Schools 5.125 05/01/2023 30,036
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Coldwater Community Schools 5.125 05/01/2023 20,020
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Concord Academy Boyne COP 7.000 10/01/2019 34,616
- ------------------------------------------------------------------------------------------------------------------------------------
65,000 Concord Academy Petoskey COP 1 8.375 12/01/2030 69,141
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 Dearborn EDC (Oakwood Obligated Group) 1 5.250 08/15/2014 45,049
- ------------------------------------------------------------------------------------------------------------------------------------
120,000 Dearborn EDC (Oakwood Obligated Group) 5.250 08/15/2021 120,114
- ------------------------------------------------------------------------------------------------------------------------------------
65,000 Dearborn EDC (OHC/UC Obligated Group) 1 5.875 11/15/2025 65,749
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 Detroit City School District 1 5.000 05/01/2028 155,931
- ------------------------------------------------------------------------------------------------------------------------------------
1,000,000 Detroit GO 2 5.000 04/01/2025 1,057,540
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Detroit GO 1 5.500 04/01/2014 15,171
- ------------------------------------------------------------------------------------------------------------------------------------
195,000 Detroit Local Devel. Finance Authority 1 5.500 05/01/2021 197,053
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Detroit Local Devel. Finance Authority 1 5.500 05/01/2021 51,509
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Detroit Local Devel. Finance Authority (Chrysler Corp.) 5.375 05/01/2018 40,623
- ------------------------------------------------------------------------------------------------------------------------------------
90,000 Detroit Local Devel. Finance Authority (Chrysler Corp.) 5.375 05/01/2021 91,386
- ------------------------------------------------------------------------------------------------------------------------------------
500,000 Detroit Sewer Disposal System 4.191 3 07/01/2032 500,800
- ------------------------------------------------------------------------------------------------------------------------------------
2,000,000 Detroit Sewer Disposal System 2 4.191 3 07/01/2032 2,003,200
- ------------------------------------------------------------------------------------------------------------------------------------
430,000 Detroit Water Supply System, Series A 5.000 07/01/2027 435,315
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 Detroit Wayne County Stadium Authority 5.250 02/01/2027 153,149
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 Devon Trace Hsg. Corp. 1 7.375 08/01/2023 45,573
- ------------------------------------------------------------------------------------------------------------------------------------
175,000 Farmington Hills EDC (Botsford General Hospital) 1 5.750 02/15/2025 175,256
- ------------------------------------------------------------------------------------------------------------------------------------
80,000 Ferris State University 5.000 10/01/2028 80,802
- ------------------------------------------------------------------------------------------------------------------------------------
80,000 Flint Hospital Building Authority (Hurley Medical Center) 5.250 07/01/2016 81,513
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Flint Hospital Building Authority (Hurley Medical Center) 1 5.375 07/01/2018 100,331
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 Flint Hospital Building Authority (Hurley Medical Center) 1 5.375 07/01/2028 60,131
- ------------------------------------------------------------------------------------------------------------------------------------
180,000 Flint Hospital Building Authority (Hurley Medical Center) 1 5.375 07/01/2028 183,587
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Garden City Hospital Finance Authority (Garden City Hospital
Osteopathic Group) 1 5.750 09/01/2017 25,315
97 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN Continued
$ 110,000 George Washington Carver Public School Academy COP 1 8.000% 09/01/2017 $ 113,974
- ------------------------------------------------------------------------------------------------------------------------------------
450,000 George Washington Carver Public School Academy COP 1 8.125 09/01/2030 465,188
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Grand Rapids & Kent County Joint Building Authority 1 5.000 01/01/2012 15,014
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Grand Rapids Community College 5.000 05/01/2022 25,286
- ------------------------------------------------------------------------------------------------------------------------------------
425,000 Grand Rapids Downtown Devel. Authority 6.600 06/01/2008 430,721
- ------------------------------------------------------------------------------------------------------------------------------------
780,000 Grand Rapids Downtown Devel. Authority 1 6.875 06/01/2024 809,858
- ------------------------------------------------------------------------------------------------------------------------------------
140,000 Gratiot County EDC (Michigan Masonic Home) 1 5.000 11/15/2020 140,123
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Hamburg Township Wastewater Treatment Plant 5.500 07/01/2016 10,175
- ------------------------------------------------------------------------------------------------------------------------------------
255,000 Highland Park Building Authority 7.750 05/01/2018 289,626
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Hillsdale Hospital Finance Authority (Community Health Center) 5.250 05/15/2026 40,788
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Holt Public Schools 1 5.125 05/01/2021 40,048
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Holt Public Schools 1 5.250 05/01/2016 40,053
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Howell Public Schools (School Building & Site) 1 5.000 05/01/2029 5,275
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Jackson County Hospital Finance Authority (W.A. Foote Memorial
Hospital) 5.250 06/01/2017 5,110
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 John Tolfree Health System Corp. 1 5.850 09/15/2013 30,885
- ------------------------------------------------------------------------------------------------------------------------------------
260,000 John Tolfree Health System Corp. 1 6.000 09/15/2023 266,955
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Kent County Airport Facility (Kent County International Airport) 1 5.000 01/01/2028 50,708
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 Lincoln Park School District 1 5.000 05/01/2020 30,031
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Lincoln Park School District 5.000 05/01/2026 25,270
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Mackinac Island Sanitary Sewer Disposal & Water Supply System 5.000 03/01/2028 204,938
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Macomb County Hospital Finance Authority (Mt. Clemens General
Hospital) 1 5.875 11/15/2034 10,615
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Melvindale Water Supply & Sewer 1 5.700 06/01/2016 35,411
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Meridian EDC (Burcham Hills Retirement Center II) 7.750 07/01/2019 51,081
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 MI Higher Education Facilities Authority (Calvin College) 5.350 06/01/2013 20,492
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 MI Higher Education Facilities Authority (Calvin College) 5.550 06/01/2017 15,379
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 MI Higher Education Student Loan Authority 1 5.000 03/01/2031 207,290
- ------------------------------------------------------------------------------------------------------------------------------------
55,000 MI Higher Education Student Loan Authority 1 5.400 06/01/2018 56,219
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 MI Higher Education Student Loan Authority 1 5.750 06/01/2013 20,244
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MI Hospital Finance Authority (Central Michigan Community Hospital) 1 6.250 10/01/2027 10,201
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 MI Hospital Finance Authority (Chelsea Community Hospital) 1 5.375 05/15/2019 15,254
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 MI Hospital Finance Authority (Crittenton Hospital Medical Center) 1 5.625 03/01/2027 64,141
- ------------------------------------------------------------------------------------------------------------------------------------
350,000 MI Hospital Finance Authority (Detroit Medical Center Obligated Group) 5.250 08/15/2023 357,413
- ------------------------------------------------------------------------------------------------------------------------------------
630,000 MI Hospital Finance Authority (Detroit Medical Group) 5.250 08/15/2027 645,120
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 MI Hospital Finance Authority (Henry Ford Health System) 1 5.250 11/15/2046 158,474
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MI Hospital Finance Authority (Holland Community Hospital) 5.600 01/01/2021 10,212
- ------------------------------------------------------------------------------------------------------------------------------------
120,000 MI Hospital Finance Authority (McLaren Health Care Corp.) 1 5.000 06/01/2028 121,952
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 MI Hospital Finance Authority (McLaren Health Care Corp.) 5.000 06/01/2028 15,297
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 MI Hospital Finance Authority (Mercy Health Services) 1 5.250 08/15/2027 5,075
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 MI Hospital Finance Authority (Oakwood Obligated Group) 5.000 08/15/2026 20,429
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MI Hospital Finance Authority (OHC/OUH Obligated Group) 1 5.000 08/15/2031 10,180
- ------------------------------------------------------------------------------------------------------------------------------------
55,000 MI Hospital Finance Authority (OHC/OUH Obligated Group) 1 5.125 08/15/2025 56,286
98 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN Continued
$ 75,000 MI Hospital Finance Authority (Pontiac Osteopathic Hospital) 1 6.000% 02/01/2024 $ 75,038
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 MI Hospital Finance Authority (Port Huron Hospital/Marwood
Manor Nursing Home) 1 5.500 07/01/2015 20,073
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MI Hospital Finance Authority (Sinai-Grace Hospital) 1 6.625 01/01/2016 10,106
- ------------------------------------------------------------------------------------------------------------------------------------
125,000 MI Hospital Finance Authority (Sinai-Grace Hospital) 1 6.700 01/01/2026 126,330
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 MI Hospital Finance Authority (St. John Health System) 5.000 05/15/2028 35,753
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 MI Hospital Finance Authority (St. John Medical Center) 1 5.250 05/15/2026 5,077
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 MI Hsg. Devel. Authority (BGC-II Nonprofit Hsg. Corp.) 1 5.500 01/15/2018 45,041
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 MI Hsg. Devel. Authority (Breton Village Green) 1 5.625 10/15/2018 15,017
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MI Hsg. Devel. Authority (Charter Square) 1 5.500 01/15/2021 50,042
- ------------------------------------------------------------------------------------------------------------------------------------
110,000 MI Hsg. Devel. Authority (Rental Hsg.) 1 6.100 10/01/2033 112,373
- ------------------------------------------------------------------------------------------------------------------------------------
140,000 MI Hsg. Devel. Authority (Section 8 Assisted Mtg.) 1 7.911 4 04/01/2014 78,968
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 MI Hsg. Devel. Authority, Series D 1 5.200 10/01/2042 257,725
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MI Job Devel. Authority Pollution Control (General Motors Corp.) 1 5.550 04/01/2009 50,050
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MI Municipal Bond Authority 1 4.750 12/01/2009 10,009
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 MI Municipal Bond Authority 1 5.000 11/01/2009 5,005
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MI Municipal Bond Authority 5.375 11/01/2017 10,096
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 MI Municipal Bond Authority 1 5.500 11/01/2027 150,167
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MI Municipal Bond Authority 1 5.650 05/01/2011 10,016
- ------------------------------------------------------------------------------------------------------------------------------------
80,000 MI Municipal Bond Authority 1 6.000 12/01/2013 81,139
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MI Municipal Bond Authority 1 6.100 05/01/2011 10,018
- ------------------------------------------------------------------------------------------------------------------------------------
165,000 MI Municipal Bond Authority 1 6.125 12/01/2018 167,492
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 MI Municipal Bond Authority 1 7.250 11/01/2010 25,072
- ------------------------------------------------------------------------------------------------------------------------------------
400,000 MI Public Educational Facilities Authority (Black River School) 1 5.800 09/01/2030 411,820
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 MI Public Educational Facilities Authority (Old Redford Academy) 1 6.000 12/01/2035 210,394
- ------------------------------------------------------------------------------------------------------------------------------------
565,000 MI Strategic Fund (Clark Retirement Community/Clark Retirement
Community Foundation Obligated Group) 5.300 06/01/2024 585,419
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 MI Strategic Fund Limited Obligation (Clark Retirement Community/Clark
Retirement Community Foundation Obligated Group) 5.650 09/01/2029 26,361
- ------------------------------------------------------------------------------------------------------------------------------------
180,000 MI Strategic Fund Limited Obligation (Detroit Edison Company) 1 5.450 09/01/2029 188,156
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 MI Strategic Fund Limited Obligation (Detroit Edison Company) 1 5.550 09/01/2029 47,255
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 MI Strategic Fund Limited Obligation (Detroit Edison Company) 1 5.650 09/01/2029 210,886
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MI Strategic Fund Limited Obligation (Dow Chemical Company) 1 5.500 12/01/2028 53,540
- ------------------------------------------------------------------------------------------------------------------------------------
105,000 MI Strategic Fund Limited Obligation (Ford Motor Company), Series A 1 6.550 10/01/2022 106,794
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MI Strategic Fund Limited Obligation (Imperial Holly Corp.) 6.250 11/01/2015 46,360
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 MI Strategic Fund Pollution Control (General Motors Corp.) 6.200 09/01/2020 101,140
- ------------------------------------------------------------------------------------------------------------------------------------
740,000 MI Strategic Fund Pollution Control (General Motors Corp.) 1 7.000 3 04/01/2008 740,000
- ------------------------------------------------------------------------------------------------------------------------------------
225,000 MI Strategic Fund Solid Waste (S.D. Warren & Company) 1 7.375 01/15/2022 228,863
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 MI Trunk Line Dept. of Treasury 5.000 11/01/2026 51,252
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Monroe County Water Supply 1 5.000 05/01/2025 20,627
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Muskegon County Building Authority 5.500 07/01/2007 20,025
99 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN Continued
$ 75,000 Northern MI University 1 5.000% 12/01/2025 $ 76,453
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Northern MI University 1 5.125 12/01/2020 15,332
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Northview Public Schools District 1 5.000 05/01/2018 10,134
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 Oakland County (John E. Olsen Drain District) 1 5.900 05/01/2014 75,107
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Oxford Area Community School District 1 5.000 05/01/2031 10,559
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Oxford Water 1 5.900 07/01/2017 25,347
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Pansophia Academy COP 7.000 06/01/2029 10,002
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Plymouth Educational Center Charter School (Public School Academy) 1 5.375 11/01/2030 51,735
- ------------------------------------------------------------------------------------------------------------------------------------
175,000 Plymouth Educational Center Charter School (Public School Academy) 1 5.625 11/01/2035 183,673
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Pontiac Sewer Disposal 1 5.750 01/01/2020 105,135
- ------------------------------------------------------------------------------------------------------------------------------------
630,000 Pontiac Tax Increment Finance Authority 1 6.250 06/01/2022 674,617
- ------------------------------------------------------------------------------------------------------------------------------------
205,000 Pontiac Tax Increment Finance Authority 1 6.375 06/01/2031 219,660
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Portage GO 1 5.600 12/01/2014 25,200
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Reeths-Puffer Schools 1 5.000 05/01/2025 15,017
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Reeths-Puffer Schools 5.000 05/01/2027 5,305
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Reeths-Puffer Schools 5.000 05/01/2027 5,305
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Saginaw County (Williamson Acres Drain) 1 5.000 06/01/2018 15,167
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Scio Township Building Authority 1 5.650 05/01/2017 25,275
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Shiawasse County (Spaulding Drain District) 1 5.000 06/01/2016 15,034
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Southfield EDC (Lawrence Technological University) 5.400 02/01/2018 15,262
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 St. Joseph School District 1 5.000 05/01/2026 15,530
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 Troy GO 5.250 05/01/2011 75,469
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Washtenaw County (Northfield Township Wastewater System) 1 5.250 05/01/2017 25,281
- ------------------------------------------------------------------------------------------------------------------------------------
120,000 Wayland Union School District 1 5.125 05/01/2024 120,145
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Wayne Charter County Airport (Detroit Metropolitan Wayne County) 5.000 12/01/2019 25,574
- ------------------------------------------------------------------------------------------------------------------------------------
395,000 Wayne Charter County Airport (Detroit Metropolitan Wayne County) 1 5.000 12/01/2022 403,868
- ------------------------------------------------------------------------------------------------------------------------------------
992,000 Wayne Charter County Airport (Detroit Metropolitan Wayne County) 1 5.000 12/01/2028 1,010,818
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Wayne County Building Authority 1 5.250 06/01/2016 35,622
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Wayne State University 1 5.650 11/15/2015 20,031
- ------------------------------------------------------------------------------------------------------------------------------------
125,000 Wayne State University 1 5.650 11/15/2015 125,194
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 West Ottawa Public School District 1 5.600 05/01/2021 5,008
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 West Ottawa Public School District 5.600 05/01/2026 20,029
- ------------------------------------------------------------------------------------------------------------------------------------
110,000 Western MI University 1 5.125 11/15/2022 110,846
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 Wyandotte Electric 5.375 10/01/2017 258,470
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Zeeland Public Schools 1 5.250 05/01/2024 10,013
----------------
19,452,498
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS--50.3%
30,000 Guam Government Waterworks Authority & Wastewater System 6.000 07/01/2025 32,909
- ------------------------------------------------------------------------------------------------------------------------------------
115,000 Puerto Rico Aqueduct & Sewer Authority 1 5.000 07/01/2019 117,277
- ------------------------------------------------------------------------------------------------------------------------------------
350,000 Puerto Rico Children's Trust Fund (TASC) 5.375 05/15/2033 366,548
100 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN Continued
$ 200,000 Puerto Rico Children's Trust Fund (TASC) 1 5.500% 05/15/2039 $ 210,126
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Puerto Rico Children's Trust Fund (TASC) 1 5.625 05/15/2043 52,816
- ------------------------------------------------------------------------------------------------------------------------------------
41,500,000 Puerto Rico Children's Trust Fund (TASC) 6.403 4 05/15/2050 2,837,355
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Puerto Rico Commonwealth GO 5.000 07/01/2035 104,398
- ------------------------------------------------------------------------------------------------------------------------------------
700,000 Puerto Rico HFC, Series B 1 5.300 12/01/2028 722,722
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Puerto Rico Highway & Transportation Authority 1 5.000 07/01/2028 5,169
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Puerto Rico Highway & Transportation Authority 1 5.000 07/01/2036 219,300
- ------------------------------------------------------------------------------------------------------------------------------------
110,000 Puerto Rico Highway & Transportation Authority, Series G 5.000 07/01/2042 118,007
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 Puerto Rico Highway & Transportation Authority, Series G 5.000 07/01/2042 61,829
- ------------------------------------------------------------------------------------------------------------------------------------
70,000 Puerto Rico Highway & Transportation Authority, Series J 1 5.125 07/01/2043 76,175
- ------------------------------------------------------------------------------------------------------------------------------------
80,000 Puerto Rico Highway & Transportation Authority, Series K 1 5.000 07/01/2040 87,007
- ------------------------------------------------------------------------------------------------------------------------------------
1,100,000 Puerto Rico Highway & Transportation Authority, Series M 5.000 07/01/2046 1,146,904
- ------------------------------------------------------------------------------------------------------------------------------------
2,000,000 Puerto Rico Highway & Transportation Authority, Series N 2 4.107 3 07/01/2045 2,003,000
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Puerto Rico IMEPCF (American Airlines) 1 6.450 12/01/2025 15,310
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Puerto Rico Infrastructure 1 5.000 07/01/2041 25,948
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 Puerto Rico ITEMECF (Ana G. Mendez University) 1 5.375 02/01/2019 61,682
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Puerto Rico ITEMECF (Ana G. Mendez University) 1 5.500 12/01/2031 21,087
- ------------------------------------------------------------------------------------------------------------------------------------
135,000 Puerto Rico ITEMECF (Mennonite General Hospital) 6.500 07/01/2012 135,884
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Puerto Rico ITEMECF (Mennonite General Hospital) 6.500 07/01/2026 25,059
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 Puerto Rico ITEMECF (San Lucas & Cristo Redentor Hospitals) 1 5.750 06/01/2029 73,069
- ------------------------------------------------------------------------------------------------------------------------------------
125,000 Puerto Rico Municipal Finance Agency, Series A 1 5.250 08/01/2023 133,826
- ------------------------------------------------------------------------------------------------------------------------------------
520,000 Puerto Rico Port Authority (American Airlines), Series A 1 6.250 06/01/2026 524,810
- ------------------------------------------------------------------------------------------------------------------------------------
195,000 Puerto Rico Port Authority (American Airlines), Series A 6.300 06/01/2023 195,121
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 Puerto Rico Public Buildings Authority 1 5.000 07/01/2036 155,291
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Puerto Rico Public Buildings Authority, Series D 1 5.125 07/01/2024 41,639
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 University of Puerto Rico 5.000 06/01/2026 262,263
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 University of Puerto Rico, Series Q 5.000 06/01/2036 208,568
----------------
10,041,099
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $29,125,173)--147.6% 29,493,597
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS--(47.6) (9,509,056)
----------------
NET ASSETS--100.0% $ 19,984,541
================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. All or a portion of the security has been segregated for collateral to cover
borrowings. See Note 6 of accompanying Notes.
2. Security represents the underlying municipal bond on an inverse floating rate
security. The bond was purchased by the Fund and subsequently segregated and
transferred to a trust. See Note 1 of accompanying Notes.
3. Represents the current interest rate for a variable or increasing rate
security.
4. Zero coupon bond reflects effective yield on the date of purchase.
101 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
TO SIMPLIFY THE LISTINGS OF SECURITIES, ABBREVIATIONS ARE USED PER THE TABLE
BELOW:
COP Certificates of Participation
EDC Economic Devel. Corp.
GO General Obligation
HFC Housing Finance Corp.
IMEPCF Industrial, Medical and Environmental Pollution Control Facilities
ITEMECF Industrial, Tourist, Educational, Medical and Environmental Community
Facilities
OHC Oakwood Hospital Corp.
