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Limited Term New York Municipal Fund
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0000 X. Xxxxxx Xxx, Xxxxxxxxx, XX 00000
0.000.000.0000
Statement of Additional Information dated April 30, 2002
This Statement of Additional Information is not a Prospectus. This document contains additional information about the Fund
and supplements information in the Prospectus dated April 30, 2002. It should be read together with the Prospectus, which
may be obtained by writing to the Fund's Transfer Agent, OppenheimerFunds Services, at X.X. Xxx 0000, Xxxxxx, Xxxxxxxx
00000 or by calling the Transfer Agent at the toll-free number shown above or by downloading it from the OppenheimerFunds
Internet website at xxx.xxxxxxxxxxxxxxxx.xxx.
Contents Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks.............................................2
The Fund's Investment Policies.............................................................................2
Municipal Securities.......................................................................................3
Other Investment Techniques and Strategies................................................................19
Investment Restrictions...................................................................................27
How the Fund is Managed..........................................................................................30
Organization and History..................................................................................30
Trustees and Officers of the Fund.........................................................................31
The Manager ..............................................................................................36
Brokerage Policies of the Fund...................................................................................38
Distribution and Service Plans...................................................................................40
Performance of the Fund..........................................................................................43
About Your Account
How To Buy Shares................................................................................................49
How To Sell Shares...............................................................................................58
How to Exchange Shares...........................................................................................62
Dividends and Taxes..............................................................................................65
Additional Information About the Fund............................................................................68
Financial Information About the Fund
Independent Auditors' Report.....................................................................................69
Financial Statements ............................................................................................70
Appendix A: Municipal Bond Ratings Definitions..................................................................A-1
Appendix B: Industry Classifications............................................................................B-1
Appendix C: Special Sales Charge Arrangements and Waivers.......................................................C-1
A B O U T T H E F U N D
Additional Information About the Fund's Investment Policies and Risks
The investment objective and the principal investment policies of the Fund are described in the Prospectus. This
Statement of Additional Information contains supplemental information about those policies and the types of securities that
the Fund's investment Manager, OppenheimerFunds, Inc., can select for the Fund. Additional explanations are also provided
about the strategies the Fund can use to try to achieve its objective.
The Fund's Investment Policies. The composition of the Fund's portfolio and the techniques and strategies that the Manager
uses will vary over time. The Fund is not required to use all of the investment techniques and strategies described below
in seeking its goal. The Fund does not make investments with the objective of seeking capital growth. However, the values
of the securities held by the Fund may be affected by changes in general interest rates and other factors prior to their
maturity. Because the current value of debt securities varies inversely with changes in prevailing interest rates, if
interest rates increase after a security is purchased, that security will normally fall in value. Conversely, should
interest rates decrease after a security is purchased, normally its value will rise.
However, those fluctuations in value will not generally result in realized gains or losses to the Fund unless the
Fund sells the security prior to the security's maturity. A debt security held to maturity is redeemable by its issuer at
full principal value plus accrued interest. The Fund does not usually intend to dispose of securities prior to their
maturity, but may do so for liquidity purposes, or because of other factors affecting the issuer that cause the Manager to
sell the particular security. In that case, the Fund could realize a capital gain or loss on the sale.
There are variations in the credit quality of municipal securities, both within a particular rating classification
and between classifications. These variations depend on numerous factors. The yields of municipal securities depend on a
number of factors, including general conditions in the municipal securities market, the size of a particular offering, the
maturity of the obligation and rating (if any) of the issue. These factors are discussed in greater detail below.
|X| Determining the Average Effective Portfolio Maturity. In seeking to maintain an average effective portfolio
maturity of less than five years, the Fund may purchase individual securities that have effective maturities of more or
less than five years. The effective maturity of a bond might lengthen if market interest rates increase, and the effective
maturity might shorten if market interest rates decline. Increasing market interest rates therefore could cause the average
effective maturity of the portfolio to lengthen beyond five years, absent any portfolio transactions.
If the average effective maturity of the portfolio should exceed five years, the Fund will not purchase securities
that have effective maturities beyond five years. The Manager might also take steps to reduce the average effective
maturity of the portfolio below five years. Those steps might include selling bonds with effective maturities beyond five
years or buying bonds with effective maturities less than five years.
In computing the Fund's average effective portfolio maturity, the Manager intends to use the same effective
maturity dates that are shorter than the bond's stated maturity that are used in the marketplace for evaluating a bond for
trading and pricing purposes. That date might be the date of a mandatory put, pre-refunded call, optional call or the
average life to which a bond is priced. A bond having a variable coupon rate or anticipated principal prepayment may be
assigned an effective maturity that is shorter than a stated call date, put date or average life, to reflect more closely
the reduced price volatility expectations as to that bond.
Municipal Securities. The types of municipal securities in which the Fund may invest are described in the Prospectus under
"About the Fund's Investments." The Fund may from time to time invest in municipal securities other than New York municipal
securities. For example, the to seek a higher yield, the Fund may invest in municipal securities issued by other states and
their respective political subdivisions. Although any interest from these securities generally would be exempt from federal
income tax, any such interest may be subject to Xxx Xxxx Xxxxx xxx Xxx Xxxx Xxxx personal income tax. Nonetheless, the Fund
does not expect to invest a significant portion of its assets in securities other than New York municipal securities.
Municipal securities are generally classified as general obligation bonds, revenue bonds and notes. A discussion
of the general characteristics of these principal types of municipal securities follows below.
|X| Municipal Bonds. Long-term municipal securities (which have a maturity of more than one year when issued) are
classified as "municipal bonds." The principal classifications of long-term municipal bonds are "general obligation" and
"revenue" bonds (including "industrial development" bonds). They may have fixed, variable or floating rates of interest, as
described below, or may be "zero-coupon" bonds, as described below.
Some bonds may be "callable," allowing the issuer to redeem them before their maturity date. To protect
bondholders, callable bonds may be issued with provisions that prevent them from being called for a period of time.
Typically, that is five to 10 years from the issuance date. When interest rates decline, if the call protection on a bond
has expired, it is more likely that the issuer may call the bond. If that occurs, the Fund might have to reinvest the
proceeds of the called bond in bonds that pay a lower rate of return. In turn, that could reduce the Fund's yield.
o General Obligation Bonds. The basic security behind general obligation bonds is the issuer's pledge of its full
faith and credit and taxing power, if any, for the repayment of principal and the payment of interest. Issuers of general
obligation bonds include states, counties, cities, towns, and regional districts. The proceeds of these obligations are
used to fund a wide range of public projects, including construction or improvement of schools, highways and roads, and
water and sewer systems. The rate of taxes that can be levied for the payment of debt service on these bonds may be limited
or unlimited. Additionally, there may be limits as to the rate or amount of special assessments that can be levied to meet
these obligations.
o Revenue Bonds. The principal security for a revenue bond is generally the net revenues derived from a particular
facility, group of facilities, or, in some cases, the proceeds of a special excise tax or other specific revenue source.
Revenue bonds are issued to finance a wide variety of capital projects. Examples include electric, gas, water and sewer
systems; highways, bridges, and tunnels; port and airport facilities; colleges and universities; and hospitals.
Although the principal security for these types of bonds may vary from bond to bond, many provide
additional security in the form of a debt service reserve fund that may be used to make principal and interest payments on
the issuer's obligations. Housing finance authorities have a wide range of security, including partially or fully insured
mortgages, rent subsidized and/or collateralized mortgages, and/or the net revenues from housing or other public projects.
Some authorities provide further security in the form of a state's ability (without obligation) to make up deficiencies in
the debt service reserve fund.
o Industrial Development Bonds. Industrial development bonds are considered municipal bonds if the interest paid is
exempt from federal income tax. They are issued by or on behalf of public authorities to raise money to finance various
privately operated facilities for business and manufacturing, housing, sports, and pollution control. These bonds may also
be used to finance public facilities such as airports, mass transit systems, ports, and parking. The payment of the
principal and interest on such bonds is dependent solely on the ability of the facility's user to meet its financial
obligations and the pledge, if any, of real and personal property financed by the bond as security for those payments.
The Fund will purchase particular industrial development bonds only if the interest paid on the bonds is tax
exempt under the Internal Revenue Code. The Internal Revenue Code limits the types of facilities that may be financed with
tax-exempt industrial revenue and private-activity bonds (discussed below) and the amounts of these bonds that each state
can issue.
As an operating policy, the Fund will not invest more than 5% of its total assets in securities for which the
obligation to pay interest and repay principal are the responsibility of an industrial user with less than three year's
operating history.
o Private Activity Municipal Securities. The Tax Reform Act of 1986 (the "Tax Reform Act") reorganized, as well as
amended, the rules governing tax exemption for interest on certain types of municipal securities. The Tax Reform Act
generally did not change the tax treatment of bonds issued in order to finance governmental operations. Thus, interest on
general obligation bonds issued by or on behalf of state or local governments, the proceeds of which are used to finance
the operations of such governments, continues to be tax-exempt. However, the Tax Reform Act limited the use of tax-exempt
bonds for non-governmental (private) purposes. More stringent restrictions were placed on the use of proceeds of such
bonds. Interest on certain private activity bonds is taxable under the revised rules. There is an exception for "qualified"
tax-exempt private activity bonds, for example, exempt facility bonds including certain industrial development bonds,
qualified mortgage bonds, qualified Section 501(c)(3) bonds, and qualified student loan bonds.
In addition, limitations as to the amount of private activity bonds which each state may issue were revised
downward by the Tax Reform Act, which will reduce the supply of such bonds. The value of the Fund's portfolio could be
affected if there is a reduction in the availability of such bonds.
Interest on certain private activity bonds issued after August 7, 1986, which continues to be tax-exempt, will be
treated as a tax preference item subject to the alternative minimum tax (discussed below) to which certain taxpayers are
subject. The Fund may hold municipal securities the interest on which (and thus a proportionate share of the
exempt-interest dividends paid by the Fund) will be subject to the federal alternative minimum tax on individuals and
corporations.
The federal alternative minimum tax is designed to ensure that all persons who receive income pay some tax, even
if their regular tax is zero. This is accomplished in part by including in taxable income certain tax preference items that
are used to calculate alternative minimum taxable income. The Tax Reform Act made tax-exempt interest from certain private
activity bonds a tax preference item for purposes of the alternative minimum tax on individuals and corporations. Any
exempt-interest dividend paid by a regulated investment company will be treated as interest on a specific private activity
bond to the extent of the proportionate relationship the interest the investment company receives on such bonds bears to
all its exempt interest dividends.
In addition, corporate taxpayers subject to the alternative minimum tax may, under some circumstances, have to
include exempt-interest dividends in calculating their alternative minimum taxable income. That could occur in situations
where the "adjusted current earnings" of the corporation exceeds its alternative minimum taxable income.
To determine whether a municipal security is treated as a taxable private activity bond, it is subject to a test
for: (a) a trade or business use and security interest, or (b) a private loan restriction. Under the trade or business use
and security interest test, an obligation is a private activity bond if: (i) more than 10% of the bond proceeds are used
for private business purposes and (ii) 10% or more of the payment of principal or interest on the issue is directly or
indirectly derived from such private use or is secured by the privately used property or the payments related to the use of
the property. For certain types of uses, a 5% threshold is substituted for this 10% threshold.
The term "private business use" means any direct or indirect use in a trade or business carried on by an
individual or entity other than a state or municipal governmental unit. Under the private loan restriction, the amount of
bond proceeds that may be used to make private loans is limited to the lesser of 5% of the proceeds or $5.0 million. Thus,
certain issues of municipal securities could lose their tax-exempt status retroactively if the issuer fails to meet certain
requirements as to the expenditure of the proceeds of that issue or the use of the bond-financed facility. The Fund makes
no independent investigation of the users of such bonds or their use of proceeds of the bonds. If the Fund should hold a
bond that loses its tax-exempt status retroactively, there might be an adjustment to the tax-exempt income previously
distributed to shareholders.
Additionally, a private activity bond that would otherwise be a qualified tax-exempt private activity bond will
not, under Internal Revenue Code Section 147(a), be a qualified bond for any period during which it is held by a person who
is a "substantial user" of the facilities or by a "related person" of such a substantial user. This "substantial user"
provision applies primarily to exempt facility bonds, including industrial development bonds. The Fund may invest in
industrial development bonds and other private activity bonds. Therefore, the Fund may not be an appropriate investment for
entities which are "substantial users" (or persons related to "substantial users") of such exempt facilities. Those
entities and persons should consult their tax advisors before purchasing shares of the Fund.
A "substantial user" of such facilities is defined generally as a "non-exempt person who regularly uses part of a
facility" financed from the proceeds of exempt facility bonds. Generally, an individual will not be a "related person"
under the Internal Revenue Code unless such individual or the individual's immediate family (spouse, brothers, sisters and
immediate descendants) own directly or indirectly in the aggregate more than 50% in value of the equity of a corporation or
partnership which is a "substantial user" of a facility financed from the proceeds of exempt facility bonds.
|X| Municipal Notes. Municipal securities having a maturity (when the security is issued) of less than one year
are generally known as municipal notes. Municipal notes generally are used to provide for short-term working capital needs.
Some of the types of municipal notes the Fund can invest in are described below.
o Tax Anticipation Notes. These are issued to finance working capital needs of municipalities. Generally, they are
issued in anticipation of various seasonal tax revenue, such as income, sales, use or other business taxes, and are payable
from these specific future taxes.
o Revenue Anticipation Notes. These are notes issued in expectation of receipt of other types of revenue, such as
federal revenues available under federal revenue-sharing programs.
o Bond Anticipation Notes. Bond anticipation notes are issued to provide interim financing until long-term financing
can be arranged. The long-term bonds that are issued typically also provide the money for the repayment of the notes.
o Construction Loan Notes. These are sold to provide project construction financing until permanent financing can be
secured. After successful completion and acceptance of the project, it may receive permanent financing through public
agencies, such as the Federal Housing Administration.
|X| Tax-Exempt Commercial Paper. This type of short-term obligation (usually having a maturity of 270 days or
less) is issued by a municipality to meet current working capital needs.
|X| Municipal Lease Obligations. The Fund's investments in municipal lease obligations may be through certificates
of participation that are offered to investors by public entities. Municipal leases may take the form of a lease or an
installment purchase contract issued by a state or local government authority to obtain funds to acquire a wide variety of
equipment and facilities.
Some municipal lease securities may be deemed to be "illiquid" securities. Their purchase by the Fund would be
limited as described below in "Illiquid Securities." Municipal lease obligations that the Manager has determined to be
liquid under guidelines set by the Board of Trustees are not subject to the Fund's 15% limit on investments in illiquid
securities.
Those guidelines require the Manager to evaluate:
o the frequency of trades and price quotations for such securities;
o the number of dealers or other potential buyers willing to purchase or sell such securities;
o the availability of market-makers; and
o the nature of the trades for such securities.
Municipal leases have special risk considerations. Although lease obligations do not constitute general
obligations of the municipality for which the municipality's taxing power is pledged, a lease obligation is ordinarily
backed by the municipality's covenant to budget for, appropriate and make the payments due under the lease obligation.
However, certain lease obligations contain "non-appropriation" clauses which provide that the municipality has no
obligation to make lease or installment purchase payments in future years unless money is appropriated for that purpose on
a yearly basis. While the obligation might be secured by the lease, it might be difficult to dispose of that property in
case of a default.
Projects financed with certificates of participation generally are not subject to state constitutional debt
limitations or other statutory requirements that may apply to other municipal securities. Payments by the public entity on
the obligation underlying the certificates are derived from available revenue sources. That revenue might be diverted to
the funding of other municipal service projects. Payments of interest and/or principal with respect to the certificates are
not guaranteed and do not constitute an obligation of a state or any of its political subdivisions.
Municipal leases may also be subject to "abatement risk." The leases underlying certain municipal lease
obligations may state that lease payments are subject to partial or full abatement. That abatement might occur, for
example, if material damage to or destruction of the leased property interferes with the lessee's use of the property.
However, in some cases that risk might be reduced by insurance covering the leased property, or by the use of credit
enhancements such as letters of credit to back lease payments, or perhaps by the lessee's maintenance of reserve funds for
lease payments.
In addition, municipal lease securities do not have as highly liquid a market as conventional municipal bonds.
Municipal leases, like other municipal debt obligations, are subject to the risk of non-payment of interest or repayment of
principal by the issuer. The ability of issuers of municipal leases to make timely lease payments may be adversely affected
in general economic downturns and as relative governmental cost burdens are reallocated among federal, state and local
governmental units. A default in payment of income would result in a reduction of income to the Fund. It could also result
in a reduction in the value of the municipal lease and that, as well as a default in repayment of principal, could result
in a decrease in the net asset value of the Fund. While the Fund holds these securities, the Manager will evaluate the
likelihood of a continuing market for these securities and their credit quality.
The Fund attempts to reduce its exposure to some of these risks by not investing more than 10% of its total assets
in municipal leases obligations that contain "non-appropriation" clauses. Also, the Fund will invest in leases with
non-appropriation clauses only if certain conditions are met:
o the nature of the leased equipment or property is such that its ownership or use is essential to a governmental
function of a municipality,
o appropriate covenants are obtained from the municipal obligor prohibiting the substitution or purchase of similar
equipment if lease payments are not appropriated,
o the lease obligor has maintained good market acceptability in the past,
o the investment is of a size that will be attractive to institutional investors, and
o the underlying leased equipment has elements of portability and/or use that enhance its marketability if
foreclosure is ever required on the underlying equipment.
|X| Credit Ratings of Municipal Securities. Ratings by ratings organizations such as Xxxxx'x Investors Service
("Moody's"), Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. ("Standard and Poor's") and
Fitch, Inc. ("Fitch"), represent the respective rating agency's opinions of the credit quality of the municipal securities
they undertake to rate. However, their ratings are general opinions and are not guarantees of quality. Municipal securities
that have the same maturity, coupon and rating may have different yields, while other municipal securities that have the
same maturity and coupon but different ratings may have the same yield.
After the Fund buys a municipal security, it may cease to be rated or its rating may be reduced below the minimum
required for purchase by the Fund. Neither event requires the Fund to sell the security, but the Manager will consider such
events in determining whether the Fund should continue to hold the security. To the extent that ratings given by Moody's,
Standard & Poor's, or Fitch change as a result of changes in those rating organizations or their rating systems, the Fund
will attempt to use comparable ratings as standards for investments in accordance with the Fund's investment policies.
The Fund may buy municipal securities that are "pre-refunded." The issuer's obligation to repay the principal
value of the security is generally collateralized with U.S. government securities placed in an escrow account. As a result,
the pre-refunded security has essentially the same risks of default as an AAA-rated security.
The rating definitions of Moody's, Standard & Poor's and Fitch for municipal securities are contained in Appendix
A to this Statement of Additional Information. The Fund can purchase securities that are unrated by nationally recognized
rating organizations. The Manager will make its own assessment of the credit quality of unrated issues the Fund buys. The
Manager will use criteria similar to those used by the rating agencies, and assign a rating category to a security that is
comparable to what the Manager believes a rating agency would assign to that security. However, the Manager's rating does
not constitute a guarantee of the quality of a particular issue.
In evaluating the credit quality of a particular security, whether it is rated or unrated, the Manager will
normally take into consideration a number of factors. Among them are the financial resources of the issuer, or the
underlying source of funds for debt service on a security, the issuer's sensitivity to economic conditions and trends, any
operating history of the facility financed by the obligation and the degree of community support for it, the capabilities
of the issuer's management and regulatory factors affecting the issuer and the particular facility.
o Special Risks of Lower-Grade Securities. Up to 5% of the Fund's assets that are invested in New York municipal
obligations (as defined in the Prospectus) may be invested in New York municipal obligations rated below investment grade.
In addition, more than 5% of the Fund's assets that are invested in municipal obligations overall may be invested in
municipal obligations rated below investment grade. These are commonly referred to as "junk bonds." Lower grade securities
may have a higher yield than securities rated in the higher rating categories. In addition to having a greater risk of
default than higher-grade, securities, there may be less of a market for these securities. As a result they may be harder
to sell at an acceptable price. The additional risks mean that the Fund may not receive the anticipated level of income
from these securities, and the Fund's net asset value may be affected by declines in the value of lower-grade securities.
However, because the added risk of lower quality securities might not be consistent with the Fund's policy of prudent
investment management, the Fund limits its investments in lower quality securities and does not buy securities rated below
"Ba" by Moody's or "BB" by Standard & Poor's or Fitch (or unrated securities that the Manager deems to be of comparable
quality).
While securities rated "Baa" by Moody's or "BBB" by Standard & Poor's or Fitch are investment grade, they may be
subject to special risks and have some speculative characteristics.
In the event of unanticipated financial difficulties, default or bankruptcy of an issuer of an obligation or the
underlying source of funds for debt service on an obligation the Fund owns, the Fund can take such action as the Manager
considers appropriate. That might include, for example, retaining the services of persons, firms, professional
organizations and others to evaluate or protect real estate, facilities or other assets securing the obligation or acquired
by the Fund as a result of such event. The Fund will incur additional costs in taking protective action with respect to
portfolio obligations that are in default or the assets securing those obligations. As a result, the Fund's share prices
could be adversely affected. Any income derived from the Fund's ownership or operation of assets acquired as a result of
these types of actions might not be tax-exempt.
Special Investment Considerations - New York Municipal Securities. As explained in the Prospectus, the Fund's investments
are highly sensitive to the fiscal stability of New York State (referred to in the section as the "State") and its
subdivisions, agencies, instrumentalities or authorities, including New York City (the "City"), which issue the municipal
securities in which the Fund invests. The following information on risk factors in concentrating in New York municipal
securities is only a summary, based on the State's Annual Information Statement dated October 2, 2001 and the update
thereto dated November 8, 2001, and on publicly-available official statements relating to offerings by issuers of New York
municipal securities on or prior to July 15, 2001 with respect to offerings of New York State, and on or prior to December
12, 2001 with respect to offerings by the City. No representation is made as to the accuracy of this information.
On September 11, 2001, terrorist attacks destroyed the World Trade Center. Those attacks resulted in substantial
loss of life, damage to other buildings in the vicinity, disruption of public transportation and business, and displacement
of residents in the immediate vicinity of the World Trade Center. It is expected that the destruction of the World Trade
Center will have a substantial impact on the City and its economy.
During the mid-1970's the State, some of its agencies, instrumentalities and public benefit corporations (the
"Authorities"), and certain of its municipalities faced serious financial difficulties. To address many of these financial
problems, the State developed various programs, many of which were successful in reducing the financial crisis. Any
further financial problems experienced by these Authorities or municipalities could have a direct adverse effect on the New
York municipal securities in which the Fund invests.
|X| Factors Affecting Investments in New York State Securities. The ramifications of the September 11, 2001
terrorist attack in New York raise many complex issues related to State finances. The State expects substantial federal
aid to be available to pay for most of the costs for disaster assistance and reconstruction. On September 14, 2001, the
United States Congress enacted an emergency supplemental appropriation of $40 billion for disaster assistance and
counter-terrorism measures, with not less than $20 billion allocated to disaster relief and recovery initiatives in New
York, Virginia, and Pennsylvania, although there is no assurance that such funds will be made available. To expedite the
flow of federal aid and other assistance, the State Legislature enacted $5.5 billion in appropriations on September 13,
2001. It also authorized $2.5 billion in additional bonding authority for the New York City Transitional Finance Authority
(TFA) to fund the City costs related to or arising from the terrorist attack.
Federal funding for disaster assistance is available in several forms. Under laws in effect in late 2001, the
federal government pays 75% or more of the costs for emergency response activities and the repair of public buildings. On
September 21, 2001, the President waived any matching requirement for the State and the City, clearing the way for 100%
reimbursement for all eligible disaster-related costs. Other significant assistance for businesses is available through
the Small Business Administration for property losses, cash-flow needs, and hazard migration.
The terrorist attacks in the City may have materially adverse consequences for the State, but at this time it is
not possible to provide a definitive assessment. The State assessed that the loss of tax and other receipts will be in the
range of $1 billion to $3 billion in the 2001-02 fiscal year and in the range of $2 billion to $6 billion next fiscal
year. The mid-year update to the State's 2001-02 financial plan ("Mid-Year Plan") projects revenue losses of $1.63
billion, which is offset in part by Legislative actions in October that provided $114 million in additional revenues and
$20 million in expenditure savings. It is expected that a number of economic sectors that generate State tax revenues will
be disrupted at least temporarily, including finance, insurance, real estate, and tourism. In the long term, the most
significant risk is the possible loss of financial sector firms and related businesses to other states. The financial
sector is an important economic activity in the State and a substantial reduction in its operations would likely have an
adverse impact on State tax revenues, leading to material changes to the Mid-Year Plan and the State's outyear projections
of receipts, adding further pressure to budget balance in future fiscal years.
In addition to the September 11, 2001 terrorist attacks in the City, many complex political, social and economic
forces influence the State's economy and finances, which may in turn affect the State's financial plan for the 2001-02
fiscal year. These forces may affect the State unpredictably from fiscal year to fiscal year and are influenced by
governments, institutions, and events that are not subject to the State's control. The financial plan for 2001-02 is also
necessarily based upon forecasts of national and State economic activity. Economic forecasts have frequently failed to
predict accurately the timing and magnitude of changes in the national and State economies.
In every year, many uncertainties exist in the forecast of the national and State economies. Given the terrorist
attacks, the nation's war-time preparations, and the volatility in financial markets, such uncertainties are significantly
more pronounced at this time. For example, the downturn in the financial markets could continue over a sustained period.
The securities industry is more important to the New York economy than to the national economy as a whole, potentially
amplifying the impact of such a downturn. A large change in stock market performance during the forecast horizon could
result in wage and unemployment levels that are significantly different from those embodied in the 2001-02 forecast.
Two variables which stand out as being particularly vulnerable to financial market volatility, and which are
closely associated with prior strength of State personal income tax receipts, are finance sector bonus income and capital
gains realizations. Historically, financial sector bonus income has been closely tied to security firm profits. With many
Wall Street profit-making activities (such as initial public offerings and mergers and acquisitions) now significantly
below 2000 levels, the New York Division of Budget ("DOB") has forecasted a significant decline in financial sector profits
for 2001, which is likely to be exacerbated by the terrorist attacks. DOB also expected that the decline in equity values
observed since early 2000, combined with the decline in the average holding period for equities, would produce a decline in
capital gains realizations for the 2001-02 fiscal year. However, both bonus income and capital gains realizations have
historically been subject to a large degree of variation and are likely to fall substantially below earlier expectations.
In early 2002, The United States Congress was contemplating an economic stimulus package. If enacted, certain
components of the package may adversely affect State tax revenues. The most significant risk concerns a provision that
would allow expanded expensing of investment costs against federal taxable income. Since the State uses federal taxable
income as the starting point for calculating taxable income, the provision could adversely impact State tax revenues.
The DOB expects to revise its projections of receipts and disbursements relating to the 2001-02 financial plan as
the impact of the terrorist attack in New York becomes clearer. Actual results could differ materially and adversely from
the State's projections. In the past, the State has taken actions to address potential financial plan shortfalls, and has
begun to take similar actions now to avoid adverse variances in its projections for the 2001-02 fiscal year.
National economic growth slowed significantly during the second half of 2000 and the first half of 2001. Real
U.S. Gross Domestic Product (GDP) declined by 0.4% during the third quarter of 2001, following 0.3% growth during the
second quarter. DOB has forecasted a recession stretching into the beginning of calendar year 2002.
The events of September 11 have exacerbated the national economic slowdown. Since the attack, the airline
industry has lost substantial revenues, retail sales have plunged, and tourist activity remains significantly below the
pre-September 11 level. However, the Federal Reserve, the President, and Congress appear to be moving aggressively to
impart both monetary and fiscal stimulus. Given DOB's assumptions concerning the magnitude and the effectiveness of the
stimulus, it projected that the U.S. economy, as measured by real U.S. GDP, will grow 1.0% for 2001 and 0.9% for 2002.
Private sector profits declined significantly in 2001 and are expected to fall further, resulting in additional
rounds of employee layoffs. The unemployment rate was expected to rise from 4.7% for 2001 to 6.2% for 2002. U.S. personal
income was expected to grow 5.0% for 2001 and 4.0% for 2002, following much higher growth of 7.0% for 2000. The reduction
in household wealth, combined with rising unemployment and slower income growth, was expected to cause consumers to
dramatically curtail spending.
There are significant risks to the national forecast. If either monetary or fiscal policy is less effective than
expected, the recession could be both longer and deeper than predicted. Weaker corporate profits than projected could, in
turn, produce even more employee layoffs and less capital investment than anticipated. Similarly, if the stock market
fails to rebound when expected in calendar 2002, the resulting additional loss of household wealth, coupled with employee
layoffs could further reduce wages, personal income, and consumption growth. World economic growth could be substantially
worse than expected. However, if monetary and fiscal policies are more effective than projected or if the stock market
rebounds earlier than expected, economic growth could rise above the forecast. The foregoing outlook was predicated upon
the assumption that no additional major disruption will occur again within the forecasting period. However, with the
nation at war abroad and on high alert domestically, the risk of an adverse shock to the U.S. economy is extremely high.
New York is the third most populous state in the nation and has a relatively high level of personal wealth. The
State's economy is diverse, with a comparatively large share of the nation's finance, insurance, transportation,
communications and services employment, and a very small share of the nation's farming and mining activity. The State's
location and its air transport facilities and natural harbors have made it an important link in international commerce.
Travel and tourism constitute an important part of the economy. However, the terrorist attack on the World Trade Center on
September 11, 2001 is likely to have an adverse effect on travel and tourism. Like the rest of the nation, New York has a
declining proportion of its workforce engaged in manufacturing, and an increasing proportion engaged in service industries.
Relative to the nation, the State has a smaller share of manufacturing and construction and a larger share of
service-related industries. The State's finance, insurance, and real estate share, as measured by wages, is particularly
large relative to the nation. The State projected that it is likely to be less affected than the nation as a whole during
an economic recession that is concentrated in manufacturing and construction, but likely to be more affected by any
economic downturn that is concentrated in the services sector.
DOB has estimated that tens of thousands of jobs may have been lost or displaced from New York, at least
temporarily, due to the events of September 11. The sector hardest hit by the disaster was the finance industry, which is
estimated to have lost 30,000 jobs, many of whom have been either laid off or relocated out-of-state. Other industries
expected to experience severe losses were businesses and media services, hotel and motel services, retail trade, arts and
entertainment services, and transportation. In contrast, as part of the reconstruction process, the construction sector
was expected to experience a net gain in employment. On an annual average basis, State employment was expected to grow a
modest 0.4% for 2001 and decline 1.2% for 2002.
DOB has estimated that the events of September 11 will also have a significantly negative impact on securities
industry profits. The fall in profit growth was expected to result in a severe decline in finance and insurance industry
cash bonuses. This decline will likely be exacerbated by firms weighing their bonus payouts more heavily than usual in
favor of stock options as well as by the transfer of dislocated workers out-of-state. Lower growth in both employment and
bonus income was expected to result in personal income growth of 2.8% for 2001, followed by growth of 1.3% for 2002.
The most significant risks to the New York economic forecast pertain to the pace of layoffs related to the events
of September 11, and the impact of both the disaster itself and deteriorating economic conditions on wages. The
possibility of yet another terrorist attack on the City area poses a substantial negative risk to the DOB forecast. Fewer
layoffs, stronger financial markets, and higher bonuses than projected would result in a stronger State economy than
reflected in the State's forecast. Similarly, greater job losses, weaker financial markets, and smaller bonus payments
than expected would result in a weaker State economy.
|X| The 2001-02 Fiscal Year. On September 21, 2001, the State issued a financial plan for the 2001-02 fiscal year
(the "September Financial Plan"). On November 8, 2001, the State issued an update to the September Financial Plan (the
"Mid-Year Plan") (the September Financial Plan, as updated by the Mid-Year Plan, being the "2001-02 Financial Plan").