OUH Oakwood United Hospitals
ROLs Residual Option Longs
TASC Tobacco Settlement Asset-Backed Bonds
UC United Care
DISTRIBUTION OF INVESTMENTS BY INDUSTRY OF ISSUE, AS A PERCENTAGE OF TOTAL
INVESTMENTS AT VALUE, IS AS FOLLOWS:
INDUSTRY MARKET VALUE PERCENT
- -----------------------------------------------------------------------------------------------------------
Highways/Railways $ 3,717,391 12.6%
Tobacco Settlement Payments 3,466,845 11.8
Hospital/Health Care 3,363,524 11.4
Sewer Utilities 2,960,427 10.0
Special Tax 2,281,092 7.7
General Obligation 2,098,780 7.1
Education 1,994,270 6.8
Marine/Aviation Facilities 1,510,993 5.1
Higher Education 1,058,677 3.6
Manufacturing, Durable Goods 997,984 3.4
Municipal Leases 745,874 2.5
Adult Living Facilities 737,465 2.5
Airlines 735,241 2.5
Electric Utilities 731,128 2.5
Single Family Housing 722,722 2.4
Water Utilities 682,209 2.3
Multifamily Housing 559,698 1.9
Student Loans 283,753 1.0
Special Assessment 260,283 0.9
Paper, Containers & Packaging 228,863 0.8
Sales Tax Revenue 211,437 0.7
Manufacturing, Non-Durable Goods 99,900 0.3
Not-for-Profit Organization 45,041 0.2
---------------------------------
Total $ 29,493,597 100.0%
=================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
102 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS March 31, 2007
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--123.7%
- ------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA--118.6%
$ 50,000 Alexandria Health Care Facilities (Board of Social Ministry) 6.000% 07/01/2032 $ 50,878
- ------------------------------------------------------------------------------------------------------------------------------------
400,000 Anoka County (Airport Improvement) 1 5.000 02/01/2033 414,932
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Apple Valley EDA (Evercare Senior Living) 6.000 12/01/2025 25,357
- ------------------------------------------------------------------------------------------------------------------------------------
70,000 Brainerd Health Care Facilities (Benedictine Health System) 6.000 02/15/2020 70,122
- ------------------------------------------------------------------------------------------------------------------------------------
275,000 Carver County Hsg. & Redevel. Authority (Lake Grace) 1 5.300 02/01/2012 275,355
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Coon Rapids Hsg. (Pine Point Apartments) 6.125 05/01/2032 5,115
- ------------------------------------------------------------------------------------------------------------------------------------
400,000 Cottage Grove Senior Hsg. 1 6.000 12/01/2046 407,084
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 Cuyuna Range Hospital District Health Facilities 1 5.500 06/01/2035 259,943
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Douglas County Alexandria Hsg. & Redevel. Authority (Windmill Ponds) 5.000 2 07/01/2015 5,000
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 Duluth EDA (Benedictine Health System) 5.250 02/15/2033 78,268
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Duluth EDA (Benedictine Health System/St. Mary's Duluth Clinic) 5.250 02/15/2028 10,463
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Eden Prairie Multifamily Hsg. (Parkway Apartments) 1 5.700 08/20/2022 36,430
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Glencoe GO 5.500 12/01/2014 5,011
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Hastings Health Care Facility (Regina Medical Center) 1 5.300 09/15/2028 50,635
- ------------------------------------------------------------------------------------------------------------------------------------
90,000 Hayfield GO 1 5.000 02/01/2018 90,783
- ------------------------------------------------------------------------------------------------------------------------------------
110,000 International Falls Pollution Control (Boise Cascade Corp.) 1 5.500 04/01/2023 112,589
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 International Falls Pollution Control (Boise Cascade Corp.) 1 5.650 12/01/2022 76,648
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 International Falls Solid Waste Disposal (Boise Cascade Corp.) 6.850 12/01/2029 21,406
- ------------------------------------------------------------------------------------------------------------------------------------
230,000 Mahtomedi Multifamily (Briarcliff) 1 7.350 06/01/2036 234,963
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Maple Grove GO 5.000 02/01/2019 5,052
- ------------------------------------------------------------------------------------------------------------------------------------
230,000 McLeod County Commercial Devel. (Southwest Minnesota Foundation) 1 5.125 12/01/2031 234,336
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Metropolitan Council (Metropolitan Radio Board) 1 5.500 02/01/2015 200,148
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Minneapolis & St. Paul Hsg. & Redevel. Authority (Healthspan Health
System) 5.000 11/15/2013 35,245
- ------------------------------------------------------------------------------------------------------------------------------------
199,150 Minneapolis & St. Paul Hsg. Finance Board (Single Family Mtg.) 1 5.000 12/01/2038 202,769
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Minneapolis & St. Paul Metropolitan Airports Commission 1 5.000 01/01/2016 5,084
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Minneapolis & St. Paul Metropolitan Airports Commission 5.000 01/01/2030 5,100
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 Minneapolis & St. Paul Metropolitan Airports Commission 1 5.250 01/01/2022 61,787
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Minneapolis & St. Paul Metropolitan Airports Commission (Northwest
Airlines) 5.200 01/01/2024 25,536
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Minneapolis & St. Paul Metropolitan Airports Commission, Series A 5.000 01/01/2019 5,100
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Minneapolis & St. Paul Metropolitan Airports Commission, Series A 5.250 01/01/2014 10,190
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Minneapolis Community Devel. Agency 1 5.875 06/01/2019 15,733
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Minneapolis Community Devel. Agency (Riverside Homes of Minneapolis) 1 6.200 09/01/2029 26,083
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Minneapolis Multifamily (Riverside Plaza) 5.100 12/20/2018 10,109
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Minneapolis Multifamily (Riverside Plaza) 5.200 12/20/2030 50,462
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 Minneapolis Tax Increment (St. Anthony Falls) 1 5.750 02/01/2027 258,315
- ------------------------------------------------------------------------------------------------------------------------------------
295,000 MN (Duluth Airport) 1 6.250 08/01/2014 301,410
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 MN Agricultural & Economic Devel. Board 1 7.250 08/01/2020 209,378
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 MN HEFA (College of St. Benedict) 1 5.350 03/01/2020 20,161
103 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA Continued
$ 5,000 MN HEFA (Saint Olaf College) 1 5.250% 04/01/2029 $ 5,025
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MN HFA (Rental Hsg.) 5.875 08/01/2028 10,179
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 MN HFA (Residential Hsg.) 1 4.800 07/01/2038 200,090
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 MN HFA (Residential Hsg.) 1 5.100 07/01/2031 257,363
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 MN HFA (Single Family Mtg.) 1 5.150 07/01/2019 30,921
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MN HFA (Single Family Mtg.) 5.200 07/01/2013 10,208
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 MN HFA (Single Family Mtg.) 5.600 07/01/2022 40,762
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 MN HFA (Single Family Mtg.) 1 5.650 07/01/2031 15,296
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MN HFA (Single Family Mtg.) 5.850 07/01/2011 10,072
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 MN HFA (Single Family Mtg.) 5.875 01/01/2017 15,344
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 MN HFA (Single Family Mtg.) 1 5.900 07/01/2025 10,152
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 MN HFA (Single Family Mtg.) 1 6.100 07/01/2030 15,531
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 MN HFA (Single Family Mtg.), Series D-2 5.950 01/01/2017 5,038
- ------------------------------------------------------------------------------------------------------------------------------------
110,000 MN HFA, Series A-1 5.100 08/01/2047 112,632
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 MN Hsg. Facilities (Madison Ave. Apartments) 5.750 04/01/2019 4,777
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 MN Municipal Power Agency 1 5.000 10/01/2035 103,822
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Moorhead EDA (Eventide) 1 5.150 06/01/2029 200,938
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Moorhead Public Utility 1 5.100 11/01/2017 20,023
- ------------------------------------------------------------------------------------------------------------------------------------
170,000 Morris GO 1 5.000 02/01/2019 170,978
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Northern Municipal Power Agency 1 5.300 01/01/2021 10,311
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Olivia GO 5.200 02/01/2011 5,004
- ------------------------------------------------------------------------------------------------------------------------------------
110,000 Olmstead County Health Care Facilities (Olmsted Medical Group) 1 5.450 07/01/2013 111,459
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Park Rapids Health Facilities (Mankato Lutheran Homes) 1 5.600 08/01/2036 101,299
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Pine City Health Care & Hsg. (North Branch) 1 6.125 10/20/2047 101,914
- ------------------------------------------------------------------------------------------------------------------------------------
65,000 Plymouth Health Facilities (HealthSpan Health System/
North Memorial Medical Center) 1 6.250 06/01/2016 65,209
- ------------------------------------------------------------------------------------------------------------------------------------
125,000 Prior Lake Senior Hsg. (Shepherds Path Senior Hsg.) 1 5.750 08/01/2041 127,595
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Redwood Falls (Redwood Area Hospital) 1 5.125 12/01/2036 101,825
- ------------------------------------------------------------------------------------------------------------------------------------
130,000 Rochester Health Care Facilities (Mayo Clinic) 5.500 11/15/2027 133,565
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Sartell Health Care & Hsg. Facilities (The Foundation for Health Care
Continuums) 1 6.625 09/01/2029 208,098
- ------------------------------------------------------------------------------------------------------------------------------------
55,000 Scott Hsg. & Redevel. Authority (Justice Center) 1 5.500 12/01/2015 55,657
- ------------------------------------------------------------------------------------------------------------------------------------
1,200,000 Seaway Port Authority of Duluth (Northstar Aerospace) 1 5.200 04/01/2027 1,206,288
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 South Washington County Independent School District No. 833 COP 1 5.250 12/01/2014 25,025
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 St. Anthony Hsg. & Redevel. Authority (Silver Lake Village) 1 5.625 02/01/2031 256,718
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 St. Cloud Hospital Facilities (St. Cloud Hospital) 5.000 07/01/2015 5,054
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 St. Paul Hsg. & Redevel. Authority Health Care Facility (Regions
Hospital) 5.200 05/15/2013 5,103
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 St. Paul Hsg. & Redevel. Authority Health Care Facility (Regions
Hospital) 1 5.300 05/15/2028 25,421
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 St. Paul Port Authority (Great Northern) 1 6.000 03/01/2030 105,537
- ------------------------------------------------------------------------------------------------------------------------------------
400,000 St. Paul, MN Hsg. & Redevel. Authority (Brigecreek Senior Place) 1 7.000 09/15/2037 400,088
- ------------------------------------------------------------------------------------------------------------------------------------
360,000 St. Paul, MN Hsg. & Redevel. Authority (Great Northern Lofts) 6.250 03/01/2029 386,881
104 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA Continued
$ 150,000 St. Paul, MN Hsg. & Redevel. Authority (Hmong Academy) 1 6.000% 09/01/2036 $ 155,282
- ------------------------------------------------------------------------------------------------------------------------------------
180,000 St. Paul, MN Hsg. & Redevel. Authority (St. Paul Academy & Summit
School) 1 5.500 10/01/2024 185,785
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 St. Paul, MN Hsg. & Redevel. Authority Health Care Facility
(GHP/RH/MAC Obligated Group) 1 5.250 05/15/2036 210,326
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Stillwater Multifamily (Orleans Homes) 5.500 02/01/2042 201,418
- ------------------------------------------------------------------------------------------------------------------------------------
130,000 Washington County Hsg. & Redevel. Authority (HealthEast) 1 5.500 11/15/2027 133,218
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Washington County Hsg. & Redevel. Authority (HealthEast/HealthEast
Bethesda Hospital Obligated Group) 5.375 11/15/2018 5,100
- ------------------------------------------------------------------------------------------------------------------------------------
220,000 Washington County Hsg. & Redevel. Authority (Seasons Villas) 1 6.950 12/01/2023 224,853
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Worthington GO 5.200 02/01/2015 35,042
----------------
9,741,206
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS--5.1%
300,000 Puerto Rico Children's Trust Fund (TASC) 1 5.500 05/15/2039 315,189
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 Puerto Rico IMEPCF (American Airlines) 1 6.450 12/01/2025 61,239
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Puerto Rico ITEMECF (Ana G. Mendez University) 1 5.375 02/01/2019 5,140
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Puerto Rico Port Authority (American Airlines), Series A 1 6.250 06/01/2026 20,185
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Puerto Rico Port Authority (American Airlines), Series A 6.300 06/01/2023 15,005
----------------
416,758
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $10,119,411)--123.7% 10,157,964
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS--(23.7) (1,946,712)
----------------
NET ASSETS--100.0% $ 8,211,252
================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. All or a portion of the security has been segregated for collateral to cover
borrowings. See Note 6 of accompanying Notes.
2. Represents the current interest rate for a variable or increasing rate
security.
TO SIMPLIFY THE LISTINGS OF SECURITIES, ABBREVIATIONS ARE USED PER THE TABLE
BELOW:
COP Certificates of Participation
EDA Economic Devel. Authority
GHP Group Health Plan
GO General Obligation
HEFA Higher Education Facilities Authority
HFA Housing Finance Authority
IMEPCF Industrial, Medical and Environmental Pollution Control Facilities
ITEMECF Industrial, Tourist, Educational, Medical and Environmental Community
Facilities
MAC Midwest Assurance Company
RH Regions Hospital
TASC Tobacco Settlement Asset-Backed Bonds
105 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
DISTRIBUTION OF INVESTMENTS BY INDUSTRY OF ISSUE, AS A PERCENTAGE OF TOTAL
INVESTMENTS AT VALUE, IS AS FOLLOWS:
INDUSTRY MARKET VALUE PERCENT
- -----------------------------------------------------------------------------------------------------------
Marine/Aviation Facilities $ 1,734,017 17.1%
Hospital/Health Care 1,559,932 15.4
Special Assessment 1,407,539 13.9
Single Family Housing 1,004,331 9.9
Adult Living Facilities 964,187 9.5
Multifamily Housing 917,021 9.0
General Obligation 613,280 6.0
Municipal Leases 331,012 3.3
Tobacco Settlement Payments 315,189 3.1
Not-for-Profit Organization 234,336 2.3
Manufacturing, Non-Durable Goods 225,111 2.2
Pollution Control 210,643 2.1
Telephone Utilities 200,148 2.0
Education 180,307 1.8
Electric Utilities 134,156 1.3
Airlines 96,429 0.8
Higher Education 30,326 0.3
---------------------------------
Total $ 10,157,964 100.0%
=================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
106 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS March 31, 2007
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--138.4%
- ------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA--60.5%
$ 50,000 Asheville COP 5.125% 06/01/2018 $ 50,609
- ------------------------------------------------------------------------------------------------------------------------------------
130,000 Asheville COP 1 6.500 02/01/2008 130,263
- ------------------------------------------------------------------------------------------------------------------------------------
110,000 Asheville Hsg. Authority (Woodridge Apartments) 1 5.750 11/20/2029 112,759
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Asheville Hsg. Authority (Woodridge Apartments) 1 5.800 11/20/2039 10,185
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Buncombe County Center for Mental Retardation (Blue Ridge Area
Foundation) 1 7.750 11/01/2017 10,005
- ------------------------------------------------------------------------------------------------------------------------------------
210,000 Charlotte Douglas International Airport Special Facilities (US Airways) 1 7.750 02/01/2028 224,685
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Charlotte Hsg. (Double Oaks Apartments) 7.350 05/15/2026 50,693
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Charlotte-Mecklenburg Hospital Authority (Carolinas Healthcare
System/CMC) 5.000 01/15/2031 51,378
- ------------------------------------------------------------------------------------------------------------------------------------
90,000 Charlotte-Mecklenburg Hospital Authority Health Care System
(CMC/CMHA/CMHC/CIR Obligated Group) 1 5.000 01/15/2017 91,661
- ------------------------------------------------------------------------------------------------------------------------------------
865,000 Charlotte-Mecklenburg Hospital Authority Health Care System
(CMC/CMHA/CMHC/CIR Obligated Group) 1 5.125 01/15/2022 880,561
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 Columbus County IF&PCFA (International Paper Company) 5.800 12/01/2016 30,856
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Columbus County IF&PCFA (International Paper Company) 5.850 12/01/2020 5,142
- ------------------------------------------------------------------------------------------------------------------------------------
90,000 Columbus County IF&PCFA (International Paper Company) 1 6.150 04/01/2021 91,919
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Cumberland County Finance Corp. (Detention Center & Mental Health) 1 5.250 06/01/2024 36,279
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Fayetteville State University 1 8.200 10/01/2009 35,119
- ------------------------------------------------------------------------------------------------------------------------------------
885,000 Gaston IF&PCFA (National Gypsum) 1 5.750 08/01/2035 933,401
- ------------------------------------------------------------------------------------------------------------------------------------
80,000 Halifax County Industrial Facilities & Pollution Control
(Champion International Corp.) 1 5.450 11/01/2033 81,493
- ------------------------------------------------------------------------------------------------------------------------------------
70,000 Haywood County IF&PCFA (Champion International Corp.) 1 6.850 05/01/2014 70,180
- ------------------------------------------------------------------------------------------------------------------------------------
300,000 Kinston Hsg. Authority (Kinston Towers) 1 6.750 12/01/2018 298,173
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 NC Capital Facilities Finance Agency (Duke University) 5.125 10/01/2041 5,228
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 NC Centennial Authority Hotel Tax (Arena) 5.125 09/01/2019 15,383
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 NC Eastern Municipal Power Agency, Series A 1 5.375 01/01/2024 5,105
- ------------------------------------------------------------------------------------------------------------------------------------
195,000 NC Eastern Municipal Power Agency, Series A 5.750 01/01/2026 204,261
- ------------------------------------------------------------------------------------------------------------------------------------
275,000 NC Eastern Municipal Power Agency, Series B 1 5.500 01/01/2017 275,363
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 NC Eastern Municipal Power Agency, Series B 1 5.500 01/01/2021 35,473
- ------------------------------------------------------------------------------------------------------------------------------------
655,000 NC Eastern Municipal Power Agency, Series B 1 5.500 01/01/2021 655,950
- ------------------------------------------------------------------------------------------------------------------------------------
565,000 NC Eastern Municipal Power Agency, Series B 5.500 01/01/2021 565,819
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 NC Educational Facilities Finance Agency (St. Augustine's College) 5.250 10/01/2018 51,715
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 NC HFA 1 5.450 01/01/2011 20,506
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 NC HFA 5.625 07/01/2030 101,620
- ------------------------------------------------------------------------------------------------------------------------------------
285,000 NC HFA 5.750 03/01/2017 290,201
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 NC HFA 1 6.000 01/01/2016 35,917
- ------------------------------------------------------------------------------------------------------------------------------------
280,000 NC HFA 6.000 07/01/2016 286,440
- ------------------------------------------------------------------------------------------------------------------------------------
400,000 NC HFA (Home Ownership) 2 4.800 01/01/2039 399,648
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 NC HFA (Home Ownership) 5.200 07/01/2026 20,296
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 NC HFA (Home Ownership) 5.250 07/01/2011 20,426
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 NC HFA (Home Ownership) 5.250 07/01/2020 15,278
107 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA Continued
$ 25,000 NC HFA (Home Ownership) 5.250% 01/01/2022 $ 25,751
- ------------------------------------------------------------------------------------------------------------------------------------
55,000 NC HFA (Home Ownership) 1 5.950 01/01/2027 55,508
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 NC HFA (Multifamily Hsg.) 1 5.450 09/01/2024 30,021
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 NC HFA (Single Family Mtg.) 1 5.200 03/01/2010 5,079
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 NC HFA (Single Family Mtg.) 5.600 09/01/2019 5,129
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 NC HFA (Single Family Mtg.) 1 5.700 09/01/2026 15,353
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 NC HFA (Single Family Mtg.) 5.950 09/01/2017 30,462
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 NC HFA (Single Family Mtg.) 6.250 09/01/2027 10,230
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 NC HFA (Single Family) 5.350 09/01/2028 30,794
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 NC HFA, Series F 1 6.700 01/01/2027 10,015
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 NC HFA, Series H 1 5.950 07/01/2021 25,196
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 NC HFA, Series JJ 1 6.450 09/01/2027 5,135
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 NC HFA, Series Z 1 6.600 09/01/2026 10,216
- ------------------------------------------------------------------------------------------------------------------------------------
280,000 NC Medical Care Commission (ARC/HDS Alamance Hsg. Corp.) 5.800 10/01/2034 303,013
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 NC Medical Care Commission (Carolina Medicorp) 5.250 05/01/2026 10,010
- ------------------------------------------------------------------------------------------------------------------------------------
95,000 NC Medical Care Commission (Catholic Health East) 1 5.000 11/15/2018 97,571
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 NC Medical Care Commission (Cypress Glen Retirement Community) 6.000 10/01/2033 5,298
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 NC Medical Care Commission (Deerfield Episcopal Retirement Community) 5.000 11/01/2023 15,545
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 NC Medical Care Commission (First Health of the Carolinas) 5.000 10/01/2028 5,092
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 NC Medical Care Commission (GHC/GHS/GMH Obligated Group) 5.000 02/15/2019 50,799
- ------------------------------------------------------------------------------------------------------------------------------------
350,000 NC Medical Care Commission (GHC/GHS/GMH Obligated Group) 1 5.400 02/15/2011 357,053
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 NC Medical Care Commission (GHC/GHS/GMH Obligated Group) 1 5.500 02/15/2019 61,522
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 NC Medical Care Commission (Glenaire/The Presbyterian Homes Obligated
Group) 5.500 10/01/2031 26,071
- ------------------------------------------------------------------------------------------------------------------------------------
270,000 NC Medical Care Commission (Glenaire/The Presbyterian Homes Obligated
Group) 5.600 10/01/2036 283,176
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 NC Medical Care Commission (Grace Healthcare System) 5.250 10/01/2016 10,111
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 NC Medical Care Commission (Halifax Regional Medical Center) 5.000 08/15/2018 192,760
- ------------------------------------------------------------------------------------------------------------------------------------
180,000 NC Medical Care Commission (Moravian Home) 5.100 10/01/2030 182,887
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 NC Medical Care Commission (Novant Health) 5.000 10/01/2018 10,262
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 NC Medical Care Commission (Novant Health) 1 5.000 10/01/2024 25,578
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 NC Medical Care Commission (Novant Health) 5.125 05/01/2016 25,023
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 NC Medical Care Commission (Novant Health) 1 5.250 05/01/2021 5,006
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 NC Medical Care Commission (Novant Health) 1 5.250 05/01/2026 35,035
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 NC Medical Care Commission (Novant Health/FMH/PH Obligated Group) 5.000 11/01/2039 208,738
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 NC Medical Care Commission (Southminster) 6.125 10/01/2018 20,284
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 NC Medical Care Commission (St. Josephs) 5.125 10/01/2028 25,781
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 NC Medical Care Commission (St. Josephs) 5.125 10/01/2028 10,267
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 NC Medical Care Commission (Stanley Health Services) 6.250 10/01/2019 5,282
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 NC Medical Care Commission (Stanley Total Living Center) 5.375 10/01/2014 20,423
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 NC Medical Care Commission (Stanley Total Living Center) 5.375 10/01/2019 35,740
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 NC Medical Care Commission (The DePaul Group) 6.125 01/01/2028 74,687
108 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA Continued
$ 5,000 NC Medical Care Commission (The United Methodist Retirement Homes) 5.500% 10/01/2035 $ 5,141
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 NC Medical Care Commission (Wake County Hospital System) 5.375 10/01/2026 30,796
- ------------------------------------------------------------------------------------------------------------------------------------
70,000 NC Medical Care Commission (Wake County Hospital) 1 5.250 10/01/2017 71,853
- ------------------------------------------------------------------------------------------------------------------------------------
135,000 NC Medical Care Commission (Well-Spring Retirement Community) 5.375 01/01/2020 136,415
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 NC Medical Care Commission (Well-Spring Retirement Community) 6.250 01/01/2027 35,021
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 NC Medical Care Commission Health Care Facilities (Wilson Memorial
Hospital) 5.250 11/01/2020 15,121
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 NC Medical Care Commission Hospital (Almance Health System) 1 5.500 08/15/2013 10,013
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 NC Medical Care Commission Hospital (Almance Health System) 1 5.500 08/15/2024 75,092
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 NC Medical Care Commission Retirement Facilities (Givens Estates) 4.375 07/01/2009 39,845
- ------------------------------------------------------------------------------------------------------------------------------------
470,000 NC Medical Care Commission Retirement Facilities (Village at Brookwood) 5.500 3 01/01/2032 470,028
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 NC Municipal Power Agency 5.000 01/01/2020 20,572
- ------------------------------------------------------------------------------------------------------------------------------------
80,000 NC Municipal Power Agency 5.125 01/01/2015 81,675
- ------------------------------------------------------------------------------------------------------------------------------------
135,000 NC Municipal Power Agency 1 5.125 01/01/2017 137,843
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Northampton County IF&PCFA (Champion International Corp.) 1 6.450 11/01/2029 52,742
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Raleigh GO 5.500 06/01/2009 40,660
----------------
9,784,710
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS--77.9%
100,000 Guam Education Financing Foundation COP 1 5.000 10/01/2023 105,493
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 Guam Power Authority, Series A 1 5.250 10/01/2023 60,239
- ------------------------------------------------------------------------------------------------------------------------------------
1,135,000 Puerto Rico Children's Trust Fund (TASC) 5.375 05/15/2033 1,188,663
- ------------------------------------------------------------------------------------------------------------------------------------
965,000 Puerto Rico Children's Trust Fund (TASC) 5.500 05/15/2039 1,013,858
- ------------------------------------------------------------------------------------------------------------------------------------
870,000 Puerto Rico Children's Trust Fund (TASC) 5.625 05/15/2043 918,990
- ------------------------------------------------------------------------------------------------------------------------------------
16,000,000 Puerto Rico Children's Trust Fund (TASC) 1 6.342 4 05/15/2050 1,093,920
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Puerto Rico Commonwealth GO 1 0.000 5 07/01/2028 95,781
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 Puerto Rico Commonwealth GO 1 5.000 07/01/2035 260,995
- ------------------------------------------------------------------------------------------------------------------------------------
70,000 Puerto Rico Commonwealth GO 5.125 07/01/2031 72,067
- ------------------------------------------------------------------------------------------------------------------------------------
345,000 Puerto Rico Commonwealth GO 1 5.250 07/01/2032 369,643
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Puerto Rico Electric Power Authority 5.250 07/01/2029 10,525
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 Puerto Rico Electric Power Authority, Series AA 1 5.375 07/01/2027 61,122
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Puerto Rico HFC 5.100 12/01/2018 10,084
- ------------------------------------------------------------------------------------------------------------------------------------
450,000 Puerto Rico HFC, Series B 1 5.300 12/01/2028 464,607
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Puerto Rico Highway & Transportation Authority 1 5.000 07/01/2022 25,451
- ------------------------------------------------------------------------------------------------------------------------------------
80,000 Puerto Rico Highway & Transportation Authority 1 5.500 07/01/2036 90,822
- ------------------------------------------------------------------------------------------------------------------------------------
230,000 Puerto Rico Highway & Transportation Authority, Series J 1 5.125 07/01/2043 250,288
- ------------------------------------------------------------------------------------------------------------------------------------
80,000 Puerto Rico Highway & Transportation Authority, Series K 1 5.000 07/01/2040 87,007
- ------------------------------------------------------------------------------------------------------------------------------------
300,000 Puerto Rico Highway & Transportation Authority, Series M 1 5.000 07/01/2046 312,792
- ------------------------------------------------------------------------------------------------------------------------------------
3,200,000 Puerto Rico Highway & Transportation Authority, Series N 6 4.107 3 07/01/2045 3,204,800
- ------------------------------------------------------------------------------------------------------------------------------------
335,000 Puerto Rico IMEPCF (American Airlines) 1 6.450 12/01/2025 341,918
- ------------------------------------------------------------------------------------------------------------------------------------
650,000 Puerto Rico Infrastructure 1 5.000 07/01/2046 675,526
- ------------------------------------------------------------------------------------------------------------------------------------
80,000 Puerto Rico ITEMECF (Ana G. Mendez University) 5.375 02/01/2029 81,889
109 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS Continued
$ 380,000 Puerto Rico Port Authority (American Airlines), Series A 1 6.250% 06/01/2026 $ 383,515
- ------------------------------------------------------------------------------------------------------------------------------------
115,000 Puerto Rico Port Authority (American Airlines), Series A 6.300 06/01/2023 115,071
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Puerto Rico Port Authority, Series D 1 7.000 07/01/2014 10,023
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Puerto Rico Public Buildings Authority 5.250 07/01/2033 37,129
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 Puerto Rico Public Buildings Authority, Series B 5.000 07/01/2012 76,370
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Puerto Rico Public Finance Corp., Series A 1 5.750 08/01/2027 10,723
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 University of Puerto Rico 5.000 06/01/2025 209,964
- ------------------------------------------------------------------------------------------------------------------------------------
300,000 University of Puerto Rico, Series Q 1 5.000 06/01/2030 313,788
- ------------------------------------------------------------------------------------------------------------------------------------
325,000 University of Puerto Rico, Series Q 1 5.000 06/01/2036 338,939
- ------------------------------------------------------------------------------------------------------------------------------------
300,000 V.I. Public Finance Authority, Series A 5.625 10/01/2025 308,334
----------------
12,600,336
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $22,337,679)--138.4% 22,385,046
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS--(38.4) (6,216,447)
----------------
NET ASSETS--100.0% $ 16,168,599
================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. All or a portion of the security has been segregated for collateral to cover
borrowings. See Note 6 of accompanying Notes.
2. When-issued security or forward commitment to be delivered and settled after
March 31, 2007. See Note 1 of accompanying Notes.
3. Represents the current interest rate for a variable or increasing rate
security.
4. Zero coupon bond reflects effective yield on the date of purchase.
5. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
6. Security represents the underlying municipal bond on an inverse floating rate
security. The bond was purchased by the Fund and subsequently segregated and
transferred to a trust. See Note 1 of accompanying Notes.
TO SIMPLIFY THE LISTINGS OF SECURITIES, ABBREVIATIONS ARE USED PER THE TABLE
BELOW:
ARC Assoc. of Retarded Citizens
CIR Charlotte Institute of Rehabilitation
CMC Carolinas Medical Center
CMHA Charlotte-Mecklenburg Hospital Authority
CMHC Center for Mental Health-Charlotte
COP Certificates of Participation
FMH Forsyth Memorial Hospital
GHC Gaston Health Care
GHS Gaston Health Services
GMH Gaston Memorial Hospital
GO General Obligation
HFA Housing Finance Authority
HFC Housing Finance Corp.
IF&PCFA Industrial Facilities & Pollution Control Financing Authority
IMEPCF Industrial, Medical and Environmental Pollution Control Facilities
ITEMECF Industrial, Tourist, Educational, Medical and Environmental
Community Facilities
PH Presbyterian Hospital
ROLs Residual Option Longs
TASC Tobacco Settlement Asset-Backed Bonds
V.I. United States Virgin Islands
110 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
DISTRIBUTION OF INVESTMENTS BY INDUSTRY OF ISSUE, AS A PERCENTAGE OF TOTAL
INVESTMENTS AT VALUE, IS AS FOLLOWS:
INDUSTRY MARKET VALUE PERCENT
- ------------------------------------------------------------------------------------------------------------------------------------
Tobacco Settlement Payments $ 4,215,431 18.8%
Highways/Railways 3,971,160 17.7
Hospital/Health Care 2,408,495 10.8
Electric Utilities 2,113,947 9.4
Single Family Housing 1,883,622 8.4
Adult Living Facilities 1,607,444 7.2
Airlines 1,065,189 4.8
Higher Education 1,036,642 4.6
Manufacturing, Durable Goods 933,401 4.2
General Obligation 798,486 3.6
Special Tax 690,909 3.1
Multifamily Housing 552,760 2.5
Municipal Leases 446,866 2.0
Resource Recovery 332,332 1.5
Sales Tax Revenue 308,334 1.4
Marine/Aviation Facilities 10,023 0.0
Not-for-Profit Organization 10,005 0.0
-------------------------------
Total $22,385,046 100.0%
===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
111 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS March 31, 2007
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--131.9%
- ------------------------------------------------------------------------------------------------------------------------------------
OHIO--88.6%
$ 15,000 Akron Bath Copley Joint Township Hospital District (Summa Health
System) 5.375% 11/15/2018 $ 15,426
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Allen County Industrial Devel. Revenue (Kmart Corp.) 6.750 11/15/2008 35,131
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Ashland County Multifamily Mtg. (Ashland Assisted Living) 1 8.000 11/01/2029 24,999
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Blue Ash Tax Increment Financing (Duke Realty) 1 5.000 12/01/2035 99,315
- ------------------------------------------------------------------------------------------------------------------------------------
85,000 Cleveland Airport (Continental Airlines) 1 5.375 09/15/2027 85,330
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Cleveland Airport (Continental Airlines) 1 5.500 12/01/2008 10,063
- ------------------------------------------------------------------------------------------------------------------------------------
245,000 Cleveland Airport (Continental Airlines) 1 5.700 12/01/2019 250,439
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Cleveland Airport System 5.125 01/01/2014 25,453
- ------------------------------------------------------------------------------------------------------------------------------------
490,000 Cleveland Airport System 1 5.125 01/01/2022 497,492
- ------------------------------------------------------------------------------------------------------------------------------------
260,000 Cleveland Airport System 1 5.125 01/01/2027 263,897
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Cleveland Airport System, Series A 5.125 01/01/2022 10,153
- ------------------------------------------------------------------------------------------------------------------------------------
140,000 Cleveland COP (Cleveland Stadium) 1 5.250 11/15/2022 143,917
- ------------------------------------------------------------------------------------------------------------------------------------
240,000 Cleveland COP (Cleveland Stadium) 1 5.250 11/15/2027 246,564
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Cleveland COP (Cleveland Stadium) 1 5.500 11/15/2018 20,609
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Cleveland GO 1 5.000 08/01/2018 15,358
- ------------------------------------------------------------------------------------------------------------------------------------
305,000 Cleveland Rock Glen Hsg. Assistance Corp. (Ambleside Apartments) 2 7.000 06/01/2018 322,702
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Cleveland Waterworks 1 5.000 01/01/2028 10,172
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Cleveland Waterworks 5.250 01/01/2015 102,122
- ------------------------------------------------------------------------------------------------------------------------------------
225,000 Cleveland-Cuyahoga County Port Authority (Myers University) 1 5.600 05/15/2025 236,088
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 Cleveland-Cuyahoga County Port Authority (Perrysburg) 1 4.800 11/15/2035 148,884
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Cleveland-Cuyahoga County Port Authority (Port Cleveland) 1 5.800 05/15/2027 15,308
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Columbiana County GO 1 5.250 12/01/2024 10,191
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Columbus Municipal Airport Authority 5.000 01/01/2028 15,299
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Cuyahoga County Health Care Facilities (Menorah Park Center for
Senior Living) 6.600 02/15/2018 100,088
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Cuyahoga County Health Care Facilities (Senior Living Bet Moshev
Zekenim) 1 6.800 02/15/2035 26,560
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Cuyahoga County Hospital (Metro Health System) 5.250 02/15/2019 5,105
- ------------------------------------------------------------------------------------------------------------------------------------
115,000 Cuyahoga County Hospital (Metro Health System) 1 5.500 02/15/2027 117,433
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Cuyahoga County Mtg. (West Tech Apartments) 1 5.700 03/20/2043 9,948
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Cuyahoga County Multifamily (Livingston Park) 1 5.350 09/20/2027 52,075
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Cuyahoga County Utility System (The Medical Center Company) 1 5.850 08/15/2010 40,281
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Dayton Airport (James M. Cox) 1 5.350 12/01/2032 20,902
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 Dayton City School District (Administrative Facility) 1 5.150 12/01/2023 78,319
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Dublin City School District 1 5.000 12/01/2012 25,457
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Erie County Hospital Facilities (Firelands Regional Medical Center) 5.500 08/15/2022 105,853
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Fairfield County Hospital Improvement (Lancaster-Fairfield Community
Hospital) 5.500 06/15/2021 201,010
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Franklin County Health Care Facilities (Ohio Presbyterian Retirement
Services) 1 5.250 07/01/2033 15,630
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Franklin County Health Care Facilities (Ohio Presbyterian Retirement
Services) 1 5.500 07/01/2017 10,200
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Franklin County Mtg. (Gateway Apartment Homes) 5.800 12/20/2028 10,657
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Franklin County Mtg. (Villas at St. Therese) 5.250 12/20/2039 15,586
112 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
OHIO Continued
$ 160,000 Franklin County Mtg. (Villas at St. Therese) 1 5.500% 07/01/2021 $ 163,243
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Franklin County Multifamily Hsg. (Tuttle Park) 1 5.950 03/01/2016 10,506
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Frankling County Health Care Facilities (Friendship Village of
Columbus) 1 5.375 08/15/2028 40,807
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 Glenwillow Village GO 1 5.000 12/01/2026 261,395
- ------------------------------------------------------------------------------------------------------------------------------------
225,000 Glenwillow Village GO 1 5.875 12/01/2024 243,272
- ------------------------------------------------------------------------------------------------------------------------------------
55,000 Green County University Hsg. (Central State University) 1 5.100 09/01/2035 57,266
- ------------------------------------------------------------------------------------------------------------------------------------
2,500,000 Grove City Tax Increment Financing 5.375 12/01/2031 2,498,100
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Hamilton County Hospital Facilities (Children's Hospital Medical
Center) 1 5.000 05/15/2013 10,009
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Hamilton County Sales Tax (Hamilton County Football) 1 5.000 12/01/2027 51,269
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 Hamilton County Sewer System 1 5.000 12/01/2031 266,053
- ------------------------------------------------------------------------------------------------------------------------------------
49,000 Heath City School District 6.375 12/01/2027 52,712
- ------------------------------------------------------------------------------------------------------------------------------------
1,775,000 Jeffrey Place New Community Authority (Jeffrey Place Redevel.) 1 5.000 12/01/2032 1,775,550
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Lake County Hospital Facilities (Lake Hospital System) 1 5.000 08/15/2023 10,223
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Lake County Sewer District Improvements 1 6.250 12/01/2014 25,050
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 Lorain County Elderly Hsg. Corp. (Harr Plaza) 1 6.375 07/15/2019 76,903
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Lorain County Hospital (Catholic Healthcare Partners) 5.250 10/01/2033 20,906
- ------------------------------------------------------------------------------------------------------------------------------------
195,000 Lorain County Hospital (Catholic Healthcare Partners) 5.500 09/01/2027 200,078
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 Lorain County Hospital (Catholic Healthcare Partners) 1 5.625 09/01/2014 76,976
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Lorain County Hospital (Catholic Healthcare Partners) 1 5.625 09/01/2016 20,541
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Lorain County Hospital (Catholic Healthcare Partners) 1 5.625 09/01/2017 15,404
- ------------------------------------------------------------------------------------------------------------------------------------
220,000 Lorain County Port Authority (Alumalloy LLC) 1 6.000 11/15/2025 225,951
- ------------------------------------------------------------------------------------------------------------------------------------
225,000 Lucas County GO 6.500 12/01/2016 229,986
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Lucas-Palmer HDC (Palmer Gardens) 6.125 07/01/2025 10,038
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 Mahoning County Hospital Facilities (Forum Health) 1 5.000 11/15/2025 61,403
- ------------------------------------------------------------------------------------------------------------------------------------
735,000 Mahoning County Hospital Facilities (Forum Health) 1 6.000 11/15/2032 736,808
- ------------------------------------------------------------------------------------------------------------------------------------
170,000 Marblehead GO (Island View Waterline) 1 5.250 12/01/2026 176,853
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Meigs County Industrial Devel. Revenue (Meigs Convalescent) 8.250 12/01/2016 51,368
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Miami County Hospital Facilities (Upper Valley Medical Center) 1 5.250 05/15/2026 211,266
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Montgomery County Sewer (Greater Moraine-Beaver Creek) 1 5.600 09/01/2011 100,778
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Muskingum County Hospital Facilities (BHA/Careserve/PP/
SSNH/BHC/BCG/Carelife/BCC Obligated Group) 1 5.400 12/01/2016 35,739
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Muskingum County Hospital Facilities (Franciscan Sisters of
Christian Charity Healthcare Ministry) 5.375 02/15/2012 35,041
- ------------------------------------------------------------------------------------------------------------------------------------
325,000 New Carlisle (Twin Creek) 1 6.125 11/01/2026 357,107
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 North Canton Health Care Facilities (Waterford at St. Luke) 5.800 11/15/2028 30,173
- ------------------------------------------------------------------------------------------------------------------------------------
130,000 OH Air Quality Devel. Authority (Cincinnati Gas & Electric Company) 1 5.450 01/01/2024 130,168
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 OH Air Quality Devel. Authority (Cleveland Electric Illuminating
Company) 1 6.000 12/01/2013 5,109
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 OH Air Quality Devel. Authority (Cleveland Electric Illuminating
Company) 1 6.000 08/01/2020 76,862
- ------------------------------------------------------------------------------------------------------------------------------------
80,000 OH Air Quality Devel. Authority (Cleveland Electric Illuminating
Company) 1 6.100 08/01/2020 81,886
- ------------------------------------------------------------------------------------------------------------------------------------
160,000 OH Air Quality Devel. Authority (JMG Funding) 1 5.625 01/01/2023 163,389
- ------------------------------------------------------------------------------------------------------------------------------------
135,000 OH Air Quality Devel. Authority (Toledo Edison Company) 1 6.100 08/01/2027 138,596
113 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
OHIO Continued
$ 110,000 OH Dept. Administrative Services 1 5.000% 06/15/2023 $ 112,933
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 OH Economic Devel. (Astro Instrumentation) 1 5.450 06/01/2022 211,558
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 OH Economic Devel. (Ohio Enterprise Bond Fund) 1 5.150 12/01/2017 15,757
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 OH Environmental Facilities (Ford Motor Company) 5.950 09/01/2029 35,629
- ------------------------------------------------------------------------------------------------------------------------------------
65,000 OH Environmental Facilities (Ford Motor Company) 1 6.150 06/01/2030 66,784
- ------------------------------------------------------------------------------------------------------------------------------------
140,000 OH HFA 1 4.800 03/01/2036 140,466
- ------------------------------------------------------------------------------------------------------------------------------------
210,000 OH HFA 1 5.250 09/01/2030 213,793
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 OH HFA 5.625 09/01/2017 25,143
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 OH HFA 1 5.750 09/01/2009 5,125
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 OH HFA 1 5.750 09/01/2028 40,531
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 OH HFA 1 6.100 09/01/2028 10,175
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 OH HFA (Beehive/Doan Obligated Group) 1 5.950 01/15/2026 15,440
- ------------------------------------------------------------------------------------------------------------------------------------
600,000 OH HFA (GNMA Collateral Mtg.) 5.000 11/20/2047 603,174
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 OH HFA (Oakleaf Village) 1 5.700 09/01/2026 10,007
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 OH HFA (Single Family Mtg.) 1 5.750 04/01/2016 5,006
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 OH HFA (Wind River Apartments) 1 5.550 11/01/2018 102,385
- ------------------------------------------------------------------------------------------------------------------------------------
65,000 OH HFA, Series A 1 6.150 03/01/2029 66,782
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 OH HFA, Series A-1 1 5.400 09/01/2029 10,190
- ------------------------------------------------------------------------------------------------------------------------------------
130,000 OH HFA, Series C 1 5.750 09/01/2028 132,917
- ------------------------------------------------------------------------------------------------------------------------------------
2,135,000 OH HFA, Series D 5.450 09/01/2031 2,163,972
- ------------------------------------------------------------------------------------------------------------------------------------
1,000,000 OH Higher Educational Facility 3 5.000 12/01/2044 1,051,210
- ------------------------------------------------------------------------------------------------------------------------------------
500,000 OH Higher Educational Facility (Mount Union College) 1 5.000 10/01/2031 523,095
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 OH Higher Educational Facility (Oberlin College) 1 5.000 10/01/2033 5,213
- ------------------------------------------------------------------------------------------------------------------------------------
500,000 OH Higher Educational Facility (University of Dayton) 1 5.000 12/01/2033 530,060
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 OH Higher Educational Facility (Xavier University) 1 5.350 11/01/2008 30,040
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 OH Pollution Control (General Motors Corp.) 1 5.625 03/01/2015 201,030
- ------------------------------------------------------------------------------------------------------------------------------------
850,000 OH Port Authority of Columbiana Solid Waste (A&L Salvage) 1 14.500 07/01/2028 1,062,874
- ------------------------------------------------------------------------------------------------------------------------------------
135,000 OH Solid Waste (General Motors Corp.) 1 6.300 12/01/2032 138,781
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 OH Solid Waste Disposal (USG Corp.) 1 5.600 08/01/2032 103,213
- ------------------------------------------------------------------------------------------------------------------------------------
950,000 OH Solid Waste Disposal (USG Corp.) 1 5.650 03/01/2033 972,496
- ------------------------------------------------------------------------------------------------------------------------------------
160,000 OH Solid Waste Disposal (USG Corp.) 1 6.050 08/01/2034 167,306
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 OH Water Devel. Authority (Cargill) 1 6.300 09/01/2020 255,365
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 OH Water Devel. Authority (Cincinnati Gas & Electric Company) 1 5.450 01/01/2024 30,170
- ------------------------------------------------------------------------------------------------------------------------------------
165,000 OH Water Devel. Authority (Cleveland Electric Illuminating Company) 1 6.100 08/01/2020 169,064
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 OH Water Devel. Authority (General Motors Corp.) 1 5.900 06/15/2008 100,008
- ------------------------------------------------------------------------------------------------------------------------------------
390,000 Orange Village GO (Chagrin) 1 5.250 12/01/2024 402,964
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Ottawa County GO 5.000 09/01/2031 5,159
- ------------------------------------------------------------------------------------------------------------------------------------
320,000 Parma GO 1 5.000 12/01/2026 334,778
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Pike County Hospital Facilities (Pike Health Services) 1 6.750 07/01/2017 5,061
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Pleasant Local School District 1 5.100 12/01/2018 15,018
- ------------------------------------------------------------------------------------------------------------------------------------
225,000 Port of Greater Cincinnati Devel. Authority (Public Parking
Infrastructure) 1 6.400 02/15/2034 243,110
114 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
OHIO Continued
$ 50,000 Reynoldsburgh Health Care Facilities (Wesley Ridge) 1 6.150% 10/20/2038 $ 51,588
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Shawnee State University General Receipts, Series A 1 7.100 06/01/2009 25,141
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 Solon GO 5.450 12/01/2013 30,041
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 Toledo GO 6.350 12/01/2025 31,073
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Toledo Hsg. (Commodore Perry) 1 5.400 12/01/2023 25,676
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 Toledo Hsg. (Commodore Perry) 1 5.450 12/01/2028 46,148
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Toledo Multifamily Hsg. (Hillcrest Apartments) 5.250 12/01/2018 5,121
- ------------------------------------------------------------------------------------------------------------------------------------
65,000 Toledo Multifamily Hsg. (Hillcrest Apartments) 1 5.300 12/01/2028 66,347
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Toledo-Lucas County Convention & Visitor's Bureau 1 5.700 10/01/2015 25,538
- ------------------------------------------------------------------------------------------------------------------------------------
365,000 Toledo-Lucas County Port Authority 1 5.500 05/15/2020 368,537
- ------------------------------------------------------------------------------------------------------------------------------------
130,000 Toledo-Lucas County Port Authority (Crocker Park) 1 5.375 12/01/2035 139,433
- ------------------------------------------------------------------------------------------------------------------------------------
300,000 Toledo-Lucas County Port Authority (Northwest Ohio) 1 5.125 11/15/2025 304,578
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Toledo-Lucas County Port Authority (Northwest Ohio) 5.400 05/15/2019 51,239
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Toledo-Lucas County Port Authority (Northwest Ohio) 6.375 11/15/2032 54,436
- ------------------------------------------------------------------------------------------------------------------------------------
170,000 Toledo-Lucas County Port Authority (Preston) 4.800 11/15/2035 168,735
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Tuscarawas County (Union Hospital Assoc.) 1 5.250 10/01/2031 15,680
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 University of Cincinnati General Receipts 5.100 06/01/2009 50,608
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Warren Waterworks 1 5.000 11/01/2022 10,258
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 Zanesville-Muskingum County Port Authority
(Anchor Glass Container Corp.) 1 10.250 12/01/2008 45,142
----------------
24,023,901
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS--43.3%
110,000 Puerto Rico Aqueduct & Sewer Authority 1 5.000 07/01/2019 112,178
- ------------------------------------------------------------------------------------------------------------------------------------
55,000 Puerto Rico Children's Trust Fund (TASC) 1 5.375 05/15/2033 57,600
- ------------------------------------------------------------------------------------------------------------------------------------
300,000 Puerto Rico Children's Trust Fund (TASC) 1 5.500 05/15/2039 315,189
- ------------------------------------------------------------------------------------------------------------------------------------
110,000 Puerto Rico Children's Trust Fund (TASC) 1 5.625 05/15/2043 116,194
- ------------------------------------------------------------------------------------------------------------------------------------
39,400,000 Puerto Rico Children's Trust Fund (TASC) 1 6.404 4 05/15/2050 2,693,778
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Puerto Rico Commonwealth GO 5.000 07/01/2035 104,398
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Puerto Rico Commonwealth GO 1 5.125 07/01/2031 5,148
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Puerto Rico Electric Power Authority, Series AA 5.375 07/01/2027 25,468
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Puerto Rico Electric Power Authority, Series NN 1 5.125 07/01/2029 52,279
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Puerto Rico HFC 1 5.100 12/01/2018 20,169
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Puerto Rico Highway & Transportation Authority, Series A 5.000 07/01/2038 10,274
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Puerto Rico Highway & Transportation Authority, Series G 5.000 07/01/2042 16,092
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Puerto Rico Highway & Transportation Authority, Series G 5.000 07/01/2042 5,152
- ------------------------------------------------------------------------------------------------------------------------------------
80,000 Puerto Rico Highway & Transportation Authority, Series K 1 5.000 07/01/2040 87,007
- ------------------------------------------------------------------------------------------------------------------------------------
375,000 Puerto Rico Highway & Transportation Authority, Series M 5.000 07/01/2046 390,990
- ------------------------------------------------------------------------------------------------------------------------------------
5,600,000 Puerto Rico Highway & Transportation Authority, Series N 3 4.107 5 07/01/2045 5,608,400
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Puerto Rico IMEPCF (American Airlines) 1 6.450 12/01/2025 25,516
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 Puerto Rico ITEMECF (Ana G. Mendez University) 1 5.375 02/01/2019 30,841
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Puerto Rico ITEMECF (Hospital Auxilio Mutuo) 1 5.500 07/01/2026 101,896
115 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS Continued
$ 75,000 Puerto Rico ITEMECF (San Lucas & Cristo Redentor Hospitals) 1 5.750% 06/01/2029 $ 73,069
- ------------------------------------------------------------------------------------------------------------------------------------
125,000 Puerto Rico Municipal Finance Agency, Series A 1 5.250 08/01/2023 133,826
- ------------------------------------------------------------------------------------------------------------------------------------
505,000 Puerto Rico Port Authority (American Airlines), Series A 1 6.250 06/01/2026 509,671
- ------------------------------------------------------------------------------------------------------------------------------------
295,000 Puerto Rico Port Authority (American Airlines), Series A 6.300 06/01/2023 295,183
- ------------------------------------------------------------------------------------------------------------------------------------
125,000 Puerto Rico Public Buildings Authority 1 5.000 07/01/2036 129,409
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Puerto Rico Public Buildings Authority, Series D 1 5.125 07/01/2024 41,639
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 University of Puerto Rico 5.000 06/01/2026 262,263
- ------------------------------------------------------------------------------------------------------------------------------------
500,000 V.I. Public Finance Authority, Series A 5.625 10/01/2025 513,899
----------------
11,737,528
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $35,366,414)--131.9% 35,761,429
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS--(31.9) (8,638,954)
----------------
NET ASSETS--100.0% $ 27,122,475
================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. All or a portion of the security has been segregated for collateral to cover
borrowings. See Note 6 of accompanying Notes.
2. Illiquid security. The aggregate value of illiquid securities as of March 31,
2007 was $322,702, which represents 1.19% of the Fund's net assets. See Note 5
of accompanying Notes.
3. Security represents the underlying municipal bond on an inverse floating rate
security. The bond was purchased by the Fund and subsequently segregated and
transferred to a trust. See Note 1 of accompanying Notes.
4. Zero coupon bond reflects effective yield on the date of purchase.
5. Represents the current interest rate for a variable or increasing rate
security.
TO SIMPLIFY THE LISTINGS OF SECURITIES, ABBREVIATIONS ARE USED PER THE TABLE
BELOW:
BCC Bethesda Company Care, Inc.
BCG Bethesda Care Givers
BHA Bethesda Hospital Assoc.
BHC Bethesda Home Care
COP Certificates of Participation
GNMA Government National Mortgage Assoc.
GO General Obligation
HFA Housing Finance Authority
HDC Housing Devel. Corp.
HFC Housing Finance Corp.
IMEPCF Industrial, Medical and Environmental Pollution Control Facilities
ITEMECF Industrial, Tourist, Educational, Medical and Environmental
Community Facilities
PP Professionals PRN, Inc.