In the Mid-Year Plan, the State continues to project that the 2001-02 Financial Plan will remain in balance for
the duration of the fiscal year after the use of $1.50 billion in existing General Fund (the major operating Fund of the
State) reserves. The Mid-Year Plan projects that General Fund receipts and transfers from other funds will total $42.09
billion in 2001-02. The net decrease of $1.52 billion from the September Financial Plan is comprised of a $1.63 billion
downward revision in estimated receipts primarily related to the World Trade Center attacks, offset in part by $114 million
in additional revenues from Legislative action in October related to the gas import tax. General Fund disbursements and
transfers to other funds are now projected to total $41.97 billion in 2001-02, a decrease of $20 million from the September
Financial Plan. The decrease reflects General Fund savings of $188 million from the use of Temporary Assistance to Needy
Families (TANF) resources for welfare and child welfare costs, offset in part by funding for not-for-profit organizations
($100 million) and a new economic stimulus program ($68 million).
The State reported that at the end of the first six (6) months of the 2001-02 fiscal year, the General Fund had a
cash balance of $5.55 billion, $489 million below the estimate in the September Financial Plan. General Fund receipts and
transfers from other funds totaled $23.56 billion through September 2001. Receipts and transfers were $502 million below
the cashflow projections in the September Financial Plan, due in part to the economic impact of the World Trade Center
attacks and an extension of the filing deadline for making estimated tax payments from September 15 to December 15.
General Fund disbursements and transfers to other funds totaled $19.11 billion through September 2001, a decrease of $13
million from the September Financial Plan. The variance was attributable to the timing of payments and was not expected to
alter year-end results.
Personal income tax ("PIT") receipts were projected to total $27.10 billion in 2001-02, a decline of $1.09 billion
from the September Financial Plan. The revised PIT projection reflects the anticipated adverse economic impact of the
World Trade Center disaster, including significant reductions in wages, employment, financial sector bonuses, and capital
gains income. DOB forecasted a significant decline in both withholding taxes (down $941 million) and estimated payments
(down $120 million) compared to the September Financial Plan estimate. DOB projected financial sector bonuses to decline
by 50 percent, and taxable capital gains realizations by 35 percent, from calendar year 2000. The State's forecast
projected actual year-over-year decreases in New York State adjusted gross income and personal income tax liability for
both the 2001 and 2002 years.
The World Trade Center attacks are also expected to reduce user tax and fee collections in 2001-02. The Mid-Year
Plan projected these tax receipts to total $7.04 billion in 2001, a decline of $52 million from the September Financial
Plan. Projected sales tax collections have been lowered by $56 million, reflecting the decline in consumer confidence,
lower tourism spending, and the anticipated decline in personal income and employment. Modest upward revisions in
cigarette and alcoholic beverage taxes partially offset the projected decline in the sales tax.
DOB has lowered its projection for business tax collections by $329 million from the September Financial Plan
projection of $3.98 billion due to several factors, including the adverse impact of the World Trade Center disaster on
financial services firms, declining corporate profits, and banking losses. Compared to the September Financial Plan, the
Mid-Year Plan forecasted declines in collections for significant components of the business taxes, including the
corporation franchise tax ($215 million), bank franchise taxes ($89 million), and corporation and utilities taxes ($50
million). Receipts in the latter category included an upward adjustment of $144 million to reflect the impact of
legislation that corrected constitutional flaws related to the gas import tax.
The State has stated that it plans to take the actions necessary to maintain budget balance during the 2001-02
fiscal year. The State Constitution requires the Governor to submit a balanced budget and cash-basis Financial Plan for
2002-03 with the Executive Budget. The State has stated that it does not believe the terrorist attacks or other events
will affect its ability to pay the principal and interest on its bonds or other debt service obligations in this or any
future fiscal year.
o State Governmental Funds Group. Substantially all State non-pension financial operations are accounted for in the
State's governmental funds group. Governmental funds include:
o the General Fund, which is the major operating fund of the State and receives all receipts that are
not required by law to be deposited in another fund, including most State tax receipts and certain fees, transfers from
other funds and miscellaneous receipts from other sources;
o Special Revenue Funds, which account for the proceeds of specific revenue sources (other than
expendable trusts or major capital projects), such as federal grants, that are legally restricted to specified purposes;
o Capital Projects Funds, which account for financial resources of the State to be used for the
acquisition or construction of major capital facilities (other than those financed by Special Revenue Funds, Proprietary
Funds and Fiduciary Funds); and
o Debt Service Funds, which account for the accumulation of resources (including receipts from certain
taxes, transfers from other funds and miscellaneous revenues, such as dormitory room rental fees, which are dedicated by
statute for payment of lease-purchase rentals) for the payment of general long-term debt service and related costs and
payments under lease-purchase and contractual-obligation financing arrangements.
o Local Government Assistance Corporation. In 1990, as part of a State fiscal reform program, legislation was
enacted creating Local Government Assistance Corporation, a public benefit corporation empowered to issue long-term
obligations to fund payments to local governments that had been traditionally funded through the State's annual seasonal
borrowing. The legislation authorized the corporation to issue its bonds and notes in an amount to yield net proceeds not
in excess of $4.7 billion (exclusive of certain refunding bonds). Over a period of years, the issuance of these long-term
obligations, which are to be amortized over no more than thirty (30) years, was expected to eliminate the need for
continued short-term seasonal borrowing.
The legislation also dedicated revenues equal to 1% of the 4% State sales and use tax to pay debt service on these
bonds. The legislation also imposed a cap on the annual seasonal borrowing of the State at $4.7 billion, less net proceeds
of bonds issued by the corporation and bonds issued to provide for capitalized interest. An exception is in cases where
the Governor and the legislative leaders have certified the need for additional borrowing and have provided a schedule for
reducing it to the cap. If borrowing above the cap is thus permitted in any fiscal year, it is required by law to be
reduced to the cap by the fourth fiscal year after the limit was first exceeded. This provision capping the seasonal
borrowing was included as a covenant with the corporation's bondholders in the resolution authorizing such bonds.
As of June 1995, the corporation had issued bonds and notes to provide net proceeds of $4.7 billion, completing
the program. The impact of its borrowing, as well as other changes in revenue and spending patterns, is that the State has
been able to meet its cash flow needs throughout the fiscal year without relying on short-term seasonal borrowings.
|X| Authorities. The fiscal stability of the State is related to the fiscal stability of its public Authorities.
Authorities have various responsibilities, including those which finance, construct and/or operate revenue-producing public
facilities. Authorities are not subject to the constitutional restrictions on the incurrence of debt which apply to the
State itself, and may issue bonds and notes within the amounts, and restrictions set forth in their legislative
authorization. As of December 31, 2000, there were 18 public authorities that had outstanding debt of $100 million or
more, and the aggregate outstanding debt, including refunding bonds, of these State public authorities was almost $98
billion, only a portion of which constitutes State-supported or State-related debt.
Authorities are generally supported by revenues generated by the projects they finance or operate, such as tolls
charged for use of highways, bridges or tunnels, charges for public power, electric and gas utility services, rentals
charged for housing units and charges for occupancy at medical care facilities. In addition, State legislation authorizes
several financing techniques for Authorities. There are statutory arrangements providing for State local assistance
payments otherwise payable to localities to be made under certain circumstances to Authorities. Although the State has no
obligation to provide additional assistance to localities whose local assistance payments have been paid to Authorities
under these arrangements, the affected localities could seek additional State assistance if local assistance payments are
diverted. Some Authorities also receive moneys from State appropriations to pay for the operating costs of certain of
their programs.
|X| Ratings of the State's Securities. As of July 17, 2001, S&P has rated the State's general obligation bonds
"AA," Xxxxx'x has rated those bonds "A2" and Fitch has rated those bonds "AA".
Ratings reflect only the views of the ratings organizations, and an explanation of the significance of a rating
must be obtained from the rating agency furnishing the rating. There is no assurance that a particular rating will
continue for any given period of time or that any such rating will not be revised downward or withdrawn entirely if, in the
judgment of the agency originally establishing the rating, circumstances so warrant. A downward revision or withdrawal of a
rating may have an effect on the market price of the State and municipal securities in which the Fund invests.
|X| The State's General Obligation Debt. As of March 31, 2001, the State had approximately $4.3 billion in
general obligation bonds outstanding. Principal and interest due on general obligation bonds and interest due on bond
anticipation notes were $677.5 million for the 2000-01 fiscal year and are estimated to be $632.6 million for the State's
2001-02 fiscal year.
|X| Pending Litigation. The State is a defendant in numerous legal proceedings pertaining to matters incidental
to the performance of routine governmental operations. That litigation includes, but is not limited to, claims asserted
against the State involving State finances and programs and arising from alleged violations of civil rights, alleged torts,
alleged breaches of contracts, real property proceedings and other alleged violations of State and Federal laws. These
proceedings could affect adversely the financial condition of the State in the 2001-02 fiscal year or thereafter.
The State believes that the proposed 2001-02 Financial Plan includes sufficient reserves for the payment of
judgments that may be required during the 2001-02 fiscal year. There can be no assurance, however, that an adverse
decision in any of these proceedings would not exceed the amount the 2001-02 Financial Plan reserves for the payment of
judgments and, therefore, could affect the ability of the State to maintain a balanced 2001-02 Financial Plan.
In addition, the State is party to other claims and litigation that either its legal counsel has advised are not
probable that the State will suffer adverse court decisions or the State has determined are not material. Although the
amounts of potential losses, if any, are not presently determinable, it is the State's opinion that its ultimate liability
in these cases is not expected to have a material adverse effect on the State's financial position in the 2001-02 fiscal
year or thereafter.
|X| Other Functions. Certain localities in addition to the City have experienced financial problems and have
requested and received additional State assistance during the last several State fiscal years. The potential impact on the
State of any future requests by localities for additional oversight or financial assistance is not included in the
projections of the State's receipts and disbursements for the State's 2001-02 fiscal year or thereafter.
|X| Factors Affecting Investments in New York City Municipal Securities. The City has a highly diversified
economic base, with a substantial volume of business activity in the service, wholesale and retail trade and manufacturing
industries and is the location of many securities, banking, law, accounting, news media and advertising firms.
Economic activity in the City has experienced periods of growth and recession and can be expected to experience
periods of growth and recession in the future. Changes in the economic activity in the City, particularly employment, per
capita personal income and retail sales, may have an impact on the City. From 1969 to 1977, the City experienced
substantial declines in employment, but from 1978 to 1987 the City experienced strong growth in jobs, especially in the
city's finance, insurance and real estate sectors due in large part to lower inflation, lower interest rates and a strong
securities market. Beginning in 1988, employment growth in the City slowed, and in 1990 the City experienced job losses,
although the U.S. economy expanded during that period. During 1991 and 1992, employment levels in the city continued to
decline. In recent years, the City has experienced increases in employment. Real per capita personal income (i.e. per
capita personal income adjusted for the effects of inflation and the differential in living costs) has generally
experienced fewer fluctuations than employment in the City. Although the City periodically experienced declines in real per
capita personal income between 1969 and 1981, real per capita personal income in the City has generally increased from the
mid-1980's until the present. In nearly all of the years between 1969 and 1990 the city experienced strong increases in
retail sales. However, from 1991 to 1993, the city experienced a weak period of retail sales. Since 1994, the City has
returned to a period of growth in retail sales. Overall, the City's economic improvement accelerated significantly between
1997 and 2000. Much of the increase was traced to the performance of the securities industry, but the City's economy also
produced gains in the retail trade sector, the hotel and tourism industry, and business services, with private sector
employment growing rapidly. The City's financial plan assumes negative economic growth during the latter half of calendar
year 2001 through the first half of calendar year 2002 as a result of the September 11 attack and the national economic
recession. The City's financial plan assumes that the City's economy will begin a slow recovery with the national economic
recovery around the middle of calendar year 2002.
The September 11, 2001 terrorist attacks on the World Trade Center are expected to have substantial impact on the
City and its economy. Reduced economic activity is expected to lower corporate profits, increase job losses and reduce
consumer spending, which would result in reduced personal income and sales tax receipts and other business tax revenues for
the City and could negatively affect real property values.
For each of the 1981 through 2001 fiscal years, the City's General Fund had an operating surplus, before
discretionary and other transfers, and achieved balanced operating results as reported in accordance with then applicable
generally accepted accounting principles after discretionary and other transfers. The City has been required to close
substantial gaps between forecast revenues and forecast expenditures in order to maintain balanced operating results. There
can be no assurance that the City will continue to maintain balanced operating results as required by State law without tax
or other revenue increases or reductions in City services or entitlement programs, which could adversely affect the City's
economic base.
The Mayor is responsible for preparing the City's financial plan, including the City's financial plan for the 2002
through 2005 fiscal years (referred to below as the "2002-2005 Financial Plan", or "Financial Plan").
The City's projections set forth in the Financial Plan are based on various assumptions and contingencies which
are uncertain and which may not materialize. Implementation of the Financial Plan is dependent upon the City's ability to
market its securities successfully. The City's program for financing capital projects for fiscal years 2002 through 2005
contemplated the issuance approximately $11.0 billion of general obligation bonds and approximately $4.0 billion of bonds
(excluding bond anticipation notes and recovery bonds and notes issued to pay costs relating to the September 11 attack) to
be issued by the New York City Transitional Finance Authority (the "Finance Authority"). In addition, it was expected that
the City will have access to approximately $2.2 billion (including the $604 million of bond proceeds received by December
2001) of proceeds from the sale of tobacco settlement bonds to be issued by TSASC, Inc. ("TSASC"). Such bonds are secured
by revenues derived from the settlement of litigation with tobacco companies selling cigarettes in the United States. The
Finance Authority and TSASC were created to assist the City in financing its capital program while keeping the City's
indebtedness within the forecast level of the constitutional restrictions on the amount of debt the City is authorized to
incur.
In addition, the City issues revenue and tax anticipation notes to finance its seasonal working capital
requirements. The success of projected public sales of City, New York City Municipal Water Finance Authority ("Water
Authority"), Finance Authority, TSASC and other bonds and notes will be subject to prevailing market conditions. The
City's planned capital and operating expenditures are dependent upon the sale of its general obligation debt, as well as
debt of the Water Authority, Finance Authority and TSASC. Future developments concerning the City and public discussion of
such developments, as well as prevailing market conditions, may affect the market for outstanding City general obligation
bonds and notes.
In addition to the financing program described above, the Finance Authority issued $1 billion of recovery notes on
October 4, 2001 to pay costs related to the September 11 attack. The Finance Authority note proceeds may be utilized to
accommodate cash needs resulting from timing differences between payment by the City of costs relating to the events of
September 11 and receipt of Federal reimbursement for such costs, or to meet other City cash requirements caused by such
events. Such notes may be paid with Finance Authority revenues (with the resulting reduction in City tax revenues to be
offset by Federal aid or other sources) or proceeds of renewal notes or bonds of the Finance Authority (which would also
reduce tax revenues to the City). The Finance Authority is authorized to have outstanding $2.5 billion of bonds or notes,
the proceeds of which are to be used to pay costs related to the September 11 attack.
The City Comptroller and other agencies and public officials issue periodic reports and make public statements
which, among other things, state that projected revenues and expenditures may be different from those forecast in the
City's financial plans. It is reasonable to expect that such reports and statements will continue to be issued and to
engender public comment.
Continuing recovery, clean up and repair efforts following the September 11 terrorist attacks will result in
substantial expenditures. The City expects to be reimbursed by the Federal government for all of its direct costs for
response and remediation of the World Trade Center site. These costs are not expected to be substantially below previous
estimates. The City also expects to receive Federal funds for costs of economic revitalization and other needs, not
directly payable through the City budget, relating to the September 11 attack.
The events of September 11 increased the risk of a recession and a delay in recovery. It is not possible to
quantify at present with any certainty the long-term impact of the September 11 attack on the City and its economy, any
economic benefits which may result from recovery and rebuilding activities and the amount of additional resources from
Federal, State, City and other sources which will be required.
|X| The City's 2002-2005 Financial Plan. The Financial Plan for the 2002 through 2005 fiscal years, released on
December 4, 2001, projects that revenues and expenditures for the 2002 fiscal year will be balanced in accordance with
generally accepted accounting principles, and projects gaps of $3.6 billion, $4.0 billion and $3.9 billion for fiscal years
2003 through 2005, respectively, after implementation of a gap-closing program for fiscal year 2002. The gap-closing
program includes agency actions to reduce expenditures by $766 million, which includes personnel reductions through
attrition, and agency actions to increase revenues, including federal aid to reimburse costs relating to the September 11
attack.. The Financial Plan depends upon its projections of decreased tax revenues in fiscal years 2002 through 2005,
reflecting primarily decreases in projected personal income, business and sales tax revenues as a result of the September
11 attack and reduced economic activity, offset by increased revenues in fiscal years 2002 through 2005 as a result of the
elimination of a previously proposed tax reduction program; increased pension costs in fiscal years 2003 through 2005
resulting primarily from investment losses in fiscal year 2001; projections of a reduction in federal and State actions in
fiscal years 2002 through 2005; an increase in labor costs in fiscal years 2002 through 2005 to reflect the cost of wage
increases for the uniformed forces coalition; a delay in the receipt of $250 million from the proposed sale of the New York
City Off-Track Betting Corporation ("OTB") from fiscal year 2002 to fiscal year 2003; the elimination of $114 million of
State payments to a stock transfer incentive fund for fiscal years 2002 through 2005, which was not included in the State
Budget; reduced net spending in fiscal year 2002 and increased agency spending in fiscal years 2003 through 2005; debt
service savings in fiscal years 2002 through 2005; savings in fiscal years 2002 through 2005 resulting from an early
retirement and severance program; and the acceleration of $73 million of State revenue sharing aid in fiscal year 2002.
The assumed tax revenue shortfalls after September 11 will be subject to revision in the future, and reflect steeper
declines in national gross domestic product and corporate profits, additional declines in capital gains realizations, local
job losses exceeding 100,000 and a disruption in tourism and related spending. The Financial Plan assumes that the costs
relating to the September 11 attack will be paid from Federal aid. The timing of actual receipt of revenues and incurrence
of expenditures for fiscal year 2002, including the timing of any tax revenue shortfalls and the gap-closing actions in the
Financial Plan, could require the City to take actions within the 2002 fiscal year to meet its cash flow requirements,
depending on the extent to which decreases and delays in the receipt of revenues occur more rapidly than the implementation
of the gap-closing actions.
The Financial Plan is based on numerous assumptions, including the condition of the City's and the region's
economies and the concomitant receipt of economically sensitive tax revenues in the amounts projected. The Financial Plan
is subject to various other uncertainties and contingencies relating to, among other factors, the effects on the City
economy of the September 11 attack, the extent, if any, to which wage increases for City employees exceed the annual wage
costs assumed for the 2002 through 2005 fiscal years; continuation of projected interest earnings assumptions for pension
fund assets and assumptions with respect to wages for City employees affecting the City's required pension fund
contributions; the willingness and ability of the State to provide the aid contemplated by the Financial Plan and to take
various other actions to assist the City; the ability of the Health and Hospitals Corporation, the Board of Education and
other such agencies to maintain balanced budgets; the willingness of the Federal government to provide the amount of
Federal aid contemplated in the Financial Plan; the impact on City revenues and expenditures of Federal and State welfare
reform and any future legislation affecting Medicare or other entitlement programs; adoption of the City's budgets by the
City Council in substantially the forms submitted by the Mayor; the ability of the City to implement cost reduction
initiatives, and the success with which the City controls expenditures; the impact of conditions in the real estate market
on real estate tax revenues; the City's ability to market its securities successfully in the public credit markets; and
unanticipated expenditures that may be incurred as a result of the need to maintain the City's infrastructure.
The Financial Plan further includes a proposed discretionary transfer in the 2002 fiscal year of $375 million to
pay debt service due in 2003. In addition, the Financial Plan reflects proposed tax reductions in fiscal years 2002
through 2005, including a proposed additional 25% reduction in the personal income tax 14% surcharge; an increase in the
taxable threshold for the commercial rent tax; an extension of tax reductions for owners of cooperative and condominium
apartments; and an extension of the Lower Manhattan Revitalization Program. All of these items except for the commercial
rent tax reduction and the reduction in the personal income tax surcharge require approval by the State Legislature.
The Financial Plan does not make any provision for wage increases other than the pay increases discussed above, or
for increased pension expenditures due to any investment losses in fiscal year 2002.
On October 4, 2001, the City Comptroller released a report proposing a framework for assessing the impact of the
events of September 11 on the City's economy and tax revenues. In the report, the City Comptroller estimated that job
losses for fiscal year 2002 could total 115,300, some of which may be replaced by activity relating to clean-up, repair and
reconstruction. In addition, the report estimated that the risk to the City budget from lost revenues resulting from the
events of September 11 is $738 million for fiscal year 2002 and $567 million for fiscal year 2003, for a total of $1.3
billion for the two fiscal years. The aggregate $1.3 billion of projected lost revenues includes $473 million from sales
and hotel taxes, $284 million from business taxes, $195 million from property taxes and $162 million from personal income
taxes, as well as projected lost revenues relating to the commercial rent tax, parking violations and airport fees. The
report noted that its estimates are preliminary and will be revised as additional information becomes available. It can be
expected that other reports and statements, which will provide varying assessments of the impact of the events of September
11 on the City's economy and tax revenues, will continue to be issued.
Various actions proposed in the Financial Plan are uncertain. If these measures cannot be implemented, the City
will be required to take other actions to decrease expenditures or increase revenues to maintain a balanced financial
plan. In addition, the economic and financial condition of the City may be affected by various financial, social, economic
and other factors which could have a material effect on the City.
The projections and assumptions contained in the Financial Plan are subject to revision which may involve
substantial change, and no assurance can be given that these estimates and projections, which include actions which the
City expects will be taken but which are not within the City's control, will be realized.
|X| Ratings of the City's Bonds. As of December 12, 2001, Xxxxx'x, S&P and Fitch rated the City's general
obligations bonds A2, A and A+, respectively. These ratings reflect only the views of Xxxxx'x, Standard & Poor's and Fitch
from which an explanation of the significance of such ratings may be obtained. There is no assurance that those ratings
will continue for any given period of time or that they will not be revised downward or withdrawn entirely. Any downward
revision or withdrawal could have an adverse effect on the market prices of the City's bonds. On July 16, 1998, S&P
revised its rating of City bonds to "A-" from "BBB+." On September 13, 2000, S&P revised its rating of City Bonds upward
to "A." Xxxxx'x rating of City bonds was revised in August 2000 to "A2" from "A3." On March 8, 1999, Fitch revised its
rating of City bonds upward to "A" from "A-" and on September 15, 2000, Fitch revised its rating to "A+." On November 16,
2001, Xxxxx'x revised its outlook on City bonds to negative from uncertain. The revised outlook reflects the disruptive
effects of the World Trade Center tragedy on the City's economy, the effects of the national economic recession that
evidenced strain on the critical financial services sector even prior to September 11, and projections of resultant current
year and outyear revenue loss and spending increases attributable to these events.
|X| The City's Outstanding Indebtedness. As of September 30, 2001, the City and the Municipal Assistance
Corporation for the City of New York had, respectively, $25.617 billion and $2.140 billion of outstanding net long-term
debt.
For its normal operations, the City depends on aid from the State both to enable the City to balance its budget
and to meet its cash requirements. There can be no assurance that there will not be reductions in State aid to the City
from amounts originally projected; that State budgets in future fiscal years will be adopted by the April 1 statutory
deadline, or interim appropriations will be enacted; or that any such reductions or delays will not have adverse effects on
the City's cash flow or expenditures.
|X| Pending Litigation. The City is a defendant in lawsuits pertaining to material matters, including claims asserted
that are incidental to performing routine governmental and other functions. That litigation includes, but is not limited
to, actions commenced and claims asserted against the City arising out of alleged constitutional violations, torts,
breaches of contract, and other violations of law and condemnation proceedings. While the ultimate outcome and fiscal
impact, if any, on the City of such proceedings and claims are not currently predictable, adverse determinations in certain
of them might have material adverse effect upon the City's ability to carry out the Financial Plan. For the fiscal year
ended on June 30, 2001, the City paid $594.8 million for judgments and claims. Expenditures for fiscal year 2002 are
projected to reach $309.5 million. The Financial Plan includes provisions for the payment of judgments and claims of
$325.7 million, $345.7 million and $369.2 million for the 2003 through 2005 fiscal years, respectively. As of June 30,
2001, the City estimates its potential future liability for outstanding claims against it to be approximately $4.2 billion.
Other Investment Techniques and Strategies. In seeking its objective, the Fund may from time to time employ the types of
investment strategies and investments described below. It is not required to use all of these strategies at all times, and
at times may not use some of them.
|X| Floating Rate and Variable Rate Obligations. Variable rate obligations may have a demand feature that allows
the Fund to tender the obligation to the issuer or a third party prior to its maturity. The tender may be at par value plus
accrued interest, according to the terms of the obligations.
The interest rate on a floating rate note is based on a stated prevailing market rate, such as a bank's prime
rate, the 91-day U.S. Treasury Xxxx rate, or some other standard, and is adjusted automatically each time such rate is
adjusted. The interest rate on a variable rate note is also based on a stated prevailing market rate but is adjusted
automatically at specified intervals of not less than one year. Generally, the changes in the interest rate on such
securities reduce the fluctuation in their market value. As interest rates decrease or increase, the potential for capital
appreciation or depreciation is less than that for fixed-rate obligations of the same maturity. The Manager may determine
that an unrated floating rate or variable rate obligation meets the Fund's quality standards by reason of the backing
provided by a letter of credit or guarantee issued by a bank that meets those quality standards.
Floating rate and variable rate demand notes that have a stated maturity in excess of one year may have features
that permit the holder to recover the principal amount of the underlying security at specified intervals not exceeding one
year and upon no more than 30 days' notice. The issuer of that type of note normally has a corresponding right in its
discretion, after a given period, to prepay the outstanding principal amount of the note plus accrued interest. Generally
the issuer must provide a specified number of days' notice to the holder.
|X| Inverse Floaters and Other Derivative Investments. "Inverse floaters" are municipal obligations on which the
interest rates typically fall as market rates increase and increase as market rates fall. Changes in market interest rates
or the floating rate of the security inversely affect the residual interest rate of an inverse floater. As a result, the
price of an inverse floater will be considerably more volatile than that of a fixed-rate obligation when interest rates
change.
To provide investment leverage, a municipal issuer might decide to issue two variable rate obligations instead of
a single long-term, fixed-rate bond. For example, the interest rate on one obligation reflects short-term interest rates.
The interest rate on the other instrument, the inverse floater, reflects the approximate rate the issuer would have paid on
a fixed-rate bond, multiplied by a factor of two, minus the rate paid on the short-term instrument. The two portions may be
recombined to create a fixed-rate bond. The Manager might acquire both portions of that type of offering, to reduce the
effect of the volatility of the individual securities. This provides the Manager with a flexible portfolio management tool
to vary the degree of investment leverage efficiently under different market conditions. The Fund can invest up to 5% of
its total assets in inverse floaters.
Inverse floaters may offer relatively high current income, reflecting the spread between short-term and long-term
tax-exempt interest rates. As long as the municipal yield curve remains relatively steep and short term rates remain
relatively low, owners of inverse floaters will have the opportunity to earn interest at above-market rates because they
receive interest at the higher long-term rates but have paid for bonds with lower short-term rates. If the yield curve
flattens and shifts upward, an inverse floater will lose value more quickly than a conventional long-term bond. The Fund
might invest in inverse floaters to seek higher tax-exempt yields than are available from fixed-rate bonds that have
comparable maturities and credit ratings. In some cases, the holder of an inverse floater may have an option to convert the
floater to a fixed-rate bond, pursuant to a "rate-lock" option.
Some inverse floaters have a feature known as an interest rate "cap" as part of the terms of the investment.
Investing in inverse floaters that have interest rate caps might be part of a portfolio strategy to try to maintain a high
current yield for the Fund when the Fund has invested in inverse floaters that expose the Fund to the risk of short-term
interest rate fluctuations. "Embedded" caps might be used to hedge a portion of the Fund's exposure to rising interest
rates. When interest rates exceed a pre-determined rate, the cap generates additional cash flows that offset the decline in
interest rates on the inverse floater, and the hedge is successful. However, the Fund bears the risk that if interest rates
do not rise above the pre-determined rate, the cap (which is purchased for additional cost) will not provide additional
cash flows and will expire worthless.
Inverse floaters are a form of derivative investment. Certain derivatives, can be used to increase or decrease the
Fund's exposure to changing security prices, interest rates or other factors that affect the value of securities. However,
these techniques could result in losses to the Fund if the Manager judges market conditions incorrectly or employs a
strategy that does not correlate well with the Fund's other investments. These techniques can cause losses if the
counterparty does not perform its promises. An additional risk of investing in municipal securities that are derivative
investments is that their market value could be expected to vary to a much greater extent than the market value of
municipal securities that are not derivative investments but have similar credit quality, redemption provisions and
maturities.
|X| "When-Issued" and "Delayed-Delivery" Transactions. As stated in the Prospectus, the Fund can purchase
securities, up to 10% of the Fund's net assets, on a "when-issued" basis, and may purchase or sell such securities on a
"delayed-delivery" (or "forward commitment") basis. "When-issued" or "delayed-delivery" refers to securities whose terms and
indenture have been created. A market exists for the securities, but they are not available for immediate delivery.
These transactions are negotiated, and the price (which is generally expressed in yield terms) is fixed at the
time the commitment is made. Delivery and payment for the securities take place at a later date. Normally the settlement
date is within six months of the purchase of municipal bonds and notes. However, the Fund, from time to time, may purchase
municipal securities having a settlement date more than six months and possibly as long as two years or more after the
trade date. The securities are subject to change in value from market fluctuation during the settlement period. The value
at delivery might be less than the purchase price. For example, changes in interest rates in a direction other than that
expected by the Manager before settlement will affect the value of these securities and could cause loss to the Fund. No
income begins to accrue to the Fund on a when-issued security until the Fund receives the security at the settlement of the
trade.
The Fund may engage in when-issued transactions in order to secure what is considered to be an advantageous price
and yield at the time of entering into the obligation. When the Fund engages in when-issued or delayed-delivery
transactions, it relies on the buyer or seller, as the case may be, to complete the transaction. Its failure to do so may
cause the Fund to lose the opportunity to obtain the security at a price and yield it considers advantageous.
When the Fund engages in when-issued and delayed-delivery transactions, it does so for the purpose of acquiring or
selling securities consistent with its investment objective and policies or for delivery pursuant to options contracts it
has entered into, and not for the purpose of investment leverage. Although the Fund will enter into when-issued or
delayed-delivery purchase transactions to acquire securities, the Fund may dispose of a commitment prior to settlement. If
the Fund chooses to dispose of the right to acquire a when-issued security prior to its acquisition or to dispose of its
right to deliver or receive against a forward commitment, it may incur a gain or loss.
At the time the Fund makes a commitment to purchase or sell a security on a when-issued or forward commitment
basis, it records the transaction on its books and reflects the value of the security purchased. In a sale transaction, it
records the proceeds to be received, in determining its net asset value. The Fund will identify on its books liquid
securities at least equal to the value of purchase commitments until the Fund pays for the investment.
When-issued transactions and forward commitments can be used by the Fund as a defensive technique to hedge against
anticipated changes in interest rates and prices. For instance, in periods of rising interest rates and falling prices, the
Fund might sell securities in its portfolio on a forward commitment basis to attempt to limit its exposure to anticipated
falling prices. In periods of falling interest rates and rising prices, the Fund might sell portfolio securities and
purchase the same or similar securities on a when-issued or forward commitment basis, to obtain the benefit of currently
higher cash yields.
|X| Zero-Coupon Securities. The Fund can buy zero-coupon and delayed interest municipal securities. Zero-coupon
securities do not make periodic interest payments and are sold at a deep discount from their face value. The buyer
recognizes a rate of return determined by the gradual appreciation of the security, which is redeemed at face value on a
specified maturity date. This discount depends on the time remaining until maturity, as well as prevailing interest rates,
the liquidity of the security and the credit quality of the issuer. In the absence of threats to the issuer's credit
quality, the discount typically decreases as the maturity date approaches. Original issue discount on these securities is
included in the Fund's tax-free income. Some zero-coupon securities are convertible, in that they are zero-coupon
securities until a predetermined date, at which time they convert to a security with a specified coupon rate.