ROLs Residual Option Longs
SSNH Sunny Slope Nursing Home
TASC Tobacco Settlement Asset-Backed Bonds
V.I. United States Virgin Islands
116 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
DISTRIBUTION OF INVESTMENTS BY INDUSTRY OF ISSUE, AS A PERCENTAGE OF TOTAL
INVESTMENTS AT VALUE, IS AS FOLLOWS:
INDUSTRY MARKET VALUE PERCENT
- ----------------------------------------------------------------------------------------------------------------------------------
Highways/Railways $ 6,117,915 17.1%
Special Assessment 4,549,818 12.7
Tobacco Settlement Payments 3,182,761 8.9
Higher Education 2,801,825 7.8
Single Family Housing 2,620,476 7.3
Hospital/Health Care 2,562,931 7.2
General Obligation 2,257,883 6.3
Marine/Aviation Facilities 2,170,864 6.1
Manufacturing, Durable Goods 1,742,043 4.9
Multifamily Housing 1,580,920 4.4
Resource Recovery 1,333,393 3.7
Airlines 1,176,202 3.3
Municipal Leases 773,390 2.2
Electric Utilities 709,602 2.0
Sales Tax Revenue 539,437 1.5
Sewer Utilities 391,881 1.1
Parking Fee Revenue 382,543 1.1
Manufacturing, Non-Durable Goods 290,496 0.8
Water Utilities 234,730 0.7
Gas Utilities 163,389 0.5
Adult Living Facilities 82,519 0.2
Sports Facility Revenue 51,269 0.1
Paper, Containers & Packaging 45,142 0.1
-----------------------
Total $ 35,761,429 100.0%
=======================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
117 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS March 31, 2007
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) VIRGINIA MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--141.8%
- ------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA--86.7%
$ 25,000 Alexandria IDA (Alexandria Hospital) 1 5.500% 07/01/2014 $ 25,037
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Alexandria IDA Educational Facilities (Episcopal High School) 1 5.250 01/01/2010 10,102
- ------------------------------------------------------------------------------------------------------------------------------------
135,000 Alexandria IDA Pollution Control (Potomac Electric Power Company) 1 5.375 02/15/2024 135,097
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Alexandria Redevel. & Hsg. Authority (CRS Alexandria Hsg. Corp.) 1 6.125 10/01/2029 20,973
- ------------------------------------------------------------------------------------------------------------------------------------
60,000 Alexandria Redevel. & Hsg. Authority (Essex House) 5.550 07/01/2028 61,439
- ------------------------------------------------------------------------------------------------------------------------------------
285,000 Alexandria, IDA Pollution Control (Potomac Electric Power Company) 1 5.375 02/15/2024 285,345
- ------------------------------------------------------------------------------------------------------------------------------------
180,000 Bedford County IDA (Georgia-Pacific Corp.) 1 5.600 12/01/2025 181,890
- ------------------------------------------------------------------------------------------------------------------------------------
175,000 Bedford County IDA (Georgia-Pacific Corp.) 6.300 12/01/2025 181,335
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 Bedford County IDA (Georgia-Pacific Corp.) 1 6.550 12/01/2025 47,109
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Broadway IDA (Bridgewater College) 5.375 04/01/2033 5,143
- ------------------------------------------------------------------------------------------------------------------------------------
265,000 Buena Vista Public Recreational Facilities Authority (Golf Course) 1 5.500 07/15/2035 283,720
- ------------------------------------------------------------------------------------------------------------------------------------
200,000 Celebrate South Community Devel. Authority Special Assessment 1 6.250 03/01/2037 207,668
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 Chesapeake Airport Authority 1 5.300 08/01/2019 25,464
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 Chesapeake GO 5.000 05/01/2014 30,629
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 Chesapeake Water & Sewer 5.000 12/01/2025 30,209
- ------------------------------------------------------------------------------------------------------------------------------------
70,000 Danville IDA Educational Facilities (Averett University) 1 6.000 03/15/2016 73,036
- ------------------------------------------------------------------------------------------------------------------------------------
85,000 Dulles Town Center Community Devel. Authority (Dulles Town Center) 6.250 03/01/2026 87,980
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Fairfax County Redevel. & Hsg. Authority (Grand View Apartments) 5.450 08/01/2025 10,212
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Fairfax County Redevel. & Hsg. Authority (Paul Spring Retirement Center) 1 6.000 12/15/2028 20,663
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 Farms New Kent Community Devel. Authority Special Assessment 1 5.800 03/01/2036 252,425
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Fredericks IDA (Mary Washington Hospital/Medicorp Health) 5.250 06/15/2016 20,453
- ------------------------------------------------------------------------------------------------------------------------------------
240,000 Giles County IDA (Hoechst Celanese Corp.) 1 5.950 12/01/2025 240,262
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Giles County IDA (Hoechst Celanese Corp.) 1 6.450 05/01/2026 50,619
- ------------------------------------------------------------------------------------------------------------------------------------
210,000 Giles County IDA (Hoechst Celanese Corp.) 1 6.625 12/01/2022 210,670
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 Goochland County IDA (Georgia-Pacific Corp.) 1 5.650 12/01/2025 75,983
- ------------------------------------------------------------------------------------------------------------------------------------
500,000 Hampton Redevel. & Hsg. Authority (Olde Hampton) 1 6.500 07/01/2016 500,410
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Henrico County IDA (Browning-Ferris Industries) 5.875 03/01/2017 50,485
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 Henrico County IDA (Governmental) 1 5.600 06/01/2016 76,604
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Henrico County IDA (Governmental) 1 5.600 06/01/2017 102,138
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Isle Wight County IDA Solid Waste Disposal (International Paper Company) 1 6.100 05/01/2027 5,106
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 James City County IDA (Anheuser-Busch Companies) 1 6.000 04/01/2032 101,153
- ------------------------------------------------------------------------------------------------------------------------------------
40,000 Lexington IDA Hospital Facility (Stonewall Jackson Hospital) 1 5.750 07/01/2007 40,013
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Loudoun County IDA (Dulles Airport Marriott Hotel) 1 7.125 09/01/2015 35,383
- ------------------------------------------------------------------------------------------------------------------------------------
380,000 Loudoun County IDA (George Washington University) 6.250 05/15/2022 388,269
- ------------------------------------------------------------------------------------------------------------------------------------
65,000 Louisa IDA Pollution Control (Virginia Electric & Power Company) 1 5.250 12/01/2008 65,716
- ------------------------------------------------------------------------------------------------------------------------------------
180,000 Louisa IDA Pollution Control (Virginia Electric & Power Company) 1 5.450 01/01/2024 180,949
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 Lynchburg IDA (Westminster-Canterbury Residential Care Facility) 1 5.000 07/01/2031 151,790
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Lynchburg Redevel. & Hsg. Authority (Waldon Pond II) 1 5.700 07/20/2023 10,065
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Manassas GO 1 6.000 05/01/2014 10,214
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 New Port CDA 1 5.600 09/01/2036 105,379
118 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) VIRGINIA MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA Continued
$ 30,000 New River Valley Regional Jail Authority 5.125% 10/01/2019 $ 30,796
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Norfolk Airport Authority (Air Cargo) 6.250 01/01/2030 21,263
- ------------------------------------------------------------------------------------------------------------------------------------
300,000 Norfolk EDA, Series A 1 6.000 11/01/2036 311,199
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Norfolk GO 5.750 06/01/2017 10,123
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 Norfolk IDA (Comfort Inn-Naval Station) 1 7.000 12/01/2016 20,003
- ------------------------------------------------------------------------------------------------------------------------------------
115,000 Norfolk Redevel. & Hsg. Authority (First Mtg.-Retirement Community) 1 6.125 01/01/2035 121,384
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Norfolk Water 1 5.250 11/01/2013 50,062
- ------------------------------------------------------------------------------------------------------------------------------------
315,000 Norfolk Water 1 5.375 11/01/2023 315,381
- ------------------------------------------------------------------------------------------------------------------------------------
105,000 Norfolk Water 1 5.900 11/01/2025 106,222
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 Norton IDA (Norton Community Hospital) 1 6.000 12/01/2022 269,180
- ------------------------------------------------------------------------------------------------------------------------------------
85,000 Peninsula Ports Authority Health Care Facilities (Bon Secours Health
Systems) 1 5.250 08/15/2023 87,092
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Portsmouth Redevel. & Hsg. Authority (Chowan Apartments) 1 5.850 12/20/2030 35,846
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 Prince William County IDA (Melrose Apartments) 1 5.400 01/01/2029 77,294
- ------------------------------------------------------------------------------------------------------------------------------------
85,000 Prince William County IDA (Potomac Place Associates) 1 6.250 12/20/2027 87,791
- ------------------------------------------------------------------------------------------------------------------------------------
95,000 Prince William County IDA (Prince William Hospital) 1 5.250 04/01/2019 95,067
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 Richmond IDA (Virginia Commonwealth University Real Estate Foundation) 1 5.550 01/01/2031 47,809
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 Richmond Public Utility 5.125 01/15/2028 10,189
- ------------------------------------------------------------------------------------------------------------------------------------
55,000 Richmond Redevel. & Hsg. Authority (Tobacco Row) 1 7.400 11/20/2031 55,092
- ------------------------------------------------------------------------------------------------------------------------------------
85,000 Southampton County IDA Medical Facilities Mtg. 1 5.625 01/15/2022 87,063
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Southside Regional Jail Authority 1 5.250 06/01/2024 15,302
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 Stafford County COP 1 5.000 11/01/2009 35,037
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Stafford County EDA Hospital Facilities (MediCorp Health System) 1 5.250 06/15/2037 104,904
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Suffolk County IDA (Hotel & Conference Center) 5.125 10/01/2035 5,175
- ------------------------------------------------------------------------------------------------------------------------------------
325,000 Suffolk IDA (Lake Prince Center) 1 5.300 09/01/2031 333,418
- ------------------------------------------------------------------------------------------------------------------------------------
315,000 Suffolk Redevel. & Hsg. Authority (Hope Village Apartments) 5.600 02/01/2033 331,188
- ------------------------------------------------------------------------------------------------------------------------------------
845,000 VA College Building Authority Educational Facilities (Regent University) 1 5.000 06/01/2036 874,482
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 VA Gateway Community Devel. Authority 1 6.375 03/01/2030 274,253
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 VA Hsg. Devel. Authority (Multifamily) 1 5.000 11/01/2019 45,805
- ------------------------------------------------------------------------------------------------------------------------------------
65,000 VA Hsg. Devel. Authority (Multifamily) 1 5.450 05/01/2012 66,773
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 VA Hsg. Devel. Authority (Multifamily) 1 5.500 05/01/2013 10,274
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 VA Hsg. Devel. Authority (Multifamily) 5.500 11/01/2013 51,457
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 VA Hsg. Devel. Authority (Multifamily) 1 5.750 11/01/2009 15,168
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 VA Hsg. Devel. Authority (Multifamily) 1 5.800 11/01/2009 15,314
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 VA Hsg. Devel. Authority (Multifamily) 5.800 05/01/2012 101,073
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 VA Hsg. Devel. Authority (Multifamily) 1 5.950 05/01/2009 10,080
- ------------------------------------------------------------------------------------------------------------------------------------
30,000 VA Hsg. Devel. Authority (Multifamily) 6.050 05/01/2010 30,629
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 VA Hsg. Devel. Authority (Multifamily) 1 6.050 11/01/2017 15,314
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 VA Hsg. Devel. Authority (Multifamily) 6.150 05/01/2011 15,328
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 VA Hsg. Devel. Authority (Rental Hsg.) 1 5.625 10/01/2020 20,679
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 VA Hsg. Devel. Authority, Series B 1 5.500 03/01/2021 46,558
- ------------------------------------------------------------------------------------------------------------------------------------
35,000 VA Hsg. Devel. Authority, Series B 1 5.950 05/01/2016 35,779
119 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) VIRGINIA MUNICIPAL FUND
PRINCIPAL VALUE
AMOUNT COUPON MATURITY SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA Continued
$ 50,000 VA Hsg. Devel. Authority, Series E 1 5.700% 05/01/2011 $ 50,521
- ------------------------------------------------------------------------------------------------------------------------------------
20,000 VA Hsg. Devel. Authority, Series H 1 5.625 11/01/2022 20,508
- ------------------------------------------------------------------------------------------------------------------------------------
125,000 VA Hsg. Devel. Authority, Series J 1 6.250 05/01/2015 127,609
- ------------------------------------------------------------------------------------------------------------------------------------
105,000 VA Hsg. Devel. Authority, Series L 1 5.950 11/01/2009 105,826
- ------------------------------------------------------------------------------------------------------------------------------------
155,000 VA Port Authority 1 5.500 07/01/2024 157,165
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 VA Port Authority 5.600 07/01/2027 10,142
- ------------------------------------------------------------------------------------------------------------------------------------
1,000,000 VA Port Authority 2 5.000 07/01/2036 1,036,290
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 VA Tobacco Settlement Authority (TASC) 1 5.500 06/01/2026 159,455
- ------------------------------------------------------------------------------------------------------------------------------------
170,000 VA Tobacco Settlement Authority (TASC) 1 5.625 06/01/2037 181,922
- ------------------------------------------------------------------------------------------------------------------------------------
45,000 Virginia Beach Devel. Authority (Our Lady of Perpetual Help Health
Center) 1 6.150 07/01/2027 46,064
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Virginia Beach Industrial Devel. Revenue (Holiday Inn) 1 7.250 12/01/2012 100,506
- ------------------------------------------------------------------------------------------------------------------------------------
75,000 West Point IDA Solid Waste (Chesapeake Corp.) 1 6.250 03/01/2019 75,015
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 West Point IDA Solid Waste (Chesapeake Corp.) 1 6.375 03/01/2019 25,212
------------
10,786,218
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS--55.1%
100,000 Puerto Rico Aqueduct & Sewer Authority 1 5.000 07/01/2019 101,980
- ------------------------------------------------------------------------------------------------------------------------------------
110,000 Puerto Rico Children's Trust Fund (TASC) 5.375 05/15/2033 115,201
- ------------------------------------------------------------------------------------------------------------------------------------
25,800,000 Puerto Rico Children's Trust Fund (TASC) 6.417 3 05/15/2050 1,763,946
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 Puerto Rico Commonwealth GO 5.000 07/01/2035 260,995
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Puerto Rico Electric Power Authority, Series AA 5.375 07/01/2027 50,935
- ------------------------------------------------------------------------------------------------------------------------------------
50,000 Puerto Rico Electric Power Authority, Series NN 1 5.125 07/01/2029 52,279
- ------------------------------------------------------------------------------------------------------------------------------------
250,000 Puerto Rico HFC, Series B 1 5.300 12/01/2028 258,115
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 Puerto Rico Highway & Transportation Authority 1 5.000 07/01/2036 164,475
- ------------------------------------------------------------------------------------------------------------------------------------
500,000 Puerto Rico Highway & Transportation Authority, Series M 5.000 07/01/2046 521,320
- ------------------------------------------------------------------------------------------------------------------------------------
2,000,000 Puerto Rico Highway & Transportation Authority, Series N 2 4.107 4 07/01/2045 2,003,000
- ------------------------------------------------------------------------------------------------------------------------------------
5,000 Puerto Rico IMEPCF (American Home Products) 5.100 12/01/2018 5,295
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Puerto Rico Infrastructure 5.000 07/01/2041 15,569
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 Puerto Rico ITEMECF (Ana G. Mendez University) 5.375 02/01/2019 102,804
- ------------------------------------------------------------------------------------------------------------------------------------
420,000 Puerto Rico Port Authority (American Airlines), Series A 1 6.250 06/01/2026 423,885
- ------------------------------------------------------------------------------------------------------------------------------------
215,000 Puerto Rico Port Authority (American Airlines), Series A 6.300 06/01/2023 215,133
- ------------------------------------------------------------------------------------------------------------------------------------
500,000 University of Puerto Rico, Series P 1 5.000 06/01/2021 528,010
- ------------------------------------------------------------------------------------------------------------------------------------
100,000 University of Puerto Rico, Series Q 5.000 06/01/2030 104,596
- ------------------------------------------------------------------------------------------------------------------------------------
150,000 University of Puerto Rico, Series Q 5.000 06/01/2036 156,427
------------
6,843,965
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $17,440,225)--141.8% 17,630,183
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS--(41.8) (5,194,400)
------------
NET ASSETS--100.0% $12,435,783
============
120 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) VIRGINIA MUNICIPAL FUND
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. All or a portion of the security has been segregated for collateral to cover
borrowings. See Note 6 of accompanying Notes.
2. Security represents the underlying municipal bond on an inverse floating rate
security. The bond was purchased by the Fund and subsequently segregated and
transferred to a trust. See Note 1 of accompanying Notes.
3. Zero coupon bond reflects effective yield on the date of purchase.
4. Represents the current interest rate for a variable or increasing rate
security.
TO SIMPLIFY THE LISTINGS OF SECURITIES, ABBREVIATIONS ARE USED PER THE TABLE
BELOW:
CDA Communities Devel. Authority
COP Certificates of Participation
EDA Economic Devel. Authority
GO General Obligation
HFC Housing Finance Corp.
IDA Industrial Devel. Agency
IMEPCF Industrial, Medical and Environmental Pollution Control Facilities
ITEMECF Industrial, Tourist, Educational, Medical and Environmental
Community Facilities
ROLs Residual Option Longs
TASC Tobacco Settlement Asset-Backed Bonds
DISTRIBUTION OF INVESTMENTS BY INDUSTRY OF ISSUE, AS A PERCENTAGE OF TOTAL
INVESTMENTS AT VALUE, IS AS FOLLOWS:
INDUSTRY MARKET VALUE PERCENT
- --------------------------------------------------------------------------------
Highways/Railways $ 2,688,795 15.3%
Higher Education 2,280,576 12.9
Tobacco Settlement Payments 2,220,524 12.6
Multifamily Housing 1,485,193 8.4
Marine/Aviation Facilities 1,250,324 7.1
Hotels, Restaurants & Leisure 972,676 5.5
Special Assessment 927,705 5.3
Hospital/Health Care 774,873 4.4
Electric Utilities 770,321 4.4
Airlines 639,018 3.6
Water Utilities 614,043 3.5
Manufacturing, Non-Durable Goods 607,999 3.4
Adult Living Facilities 606,592 3.4
Paper, Containers & Packaging 586,544 3.3
General Obligation 311,961 1.8
Sports Facility Revenue 283,720 1.6
Single Family Housing 268,180 1.5
Municipal Leases 244,575 1.4
Sewer Utilities 50,485 0.3
Special Tax 15,569 0.1
Not-for-Profit Organization 15,302 0.1
Education 10,102 0.1
Resource Recovery 5,106 0.0
-------------------------
Total $ 17,630,183 100.0%
=========================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
121 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENTS OF ASSETS AND LIABILITIES March 31, 2007
- --------------------------------------------------------------------------------
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER
ROCHESTER ROCHESTER ROCHESTER ROCHESTER
ARIZONA MARYLAND MASSACHUSETTS MICHIGAN
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
Investments, at cost $ 16,029,163 $ 19,662,542 $ 32,387,708 $ 29,125,173
===============================================================================================================================
Investments, at value $ 16,159,538 $ 19,758,682 $ 32,584,695 $ 29,493,597
- -------------------------------------------------------------------------------------------------------------------------------
Cash 364,006 322,343 394,834 352,358
- -------------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 279,843 396,990 251,500 114,256
Interest 195,974 171,044 365,852 333,709
Investments sold 35,000 45,203 -- --
Other 946 1,058 1,214 1,384
--------------------------------------------------------------
Total assets 17,035,307 20,695,320 33,598,095 30,295,304
- -------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Payable on borrowings (See Note 6) 3,100,000 3,900,000 6,900,000 5,500,000
Payable for short-term floating rate notes issued (See Note 1) 1,750,000 2,625,000 4,725,000 4,000,000
Investments purchased* 460,895 487,293 2,089,130 742,910
Interest expense 10,647 14,366 30,782 21,044
Shares of beneficial interest redeemed -- 29,272 -- 930
Dividends 6,023 7,043 10,196 10,522
Shareholder communications 7,422 7,438 5,827 5,428
Distribution and service plan fees 2,600 4,653 5,099 3,647
Trustees' compensation 318 453 639 799
Transfer and shareholder servicing agent fees 69 145 393 387
Other 25,243 23,762 28,825 25,096
--------------------------------------------------------------
Total liabilities 5,363,217 7,099,425 13,795,891 10,310,763
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 11,672,090 $ 13,595,895 $ 19,802,204 $ 19,984,541
==============================================================
- -------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 816 $ 1,049 $ 1,381 $ 1,385
- -------------------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 11,490,835 13,437,197 19,494,785 19,463,769
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 50,919 63,435 109,627 151,317
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (855) (1,926) (576) (354)
- -------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 130,375 96,140 196,987 368,424
--------------------------------------------------------------
NET ASSETS $ 11,672,090 $ 13,595,895 $ 19,802,204 $ 19,984,541
==============================================================
*Investments purchased on a when-issued basis or
forward commitment $ 200,000 $ 357,623 $ 2,000,000 $ --
122 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER
ROCHESTER ROCHESTER ROCHESTER ROCHESTER
ARIZONA MARYLAND MASSACHUSETTS MICHIGAN
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- -------------------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based
on net assets and shares of beneficial interest outstanding)
Net assets $10,307,874 $11,322,025 $ 16,474,894 $17,170,406
Shares of benefical interest outstanding 720,788 873,076 1,148,531 1,189,556
--------------------------------------------------------
Per share $ 14.30 $ 12.97 $ 14.34 $ 14.43
Maximum offering price per share (net asset value
plus sales charge of 4.75% of offering price) $ 15.01 $ 13.62 $ 15.06 $ 15.15
- -------------------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets and shares of beneficial
interest outstanding)
Net assets $ 79,691 $ 379,522 $ 631,756 $ 505,652
Shares of benefical interest outstanding 5,576 29,294 44,053 35,032
--------------------------------------------------------
Per share $ 14.29 $ 12.96 $ 14.34 $ 14.43
- -------------------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets and shares of beneficial
interest outstanding)
Net assets $ 1,284,525 $ 1,894,348 $ 2,695,554 $ 2,308,483
Shares of benefical interest outstanding 89,861 146,277 188,102 160,074
--------------------------------------------------------
Per share $ 14.29 $ 12.95 $ 14.33 $ 14.42
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
123 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENTS OF ASSETS AND LIABILITIES March 31, 2007 Continued
- --------------------------------------------------------------------------------
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER
ROCHESTER ROCHESTER ROCHESTER ROCHESTER
MINNESOTA NORTH CAROLINA OHIO VIRGINIA
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
Investments, at cost $ 10,119,411 $ 22,337,679 $ 35,366,414 $ 17,440,225
==================================================================================================================================
Investments, at value $ 10,157,964 $ 22,385,046 $ 35,761,429 $ 17,630,183
- ----------------------------------------------------------------------------------------------------------------------------------
Cash 407,389 324,003 341,326 314,131
- ----------------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 255,518 166,261 562,477 150,287
Interest 135,467 275,760 427,205 218,956
Investments sold 15,435 -- 5,000 668,100
Other 852 1,143 1,307 1,108
---------------------------------------------------------------
Total assets 10,972,625 23,152,213 37,098,744 18,982,765
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Payable on borrowings (See Note 6) 2,700,000 3,500,000 3,100,000 3,900,000
Payable for short-term floating rate notes issued (See Note 1) -- 2,800,000 5,650,000 2,500,000
Investments purchased* 10,322 576,034 1,139,816 92,980
Interest expense 11,334 10,706 17,206 14,718
Shares of beneficial interest redeemed -- 50,006 17,363 --
Dividends 4,108 7,689 14,055 6,257
Shareholder communications 7,378 7,430 5,833 5,293
Distribution and service plan fees 2,876 5,768 4,560 2,082
Trustees' compensation 288 381 834 548
Transfer and shareholder servicing agent fees 67 327 462 191
Other 25,000 25,273 26,140 24,913
---------------------------------------------------------------
Total liabilities 2,761,373 6,983,614 9,976,269 6,546,982
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 8,211,252 $ 16,168,599 $ 27,122,475 $ 12,435,783
===============================================================
- ----------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 595 $ 1,105 $ 1,997 $ 941
- ----------------------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 8,126,950 16,097,642 26,570,802 12,144,209
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 45,747 23,786 160,523 102,129
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (593) (1,301) (5,862) (1,454)
- ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 38,553 47,367 395,015 189,958
---------------------------------------------------------------
NET ASSETS $ 8,211,252 $ 16,168,599 $ 27,122,475 $ 12,435,783
===============================================================
*Investments purchased on a when-issued basis or
forward commitment $ -- $ 400,000 $ -- $ --
124 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER
ROCHESTER ROCHESTER ROCHESTER ROCHESTER
MINNESOTA NORTH CAROLINA OHIO VIRGINIA
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ---------------------------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based
on net assets and shares of beneficial interest outstanding)
Net assets $ 7,831,567 $ 10,882,329 $ 22,291,838 $ 11,023,254
Shares of beneficial interest outstanding 567,747 743,338 1,641,016 834,383
--------------------------------------------------------------
Per share $ 13.79 $ 14.64 $ 13.58 $ 13.21
Maximum offering price per share (net asset value
plus sales charge of 4.75% of offering price) $ 14.48 $ 15.37 $ 14.26 $ 13.87
- ---------------------------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets and shares of beneficial
interest outstanding)
Net assets $ 215,507 $ 61,999 $ 934,855 $ 149,539
Shares of benefical interest outstanding 15,635 4,236 68,860 11,329
--------------------------------------------------------------
Per share $ 13.78 $ 14.64 $ 13.58 $ 13.20
- ---------------------------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets and shares of beneficial
interest outstanding)
Net assets $ 164,178 $ 5,224,271 $ 3,895,782 $ 1,262,990
Shares of benefical interest outstanding 11,914 357,051 287,099 95,776
--------------------------------------------------------------
Per share $ 13.78 $ 14.63 $ 13.57 $ 13.19
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
125 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENTS OF OPERATIONS For the Period Ended March 31, 2007
- --------------------------------------------------------------------------------
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER
ROCHESTER ROCHESTER ROCHESTER ROCHESTER
ARIZONA MARYLAND MASSACHUSETTS MICHIGAN
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
FUND 1 FUND 1 FUND 2 FUND 3
- -----------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------------------------------
Interest $ 217,359 $ 290,171 $ 515,474 $ 679,011
- -----------------------------------------------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------------------------------------------
Management fees 18,420 25,003 42,634 53,586
- -----------------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 2,266 3,183 6,335 4,550
Class B 205 807 1,351 1,502
Class C 1,914 3,125 5,189 6,507
- -----------------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 201 332 1,331 1,016
Class B 33 95 148 197
Class C 58 99 287 577
- -----------------------------------------------------------------------------------------------------------------------------
Shareholder communications:
Class A 4,805 4,837 5,605 5,017
Class B 1,656 1,632 1,323 1,609
Class C 1,635 1,644 2,144 2,236
- -----------------------------------------------------------------------------------------------------------------------------
Interest expense and fees on short-term floating rate
notes issued (See Note 1) 4,579 6,986 12,574 33,712
- -----------------------------------------------------------------------------------------------------------------------------
Interest expense on borrowings 41,910 67,020 135,339 152,337
- -----------------------------------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 25,001 25,000 35,383 26,872
- -----------------------------------------------------------------------------------------------------------------------------
Trustees' compensation 348 498 711 884
- -----------------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 298 227 28 53
- -----------------------------------------------------------------------------------------------------------------------------
Other 3,500 6,329 9,369 11,166
----------------------------------------------------------
Total expenses 106,829 146,817 259,751 301,821
Less reduction to custodian expenses (298) (227) (28) (29)
Less waivers and reimbursements of expenses (73,291) (99,943) (179,724) (183,624)
----------------------------------------------------------
Net expenses 33,240 46,647 79,999 118,168
- -----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 184,119 243,524 435,475 560,843
- -----------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -----------------------------------------------------------------------------------------------------------------------------
Net realized loss on investments (855) (1,926) (576) (354)
- -----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 130,375 96,140 196,987 368,424
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 313,639 $ 337,738 $ 631,886 $ 928,913
==========================================================
1. For the period from October 10, 2006 (commencement of operations) to March
31, 2007.
2. For the period from July 18, 2006 (commencement of operations) to March 31,
2007.
3. For the period from June 21, 2006 (commencement of operations) to March 31,
2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
126 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER
ROCHESTER ROCHESTER ROCHESTER ROCHESTER
MINNESOTA NORTH CAROLINA OHIO VIRGINIA
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
FUND 4 FUND 1 FUND 3 FUND 2
- -----------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------------------------
Interest $ 163,461 $ 271,664 $ 721,049 $ 401,333
- -----------------------------------------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------------------------------------
Management fees 14,086 27,507 58,359 31,416
- -----------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 2,767 4,645 5,783 2,638
Class B 369 221 3,234 270
Class C 299 12,514 5,991 2,775
- -----------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 170 430 1,462 654
Class B 26 33 315 49
Class C 35 707 432 194
- -----------------------------------------------------------------------------------------------------------------------
Shareholder communications:
Class A 4,781 4,854 5,562 6,010
Class B 1,584 1,608 1,659 1,153
Class C 1,586 1,644 2,022 1,345
- -----------------------------------------------------------------------------------------------------------------------
Interest expense and fees on short-term floating rate
notes issued (See Note 1) -- 7,451 18,507 18,459
- -----------------------------------------------------------------------------------------------------------------------
Interest expense on borrowings 38,704 34,874 151,724 101,842
- -----------------------------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 25,000 25,000 27,058 27,643
- -----------------------------------------------------------------------------------------------------------------------
Trustees' compensation 317 411 923 615
- -----------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses -- 12 226 98
- -----------------------------------------------------------------------------------------------------------------------
Other 3,032 3,618 11,467 7,207
-----------------------------------------------------------
Total expenses 92,756 125,529 294,724 202,368
Less reduction to custodian expenses -- (12) (31) (98)
Less waivers and reimbursements of expenses (71,581) (68,043) (183,690) (135,525)
-----------------------------------------------------------
Net expenses 21,175 57,474 111,003 66,745
- -----------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 142,286 214,190 610,046 334,588
- -----------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -----------------------------------------------------------------------------------------------------------------------
Net realized loss on investments (593) (1,301) (5,862) (1,454)
- -----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 38,553 47,367 395,015 189,958
- -----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 180,246 $ 260,256 $ 999,199 $ 523,092
===========================================================
1. For the period from October 10, 2006 (commencement of operations) to March
31, 2007.
2. For the period from July 18, 2006 (commencement of operations) to March 31,
2007.
3. For the period from June 21, 2006 (commencement of operations) to March 31,
2007.
4. For the period from November 7, 2006 (commencement of operations) to March
31, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
127 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER
ROCHESTER ROCHESTER ROCHESTER ROCHESTER
ARIZONA MARYLAND MASSACHUSETTS MICHIGAN
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
PERIOD ENDED MARCH 31, 2007 FUND 1 FUND 1 FUND 3 FUND 4
- ------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------
Net investment income $ 184,119 $ 243,524 $ 435,475 $ 560,843
- ------------------------------------------------------------------------------------------------------------------------
Net realized loss (855) (1,926) (576) (354)
- ------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 130,375 96,140 196,987 368,424
---------------------------------------------------------------
Net increase in net assets resulting from operations 313,639 337,738 631,886 928,913
- ------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (127,692) (169,070) (303,283) (382,932)
Class B (791) (2,794) (4,717) (5,417)
Class C (6,491) (10,924) (18,464) (22,966)
---------------------------------------------------------------
(134,974) (182,788) (326,464) (411,315)
- ------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
beneficial interest transactions:
Class A 10,029,836 11,068,314 16,074,435 16,562,516
Class B 78,749 378,963 628,692 504,440
Class C 1,282,840 1,891,668 2,691,655 2,297,987
---------------------------------------------------------------
11,391,425 13,338,945 19,394,782 19,364,943
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------
Total increase 11,570,090 13,493,895 19,700,204 19,882,541
- ------------------------------------------------------------------------------------------------------------------------
Beginning of period 102,000 2 102,000 2 102,000 2 102,000 5
---------------------------------------------------------------
End of period $ 11,672,090 $ 13,595,895 $ 19,802,204 $ 19,984,541
===============================================================
Accumulated net investment income for the period
ended March 31, 2007 $ 50,919 $ 63,435 $ 109,627 $ 151,317
1. For the period from October 10, 2006 (commencement of operations) to March
31, 2007.
2. Reflects the value of the Manager's initial seed money on May 31, 2006.
3. For the period from July 18, 2006 (commencement of operations) to March 31,
2007.
4. For the period from June 21, 2006 (commencement of operations) to March 31,
2007.
5. Reflects the value of the Manager's initial seed money on May 10, 2006.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
128 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER
ROCHESTER ROCHESTER ROCHESTER ROCHESTER
MINNESOTA NORTH CAROLINA OHIO VIRGINIA
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
PERIOD ENDED MARCH 31, 2007 FUND 6 FUND 1 FUND 4 FUND 3
- -------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------
Net investment income $ 142,286 $ 214,190 $ 610,046 $ 334,588
- -------------------------------------------------------------------------------------------------------------------------
Net realized loss (593) (1,301) (5,862) (1,454)
- -------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 38,553 47,367 395,015 189,958
----------------------------------------------------------------
Net increase in net assets resulting from operations 180,246 260,256 999,199 523,092
- -------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (96,679) (149,994) (418,385) (222,574)
Class B (1,277) (709) (11,748) (957)
Class C (1,099) (42,285) (21,157) (9,222)
----------------------------------------------------------------
(99,055) (192,988) (451,290) (232,753)
- -------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
beneficial interest transactions:
Class A 7,651,497 10,717,031 21,658,469 10,634,898
Class B 213,782 61,014 921,997 148,549
Class C 162,782 5,221,286 3,892,100 1,259,997
----------------------------------------------------------------
8,028,061 15,999,331 26,472,566 12,043,444
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------
Total increase 8,109,252 16,066,599 27,020,475 12,333,783
- -------------------------------------------------------------------------------------------------------------------------
Beginning of period 102,000 2 102,000 2 102,000 5 102,000 2
----------------------------------------------------------------
End of period $ 8,211,252 $ 16,168,599 $ 27,122,475 $ 12,435,783
================================================================
Accumulated net investment income for the period
ended March 31, 2007 $ 45,747 $ 23,786 $ 160,523 $ 102,129
1. For the period from October 10, 2006 (commencement of operations) to March
31, 2007.
2. Reflects the value of the Manager's initial seed money on May 31, 2006.
3. For the period from July 18, 2006 (commencement of operations) to March 31,
2007.
4. For the period from June 21, 2006 (commencement of operations) to March 31,
2007.
5. Reflects the value of the Manager's initial seed money on May 10, 2006.
6. For the period from November 7, 2006 (commencement of operations) to March
31, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
129 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF CASH FLOWS
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
For the Period Ended March 31, 2007 1
- -------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
- -------------------------------------------------------------------------------------
Net increase in net assets from operations $ 313,639
- -------------------------------------------------------------------------------------
Adjustments to reconcile net increase in net assets from operations
to net cash used in operating activities:
Purchase of investment securities (10,832,084)
Proceeds from disposition of investment securities 35,000
Short-term investment securities, net (5,223,444)
Premium amortization 27,980
Discount accretion (37,470)
Net realized loss on investments 855
Net change in unrealized appreciation on investments (130,375)
Increase in interest receivable (195,974)
Increase in receivable for securities sold (35,000)
Increase in other assets (946)
Increase in payable for securities purchased 460,895
Increase in payable for accrued expenses 46,299
---------------
Net cash used in operating activities (15,570,625)
- -------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- -------------------------------------------------------------------------------------
Proceeds from bank borrowing 8,800,000
Payments on bank borrowing (5,700,000)
Proceeds from short-term floating rate notes issued 1,750,000
Proceeds from shares sold 11,107,766
Payment on shares redeemed (10,471)
Cash distributions paid (114,664)
---------------
Net cash provided by financing activities 15,832,631
- -------------------------------------------------------------------------------------
Net increase in cash 262,006
- -------------------------------------------------------------------------------------
Cash, beginning balance 102,000 2
---------------
Cash, ending balance $ 364,006
===============
Supplemental disclosure of cash flow information:
Noncash financing activities not included herein consist of reinvestment of
dividends and distributions of $14,287.
Cash paid for interest on bank borrowings--$31,263.
Cash paid on short-term floating rate notes issued--$4,579.
1. For the period from October 10, 2006 (commencement of operations) to March
31, 2007.
2. Reflects the value of the Manager's initial seed money on May 31, 2006.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
130 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
For the Period Ended March 31, 2007 1
- -------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
- -------------------------------------------------------------------------------------
Net increase in net assets from operations $ 337,738
- -------------------------------------------------------------------------------------
Adjustments to reconcile net increase in net assets from operations
to net cash used in operating activities:
Purchase of investment securities (13,734,513)
Proceeds from disposition of investment securities 60,000
Short-term investment securities, net (5,967,212)
Premium amortization 34,219
Discount accretion (56,962)
Net realized loss on investments 1,926
Net change in unrealized appreciation on investments (96,140)
Increase in interest receivable (171,044)
Increase in receivable for securities sold (45,203)
Increase in other assets (1,058)
Increase in payable for securities purchased 487,293
Increase in payable for accrued expenses 50,817
---------------
Net cash used in operating activities (19,100,139)
- -------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- -------------------------------------------------------------------------------------
Proceeds from bank borrowing 9,500,000
Payments on bank borrowing (5,600,000)
Proceeds from short-term floating rate notes issued 2,625,000
Proceeds from shares sold 13,100,185
Payment on shares redeemed (149,600)
Cash distributions paid (155,103)
---------------
Net cash provided by financing activities 19,320,482
- -------------------------------------------------------------------------------------
Net increase in cash 220,343
- -------------------------------------------------------------------------------------
Cash, beginning balance 102,000 2
---------------
Cash, ending balance $ 322,343
===============
Supplemental disclosure of cash flow information:
Noncash financing activities not included herein consist of reinvestment of
dividends and distributions of $20,642.
Cash paid for interest on bank borrowings--$52,654.
Cash paid on short-term floating rate notes issued--$6,986.
1. For the period from October 10, 2006 (commencement of operations) to March
31, 2007.
2. Reflects the value of the Manager's initial seed money on May 31, 2006.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
131 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF CASH FLOWS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
For the Period Ended March 31, 2007 1
- -------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
- -------------------------------------------------------------------------------------
Net increase in net assets from operations $ 631,886
- -------------------------------------------------------------------------------------
Adjustments to reconcile net increase in net assets from operations
to net cash used in operating activities:
Purchase of investment securities (18,009,931)
Proceeds from disposition of investment securities 105,000
Short-term investment securities, net (14,474,336)
Premium amortization 57,241
Discount accretion (66,258)
Net realized loss on investments 576
Net change in unrealized appreciation on investments (196,987)
Increase in interest receivable (365,852)
Increase in other assets (1,214)
Increase in payable for securities purchased 2,089,130
Increase in payable for accrued expenses 71,565
---------------
Net cash used in operating activities (30,159,180)
- -------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- -------------------------------------------------------------------------------------
Proceeds from bank borrowing 18,300,000
Payments on bank borrowing (11,400,000)
Proceeds from short-term floating rate notes issued 4,725,000
Proceeds from shares sold 19,504,611
Payment on shares redeemed (446,496)
Cash distributions paid (231,101)
---------------
Net cash provided by financing activities 30,452,014
- -------------------------------------------------------------------------------------
Net increase in cash 292,834
- -------------------------------------------------------------------------------------
Cash, beginning balance 102,000 2
---------------
Cash, ending balance $ 394,834
===============
Supplemental disclosure of cash flow information:
Noncash financing activities not included herein consist of reinvestment of
dividends and distributions of $85,167.
Cash paid for interest on bank borrowings--$104,557.
Cash paid on short-term floating rate notes issued--$12,574.
1. For the period from July 18, 2006 (commencement of operations) to March 31,
2007.
2. Reflects the value of the Manager's initial seed money on May 31, 2006.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
132 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
For the Period Ended March 31, 2007 1
- -----------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
- -------------------------------------------------------------------------------------
Net increase in net assets from operations $ 928,913
- -------------------------------------------------------------------------------------
Adjustments to reconcile net increase in net assets from operations
to net cash used in operating activities:
Purchase of investment securities (17,756,713)
Proceeds from disposition of investment securities 393,560
Short-term investment securities, net (11,721,881)
Premium amortization 71,406
Discount accretion (111,899)
Net realized loss on investments 354
Net change in unrealized appreciation on investments (368,424)
Increase in interest receivable (333,709)
Increase in other assets (1,384)
Increase in payable for securities purchased 742,910
Increase in payable for accrued expenses 56,401
---------------
Net cash used in operating activities (28,100,466)
- -------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- -------------------------------------------------------------------------------------
Proceeds from bank borrowing 16,100,000
Payments on bank borrowing (10,600,000)
Proceeds from short-term floating rate notes issued 4,000,000
Proceeds from shares sold 19,447,628
Payment on shares redeemed (295,698)
Cash distributions paid (301,106)
---------------
Net cash provided by financing activities 28,350,824
- -------------------------------------------------------------------------------------
Net increase in cash 250,358
- -------------------------------------------------------------------------------------
Cash, beginning balance 102,000 2
---------------
Cash, ending balance $ 352,358
===============
Supplemental disclosure of cash flow information:
Noncash financing activities not included herein consist of reinvestment of
dividends and distributions of $99,687.
Cash paid for interest on bank borrowings--$131,293.
Cash paid on short-term floating rate notes issued--$33,712.
1. For the period from June 21, 2006 (commencement of operations) to March 31,
2007.
2. Reflects the value of the Manager's initial seed money on May 10, 2006.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
133 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF CASH FLOWS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
For the Period Ended March 31, 2007 1
- -------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
- -------------------------------------------------------------------------------------
Net increase in net assets from operations $ 180,246
- -------------------------------------------------------------------------------------
Adjustments to reconcile net increase in net assets from operations
to net cash used in operating activities:
Purchase of investment securities (7,715,781)
Proceeds from disposition of investment securities 15,850
Short-term investment securities, net (2,440,762)
Premium amortization 20,698
Discount accretion (9)
Net realized loss on investments 593
Net change in unrealized appreciation on investments (38,553)
Increase in interest receivable (135,467)
Increase in receivable for securities sold (15,435)
Increase in other assets (852)
Increase in payable for securities purchased 10,322
Increase in payable for accrued expenses 46,943
---------------
Net cash used in operating activities (10,072,207)
- -------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- -------------------------------------------------------------------------------------
Proceeds from bank borrowing 5,300,000
Payments on bank borrowing (2,600,000)
Proceeds from shares sold 7,770,266
Payment on shares redeemed (4,477)
Cash distributions paid (88,193)
---------------
Net cash provided by financing activities 10,377,596
- -------------------------------------------------------------------------------------
Net increase in cash 305,389
- -------------------------------------------------------------------------------------
Cash, beginning balance 102,000 2
---------------
Cash, ending balance $ 407,389
===============
Supplemental disclosure of cash flow information:
Noncash financing activities not included herein consist of reinvestment of
dividends and distributions of $6,754.
Cash paid for interest on bank borrowings--$27,370.
1. For the period from November 7, 2006 (commencement of operations) to March
31, 2007.
2. Reflects the value of the Manager's initial seed money on May 31, 2006.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
134 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
For the Period Ended March 31, 2007 1
- -------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
- -------------------------------------------------------------------------------------
Net increase in net assets from operations $ 260,256
- -------------------------------------------------------------------------------------
Adjustments to reconcile net increase in net assets from operations
to net cash used in operating activities:
Purchase of investment securities (12,673,509)
Proceeds from disposition of investment securities 35,000
Short-term investment securities, net (9,711,356)
Premium amortization 40,887
Discount accretion (30,002)
Net realized loss on investments 1,301
Net change in unrealized appreciation on investments (47,367)
Increase in interest receivable (275,760)
Increase in other assets (1,143)
Increase in payable for securities purchased 576,034
Increase in payable for accrued expenses 49,885
---------------
Net cash used in operating activities (21,775,774)
- -------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- -------------------------------------------------------------------------------------
Proceeds from bank borrowing 10,500,000
Payments on bank borrowing (7,000,000)
Proceeds from short-term floating rate notes issued 2,800,000
Proceeds from shares sold 15,915,607
Payment on shares redeemed (115,593)
Cash distributions paid (102,237)
---------------
Net cash provided by financing activities 21,997,777
- -------------------------------------------------------------------------------------
Net increase in cash 222,003
- -------------------------------------------------------------------------------------
Cash, beginning balance 102,000 2
---------------
Cash, ending balance $ 324,003
===============
Supplemental disclosure of cash flow information:
Noncash financing activities not included herein consist of reinvestment of
dividends and distributions of $83,062.
Cash paid for interest on bank borrowings--$24,168.
Cash paid on short-term floating rate notes issued--$7,451.
1. For the period from October 10, 2006 (commencement of operations) to March
31, 2007.
2. Reflects the value of the Manager's initial seed money on May 31, 2006.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
135 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
STATEMENT OF CASH FLOWS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
For the Period Ended March 31, 2007 1
- -------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
- -------------------------------------------------------------------------------------
Net increase in net assets from operations $ 999,199
- -------------------------------------------------------------------------------------
Adjustments to reconcile net increase in net assets from operations
to net cash used in operating activities:
Purchase of investment securities (24,712,685)
Proceeds from disposition of investment securities 290,000
Short-term investment securities, net (10,895,113)
Premium amortization 51,229
Discount accretion (105,707)
Net realized loss on investments 5,862
Net change in unrealized appreciation on investments (395,015)
Increase in interest receivable (427,205)
Increase in receivable for securities sold (5,000)
Increase in other assets (1,307)
Increase in payable for securities purchased 1,139,816
Increase in payable for accrued expenses 55,035
---------------
Net cash used in operating activities (34,000,891)
- -------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- -------------------------------------------------------------------------------------
Proceeds from bank borrowing 21,200,000
Payments on bank borrowing (18,100,000)
Proceeds from short-term floating rate notes issued 5,650,000
Proceeds from shares sold 26,269,464
Payment on shares redeemed (444,712)
Cash distributions paid (334,535)
---------------
Net cash provided by financing activities 34,240,217
- -------------------------------------------------------------------------------------
Net increase in cash 239,326
- -------------------------------------------------------------------------------------
Cash, beginning balance 102,000 2
---------------
Cash, ending balance $ 341,326
===============
Supplemental disclosure of cash flow information:
Noncash financing activities not included herein consist of reinvestment of
dividends and distributions of $102,700.
Cash paid for interest on bank borrowings--$134,518.
Cash paid on short-term floating rate notes issued--$18,507.
1. For the period from June 21, 2006 (commencement of operations) to March 31,
2007.
2. Reflects the value of the Manager's initial seed money investment on May 10,
2006.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
136 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) VIRGINIA MUNICIPAL FUND
For the Period Ended March 31, 2007 1
- -------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
- -------------------------------------------------------------------------------------
Net increase in net assets from operations $ 523,092
- -------------------------------------------------------------------------------------
Adjustments to reconcile net increase in net assets from operations
to net cash used in operating activities:
Purchase of investment securities (10,429,390)
Proceeds from disposition of investment securities 104,919
Short-term investment securities, net (7,106,095)
Premium amortization 57,082
Discount accretion (68,195)
Net realized loss on investments 1,454
Net change in unrealized appreciation on investments (189,958)
Increase in interest receivable (218,956)
Increase in receivable for securities sold (668,100)
Increase in other assets (1,108)
Increase in payable for securities purchased 92,980
Increase in payable for accrued expenses 47,745
---------------
Net cash used in operating activities (17,854,530)
- -------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- -------------------------------------------------------------------------------------
Proceeds from bank borrowing 11,000,000
Payments on bank borrowing (7,100,000)
Proceeds from short-term floating rate notes issued 2,500,000
Proceeds from shares sold 12,398,189
Payment on shares redeemed (540,688)
Cash distributions paid (190,840)
---------------
Net cash provided by financing activities 18,066,661
- -------------------------------------------------------------------------------------
Net increase in cash 212,131
- -------------------------------------------------------------------------------------
Cash, beginning balance 102,000 2
---------------
Cash, ending balance $ 314,131
===============
Supplemental disclosure of cash flow information:
Noncash financing activities not included herein consist of reinvestment of
dividends and distributions of $35,656.
Cash paid for interest on bank borrowings--$87,124.
Cash paid on short-term floating rate notes issued--$18,459.
1. For the period from July 18, 2006 (commencement of operations) to March 31,
2007.
2. Reflects the value of the Manager's initial seed money on May 31, 2006.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
137 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
CLASS A CLASS B CLASS C
PERIOD ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 2007 1 MARCH 31, 2007 1 MARCH 31, 2007 1
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.80 $ 13.80 $ 13.80
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .37 .31 .29
Net realized and unrealized gain .39 .39 .41
-------------------------------------------------------------
Total from investment operations .76 .70 .70
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.26) (.21) (.21)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.30 $ 14.29 $ 14.29
=============================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 5.61% 5.16% 5.18%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 10,308 $ 80 $ 1,284
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 6,676 $ 44 $ 411
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 5.52% 4.56% 4.39%
Expenses excluding interest and fees on short-term floating rate
notes issued 2.88% 11.63% 4.48%
Interest and fees on short-term floating rate notes issued 5 .14% .14% .14%
-------------------------------------------------------------
Total expenses 3.02% 6 11.77% 6 4.62% 6
Expenses after payments and waivers and reduction to custodian
expenses 0.80% 1.55% 1.55%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 0% 0% 0%
1. For the period from October 10, 2006 (commencement of operations) to March
31, 2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for periods of
less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods of less than one full year.