Because zero-coupon securities pay no interest and compound semi-annually at the rate fixed at the time of their
issuance, their value is generally more volatile than the value of other debt securities. Their value may fall more
dramatically than the value of interest-bearing securities when interest rates rise. When prevailing interest rates fall,
zero-coupon securities tend to rise more rapidly in value because they have a fixed rate of return.
The Fund's investment in zero-coupon securities may cause the Fund to recognize income and make distributions to
shareholders before it receives any cash payments on the zero-coupon investment. To generate cash to satisfy those
distribution requirements, the Fund may have to sell portfolio securities that it otherwise might have continued to hold or
to use cash flows from other sources such as the sale of Fund shares.
|X| Puts and Standby Commitments. The Fund can acquire "stand-by commitments" or "puts" with respect to municipal
securities to enhance portfolio liquidity and to try to reduce the average effective portfolio maturity. These arrangements
give the Fund the right to sell the securities at a set price on demand to the issuing broker-dealer or bank. However,
securities having this feature may have a relatively lower interest rate.
When the Fund buys a municipal security subject to a standby commitment to repurchase the security, the Fund is
entitled to same-day settlement from the purchaser. The Fund receives an exercise price equal to the amortized cost of the
underlying security plus any accrued interest at the time of exercise. A put purchased in conjunction with a municipal
security enables the Fund to sell the underlying security within a specified period of time at a fixed exercise price.
The Fund might purchase a standby commitment or put separately in cash or it might acquire the security subject to
the standby commitment or put (at a price that reflects that additional feature). The Fund will enter into these
transactions only with banks and securities dealers that, in the Manager's opinion, present minimal credit risks. The
Fund's ability to exercise a put or standby commitment will depend on the ability of the bank or dealer to pay for the
securities if the put or standby commitment is exercised. If the bank or dealer should default on its obligation, the Fund
might not be able to recover all or a portion of any loss sustained from having to sell the security elsewhere.
Puts and standby commitments are not transferable by the Fund. They terminate if the Fund sells the underlying
security to a third party. The Fund intends to enter into these arrangements to facilitate portfolio liquidity, although
such arrangements might enable the Fund to sell a security at a pre-arranged price that may be higher than the prevailing
market price at the time the put or standby commitment is exercised. However, the Fund might refrain from exercising a put
or standby commitment if the exercise price is significantly higher than the prevailing market price, to avoid imposing a
loss on the seller that could jeopardize the Fund's business relationships with the seller.
A put or standby commitment increases the cost of the security and reduces the yield otherwise available from the
security. Any consideration paid by the Fund for the put or standby commitment will be reflected on the Fund's books as
unrealized depreciation while the put or standby commitment is held, and a realized gain or loss when the put or commitment
is exercised or expires. Interest income received by the Fund from municipal securities subject to puts or stand-by
commitments may not qualify as tax exempt in its hands if the terms of the put or stand-by commitment cause the Fund not to
be treated as the tax owner of the underlying municipal securities.
|X| Repurchase Agreements. The Fund can acquire securities subject to repurchase agreements. It might do so for
temporary defensive purposes or for liquidity purposes to meet anticipated redemptions of Fund shares, or pending the
investment of the proceeds from sales of Fund shares, or pending the settlement of portfolio securities transactions.
In a repurchase transaction, the Fund acquires a security from, and simultaneously resells it to an approved
vendor for delivery on an agreed upon future date. The resale price exceeds the purchase price by an amount that reflects
an agreed-upon interest rate effective for the period during which the repurchase agreement is in effect. Approved vendors
include U.S. commercial banks, U.S. branches of foreign banks or broker-dealers that have been designated a primary dealer
in government securities, which meet the credit requirements set by the Manager from time to time.
The majority of these transactions run from day to day. Delivery pursuant to resale typically will occur within
one to five days of the purchase. Repurchase agreements having a maturity beyond seven days are subject to the Fund's
limits on holding illiquid investments. The Fund cannot invest more than 20% of its total assets in taxable repurchase
agreements offering taxable income.
Repurchase agreements, considered "loans" under the Investment Company Act, are collateralized by the underlying
security. The Fund's repurchase agreements require that at all times while the repurchase agreement is in effect, the
collateral's value must equal or exceed the repurchase price to fully collateralize the repayment obligation. Additionally,
the Manager will monitor the vendor's creditworthiness to confirm that the vendor is financially sound and will
continuously monitor the collateral's value. However, if the vendor fails to pay the resale price on the delivery date, the
Fund may incur costs in disposing of the collateral and may experience losses if there is any delay in its ability to do so.
|X| Illiquid and Restricted Securities. Under the policies and procedures established by the Fund's Board of
Trustees, the Manager determines the liquidity of certain of the Fund's investments. To enable the Fund to sell its
holdings of a restricted security not registered under the Securities Act of 1933, the Fund may have to cause those
securities to be registered. The expenses of registering restricted securities may be negotiated by the Fund with the
issuer at the time the Fund buys the securities. When the Fund must arrange registration because the Fund wishes to sell
the security, a considerable period may elapse between the time the decision is made to sell the security and the time the
security is registered so that the Fund could sell it. The Fund would bear the risks of any downward price fluctuation
during that period.
The Fund may also acquire restricted securities through private placements. Those securities have contractual
restrictions on their public resale. Those restrictions might limit the Fund's ability to dispose of the securities and
might lower the amount the Fund could realize upon the sale.
The Fund has limitations that apply to purchases of restricted securities, as stated in the Prospectus. Those
percentage restrictions do not limit purchases of restricted securities that are eligible for sale to qualified
institutional purchasers under Rule 144A of the Securities Act of 1933, if those securities have been determined to be
liquid by the Manager under Board-approved guidelines. Those guidelines take into account the trading activity for such
securities and the availability of reliable pricing information, among other factors. If there is a lack of trading
interest in a particular Rule 144A security, the Fund's holdings of that security may be considered to be illiquid.
Illiquid securities include repurchase agreements maturing in more than seven days.
|X| Borrowing for Leverage. The Fund has the ability to borrow from banks on an unsecured basis in amounts limited
(as a fundamental policy) to a maximum of 10% of its total assets, to invest the borrowed funds in portfolio securities.
This technique is known as "leverage." The Fund may borrow only from banks. As a fundamental policy, borrowings can be made
only to the extent that the value of the Fund's assets, less its liabilities other than borrowings, is equal to at least
300% of all borrowings (including the proposed borrowing). If the value of the Fund's assets fails to meet this 300% asset
coverage requirement, the Fund is required to reduce its bank debt within three days to meet the requirement. To do so, the
Fund might have to sell a portion of its investments at a disadvantageous time.
The Fund will pay interest on these loans, and that interest expense will raise the overall expenses of the Fund
and reduce its returns. If it does borrow, its expenses will be greater than comparable funds that do not borrow for
leverage. The interest on a loan might be more (or less) than the yield on the securities purchased with the loan proceeds.
Additionally, the Fund's net asset value per share might fluctuate more than that of funds that do not borrow.
The Fund has entered into an agreement enabling it to participate with either OppenheimerFunds in an unsecured
line of credit with a bank. Interest is charged to each fund based on its respective borrowings. The Fund pays a commitment
fee equal to its pro rata share of the average amortized amount of the credit line. This fee is described in the notes to
the Financial Statements at the end of this Statement of Additional Information.
|X| Investments in Other Investment Companies. On a temporary basis, the Fund can invest up to 5% of its total
assets in shares of other investment companies that have an investment objective of seeking income exempt from federal, Xxx
Xxxx Xxxxx xxx Xxx Xxxx Xxxx personal income taxes. It can invest up to 5% of its total assets in any one investment
company (but cannot own more than 3% of the outstanding voting stock of that company). These limits do not apply to shares
acquired in a merger, consolidation, reorganization or acquisition of another investment company. Because the Fund would be
subject to its ratable share of the other investment company's expenses, the Fund will not make these investments unless
the Manager believes that the potential investment benefits justify the added costs and expenses.
|X| Hedging. The Fund can use hedging to attempt to protect against declines in the market value of its portfolio,
to permit the Fund to retain unrealized gains in the value of portfolio securities that have appreciated, or to facilitate
selling securities for investment reasons. To do so the Fund could:
o buy puts on securities, or
o write covered calls on securities. Covered calls can also be written on debt securities to attempt to increase the
Fund's income, but that income would not be tax-exempt. Therefore it is unlikely that the Fund would write
covered calls for that purpose.
The Fund is not obligated to use hedging instruments, even though it is permitted to use them in the Manager's
discretion, as described below. The particular options the Fund can use are described below. The Fund may employ other
hedging instruments and strategies in the future, if those investment methods are consistent with the Fund's investment
objective, are permissible under applicable regulations governing the Fund and are approved by the Fund's Board of
Trustees.
o Put and Call Options. The Fund can buy and sell certain kinds of put options (puts) and call options (calls).
These strategies are described below.
o Writing Covered Call Options. The Fund can write (that is, sell) call options. The Fund's call writing is subject
to a number of restrictions:
(1) Calls the Fund sells must be listed on a national securities exchange.
(2) Each call the Fund writes must be "covered" while it is outstanding. That means the Fund must own the investment
on which the call was written.
When the Fund writes a call on a security, it receives cash (a premium). The Fund agrees to sell the underlying
investment to a purchaser of a corresponding call on the same security during the call period at a fixed exercise price
regardless of market price changes during the call period. The call period is usually not more than nine months. The
exercise price may differ from the market price of the underlying security. The Fund has retained the risk of loss that the
price of the underlying security may decline during the call period. That risk may be offset to some extent by the premium
the Fund receives. If the value of the investment does not rise above the call price, it is likely that the call will lapse
without being exercised. In that case the Fund would keep the cash premium and the investment.
The Fund's custodian bank, or a securities depository acting for the custodian, will act as the Fund's escrow
agent through the facilities of the Options Clearing Corporation ("OCC"), as to the investments on which the Fund has
written calls traded on exchanges, or as to other acceptable escrow securities. In that way, no margin will be required for
such transactions. OCC will release the securities on the expiration of the calls or upon the Fund's entering into a
closing purchase transaction.
To terminate its obligation on a call it has written, the Fund may purchase a corresponding call in a "closing
purchase transaction." The Fund will then realize a profit or loss, depending upon whether the net of the amount of the
option transaction costs and the premium received on the call the Fund wrote was more or less than the price of the call
the Fund purchased to close out the transaction. A profit may also be realized if the call lapses unexercised, because the
Fund retains the underlying investment and the premium received. Any such profits are considered short-term capital gains
for federal tax purposes, as are premiums on lapsed calls. When distributed by the Fund, they are taxable as ordinary
income.
o Purchasing Calls and Puts. The Fund may buy calls only to close out a call it has written, as discussed above.
Calls the Fund buys must be listed on a securities exchange. A call or put option may not be purchased if the purchase
would cause the value of all the Fund's put and call options to exceed 5% of its total assets.
The Fund may buy only those puts that relate to securities that the Fund owns or broadly-based municipal bond
indices. The Fund may not sell puts other than puts it has previously purchased, to close out a position.
When the Fund purchases a put, it pays a premium. The Fund then has the right to sell the underlying investment to
a seller of a corresponding put on the same investment during the put period at a fixed exercise price. Puts on municipal
bond indices are settled in cash. Buying a put on a debt security, interest rate future or municipal bond index future the
Fund owns enables it to protect itself during the put period against a decline in the value of the underlying investment
below the exercise price. If the market price of the underlying investment is equal to or above the exercise price and as a
result the put is not exercised or resold, the put will become worthless at its expiration date. In that case the Fund will
lose its premium payment and the right to sell the underlying investment. A put may be sold prior to expiration (whether or
not at a profit).
o Risks of Hedging with Options. The use of hedging instruments requires special skills and knowledge of investment
techniques that are different than what is required for normal portfolio management. If the Manager uses a hedging
instrument at the wrong time or judges market conditions incorrectly, hedging strategies may reduce the Fund's returns.
The Fund's option activities could affect its portfolio turnover rate and brokerage commissions. The exercise of
calls written by the Fund might cause the Fund to sell related portfolio securities, thus increasing its turnover rate. The
Fund could pay a brokerage commission each time it buys a call or put, sells a call, or buys or sells an underlying
investment in connection with the exercise of a call or put. Such commissions might be higher on a relative basis than the
commissions for direct purchases or sales of the underlying investments. Premiums paid for options are small in relation to
the market value of the underlying investments. Consequently, put and call options offer large amounts of leverage. The
leverage offered by trading in options could result in the Fund's net asset value being more sensitive to changes in the
value of the underlying investment.
If a covered call written by the Fund is exercised on an investment that has increased in value, the Fund will be
required to sell the investment at the call price. It will not be able to realize any profit if the investment has
increased in value above the call price.
There is a risk in using short hedging by purchasing puts on municipal bond indices or futures to attempt to
protect against declines in the value of the Fund's securities. The risk is that the prices of such futures or the
applicable index will correlate imperfectly with the behavior of the cash (that is, market) prices of the Fund's
securities. It is possible for example, that while the Fund has used hedging instruments in a short hedge, the market might
advance and the value of debt securities held in the Fund's portfolio might decline. If that occurred, the Fund would lose
money on the hedging instruments and also experience a decline in value of its debt securities. However, while this could
occur over a brief period or to a very small degree, over time the value of a diversified portfolio of debt securities will
tend to move in the same direction as the indices upon which the hedging instruments are based.
The risk of imperfect correlation increases as the composition of the Fund's portfolio diverges from the
securities included in the applicable index. To compensate for the imperfect correlation of movements in the price of debt
securities being hedged and movements in the price of the hedging instruments, the Fund might use hedging instruments in a
greater dollar amount than the dollar amount of debt securities being hedged. It might do so if the historical volatility
of the prices of the debt securities being hedged is greater than the historical volatility of the applicable index.
An option position may be closed out only on a market that provides secondary trading for options of the same
series. There is no assurance that a liquid secondary market will exist for a particular option. If the Fund could not
effect a closing purchase transaction due to a lack of a market, it would have to hold the callable investment until the
call lapsed or was exercised, and could experience losses.
o Regulatory Aspects of Hedging Instruments. Transactions in options by the Fund are subject to limitations
established by the option exchanges. The exchanges limit the maximum number of options that may be written or held by a
single investor or group of investors acting in concert. Those limits apply regardless of whether the options were written
or purchased on the same or different exchanges, or are held in one or more accounts or through one or more different
exchanges or through one or more brokers. Thus, the number of options that the Fund may write or hold may be affected by
options written or held by other entities, including other investment companies having the same advisor as the Fund (or an
advisor that is an affiliate of the Fund's advisor). The exchanges also impose position limits on futures transactions. An
exchange may order the liquidation of positions found to be in violation of those limits and may impose certain other
sanctions.
|X| Portfolio Turnover. A change in the securities held by the Fund from buying and selling investments is known
as "portfolio turnover." Short-term trading increases the rate of portfolio turnover and could increase the Fund's
transaction costs. However, the Fund ordinarily incurs little or no brokerage expense because most of the Fund's portfolio
transactions are principal trades that do not require payment of brokerage commissions.
The Fund ordinarily does not trade securities to achieve capital gains, because they would not be tax-exempt
income. To a limited degree, the Fund may engage in short-term trading to attempt to take advantage of short-term market
variations. It may also do so to dispose of a portfolio security prior to its maturity. That might be done if, on the basis
of a revised credit evaluation of the issuer or other considerations, the Manager believes such disposition is advisable or
the Fund needs to generate cash to satisfy requests to redeem Fund shares. In those cases, the Fund may realize a capital
gain or loss on its investments. The Fund's annual portfolio turnover rate normally is not expected to exceed 50%.
Investment Restrictions
|X| What Are "Fundamental Policies?" Fundamental policies are those policies that the Fund has adopted to govern
its investments that can be changed only by the vote of a "majority" of the Fund's outstanding voting securities. Under the
Investment Company Act, such a "majority" vote is defined as the vote of the holders of the lesser of:
o 67% or more of the shares present or represented by proxy at a shareholder meeting, if the holders of more than
50% of the outstanding shares are present or represented by proxy, or
o more than 50% of the outstanding shares.
The Fund's investment objective is not a fundamental policy, but will not be changed without approval by the
Fund's Board of Trustees and notice to shareholders. Other policies described in the Prospectus or this Statement of
Additional Information are "fundamental" only if they are identified as such. The Fund's Board of Trustees can change
non-fundamental policies without shareholder approval. However, significant changes to investment policies will be
described in supplements or updates to the Prospectus or this Statement of Additional Information, as appropriate. The
Fund's most significant investment policies are described in the Prospectus.
o Does the Fund Have Additional Fundamental Policies? The following investment restrictions are fundamental
policies of the Fund:
o The Fund cannot invest in common stocks, preferred stocks, warrants or other equity securities.
o The Fund cannot make loans to others except in accordance with the Fund's investment objective and policies. The
Fund can also enter into contracts that compensate service providers by means of compensating balances.
o The Fund cannot mortgage or pledge any of its assets, and the Fund can borrow money only from a bank for temporary
or emergency purposes or for investment purposes in amounts not exceeding 10% of its total assets. When borrowings are made
for investment purposes, the Fund must comply with the provisions of the Investment Company Act that require the Fund to
maintain asset coverage of at least 300% of all such borrowings. If asset coverage should fall below 300%, the Fund will be
required to reduce its borrowings within three days to the extent needed to meet the 300% asset coverage requirement.
o The Fund cannot purchase the securities of any issuer if the Fund would then own more than 10% of the voting
securities of that issuer.
o The Fund cannot invest more than 25% of its assets in any industry or industries. However, the Fund can invest
more than 25% of its assets in obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities. Industrial revenue bonds whose interest and principal payments are the responsibility of companies
within the same industry are grouped together as an "industry" for the purpose of this restriction.
o The Fund cannot purchase or sell real estate, real estate investment trust securities, commodities, commodity
contracts, or oil or gas interests. However, the Fund can invest in municipal securities that are secured by real estate or
interests in real estate.
o The Fund cannot invest in companies for the purpose of exercising control or management.
o The Fund cannot sell securities short, purchase securities on margin, or write put options. The Fund can purchase
securities that have puts attached.
o The Fund cannot underwrite securities of other issuers. A permitted exception is in case the purchase of municipal
obligations in accordance with the Fund's investment objective and policies is deemed to be an underwriting, whether the
Fund buys the securities directly from the issuer or from an underwriter for an issuer.
o The Fund cannot invest in or hold securities of any issuer if Trustees of the Fund own more than 1/2 of 1% of the
securities of that issuer and together own more than 5% of the securities of that issuer.
o The Fund cannot issue "senior securities."
On November 10, 1998, the Board of Trustees of the Fund changed the Fund's classification under the Investment
Company Act from "non-diversified" to "diversified." That change did not require the approval of shareholders. In making
that change, the Fund has adopted an operating policy on diversification of its investments (which amplifies the
restriction, stated above against owning more than 10% of the voting securities of any issuer). This policy cannot be
changed without the approval of shareholders as in the case of a "fundamental" policy. Under this policy,
o With respect to 75% of its assets, the Fund cannot purchase securities issued or guaranteed by any one issuer
(other than the U.S. government or its agencies or instrumentalities), if more than 5% of the Fund's total assets would be
invested in securities of that issuer.
Unless the Prospectus or Statement of Additional Information states that a percentage restriction applies on an
ongoing basis, it applies only at the time the Fund makes an investment. In that case the Fund need not sell securities to
meet the percentage limits if the value of the investment increases in proportion to the size of the Fund.
|X| Does the Fund Have Any Restrictions That Are Not Fundamental? The Fund operates under certain investment
restrictions which are non-fundamental investment policies of the Fund and which can be changed by the Board without
shareholder approval. These restrictions provide that:
o In carrying out its policy prohibiting concentration of its assets, the Fund has an operating policy that the Fund
cannot invest 25% or more of its assets in any particular industry or group of related industries. Subject to the Fund's
policy on concentration, the Fund may invest more than 25% of its total assets in a particular segment of the municipal
securities market, such as general obligation bonds, pollution control bonds, hospital bonds or any other industry segment
listed in Appendix B to this Statement of Additional Information. In that case, economic, business, political or other
events affecting that segment or an issuer in that segment might affect the value of other bonds of issuers in the same
segment and therefore would increase the Fund's exposure to market risks.
o
In applying its policy prohibiting the issuance of senior securities, the Fund interprets that policy not to
prohibit certain investment activities for which assets of the Fund are designated as segregated to cover the related
obligations. Examples of those activities include borrowing money, repurchase agreements, delayed-delivery and when-issued
transactions and contracts to buy or sell derivatives.
o For the purposes of the Fund's policy regarding minimum investments in the tax-exempt securities, the minimum
investment requirement is based on net assets plus borrowings used for investment purposes.
Diversification. The Fund intends to be "diversified" as defined in the Investment Company Act and to satisfy the
restrictions against investing too much of its assets in any one "issuer" as set forth in the restrictions above. In
implementing this policy, the identification of the issuer of a municipal security depends on the terms and conditions of
the security. When the assets and revenues of an agency, authority, instrumentality or other political subdivision are
separate from those of the government creating it and the security is backed only by the assets and revenues of the
subdivision, agency, authority or instrumentality, the latter would be deemed to be the sole issuer. Similarly, if an
industrial development bond is backed only by the assets and revenues of the non-governmental user, then that user would be
deemed to be the sole issuer. However, if in either case the creating government or some other entity guarantees a
security, the guarantee would be considered a separate security and would be treated as an issue of that government or
other entity.
How the Fund Is Managed
Organization and History. The Fund is a series of Rochester Portfolio Series, which was organized in June 1991 as a
Massachusetts business trust (the trust is referred to in this section as the "Fund's parent Trust" or the "Trust"). The
Trust is an open-end, diversified management investment company with an unlimited number of authorized shares of beneficial
interest The Fund is currently the only series of the Trust.
The Fund and its parent Trust are governed by a Board of Trustees, which is responsible for protecting the
interests of shareholders under Massachusetts law. The Trustees meet periodically throughout the year to oversee the Fund's
(and the Trust's) activities, review its performance, and review the actions of the Manager.
|X| Classes of Shares. The Trustees are authorized, without shareholder approval, to create new series and classes
of shares. The Trustees may reclassify unissued shares of the Fund into additional series or classes of shares. The
Trustees also may divide or combine the shares of a class into a greater or lesser number of shares without changing the
proportionate beneficial interest of a shareholder in the Fund. Shares do not have cumulative voting rights or preemptive
or subscription rights. Shares may be voted in person or by proxy at shareholder meetings.
The Fund currently has four classes of shares: Class A, Class B, Class C and Class X. Class X shares are no longer
offered for sale. They are described below in "Classes of Shares." Each class of shares:
o has its own dividends and distributions,
o pays certain expenses which may be different for the different classes,
o may have a different net asset value,
o may have separate voting rights on matters in which interests of one class are different from interests of another
class, and
o votes as a class on matters that affect that class alone.
Shares are freely transferable, and each share of each class has one vote at shareholder meetings, with fractional
shares voting proportionally on matters submitted to the vote of shareholders. Each share of the Fund represents an
interest in the Fund proportionately equal to the interest of each other share of the same class.
|X| Meetings of Shareholders. As a Massachusetts business trust, the Trust is not required to hold, and does not
plan to hold, regular annual meetings of shareholders. The Trust will hold meetings when required to do so by the 1940 Act
or other applicable law. It will also do so when a shareholder meeting is called by the Trustees or upon proper request of
the shareholders.
Shareholders have the right, upon the declaration in writing or vote of two-thirds of the outstanding shares of
the Trust, to remove a Trustee. The Trustees will call a meeting of shareholders to vote on the removal of a Trustee upon
the written request of the record holders of 10% of its outstanding shares. If the Trustees receive a request from at
least 10 shareholders stating that they wish to communicate with other shareholders to request a meeting to remove a
Trustee, the Trustees will then either make the Fund's shareholder list available to the applicants or mail their
communication to all other shareholders at the applicants' expense. The shareholders making the request must have been
shareholders for at least six months and must hold shares of the Fund valued at $25,000 or more or constituting at least 1%
of the Fund's outstanding shares, whichever is less. The Trustees may also take other action as permitted by the Investment
Company Act.
|X| Shareholder and Trustee Liability. The Trust's Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's obligations. It also provides for indemnification and reimbursement of
expenses out of the Trust's property for any shareholder held personally liable for its obligations. The Declaration of
Trust also states that upon request, the Trust shall assume the defense of any claim made against a shareholder for any act
or obligation of the Trust and shall satisfy any judgment on that claim. Massachusetts law permits a shareholder of a
business trust (such as the Fund) to be held personally liable as a "partner" under certain circumstances. However, the
risk that a Fund shareholder will incur financial loss from being held liable as a "partner" of the Fund's parent Trust is
limited to the relatively remote circumstances in which the Trust would be unable to meet its obligations.
The Fund's contractual arrangements state that any person doing business with the Fund (and each shareholder of
the Fund) agrees under its Declaration of Trust to look solely to the assets of the Fund for satisfaction of any claim or
demand that may arise out of any dealings with the Fund. Additionally, the Trustees shall have no personal liability to any
such person, to the extent permitted by law.
Board of Trustees. The Fund is governed by a Board of Trustees, which is responsible for protecting the interests of
shareholders under Massachusetts law. The Trustees meet periodically throughout the year to oversee the Fund's activities,
review its performance, and review the actions of the Manager. Although the Fund will not normally hold annual meetings of
its shareholders, it may hold shareholder meetings from time to time on important matters, and shareholders have the right
to call a meeting to remove a Trustee or to take other action described in the Fund's Declaration of Trust.
The Board of Trustees has an Audit Committee. The Audit Committee provides the Board with recommendations
regarding the selection of the Fund's independent auditor. The Audit Committee also reviews the scope and results of
audits and the audit fees charged, reviews reports from the Fund's independent auditors concerning the Fund's internal
accounting procedures and controls, and reviews reports of the Manager's internal auditor. The members of the Audit
Committee are Xxxx Xxxxxxx (Chairman), Xxxxxx Xxxxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxxxx and Xxxxx Xxxxxx. The Audit Committee
met three times during the Fund's fiscal year ended December 31, 2001.
Trustees and Officers of the Fund. The Fund's Trustees and officers and their positions held with the Fund and length of
service in such position(s) and the principal occupations and business affiliations during the past five years are listed
below. Each of the Trustees is an "Independent Trustee," as defined in the 1940 Act. The information for the Trustees
also includes the dollar range of shares of the Fund as well as the aggregate dollar range of shares of the Board III Funds
beneficially owned by the Trustee. All information is as of December 31, 2001. All of the Trustees are also trustees or
directors of the following Xxxxxxxxxxx funds1 (referred to as "Board III Funds"):
Xxxxxxxxxxx Quest For Value Funds, a series fund Rochester Portfolio Series, a series fund having one series:
having the following series: Limited-Term New York Municipal Fund
Xxxxxxxxxxx Small Cap Value Fund, Bond Fund Series, a series fund having one series:
Xxxxxxxxxxx Quest Balanced Value Fund and Xxxxxxxxxxx Convertible Securities Fund
Xxxxxxxxxxx Quest Opportunity Value Fund Rochester Fund Municipals
Xxxxxxxxxxx Quest Global Value Fund, Inc. Xxxxxxxxxxx XxxXxx Fund
Xxxxxxxxxxx Quest Capital Value Fund, Inc. Xxxxxxxxxxx Quest Value Fund, Inc.
In addition to being a director or trustee of the Board III Funds, Xx. Xxxxx is also a director or trustee of 31
other portfolios in the Xxxxxxxxxxx Funds complex.
Messrs. Murphy, Fielding, Molleur, Tanner, Xxxxxx and Xxxx and Mses. Xxxx and Ives who are officers of the Fund,
respectively hold the same offices of one or more of the other Board III Funds as with the Fund. As of April 1, 2002, the
Trustees and officers of the Fund as a group beneficially owned more than 1% of the outstanding shares of Class A shares
and beneficially owned less than 1% of the outstanding shares of Class B, Class C and Class X shares. The foregoing
statement does not reflect ownership of shares of the Fund held of record by an employee benefit plan for employees of the
Manager, other than the shares beneficially owned under the plan by officers of the Fund listed above. In addition, each
Independent Trustee, and his or her family members, do not own securities of either the Manager or Distributor of the Board
III Funds or any person directly or indirectly controlling, controlled by or under common control with the Manager or
Distributor.
Independent Trustees
----------------------- ----------------------------------------------------------------- ------------ -----------------
Dollar Aggregate
Name, Address,2 Age, Range of Dollar Range of
Position(s) Held with Principal Occupation(s) During Past 5 Years / Other Shares Shares Owned in
Fund and Length of Trusteeships/Directorships Held by Trustee / Number of Owned in any of the
Service3 Portfolios in Fund Complex Overseen by Trustee the Fund Board III Funds
----------------------- ----------------------------------------------------------------- ------------ -----------------
----------------------- ----------------------------------------------------------------- ------------ -----------------
Xxxxxx X. Xxxxxxxx, Principal of Xxxxxxxx Associates, Inc. (venture capital firm); None $10,001 -
Chairman of the Board former General Partner of Trivest Venture Fund (private venture
of Trustees, Trustee capital fund); former President of Investment Counseling
since 1996 Federated Investors, Inc.; Trustee of Cash Assets Trust, a
Age: 68 money market fund; Director of OCC Cash Reserves, Inc. and
Trustee of OCC Accumulation Trust, both of which are open-end $50,000
investment companies; Trustee of four funds for Pacific Capital
and Tax Free Trust of Arizona. Oversees 10 portfolios in the
OppenheimerFunds complex.
----------------------- ----------------------------------------------------------------- ------------ -----------------
----------------------- ----------------------------------------------------------------- ------------ -----------------
Xxxx Xxxxxx, Trustee, Director, Xxxxxxxxx Xxxxxx Income Managers Trust, Neuberger &
since 1992 Xxxxxx Income Funds and Xxxxxxxxx Xxxxxx Trust, (1995 -
Age: 72. present); Xxxxxxxxx Xxxxxx Equity Funds (November 2000 -
present); Trustee, Xxxxxxxxx Xxxxxx Mutual Funds (October 1994
- present); formerly Chairman and Treasurer, CDC Associates, a $10,001 -
registered investment adviser (December 1993 - February 1996); None $50,000
Independent Consultant; Chief Investment Officer, CDC
Associates (1996 - June 2000); Consultant and director, CDC
Associates (December 1993 - February 1999). Oversees three
portfolios in the OppenheimerFunds complex.
----------------------- ----------------------------------------------------------------- ------------ -----------------
----------------------- ----------------------------------------------------------------- ------------ -----------------
Xxxx X. Xxxxxxx, Principal of Clinton Management Associates, a financial and
Trustee, since 1996 venture capital consulting firm; Trustee of Capital Cash
Age: 70. Management Trust, a money-market fund and Narragansett Tax-Free
Fund, a tax-exempt bond fund; Director of OCC Cash Reserves,
Inc. and Trustee of OCC Accumulation Trust, both of which are
open-end investment companies. Formerly: Director, External
Affairs, Kravco Corporation, a national real estate owner and
property management corporation; President of Essex Management None Over $100,000
Corporation, a management consulting company; a general partner
of Capital Growth Fund, a venture capital partnership; a
general partner of Essex Limited Partnership, an investment
partnership; President of Geneve Corp., a venture capital fund;
Chairman of Woodland Capital Corp., a small business investment
company; and Vice President of X.X. Xxxxx & Co. Oversees 10
portfolios in the OppenheimerFunds complex.
----------------------- ----------------------------------------------------------------- ------------ -----------------
----------------------- ----------------------------------------------------------------- ------------ -----------------
Xxxxxx X. Xxxxx, A Trustee or Director of other Xxxxxxxxxxx funds. Formerly Vice None Over $100,000
Trustee since 1996 Chairman of the Manager (October 1995 - December 1997).
Age: 68 Oversees 41 portfolios in the OppenheimerFunds complex.