5. Interest and fee expense relates to the Fund's liability for short-term
floating rate notes issued in conjunction with inverse floating rate security
transactions. See Note 1 of accompanying Notes.
6. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future fiscal years due to the Fund's limited
operating history at March 31, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
138 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
CLASS A CLASS B CLASS C
PERIOD ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 2007 1 MARCH 31, 2007 1 MARCH 31, 2007 1
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.70 $ 12.70 $ 12.70
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .33 .27 .27
Net realized and unrealized gain .18 .18 .17
-------------------------------------------------------------
Total from investment operations .51 .45 .44
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.24) (.19) (.19)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.97 $ 12.96 $ 12.95
=============================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 4.00% 3.50% 3.47%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 11,322 $ 380 $ 1,894
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 8,826 $ 173 $ 671
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 5.40% 4.46% 4.41%
Expenses excluding interest and fees on short-term floating rate
notes issued 2.90% 5.87% 4.29%
Interest and fees on short-term floating rate notes issued 5 .15% .15% .15%
-------------------------------------------------------------
Total expenses 3.05% 6 6.02% 6 4.44% 6
Expenses after payments and waivers and reduction to custodian
expenses 0.80% 1.55% 1.55%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 1% 1% 1%
1. For the period from October 10, 2006 (commencement of operations) to March
31, 2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for periods of
less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods of less than one full year.
5. Interest and fee expense relates to the Fund's liability for short-term
floating rate notes issued in conjunction with inverse floating rate security
transactions. See Note 1 of accompanying Notes.
6. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future fiscal years due to the Fund's limited
operating history at March 31, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
139 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MASSACHUSETTS MUNICIPAL FUND
CLASS A CLASS B CLASS C
PERIOD ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 2007 1 MARCH 31, 2007 1 MARCH 31, 2007 1
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.70 $ 13.70 $ 13.70
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .57 .47 .46
Net realized and unrealized gain .48 .50 .50
-------------------------------------------------------------
Total from investment operations 1.05 .97 .96
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.41) (.33) (.33)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.34 $ 14.34 $ 14.33
=============================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 7.73% 7.13% 7.05%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 16,475 $ 632 $ 2,695
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 10,143 $ 195 $ 748
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 5.67% 4.69% 4.59%
Expenses excluding interest and fees on short-term floating rate
notes issued 3.05% 4.92% 4.24%
Interest and fees on short-term floating rate notes issued 5 .16% .16% .16%
=============================================================
Total expenses 3.21% 6 5.08% 6 4.40% 6
Expenses after payments and waivers and reduction to custodian
expenses 0.80% 1.55% 1.55%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 1% 1% 1%
1. For the period from July 18, 2006 (commencement of operations) to March 31,
2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for periods of
less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods of less than one full year.
5. Interest and fee expense relates to the Fund's liability for short-term
floating rate notes issued in conjunction with inverse floating rate security
transactions. See Note 1 of accompanying Notes.
6. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future fiscal years due to the Fund's limited
operating history at March 31, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
140 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) MICHIGAN MUNICIPAL FUND
CLASS A CLASS B CLASS C
PERIOD ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 2007 1 MARCH 31, 2007 1 MARCH 31, 2007 1
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.60 $ 13.60 $ 13.60
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .65 .51 .52
Net realized and unrealized gain .64 .69 .67
-------------------------------------------------------------
Total from investment operations 1.29 1.20 1.19
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.46) (.37) (.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.43 $ 14.43 $ 14.42
=============================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 9.62% 9.03% 8.94%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 17,170 $ 506 $ 2,309
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 11,550 $ 196 $ 845
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 5.82% 4.55% 4.63%
Expenses excluding interest and fees on short-term floating rate
notes issued 2.63% 4.43% 3.76%
Interest and fees on short-term floating rate notes issued 5 .34% .34% .34%
-------------------------------------------------------------
Total expenses 2.97% 6 4.77% 6 4.10% 6
Expenses after payments and waivers and reduction to custodian
expenses 0.80% 1.55% 1.55%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 4% 4% 4%
1. For the period from June 21, 2006 (commencement of operations) to March 31,
2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for periods of
less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods of less than one full year.
5. Interest and fee expense relates to the Fund's liability for short-term
floating rate notes issued in conjunction with inverse floating rate security
transactions. See Note 1 of accompanying Notes.
6. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future fiscal years due to the Fund's limited
operating history at March 31, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
141 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
CLASS A CLASS B CLASS C
PERIOD ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 2007 1 MARCH 31, 2007 1 MARCH 31, 2007 1
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.60 $ 13.60 $ 13.60
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .30 .26 .26
Net realized and unrealized gain .09 .08 .08
-------------------------------------------------------------
Total from investment operations .39 .34 .34
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.20) (.16) (.16)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.79 $ 13.78 $ 13.78
=============================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 2.85% 2.48% 2.47%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 7,832 $ 215 $ 164
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 6,330 $ 95 $ 77
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 5.53% 4.75% 4.75%
Total expenses 3.44% 5 8.87% 5 9.87% 5
Expenses after payments and waivers and reduction to custodian
expenses 0.80% 1.55% 1.55%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 0% 0% 0%
1. For the period from November 7, 2006 (commencement of operations) to March
31, 2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for periods of
less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods of less than one full year.
5. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future fiscal years due to the Fund's limited
operating history at March 31, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
142 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND
CLASS A CLASS B CLASS C
PERIOD ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 2007 1 MARCH 31, 2007 1 MARCH 31, 2007 1
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.40 $ 14.40 $ 14.40
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .31 .25 .25
Net realized and unrealized gain .19 .20 .19
-------------------------------------------------------------
Total from investment operations .50 .45 .44
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.26) (.21) (.21)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.64 $ 14.64 $ 14.63
=============================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 3.48% 3.14% 3.02%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 10,883 $ 62 $ 5,224
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 7,927 $ 47 $ 2,670
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 4.48% 3.59% 3.56%
Expenses excluding interest and fees on short-term floating rate
notes issued 2.09% 10.13% 2.95%
Interest and fees on short-term floating rate notes issued 5 .15% .15% .15%
-------------------------------------------------------------
Total expenses 2.24% 6 10.28% 6 3.10% 6
Expenses after payments and waivers and reduction to custodian
expenses 0.80% 1.55% 1.55%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 0% 0% 0%
1. For the period from October 10, 2006 (commencement of operations) to March
31, 2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for periods of
less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods of less than one full year.
5. Interest and fee expense relates to the Fund's liability for short-term
floating rate notes issued in conjunction with inverse floating rate security
transactions. See Note 1 of accompanying Notes.
6. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future fiscal years due to the Fund's limited
operating history at March 31, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
143 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) OHIO MUNICIPAL FUND
CLASS A CLASS B CLASS C
PERIOD ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 2007 1 MARCH 31, 2007 1 MARCH 31, 2007 1
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.80 $ 12.80 $ 12.80
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .61 .52 .46
Net realized and unrealized gain .61 .62 .67
-------------------------------------------------------------
Total from investment operations 1.22 1.14 1.13
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.44) (.36) (.36)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.58 $ 13.58 $ 13.57
=============================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 9.78% 9.13% 9.01%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 22,292 $ 935 $ 3,895
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 12,528 $ 419 $ 784
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 5.81% 4.96% 4.48%
Expenses excluding interest and fees on short-term floating rate
notes issued 2.49% 3.95% 3.45%
Interest and fees on short-term floating rate notes issued 5 .17% .17% .17%
-------------------------------------------------------------
Total expenses 2.66% 6 4.12% 6 3.62% 6
Expenses after payments and waivers and reduction to custodian
expenses 0.80% 1.55% 1.55%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 2% 2%
1. For the period from June 21, 2006 (commencement of operations) to March 31,
2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for periods of
less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods of less than one full year.
5. Interest and fee expense relates to the Fund's liability for short-term
floating rate notes issued in conjunction with inverse floating rate security
transactions. See Note 1 of accompanying Notes.
6. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future fiscal years due to the Fund's limited
operating history at March 31, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
144 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OPPENHEIMER ROCHESTER(TM) VIRGINIA MUNICIPAL FUND
CLASS A CLASS B CLASS C
PERIOD ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 2007 1 MARCH 31, 2007 1 MARCH 31, 2007 1
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.60 $ 12.60 $ 12.60
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .54 .43 .43
Net realized and unrealized gain .44 .47 .44
-------------------------------------------------------------
Total from investment operations .98 .90 .87
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.37) (.30) (.28)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.21 $ 13.20 $ 13.19
=============================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 7.81% 7.13% 6.95%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 11,023 $ 150 $ 1,263
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 7,721 $ 40 $ 400
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 5.89% 4.66% 4.69%
Expenses excluding interest and fees on short-term floating rate
notes issued 3.11% 8.07% 4.38%
Interest and fees on short-term floating rate notes issued 5 .32% .32% .32%
-------------------------------------------------------------
Total expenses 3.43% 6 8.39% 6 4.70% 6
Expenses after payments and waivers and reduction to custodian
expenses 0.80% 1.55% 1.55%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 2% 2%
1. For the period from July 18, 2006 (commencement of operations) to March 31,
2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for periods of
less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods of less than one full year.
5. Interest and fee expense relates to the Fund's liability for short-term
floating rate notes issued in conjunction with inverse floating rate security
transactions. See Note 1 of accompanying Notes.
6. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future fiscal years due to the Fund's limited
operating history at March 31, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
145 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Rochester Arizona Municipal Fund ("Arizona Fund"), Oppenheimer
Rochester Maryland Municipal Fund ("Maryland Fund"), Oppenheimer Rochester
Massachusetts Municipal Fund ("Massachusetts Fund"), Oppenheimer Rochester
Michigan Municipal Fund ("Michigan Fund"), Oppenheimer Rochester Minnesota
Municipal Fund ("Minnesota Fund"), Oppenheimer Rochester North Carolina
Municipal Fund ("North Carolina Fund"), Oppenheimer Rochester Ohio Municipal
Fund ("Ohio Fund") and Oppenheimer Rochester Virginia Municipal Fund ("Virginia
Fund") (the "Funds") are each non-diversified, open-end management investment
companies registered under the Investment Company Act of 1940, as amended. The
investment objective of each of the Funds is to seek a high level of current
interest income exempt from federal and its state income taxes for individual
investors as is consistent with preservation of capital. The Funds' investment
advisor is OppenheimerFunds, Inc. (the "Manager").
The Funds offer Class A, Class B and Class C shares. Class A shares are
sold at their offering price, which is normally net asset value plus a front-end
sales charge. Class B and Class C shares are sold without a front-end sales
charge but may be subject to a contingent deferred sales charge ("CDSC"). All
classes of shares have identical rights and voting privileges with respect to
the Funds in general and exclusive voting rights on matters that affect that
class alone. Earnings, net assets and net asset value per share may differ due
to each class having its own expenses, such as transfer and shareholder
servicing agent fees and shareholder communications, directly attributable to
that class. Class A, B and C shares have separate distribution and/or service
plans. Class B shares will automatically convert to Class A shares six years
after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Funds.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Funds calculate the net asset value of their shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Funds'
assets are valued. Securities traded on NASDAQ(R) are valued based on the
closing price provided by NASDAQ prior to the time when the Funds' assets are
valued. In the absence of a sale, the security is valued at the last sale price
on the prior trading day, if it is within the spread of the closing "bid" and
"asked" prices, and if not, at the closing bid price. Securities traded on
foreign exchanges are valued based on the last sale price on the principal
exchange on which the security is traded, identified by the portfolio pricing
service, prior to the time when the Funds' assets are valued. In the absence of
a sale, the security is valued at the official closing price on the principal
exchange. Corporate, government and municipal debt instruments having a
remaining maturity in excess of sixty days and all mortgage-backed securities
will be valued at the mean between the "bid" and "asked" prices. Futures
contracts traded on a commodities or futures exchange will be valued at the
final settlement price or official closing price on the principal exchange as
reported by such principal exchange at its trading session ending at, or most
recently prior to, the time when the Funds' assets are valued. Securities
(including restricted securities) for which market quotations are not readily
available are valued at their fair value. Foreign and domestic securities whose
values have been materially affected by what the Manager identifies as a
significant event occurring before the Funds' assets are valued but after the
close of their respective exchanges will be fair valued. Fair value is
determined in good faith using consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment
for securities that have been purchased by the Funds on a when-issued basis or
forward commitment take place generally at least ten days or more after the
trade date. Normally the settlement date occurs within six months after the
trade date; however, the Funds may, from time to time, purchase securities whose
settlement date extends six months or more beyond trade date. During this
period, such securities do not earn interest, are subject to market fluctuation
and may increase or decrease
146 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
in value prior to their delivery. The Funds maintain internally designated
assets with a market value equal to or greater than the amount of their purchase
commitments. The purchase of securities on a when-issued basis or forward
commitment may increase the volatility of the Funds' net asset value to the
extent the Funds execute such transactions while remaining substantially fully
invested. The Funds may also sell securities that they purchased on a
when-issued basis or forward commitment prior to settlement of the original
purchase. As of March 31, 2007, the Funds had purchased securities issued on a
when-issued basis or forward commitment and sold securities issued on a
when-issued basis or forward commitment as follows:
PURCHASED ON A WHEN-ISSUED BASIS
OR FORWARD COMMITMENT
------------------------------------------------------
Arizona Fund $ 200,000
Maryland Fund 357,623
Massachusetts Fund 2,000,000
North Carolina Fund 400,000
- --------------------------------------------------------------------------------
INVERSE FLOATING RATE SECURITIES. The Funds invest in inverse floating rate
securities that pay interest at a rate that varies inversely with short-term
interest rates. Certain of these securities may be leveraged, whereby the
interest rate varies inversely at a multiple of the change in short-term rates.
As interest rates rise, inverse floaters produce less current income. The price
of such securities is more volatile than comparable fixed rate securities. The
Funds will not invest more than 20% of their total assets in inverse floaters.
As of March 31, 2007, the following funds held inverse floaters:
INVERSE FLOATER % OF TOTAL ASSETS
---------------------------------------------------------
Arizona Fund $ 253,000 1.49%
Maryland Fund 379,500 1.83
Massachusetts Fund 683,100 2.03
Michigan Fund 1,063,740 3.51
North Carolina Fund 404,800 1.75
Ohio Fund 1,009,610 2.72
Virginia Fund 539,290 2.84
Certain inverse floating rate securities are created when the Funds purchase and
subsequently transfer a municipal bond security (the "municipal bond") to a
broker dealer. The municipal bond is typically a fixed rate security. The broker
dealer (the "sponsor") creates a trust (the "Trust") and deposits the municipal
bond. The Trust issues short-term floating rate notes available to third parties
and a residual interest in the municipal bond (referred to as an "inverse
floating rate security") to the Funds. The terms of these inverse floating rate
securities grant the Funds the right to require that the Trust issuing the
inverse floating rate security compel a tender of the short-term floating rate
notes to facilitate the Funds' repurchase of the underlying municipal bond.
Following such a request, the Funds pay the sponsor the principal amount due to
the holders of the short-term floating rate notes issued by the Trust and
exchanges the inverse floating rate security for the underlying municipal bond.
These transactions are considered secured borrowings for financial reporting
purposes. As a result of such accounting treatments, the Funds include the
municipal bond position on its Statement of Investments (but does not separately
include the inverse floating rate securities received). The Funds also include
the value of the municipal bond and a payable amount equal to the short-term
floating rate notes issued by the Trust on their Statements of Assets and
Liabilities. The interest rates on these short-term floating rate notes reset
periodically, usually weekly. The holders of these short-term floating rate
notes have the option to tender their investment, to the sponsor or the Trust's
liquidity provider, for redemption at par at each reset date. Income from the
municipal bond position and the interest expense on the payable for the
short-term floating rate notes issued by the Trust are recorded on the Funds'
Statements of Operations. At March 31, 2007 municipal bond holdings shown on the
Fund's Statement of Investments are held by such Trusts and serve as collateral
for the short-term floating rate notes issued and outstanding at that date. The
value of the municipal bond holdings and the short-term floating rate notes
issued are shown in the following table.
147 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
VALUE OF MUNICIPAL BOND SHORT-TERM FLOATING
HOLDINGS RATE NOTES ISSUED
-------------------------------------------------------------------
Arizona Fund $ 2,003,000 $ 1,750,000
Maryland Fund 3,004,500 2,625,000
Massachusetts Fund 5,408,100 4,725,000
Michigan Fund 5,063,740 4,000,000
North Carolina Fund 3,204,800 2,800,000
Ohio Fund 6,659,610 5,650,000
Virginia Fund 3,039,290 2,500,000
At March 31, 2007, the Funds' residual exposure to these types of inverse
floating rate securities were as follows:
PRINCIPAL INVERSE COUPON MATURITY VALUE AS OF
AMOUNT FLOATER 1 RATE 2 DATE MARCH 31, 2007
- ---------------------------------------------------------------------------------------------------------------
ARIZONA FUND
$ 250,000 Puerto Rico Highway & Transportation Authority ROLs 6.178% 7/1/45 $ 253,000
==============
MARYLAND FUND
$ 375,000 Puerto Rico Highway & Transportation Authority ROLs 6.178% 7/1/45 $ 379,500
==============
MASSACHUSETTS FUND
$ 675,000 Puerto Rico Highway & Transportation Authority ROLs 6.178% 7/1/45 $ 683,100
==============
MICHIGAN FUND
$ 250,000 Detroit GO ROLs 8.478% 4/1/25 $ 307,540
500,000 Detroit Sewer Disposal System 5.319 7/1/10 503,200
250,000 Puerto Rico Highway & Transportation Authority ROLs 6.178 7/1/45 253,000
--------------
$ 1,063,740
==============
NORTH CAROLINA FUND
$ 400,000 Puerto Rico Highway & Transportation Authority ROLs 6.178% 7/1/45 $ 404,800
==============
OHIO FUND
$ 250,000 OH Higher Educational Facility ROLs 8.290% 12/1/44 $ 301,210
700,000 Puerto Rico Highway & Transportation Authority ROLs 6.178 7/1/45 708,400
--------------
$ 1,009,610
==============
VIRGINIA FUND
$ 250,000 VA Port Authority ROLs 8.200% 7/1/36 $ 286,290
250,000 Puerto Rico Highway & Transportation Authority ROLs 6.178 7/1/45 253,000
--------------
$ 539,290
==============
1. For a list of abbreviations used in the Inverse Floater table see the
Portfolio Abbreviations table on page 87 of the Statement of Investments.
2. Represents the current interest rate for a variable rate bond known as an
"inverse floater."
- --------------------------------------------------------------------------------
SECURITY CREDIT RISK. 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.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis 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 Funds intend to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
148 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
The tax components of capital shown in the table below represents distribution
requirements the Funds must satisfy under the income tax regulations, losses the
Funds may be able to offset against income and gains realized in future years
and unrealized appreciation or depreciation of securities and other investments
for federal income tax purposes.
NET UNREALIZED
APPRECIATION BASED
UNDISTRIBUTED ON COST OF SECURITIES
NET UNDISTRIBUTED ACCUMULATED AND OTHER INVESTMENTS
INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2,3 TAX PURPOSES
- ---------------------------------------------------------------------------------------------------
Arizona Fund $ 57,217 $ -- $ 855 $ 130,375
Maryland Fund 70,873 -- 1,926 96,140
Massachusetts Fund 120,396 -- 576 196,987
Michigan Fund 162,560 -- 1,164 369,234
Minnesota Fund 50,093 -- 593 38,553
North Carolina Fund 31,792 -- 1,301 47,367
Ohio Fund 175,330 -- 5,612 394,765
Virginia Fund 108,883 -- 1,469 189,973
1. As of March 31, 2007, the Funds had net capital loss carryforwards available
to offset future realized capital gains, if any, and thereby reduce future
taxable gain distributions as shown in the table below.
NET CAPITAL LOSS CARRYFORWARDS
-------------------------------------------------------------------
Arizona Fund $ --
Maryland Fund --
Massachusetts Fund 173
Michigan Fund 184
Minnesota Fund --
North Carolina Fund --
Ohio Fund 5
Virginia Fund 19
As of March 31, 2007, details of the capital loss carryforwards were as
follows:
MASSACHUSETTS FUND OHIO FUND
------------------------------- ------------------------------
EXPIRING EXPIRING
2015 $ 173 2015 $ 5
MICHIGAN FUND VIRGINIA FUND
------------------------------- ------------------------------
EXPIRING EXPIRING
2015 $ 184 2015 $ 19
2. As of March 31, 2007, the Funds had post-October losses available to offset
future realized capital gains, if any. Such losses, if unutilized, will expire
in 2016. As of March 31, 2007, the post-October losses were as follows:
POST-OCTOBER LOSSES
-----------------------------------------------------------
Arizona Fund $ 855
Maryland Fund 1,926
Massachusetts Fund 403
Michigan Fund 980
Minnesota Fund 593
North Carolina Fund 1,301
Ohio Fund 5,607
Virginia Fund 1,450
3. During the fiscal year ended March 31, 2007, the Funds did not utilize any
capital loss carryforward.
149 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Funds.
Accordingly, the following amounts have been reclassified for March 31, 2007.
Net assets of the Funds were unaffected by the reclassifications.
INCREASE TO
REDUCTION TO PAID-IN ACCUMULATED NET
CAPITAL INVESTMENT INCOME
-------------------------------------------------------------------
Arizona Fund $ 1,774 $ 1,774
Maryland Fund 2,699 2,699
Massachusetts Fund 616 616
Michigan Fund 1,789 1,789
Minnesota Fund 2,516 2,516
North Carolina Fund 2,584 2,584
Ohio Fund 1,767 1,767
Virginia Fund 294 294
The tax character of distributions paid during the period ended March 31, 2007
was as follows:
EXEMPT-INTEREST DIVIDENDS ORDINARY INCOME
-------------------------------------------------------------------
Arizona Fund $ 134,868 $ 106
Maryland Fund 182,485 303
Massachusetts Fund 325,915 549
Michigan Fund 411,054 261
Minnesota Fund 99,055 --
North Carolina Fund 192,702 286
Ohio Fund 450,942 348
Virginia Fund 232,580 173
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of March 31, 2007 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable, is attributable to the tax deferral of losses
or tax realization of financial statement unrealized gain or loss.
FEDERAL TAX COST GROSS UNREALIZED GROSS UNREALIZED NET UNREALIZED
OF SECURITIES APPRECIATION DEPRECIATION APPRECIATION
- ---------------------------------------------------------------------------------------------
Arizona Fund $ 14,279,163 $ 155,865 $ 25,490 $ 130,375
Maryland Fund 17,037,542 130,705 34,565 96,140
Massachusetts Fund 27,662,708 242,127 45,140 196,987
Michigan Fund 25,124,363 395,732 26,498 369,234
Minnesota Fund 10,119,411 46,646 8,093 38,553
North Carolina Fund 19,537,679 87,061 39,694 47,367
Ohio Fund 29,716,664 429,365 34,600 394,765
Virginia Fund 14,940,210 204,773 14,800 189,973
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Funds have adopted an unfunded retirement plan (the
"Plan") for the Funds' independent trustees. Benefits are based on years of
service and fees paid to each trustee during their period of service. The Plan
was frozen with respect to adding new participants effective December 31, 2006
(the "Freeze Date") and existing Plan Participants as of the Freeze Date will
continue to receive accrued benefits under the Plan. Active independent trustees
as of the Freeze Date have each elected a distribution method with respect to
their benefits under the Plan. During
150 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
the period ended March 31, 2007, the Funds' projected benefit obligations were
increased and payments were made to retired trustees, resulting in an
accumulated liability as shown in the following table:
PROJECTED BENEFIT PAYMENTS MADE TO ACCUMULATED
OBLIGATIONS INCREASED RETIRED TRUSTEES LIABILITY
- --------------------------------------------------------------------------------
Arizona Fund $ 277 $ 31 $ 246
Maryland Fund 398 44 354
Massachusetts Fund 572 89 483
Michigan Fund 723 115 608
Minnesota Fund 240 24 216
North Carolina Fund 319 30 289
Ohio Fund 755 120 635
Virginia Fund 496 80 416
The Funds' Board of Trustees have adopted a compensation deferral plan for
independent trustees that enables trustees to elect to defer receipt of all or a
portion of the annual compensation they are entitled to receive from the Funds.