----------------------- ----------------------------------------------------------------- ------------ -----------------
----------------------- ----------------------------------------------------------------- ------------ -----------------
Xxxx X. Xxxxxxxx, Chairman and Chief Executive Officer of Aquila Management None $10,001 -
Trustee since 1996 Corporation, the sponsoring organization and manager,
Age: 72 administrator and/or sub-Adviser to the following open-end
investment companies, and Chairman of the Board of Trustees and
President of each: Xxxxxxxxx Cash Reserves Trust, Aquila -
Cascadia Equity Fund, Pacific Capital Cash Assets Trust,
Pacific Capital U.S. Treasuries Cash Assets Trust, Pacific
Capital Tax-Free Cash Assets Trust, Prime Cash Fund,
Narragansett Insured Tax-Free Income Fund, Tax-Free Fund For
Utah, Xxxxxxxxx Tax-Free Fund of Kentucky, Tax-Free Fund of
Colorado, Tax-Free Trust of Oregon, Tax-Free Trust of Arizona,
Hawaiian Tax-Free Trust, and Aquila Rocky Mountain Equity Fund;
Vice President, Director, Secretary, and formerly Treasurer of $50,000
Aquila Distributors, Inc., distributor of the above funds;
President and Chairman of the Board of Trustees of Capital Cash
Management Trust ("CCMT"), and an Officer and Trustee/Director
of its predecessors; President and Director of STCM Management
Company, Inc., sponsor and adviser to CCMT; Chairman, President
and a Director of InCap Management Corporation, formerly
sub-adviser and administrator of Prime Cash Fund and Short Term
Asset Reserves; Director of OCC Cash Reserves, Inc., and
Trustee of OCC Accumulation Trust, both of which are open-end
investment companies; Trustee Emeritus of Xxxxx University.
Oversees 10 portfolios in the OppenheimerFunds complex.
----------------------- ----------------------------------------------------------------- ------------ -----------------
----------------------- ----------------------------------------------------------------- ------------ -----------------
Xxxxx Xxxxxx, Trustee Special Limited Partner (since January 1999) of Odyssey $10,001 - $50,001 -
since 2001 Investment Partners, LLC (private equity investment); General
Age: 59 Partner (since September 1996) of Odyssey Partners, L.P. (hedge
fund in distribution since 1/1/97); Director (since May 2000)
of Ray & Berendtson, Inc. (executive search firm); Board of
Governing Trustees (since August 1990) of The Xxxxxxx
Laboratory (non-profit); Trustee (since May 1992) of Institute $50,000 $100,000
for Advanced Study (educational institute); Trustee (since May
2000) of Research Foundation of AIMR (investment research,
non-profit); formerly Governor, Xxxxxx Xxxx Economics Institute
of Bard College (economics research) (August 1990 - September
2001). Oversees 10 portfolios in the OppenheimerFunds complex.
----------------------- ----------------------------------------------------------------- ------------ -----------------
Officers of the Fund
------------------------------------------- ----------------------------------------------------------------------------
Name, Address,4 Age, Position(s) Held Principal Occupation(s) During Past 5 Years
with Fund and Length of Time Served5
------------------------------------------- ----------------------------------------------------------------------------
------------------------------------------- ----------------------------------------------------------------------------
Xxxxxx X. Xxxxxxxx, Senior Vice President (since January 1996) of the Manager; Chairman of the
Vice President and Portfolio Manager Rochester Division of the Manager (since January 1996); an officer and
(since 1996) portfolio manager of other Xxxxxxxxxxx funds; prior to joining the Manager
Age: 53 in January 1996, he was President and a director of Rochester Capital
Advisors, Inc. (1993 - 1995), the Fund's prior investment advisor, and of
Rochester Fund Services, Inc. (1986 - 1995), the Fund's prior distributor;
President and a trustee of Limited Term New York Municipal Fund (1991 -
1995), Oppenheimer Convertible Securities Fund (1986 - 1995) and Rochester
Fund Municipals (1986 - 1995); President and a director of Rochester Tax
Managed Fund, Inc. (1982 - 1995) and of Fielding Management Company, Inc.
(1982 - 1995), an investment advisor.
------------------------------------------- ----------------------------------------------------------------------------
------------------------------------------- ----------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx, Vice President of the Rochester Division of the Manager (since January
Vice President (since 2002) and Portfolio 1996); an officer and portfolio manager of other Xxxxxxxxxxx funds;
Manager (since 1996) formerly Vice President of Research of Rochester Capital Advisors, Inc.
Age: 41 and Fielding Management Company, Inc. (1991 - December 1995).
------------------------------------------- ----------------------------------------------------------------------------
------------------------------------------- ----------------------------------------------------------------------------
Xxxx X. Xxxxxx, Chairman, Chief Executive Officer and director (since June 2001) and
President (since October 2001) President (since September 2000) of the Manager; President and a trustee
Age: 52 of other Xxxxxxxxxxx funds; President and a director (since July 2001) of
Xxxxxxxxxxx Acquisition Corp., the Manager's parent holding company and of
Xxxxxxxxxxx Partnership Holdings, Inc., a holding company subsidiary of
the Manager; Director (since November 2001) of OppenheimerFunds
Distributor, Inc., a subsidiary of the Manager; Chairman and a director
(since July 2001) of Shareholder Services, Inc. and of Shareholder
Financial Services, Inc., transfer agent subsidiaries of the Manager;
President and a director (since July 2001) of OppenheimerFunds Legacy
Program, a charitable trust program established by the Manager; a director
of the following investment advisory subsidiaries of the Manager: OAM
Institutional, Inc. and Centennial Asset Management Corporation (since
November 2001), HarbourView Asset Management Corporation and OFI Private
Investments, Inc. (since July 2002); President (since November 1, 2001)
and a director (since July 2001) of Xxxxxxxxxxx Real Asset Management,
Inc., an investment advisor subsidiary of the Manager; a director (since
November 2001) of Trinity Investment Management Corp. and Tremont
Advisers, Inc., investment advisory affiliates of the Manager; Executive
Vice President (since February 1997) of Massachusetts Mutual Life
Insurance Company, the Manager's parent company; a director (since June
1995) of DBL Acquisition Corporation; formerly Chief Operating Officer
(from September 2000 to June 2001) of the Manager; President and trustee
(from November 1999 to November 2001) of MML Series Investment Fund and
MassMutual Institutional Funds, open-end investment companies; a director
(from September 1999 to August 2000) of C.M. Life Insurance Company;
President, Chief Executive Officer and director (from September 1999 to
August 2000) of MML Bay State Life Insurance Company; a director (from
June 1989 to June 1998) of Emerald Isle Bancorp and Hibernia Savings Bank,
wholly-owned subsidiary of Emerald Isle Bancorp. Oversees 63 portfolios in
the OppenheimerFunds complex.
------------------------------------------- ----------------------------------------------------------------------------
------------------------------------------- ----------------------------------------------------------------------------
Xxxxx X. Xxxxxx, Senior Vice President and Treasurer (since March 1999) of the Manager;
Treasurer, Principal Financial and Treasurer (since March 1999) of HarbourView Asset Management Corporation,
Accounting Officer (since April 1999) Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation,
Age: 42 Shareholder Financial Services, Inc., Oppenheimer Partnership Holdings,
Inc., OFI Private Investments, Inc. (since March 2000), OppenheimerFunds
International Ltd. and Oppenheimer Millennium Funds plc (since May 2000),
offshore fund management subsidiaries of the Manager, and OAM
Institutional, Inc. (since November 2000), an investment advisory
subsidiary of the Manager; Treasurer and Chief Financial Officer (since
May 2000) of Xxxxxxxxxxx Trust Company, a trust company subsidiary of the
Manager; Assistant Treasurer (since March 1999) of Xxxxxxxxxxx Acquisition
Corp. and OppenheimerFunds Legacy Program (since April 2000); an officer
of other Xxxxxxxxxxx funds; formerly Principal and Chief Operating
Officer, Bankers Trust Company - Mutual Fund Services Division (March 1995
- March 1999).
------------------------------------------- ----------------------------------------------------------------------------
------------------------------------------- ----------------------------------------------------------------------------
Xxxxxx X. Xxxx, Senior Vice President (since May 1985) and General Counsel (since February
Secretary (since November 1, 2001) 2002) of the Manager; Assistant Secretary of Shareholder Services, Inc.
Age: 53 (since May 1985), Shareholder Financial Services, Inc. (since November
1989); OppenheimerFunds International Ltd. and Oppenheimer Millennium
Funds plc (since October 1997); an officer of other Xxxxxxxxxxx funds;
formerly, Acting General Counsel (November 2001-February 2002) and
Associate General Counsel (1984 - October 2001)
------------------------------------------- ----------------------------------------------------------------------------
------------------------------------------- ----------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Assistant Secretary Vice President and Senior Counsel of the Manager (since July 1999); an
(since December 2001) officer of other Xxxxxxxxxxx funds; formerly a Vice President and
Age: 44 Associate Counsel of the Manager (September 1995 - July 1999).
------------------------------------------- ----------------------------------------------------------------------------
------------------------------------------- ----------------------------------------------------------------------------
Xxxxxxxxx X. Xxxx, Assistant Secretary Vice President and Senior Counsel of the Manager (since July 1999); an
(since December 2001) officer of other Xxxxxxxxxxx funds; formerly a Vice President and
Age: 43 Associate Counsel of the Manager (June 1990 - July 1999).
------------------------------------------- ----------------------------------------------------------------------------
------------------------------------------- ----------------------------------------------------------------------------
Xxxxxxxx X. Xxxx, Assistant Secretary Vice President and Assistant Counsel of the Manager (since June 1998); an
(since December 2001) officer of other Xxxxxxxxxxx funds; formerly an Assistant Vice President
Age: 36 and Assistant Counsel of the Manager (August 1997 - June 1998); and
Assistant Counsel of the Manager (August 1994-August 1997).
------------------------------------------- ----------------------------------------------------------------------------
|X| Remuneration of Trustees. The officers of the Fund who are affiliated with the Manager receive no salary or
fee from the Fund. The Trustees of the Fund received the compensation shown below from the Fund with respect to the Fund's
fiscal year ended December 31, 2001. The compensation from all of the Board III Funds (including the Fund) represents
compensation received as a director, trustee or member of a committee of the boards of those funds during the calendar year
2001.
-------------------------------------------- ------------------------ ----------------------- ------------------------
Trustee Name and Other Fund Position(s) Aggregate Compensation Retirement Total
Benefits Compensation
Accrued as Part From All
of Fund Board III Funds
(as applicable) from Fund1 Expenses1 (10 Funds)2
-------------------------------------------- ------------------------ ----------------------- ------------------------
-------------------------------------------- ------------------------ ----------------------- ------------------------
Xxxx Xxxxxx $2,952 None $37,414
-------------------------------------------- ------------------------ ----------------------- ------------------------
-------------------------------------------- ------------------------ ----------------------- ------------------------
Xxxx X. Xxxxxxx $7,661 None $97,126
-------------------------------------------- ------------------------ ----------------------- ------------------------
-------------------------------------------- ------------------------ ----------------------- ------------------------
Xxxxxx X. Xxxxxxxx $7,661 None $97,126
-------------------------------------------- ------------------------ ----------------------- ------------------------
-------------------------------------------- ------------------------ ----------------------- ------------------------
Xxxxxx X. Galli3 $7,661 None $202,886
-------------------------------------------- ------------------------ ----------------------- ------------------------
-------------------------------------------- ------------------------ ----------------------- ------------------------
Xxxx X. Xxxxxxxx $7,661 None $97,126
-------------------------------------------- ------------------------ ----------------------- ------------------------
-------------------------------------------- ------------------------ ----------------------- ------------------------
Xxxxx Wruble4 $4,674 None $59,250
-------------------------------------------- ------------------------ ----------------------- ------------------------
* Effective March 31, 2001, Xxxxxx Loft resigned as a Trustee of the Fund. For the fiscal year ended December 31, 2001 Mr.
Loft received $2,988 aggregate compensation from the Fund, and for the calendar year ended December 31, 2001 Mr. Loft
received $37,876 total compensation from all Board III funds.
1. For the fiscal year ended December 31, 2001. Aggregate compensation includes fees, deferred compensation, if any,
and retirement plan benefits accrued for a Trustee. No retirement benefit expenses were allocated to the Fund for
fiscal year ended December 31, 2001.
2. For the 2001 calendar year.
3. Total compensation for the 2001 calendar year includes $105,760 compensation received for serving as a Trustee or
Director of 33 Xxxxxxxxxxx funds other than Board III Funds.
4. Elected to the board on 4/01/01.
|X| Retirement Plan for Trustees. The Fund has adopted a retirement plan that provides for payments to retired
Trustees. Payments are up to 80% of the average compensation paid during a Trustee's five years of service in which the
highest compensation was received. A Trustee must serve as Trustee for any of the Xxxxxxxxxxx Quest/Rochester/MidCap funds
listed above for at least 15 years to be eligible for the maximum payment. Each Trustee's retirement benefits will depend
on the amount of the Trustee's future compensation and length of service. Therefore the amount of those benefits cannot be
determined at this time, nor can we estimate the number of years of credited service that will be used to determine those
benefits.
|X| Deferred Compensation Plan for Trustees. The Board of Trustees has adopted a Deferred Compensation Plan for
disinterested trustees that enables them to elect to defer receipt of all or a portion of the annual fees they are entitled
to receive from the Fund. Under the plan, the compensation deferred by a Trustee is periodically adjusted as though an
equivalent amount had been invested in shares of one or more Xxxxxxxxxxx funds selected by the Trustee. The amount paid to
the Trustee under the plan will be determined based upon the performance of the selected funds.
Deferral of Trustees' fees under the plan will not materially affect the Fund's assets, liabilities or net income
per share. The plan will not obligate the Fund to retain the services of any Trustee or to pay any particular level of
compensation to any Trustee. Pursuant to an Order issued by the Securities and Exchange Commission, the Fund may invest in
the funds selected by the Trustee under the plan without shareholder approval for the limited purpose of determining the
value of the Trustee's deferred fee account.
|X| Major Shareholders. As of April 1, 2002, the only person who owned of record or who were known by the Fund to
own beneficially 5% or more of any class of the Fund's outstanding shares was:
Xxxxxxx Xxxxx Xxxxxx Xxxxxx & Xxxxx Inc. 0000 Xxxx Xxxx Xxxxx Xxxx, Xxxxx 0, Xxxxxxxxxxxx, Xxxxxxx 00000, which
owned 57,205,360.489 Class A shares (representing 14.79% of the Class A shares then outstanding); 9,668,276.873
Class B shares (representing 15.56% of the Class B shares then outstanding; 35,834,262.629 Class C shares
(representing 28.40% of the Class C shares then outstanding); and 1,776,635.507 Class X shares (representing
26.43% of the Class X shares then outstanding), for the benefit of its customers.
The Manager. The Manager is wholly-owned by Xxxxxxxxxxx Acquisition Corp., a holding company controlled by Massachusetts
Mutual Life Insurance Company.
|X| Code of Ethics. The Fund, the Manager and the Distributor have a Code of Ethics. It is designed to detect
and prevent improper personal trading by certain employees, including portfolio managers, that would compete with or take
advantage of the Fund's portfolio transactions. Covered persons include persons with knowledge of the investments and
investment intentions of the Fund and other funds advised by the Manager. The Code of Ethics does permit personnel subject
to the Code to invest in securities, including securities that may be purchased or held by the Fund, subject to a number of
restrictions and controls. Compliance with the Code of Ethics is carefully monitored and enforced by the Manager.
The Code of Ethics is an exhibit to the Fund's registration statement filed with the Securities and Exchange
Commission and can be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. You can obtain information
about the hours of operation of the Public Reference Room by calling the SEC at 0.000.000.0000. The Code of Ethics can also
be viewed as part of the Fund's registration statement on the SEC's XXXXX database at the SEC's Internet website at
XXXX://XXX.XXX.XXX. Copies may be obtained, after paying a duplicating fee, by electronic request at the following E-mail
------------------
address: XXXXXXXXXX@XXX.XXX., or by writing to the SEC's Public Reference Section, Washington, D.C. 20549-0102.
-------------------
|X| The Investment Advisory Agreement. The Manager provides investment advisory and management services to the
Fund under an investment advisory agreement between the Manager and the Fund. The Manager selects securities for the Fund's
portfolio and handles its day-to day business. That agreement requires the Manager, at its expense, to provide the Fund
with adequate office space, facilities and equipment. It also requires the Manager to provide and supervise the activities
of all administrative and clerical personnel required to provide effective corporate administration for the Fund. Those
responsibilities include the compilation and maintenance of records with respect to the Fund's operations, the preparation
and filing of specified reports, and the composition of proxy materials and registration statements for continuous public
sale of shares of the Fund.
The Fund pays expenses not expressly assumed by the Manager under the advisory agreement. The investment advisory
agreement lists examples of expenses paid by the Fund. The major categories relate to interest, taxes, fees to
disinterested Trustees, legal and audit expenses, custodian and transfer agent expenses, share issuance costs, certain
printing and registration costs, brokerage commissions, and non-recurring expenses, including litigation cost. The
management fees paid by the Fund to the Manager are calculated at the rates described in the Prospectus, which are applied
to the assets of the Fund as a whole. The fees are allocated to each class of shares based upon the relative proportion of
the Fund's net assets represented by that class. The management fees paid by the Fund to the Manager during its last three
fiscal years are listed below.
The investment advisory agreement states that in the absence of willful misfeasance, bad faith, gross negligence
in the performance of its duties, or reckless disregard for its obligations and duties under the investment advisory
agreement, the Manager is not liable for any loss the Fund sustains by reason of good faith errors or omissions on its part
with respect to any of its duties under the agreement. The agreement permits the Manager to act as investment advisor for
any other person, firm or corporation and to use the name "Xxxxxxxxxxx" in connection with other investment companies for
which it may act as investment advisor or general distributor.
o Accounting and Record-Keeping Services. The Manager provides accounting and record-keeping services to the Fund
pursuant to an Accounting and Administration Agreement approved by the Board of Trustees. Under that agreement, the Manager
maintains the general ledger accounts and records relating to the Fund's business and calculates the daily net asset values
of the Fund's shares.
---------------------- ----------------------------------------------- -----------------------------------------------
Fiscal Year Ended Management Fee Paid to OppenheimerFunds, Inc. Accounting and Administrative Services Fee
12/31 Paid to OppenheimerFunds, Inc.
---------------------- ----------------------------------------------- -----------------------------------------------
---------------------- ----------------------------------------------- -----------------------------------------------
1999 $5,372,033 $392,771
---------------------- ----------------------------------------------- -----------------------------------------------
---------------------- ----------------------------------------------- -----------------------------------------------
2000 $4,863,251 $354,630
---------------------- ----------------------------------------------- -----------------------------------------------
---------------------- ----------------------------------------------- -----------------------------------------------
2001 $5,333,664 $389,8931
---------------------- ----------------------------------------------- -----------------------------------------------
|X| Annual Approval of Investment Advisory Agreement. Each year, the Board of Trustees, including a majority
of the Independent Trustees is required to approve the renewal of the investment advisory agreement. The 1940 Act requires
that the Board request and evaluate and the Manager provide such information as may be reasonably necessary to evaluate the
terms of the investment advisory agreement. The board employs an independent consultant to prepare a report that provides
such information as the Board requests for this purpose.
The Board also receives information about the 12b-1 distribution fees the Fund pays. These distribution fees are
reviewed and approved at a different time of the year.
The Board reviewed the foregoing information in arriving at its decision to renew the investment advisory
agreement. Among other factors, the Board considered:
o The nature, cost, and quality of the services provided to the Fund and its shareholders;
o The profitability of the Fund to the Manager;
o The investment performance of the Fund in comparison to regular market indices
o Economies of scale that may be available to the Fund from the Manager;
o Fees paid by other mutual funds for similar services;
o The value and quality of any other benefits or services received by the Fund from its relationship with the
Manager, and
o The direct and indirect benefits the Manager received from its relationship with the Fund. These included
services provided by the General Distributor and the Transfer Agent, and brokerage and soft dollar
arrangements permissible under Section 28(e) of the Securities Exchange Act.
The Board considered that the Manager must be able to pay and retain high quality personnel at competitive rates
to provide services to the Fund. The Board also considered that maintaining the financial viability of the Manager is
important so that the Manager will be able to continue to provide quality services to the Fund and its shareholders in
adverse times. The Board also considered the investment performance of other mutual funds advised by the Manager. The
Board is aware that there are alternatives to the use of the Manager.
These matters were also considered by the Independent Trustees, meeting separately from the full Board with
experienced Counsel to the Fund who assisted the Board in its deliberations. The Fund's Counsel is independent of the
Manager within the meaning and intent of the SEC Rules regarding the independence of counsel.
In arriving at a decision, the Board did not single out any one factor or group of factors as being more important
than other factors, but considered all factors together. The Board judged the terms and conditions of the Agreement,
including the investment advisory fee, in light of all of the surrounding circumstances.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement. One of the duties of the Manager under the investment advisory
agreement is to buy and sell portfolio securities for the Fund. The investment advisory agreement allows the Manager to use
broker-dealers to effect the Fund's portfolio transactions. Under the agreement, the Manager may employ those
broker-dealers (including "affiliated" brokers, as that term is defined in the Investment Company Act) that, the Manager
thinks in its best judgment based on all relevant factors, will implement the Fund's policy to obtain, at reasonable
expense, the "best execution" of portfolio transactions. "Best execution" refers to prompt and reliable execution at the
most favorable price obtainable. The Manager need not seek competitive commission bidding. However, the Manager is expected
to minimize the commissions paid to the extent consistent with the interest and policies of the Fund as established by its
Board of Trustees.
Under the investment advisory agreement, the Manager may select brokers that provide brokerage and/or research
services for the Fund and/or the other accounts over which the Manager or its affiliates have investment discretion. The
commissions paid to such brokers may be higher than another qualified broker would charge, if the Manager makes a good
faith determination that the commission is fair and reasonable in relation to the services provided. Subject to those other
considerations, as a factor in selecting brokers for the Fund's portfolio transactions, the Manager may also consider sales
of shares of the Fund and other investment companies managed by the Manager or its affiliates.
Brokerage Practices Followed by the Manager. The Manager allocates brokerage for the Fund subject to the provisions of the
investment advisory agreement and the procedures and rules described above. Generally the Manager's portfolio traders
allocate brokerage upon recommendations from the Manager's portfolio managers. In certain instances, portfolio managers may
directly place trades and allocate brokerage. In either case, the Manager's executive officers supervise the allocation of
brokerage.
Most securities purchases made by the Fund are in principal transactions at net prices. The Fund usually deals
directly with the selling or purchasing principal or market maker without incurring charges for the services of a broker on
its behalf unless the Manager determines that a better price or execution may be obtained by using the services of a
broker. Therefore, the Fund does not incur substantial brokerage costs. Portfolio securities purchased from underwriters
include a commission or concession paid by the issuer to the underwriter in the price of the security. Portfolio securities
purchased from dealers include a spread between the bid and asked price.
The Fund seeks to obtain prompt execution of orders at the most favorable net prices. In an option transaction,
the Fund ordinarily uses the same broker for the purchase or sale of the option and any transaction in the investment to
which the option relates.
Other funds advised by the Manager have investment objectives and policies similar to those of the Fund. Those
other funds may purchase or sell the same securities as the Fund at the same time as the Fund, which could affect the
supply and price of the securities. When possible, the Manager tries to combine concurrent orders to purchase or sell the
same security by more than one of the accounts managed by the Manager or its affiliates. The transactions under those
combined orders are averaged as to price and allocated in accordance with the purchase or sale orders actually placed for
each account.
The investment advisory agreement permits the Manager to allocate brokerage for research services. The research
services provided by a particular broker may be useful only to one or more of the advisory accounts of the Manager and its
affiliates. Investment research received by the Manager for the commissions paid by those other accounts may be useful both
to the Fund and one or more of the Manager's other accounts. Investment research services may be supplied to the Manager by
a third party at the instance of a broker through which trades are placed. Investment research services include information
and analysis on particular companies and industries as well as market or economic trends and portfolio strategy, market
quotations for portfolio evaluations, information systems, computer hardware and similar products and services. If a
research service also assists the Manager in a non-research capacity (such as bookkeeping or other administrative
functions), then only the percentage or component that provides assistance to the Manager in the investment decision-making
process may be paid in commission dollars.
The research services provided by brokers broaden the scope and supplement the research activities of the Manager.
That research provides additional views and comparisons for consideration and helps the Manager to obtain market
information for the valuation of securities that are either held in the Fund's portfolio or are being considered for
purchase. The Manager provides information to the Board of the Fund about the concessions paid to brokers furnishing
research services, together with the Manager's representation that the amount of such concessions was reasonably related to
the value or benefit of such services.
-------------------------------- -----------------------------------------------------------
Fiscal Year Ended 12/31 Total Brokerage Commissions Paid by the Fund1
-------------------------------- -----------------------------------------------------------
-------------------------------- -----------------------------------------------------------
1999 None
-------------------------------- -----------------------------------------------------------
-------------------------------- -----------------------------------------------------------
2000 None
-------------------------------- -----------------------------------------------------------
-------------------------------- -----------------------------------------------------------
2001 None
-------------------------------- -----------------------------------------------------------
1. Amounts do not include spreads or concessions on principal amounts on a net trade basis.
Distribution and Service Plans
The Distributor. Under its General Distributor's Agreement with the Fund, the Distributor acts as the Fund's principal
underwriter in the continuous public offering of the different classes of shares of the Fund. The Distributor bears the
expenses normally attributable to sales, including advertising and the cost of printing and mailing prospectuses, other
than those furnished to existing shareholders. The Distributor is not obligated to sell a specific number of shares.
Expenses normally attributable to sales are borne by the Distributor.
The sales charges and concessions paid to, or retained by, the Distributor from the sale of shares during the
Fund's three most recent fiscal years, and the contingent deferred sales charges retained by the Distributor on the
redemption of shares for the most recent fiscal year are shown in the tables below:
------------- ------------------ ------------------- -------------------- ------------------- -------------------
Fiscal Year Aggregate Class A Front-End Concessions on Concessions on Concessions on
Front-End Sales Sales Charges Class A Shares Class B Shares Class C Shares
Charges on Class Retained by Advanced by Advanced by Advanced by
Ended 12/31: A Shares Distributor Distributor1 Distributor1 Distributor1
------------- ------------------ ------------------- -------------------- ------------------- -------------------
------------- ------------------ ------------------- -------------------- ------------------- -------------------
1999 $3,235,381 $366,186 $1,785,574 $881,649 $602,450
------------- ------------------ ------------------- -------------------- ------------------- -------------------
------------- ------------------ ------------------- -------------------- ------------------- -------------------
2000 $714,491 $151,709 $120,470 $367,648 $140,072
------------- ------------------ ------------------- -------------------- ------------------- -------------------
------------- ------------------ ------------------- -------------------- ------------------- -------------------
2001 $3,175,203 $580,635 $532,158 $1,801,030 $1,714,796
------------- ------------------ ------------------- -------------------- ------------------- -------------------
1. The Distributor advances concession payments to dealers for certain sales of Class A shares and for sales of Class
B and Class C shares from its own resources at the time of sale. During the fiscal year ended 12/31/97, the Fund also
offered Class X shares (previously designated as Class B shares). The Fund ceased to offer Class X shares after January
5, 1998. The concessions advanced by the Distributor on sales of Class X shares during 2001 was $1,400.
------------------- ----------------------- ----------------------- ----------------------- -----------------------
Fiscal Year Class A Contingent Class B Contingent Class C Contingent Class X Contingent
Deferred Sales Deferred Sales Deferred Sales Deferred Sales Charge
Charges Retained by Charges Retained Charges Retained by Retained by
Ended 12/31: Distributor by Distributor Distributor Distributor
------------------- ----------------------- ----------------------- ----------------------- -----------------------
------------------- ----------------------- ----------------------- ----------------------- -----------------------
2001 $26,204 $205,542 $39,182 $3,703
------------------- ----------------------- ----------------------- ----------------------- -----------------------
Distribution and Service Plans. The Fund has adopted a Service Plan for its Class A shares and Distribution and Service
Plans for its Class B, Class C and Class X shares under Rule 12b-1 of the Investment Company Act. Under those plans, the
Fund makes payments to the Distributor in connection with the distribution and/or servicing of the shares of the particular
class. Each plan has been approved by a vote of the Board of Trustees of the Fund, including a majority of the Independent
Trustees6, cast in person at a meeting called for the purpose of voting on that plan.
Under the plans the Manager and the Distributor may make payments to affiliates and, in their sole discretion,
from time to time may use their own resources (at no direct cost to the Fund) to make payments to brokers, dealers or other
financial institutions for distribution and administrative services they perform. The Manager may use profits from the
advisory fee it receives from the Fund. The Distributor and the Manager may, in their sole discretion, increase or decrease
the amount of payments they make to plan recipients from their own resources.
Unless a plan is terminated as described below, the plan continues in effect from year to year, but only if the
Fund's Board of Trustees and its Independent Trustees specifically vote annually to approve its continuance. Approval must
be by a vote cast in person at a meeting called for the purpose of voting on continuing the plan. A plan may be terminated
at any time by the vote of a majority of the Independent Trustees or by the vote of the holders of a "majority" (as defined
in the Investment Company Act) of the outstanding shares of that class.
The Board and the Independent Trustees must approve all material amendments to a plan. An amendment to increase
materially the amount of payments to be made under the plan must be approved by shareholders of the class affected by the
amendment. Because Class B and Class X shares automatically convert into Class A shares after six years, the Fund must
obtain the approval of Class A as well as Class B and Class X shareholders for an amendment to the Class A plan that would
materially increase the amount to be paid under that plan. That approval must be by a "majority" (as defined in the
Investment Company Act) of the shares of each class, voting separately by class.
While the plans are in effect, the Treasurer of the Fund shall provide separate written reports on the plans to
the Fund's Board of Trustees at least quarterly for its review. The reports shall detail the amount of all payments made
under a plan and the purpose for which the payments were made. Those reports are subject to the review and approval of the
Independent Trustees in the exercise of their fiduciary duty.
Each plan states that while it is in effect, the selection or replacement and nomination of those Trustees of the
Fund who are not "interested persons" of the Fund is committed to the discretion of the Independent Trustees. This
provision does not prevent the involvement of others in the selection and nomination process as long as the final decision
as to selection or nomination is approved by a majority of the Independent Trustees.
Under the plans for a class, no payment will be made to any recipient in any quarter in which the aggregate net
asset value of all Fund shares of that class held by the recipient for itself and its customers does not exceed a minimum
amount, if any, that may be set from time to time by a majority of the Fund's Independent Trustees. Initially, the Board of
Trustees has set the fees at the maximum rate allowed under the Class A, Class B and Class C plans and has set no minimum
asset amount needed to qualify for payments. The Class X plan permits the Fund to pay an asset-based sales charge of up to
0.75% per year of average daily net assets attributable to Class X shares, but the Board of Trustees has set that
asset-based sales charge 0.50% per year of the average daily net assets attributable to Class X shares.
|X| Class A Service Plan. Under the Class A service plan, the Distributor currently uses the fees it receives from
the Fund to pay brokers, dealers and other financial institutions (they are referred to as "recipients") for personal
services and account maintenance services they provide for their customers who hold Class A shares. The services include,
among others, answering customer inquiries about the Fund, assisting in establishing and maintaining accounts in the Fund,
making the Fund's investment plans available and providing other services at the request of the Fund or the Distributor.
The Distributor makes payments to plan recipients quarterly at an annual rate not to exceed 0.25% of the average annual net
assets of Class A shares held in accounts of the service providers or their customers.
For the fiscal year ended December 31, 2001, payments under the Plan for Class A shares totaled $2,417,500, all of
which was paid by the Distributor to recipients. . That amount included $47,298 paid to an affiliate of the Distributor.
Any unreimbursed expenses the Distributor incurs with respect to Class A shares for any fiscal year may not be recovered in
subsequent years. The Distributor may not use payments received under the Class A plan to pay any of its interest expenses,
carrying charges, other financial costs, or allocation of overhead.
|X| Class B, Class C and Class X Service and Distribution Plan Fees. Under each plan, service fees and
distribution fees are computed on the average of the net asset value of shares in the respective class, determined as of
the close of each regular business day during the period. The Class B, Class C and Class X plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's distribution expenses are more or less than the
amounts paid by the Fund under the plans during that period. The types of services that recipients provide are similar to
the services provided under the Class A service plan described above. Under the Class X plan, the Distributor receives a
service fee of 0.25% of the average annual net assets of Class X shares and makes payments to plan recipients quarterly at
an annual rate not to exceed 0.25% of the average net assets of Class X shares held in accounts of the service providers or
their customers.
The plans permit the Distributor to retain both the asset-based sales charges and the service fee on shares or to
pay recipients the service fee on a quarterly basis, without payment in advance. However, the Distributor presently intends
to pay recipients the service fee on Class B and Class C shares in advance for the first year the shares are outstanding.
The advance payment is based on the net asset value of shares sold. Shares purchased by exchange do not qualify for an
advance service fee payment. After the first year shares are outstanding, the Distributor makes service fee payments
quarterly on outstanding shares under each plan. If Class B or Class C shares are redeemed during the first year after
their purchase, the recipient of the service fees on those shares will be obligated to repay the Distributor a pro rata
portion of the advance payment made on those shares.
The Distributor retains the asset-based sales charge on Class B and Class X shares. The Distributor retains the
asset-based sales charge on Class C shares during the first year the shares are outstanding. It pays the asset-based sales
charge as an ongoing concession to the dealer on Class C shares outstanding for a year or more. If a dealer has a special
agreement with the Distributor, the Distributor will pay the Class B and/or Class C service fees and the asset-based sales
charge to the dealer quarterly in lieu of paying the sales concession and service fee in advance at the time of purchase.
The asset-based sales charge on Class B and Class C shares allows investors to buy shares without a front-end
sales charge while allowing the Distributor to compensate dealers that sell those shares. The Distributor's actual expenses
in selling Class B and Class C shares may be more than the payments it receives from contingent deferred sales charges
collected on redeemed shares and from the Fund under the plans. The Fund pays the asset-based sales charge to the
Distributor for its services rendered in distributing Class B and Class C shares. The payments are made to the Distributor
in recognition that the Distributor:
o pays sales concessions to authorized brokers and dealers at the time of sale and pays service fees as described
above,
o may finance payment of sales concessions and/or the advance of the service fee payment to recipients under the
plans, or may provide such financing from its own resources or from the resources of an affiliate,
o employs personnel to support distribution of Class B and Class C shares, and
o bears the costs of sales literature, advertising and prospectuses (other than those furnished to current
shareholders) and state "blue sky" registration fees and certain other distribution expenses.
o may not be able to adequately compensate dealers that sell Class B and Class C shares without receiving payment
under the plans and therefore may not be able to offer such Classes for sale absent the plans,
o receives payments under the plans consistent with the service fees and asset-based sales charges paid by other
non-proprietary funds that charge 12b-1 fees,
o may use the payments under the plan to include the Fund in various third-party distribution programs that may
increase sales of Fund shares,
o may experience increased difficulty selling the Fund's shares if payments under the plan are discontinued because
most competitor funds have plans that pay dealers for rendering distribution services as much or more than the
amounts currently being paid by the Fund, and
o may not be able to continue providing, at the same or at a lesser cost, the same quality distribution sales
efforts and services, or to obtain such services from brokers and dealers, if the plan payments were to be
discontinued.
----------------------------------------------------------------------------------------------------------------------
Distribution Fees Paid to the Distributor for the Year Ended 12/31/01
----------------------------------------------------------------------------------------------------------------------
------------------- --------------------- ---------------------- ---------------------------- ------------------------
Class: Total Payments Amount Retained by Distributor's Aggregate Distributor's
Unreimbursed Expenses
Unreimbursed Expenses as % of Net Assets of
Under Plan Distributor Under Plan Class
------------------- --------------------- ---------------------- ---------------------------- ------------------------
------------------- --------------------- ---------------------- ---------------------------- ------------------------
Class B Plan $1,138,107 $853,2161 $2,973,970 1.94%
------------------- --------------------- ---------------------- ---------------------------- ------------------------
------------------- --------------------- ---------------------- ---------------------------- ------------------------
Class C Plan $1,500,628 $423,9842 $4,861,376 1.86%
------------------- --------------------- ---------------------- ---------------------------- ------------------------
------------------- --------------------- ---------------------- ---------------------------- ------------------------
Class X Plan $222,461 $148,5023 N/A N/A
------------------- --------------------- ---------------------- ---------------------------- ------------------------
1. Includes $1,775 paid to an affiliate of the Distributor's parent company.
2. Includes $3,026 paid to an affiliate of the Distributor's parent company.
3. Includes $804 paid to an affiliate of the Distributor's parent company.
If a plan is terminated by the Fund, the Board of Trustees may allow the Fund to continue payments of the
asset-based sales charge to the Distributor for distributing shares before the plan was terminated. All payments under the
plans are subject to the limitations imposed by the Conduct Rules of the National Association of Securities Dealers, Inc.
on payments of asset-based sales charges and service fees to NASD members.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses a variety of terms to illustrate its performance. These terms include
"standardized yield," "tax-equivalent yield," "dividend yield," "average annual total return," "cumulative total return,"
"average annual total return at net asset value" and "total return at net asset value." An explanation of how yields and
total returns are calculated is set forth below. The charts below show the Fund's performance as of its most recent fiscal
year end for its classes of shares that are currently offered to investors. You can obtain current performance information
by calling the Fund's Transfer Agent at 0.000.000.0000 or by visiting the OppenheimerFunds Internet website at
xxx.xxxxxxxxxxxxxxxx.xxx.
The Fund's illustrations of its performance data in advertisements must comply with rules of the Securities and
Exchange Commission. Those rules describe the types of performance data that may be used and how it is to be calculated. In
general, any advertisement by the Fund of its performance data must include the average annual total returns for the
advertised class of shares of the Fund. Those returns must be shown for the one-, five- and 10-year periods (or the life of
the class, if less) ending as of the most recently ended calendar quarter prior to the publication of the advertisement (or
its submission for publication). Certain types of yields may also be shown, provided that they are accompanied by
standardized average annual total returns.
Use of standardized performance calculations enables an investor to compare the Fund's performance to the
performance of other funds for the same periods. However, a number of factors should be considered before using the Fund's
performance information as a basis for comparison with other investments:
o Yields and total returns measure the performance of a hypothetical account in the Fund over various periods and do
not show the performance of each shareholder's account. Your account's performance will vary from the model performance
data if your dividends are received in cash, or you buy or sell shares during the period, or you bought your shares at a
different time and price than the shares used in the model.
o The Fund's performance returns do not reflect the effect of taxes on dividends and distributions.
o An investment in the Fund is not insured by the FDIC or any other government agency.
o The principal value of the Fund's shares, and its yields and total returns are not guaranteed and normally will
fluctuate on a daily basis.
o When an investor's shares are redeemed, they may be worth more or less than their original cost.
o Yields and total returns for any given past period represent historical performance information and are not, and
should not be considered, a prediction of future yields or returns.
The performance of each class of shares is shown separately, because the performance of each class of shares will
usually be different. That is because of the different kinds of expenses each class bears. The yields and total returns of
each class of shares of the Fund are affected by market conditions, the quality of the Fund's investments, the maturity of
those investments, the types of investments the Fund holds, and its operating expenses that are allocated to the particular
class.
|X| Yields. The Fund uses a variety of different yields to illustrate its current returns. Each class of shares
calculates its yield separately because of the different expenses that affect each class.
o Standardized Yield. The "standardized yield" (sometimes referred to just as "yield") is shown for a class of
shares for a stated 30-day period. It is not based on actual distributions paid by the Fund to shareholders in the 30-day
period, but is a hypothetical yield based upon the net investment income from the Fund's portfolio investments for that
period. It may therefore differ from the "dividend yield" for the same class of shares, described below.
Standardized yield is calculated using the following formula set forth in rules adopted by the Securities and
Exchange Commission, designed to assure uniformity in the way that all funds calculate their yields:
Standardized Yield = 2[( a - b +1)6 -1 ]
--------
cd
The symbols above represent the following factors:
a = dividends and interest earned during the 30-day period.
b = expenses accrued for the period (net of any expense assumptions).
c = the average daily number of shares of that class outstanding during the 30-day period that were entitled to
receive dividends.
d = the maximum offering price per share of that class on the last day of the period, adjusted for undistributed
net investment income.
The standardized yield for a particular 30-day period may differ from the yield for other periods. The SEC formula
assumes that the standardized yield for a 30-day period occurs at a constant rate for a six-month period and is annualized
at the end of the six-month period. Additionally, because each class of shares is subject to different expenses, it is
likely that the standardized yields of the Fund's classes of shares will differ for any 30-day period.
o Dividend Yield. The Fund may quote a "dividend yield" for each class of its shares. Dividend yield is based on the
dividends paid on a class of shares during the actual dividend period. To calculate dividend yield, the dividends of a
class declared during a stated period are added together, and the sum is multiplied by 12 (to annualize the yield) and
divided by the maximum offering price on the last day of the dividend period. The formula is shown below:
Dividend Yield = dividends paid x 12/maximum offering price (payment date)
The maximum offering price for Class A shares includes the current maximum initial sales charge. The maximum
offering price for Class B and Class C shares is the net asset value per share, without considering the effect of
contingent deferred sales charges. The Class A dividend yield may also be quoted without deducting the maximum initial
sales charge.
o Tax-Equivalent Yield. The "tax-equivalent yield" of a class of shares is the equivalent yield that would have to
be earned on a taxable investment to achieve the after-tax results represented by the Fund's tax-equivalent yield. It
adjusts the Fund's standardized yield, as calculated above, by a stated tax rate. Using different tax rates to show
different tax equivalent yields shows investors in different tax brackets the tax equivalent yield of the Fund based on
their own tax bracket.
The tax-equivalent yield is based on a 30-day period, and is computed by dividing the tax-exempt portion of the
Fund's current yield (as calculated above) by one minus a stated income tax rate. The result is added to the portion (if
any) of the Fund's current yield that is not tax-exempt.
The tax-equivalent yield may be used to compare the tax effects of income derived from the Fund with income from
taxable investments at the tax rates stated. Your tax bracket is determined by your federal and state taxable income (the
net amount subject to federal and state income tax after deductions and exemptions). The tax-equivalent yield table assumes
that the investor is taxed at the highest bracket, regardless of whether a switch to non-taxable investments would cause a
lower bracket to apply.
-----------------------------------------------------------------------------------------------------------------------
The Fund's Yields for the 30-Day Period Ended 12/31/01
-----------------------------------------------------------------------------------------------------------------------
----------------- ------------------------------- -------------------------------- ------------------------------------
Class of Shares Standardized Yield Dividend Yield Tax-Equivalent Yield (43.27%
Combined Federal/
New York Tax Bracket)
----------------- ------------------------------- -------------------------------- ------------------------------------
----------------- --------------- --------------- --------------- ---------------- ----------------- ------------------
Without Sales After Sales Without Sales After Sales Without Sales After Sales
Charge Charge Charge Charge Charge Charge
----------------- --------------- --------------- --------------- ---------------- ----------------- ------------------
----------------- --------------- --------------- --------------- ---------------- ----------------- ------------------
Class A 4.36% 4.21% 4.77% 4.60% 7.695% 7.41%
----------------- --------------- --------------- --------------- ---------------- ----------------- ------------------
----------------- --------------- --------------- --------------- ---------------- ----------------- ------------------
Class B 3.85% N/A 4.19% N/A 6.79% N/A
----------------- --------------- --------------- --------------- ---------------- ----------------- ------------------
----------------- --------------- --------------- --------------- ---------------- ----------------- ------------------
Class C 3.60% N/A 3.93% N/A 6.34% N/A
----------------- --------------- --------------- --------------- ---------------- ----------------- ------------------
----------------- --------------- --------------- --------------- ---------------- ----------------- ------------------
Class X 3.60% N/A 3.94% N/A 6.34% N/A
----------------- --------------- --------------- --------------- ---------------- ----------------- ------------------
|X| Total Return Information. There are different types of "total returns" to measure the Fund's performance.
Total return is the change in value of a hypothetical investment in the Fund over a given period, assuming that all
dividends and capital gains distributions are reinvested in additional shares and that the investment is redeemed at the
end of the period. Because of differences in expenses for each class of shares, the total returns for each class are
separately measured. The cumulative total return measures the change in value over the entire period (for example, ten
years). An average annual total return shows the average rate of return for each year in a period that would produce the
cumulative total return over the entire period. However, average annual total returns do not show actual year-by-year
performance. The Fund uses standardized calculations for its total returns as prescribed by the SEC. The methodology is
discussed below.
In calculating total returns for Class A shares, the current maximum sales charge of 3.50% (as a percentage of the
offering price) is deducted from the initial investment ("P") (unless the return is shown without sales charge, as
described below). For Class B shares, payment of the applicable contingent deferred sales charge is applied, depending on
the period for which the return is shown: 4.0% in the first year, 3.0% in the second year, 2.0% in the third and fourth
years, 1.0% in the fifth year, and none thereafter. For Class C shares, the 1% contingent deferred sales charge is deducted
for returns for the one-year period.
o Average Annual Total Return. The "average annual total return" of each class is an average annual compounded rate
of return for each year in a specified number of years. It is the rate of return based on the change in value of a
hypothetical initial investment of $1,000 ("P" in the formula below) held for a number of years ("n") to achieve an Ending
Redeemable Value ("ERV" in the formula) of that investment, according to the following formula:
ERV l/n - 1 Average Annual Total Return
--------------
P
o Cumulative Total Return. The "cumulative total return" calculation measures the change in value of a hypothetical
investment of $1,000 over an entire period of years. Its calculation uses some of the same factors as average annual total
return, but it does not average the rate of return on an annual basis. Cumulative total return is determined as follows:
ERV - P = Total Return
----------------
P
o Total Returns at Net Asset Value. From time to time the Fund may also quote a cumulative or an average annual
total return "at net asset value" (without deducting sales charges) for Class A, Class B or Class C shares. Each is based
on the difference in net asset value per share at the beginning and the end of the period for a hypothetical investment in
that class of shares (without considering front-end or contingent deferred sales charges) and takes into consideration the
reinvestment of dividends and capital gains distributions.
----------------------------------------------------------------------------------------------------------------------
The Fund's Total Returns for the Periods Ended 12/31/01
----------------------------------------------------------------------------------------------------------------------
-------------- ------------------------ ------------------------------------------------------------------------------
Class of Cumulative Total Average Annual Total Returns
Returns
Shares (Life of Class)
-------------- ------------------------ ------------------------------------------------------------------------------
-------------- ------------------------ ----------------------- -------------------------- ---------------------------
1-Year 5-Years 10-Years
(or Life of Class, if
Less) (if applicable)
-------------- ------------------------ ----------------------- -------------------------- ---------------------------
-------------- ----------- ------------ ----------- ----------- ------------ ------------- ------------- -------------
After Without After Without After Without After Sales Without
Sales Sales Sales Sales Sales Sales Charge Charge Sales Charge
Charge Charge Charge Charge Charge
-------------- ----------- ------------ ----------- ----------- ------------ ------------- ------------- -------------
-------------- ----------- ------------ ----------- ----------- ------------ ------------- ------------- -------------
Class A1 70.73% 76.92% 1.18% 4.85% 4.28/% 5.03% 5.49% 5.87%
-------------- ----------- ------------ ----------- ----------- ------------ ------------- ------------- -------------
-------------- ----------- ------------ ----------- ----------- ------------ ------------- ------------- -------------
Class B 20.51%2 21.51%2 0.06% 4.06% 4.08%2 4.26%2 N/A N/A
-------------- ----------- ------------ ----------- ----------- ------------ ------------- ------------- -------------
-------------- ----------- ------------ ----------- ----------- ------------ ------------- ------------- -------------
Class C 21.23%3 21.23%3 3.06% 4.06% 4.21%3 4.21%3 N/A N/A
-------------- ----------- ------------ ----------- ----------- ------------ ------------- ------------- -------------
-------------- ----------- ------------ ----------- ----------- ------------ ------------- ------------- -------------
Class X 37.42%4 37.42%4 1.80% 4.30% 4.47% 4.47% 4.88%4 4.88%4
-------------- ----------- ------------ ----------- ----------- ------------ ------------- ------------- -------------
1 Inception of Class A: 9/18/91
2 Inception of Class B: 5/1/97
3 Inception of Class C: 5/1/97
4 Inception of Class X: 5/1/95
Other Performance Comparisons. The Fund compares its performance annually to that of an appropriate broadly-based market
index in its Annual Report to shareholders. You can obtain that information by contacting the Transfer Agent at the
addresses or telephone numbers shown on the cover of this Statement of Additional Information. The Fund may also compare
its performance to that of other investments, including other mutual funds, or use rankings of its performance by
independent ranking entities. Examples of these performance comparisons are set forth below.
|X| Lipper Rankings. From time to time the Fund may publish the ranking of the performance of its classes of shares by
Lipper, Inc. ("Lipper"). Lipper is a widely-recognized independent mutual fund monitoring service. Lipper monitors the
performance of regulated investment companies, including the Fund, and ranks their performance for various periods in
categories based on investment styles. The Lipper performance rankings are based on total returns that include the
reinvestment of capital gain distributions and income dividends but do not take sales charges or taxes into consideration.
Lipper also publishes "peer-group" indices of the performance of all mutual funds in a category that it monitors and
averages of the performance of the funds in particular categories. Lipper also publishes "Lipper Leader" awards in two
categories:
o Lipper Leaders for Consistent Return. Lipper also scores funds in their broad asset categories and in their peer
groups, based on two characteristics: consistency, or the strength of a fund's performance trend, and effective return, the
Fund's total return adjusted for its historical downside risk but without considering sales charge.
o Lipper Leaders for Preservation. In addition, Lipper scores funds in their peer groups, based on monthly returns,
without considering sales charges, and identifies funds that had fewer and less severe negative monthly performance
periods.
|X| Morningstar Rankings. From time to time the Fund may publish the ranking and/or star rating of the performance
of its classes of shares by Morningstar, Inc., an independent mutual fund monitoring service. Morningstar rates and ranks
mutual funds in broad investment categories: domestic stock funds, international stock funds, taxable bond funds and
municipal bond funds. The Fund is ranked among municipal bond funds.
Morningstar proprietary star rankings reflect historical risk-adjusted total investment return. For each fund
with at least a three-year history, Morningstar calculates a Morningstar RatingTM metric each month by subtracting the
return on a 90-day U.S. Treasury Xxxx from the fund's load-adjusted return for the same period, and then adjusting this
excess return for risk. The top 10% of funds in each broad asset class receive five stars, the next 22.5% receive four
stars, the next 35% receive three stars, the next 22.5% receive two stars and the bottom 10% receive one star. The Overall
Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three-,
five- and 10-year (if applicable) Morningstar Ratings metrics.
The Fund may also compare its total return ranking to that of other funds in its Morningstar category, in addition
to its star rating. Those total return rankings are percentages from 1% to 100% and are not risk-adjusted. For example, if
a fund is in the 94th percentile, that means that 94% of the funds in the same category performed better than it did.
|X| Performance Rankings and Comparisons by Other Entities and Publications. From time to time the Fund may
include in its advertisements and sales literature performance information about the Fund cited in newspapers and other
periodicals such as The New York Times, The Wall Street Journal, Xxxxxx'x, or similar publications. That information may
include performance quotations from other sources, including Lipper and Morningstar. The performance of the Fund's classes
of shares may be compared in publications to the performance of various market indices or other investments, and averages,
performance rankings or other benchmarks prepared by recognized mutual fund statistical services.
Investors may also wish to compare the returns on the Fund's share classes to the return on fixed-income
investments available from banks and thrift institutions. Those include certificates of deposit, ordinary interest-paying
checking and savings accounts, and other forms of fixed or variable time deposits, and various other instruments such as
Treasury bills. However, the Fund's returns and share price are not guaranteed or insured by the FDIC or any other agency
and will fluctuate daily, while bank depository obligations may be insured by the FDIC and may provide fixed rates of
return. Repayment of principal and payment of interest on Treasury securities is backed by the full faith and credit of the
U.S. government.
From time to time, the Fund may publish rankings or ratings of the Manager or Transfer Agent, and of the investor
services provided by them to shareholders of the Xxxxxxxxxxx funds, other than performance rankings of the Xxxxxxxxxxx
funds themselves. Those ratings or rankings of shareholder and investor services by third parties may include comparisons
of their services to those provided by other mutual fund families selected by the rating or ranking services. They may be
based upon the opinions of the rating or ranking service itself, using its research or judgment, or based upon surveys of
investors, brokers, shareholders or others.
From time to time the Fund may include in its advertisements and sales literature the total return performance of
a hypothetical investment account that includes shares of the fund and other Xxxxxxxxxxx funds. The combined account may be
part of an illustration of an asset allocation model or similar presentation. The account performance may combine total
return performance of the Fund and the total return performance of other Xxxxxxxxxxx funds included in the account.
Additionally, from time to time, the Fund's advertisements and sales literature may include, for illustrative or
comparative purposes, statistical data or other information about general or specific market and economic conditions. That
may include, for example,
o information about the performance of certain securities or commodities markets or segments of those markets,
o information about the performance of the economies of particular countries or regions,
o the earnings of companies included in segments of particular industries, sectors, securities markets, countries or
regions,
o the availability of different types of securities or offerings of securities,
o information relating to the gross national or gross domestic product of the United States or other countries or
regions,
o comparisons of various market sectors or indices to demonstrate performance, risk, or other characteristics of the
Fund.
A B O U T Y O U R A C C O U N T
How to Buy Shares
Additional information is presented below about the methods that can be used to buy shares of the Fund. Appendix C contains
more information about the special sales charge arrangements offered by the Fund, and the circumstances in which sales
charges may be reduced or waived for certain classes of investors.
AccountLink. When shares are purchased through AccountLink, each purchase must be at least $25. Shares will be purchased on
the regular business day the Distributor is instructed to initiate the Automated Clearing House ("ACH") transfer to buy the
shares. Dividends will begin to accrue on shares purchased with the proceeds of ACH transfers on the business day the Fund
receives Federal Funds for the purchase through the ACH system before the close of The New York Stock Exchange. The
Exchange normally closes at 4:00 P.M., but may close earlier on certain days. If Federal Funds are received on a business
day after the close of the Exchange, the shares will be purchased and dividends will begin to accrue on the next regular
business day. The proceeds of ACH transfers are normally received by the Fund three days after the transfers are initiated.
If the proceeds of the ACH transfer are not received on a timely basis, the Distributor reserves the right to cancel the
purchase order. The Distributor and the Fund are not responsible for any delays in purchasing shares resulting from delays
in ACH transmissions.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales charge rate may be obtained for Class A shares under
Right of Accumulation and Letters of Intent because of the economies of sales efforts and reduction in expenses realized by
the Distributor, dealers and brokers making such sales. No sales charge is imposed in certain other circumstances described
in Appendix C to this Statement of Additional Information because the Distributor or dealer or broker incurs little or no
selling expenses.
|X| Right of Accumulation. To qualify for the lower sales charge rates that apply to larger purchases of Class A
shares, you and your spouse can add together:
o Class A and Class B shares you purchase for your individual accounts (including IRAs and 403(b) plans), or for
your joint accounts, or for trust or custodial accounts on behalf of your children who are minors, and
o Current purchases of Class A and Class B shares of the Fund and other Xxxxxxxxxxx funds to reduce the sales charge
rate that applies to current purchases of Class A shares, and
o Class A and Class B shares of Xxxxxxxxxxx funds you previously purchased subject to an initial or contingent
deferred sales charge to reduce the sales charge rate for current purchases of Class A shares, provided
that you still hold your investment in one of the Xxxxxxxxxxx funds.
A fiduciary can count all shares purchased for a trust, estate or other fiduciary account (including one or more
employee benefit plans of the same employer) that has multiple accounts. The Distributor will add the value, at current
offering price, of the shares you previously purchased and currently own to the value of current purchases to determine the
sales charge rate that applies. The reduced sales charge will apply only to current purchases. You must request it when you
buy shares.
|X| The Xxxxxxxxxxx Funds. The Xxxxxxxxxxx funds are those mutual funds for which the Distributor acts as the
distributor
Xxxxxxxxxxx Bond Fund Xxxxxxxxxxx Municipal Bond Fund
Xxxxxxxxxxx California Municipal Fund Xxxxxxxxxxx Main Street Opportunity Fund
Xxxxxxxxxxx Capital Appreciation Fund Xxxxxxxxxxx New Jersey Municipal Fund
Xxxxxxxxxxx Capital Preservation Fund Xxxxxxxxxxx Pennsylvania Municipal Fund
Xxxxxxxxxxx Capital Income Fund Xxxxxxxxxxx Quest Balanced Value Fund
Xxxxxxxxxxx Champion Income Fund Xxxxxxxxxxx Quest Capital Value Fund, Inc.
Xxxxxxxxxxx Concentrated Growth Fund Xxxxxxxxxxx Quest Global Value Fund, Inc.
Xxxxxxxxxxx Convertible Securities Fund Xxxxxxxxxxx Quest Opportunity Value Fund
Xxxxxxxxxxx Developing Markets Fund Xxxxxxxxxxx Quest Value Fund, Inc.
Xxxxxxxxxxx Disciplined Allocation Fund Xxxxxxxxxxx Real Asset Fund
Xxxxxxxxxxx Discovery Fund Xxxxxxxxxxx Rochester National Municipals
Xxxxxxxxxxx Emerging Growth Fund Xxxxxxxxxxx Senior Floating Rate Fund
Xxxxxxxxxxx Emerging Technologies Fund Xxxxxxxxxxx Small Cap Value Fund
Xxxxxxxxxxx Enterprise Fund Xxxxxxxxxxx Special Value Fund
Xxxxxxxxxxx Europe Fund Xxxxxxxxxxx Strategic Income Fund
Xxxxxxxxxxx Global Fund Xxxxxxxxxxx Total Return Fund, Inc.
Xxxxxxxxxxx Global Growth & Income Fund Xxxxxxxxxxx Trinity Core Fund
Xxxxxxxxxxx Gold & Special Minerals Fund Xxxxxxxxxxx Trinity Large Cap Growth Fund
Xxxxxxxxxxx Growth Fund Xxxxxxxxxxx Trinity Value Fund
Xxxxxxxxxxx High Yield Fund Xxxxxxxxxxx U.S. Government Trust
Xxxxxxxxxxx Intermediate Municipal Fund Xxxxxxxxxxx Value Fund
Xxxxxxxxxxx International Bond Fund Limited-Term New York Municipal Fund
Xxxxxxxxxxx International Growth Fund Rochester Fund Municipals
Xxxxxxxxxxx International Small Company Fund OSM1- Gartmore Millennium Growth Fund II
Xxxxxxxxxxx Limited-Term Government Fund OSM1 - Xxxxxxxx Growth Fund
Xxxxxxxxxxx Main Street Growth & Income Fund OSM1 - Mercury Advisors S&P 500 Index
Xxxxxxxxxxx Main Street Opportunity Fund OSM1 - Mercury Advisors Focus Growth Fund
Xxxxxxxxxxx Main Street Small Cap Fund OSM1 - QM Active Balanced Fund
Xxxxxxxxxxx MidCap Fund OSM1 - Salomon Brothers Capital Fund
Xxxxxxxxxxx Multiple Strategies Fund
And the following money market funds:
Centennial America Fund, L. P. Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust Centennial Tax Exempt Trust
Centennial Government Trust Xxxxxxxxxxx Cash Reserves
Centennial Money Market Trust Xxxxxxxxxxx Money Market Fund, Inc.
1 - "OSM" stands for Xxxxxxxxxxx Select Managers
There is an initial sales charge on the purchase of Class A shares of each of the Xxxxxxxxxxx funds described above except
the money market funds. Under certain circumstances described in this Statement of Additional Information, redemption
proceeds of certain money market fund shares may be subject to a contingent deferred sales charge.
Letters of Intent. Under a Letter of Intent, if you purchase Class A shares or Class A and Class B shares of the Fund and
other Xxxxxxxxxxx funds during a 13-month period, you can reduce the sales charge rate that applies to your purchases of
Class A shares. The total amount of your intended purchases of both Class A and Class B shares will determine the reduced
sales charge rate for the Class A shares purchased during that period. You can include purchases made up to 90 days before
the date of the Letter.
A Letter of Intent is an investor's statement in writing to the Distributor of the intention to purchase Class A
shares or Class A and Class B shares of the Fund (and other Xxxxxxxxxxx funds) during a 13-month period (the "Letter of
Intent period"). At the investor's request, this may include purchases made up to 90 days prior to the date of the Letter.
The Letter states the investor's intention to make the aggregate amount of purchases of shares which, when added to the
investor's holdings of shares of those funds, will equal or exceed the amount specified in the Letter. Purchases made by
reinvestment of dividends or distributions of capital gains and purchases made at net asset value without sales charge do
not count toward satisfying the amount of the Letter.
A Letter enables an investor to count the Class A and Class B shares purchased under the Letter to obtain the
reduced sales charge rate on purchases of Class A shares of the Fund (and other Xxxxxxxxxxx funds) that applies under the
Right of Accumulation to current purchases of Class A shares. Each purchase of Class A shares under the Letter will be made
at the offering price (including the sales charge) that applies to a single lump-sum purchase of shares in the amount
intended to be purchased under the Letter.
In submitting a Letter, the investor makes no commitment to purchase shares. However, if the investor's purchases
of shares within the Letter of Intent period, when added to the value (at offering price) of the investor's holdings of
shares on the last day of that period, do not equal or exceed the intended purchase amount, the investor agrees to pay the
additional amount of sales charge applicable to such purchases. That amount is described in "Terms of Escrow," below (those
terms may be amended by the Distributor from time to time). The investor agrees that shares equal in value to 5% of the
intended purchase amount will be held in escrow by the Transfer Agent subject to the Terms of Escrow. Also, the investor
agrees to be bound by the terms of the Prospectus, this Statement of Additional Information and the Application used for a
Letter of Intent. If those terms are amended, as they may be from time to time by the Fund, the investor agrees to be bound
by the amended terms and that those amendments will apply automatically to existing Letters of Intent.
If the total eligible purchases made during the Letter of Intent period do not equal or exceed the intended
purchase amount, the concessions previously paid to the dealer of record for the account and the amount of sales charge
retained by the Distributor will be adjusted to the rates applicable to actual total purchases. If total eligible purchases
during the Letter of Intent period exceed the intended purchase amount and exceed the amount needed to qualify for the next
sales charge rate reduction set forth in the Prospectus, the sales charges paid will be adjusted to the lower rate. That
adjustment will be made only if and when the dealer returns to the Distributor the excess of the amount of concessions
allowed or paid to the dealer over the amount of concessions that apply to the actual amount of purchases. The excess
concessions returned to the Distributor will be used to purchase additional shares for the investor's account at the net
asset value per share in effect on the date of such purchase, promptly after the Distributor's receipt thereof.
The Transfer Agent will not hold shares in escrow for purchases of shares of the Fund and other Xxxxxxxxxxx funds
by OppenheimerFunds prototype 401(k) plans under a Letter of Intent. If the intended purchase amount under a Letter of
Intent entered into by an OppenheimerFunds prototype 401(k) plan is not purchased by the plan by the end of the Letter of
Intent period, there will be no adjustment of concessions paid to the broker-dealer or financial institution of record for
accounts held in the name of that plan.
In determining the total amount of purchases made under a Letter, shares redeemed by the investor prior to the
termination of the Letter of Intent period will be deducted. It is the responsibility of the dealer of record and/or the
investor to advise the Distributor about the Letter in placing any purchase orders for the investor during the Letter of
Intent period. All of such purchases must be made through the Distributor.
|X| Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if necessary) made pursuant to a Letter, shares of
the Fund equal in value up to 5% of the intended purchase amount specified in the Letter shall be held in escrow by the
Transfer Agent. For example, if the intended purchase amount is $50,000, the escrow shall be shares valued in the amount of
$2,500 (computed at the offering price adjusted for a $50,000 purchase). Any dividends and capital gains distributions on
the escrowed shares will be credited to the investor's account.