For purposes of determining the amount owed to the Trustee under the plan,
deferred amounts are treated as though equal dollar amounts had been invested in
shares of the Funds or in other Oppenheimer funds selected by the Trustee. The
Funds purchase shares of the funds selected for deferral by the Trustee in
amounts equal to his or her deemed investment, resulting in a Funds' assets
equal to the deferred compensation liability. Such assets are included as a
component of "Other" within the asset section of the Statement of Assets and
Liabilities. Deferral of trustees' fees under the plan will not affect the net
assets of the Funds, and will not materially affect the Funds' assets,
liabilities or net investment income per share. Amounts will be deferred until
distributed in accordance to the compensation deferral plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income distributions, if any, are declared
daily and paid monthly. Capital gain distributions, if any, are declared and
paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Interest income, which includes accretion of discount and
amortization of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statements of Operations
may include interest expense incurred by the Funds on any cash overdrafts of
their custodian accounts during the period. Such cash overdrafts may result from
the effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Funds pay
interest to their custodian on such cash overdrafts to the extent they are not
offset by positive cash balances maintained by the Funds, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if applicable, represents earnings on cash balances maintained by the Funds
during the period. Such interest expense and other custodian fees may be paid
with these earnings.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Funds' organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Funds. In the normal
course of business, the Funds may also enter into contracts that provide general
indemnifications. The Funds' maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Funds. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. 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.
151 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Funds have authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
for the Funds were as follows:
ARIZONA FUND
PERIOD ENDED MARCH 31, 2007 1,2
SHARES AMOUNT
- --------------------------------------------------------------------------------
CLASS A
Sold 713,364 $ 10,027,355
Dividends and/or distributions reinvested 899 12,860
Redeemed (721) (10,379)
--------------------------------
Net increase 713,542 $ 10,029,836
================================
- --------------------------------------------------------------------------------
CLASS B
Sold 5,491 $ 78,562
Dividends and/or distributions reinvested 18 251
Redeemed (5) (64)
--------------------------------
Net increase 5,504 $ 78,749
================================
- --------------------------------------------------------------------------------
CLASS C
Sold 89,709 $ 1,281,692
Dividends and/or distributions reinvested 82 1,176
Redeemed (2) (28)
--------------------------------
Net increase 89,789 $ 1,282,840
================================
1. For the period from October 10, 2006 (commencement of operations) to March
31, 2007.
2. The Fund sold 7,246.377 shares of Class A at a value of $100,000 and 72.464
shares each of Class B and Class C at a value of $1,000, respectively, to the
Manager upon seeding of the Fund on May 31, 2006.
MARYLAND FUND
PERIOD ENDED MARCH 31, 2007 1,2
SHARES AMOUNT
- --------------------------------------------------------------------------------
CLASS A
Sold 873,908 $ 11,181,124
Dividends and/or distributions reinvested 1,120 14,524
Redeemed (9,826) (127,334)
--------------------------------
Net increase 865,202 $ 11,068,314
================================
- --------------------------------------------------------------------------------
CLASS B
Sold 29,175 $ 378,447
Dividends and/or distributions reinvested 42 542
Redeemed (2) (26)
--------------------------------
Net increase 29,215 $ 378,963
================================
- --------------------------------------------------------------------------------
CLASS C
Sold 149,735 $ 1,937,604
Dividends and/or distributions reinvested 431 5,576
Redeemed (3,968) (51,512)
--------------------------------
Net increase 146,198 $ 1,891,668
================================
1. For the period from October 10, 2006 (commencement of operations) to March
31, 2007.
2. The Fund sold 7,874.02 shares of Class A at a value of $100,000 and 78.74
shares each of Class B and Class C at a value of $1,000, respectively, to the
Manager upon seeding of the Fund on May 31, 2006.
152 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
MASSACHUSETTS FUND
PERIOD ENDED MARCH 31, 2007 1,2
SHARES AMOUNT
- --------------------------------------------------------------------------------
CLASS A
Sold 1,164,166 $ 16,404,587
Dividends and/or distributions reinvested 4,865 69,749
Redeemed (27,799) (399,901)
--------------------------------
Net increase 1,141,232 $ 16,074,435
================================
- --------------------------------------------------------------------------------
CLASS B
Sold 47,030 $ 672,138
Dividends and/or distributions reinvested 220 3,149
Redeemed (3,270) (46,595)
--------------------------------
Net increase 43,980 $ 628,692
================================
- --------------------------------------------------------------------------------
CLASS C
Sold 187,173 $ 2,679,386
Dividends and/or distributions reinvested 856 12,269
Redeemed -- --
--------------------------------
Net increase 188,029 $ 2,691,655
================================
1. For the period from July 18, 2006 (commencement of operations) to March 31,
2007.
2. The Fund sold 7,299.27 shares of Class A at a value of $100,000 and 72.993
shares each of Class B and Class C at a value of $1,000, respectively, to the
Manager upon seeding of the Fund on May 31, 2006.
MICHIGAN FUND
PERIOD ENDED MARCH 31, 2007 1,2
SHARES AMOUNT
- --------------------------------------------------------------------------------
CLASS A
Sold 1,178,570 $ 16,510,380
Dividends and/or distributions reinvested 5,711 82,199
Redeemed (2,078) (30,063)
--------------------------------
Net increase 1,182,203 $ 16,562,516
================================
- --------------------------------------------------------------------------------
CLASS B
Sold 38,305 $ 552,605
Dividends and/or distributions reinvested 244 3,516
Redeemed (3,591) (51,681)
--------------------------------
Net increase 34,958 $ 504,440
================================
- --------------------------------------------------------------------------------
CLASS C
Sold 173,933 $ 2,498,899
Dividends and/or distributions reinvested 970 13,972
Redeemed (14,903) (214,884)
--------------------------------
Net increase 160,000 $ 2,297,987
================================
1. For the period from June 21, 2006 (commencement of operations) to March 31,
2007.
2. The Fund sold 7,352.941 shares of Class A at a value of $100,000 and 73.529
shares each of Class B and Class C at a value of $1,000, respectively, to the
Manager upon seeding of the Fund on May 10, 2006.
153 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
MINNESOTA FUND
PERIOD ENDED MARCH 31, 2007 1,2
SHARES AMOUNT
- --------------------------------------------------------------------------------
CLASS A
Sold 560,338 $ 7,650,736
Dividends and/or distributions reinvested 378 5,211
Redeemed (322) (4,450)
--------------------------------
Net increase 560,394 $ 7,651,497
================================
- --------------------------------------------------------------------------------
CLASS B
Sold 15,525 $ 213,286
Dividends and/or distributions reinvested 38 523
Redeemed (2) (27)
--------------------------------
Net increase 15,561 $ 213,782
================================
- --------------------------------------------------------------------------------
CLASS C
Sold 11,766 $ 161,762
Dividends and/or distributions reinvested 74 1,020
Redeemed -- --
--------------------------------
Net increase 11,840 $ 162,782
================================
1. For the period from November 7, 2006 (commencement of operations) to March
31, 2007.
2. The Fund sold 7,352.941 shares of Class A at a value of $100,000 and 73.529
shares each of Class B and Class C at a value of $1,000, respectively, to the
Manager upon seeding of the Fund on May 31, 2006.
NORTH CAROLINA FUND
PERIOD ENDED MARCH 31, 2007 1,2
SHARES AMOUNT
- --------------------------------------------------------------------------------
CLASS A
Sold 737,964 $ 10,740,097
Dividends and/or distributions reinvested 3,903 57,119
Redeemed (5,473) (80,185)
--------------------------------
Net increase 736,394 $ 10,717,031
================================
- --------------------------------------------------------------------------------
CLASS B
Sold 6,300 $ 92,241
Dividends and/or distributions reinvested 8 114
Redeemed (2,141) (31,341)
--------------------------------
Net increase 4,167 $ 61,014
================================
- --------------------------------------------------------------------------------
CLASS C
Sold 358,919 $ 5,249,530
Dividends and/or distributions reinvested 1,766 25,829
Redeemed (3,703) (54,073)
--------------------------------
Net increase 356,982 $ 5,221,286
================================
1. For the period from October 10, 2006 (commencement of operations) to March
31, 2007.
2. The Fund sold 6,944.444 shares of Class A at a value of $100,000 and 69.444
shares each of Class B and Class C at a value of $1,000, respectively, to the
Manager upon seeding of the Fund on May 31, 2006.
154 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
OHIO FUND
PERIOD ENDED MARCH 31, 2007 1,2
SHARES AMOUNT
- --------------------------------------------------------------------------------
CLASS A
Sold 1,659,213 $ 22,005,201
Dividends and/or distributions reinvested 6,352 86,063
Redeemed (32,362) (432,795)
--------------------------------
Net increase 1,633,203 $ 21,658,469
================================
- --------------------------------------------------------------------------------
CLASS B
Sold 70,526 $ 945,825
Dividends and/or distributions reinvested 381 5,157
Redeemed (2,125) (28,985)
--------------------------------
Net increase 68,782 $ 921,997
================================
- --------------------------------------------------------------------------------
CLASS C
Sold 286,195 $ 3,880,915
Dividends and/or distributions reinvested 848 11,480
Redeemed (22) (295)
--------------------------------
Net increase 287,021 $ 3,892,100
================================
1. For the period from June 21, 2006 (commencement of operations) to March 31,
2007.
2. The Fund sold 7,812.50 shares of Class A at a value of $100,000 and 78.125
shares each of Class B and Class C at a value of $1,000, respectively, to the
Manager upon seeding of the Fund on May 10, 2006.
VIRGINIA FUND
PERIOD ENDED MARCH 31, 2007 1,2
SHARES AMOUNT
- --------------------------------------------------------------------------------
CLASS A
Sold 860,844 $ 11,089,523
Dividends and/or distributions reinvested 2,261 29,847
Redeemed (36,659) (484,472)
--------------------------------
Net increase 826,446 $ 10,634,898
================================
- --------------------------------------------------------------------------------
CLASS B
Sold 11,184 $ 147,680
Dividends and/or distributions reinvested 66 869
Redeemed -- --
--------------------------------
Net increase 11,250 $ 148,549
================================
- --------------------------------------------------------------------------------
CLASS C
Sold 99,596 $ 1,311,273
Dividends and/or distributions reinvested 375 4,940
Redeemed (4,274) (56,216)
--------------------------------
Net increase 95,697 $ 1,259,997
================================
1. For the period from July 18, 2006 (commencement of operations) to March 31,
2007.
2. The Fund sold 7,936.508 shares of Class A at a value of $100,000 and 79.365
shares each of Class B and Class C at a value of $1,000, respectively, to the
Manager upon seeding of the Fund on May 31, 2006.
155 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in affiliated companies, for the
period ended March 31, 2007, were as follows:
INVESTMENT SECURITIES
PURCHASES SALES
-------------------------------------------------------------------
Arizona Fund $ 10,832,084 $ 35,000
Maryland Fund 13,734,513 60,000
Massachusetts Fund 18,009,931 105,000
Michigan Fund 17,756,713 393,560
Minnesota Fund 7,715,781 15,850
North Carolina Fund 12,673,509 35,000
Ohio Fund 24,712,685 290,000
Virginia Fund 10,429,390 104,919
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with each of the Funds which provides for a fee at
an average annual rate as shown in the following table:
FEE SCHEDULE FOR THE FUNDS
---------------------------------------------------------
Up to $500 million of net assets 0.55%
Next $500 million of net assets 0.50
Next $500 million of net assets 0.45
Over $1.5 billion of net assets 0.40
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Funds. The Funds
each pay OFS a per account fee. For the period ended March 31, 2007, the Funds
paid OFS for services as shown in the table below.
---------------------------------------------------------------
Arizona Fund $ 190
Maryland Fund 381
Massachusetts Fund 1,373
Michigan Fund 1,374
Minnesota Fund 164
North Carolina Fund 843
Ohio Fund 1,747
Virginia Fund 706
- --------------------------------------------------------------------------------
INITIAL OFFERING AND ORGANIZATIONAL COSTS. The Manager assumed all initial
offering and organizational costs associated with the registration and seeding
of the Funds.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with each of the Funds, OppenheimerFunds Distributor, Inc. (the
Distributor) acts as the Funds' principal underwriter in the continuous public
offering of the Funds' classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Funds have each adopted a Service Plan (the
Plan) for Class A shares. The Funds reimburse the Distributor for a portion of
their costs incurred for services provided to accounts that hold Class A shares.
Reimbursement is made periodically at an annual rate of up to 0.25% of the
average annual net assets of Class A shares of the Funds. The Distributor
currently uses all of those fees to pay dealers, brokers, banks and other
financial institutions periodically for providing personal services and
maintenance of accounts of their customers that hold Class A shares. Any
unreimbursed expenses the Distributor incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent years. Fees incurred by the
Funds under the Plan are detailed in the Statements of Operations.
156 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B AND CLASS C SHARES. The Funds have
each adopted Distribution and Service Plans (the Plans) for Class B and Class C
shares to compensate the Distributor for its services in connection with the
distribution of those shares and servicing accounts. Under the Plans, the Funds
pay the Distributor an annual asset-based sales charge of 0.75% on Class B and
Class C shares. The Distributor also receives a service fee of up to 0.25% under
each plan. If either the Class B or Class C plan is terminated by the Funds or
by the shareholders of a class, the Board of Trustees and its independent
trustees must determine whether the Distributor shall be entitled to payment
from the Funds of all or a portion of the service fee and/or asset-based sales
charge in respect to shares sold prior to the effective date of such
termination. Fees incurred by the Funds under the Plans are detailed in the
Statements of Operations. The Distributor's aggregate uncompensated expenses
under the plan at March 31, 2007 for Class B and Class C shares were as follows:
CLASS B CLASS C
-------------------------------------------------------------------
Arizona Fund $ 2,228 $ 14,974
Maryland Fund 16,397 28,937
Massachusetts Fund 18,075 37,860
Michigan Fund 19,861 34,961
Minnesota Fund 4,032 1,689
North Carolina Fund 2,689 61,291
Ohio Fund 21,892 54,078
Virginia Fund 6,148 15,351
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Funds. They are deducted from the
proceeds of sales of fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares are shown in the table below for the period ended March
31, 2007.
CLASS A CLASS B CLASS C
CLASS A CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
RETAINED BY RETAINED BY RETAINED BY RETAINED BY
DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ------------------------------------------------------------------------------------
Arizona Fund $ 5,197 $ -- $ -- $ --
Maryland Fund 12,946 -- 3 --
Massachusetts Fund 29,199 -- 397 --
Michigan Fund 22,305 -- 4 529
Minnesota Fund 5,335 -- 1 --
North Carolina Fund 13,043 -- 1 --
Ohio Fund 33,995 -- 8 --
Virginia Fund 12,537 -- -- 20
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily agreed to
waive management fees and/or reimburse the Funds for certain expenses so that
"Total expenses" will not exceed 0.80% for Class A shares and 1.55% for Class B
shares and Class C shares, respectively, of average annual net assets for each
class of shares. This voluntary undertaking is expected to remain in effect
indefinitely. However, it may be amended or withdrawn by the Manager at any time
without shareholder notice. During the period ended March 31, 2007, the Manager
reimbursed the Funds as detailed in the following table.
CLASS A CLASS B CLASS C
-------------------------------------------------------------------
Arizona Fund $ 65,478 $ 2,084 $ 5,696
Maryland Fund 87,705 3,534 8,704
Massachusetts Fund 160,942 4,613 14,169
Michigan Fund 164,722 4,375 14,498
Minnesota Fund 66,277 2,761 2,543
North Carolina Fund 48,407 1,918 17,718
Ohio Fund 164,289 7,830 11,571
Virginia Fund 125,734 1,836 7,955
157 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
NOTES TO FINANCIAL STATEMENTS Continued
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4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees for all classes to 0.35% of average annual net assets per class. This
undertaking may be amended or withdrawn at any time.
During the period ended March 31, 2007, OFS waived fees as detailed in the
following table.
CLASS B
---------------------------------------
Arizona Fund $33
Michigan Fund 29
- --------------------------------------------------------------------------------
5. ILLIQUID SECURITIES
As of March 31, 2007, 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
Funds will not invest more than 15% of their net assets (determined at the time
of purchase and reviewed periodically) in illiquid securities. Securities that
are illiquid are marked with the applicable footnote on the Statement of
Investments.
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6. BORROWINGS
The Funds can each borrow money from banks in amounts up to one-third of their
total assets (including the amount borrowed) less all liabilities and
indebtedness other than borrowings to purchase portfolio securities, to meet
redemption obligations or for temporary and emergency purposes. The purchase of
securities with borrowed funds creates leverage in the Funds. The Funds have
entered into a Revolving Credit and Security Agreement (the "Agreement") with a
conduit lender and a bank which enables them to participate with certain other
Oppenheimer funds in a committed, secured borrowing facility that permits
borrowings of up to $900 million, collectively. To secure the loan, the Funds
pledge investment securities in accordance with the terms of the Agreement.
Interest is charged to the Funds, based on their borrowings, at current
commercial paper issuance rates (5.2781% as of March 31, 2007). The Funds pay
additional fees of 0.30% per annum on their outstanding borrowings to manage and
administer the facility and are allocated their pro-rata share of a 0.13% per
annum commitment fee for a liquidity backstop facility with respect to the $900
million facility size.
For the period ended March 31, 2007, the Funds had borrowings outstanding at an
interest rate of 5.2781%. Details of the borrowings for the period ended March
31, 2007 are listed in the following table.
MAXIMUM
AMOUNT OF
BORROWINGS
AVERAGE OUTSTANDING
AVERAGE DAILY GROSS GROSS LOAN AT ANY FEES INTEREST
DAILY LOAN INTEREST BORROWINGS REPAYMENTS MONTH-END PAID PAID
BALANCE FOR RATE FOR BORROWINGS DURING DURING DURING DURING DURING
THE PERIOD THE PERIOD OUTSTANDING THE PERIOD THE PERIOD THE PERIOD THE PERIOD THE PERIOD
ENDED ENDED AT ENDED ENDED ENDED ENDED ENDED
MARCH MARCH MARCH MARCH MARCH MARCH MARCH MARCH
31, 2007 31, 2007 31, 2007 31, 2007 31, 2007 31, 2007 31, 2007 31, 2007
- ----------------------------------------------------------------------------------------------------------------------------
Arizona Fund $ 1,652,601 5.2790% $ 3,100,000 $ 8,800,000 $ 5,700,000 $ 3,100,000 $ 1,825 $ 31,263
Maryland Fund 2,642,775 5.2792 3,900,000 9,500,000 5,600,000 4,700,000 3,968 52,654
Massachusetts Fund 3,585,603 5.2961 6,900,000 18,300,000 11,400,000 7,100,000 6,065 104,557
Michigan Fund 3,648,592 5.2880 5,500,000 16,100,000 10,600,000 5,800,000 7,655 131,293
Minnesota Fund 1,821,379 5.2760 2,700,000 5,300,000 2,600,000 2,700,000 1,592 27,370
North Carolina Fund 1,375,145 5.2790 3,500,000 10,500,000 7,000,000 3,500,000 1,444 24,168
Ohio Fund 3,636,268 5.2899 3,100,000 21,200,000 18,100,000 6,200,000 7,841 134,518
Virginia Fund 2,706,250 5.2960 3,900,000 11,000,000 7,100,000 3,900,000 5,037 87,124
158 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
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7. RECENT ACCOUNTING PRONOUNCEMENTS
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES.
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions
taken in the course of preparing the Fund's tax returns to determine whether it
is "more-likely-than-not" that tax positions taken in the Fund's tax return will
be ultimately sustained. A tax liability and expense must be recorded in respect
of any tax position that, in Management's judgment, will not be fully realized.
FIN 48 is effective for fiscal years beginning after December 15, 2006. As of
March 31, 2007, the Manager has evaluated the implications of FIN 48 and does
not currently anticipate a material impact to the Funds' financial statements.
The Manager will continue to monitor the Funds' tax positions prospectively for
potential future impacts.
In September 2006, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This standard establishes a
single authoritative definition of fair value, sets out a framework for
measuring fair value and expands disclosures about fair value measurements. SFAS
No. 157 applies to fair value measurements already required or permitted by
existing standards. SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. As of March 31, 2007, the Manager does not believe the
adoption of SFAS No. 157 will materially impact the financial statement amounts;
however, additional disclosures may be required about the inputs used to develop
the measurements and the effect of certain of the measurements on changes in net
assets for the period.
159 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER ROCHESTER ARIZONA
MUNICIPAL FUND, OPPENHEIMER ROCHESTER MARYLAND MUNICIPAL FUND, OPPENHEIMER
ROCHESTER MASSACHUSETTS MUNICIPAL FUND, OPPENHEIMER ROCHESTER MICHIGAN MUNICIPAL
FUND, OPPENHEIMER ROCHESTER MINNESOTA MUNICIPAL FUND, OPPENHEIMER ROCHESTER
NORTH CAROLINA MUNICIPAL FUND, OPPENHEIMER ROCHESTER OHIO MUNICIPAL FUND, AND
OPPENHEIMER ROCHESTER VIRGINIA MUNICIPAL FUND:
We have audited the accompanying statements of assets and liabilities of
Oppenheimer Rochester Arizona Municipal Fund, Oppenheimer Rochester Maryland
Municipal Fund, Oppenheimer Rochester Massachusetts Municipal Fund, Oppenheimer
Rochester Michigan Municipal Fund, Oppenheimer Rochester Minnesota Municipal
Fund, Oppenheimer Rochester North Carolina Municipal Fund, Oppenheimer Rochester
Ohio Municipal Fund, and Oppenheimer Rochester Virginia Municipal Fund
(collectively "the Funds"), including the statements of investments, as of March
31, 2007, the related statements of operations, the statements of changes in net
assets and the financial highlights of Oppenheimer Rochester Ohio Municipal Fund
and Oppenheimer Rochester Michigan Municipal Fund for the period June 21, 2006
(commencement of operations) to March 31, 2007, the related statements of
operations, the statements of changes in net assets and the financial highlights
of Oppenheimer Rochester Massachusetts Municipal Fund and Oppenheimer Rochester
Virginia Municipal Fund for the period July 18, 2006 (commencement of
operations) to March 31, 2007, the related statements of operations, the
statements of changes in net assets and the financial highlights of Oppenheimer
Rochester North Carolina Municipal Fund, Oppenheimer Rochester Arizona Municipal
Fund and Oppenheimer Rochester Maryland Municipal Fund for the period October
10, 2006 (commencement of operations) to March 31, 2007, and the related
statement of operations, the statement of changes in net assets and the
financial highlights of Oppenheimer Rochester Minnesota Municipal Fund for the
period November 7, 2006 (commencement of operations) to March 31, 2007
(collectively "the commencements of operations"). These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of March 31, 2007, by correspondence with
the custodian and brokers or by other appropriate auditing procedures where
replies from brokers were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly in all material respects, the financial positions of the
Funds as of March 31, 2007, the results of their operations, the changes in
their net assets and the financial highlights for the period from the
commencements of operations to March 31, 2007, in conformity with U.S. generally
accepted accounting principles.
KPMG LLP
Denver, Colorado
May 16, 2007
160 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2008, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2007. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
None of the dividends paid by the Fund during the fiscal year ended March 31,
2007 are eligible for the corporate dividend-received deduction. To the extent a
shareholder is subject to any state or local tax laws, some or all of the
dividends received may be taxable. The percentages of dividends that were
derived from interest on municipal bonds and are not subject to federal income
taxes are as follows:
------------------------------------------------
Arizona Fund 99.92%
Maryland Fund 99.83
Massachusetts Fund 99.83
Michigan Fund 99.94
Minnesota Fund 100.00
North Carolina Fund 99.85
Ohio Fund 99.92
Virginia Fund 99.93
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.
161 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
162 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
BOARD APPROVAL OF THE FUNDS' INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
OPPENHEIMER ROCHESTER(TM) ARIZONA MUNICIPAL FUND
OPPENHEIMER ROCHESTER(TM) MARYLAND MUNICIPAL FUND
OPPENHEIMER ROCHESTER(TM) MINNESOTA MUNICIPAL FUND
OPPENHEIMER ROCHESTER(TM) NORTH CAROLINA MUNICIPAL FUND*
- --------------------------------------------------------------------------------
The Investment Company Act of 1940, as amended, requires that the Board request
and evaluate, and that the Manager provide, such information as may be
reasonably necessary to evaluate the terms of each Fund's investment advisory
agreement (each an "Agreement" and together the "Agreements").
In approving each Fund's Agreement, the Board considered information
provided by the Manager on the following factors: (i) the nature, quality and
extent of the Manager's services to be provided, (ii) the fees and expenses of
each Fund, including comparative expense information, (iii) the profitability of
the Manager and its affiliates, including an analysis of the anticipated cost of
providing services by the Manager and its affiliates, (iv) the extent to which
economies of scale may be realized as each Fund grows and whether fee levels
reflect these economies of scale for Fund investors and (v) other benefits that
the Manager may receive from its relationship with the Fund.