2. If the total minimum investment specified under the Letter is completed within the thirteen-month Letter
of Intent period, the escrowed shares will be promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the total purchases pursuant to the Letter
are less than the intended purchase amount specified in the Letter, the investor must remit to the Distributor an amount
equal to the difference between the dollar amount of sales charges actually paid and the amount of sales charges which
would have been paid if the total amount purchased had been made at a single time. That sales charge adjustment will apply
to any shares redeemed prior to the completion of the Letter. If the difference in sales charges is not paid within twenty
days after a request from the Distributor or the dealer, the Distributor will, within sixty days of the expiration of the
Letter, redeem the number of escrowed shares necessary to realize such difference in sales charges. Full and fractional
shares remaining after such redemption will be released from escrow. If a request is received to redeem escrowed shares
prior to the payment of such additional sales charge, the sales charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and appoints the Transfer Agent as
attorney-in-fact to surrender for redemption any or all escrowed shares.
5. The shares eligible for purchase under the Letter (or the holding of which may be counted toward
completion of a Letter) include:
(a) Class A shares sold with a front-end sales charge or subject to a Class A contingent deferred sales charge,
(b) Class B shares of other Xxxxxxxxxxx funds acquired subject to a contingent deferred sales charge, and
(c) Class A or Class B shares acquired by exchange of either (1) Class A shares of one of the other Xxxxxxxxxxx funds
that were acquired subject to a Class A initial or contingent deferred sales charge or (2) Class B
shares of one of the other Xxxxxxxxxxx funds that were acquired subject to a contingent deferred
sales charge.
6. Shares held in escrow hereunder will automatically be exchanged for shares of another fund to which an
exchange is requested, as described in the section of the Prospectus entitled "How to Exchange Shares" and the escrow will
be transferred to that other fund.
Asset Builder Plans. To establish an Asset Builder Plan to buy shares directly from a bank account, you must enclose a
check (the minimum is $25) for the initial purchase with your application. Shares purchased by Asset Builder Plan payments
from bank accounts are subject to the redemption restrictions for recent purchases described in the Prospectus. Asset
Builder Plans are available only if your bank is an ACH member. Asset Builder Plans also enable shareholders of Xxxxxxxxxxx
Cash Reserves to use their fund account to make monthly automatic purchases of shares of up to four other Xxxxxxxxxxx
funds.
If you make payments from your bank account to purchase shares of the Fund, your bank account will be debited
automatically. Normally the debit will be made two business days prior to the investment dates you selected on your
Application. Neither the Distributor, the Transfer Agent nor the Fund shall be responsible for any delays in purchasing
shares that result from delays in ACH transmissions.
Before you establish Asset Builder payments, you should obtain a prospectus of the selected fund(s) from your
financial advisor (or the Distributor) and request an application from the Distributor. Complete the application and return
it. You may change the amount of your Asset Builder payment or you can terminate these automatic investments at any time by
writing to the Transfer Agent. The Transfer Agent requires a reasonable period (approximately 10 days) after receipt of
your instructions to implement them. The Fund reserves the right to amend, suspend or discontinue offering Asset Builder
plans at any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for the Fund's shares (for example, when a purchase check
is returned to the Fund unpaid) causes a loss to be incurred when the net asset values of the Fund's shares on the
cancellation date is less than on the purchase date. That loss is equal to the amount of the decline in the net asset value
per share multiplied by the number of shares in the purchase order. The investor is responsible for that loss. If the
investor fails to compensate the Fund for the loss, the Distributor will do so. The Fund may reimburse the Distributor for
that amount by redeeming shares from any account registered in that investor's name, or the Fund or the Distributor may
seek other redress.
Classes of Shares. Each class of shares of the Fund represents an interest in the same portfolio of investments of the
Fund. However, each class has different shareholder privileges and features. The net income attributable to Class B, Class
C or Class X shares and the dividends payable on Class B or Class C or Class X shares will be reduced by incremental
expenses borne solely by that class. Those expenses include the asset-based sales charges to which Class B, Class C and
Class X shares are subject.
The availability of different classes of shares permits an investor to choose the method of purchasing shares that
is more appropriate for the investor. That may depend on the amount of the purchase, the length of time the investor
expects to hold shares, and other relevant circumstances. Class A shares normally are sold subject to an initial sales
charge. While Class B and Class C shares have no initial sales charge, the purpose of the deferred sales charge and
asset-based sales charge on Class B and Class C shares is the same as that of the initial sales charge on Class A shares -
to compensate the Distributor and brokers, dealers and financial institutions that sell shares of the Fund. A salesperson
who is entitled to receive compensation from his or her firm for selling Fund shares may receive different levels of
compensation for selling one class of shares rather than another.
The Distributor will not accept any order in the amount of $500,000 or more for Class B shares or $1 million or
more for Class C shares on behalf of a single investor (not including dealer "street name" or omnibus accounts). That is
because generally it will be more advantageous for that investor to purchase Class A shares of the Fund.
|X| Class X Shares. Effective January 6, 1998, the Fund ceased offering Class X shares to investors. Prior to May
1, 1997, Class X shares had been designated as the Fund's Class B shares. On that date, the Fund re-designated its Class B
shares as Class X shares and commenced offering shares of a new Class B. Already-issued Class X shares remain outstanding
until they are redeemed or exchanged or converted. (Class X shares of the Fund may be exchanged only for Class B shares of
other Xxxxxxxxxxx funds.)
Class X shares were originally sold at net asset value without initial sales charge. However, if Class X shares
are redeemed within 4 years of their purchase, a contingent deferred sales charge will be deducted from the redemption
proceeds. That contingent deferred sales charge will not be assessed on shares purchased by reinvestment of dividends or
capital gains distributions, nor on the amount of the account value represented by any increase in the net asset value of
shares over the original net asset value. The contingent deferred sales charge is assessed on the lesser of the original
net asset value or the net asset value of the shares at the time of redemption. The contingent deferred sales charge is
paid to compensate the Distributor for its expenses incurred in providing distribution-related services to the Fund in
connection with the sale of Class X shares.
To determine whether the contingent deferred sales charge applies to redeemed shares, the Fund redeems shares in
the same order as for Class B and Class C shares. The contingent deferred sales charge is not imposed in the circumstances
that apply to waivers of the Class B and Class C contingent deferred sales charge as set forth in Appendix C to this
Statement of Additional Information. The amount of the contingent deferred sales charge will depend on the number of years
since you invested and the dollar amount being redeemed, according to the following schedule:
------------------------------------------------- -----------------------------------------------
Contingent Deferred Sales Charge on
Years Since Beginning of Month in Which Redemptions in that Year (as % of Amount
Purchase Order was Accepted Subject to Charge)
------------------------------------------------- -----------------------------------------------
------------------------------------------------- -----------------------------------------------
0 - 1 2.50%
------------------------------------------------- -----------------------------------------------
------------------------------------------------- -----------------------------------------------
1 - 2 2.00%
------------------------------------------------- -----------------------------------------------
------------------------------------------------- -----------------------------------------------
2 - 3 1.50%
------------------------------------------------- -----------------------------------------------
------------------------------------------------- -----------------------------------------------
3 - 4 1.00%
------------------------------------------------- -----------------------------------------------
------------------------------------------------- -----------------------------------------------
4 and following None
------------------------------------------------- -----------------------------------------------
In the table, a "year" is a 12-month period. In applying the contingent sales charge, all purchases are
considered to have been made on the first regular business day of the month in which the purchase was made.
|X| Class B and Class X Conversion. Under current interpretations of applicable federal income tax law by the
Internal Revenue Service, the conversion of Class B and Class X shares to Class A shares after six years is not treated as
a taxable event for the shareholder. If those laws or the IRS interpretation of those laws should change, the automatic
conversion feature may be suspended. In that event, no further conversions of Class B and Class X shares would occur while
that suspension remained in effect. Although Class B and Class X shares could then be exchanged for Class A shares on the
basis of relative net asset value of the two classes, without the imposition of a sales charge or fee, such exchange could
constitute a taxable event for the shareholder, and absent such exchange, Class B and Class X shares might continue to be
subject to the asset-based sales charge for longer than six years.
|X| Allocation of Expenses. The Fund pays expenses related to its daily operations, such as custodian fees,
Trustees' fees, transfer agency fees, legal fees and auditing costs. Those expenses are paid out of the Fund's assets and
are not paid directly by shareholders. However, those expenses reduce the net asset values of shares, and therefore are
indirectly borne by shareholders through their investment.
The methodology for calculating the net asset value, dividends and distributions of the Fund's share classes
recognizes two types of expenses. General expenses that do not pertain specifically to any one class are allocated pro rata
to the shares of all classes. The allocation is based on the percentage of the Fund's total assets that is represented by
the assets of each class, and then equally to each outstanding share within a given class. Such general expenses include
management fees, legal, bookkeeping and audit fees, printing and mailing costs of shareholder reports, Prospectuses,
Statements of Additional Information and other materials for current shareholders, fees to unaffiliated Trustees, custodian
expenses, share issuance costs, organization and start-up costs, interest, taxes and brokerage commissions, and
non-recurring expenses, such as litigation costs.
Other expenses that are directly attributable to a particular class are allocated equally to each outstanding
share within that class. Examples of such expenses include distribution and service plan (12b-1) fees, transfer and
shareholder servicing agent fees and expenses and shareholder meeting expenses (to the extent that such expenses pertain
only to a specific class).
Determination of Net Asset Values Per Share. The net asset values per share of each class of shares of the Fund are
determined as of the close of business of The New York Stock Exchange on each day that the Exchange is open. The
calculation is done by dividing the value of the Fund's net assets attributable to a class by the number of shares of that
class that are outstanding. The Exchange normally closes at 4:00 P.M., New York time, but may close earlier on some other
days (for example, in case of weather emergencies or on days falling before a holiday). The Exchange's most recent annual
announcement (which is subject to change) states that it will close on New Year's Day, Xxxxxx Xxxxxx Xxxx, Xx. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It may also
close on other days.
Dealers other than Exchange members may conduct trading in municipal securities on days on which the Exchange is
closed (including weekends and U.S. holidays) or after 4:00 P.M. on a regular business day. Because the Fund's net asset
values will not be calculated on those days, the Fund's net asset values per share may be significantly affected on such
days when shareholders may not purchase or redeem shares.
|X| Securities Valuation. The Fund's Board of Trustees has established procedures for the valuation of the Fund's
securities. In general those procedures are as follows:
o Long-term debt securities having a remaining maturity in excess of 60 days are valued based on the mean between
the "bid" and "asked" prices determined by a portfolio pricing service approved by the Fund's Board of Trustees or obtained
by the Manager from two active market makers in the security on the basis of reasonable inquiry.
o The following securities are valued at the mean between the "bid" and "asked" prices determined by a pricing
service approved by the Fund's Board of Trustees or obtained by the Manager from two active market makers in the security
on the basis of reasonable inquiry:
(1) debt instruments that have a maturity of more than 397 days when issued,
(2) debt instruments that had a maturity of 397 days or less when issued and have a remaining maturity of more than 60
days, and
(3) non-money market debt instruments that had a maturity of 397 days or less when issued and which have a remaining
maturity of 60 days or less.
o The following securities are valued at cost, adjusted for amortization of premiums and accretion of discounts:
(1) money market debt securities held by a non-money market fund that had a maturity of less than 397 days when issued
that have a remaining maturity of 60 days or less, and
(2) debt instruments held by a money market fund that have a remaining maturity of 397 days or less.
o Securities not having readily-available market quotations are valued at fair value determined under the Board's
procedures.
If the Manager is unable to locate two market makers willing to give quotes, a security may be priced at the mean
between the "bid" and "asked" prices provided by a single active market maker (which in certain cases may be the "bid"
price if no "asked" price is available).
In the case of municipal securities, when last sale information is not generally available, the Manager may use
pricing services approved by the Board of Trustees. The pricing service may use "matrix" comparisons to the prices for
comparable instruments on the basis of quality, yield and maturity. Other special factors may be involved (such as the
tax-exempt status of the interest paid by municipal securities). The Manager will monitor the accuracy of the pricing
services. That monitoring may include comparing prices used for portfolio valuation to actual sales prices of selected
securities.
Puts and calls are valued at the last sale price on the principal exchange on which they are traded or on NASDAQ,
as applicable, as determined by a pricing service approved by the Board of Trustees or by the Manager. If there were no
sales that day, they shall be valued at the last sale price on the preceding trading day if it is within the spread of the
closing "bid" and "asked" prices on the principal exchange or on NASDAQ on the valuation date. If not, the value shall be
the closing bid price on the principal exchange or on NASDAQ on the valuation date. If the put, call or future is not
traded on an exchange or on NASDAQ, it shall be valued by the mean between "bid" and "asked" prices obtained by the Manager
from two active market makers. In certain cases that may be at the "bid" price if no "asked" price is available.
When the Fund writes an option, an amount equal to the premium received is included in the Fund's Statement of
Assets and Liabilities as an asset. An equivalent credit is included in the liability section. The credit is adjusted
("marked-to-market") to reflect the current market value of the option. In determining the Fund's gain on investments, if a
call or put written by the Fund is exercised, the proceeds are increased by the premium received. If a call written by the
Fund expires, the Fund has a gain in the amount of the premium. If the Fund enters into a closing purchase transaction, it
will have a gain or loss, depending on whether the premium received was more or less than the cost of the closing
transaction. If the Fund exercises a put it holds, the amount the Fund receives on its sale of the underlying investment is
reduced by the amount of premium paid by the Fund.
How to Sell Shares
The information below supplements the terms and conditions for redeeming shares set forth in the Prospectus.
Checkwriting. When a check is presented to the Bank for clearance, the Bank will ask the Fund to redeem a sufficient number
of full and fractional shares in the shareholder's account to cover the amount of the check. This enables the shareholder
to continue receiving dividends on those shares until the check is presented to the Fund. Checks may not be presented for
payment at the offices of the Bank or the Fund's custodian. This limitation does not affect the use of checks for the
payment of bills or to obtain cash at other banks. The Fund reserves the right to amend, suspend or discontinue offering
checkwriting privileges at any time. The Fund will provide you notice whenever it is required to do so by applicable law.
In choosing to take advantage of the Checkwriting privilege, by signing the Account Application or by completing a
Checkwriting card, each individual who signs:
(1) for individual accounts, represents that they are the registered owner(s) of the shares of the Fund in that
account;
(2) for accounts for corporations, partnerships, trusts and other entities, represents that they are an officer,
general partner, trustee or other fiduciary or agent, as applicable, duly authorized to act on behalf of the
registered owner(s);
(3) authorizes the Fund, its Transfer Agent and any bank through which the Fund's drafts (checks) are payable to pay
all checks drawn on the Fund account of such person(s) and to redeem a sufficient amount of shares from that
account to cover payment of each check;
(4) specifically acknowledges that if they choose to permit checks to be honored if there is a single signature on
checks drawn against joint accounts, or accounts for corporations, partnerships, trusts or other entities,
the signature of any one signatory on a check will be sufficient to authorize payment of that check and
redemption from the account, even if that account is registered in the names of more than one person or more
than one authorized signature appears on the Checkwriting card or the Application, as applicable;
(5) understands that the Checkwriting privilege may be terminated or amended at any time by the Fund and/or the Fund's
bank; and
(6) acknowledges and agrees that neither the Fund nor its bank shall incur any liability for that amendment or
termination of checkwriting privileges or for redeeming shares to pay checks reasonably believed by them to
be genuine, or for returning or not paying checks that have not been accepted for any reason.
Sending Redemption Proceeds by Federal Funds Wire. The Federal Funds wire of redemption proceeds may be delayed if the
Fund's custodian bank is not open for business on a day when the Fund would normally authorize the wire to be made, which is
usually the Fund's next regular business day following the redemption. In those circumstances, the wire will not be
transmitted until the next bank business day on which the Fund is open for business. No dividends will be paid on the
proceeds of redeemed shares awaiting transfer by Federal Funds wire.
Reinvestment Privilege. Within six months of a redemption, a shareholder may reinvest all or part of the redemption
proceeds of:
o Class A shares purchased subject to an initial sales charge or Class A shares on which a contingent deferred sales
charge was paid, or
o Class B shares that were subject to the Class B contingent deferred sales charge when redeemed.
The reinvestment may be made without sales charge only in Class A shares of the Fund or any of the other
Xxxxxxxxxxx funds into which shares of the Fund are exchangeable as described in "How to Exchange Shares" below.
Reinvestment will be at the net asset value next computed after the Transfer Agent receives the reinvestment order. The
shareholder must ask the Transfer Agent for that privilege at the time of reinvestment. This privilege does not apply to
Class C or Class X shares. The Fund may amend, suspend or cease offering this reinvestment privilege at any time as to
shares redeemed after the date of such amendment, suspension or cessation.
Any capital gain that was realized when the shares were redeemed is taxable, and reinvestment will not alter any
capital gains tax payable on that gain. If there has been a capital loss on the redemption, some or all of the loss may not
be tax deductible, depending on the timing and amount of the reinvestment. Under the Internal Revenue Code, if the
redemption proceeds of Fund shares on which a sales charge was paid are reinvested in shares of the Fund or another of the
Xxxxxxxxxxx funds within 90 days of payment of the sales charge, the shareholder's basis in the shares of the Fund that
were redeemed may not include the amount of the sales charge paid. That would reduce the loss or increase the gain
recognized from the redemption. However, in that case the sales charge would be added to the basis of the shares acquired
by the reinvestment of the redemption proceeds.
Payments "In Kind". The Prospectus states that payment for shares tendered for redemption is ordinarily made in cash.
However, the Board of Trustees of the Fund may determine that it would be detrimental to the best interests of the
remaining shareholders of the Fund to make payment of a redemption order wholly or partly in cash. In that case, the Fund
may pay the redemption proceeds in whole or in part by a distribution "in kind" of liquid securities from the portfolio of
the Fund, in lieu of cash.
The Fund has elected to be governed by Rule 18f-1 under the Investment Company Act. Under that rule, the Fund is
obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the net assets of the Fund during any
90-day period for any one shareholder. If shares are redeemed in kind, the redeeming shareholder might incur brokerage or
other costs in selling the securities for cash. The Fund will value securities used to pay redemptions in kind using the
same method the Fund uses to value its portfolio securities described above under "Determination of Net Asset Values Per
Share." That valuation will be made as of the time the redemption price is determined.
Involuntary Redemptions. The Fund's Board of Trustees has the right to cause the involuntary redemption of the shares held
in any account if the aggregate net asset value of those shares is less than $200 or such lesser amount as the Board may
fix. The Board of Trustees will not cause the involuntary redemption of shares in an account if the aggregate net asset
value of such shares has fallen below the stated minimum solely as a result of market fluctuations. If the Board exercises
this right, it may also fix the requirements for any notice to be given to the shareholders in question (not less than 30
days). The Board may alternatively set requirements for the shareholder to increase the investment, or set other terms and
conditions so that the shares would not be involuntarily redeemed.
Transfers of Shares. A transfer of shares to a different registration is not an event that triggers the payment of sales
charges. Therefore, shares are not subject to the payment of a contingent deferred sales charge of any class at the time of
transfer to the name of another person or entity. It does not matter whether the transfer occurs by absolute assignment,
gift or bequest, as long as it does not involve, directly or indirectly, a public sale of the shares. When shares subject
to a contingent deferred sales charge are transferred, the transferred shares will remain subject to the contingent
deferred sales charge. It will be calculated as if the transferee shareholder had acquired the transferred shares in the
same manner and at the same time as the transferring shareholder.
If less than all shares held in an account are transferred, and some but not all shares in the account would be
subject to a contingent deferred sales charge if redeemed at the time of transfer, the priorities described in the
Prospectus under "How to Buy Shares" for the imposition of the Class B, Class C and Class X contingent deferred sales
charge will be followed in determining the order in which shares are transferred.
Special Arrangements for Repurchase of Shares from Dealers and Brokers. The Distributor is the Fund's agent to repurchase
its shares from authorized dealers or brokers on behalf of their customers. Shareholders should contact their broker or
dealer to arrange this type of redemption. The repurchase price per share will be the net asset value next computed after
the Distributor receives an order placed by the dealer or broker. However, if the Distributor receives a repurchase order
from a dealer or broker after the close of The New York Stock Exchange on a regular business day, it will be processed at
that day's net asset value if the order was received by the dealer or broker from its customers prior to the time the
Exchange closes. Normally, the Exchange closes at 4:00 P.M., but may do so earlier on some days. Additionally, the order
must have been transmitted to and received by the Distributor prior to its close of business that day (normally 5:00 P.M.).
Ordinarily, for accounts redeemed by a broker-dealer under this procedure, payment will be made within three
business days after the shares have been redeemed upon the Distributor's receipt of the required redemption documents in
proper form. The signature(s) of the registered owners on the redemption documents must be guaranteed as described in the
Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of the Fund valued at $5,000 or more can authorize the
Transfer Agent to redeem shares (having a value of at least $50) automatically on a monthly, quarterly, semi-annual or
annual basis under an Automatic Withdrawal Plan. Shares will be redeemed three business days prior to the date requested by
the shareholder for receipt of the payment. Automatic withdrawals of up to $1,500 per month may be requested by telephone
if payments are to be made by check payable to all shareholders of record. Payments must also be sent to the address of
record for the account and the address must not have been changed within the prior 30 days. Required minimum distributions
from OppenheimerFunds-sponsored retirement plans may not be arranged on this basis.
Payments are normally made by check, but shareholders having AccountLink privileges (see "How To Buy Shares") may
arrange to have Automatic Withdrawal Plan payments transferred to the bank account designated on the Account Application or
by signature-guaranteed instructions sent to the Transfer Agent. Shares are normally redeemed pursuant to an Automatic
Withdrawal Plan three business days before the payment transmittal date you select in the Account Application. If a
contingent deferred sales charge applies to the redemption, the amount of the check or payment will be reduced accordingly.
The Fund cannot guarantee receipt of a payment on the date requested. The Fund reserves the right to amend,
suspend or discontinue offering these plans at any time without prior notice. Because of the sales charge assessed on Class
A share purchases, shareholders should not make regular additional Class A share purchases while participating in an
Automatic Withdrawal Plan. Class B, Class C and Class X shareholders should not establish withdrawal plans, because of the
potential imposition of the contingent deferred sales charge on such withdrawals (except where the contingent deferred
sales charge is waived as described in Appendix C to this Statement of Additional Information.)
By requesting an Automatic Withdrawal or Exchange Plan, the shareholder agrees to the terms and conditions that
apply to such plans, as stated below. These provisions may be amended from time to time by the Fund and/or the Distributor.
When adopted, any amendments will automatically apply to existing Plans.
|X| Automatic Exchange Plans. Shareholders can authorize the Transfer Agent to exchange a pre-determined amount of
shares of the Fund for shares (of the same class) of other Xxxxxxxxxxx funds automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Exchange Plan. The minimum amount that may be exchanged to each other fund
account is $25. Instructions should be provided on the OppenheimerFunds Application or signature-guaranteed instructions.
Exchanges made under these plans are subject to the restrictions that apply to exchanges as set forth in "How to Exchange
Shares" in the Prospectus and below in this Statement of Additional Information.
|X| Automatic Withdrawal Plans. Fund shares will be redeemed as necessary to meet withdrawal payments. Shares
acquired without a sales charge will be redeemed first. Shares acquired with reinvested dividends and capital gains
distributions will be redeemed next, followed by shares acquired with a sales charge, to the extent necessary to make
withdrawal payments. Depending upon the amount withdrawn, the investor's principal may be depleted. Payments made under
these plans should not be considered as a yield or income on your investment.
The Transfer Agent will administer the investor's Automatic Withdrawal Plan as agent for the shareholder(s) (the
"Planholder") who executed the Plan authorization and application submitted to the Transfer Agent. Neither the Fund nor the
Transfer Agent shall incur any liability to the Planholder for any action taken or not taken by the Transfer Agent in good
faith to administer the Plan. Share certificates will not be issued for shares of the Fund purchased for and held under the
Plan, but the Transfer Agent will credit all such shares to the account of the Planholder on the records of the Fund. Any
share certificates held by a Planholder may be surrendered unendorsed to the Transfer Agent with the Plan application so
that the shares represented by the certificate may be held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of capital gains must be reinvested in shares of
the Fund, which will be done at net asset value without a sales charge. Dividends on shares held in the account may be paid
in cash or reinvested.
Shares will be redeemed to make withdrawal payments at the net asset value per share determined on the redemption
date. Checks or AccountLink payments representing the proceeds of Plan withdrawals will normally be transmitted three
business days prior to the date selected for receipt of the payment, according to the choice specified in writing by the
Planholder. Receipt of payment on the date selected cannot be guaranteed.
The amount and the interval of disbursement payments and the address to which checks are to be mailed or
AccountLink payments are to be sent may be changed at any time by the Planholder by writing to the Transfer Agent. The
Planholder should allow at least two weeks' time after mailing such notification for the requested change to be put in
effect. The Planholder may, at any time, instruct the Transfer Agent by written notice to redeem all, or any part of, the
shares held under the Plan. That notice must be in proper form in accordance with the requirements of the then-current
Prospectus of the Fund. In that case, the Transfer Agent will redeem the number of shares requested at the net asset value
per share in effect and will mail a check for the proceeds to the Planholder.
The Planholder may terminate a Plan at any time by writing to the Transfer Agent. The Fund may also give
directions to the Transfer Agent to terminate a Plan. The Transfer Agent will also terminate a Plan upon its receipt of
evidence satisfactory to it that the Planholder has died or is legally incapacitated. Upon termination of a Plan by the
Transfer Agent or the Fund, shares that have not been redeemed will be held in uncertificated form in the name of the
Planholder. The account will continue as a dividend-reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder, his or her executor or guardian, or another authorized person.
To use shares held under the Plan as collateral for a debt, the Planholder may request issuance of a portion of
the shares in certificated form. Upon written request from the Planholder, the Transfer Agent will determine the number of
shares for which a certificate may be issued without causing the withdrawal checks to stop. However, should such
uncertificated shares become exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund, the Planholder will be deemed to have
appointed any successor transfer agent to act as agent in administering the Plan.
How to Exchange Shares
As stated in the Prospectus, shares of a particular class of Xxxxxxxxxxx funds having more than one class of shares may be
exchanged only for shares of the same class of other Xxxxxxxxxxx funds. Shares of Xxxxxxxxxxx funds that have a single
class without a class designation are deemed "Class A" shares for this purpose. You can obtain a current list showing which
funds offer which classes by calling the Distributor.
o All of the Xxxxxxxxxxx funds currently offer Class A, B, C and N shares except for: Xxxxxxxxxxx Money Market Fund,
Inc., Centennial Money Market Trust, Centennial Tax Exempt Trust, Centennial Government Trust, Centennial New York
Tax Exempt Trust, Centennial California Tax Exempt Trust, and Centennial America Fund, L.P., which only offer
Class A shares and Xxxxxxxxxxx Municipal Bond Fund, Xxxxxxxxxxx Senior Floating Rate Fund, Xxxxxxxxxxx New Jersey
Municipal Fund, Xxxxxxxxxxx New York Municipal Fund, Xxxxxxxxxxx Pennsylvania Municipal Fund, Xxxxxxxxxxx
Intermediate Municipal Fund, Rochester National Municipals, Rochester Fund Municipals and Limited Term New York
Municipal Fund which do not offer Class N shares.
o Only certain Xxxxxxxxxxx funds currently offer Class Y shares. Class Y shares of Xxxxxxxxxxx Real Asset Fund may
not be exchanged for shares of any other fund.
o Class B, Class C and Class N shares of Xxxxxxxxxxx Cash Reserves are generally available only by exchange from the
same class of shares of other Xxxxxxxxxxx funds or through OppenheimerFunds-sponsored 401(k) plans.
o Class M shares of Xxxxxxxxxxx Convertible Securities Fund may be exchanged only for Class A shares of other
Xxxxxxxxxxx funds. They may not be acquired by exchange of shares of any class of any other Xxxxxxxxxxx funds
except Class A shares of Xxxxxxxxxxx Money Market Fund or Xxxxxxxxxxx Cash Reserves acquired by exchange of Class
M shares.
o Class X shares of Limited Term New York Municipal Fund may be exchanged only for Class B shares of other
Xxxxxxxxxxx funds and no exchanges may be made to Class X shares.
o Shares of Xxxxxxxxxxx Capital Preservation Fund may not be exchanged for shares of Xxxxxxxxxxx Money Market Fund,
Inc., Xxxxxxxxxxx Cash Reserves or Xxxxxxxxxxx Limited-Term Government Fund. Only participants in certain
retirement plans may purchase shares of Xxxxxxxxxxx Capital Preservation Fund, and only those participants may
exchange shares of other Xxxxxxxxxxx funds for shares of Xxxxxxxxxxx Capital Preservation Fund.
o Class A shares of Xxxxxxxxxxx Senior Floating Rate Fund are not available by exchange of shares of Xxxxxxxxxxx
Money Market Fund or Class A shares of Xxxxxxxxxxx Cash Reserves. If any Class A shares of another Xxxxxxxxxxx
fund that are exchanged for Class A shares of Xxxxxxxxxxx Senior Floating Rate Fund are subject to the Class A
contingent deferred sales charge of the other Xxxxxxxxxxx fund at the time of exchange, the holding period for
that Class A contingent deferred sales charge will carry over to the Class A shares of Xxxxxxxxxxx Senior Floating
Rate Fund acquired in the exchange. The Class A shares of Xxxxxxxxxxx Senior Floating Rate Fund acquired in that
exchange will be subject to the Class A Early Withdrawal Charge of Xxxxxxxxxxx Senior Floating Rate Fund if they
are repurchased before the expiration of the holding period.
o Shares of Xxxxxxxxxxx Select Managers Mercury Advisors S&P Index Fund and Xxxxxxxxxxx Select Managers QM Active
Balanced Fund are only available to retirement plans and are available only by exchange from the same class of
shares of other Xxxxxxxxxxx funds held by retirement plans.
Class A shares of Xxxxxxxxxxx funds may be exchanged at net asset value for shares of any money market fund
offered by the Distributor. Shares of any money market fund purchased without a sales charge may be exchanged for shares of
Xxxxxxxxxxx funds offered with a sales charge upon payment of the sales charge. They may also be used to purchase shares of
Xxxxxxxxxxx funds subject to an early withdrawal charge or contingent deferred sales charge.
Shares of Xxxxxxxxxxx Money Market Fund, Inc. purchased with the redemption proceeds of shares of other mutual
funds (other than funds managed by the Manager or its subsidiaries) redeemed within the 30 days prior to that purchase may
subsequently be exchanged for shares of other Xxxxxxxxxxx funds without being subject to an initial sales charge or
contingent deferred sales charge. To qualify for that privilege, the investor or the investor's dealer must notify the
Distributor of eligibility for this privilege at the time the shares of Xxxxxxxxxxx Money Market Fund, Inc. are purchased.
If requested, they must supply proof of entitlement to this privilege.
Shares of the Fund acquired by reinvestment of dividends or distributions from any of the other Xxxxxxxxxxx funds
or from any unit investment trust for which reinvestment arrangements have been made with the Distributor may be exchanged
at net asset value for shares of any of the Xxxxxxxxxxx funds.
The Fund may amend, suspend or terminate the exchange privilege at any time. Although the Fund may impose these
changes at any time, it will provide you with notice of those changes whenever it is required to do so by applicable law.
It may be required to provide 60 days' notice prior to materially amending or terminating the exchange privilege. That 60
day notice is not required in extraordinary circumstances.
|X| How Exchanges Affect Contingent Deferred Sales Charges. No contingent deferred sales charge is imposed on
exchanges of shares of any class purchased subject to a contingent deferred sales charge. However, when Class A shares
acquired by exchange of Class A shares of other Xxxxxxxxxxx funds purchased subject to a Class A contingent deferred sales
charge are redeemed within 18 months of the end of the calendar month of the initial purchase of the exchanged Class A
shares, the Class A contingent deferred sales charge is imposed on the redeemed shares. The Class B contingent deferred
sales charge is imposed on Class B shares acquired by exchange if they are redeemed within six years of the initial
purchase of the exchanged Class B shares. The Class C contingent deferred sales charge is imposed on Class C shares
acquired by exchange if they are redeemed within 12 months of the initial purchase of the exchanged Class C shares.
When Class B, Class C or Class X shares are redeemed to effect an exchange, the priorities described in "How To
Buy Shares" in the Prospectus for the imposition of the Class B or the Class C contingent deferred sales charge will be
followed in determining the order in which the shares are exchanged. Before exchanging shares, shareholders should take
into account how the exchange may affect any contingent deferred sales charge that might be imposed in the subsequent
redemption of remaining shares.
Shareholders owning shares of more than one Class must specify which class of shares they wish to exchange.
|X| Limits on Multiple Exchange Orders. The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of more than one account. The Fund may accept requests for exchanges of up
to 50 accounts per day from representatives of authorized dealers that qualify for this privilege.
|X| Telephone Exchange Requests. When exchanging shares by telephone, a shareholder must have an existing account
in the fund to which the exchange is to be made. Otherwise, the investors must obtain a prospectus of that fund before the
exchange request may be submitted. If all telephone lines are busy (which might occur, for example, during periods of
substantial market fluctuations), shareholders might not be able to request exchanges by telephone and would have to submit
written exchange requests.
|X| Processing Exchange Requests. Shares to be exchanged are redeemed on the regular business day the Transfer
Agent receives an exchange request in proper form (the "Redemption Date"). Normally, shares of the fund to be acquired are
purchased on the Redemption Date, but such purchases may be delayed by either fund up to five business days if it
determines that it would be disadvantaged by an immediate transfer of the redemption proceeds. The Fund reserves the right,
in its discretion, to refuse any exchange request that may disadvantage it. For example, if the receipt of multiple
exchange requests from a dealer might require the disposition of portfolio securities at a time or at a price that might be
disadvantageous to the Fund, the Fund may refuse the request.
When you exchange some or all of your shares from one fund to another, any special account feature such as an
Asset Builder Plan or Automatic Withdrawal Plan will be switched to the new fund account unless you tell the Transfer Agent
not to do so. However, special redemption and exchange features such as Automatic Exchange Plans and Automatic Withdrawal
Plans cannot be switched to an account in Xxxxxxxxxxx Senior Floating Rate Fund.
In connection with any exchange request, the number of shares exchanged may be less than the number requested if
the exchange or the number requested would include shares subject to a restriction cited in the Prospectus or this
Statement of Additional Information, or would include shares covered by a share certificate that is not tendered with the
request. In those cases, only the shares available for exchange without restriction will be exchanged.
The different Xxxxxxxxxxx funds available for exchange have different investment objectives, policies and risks. A
shareholder should assure that the fund selected is appropriate for his or her investment and should be aware of the tax
consequences of an exchange. For federal income tax purposes, an exchange transaction is treated as a redemption of shares
of one fund and a purchase of shares of another. "Reinvestment Privilege," above, discusses some of the tax consequences of
reinvestment of redemption proceeds in such cases. The Fund, the Distributor, and the Transfer Agent are unable to provide
investment, tax or legal advice to a shareholder in connection with an exchange request or any other investment transaction.
Tax Status of the Fund's Dividends, Distributions and Redemptions of Shares.
The federal tax treatment of the Fund's distributions is briefly highlighted in the Prospectus. The following is only a
summary of certain additional tax considerations generally affecting the Fund and its shareholders.
The tax discussion in the Prospectus and this Statement of Additional Information is based on tax law in effect on
the date of the Prospectus and this Statement of Additional Information. Those laws and regulations may be changed by
legislative, judicial, or administrative action, possible with retroactive effect. State and local tax treatment of
exempt-interest dividends and potential capital gain distributions from regulated investment companies may differ from the
treatment under the Internal Revenue Code described below. Potential purchasers of shares of the Fund are urged to consult
their tax advisers with specific reference to their own tax circumstances as well as the consequences of federal, state and
local tax rules affecting an investment in the Fund.
|X| Qualification as a Regulated Investment Company. The Fund has elected to be taxed as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended. As a regulated investment company, the Fund
is not subject to federal income tax on the portion of its net investment income (that is, taxable interest, dividends, and
other taxable ordinary income, net of expenses) and capital gain net income (that is, the excess of net long-term capital
gains over net short-term capital losses) that it distributes to shareholders.
If the Fund qualifies as a "regulated investment company" under the Internal Revenue Code, it will not be liable
for federal income tax on amounts it pays as dividends and other distributions. That qualification enables the Fund to
"pass through" its income and realized capital gains to shareholders without having to pay tax on them. The Fund qualified
as a regulated investment company in its last fiscal year and intends to qualify in future years, but reserves the right
not to qualify. The Internal Revenue Code contains a number of complex tests to determine whether the Fund qualifies. The
Fund might not meet those tests in a particular year. If it does not qualify, the Fund will be treated for tax purposes as
an ordinary corporation and will receive no tax deduction for payments of dividends and other distributions made to
shareholders. In such an instance, all of the Fund's dividends would be taxable to shareholders.
To qualify as a regulated investment company, the Fund must distribute at least 90% of its investment company
taxable income (in brief, net investment income and the excess of net short-term capital gain over net long-term capital
loss) and at least 90% of its net tax-exempt income for the taxable year. The Fund must also satisfy certain other
requirements of the Internal Revenue Code, some of which are described below. Distributions by the Fund made during the
taxable year or, under specified circumstances, within twelve months after the close of the taxable year, will be
considered distributions of income and gains for the taxable year and will therefore count toward satisfaction of the
above-mentioned requirement.
To qualify as a regulated investment company, the Fund must derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition of stock
or securities or foreign currencies (to the extent such currency gains are directly related to the regulated investment
company's principal business of investing in stock or securities) and certain other income.
In addition to satisfying the requirements described above, the Fund must satisfy an asset diversification test in
order to qualify as a regulated investment company. Under that test, at the close of each quarter of the Fund's taxable
year, at least 50% of the value of the Fund's assets must consist of cash and cash items (including receivables), U.S.
government securities, securities of other regulated investment companies, and securities of other issuers. As to each of
those issuers, the Fund must not have invested more than 5% of the value of the Fund's total assets in securities of each
such issuer and the Fund must not hold more than 10% of the outstanding voting securities of each such issuer. No more than
25% of the value of its total assets may be invested in the securities of any one issuer (other than U.S. government
securities and securities of other regulated investment companies), or in two or more issuers which the Fund controls and
which are engaged in the same or similar trades or businesses. For purposes of this test, obligations issued or guaranteed
by certain agencies or instrumentalities of the U.S. government are treated as U.S. government securities.
|X| Taxation of Fund Distributions. The Fund intends to qualify under the Internal Revenue Code during each fiscal
year to pay "exempt-interest dividends" to its shareholders. To satisfy this qualification, at the end of each quarter of
its taxable year, at least 50% of the value of the Fund's total assets consists of obligations as defined in Section 103(a)
of the Internal Revenue Code, as amended. Exempt-interest dividends that are derived from net investment income earned by
the Fund on municipal securities will be excludable from gross income of shareholders for federal income tax purposes. To
the extent the Fund fails to qualify to pay exempt-interest dividends in any given form, such dividends would be included
in the gross income of shareholders for federal income tax purposes.
Net investment income includes the allocation of amounts of income from the municipal securities in the Fund's
portfolio that are free from federal income taxes. This allocation will be made by the use of one designated percentage
applied uniformly to all income dividends paid during the Fund's tax year. That designation will normally be made following
the end of each fiscal year as to income dividends paid in the prior year. The percentage of income designated as
tax-exempt may substantially differ from the percentage of the Fund's income that was tax-exempt for a given period.
A portion of the exempt-interest dividends paid by the Fund may be an item of tax preference for shareholders
subject to the federal alternative minimum tax. The amount of any dividends attributable to tax preference items for
purposes of the alternative minimum tax will be identified when tax information is distributed by the Fund.
A shareholder receiving a dividend from income earned by the Fund from one or more of the following sources must
treat the dividend as ordinary income in the computation of the shareholder's gross income, regardless of whether the
dividend is reinvested:
(1) certain taxable temporary investments (such as certificates of deposit, repurchase agreements, commercial paper
and obligations of the U.S. government, its agencies and instrumentalities);
(2) income from securities loans;
(3) income or gains from options or futures,
(4) any net short-term capital gain; and
(5) any market discount amortization on tax-exempt bonds.
The Fund's dividends will not be eligible for the dividends-received deduction for corporations. Shareholders
receiving Social Security benefits should be aware that exempt-interest dividends are a factor in determining whether (and
the extent to which) such benefits are subject to federal income tax. Losses realized by shareholders on the redemption of
Fund shares within six months of purchase will be disallowed for federal income tax purposes to the extent of
exempt-interest dividends received on such shares.
In any year in which the Fund qualifies as a regulated investment company under the Internal Revenue Code, the
Fund will also be exempt from New York corporate income and franchise taxes. It will also be qualified under New York law
to pay exempt-interest dividends that will be exempt from Xxx Xxxx Xxxxx xxx Xxx Xxxx Xxxx personal income taxes. That
exemption applies to the extent that the Fund's distributions are attributable to interest on New York municipal
securities. Distributions from the Fund attributable to income from sources other than New York municipal securities and
U.S. government obligations will generally be subject to New York State and New York City personal income taxes as ordinary
income.
Distributions by the Fund from investment income and long- and short-term capital gains will generally not be
excludable from taxable net investment income in determining New York corporate franchise tax and New York City general
corporation tax for corporate shareholders of the Fund. Additionally, certain distributions paid to corporate shareholders
of the Fund may be includable in income subject to the New York alternative minimum tax.
|X| Excise Tax on Regulated Investment Companies. Under the Internal Revenue Code, by December 31 each year, the
Fund must distribute 98% of its taxable investment income earned from January 1 through December 31 of that year and 98% of
its capital gains realized in the period from November 1 of the prior year through October 31 of the current year. If it
does not, the Fund must pay an excise tax on the amounts not distributed. It is presently anticipated that the Fund will
meet those requirements. To meet this requirement, in certain circumstances the Fund might be required to liquidate
portfolio investments to make sufficient distributions to avoid excise tax liability. However, the Board of Trustees and
the Manager might determine in a particular year that it would be in the best interests of shareholders for the Fund not to
make such distributions at the required levels and to pay the excise tax on the undistributed amounts. That would reduce
the amount of income or capital gains available for distribution to shareholders.
The Fund may either retain or distribute to shareholders its net capital gain for each taxable year. The Fund
currently intends to distribute any such amounts. If the net capital gain is distributed and designated as a capital gain
distribution, it will be taxable to shareholders as a long-term capital gain and will be properly identified in reports
sent to shareholders in January of each year. Such treatment will apply no matter how long the shareholder has held his or
her shares or whether that gain was recognized by the Fund before the shareholder acquired his or her shares.
If the Fund elects to retain its net capital gain, the Fund will be subject to tax on it at the 35% corporate tax
rate. If the Fund elects to retain its net capital gain, it is expected that the Fund also will elect to have shareholders
of record on the last day of its taxable year treated as if each received a distribution of their pro rata share of such
gain. As a result, each shareholder will be required to report his or her pro rata share of such gain on their tax return
as long-term capital gain, will receive a refundable tax credit for his/her pro rata share of tax paid by the Fund on the
gain, and will increase the tax basis for his/her shares by an amount equal to the deemed distribution less the tax credit.
Distributions by the Fund will be treated in the manner described above regardless of whether the distributions
are paid in cash or reinvested in additional shares of the Fund (or of another fund). Shareholders receiving a
distribution in the form of additional shares will be treated as receiving a distribution in an amount equal to the fair
market value of the shares received, determined as of the reinvestment date.
The Fund will be required in certain cases to withhold 30% (29% for payments after December 31, 2003) of ordinary
income dividends (not including "exempt-interest dividends"), capital gains distributions (including short-term and
long-term) and the proceeds of the redemption of shares, paid to any shareholder (1) who has failed to provide a correct
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taxpayer identification number or to properly certify that number when required, (2) who is subject to backup withholding
for failure to report the receipt of interest or dividend income properly, or (3) who has failed to certify to the Fund
that the shareholder is not subject to backup withholding or is an "exempt recipient" (such as a corporation). All income
and any tax withheld by the Fund is remitted by the Fund to the U.S. Treasury and is identified in reports mailed to
shareholders in January of each year.
|X| Tax Effects of Redemptions of Shares. If a shareholder redeems all or a portion of his/her shares, the
-
shareholder will recognize a gain or loss on the redeemed shares in an amount equal to the difference between the proceeds
of the redeemed shares and the shareholder's adjusted tax basis in the shares. All or a portion of any loss recognized in
that manner may be disallowed if the shareholder purchases other shares of the Fund within 30 days before or after the
redemption.
In general, any gain or loss arising from the redemption of shares of the Fund will be considered capital gain or
loss, if the shares were held as a capital asset. It will be long-term capital gain or loss if the shares were held for
more than one year. However, any capital loss arising from the redemption of shares held for six months or less will be
treated as a long-term capital loss to the extent of the amount of capital gain dividends received on those shares. Special
holding period rules under the Internal Revenue Code apply in this case to determine the holding period of shares and there
are limits on the deductibility of capital losses in any year.
|X| Foreign Shareholders. Under U.S. tax law, taxation of a shareholder who is a foreign person (to include, but
limited to, a nonresident alien individual, a foreign trust, a foreign estate, a foreign corporation, or a foreign
partnership) primarily depends on whether the foreign person's income from the Fund is effectively connected with the
conduct of a U.S. trade or business. Typically, ordinary income dividends paid (not including exempt-interest dividends
paid by the Fund) from a mutual fund are not considered "effectively connected" income.
Ordinary income dividends that are paid by the Fund (and are deemed not "effectively connected income") to foreign
persons will be subject to a U.S. tax withheld by the Fund at a rate of 30%, provided the Fund obtains a properly completed
and signed Certificate of Foreign Status. The tax rate may be reduced if the foreign person's country of residence has a
tax treaty with the U.S. allowing for a reduced tax rate on ordinary income dividends paid by the Fund. All income and any
tax withheld by the Fund is remitted by the Fund to the U.S. Treasury and is identified in reports mailed to shareholders
in March of each year.
If the ordinary income dividends from the Fund are effectively connected with the conduct of a U.S. trade or
---
business, then the foreign person may claim an exemption from the U.S. tax described above provided the Fund obtains a
properly completed and signed Certificate of Foreign Status.
If the foreign person fails to provide a certification of her/her foreign status, the Fund will be required to
withhold U.S. tax at a rate of 30% (29% for payments after December 31, 2003) on ordinary income dividends (not including
"exempt-interest dividends"), capital gains distributions (including short-term and long-term) and the proceeds of the
redemption of shares, paid to any foreign person. All income and any tax withheld (in this situation) by the Fund is
remitted by the Fund to the U.S. Treasury and is identified in reports mailed to shareholders in January of each year.
The tax consequences to foreign persons entitled to claim the benefits of an applicable tax treaty may be
different from those described herein. Foreign shareholders are urged to consult their own tax advisors or the U.S.
Internal Revenue Service with respect to the particular tax consequences to them of an investment in the Fund, including
the applicability of the U.S. withholding taxes described above.
Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect to reinvest all dividends and/or capital gains
distributions in shares of the same class of any of the other Xxxxxxxxxxx funds listed above. Reinvestment will be made at
net asset value without sales charge. To elect this option, the shareholder must notify the Transfer Agent in writing and
must have an existing account in the fund selected for reinvestment. Otherwise the shareholder must first obtain a
prospectus for that fund and an application from the Transfer Agent to establish an account. The investment will be made at
the net asset value per share in effect at the close of business on the payable date of the dividend or distribution.
Dividends and/or other distributions from certain of the other Xxxxxxxxxxx funds may be invested in shares of this Fund on
the same basis.
Additional Information About the Fund
The Distributor. The Fund's shares are sold through dealers, brokers and other financial institutions that have a sales
agreement with OppenheimerFunds Distributor, Inc. a subsidiary of the Manager that acts as the Fund's Distributor. The
Distributor also distributes shares of the other Xxxxxxxxxxx funds and is sub-distributor for funds managed by a subsidiary
of the Manager.
The Transfer Agent. OppenheimerFunds Services, the Fund's Transfer Agent, is a division of the Manager. It is responsible
for maintaining the Fund's shareholder registry and shareholder accounting records, and for paying dividends and
distributions to shareholders. It also handles shareholder servicing and administrative functions. It serves as the
Transfer Agent for an annual per account fee. It also acts as shareholder servicing agent for the other Xxxxxxxxxxx funds.
Shareholders should direct inquiries about their accounts to the Transfer Agent at the address and toll-free numbers shown
on the back cover.
The Custodian Bank. Citibank, N.A. is the custodian of the Fund's assets. The custodian's responsibilities include
safeguarding and controlling the Fund's portfolio securities and handling the delivery of such securities to and from the
Fund. It will be the practice of the Fund to deal with the custodian in a manner uninfluenced by any banking relationship
the custodian may have with the Manager and its affiliates. The Fund's cash balances with the custodian in excess of
$100,000 are not protected by federal deposit insurance. Those uninsured balances at times may be substantial.
Independent Auditors. KPMG LLP are the independent auditors of the Fund. They audit the Fund's financial statements and
perform other related audit services. They also act as auditors for certain other funds advised by the Manager and its
affiliates.
INDEPENDENT AUDITORS' REPORT
===============================================================================
To the Board of Trustees and Shareholders of
Rochester Portfolio Series:
We have audited the accompanying statement of assets and liabilities of Limited
Term New York Municipal Fund (the sole portfolio constituting Rochester
Portfolio Series), including the statement of investments, as of December 31,
2001, and the related statement of operations for the year then ended, the
statements of changes in net assets and the financial highlights for each of
the two years in the period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for each of
the three years in the period ended December 31, 1999, were audited by other
auditors whose report dated January 24, 2000, expressed an unqualified opinion
on this information.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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 December 31, 2001, 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 position of
Limited Term New York Municipal Fund as of December 31, 2001, the results of
its operations for the year then ended, the changes in its net assets and the
financial highlights for each of the two years in the period then ended, in
conformity with accounting principles generally accepted in the United States
of America.
KPMG LLP
Denver, Colorado
January 18, 2002
STATEMENT OF INVESTMENTS December 31, 2001
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
=====================================================================================================================
Municipal Bonds and Notes--99.2%
---------------------------------------------------------------------------------------------------------------------
New York--85.0%
$ 5,000 Albany GO 7.000% 01/15/2010 01/15/2002(b) $ 5,077
---------------------------------------------------------------------------------------------------------------------
258,527 Albany Hsg. Authority 0.000 10/01/2012 10/01/2002(a) 86,209
---------------------------------------------------------------------------------------------------------------------
250,000 Albany Hsg. Authority 6.250 10/01/2012(s) 10/01/2007(b) 264,830
---------------------------------------------------------------------------------------------------------------------
810,000 Albany XXX (Albany Medical Center) 5.600 05/01/2005 11/27/2003(c) 810,737
---------------------------------------------------------------------------------------------------------------------
1,800,000 Albany XXX (X. Xxxxxxx Office Park) 5.250 03/01/2018(s) 03/01/2003(f) 1,807,074
---------------------------------------------------------------------------------------------------------------------
125,000 Albany XXX (Port of Albany) 6.250 02/01/2005 08/24/2003(c) 125,067
---------------------------------------------------------------------------------------------------------------------
50,000 Albany XXX (Spectrapark) 7.500 12/01/2003 06/01/2002(b) 50,428
---------------------------------------------------------------------------------------------------------------------
3,525,000 Albany XXX (Spectrapark) 7.600 12/01/2009(s) 06/01/2002(b) 3,624,052
---------------------------------------------------------------------------------------------------------------------
75,000 Albany XXX
(University Heights-Albany Law School) 6.750 12/01/2019(s) 12/01/2009(b) 85,182
---------------------------------------------------------------------------------------------------------------------
1,655,000 Albany XXX
(University Heights-Albany Pharmacy) 6.750 12/01/2019(s) 12/01/2009(b) 1,872,666
---------------------------------------------------------------------------------------------------------------------
8,990,000 Albany Municipal Water Finance Authority 5.500 12/01/2022(s) 12/01/2005(b) 9,065,336
---------------------------------------------------------------------------------------------------------------------
1,000,000 Albany Municipal Water Finance Authority 6.375 12/01/2017(s) 12/01/2009(b) 1,114,790
---------------------------------------------------------------------------------------------------------------------
40,000 Albany Parking Authority 0.000 09/15/2002 09/15/2002 39,352
---------------------------------------------------------------------------------------------------------------------
25,000 Albany Parking Authority 0.000 09/15/2003 09/15/2003 23,756
---------------------------------------------------------------------------------------------------------------------
625,000 Albany Parking Authority 0.000 09/15/2004 09/15/2004 569,681
---------------------------------------------------------------------------------------------------------------------
20,000 Albany Parking Authority 0.000 09/15/2005 09/15/2005 17,336
---------------------------------------------------------------------------------------------------------------------
2,000,000 Albany Parking Authority 5.625 07/15/2020(s) 07/15/2012(b) 2,006,260
---------------------------------------------------------------------------------------------------------------------
3,600,000 Allegany County XXX (Atlantic Richfield) 6.625 09/01/2016 09/01/2002(b) 3,778,164
---------------------------------------------------------------------------------------------------------------------
3,500,000 Allegany County XXX (Houghton College) 5.250 01/15/2018 04/18/2015(c) 3,358,845
---------------------------------------------------------------------------------------------------------------------
1,500,000 Allegany County XXX (Xxxxxxxx College) 5.250 01/15/2024 09/17/2021(c) 1,400,715
---------------------------------------------------------------------------------------------------------------------
1,735,000 Amherst XXX (Daemen College) 5.750 10/01/2011 01/22/2008(c) 1,738,036
---------------------------------------------------------------------------------------------------------------------
950,000 Andpress HDC (Andpress Plaza) 6.600 01/15/2023(s) 08/01/2003(b) 968,316
---------------------------------------------------------------------------------------------------------------------
6,940,000 Babylon XXX (WSNCHS East, Inc.) 6.500 08/01/2019(s) 08/01/2010(b) 7,686,328
---------------------------------------------------------------------------------------------------------------------
100,000 Baldwinsville Devel. Corp. 7.200 06/01/2010(s) 07/01/2002(b) 101,246
---------------------------------------------------------------------------------------------------------------------
200,000 Battery Park City Authority 5.650 12/01/2013(s) 06/01/2002(b) 200,076
---------------------------------------------------------------------------------------------------------------------
250,000 Battery Park City Authority 5.700 11/01/2020 11/01/2005(b) 250,445
---------------------------------------------------------------------------------------------------------------------
50,000 Battery Park City Authority 5.700 11/01/2023 11/01/2005(b) 51,696
---------------------------------------------------------------------------------------------------------------------
1,600,000 Battery Park City Authority 5.750 06/01/2023(s) 06/01/2002(b) 1,627,200
---------------------------------------------------------------------------------------------------------------------
45,000 Battery Park City Authority 5.800 11/01/2022(s) 11/01/2005(b) 45,243
---------------------------------------------------------------------------------------------------------------------
515,000 Xxxxxxxx Volunteer Fire Company 6.000 10/15/2008 01/04/2006(c) 507,347
---------------------------------------------------------------------------------------------------------------------
40,000 Brookhaven GO 6.400 10/01/2010 10/01/2002(b) 42,104
---------------------------------------------------------------------------------------------------------------------
205,000 Brookhaven XXX (Xxxxxxx College) 6.400 03/01/2003 03/01/2003 206,999
---------------------------------------------------------------------------------------------------------------------
785,000 Brookhaven XXX (Stony Brook Foundation) 5.750 11/01/2008 01/18/2006(c) 790,966
---------------------------------------------------------------------------------------------------------------------
505,000 Buffalo GO 6.000 12/01/2015 12/01/2009(b) 579,482
---------------------------------------------------------------------------------------------------------------------
760,000 Carnegie Redevelopment Corp. 6.250 09/01/2005 03/30/2004(c) 758,746
---------------------------------------------------------------------------------------------------------------------
1,550,000 Carnegie Redevelopment Corp. 6.500 09/01/2011 05/17/2009(c) 1,547,520
---------------------------------------------------------------------------------------------------------------------
435,000 Cattaraugus County XXX
(Jamestown Community College) 6.000 07/01/2012(s) 07/01/2010(b) 459,103
---------------------------------------------------------------------------------------------------------------------
60,000 Cayuga County COP
(Auburn Memorial Hospital) 6.000 01/01/2021(s) 01/01/2004(b) 62,228
---------------------------------------------------------------------------------------------------------------------
2,035,000 Chautauqua County Tobacco
Asset Securitization Corp. 6.000 07/01/2012 10/15/2008(c) 2,112,879
---------------------------------------------------------------------------------------------------------------------
3,080,000 Chautauqua County Tobacco
Asset Securitization Corp. 6.500 07/01/2024(s) 07/01/2010(b) 3,292,274
9 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF INVESTMENTS Continued
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
----------------------------------------------------------------------------------------------------------------------
New York Continued
$ 645,000 Xxxxxxx Springs Hospital & Clinic 7.000% 01/01/2005 09/17/2003(c) $ 640,756
----------------------------------------------------------------------------------------------------------------------
1,000,000 Dutchess County XXX (Xxxx College) 7.000 11/01/2017(s) 11/01/2003(b) 1,058,320
----------------------------------------------------------------------------------------------------------------------
2,950,000 Dutchess County XXX
(Vassar Brothers Hospital) 6.500 04/01/2020(s) 04/01/2010(b) 3,122,958
----------------------------------------------------------------------------------------------------------------------
1,175,000 Dutchess County Res Rec (Solid Waste) 6.800 01/01/2010 01/01/2003(a) 1,256,063
----------------------------------------------------------------------------------------------------------------------
50,000 East Irondequoit CSD GO 6.125 05/15/2008 05/15/2002(b) 51,725
----------------------------------------------------------------------------------------------------------------------
50,000 East Rochester UFSD GO 6.750 06/15/2011 06/15/2003(b) 54,057
----------------------------------------------------------------------------------------------------------------------
290,000 Elmira HDC 7.500 08/01/2008 02/01/2002(b) 292,877
----------------------------------------------------------------------------------------------------------------------
20,000 Elmira HDC 7.500 08/01/2009 02/01/2002(b) 20,198
----------------------------------------------------------------------------------------------------------------------
260,000 Erie County XXX (FMC Corp.) 6.000 02/01/2003 08/02/2002(c) 260,543
----------------------------------------------------------------------------------------------------------------------
730,000 Erie County XXX (Medaille College) 7.250 11/01/2010 03/24/2007(c) 734,854
----------------------------------------------------------------------------------------------------------------------
65,000 Erie County XXX (Medaille College) 7.400 12/30/2002 12/30/2002 65,510
----------------------------------------------------------------------------------------------------------------------
285,000 Erie County XXX (Mercy Hospital) 5.900 06/01/2003 12/05/2002(c) 281,834
----------------------------------------------------------------------------------------------------------------------
8,715,000 Erie County Tobacco Asset Securitization Corp. 6.000 07/15/2020 10/03/2009(c) 8,979,413
----------------------------------------------------------------------------------------------------------------------
370,000 Erie County Tobacco Asset Securitization Corp. 6.125 07/15/2030(s) 07/15/2011(b) 384,056
----------------------------------------------------------------------------------------------------------------------
2,170,000 Erie County Tobacco Asset Securitization Corp. 6.250 07/15/2040(s) 07/15/2011(b) 2,272,272
----------------------------------------------------------------------------------------------------------------------
16,825,000 Erie County Tobacco Asset Securitization Corp. 6.500 07/15/2024 07/15/2011(b) 17,925,355
----------------------------------------------------------------------------------------------------------------------
2,945,000 Erie County Tobacco Asset Securitization Corp. 6.750 07/15/2040(s) 07/15/2010(b) 3,159,956
----------------------------------------------------------------------------------------------------------------------
1,000,000 Essex County XXX
(International Paper Company) 5.800 12/01/2019 12/01/2007(b) 1,006,550
----------------------------------------------------------------------------------------------------------------------
385,000 Franklin County XXX (Correctional Facilities) 6.375 11/01/2002 11/01/2002 393,601
----------------------------------------------------------------------------------------------------------------------
1,825,000 Franklin County XXX COP 8.125 08/01/2006 03/28/2005(c) 1,983,738
----------------------------------------------------------------------------------------------------------------------
1,775,000 Franklin County SWMA 6.000 06/01/2005 04/02/2004(c) 1,814,991
----------------------------------------------------------------------------------------------------------------------
1,350,000 Franklin County SWMA 6.125 06/01/2009 12/28/2007(c) 1,380,469
----------------------------------------------------------------------------------------------------------------------
120,000 Franklin County SWMA 6.250 06/01/2015(s) 06/01/2005(b) 122,407
----------------------------------------------------------------------------------------------------------------------
800,000 Xxxxxxxx EHC (Xxxxxxxx Apartments) 11.250 01/01/2015(s) 05/01/2002(b) 824,096
----------------------------------------------------------------------------------------------------------------------
1,040,000 Xxxxxxxxx XXX (South Shore Y JCC) 5.950 11/01/2007 07/02/2005(c) 996,965
----------------------------------------------------------------------------------------------------------------------
2,700,000 Herkimer County XXX (Xxxxxxx Paper)(i) 8.000 01/01/2009 10/28/2005(c) 2,588,868
----------------------------------------------------------------------------------------------------------------------
945,000 Herkimer County XXX (College Foundation) 5.850 11/01/2010 03/20/2007(c) 966,688
----------------------------------------------------------------------------------------------------------------------
2,415,000 Herkimer Hsg. Authority 7.150 03/01/2011 10/19/2005(g) 2,444,632
----------------------------------------------------------------------------------------------------------------------
15,000 Xxxxxx HDC (Providence Xxxx-Xxxxxxxx Court) 6.400 07/01/2012(s) 01/01/2003(b) 15,281
----------------------------------------------------------------------------------------------------------------------
25,000 Xxxxxx HDC (Providence Xxxx-Xxxxxxxx Court) 6.500 01/01/2025(s) 01/01/2003(b) 25,448
----------------------------------------------------------------------------------------------------------------------
325,000 Xxxxxx XXX (Have, Inc.) 7.125 12/01/2007 08/16/2005(c) 321,090
----------------------------------------------------------------------------------------------------------------------
3,410,000 Jamestown Hsg. Authority 6.125 07/01/2010 12/24/2006(c) 3,466,981
----------------------------------------------------------------------------------------------------------------------
2,000,000 Jefferson County XXX
(Champion International) 7.200 12/01/2020 11/15/2002(b) 2,079,200
----------------------------------------------------------------------------------------------------------------------
5,700,000 L.I. Power Authority, Series A 5.500 12/01/2029(s) 06/01/2003(b) 5,766,063
----------------------------------------------------------------------------------------------------------------------
25,000 Liberty GO 8.200 10/15/2018 04/15/2002(b) 25,129
----------------------------------------------------------------------------------------------------------------------
25,000 Liberty GO 8.200 10/15/2019 04/15/2002(b) 25,127
----------------------------------------------------------------------------------------------------------------------
85,000 Xxxxxxx Xxxxxx HDC 7.000 01/01/2022(s) 07/01/2002(b) 85,596
----------------------------------------------------------------------------------------------------------------------
25,000 Xxxxxxx Xxxxxx HDC 7.375 01/01/2023(s) 07/01/2002(b) 25,221
----------------------------------------------------------------------------------------------------------------------
11,268 Xxxxx Fire District #1(i) 7.500 07/01/2002 04/02/2002(c) 11,574
----------------------------------------------------------------------------------------------------------------------