NATURE AND EXTENT OF SERVICES. In approving each Fund's Agreement, the
Board considered information about the nature and extent of the services to be
provided to each Fund and information regarding the Manager's key personnel who
provide such services. The Manager's duties include providing each Fund with the
services of the portfolio managers and the Manager's investment team, who
provide research, analysis and other advisory services in regard to each Fund's
investments; securities trading services; oversight of third party service
providers; monitoring compliance with applicable Fund policies and procedures
and adherence to each Fund's investment restrictions. The Manager is responsible
for providing certain administrative services to each Fund as well. Those
services include providing and supervising all administrative and clerical
personnel who are necessary in order to provide effective corporate
administration for each Fund; compiling and maintaining records with respect to
each Fund's operations; preparing and filing reports required by the Securities
and Exchange Commission; preparing periodic reports regarding the operations of
each Fund for its shareholders; preparing proxy materials for shareholder
meetings; and preparing the registration statements required by Federal and
state securities laws for the sale of each Fund's shares. The Manager also
provides each Fund with office space, facilities and equipment.
QUALITY OF SERVICES. The Board also considered the quality of the services
it expected to be provided by the Manager and the quality of the Manager's
resources that would be available to the Funds. The Board took account of the
fact that the Manager has had over forty years of experience as an investment
adviser and that its assets under management rank it among the top mutual fund
managers in the United States. The Board evaluated the Manager's administrative,
accounting, legal and compliance services, and information the Board has
received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. In its evaluation
of the quality of the portfolio management services provided, the Board
considered the experience of Ronald H. Fielding, Daniel G. Loughran, Scott
Cottier, Troy Willis, Mark DeMitry, Marcus Franz, and Michael Camarella, and the
Manager's Rochester investment team and analysts. The Board members also
considered their experiences with the Manager and its officers and other
personnel through their service on the boards of other funds advised by the
Manager. The Board considered information regarding the quality of services
provided by affiliates of the Manager, which its members have become
knowledgeable about in connection with the renewal of service agreements of
other funds managed by the
* As discussed in a shareholder report dated September 30, 2006, the Board
previously evaluated and approved the terms of the investment advisory agreement
for Oppenheimer Rochester(TM) Michigan Municipal Fund, Oppenheimer Rochester(TM)
Ohio Municipal Fund, Oppenheimer Rochester(TM) Massachusetts Municipal Fund and
Oppenheimer Rochester(TM) Virginia Municipal Fund, all of which commenced
operations before September 30.
163 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
Manager. In light of the foregoing, the Board concluded that each Fund will
benefit from the services to be provided under the Agreement and from the
Manager's experience, reputation, personnel, operations, and resources.
MANAGEMENT FEES AND EXPENSES. The Board reviewed the fees to be paid to
the Manager and its affiliates and the other expenses that will be borne by the
Funds. The Board also evaluated the comparability of the fees to be charged and
the services to be provided to each Fund to the fees and services for other
clients or accounts advised by the Manager. The Manager provided comparative
data in regard to the fees and anticipated expenses of the Funds and the fees
and expenses of other Oppenheimer state specific municipal funds with comparable
asset levels and distribution features. An independent consultant provided
comparative data in regard to the fees and expenses of other state municipal
bond funds with comparable asset levels and distribution features. The Board
noted that the effective fee rates under the Funds' proposed advisory fee
schedule were either at or above certain other Oppenheimer state municipal funds
as well as the peer group median provided by the independent consultant. The
Board also noted that under the Agreements, the Manager would agree to
voluntarily waive management fees and/or reimburse the Funds for certain
expenses so that total expenses would not exceed 0.80% of average annual net
assets for Class A Shares and 1.55% of average annual net assets for both Class
B and Class C shares, which may be modified or terminated by the Manager at any
time without notice to shareholders.
ECONOMIES OF SCALE. The Board considered the extent to which the Manager
may realize economies of scale in managing and supporting each Fund and the
extent to which those economies of scale would benefit each Fund's shareholders.
BENEFITS TO THE MANAGER. The Board considered information regarding the
Manager's estimated costs in serving as each Fund's investment adviser,
including the costs associated with the personnel and systems necessary to
manage the Funds, and information regarding the Manager's potential
profitability from its relationship with each Fund. The Board considered that
the Manager must be able to pay and retain experienced professional personnel at
competitive rates to provide services to the Funds and that maintaining the
financial viability of the Manager is important in order for the Manager to
provide significant services to each of the Funds and their shareholders. In
addition to considering the potential profits that may be realized by the
Manager, the Board considered information regarding the direct and indirect
benefits the Manager may receive as a result of its relationship with the Funds,
including compensation paid to the Manager's affiliates for services provided.
CONCLUSIONS. These factors were also considered by the independent
Trustees of the Funds meeting separately from the full Board, assisted by
experienced counsel to the Funds and the independent Trustees. Fund counsel is
independent of the Manager within the meaning and intent of the Securities and
Exchange Commission Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees of
each Fund, concluded that the nature, extent and quality of the services to be
provided by the Manager would be a benefit to each Fund and in the best interest
of each Fund's shareholders and that the amount and structure of the
compensation to be received by the Manager and its affiliates are reasonable in
relation to the services to be provided. Accordingly, the Board approved each of
the Agreements for an initial period of two years. In arriving at this decision,
the Board did not single out any factor or factors as being more important than
others, but considered all of the factors together. The Board judged the terms
and conditions of each Agreement, including the management fee, in light of all
of the surrounding circumstances.
164 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD;
THE FUNDS, LENGTH OF SERVICE, NUMBER OF PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN
AGE
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, CO
TRUSTEES 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR HER RESIGNATION,
RETIREMENT, DEATH OR REMOVAL.
BRIAN F. WRUBLE, General Partner of Odyssey Partners, L.P. (hedge fund) (since September 1995); Director of
Chairman of the Board of Special Value Opportunities Fund, LLC (registered investment company) (since September
Trustees (since 2007), 2004); Investment Advisory Board Member of Zurich Financial Services (insurance) (since
Trustee (since 2006) October 2004); Board of Governing Trustees of The Jackson Laboratory (non-profit) (since
Age: 64 August 1990); Trustee of the Institute for Advanced Study (non-profit educational institute)
(since May 1992); Special Limited Partner of Odyssey Investment Partners, LLC (private
equity investment) (January 1999-September 2004) and Managing Principal (1997-December
1998); Trustee of Research Foundation of AIMR (2000-2002) (investment research, non-profit);
Governor, Jerome Levy Economics Institute of Bard College (August 1990-September 2001)
(economics research); Director of Ray & Berendtson, Inc. (May 2000-April 2002) (executive
search firm). Oversees 62 portfolios in the OppenheimerFunds complex.
MATTHEW P. FINK, Trustee of the Committee for Economic Development (policy research foundation) (since 2005);
Trustee (since 2006) Director of ICI Education Foundation (education foundation) (since October 1991); President
Age: 66 of the Investment Company Institute (trade association) (October 1991-June 2004); Director
of ICI Mutual Insurance Company (insurance company) (October 1991-June 2004). Oversees 52
portfolios in the OppenheimerFunds complex.
ROBERT G. GALLI, A director or trustee of other Oppenheimer funds. Oversees 62 portfolios in the
Trustee (since 2006) OppenheimerFunds complex.
Age: 73
PHILLIP A. GRIFFITHS, Distinguished Presidential Fellow for International Affairs (since 2002) and Member (since
Trustee (since 2006) 1979) of the National Academy of Sciences; Council on Foreign Relations (since 2002);
Age: 68 Director of GSI Lumonics Inc. (precision medical equipment supplier) (since 2001); Senior
Advisor of The Andrew W. Mellon Foundation (since 2001); Chair of Science Initiative Group
(since 1999); Member of the American Philosophical Society (since 1996); Trustee of Woodward
Academy (since 1983); Foreign Associate of Third World Academy of Sciences; Director of the
Institute for Advanced Study (1991-2004); Director of Bankers Trust New York Corporation
(1994-1999); Provost at Duke University (1983-1991). Oversees 52 portfolios in the
OppenheimerFunds complex.
MARY F. MILLER, Trustee of the American Symphony Orchestra (not-for-profit) (since October 1998); and Senior
Trustee (since 2006) Vice President and General Auditor of American Express Company (financial services company)
Age: 64 (July 1998-February 2003). Oversees 52 portfolios in the OppenheimerFunds complex.
JOEL W. MOTLEY, Director of Columbia Equity Financial Corp. (privately-held financial adviser) (since 2002);
Trustee (since 2006) Managing Director of Carmona Motley, Inc. (privately-held financial adviser) (since January
Age: 55 2002); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial adviser)
(January 1998-December 2001); Member of the Finance and Budget Committee of the Council on
Foreign Relations, the Investment Committee of the Episcopal Church of America, the
Investment Committee and Board of Human Rights Watch and the Investment Committee of
Historic Hudson Valley. Oversees 52 portfolios in the OppenheimerFunds complex.
KENNETH A. RANDALL, Director of Dominion Resources, Inc. (electric utility holding company) (February
Trustee (since 2006) 1972-October 2005); Former Director of Prime Retail, Inc. (real estate investment trust),
Age: 79 Dominion Energy Inc. (electric power and oil & gas producer), Lumberman's Mutual Casualty
Company, American Motorists Insurance Company and American Manufacturers Mutual Insurance
Company; Former President and Chief Executive Officer of The Conference Board, Inc.
(international economic and business research). Oversees 52 portfolios in the
OppenheimerFunds complex.
RUSSELL S. REYNOLDS, JR., Chairman of The Directorship Search Group, Inc. (corporate governance consulting and
Trustee (since 2006) executive recruiting) (since 1993); Life Trustee of International House (non-profit
Age: 75 educational organization); Founder, Chairman and Chief Executive Officer of Russell Reynolds
Associates, Inc. (1969-1993); Banker at J.P. Morgan & Co. (1958-1966); 1st Lt. Strategic Air
Command, U.S. Air Force (1954-1958). Oversees 52 portfolios in the OppenheimerFunds complex.
165 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
JOSEPH M. WIKLER, Director of the following medical device companies: Medintec (since 1992) and Cathco (since
Trustee (since 2006) 1996); Director of Lakes Environmental Association (since 1996); Member of the Investment
Age: 66 Committee of the Associated Jewish Charities of Baltimore (since 1994); Director of
Fortis/Hartford mutual funds (1994-December 2001). Oversees 52 portfolios in the
OppenheimerFunds complex.
PETER I. WOLD, President of Wold Oil Properties, Inc. (oil and gas exploration and production company)
Trustee (since 2006) (since 1994); Vice President, Secretary and Treasurer of Wold Trona Company, Inc. (soda ash
Age: 59 processing and production) (since 1996); Vice President of Wold Talc Company, Inc. (talc
mining) (since 1999); Managing Member of Hole-in-the-Wall Ranch (cattle ranching) (since
1979); Director and Chairman of the Denver Branch of the Federal Reserve Bank of Kansas City
(1993-1999); and Director of PacifiCorp. (electric utility) (1995-1999). Oversees 52
portfolios in the OppenheimerFunds complex.
- -----------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW
AND OFFICER YORK, NEW YORK 10281-1008. MR. MURPHY SERVES AS A TRUSTEE FOR AN INDEFINITE TERM, OR UNTIL
HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL AND AS AN OFFICER FOR AN INDEFINITE TERM, OR
UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS AN INTERESTED TRUSTEE DUE
TO HIS POSITIONS WITH OPPENHEIMERFUNDS, INC. AND ITS AFFILIATES.
JOHN V. MURPHY, Chairman, Chief Executive Officer and Director of the Manager (since June 2001); President
President and Principal of the Manager (September 2000-March 2007); President and a director or trustee of other
Executive Officer and Oppenheimer funds; President and Director of Oppenheimer Acquisition Corp. ("OAC") (the
Trustee (since 2006) Manager's parent holding company) and of Oppenheimer Partnership Holdings, Inc. (holding
Age: 57 company subsidiary of the Manager) (since July 2001); Director of OppenheimerFunds
Distributor, Inc. (subsidiary of the Manager) (since November 2001); Chairman and Director
of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent
subsidiaries of the Manager) (since July 2001); President and Director of OppenheimerFunds
Legacy Program (charitable trust program established by the Manager) (since July 2001);
Director of the following investment advisory subsidiaries of the Manager: OFI
Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity
Investment Management Corporation and Tremont Capital Management, Inc. (since November
2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since
July 2001); President (since November 1, 2001) and Director (since July 2001) of Oppenheimer
Real Asset Management, Inc.; Executive Vice President of Massachusetts Mutual Life Insurance
Company (OAC's parent company) (since February 1997); Director of DLB Acquisition
Corporation (holding company parent of Babson Capital Management LLC) (since June 1995);
Member of the Investment Company Institute's Board of Governors (since October 3, 2003);
Chief Operating Officer of the Manager (September 2000-June 2001); President and Trustee of
MML Series Investment Fund and MassMutual Select Funds (open-end investment companies)
(November 1999-November 2001); Director of C.M. Life Insurance Company (September
1999-August 2000); President, Chief Executive Officer and Director of MML Bay State Life
Insurance Company (September 1999-August 2000); Director of Emerald Isle Bancorp and
Hibernia Savings Bank (wholly-owned subsidiary of Emerald Isle Bancorp) (June 1989-June
1998). Oversees 99 portfolios in the OppenheimerFunds complex.
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OTHER OFFICERS THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS. ZACK, GILLESPIE
OF THE FUNDS AND MS. BLOOMBERG, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NEW YORK
10281-1008, FOR MESSRS. VANDEHEY, WIXTED, PETERSEN, SZILAGYI AND MS. IVES, 6803 S. TUCSON
WAY, CENTENNIAL, COLORADO 80112-3924, FOR MESSRS. FIELDING, LOUGHRAN, COTTIER AND WILLIS,
350 LINDEN OAKS, ROCHESTER, NEW YORK 14625, EACH OFFICER SERVES FOR AN INDEFINITE TERM OR
UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Vice
Vice President and Chief President of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and
Compliance Officer Shareholder Services, Inc. (since June 1983). Former Vice President and Director of Internal
(since 2006) Audit of the Manager (1997-February 2004). An officer of 99 portfolios in the
Age: 56 OppenheimerFunds complex.
166 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the
Treasurer and Principal following: HarbourView Asset Management Corporation, Shareholder Financial Services, Inc.,
Financial & Accounting Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation, and Oppenheimer
Officer (since 2006) Partnership Holdings, Inc. (since March 1999), OFI Private Investments, Inc. (since March
Age: 47 2000), OppenheimerFunds International Ltd. (since May 2000), OppenheimerFunds plc (since May
2000), OFI Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds
Legacy Program (charitable trust program established by the Manager) (since June 2003);
Treasurer and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the
Manager) (since May 2000); Assistant Treasurer of the following: OAC (since March 1999),
Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds
Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer of Bankers
Trust Company-Mutual Fund Services Division (March 1995-March 1999). An officer of 99
portfolios in the OppenheimerFunds complex.
BRIAN S. PETERSEN, Vice President of the Manager (since February 2007); Assistant Vice President of the Manager
Assistant Treasurer (August 2002-February 2007); Manager/Financial Product Accounting of the Manager (November
(since 2006) 1998-July 2002). An officer of 99 portfolios in the OppenheimerFunds complex.
Age: 36
BRIAN C. SZILAGYI, Assistant Vice President of the Manager (since July 2004); Director of Financial Reporting
Assistant Treasurer and Compliance of First Data Corporation (April 2003-July 2004); Manager of Compliance of
(since 2006) Berger Financial Group LLC (May 2001-March 2003); Director of Mutual Fund Operations at
Age: 37 American Data Services, Inc. (September 2000-May 2001). An officer of 99 portfolios in the
OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since March 2002) of the
Secretary (since 2006) Manager; General Counsel and Director of the Distributor (since December 2001); General
Age: 58 Counsel of Centennial Asset Management Corporation (since December 2001); Senior Vice
President and General Counsel of HarbourView Asset Management Corporation (since December
2001); Secretary and General Counsel of OAC (since November 2001); Assistant Secretary
(since September 1997) and Director (since November 2001) of OppenheimerFunds International
Ltd. and OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership
Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset Management, Inc.
(since November 2001); Senior Vice President, General Counsel and Director of Shareholder
Financial Services, Inc. and Shareholder Services, Inc. (since December 2001); Senior Vice
President, General Counsel and Director of OFI Private Investments, Inc. and OFI Trust
Company (since November 2001); Vice President of OppenheimerFunds Legacy Program (since June
2003); Senior Vice President and General Counsel of OFI Institutional Asset Management, Inc.
(since November 2001); Director of OppenheimerFunds (Asia) Limited (since December 2003);
Senior Vice President (May 1985-December 2003), Acting General Counsel (November
2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager;
Assistant Secretary of the following: Shareholder Services, Inc. (May 1985-November 2001),
Shareholder Financial Services, Inc. (November 1989-November 2001), and OppenheimerFunds
International Ltd. (September 1997-November 2001). An officer of 99 portfolios in the
OppenheimerFunds complex.
LISA I. BLOOMBERG, Vice President and Associate Counsel of the Manager (since May 2004); First Vice President
Assistant Secretary (April 2001-April 2004), Associate General Counsel (December 2000-April 2004), Corporate
(since 2006) Vice President (May 1999-April 2001) and Assistant General Counsel (May 1999-December 2000)
Age: 39 of UBS Financial Services Inc. (formerly, PaineWebber Incorporated). An officer of 99
portfolios in the OppenheimerFunds complex.
PHILLIP S. GILLESPIE, Senior Vice President and Deputy General Counsel of the Manager (since September 2004);
Assistant Secretary First Vice President (2001-September 2004); Director (2000-September 2004) and Vice
(since 2006) President (1998-2000) of Merrill Lynch Investment Management. An officer of 99 portfolios in
Age: 43 the OppenheimerFunds complex.
KATHLEEN T. IVES, Vice President (since June 1998) and Senior Counsel and Assistant Secretary (since October
Assistant Secretary 2003) of the Manager; Vice President (since 1999) and Assistant Secretary (since October
(since 2006) 2003) of the Distributor; Assistant Secretary of Centennial Asset Management Corporation
Age: 41 (since October 2003); Vice President and Assistant Secretary of Shareholder Services, Inc.
(since 1999); Assistant Secretary of OppenheimerFunds Legacy Program and Shareholder
Financial Services, Inc. (since December 2001); Assistant Counsel of the Manager (August
1994-October 2003). An officer of 99 portfolios in the OppenheimerFunds complex.
THE FUNDS' STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUNDS' TRUSTEES AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE, UPON
REQUEST, BY CALLING 1.800.525.7048.
167 | OPPENHEIMER ROCHESTER MUNICIPAL BOND FUNDS
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees of the registrant has determined that the registrant does
not have an audit committee financial expert serving on its Audit Committee. In
this regard, no member of the Audit Committee was identified as having all of
the technical attributes identified in Instruction 2(b) to Item 3 of Form N-CSR
to qualify as an "audit committee
financial expert," whether through the type of specialized education or
experience described in that Instruction. The Board has concluded that while the
members of the Audit Committee collectively have the necessary attributes and
experience required to serve effectively as an Audit Committee, no single member
possesses all of the required technical attributes through the particular
methods of education or experience set forth in the Instructions to be
designated as an audit committee financial expert.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $25,000 in fiscal 2007 and no such fees in fiscal 2006.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees to the registrant during the last two fiscal
years.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees to the registrant during the last two fiscal
years to the registrant's investment adviser or any entity controlling,
controlled by, or under common control with the adviser that provides ongoing
services to the registrant.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees to the registrant during the last two fiscal
years.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years to the
registrant's investment adviser
or any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant.
(e) (1) During its regularly scheduled periodic meetings, the registrant's
audit committee will pre-approve all audit, audit-related, tax and
other services to be provided by the principal accountants of the
registrant.
The audit committee has delegated pre-approval authority to its
Chairman for any subsequent new engagements that arise between
regularly scheduled meeting dates provided that any fees such
pre-approved are presented to the audit committee at its next regularly
scheduled meeting.
Under applicable laws, pre-approval of non-audit services maybe waived
provided that: 1) the aggregate amount of all such services provided
constitutes no more than five percent of the total amount of fees paid
by the registrant to it principal accountant during the fiscal year in
which services are provided 2) such services were not recognized by the
registrant at the time of engagement as non-audit services and 3) such
services are promptly brought to the attention of the audit committee
of the registrant and approved prior to the completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed no such fees during the last two fiscal
years to the registrant and the registrant's investment adviser or any
entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant related to
non-audit fees. Those billings did not include any prohibited non-audit
services as defined by the Securities Exchange Act of 1934.
(h)
No such services were rendered.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Governance Committee (the "Committee") will evaluate potential
Board candidates to assess their qualifications. The Committee shall have
the authority, upon approval of the Board, to retain an executive search
firm to assist in this effort. The Committee may consider recommendations by
business and personal contacts of current Board members and by executive
search firms which the Committee may engage from time to time and may also
consider shareholder recommendations. The Committee may consider the advice
and recommendation of the Funds' investment manager and its affiliates in
making the selection.
2. The Committee shall screen candidates for Board membership. The Committee
has not established specific qualifications that it believes must be met by
a trustee nominee. In evaluating trustee nominees, the Committee considers,
among other things, an individual's background, skills, and experience;
whether the individual is an "interested person" as defined in the
Investment Company Act of 1940; and whether the individual would be deemed
an "audit committee financial expert" within the meaning of applicable SEC
rules. The Committee also considers whether the individual's background,
skills, and experience will complement the background, skills, and
experience of other nominees and will contribute to the Board. There are no
differences in the manner in which the Committee evaluates nominees for
trustees based on whether the nominee is recommended by a shareholder.
3. The Committee may consider nominations from shareholders for the Board at
such times as the Committee meets to consider new nominees for the Board.
The Committee shall have the sole discretion to determine the candidates to
present to the Board and, in such cases where required, to shareholders.
Recommendations for trustee nominees should, at a minimum, be accompanied by
the following:
o the name, address, and business, educational, and/or other pertinent
background of the person being recommended;
o a statement concerning whether the person is an "interested person" as
defined in the Investment Company Act of 1940;
o any other information that the Funds would be required to include in a
proxy statement concerning the person if he or she was nominated; and
o the name and address of the person submitting the recommendation and, if
that person is a shareholder, the period for which that person held Fund
shares.
The recommendation also can include any additional information which the
person submitting it believes would assist the Committee in evaluating the
recommendation.
4. Shareholders should note that a person who owns securities issued by
Massachusetts Mutual Life Insurance Company (the parent company of the
Funds' investment adviser) would be deemed an "interested person" under the
Investment Company Act of 1940. In addition, certain other relationships
with Massachusetts Mutual Life Insurance Company or its subsidiaries, with
registered broker-dealers, or with the Funds' outside legal counsel may
cause a person to be deemed an "interested person."
5. Before the Committee decides to nominate an individual as a trustee,
Committee members and other directors customarily interview the individual
in person. In addition, the individual customarily is asked to complete a
detailed questionnaire which is designed to elicit information which must be
disclosed under SEC and stock exchange rules and to determine whether the
individual is subject to any statutory disqualification from serving as a
trustee of a registered investment company.
ITEM 11. CONTROLS AND PROCEDURES.
The registrant's principal executive officer and principal financial officer
have concluded, based on their evaluation of the registrant's disclosure
controls and procedures (as defined in rule 30a-3(c) under the Investment
Company Act of 1940 (17 CFR 270.30a-3(c)) as of May 14, 2007, which is a date
within 90 days of the filing date of this report on Form N-CSR, that, as of said
date, the design and operation of such controls and procedures are effective to
provide reasonable assurances that information required to be disclosed by the
registrant in the reports that it files under the Securities Exchange Act of
1934 (i) is accumulated and communicated to registrant's management,
including its principal executive officer and principal financial officer, to
allow timely decisions regarding required disclosure, and (ii) is recorded,
processed, summarized and reported, within the time periods specified in the
rules and forms adopted by the U.S. Securities and Exchange Commission.
As discussed in Item 2 of registrant's Form N-Q for the period ended December
31, 2006, which was filed with the Securities and Exchange Commission on
February 28, 2007, during the registrant's last fiscal quarter of the six-month
period ended March 31, 2007 covered by this report and prior to the evaluation
of its internal controls in connection with the certifications included in the
Form N-Q for the period ended December 31, 2006, the operation of registrant's
disclosure controls and procedures and its controls and procedures over
financial reporting was modified to enhance the review and analysis of the
relevant terms and conditions for transfers of securities in connection with
inverse floating rate obligations.
ITEM 12. EXHIBITS.
(a) (1) Exhibit attached hereto.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer Rochester Minnesota Municipal Fund
By: /s/ John V. Murphy
------------------
John V. Murphy
Principal Executive Officer
Date: 05/14/2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John V. Murphy
------------------
John V. Murphy
Principal Executive Officer
Date: 05/14/2007
By: /s/ Brian W. Wixted
-------------------
Brian W. Wixted
Principal Financial Officer
Date: 05/14/2007