1,300,000 Lockport HDC 6.000 10/01/2018 03/28/2014(c) 1,270,347
----------------------------------------------------------------------------------------------------------------------
1,115,000 Madison County XXX (Morrisville College) 6.750 07/01/2007 12/09/2004(c) 1,146,019
----------------------------------------------------------------------------------------------------------------------
555,000 Madison County XXX
(Oneida Healthcare Center) 5.300 07/01/2005 01/21/2004(c) 590,370
10 | LIMITED TERM NEW YORK MUNICIPAL FUND
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
-------------------------------------------------------------------------------------------------------------------
New York Continued
$ 2,260,000 Madison County XXX
(Oneida Healthcare Center) 5.500% 02/01/2016 02/01/2013(b) $ 2,317,427
-------------------------------------------------------------------------------------------------------------------
220,000 Xxxxxx Hsg. Corp. 8.250 08/15/2011(s) 02/15/2002(b) 223,848
-------------------------------------------------------------------------------------------------------------------
480,000 Xxxxxxxxx XXX (Fleurchem, Inc.)(i) 7.125 12/01/2008 10/23/2005(c) 480,293
-------------------------------------------------------------------------------------------------------------------
1,220,000 Middletown XXX
(Southwinds Retirement Home) 5.875 03/01/2007 08/24/2004(c) 1,185,767
-------------------------------------------------------------------------------------------------------------------
310,000 Middletown XXX
(Southwinds Retirement Home) 7.250 03/01/2003 09/05/2002(c) 321,247
-------------------------------------------------------------------------------------------------------------------
5,000 Monroe County Airport Authority (GRIA) 0.000 01/01/2004 01/01/2004 4,702
-------------------------------------------------------------------------------------------------------------------
7,155,000 Monroe County COP 8.050 01/01/2011(s) 07/01/2002(b) 7,331,728
-------------------------------------------------------------------------------------------------------------------
30,000 Monroe County GO 6.100 05/01/2003 05/01/2002(b) 30,528
-------------------------------------------------------------------------------------------------------------------
1,990,000 Monroe County XXX (Xx Xxxx Center) 6.125 12/15/2008 03/12/2006(c) 2,007,412
-------------------------------------------------------------------------------------------------------------------
680,000 Monroe County XXX (Xx Xxxx Center) 6.375 12/15/2005 07/12/2004(c) 701,400
-------------------------------------------------------------------------------------------------------------------
1,135,000 Monroe County XXX (Xx Xxxx Center) 6.750 12/15/2010 02/01/2009(c) 1,157,132
-------------------------------------------------------------------------------------------------------------------
960,000 Monroe County XXX
(Xxxxxx Xxxxxx Manufacturing) 5.850 12/01/2006 01/13/2005(c) 921,744
-------------------------------------------------------------------------------------------------------------------
1,285,000 Monroe County XXX
(DePaul Community Facilities) 6.500 02/01/2024(s) 02/01/2004(b) 1,343,827
-------------------------------------------------------------------------------------------------------------------
1,085,000 Monroe County XXX (DePaul Properties) 5.900 09/01/2007 05/04/2005(c) 1,049,705
-------------------------------------------------------------------------------------------------------------------
120,000 Monroe County XXX (Geva Theatre) 7.750 04/01/2002(s) 04/01/2002 120,262
-------------------------------------------------------------------------------------------------------------------
285,000 Monroe County XXX (Geva Theatre) 7.750 04/01/2003 04/01/2003 285,621
-------------------------------------------------------------------------------------------------------------------
1,260,000 Monroe County XXX (Piano Works) 6.625 11/01/2006 12/18/2004(c) 1,278,005
-------------------------------------------------------------------------------------------------------------------
100,000 Monroe County XXX (West End Business) 6.750 12/01/2004 12/19/2003 100,344
-------------------------------------------------------------------------------------------------------------------
14,795,000 Monroe County Tobacco Asset
Securitization Corp. 6.150 06/01/2025 01/22/2009(c) 15,399,820
-------------------------------------------------------------------------------------------------------------------
11,165,000 Monroe County Tobacco Asset
Securitization Corp. 6.375 06/01/2019(s) 06/01/2010(b) 11,778,405
-------------------------------------------------------------------------------------------------------------------
2,305,000 Monroe County Tobacco Asset
Securitization Corp. 6.375 06/01/2035(s) 06/01/2011(b) 2,433,365
-------------------------------------------------------------------------------------------------------------------
730,000 Xxxxxxxxxx County XXX (ASMF) (i,t,u) 6.500 01/15/2003 01/15/2003 463,550
-------------------------------------------------------------------------------------------------------------------
375,000 Mount Xxxxxx XXX (Meadowview) 6.000 06/01/2009 01/31/2007(c) 368,175
-------------------------------------------------------------------------------------------------------------------
1,230,000 MTA Commuter Facilities, Series A 5.500 07/01/2017 07/01/2002(b) 1,233,124
-------------------------------------------------------------------------------------------------------------------
1,000,000 MTA Commuter Facilities, Series A 6.125 07/01/2012(s) 07/01/2002(b) 1,040,330
-------------------------------------------------------------------------------------------------------------------
6,600,000 MTA Commuter Facilities, Series A 6.500 07/01/2016 07/01/2007(b) 7,138,428
-------------------------------------------------------------------------------------------------------------------
2,000,000 MTA Dedicated Tax Fund, Series A 6.125 04/01/2015 04/01/2010(b) 2,209,720
-------------------------------------------------------------------------------------------------------------------
75,000 MTA Service Contract, Series 5 6.000 07/01/2018(s) 07/01/2002(b) 75,064
-------------------------------------------------------------------------------------------------------------------
115,000 MTA Service Contract, Series 5 6.000 07/01/2018(s) 07/01/2002(b) 115,099
-------------------------------------------------------------------------------------------------------------------
45,000 MTA Service Contract, Series 5 6.000 07/01/2018(s) 07/01/2002(b) 45,136
-------------------------------------------------------------------------------------------------------------------
495,000 MTA Service Contract, Series 5 6.000 07/01/2018(s) 07/01/2002(b) 496,500
-------------------------------------------------------------------------------------------------------------------
20,000 MTA Service Contract, Series 5 6.500 07/01/2016(s) 07/01/2002(b) 20,459
-------------------------------------------------------------------------------------------------------------------
125,000 MTA Service Contract, Series 5 6.500 07/01/2016(s) 07/01/2002(b) 128,045
-------------------------------------------------------------------------------------------------------------------
30,000 MTA Service Contract, Series 5 6.900 07/01/2005 07/01/2002(b) 30,753
-------------------------------------------------------------------------------------------------------------------
1,000,000 MTA Service Contract, Series 5 7.000 07/01/2012(s) 07/01/2002(b) 1,024,810
-------------------------------------------------------------------------------------------------------------------
7,135,000 MTA, Series A 6.500 07/01/2016 07/01/2007(b) 7,717,073
-------------------------------------------------------------------------------------------------------------------
15,000 MTA, Series K 6.000 07/01/2016(s) 07/01/2002(b) 15,310
-------------------------------------------------------------------------------------------------------------------
65,000 MTA, Series M 6.000 07/01/2014(s) 07/01/2005(b) 68,639
-------------------------------------------------------------------------------------------------------------------
20,000 Nassau County GO 6.375 05/15/2013 05/15/2002(b) 20,778
11 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF INVESTMENTS Continued
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
--------------------------------------------------------------------------------------------------------------------
New York Continued
$ 710,000 Nassau County GO
Combined Sewer Districts, Series F 7.000% 03/01/2015 03/01/2010(b) $ 822,507
--------------------------------------------------------------------------------------------------------------------
720,000 Nassau County GO
Combined Sewer Districts, Series F 7.000 03/01/2016 03/01/2010(b) 830,383
--------------------------------------------------------------------------------------------------------------------
730,000 Nassau County GO
Combined Sewer Districts, Series F 7.000 03/01/2017 03/01/2010(b) 841,383
--------------------------------------------------------------------------------------------------------------------
740,000 Nassau County GO
Combined Sewer Districts, Series F 7.000 03/01/2018 03/01/2010(b) 850,208
--------------------------------------------------------------------------------------------------------------------
745,000 Nassau County GO
Combined Sewer Districts, Series F 7.000 03/01/2019 03/01/2010(b) 852,697
--------------------------------------------------------------------------------------------------------------------
90,000 Nassau County GO
Combined Sewer Districts, Series F 7.000 03/01/2020 03/01/2010(b) 102,555
--------------------------------------------------------------------------------------------------------------------
1,300,000 Nassau County GO
General Improvement, Series F 6.500 03/01/2018 03/01/2010(b) 1,450,085
--------------------------------------------------------------------------------------------------------------------
1,635,000 Nassau County GO
General Improvement, Series F 6.500 03/01/2019 03/01/2010(b) 1,816,747
--------------------------------------------------------------------------------------------------------------------
705,000 Nassau County GO
General Improvement, Series F 7.000 03/01/2014 03/01/2010(b) 819,837
--------------------------------------------------------------------------------------------------------------------
3,435,000 Nassau County GO
General Improvement, Series F 7.000 03/01/2016 03/01/2010(b) 3,961,620
--------------------------------------------------------------------------------------------------------------------
190,000 Nassau County XXX (ACLD) 7.250 10/01/2004 10/10/2003(c) 191,870
--------------------------------------------------------------------------------------------------------------------
615,000 Nassau County XXX (ALIA--ACDS) 7.000 10/01/2016 11/01/2010(c) 600,695
--------------------------------------------------------------------------------------------------------------------
915,000 Nassau County XXX (ALIA--CMA) 7.000 10/01/2016 11/01/2010(c) 893,717
--------------------------------------------------------------------------------------------------------------------
700,000 Nassau County XXX (ALIA--CRR) 7.000 10/01/2016 11/01/2010(c) 683,718
--------------------------------------------------------------------------------------------------------------------
150,000 Nassau County XXX (ALIA--FREE) 7.000 10/01/2016 11/01/2010(c) 146,511
--------------------------------------------------------------------------------------------------------------------
640,000 Nassau County XXX (ALIA--HKSB) 7.000 10/01/2016 11/01/2010(c) 629,805
--------------------------------------------------------------------------------------------------------------------
470,000 Nassau County XXX (North Shore CFGA) 5.750 05/01/2008 07/25/2005(c) 448,502
--------------------------------------------------------------------------------------------------------------------
1,205,000 Nassau County XXX (United Cerebral Palsy) 5.750 11/01/2007 06/27/2005(c) 1,186,142
--------------------------------------------------------------------------------------------------------------------
2,915,000 Nassau County XXX (United Cerebral Palsy) 5.750 11/01/2009 05/26/2006(c) 2,841,629
--------------------------------------------------------------------------------------------------------------------
680,000 Nassau County Tobacco Settlement Corp. 5.300 07/15/2012 07/15/2003(e) 691,798
--------------------------------------------------------------------------------------------------------------------
545,000 Nassau County Tobacco Settlement Corp. 5.400 07/15/2013 07/15/2004(e) 557,442
--------------------------------------------------------------------------------------------------------------------
615,000 Nassau County Tobacco Settlement Corp. 5.500 07/15/2014 07/15/2005(e) 635,553
--------------------------------------------------------------------------------------------------------------------
645,000 Nassau County Tobacco Settlement Corp. 5.625 07/15/2015 07/15/2006(e) 672,348
--------------------------------------------------------------------------------------------------------------------
590,000 Nassau County Tobacco Settlement Corp. 5.750 07/15/2016 07/15/2007(e) 617,577
--------------------------------------------------------------------------------------------------------------------
150,000 Nassau County Tobacco Settlement Corp. 6.125 07/15/2018 07/15/2010(e) 155,746
--------------------------------------------------------------------------------------------------------------------
250,000 Nassau County Tobacco Settlement Corp. 6.250 07/15/2020 07/15/2010(b) 260,990
--------------------------------------------------------------------------------------------------------------------
190,000 Nassau County Tobacco Settlement Corp. 6.250 07/15/2021(s) 07/15/2010(b) 198,221
--------------------------------------------------------------------------------------------------------------------
8,095,000 Nassau County Tobacco Settlement Corp. 6.400 07/15/2033(s) 07/15/2010(b) 8,526,787
--------------------------------------------------------------------------------------------------------------------
3,500,000 Nassau County Tobacco Settlement Corp. 6.500 07/15/2027(s) 07/15/2010(b) 3,710,175
--------------------------------------------------------------------------------------------------------------------
85,000 New Xxxxxxxx Municipal Hsg. Authority 6.500 12/01/2014(s) 12/01/2011(b) 87,560
--------------------------------------------------------------------------------------------------------------------
210,000 Newark SCHC
(Newark Rose Garden Apartments) 9.000 03/01/2011(s) 03/01/2002(b) 215,500
--------------------------------------------------------------------------------------------------------------------
1,945,000 Newark-Xxxxx Community Hospital 7.600 09/01/2015 05/04/2010(c) 1,886,358
--------------------------------------------------------------------------------------------------------------------
60,000 Newburgh GO 7.600 04/01/2008 04/01/2002(b) 60,861
--------------------------------------------------------------------------------------------------------------------
700,000 Niagara County XXX (Sevenson Hotel) 5.750 05/01/2003 10/30/2002(c) 698,425
--------------------------------------------------------------------------------------------------------------------
5,000,000 Niagara County XXX (Solid Waste Disposal) 5.450 11/15/2025 11/15/2012(d) 5,140,150
--------------------------------------------------------------------------------------------------------------------
7,000,000 Niagara County XXX (Solid Waste Disposal) 5.550 11/15/2024 11/15/2013(d) 7,195,160
12 | LIMITED TERM NEW YORK MUNICIPAL FUND
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
========================================================================================================================
New York Continued
$ 1,175,000 Niagara County Tobacco Asset
Securitization Corp. 5.875% 05/15/2022 05/15/2011(b) $ 1,197,795
------------------------------------------------------------------------------------------------------------------------
100,000 Niagara County Tobacco Asset
Securitization Corp. 6.250 05/15/2034(s) 05/15/2011(b) 104,497
------------------------------------------------------------------------------------------------------------------------
135,000 Niagara County Tobacco Asset
Securitization Corp. 6.250 05/15/2040(s) 05/15/2011(b) 140,870
------------------------------------------------------------------------------------------------------------------------
11,995,000 Niagara County Tobacco Asset
Securitization Corp. 6.750 05/15/2029(s) 05/15/2010(b) 12,985,667
------------------------------------------------------------------------------------------------------------------------
1,195,000 Niagara Falls CSD COP (High School Facility) 6.500 06/15/2019 06/15/2009(b) 1,269,568
------------------------------------------------------------------------------------------------------------------------
3,125,000 NY Counties Tobacco Trust I (TASC) 5.800 06/01/2023 04/11/2004(c) 3,189,562
------------------------------------------------------------------------------------------------------------------------
14,195,000 NY Counties Tobacco Trust I (TASC) 6.300 06/01/2019(s) 06/01/2010(b) 14,897,794
------------------------------------------------------------------------------------------------------------------------
2,220,000 NY Counties Tobacco Trust I (TASC) 6.500 06/01/2035(s) 06/01/2011(b) 2,367,053
------------------------------------------------------------------------------------------------------------------------
13,240,000 NY Counties Tobacco Trust I (TASC) RITES(i) 14.425(r) 06/01/2028(s) 06/01/2011(b) 15,122,066
------------------------------------------------------------------------------------------------------------------------
20,000,000 NY Counties Tobacco Trust II (TASC) 5.250 06/01/2025 02/15/2009(c) 19,409,200
------------------------------------------------------------------------------------------------------------------------
7,055,000 NY Counties Tobacco Trust II (TASC) 5.625 06/01/2035 03/22/2019(c) 7,022,970
------------------------------------------------------------------------------------------------------------------------
1,675,000 NY Counties Tobacco Trust II (TASC) 5.750 06/01/2014 06/01/2012(b) 1,721,833
------------------------------------------------------------------------------------------------------------------------
16,260,000 NY Counties Tobacco Trust II (TASC) 5.750 06/01/2043(s) 06/01/2012(b) 16,328,617
------------------------------------------------------------------------------------------------------------------------
2,120,000 NY Counties Tobacco Trust II (TASC) 6.000 06/01/2015 06/01/2012(b) 2,222,799
------------------------------------------------------------------------------------------------------------------------
2,330,000 NY Counties Tobacco Trust II (TASC) 6.000 06/01/2016 06/01/2012(b) 2,429,771
------------------------------------------------------------------------------------------------------------------------
20,000 NYC GO 5.500 10/01/2014 10/01/2005(b) 20,498
------------------------------------------------------------------------------------------------------------------------
10,000 NYC GO 5.500 10/01/2016 10/01/2005(b) 10,468
------------------------------------------------------------------------------------------------------------------------
14,765,000 NYC GO 5.500 05/15/2024(s) 05/15/2012(b) 14,804,423
------------------------------------------------------------------------------------------------------------------------
15,000 NYC GO 5.600 12/01/2010 06/01/2002(b) 15,047
------------------------------------------------------------------------------------------------------------------------
10,000 NYC GO 5.625 10/01/2012 10/01/2003(b) 10,212
------------------------------------------------------------------------------------------------------------------------
20,000 NYC GO 5.625 10/01/2013 10/01/2005(b) 20,946
------------------------------------------------------------------------------------------------------------------------
15,000 NYC GO 5.625 08/01/2014 08/01/2006(b) 15,740
------------------------------------------------------------------------------------------------------------------------
20,000 NYC GO 5.750 08/15/2012 08/15/2005(b) 20,500
------------------------------------------------------------------------------------------------------------------------
15,000 NYC GO 5.750 05/15/2013 05/15/2005(b) 15,643
------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 5.750 02/01/2015(s) 02/01/2008(b) 5,164
------------------------------------------------------------------------------------------------------------------------
25,000 NYC GO 5.750 08/01/2015 08/01/2005(b) 26,255
------------------------------------------------------------------------------------------------------------------------
14,280,000 NYC GO(w) 5.750 12/01/2022 12/01/2011(b) 14,708,828
------------------------------------------------------------------------------------------------------------------------
60,000 NYC GO 5.800 08/01/2013 08/01/2005(b) 62,867
------------------------------------------------------------------------------------------------------------------------
50,000 NYC GO 6.000 08/01/2006 02/01/2002(a) 51,309
------------------------------------------------------------------------------------------------------------------------
15,000 NYC GO 6.000 08/01/2006 02/01/2002(b) 15,065
------------------------------------------------------------------------------------------------------------------------
10,000 NYC GO 6.000 08/01/2007 02/01/2002(b) 10,043
------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 6.000 08/01/2008 02/01/2002(b) 5,022
------------------------------------------------------------------------------------------------------------------------
15,000 NYC GO 6.000 05/15/2010 05/15/2003(b) 15,899
------------------------------------------------------------------------------------------------------------------------
30,000 NYC GO 6.000 08/01/2010 08/01/2003(b) 31,987
------------------------------------------------------------------------------------------------------------------------
55,000 NYC GO 6.000 02/01/2011 02/01/2006(b) 57,974
------------------------------------------------------------------------------------------------------------------------
30,000 NYC GO 6.000 02/15/2011 02/15/2005(b) 31,235
------------------------------------------------------------------------------------------------------------------------
130,000 NYC GO 6.000 08/01/2011 02/01/2002(a) 130,560
------------------------------------------------------------------------------------------------------------------------
25,000 NYC GO 6.000 08/01/2011 08/01/2003(b) 26,656
------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 6.000 02/15/2012 02/15/2005(b) 5,503
------------------------------------------------------------------------------------------------------------------------
40,000 NYC GO 6.000 02/15/2012 02/15/2005(b) 41,512
------------------------------------------------------------------------------------------------------------------------
30,000 NYC GO 6.000 08/01/2012 02/01/2002(a) 30,331
------------------------------------------------------------------------------------------------------------------------
115,000 NYC GO 6.000 08/01/2012 08/01/2003(b) 118,364
13 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF INVESTMENTS Continued
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
---------------------------------------------------------------------------------------------------------------------------
New York Continued
$ 10,000 NYCGO 6.000% 02/15/2014 02/15/2005(b) $ 10,340
---------------------------------------------------------------------------------------------------------------------------
15,000 NYC GO 6.000 02/15/2015 02/15/2005(b) 15,523
---------------------------------------------------------------------------------------------------------------------------
450,000 NYC GO 6.000 08/01/2015 02/01/2002(a) 452,020
---------------------------------------------------------------------------------------------------------------------------
10,000 NYC GO 6.000 08/01/2016(s) 08/01/2006(b) 10,696
---------------------------------------------------------------------------------------------------------------------------
10,000 NYC GO 6.000 05/15/2019 05/15/2003(b) 10,227
---------------------------------------------------------------------------------------------------------------------------
15,000 NYC GO 6.000 08/15/2026(s) 08/15/2008(b) 15,730
---------------------------------------------------------------------------------------------------------------------------
65,000 NYC GO 6.125 08/01/2011 08/01/2004(b) 70,557
---------------------------------------------------------------------------------------------------------------------------
15,000 NYC GO 6.250 10/01/2008 10/01/2002(b) 15,742
---------------------------------------------------------------------------------------------------------------------------
75,000 NYC GO 6.250 08/01/2010 08/01/2004(b) 81,643
---------------------------------------------------------------------------------------------------------------------------
2,000,000 NYC GO 6.250 08/01/2012 08/01/2006(b) 2,127,220
---------------------------------------------------------------------------------------------------------------------------
4,050,000 NYC GO 6.250 08/01/2013 08/01/2006(b) 4,304,178
---------------------------------------------------------------------------------------------------------------------------
70,000 NYC GO 6.250 08/01/2016 08/01/2002(b) 72,747
---------------------------------------------------------------------------------------------------------------------------
35,000 NYC GO 6.250 08/01/2018 08/01/2002(b) 36,232
---------------------------------------------------------------------------------------------------------------------------
110,000 NYC GO 6.250 08/01/2019 08/01/2004(b) 112,394
---------------------------------------------------------------------------------------------------------------------------
90,000 NYC GO 6.250 08/01/2021 08/01/2002(b) 91,849
---------------------------------------------------------------------------------------------------------------------------
415,000 NYC GO 6.375 08/01/2006 08/01/2002(b) 431,276
---------------------------------------------------------------------------------------------------------------------------
1,460,000 NYC GO 6.375 08/01/2007 08/01/2002(b) 1,499,011
---------------------------------------------------------------------------------------------------------------------------
4,000,000 NYC GO 6.375 08/15/2009 08/15/2005(b) 4,413,080
---------------------------------------------------------------------------------------------------------------------------
1,495,000 NYC GO 6.375 08/01/2010 08/01/2005(b) 1,621,597
---------------------------------------------------------------------------------------------------------------------------
815,000 NYC GO 6.375 08/15/2010 08/15/2005(b) 899,165
---------------------------------------------------------------------------------------------------------------------------
5,400,000 NYC GO 6.375 08/01/2012 08/15/2005(b) 5,928,660
---------------------------------------------------------------------------------------------------------------------------
95,000 NYC GO 6.500 08/01/2005 08/01/2002(b) 98,794
---------------------------------------------------------------------------------------------------------------------------
20,000 NYC GO 6.500 08/01/2006 08/01/2002(b) 20,799
---------------------------------------------------------------------------------------------------------------------------
20,000 NYC GO 6.500 08/01/2007 08/01/2002(b) 20,799
---------------------------------------------------------------------------------------------------------------------------
95,000 NYC GO 6.500 08/01/2008 08/01/2002(b) 98,794
---------------------------------------------------------------------------------------------------------------------------
8,715,000 NYC GO 6.500 08/01/2011 08/01/2002(b) 9,063,077
---------------------------------------------------------------------------------------------------------------------------
70,000 NYC GO 6.500 08/01/2012 08/01/2002(b) 72,691
---------------------------------------------------------------------------------------------------------------------------
55,000 NYC GO 6.500 08/01/2013 08/01/2002(b) 57,304
---------------------------------------------------------------------------------------------------------------------------
20,000 NYC GO 6.500 08/01/2014 08/01/2002(b) 20,838
---------------------------------------------------------------------------------------------------------------------------
103,000 NYC GO 6.500 08/01/2014 08/01/2005(b) 112,858
---------------------------------------------------------------------------------------------------------------------------
40,000 NYC GO 6.500 08/01/2016 08/01/2005(b) 43,828
---------------------------------------------------------------------------------------------------------------------------
7,500,000 NYC GO 6.500 05/15/2017 05/15/2010(b) 8,232,675
---------------------------------------------------------------------------------------------------------------------------
95,000 NYC GO 6.500 08/01/2019(s) 08/01/2005(b) 99,887
---------------------------------------------------------------------------------------------------------------------------
70,000 NYC GO 6.600 10/01/2016 10/01/2002(b) 73,394
---------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 6.750 10/01/2006 10/01/2002(b) 5,266
---------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 7.000 02/01/2002 02/01/2002 5,023
---------------------------------------------------------------------------------------------------------------------------
20,000 NYC GO 7.000 08/15/2002 02/15/2002(a) 20,143
---------------------------------------------------------------------------------------------------------------------------
35,000 NYC GO 7.000 02/01/2003 02/01/2002(a) 35,186
---------------------------------------------------------------------------------------------------------------------------
260,000 NYC GO 7.000 02/01/2006 02/01/2002(b) 265,234
---------------------------------------------------------------------------------------------------------------------------
160,000 NYC GO 7.000 12/01/2006 06/01/2002(b) 163,363
---------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 7.000 02/01/2009 02/01/2002(b) 5,026
---------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 7.000 10/01/2010 10/01/2002(b) 5,274
---------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 7.000 12/01/2010 06/01/2002(b) 5,101
---------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 7.000 02/01/2011 02/01/2002(b) 5,026
---------------------------------------------------------------------------------------------------------------------------
30,000 NYC GO 7.000 02/01/2012 02/01/2002(b) 30,150
---------------------------------------------------------------------------------------------------------------------------
25,000 NYC GO 7.000 10/01/2015 04/01/2002(a) 25,327
14 | LIMITED TERM NEW YORK MUNICIPAL FUND
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
---------------------------------------------------------------------------------------------------------------------------
New York Continued
---------------------------------------------------------------------------------------------------------------------------
$ 25,000 NYC GO 7.000% 02/01/2016 02/01/2002(b) $ 25,490
---------------------------------------------------------------------------------------------------------------------------
70,000 NYC GO 7.000 10/01/2016 04/01/2002(a) 70,915
---------------------------------------------------------------------------------------------------------------------------
15,000 NYC GO 7.000 02/01/2017 02/01/2002(b) 15,698
---------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 7.000 02/01/2018 02/01/2002(a) 5,098
---------------------------------------------------------------------------------------------------------------------------
120,000 NYC GO 7.000 02/01/2018 02/01/2002(b) 122,305
---------------------------------------------------------------------------------------------------------------------------
35,000 NYC GO 7.000 10/01/2018 04/01/2002(a) 35,469
---------------------------------------------------------------------------------------------------------------------------
15,000 NYC GO 7.000 10/01/2019 04/01/2002(a) 15,235
---------------------------------------------------------------------------------------------------------------------------
15,000 NYC GO 7.000 02/01/2022 02/01/2002(a) 15,294
---------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 7.100 02/01/2004 02/01/2002(b) 5,017
---------------------------------------------------------------------------------------------------------------------------
175,000 NYC GO 7.100 02/01/2009 02/01/2002(b) 178,440
---------------------------------------------------------------------------------------------------------------------------
20,000 NYC GO 7.100 02/01/2010 02/01/2002(b) 20,393
---------------------------------------------------------------------------------------------------------------------------
30,000 NYC GO 7.200 08/01/2002 02/01/2002(b) 30,361
---------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 7.200 02/01/2005 02/01/2002(b) 5,027
---------------------------------------------------------------------------------------------------------------------------
40,000 NYC GO 7.250 10/01/2005 04/01/2002(a) 40,534
---------------------------------------------------------------------------------------------------------------------------
100,000 NYC GO 7.250 02/01/2007 02/01/2002(a) 100,552
---------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 7.250 02/01/2007 02/01/2002(b) 5,027
---------------------------------------------------------------------------------------------------------------------------
15,000 NYC GO 7.250 08/15/2017 02/15/2002(a) 15,116
---------------------------------------------------------------------------------------------------------------------------
120,000 NYC GO 7.500 08/15/2003 02/15/2002(b) 120,934
---------------------------------------------------------------------------------------------------------------------------
20,000 NYC GO 7.500 12/01/2003 06/01/2002(a) 20,462
---------------------------------------------------------------------------------------------------------------------------
10,135,000 NYC GO 7.500 02/01/2004 02/01/2002(b) 10,343,274
---------------------------------------------------------------------------------------------------------------------------
2,000,000 NYC GO 7.500 02/01/2004 02/01/2002(b) 2,041,020
---------------------------------------------------------------------------------------------------------------------------
25,000 NYC GO 7.500 12/01/2004 06/01/2002(a) 25,577
---------------------------------------------------------------------------------------------------------------------------
160,000 NYC GO 7.500 02/01/2005 02/01/2002(b) 163,288
---------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 7.500 08/15/2005 02/15/2002(b) 5,039
---------------------------------------------------------------------------------------------------------------------------
2,445,000 NYC GO 7.500 02/01/2006 02/01/2002(b) 2,495,245
---------------------------------------------------------------------------------------------------------------------------
160,000 NYC GO 7.500 02/01/2007 02/01/2002(b) 163,288
---------------------------------------------------------------------------------------------------------------------------
25,000 NYC GO 7.500 02/01/2008 02/01/2002(b) 26,226
---------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 7.500 02/01/2008 02/01/2002(b) 5,100
---------------------------------------------------------------------------------------------------------------------------
785,000 NYC GO 7.500 02/01/2009 02/01/2002(b) 801,132
---------------------------------------------------------------------------------------------------------------------------
40,000 NYC GO 7.650 02/01/2007 02/01/2002(b) 40,827
---------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 7.700 02/01/2009 02/01/2002(b) 5,104
---------------------------------------------------------------------------------------------------------------------------
75,000 NYC GO 7.750 08/15/2006 02/15/2002(b) 76,557
---------------------------------------------------------------------------------------------------------------------------
15,000 NYC GO 7.750 08/15/2007 02/15/2002(b) 15,311
---------------------------------------------------------------------------------------------------------------------------
20,000 NYC GO 7.750 08/15/2014 02/15/2002(b) 20,413
---------------------------------------------------------------------------------------------------------------------------
20,000 NYC GO 7.750 08/15/2028 02/15/2002(b) 20,139
---------------------------------------------------------------------------------------------------------------------------
5,000 NYC GO 8.000 08/01/2003 02/01/2002(b) 5,030
---------------------------------------------------------------------------------------------------------------------------
60,000 NYC GO 8.000 08/01/2003 02/01/2002(b) 61,258
---------------------------------------------------------------------------------------------------------------------------
1,355,000 NYC GO CAB 0.000(v) 05/15/2014 05/15/2008(b) 1,322,223
---------------------------------------------------------------------------------------------------------------------------
5,000,000 NYC GO CARS 10.245(r) 09/01/2011 08/01/2002(b) 5,275,000
---------------------------------------------------------------------------------------------------------------------------
10,000 NYC GO DIAMONDS 0.000(v) 08/01/2007 08/01/2002(b) 9,870
---------------------------------------------------------------------------------------------------------------------------
1,950,000 NYC GO LIMO 0.000(v) 02/01/2007 02/01/2002(b) 1,971,138
---------------------------------------------------------------------------------------------------------------------------
115,000 NYC GO PRAMS 0.000(v) 10/01/2006 10/01/2002(b) 114,622
---------------------------------------------------------------------------------------------------------------------------
350,000 NYC HDC (Xxxxxxx Avenue) 5.750 04/01/2007 11/21/2004(c) 369,558
---------------------------------------------------------------------------------------------------------------------------
1,715,000 NYC HDC (Multifamily Hsg.), Series A 6.550 10/01/2015(s) 04/01/2003(b) 1,778,266
---------------------------------------------------------------------------------------------------------------------------
1,970,000 NYC HDC (Pass Through Certificate)(i) 6.500 09/20/2003 05/24/2003(c) 2,077,089
---------------------------------------------------------------------------------------------------------------------------
1,675,000 NYC XXX (Acme Architectural Products) 5.875 11/01/2009 08/21/2006(c) 1,573,662
15 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF INVESTMENTS Continued
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
---------------------------------------------------------------------------------------------------------------------------
New York Continued
$10,000,000 NYC XXX
(Airis JFK I/JFK International Airport) 6.000% 07/01/2015 03/09/2013(c) $ 9,615,800
---------------------------------------------------------------------------------------------------------------------------
600,000 NYC XXX (ALA Realty) 7.000 12/01/2005 07/01/2004(c) 617,550
---------------------------------------------------------------------------------------------------------------------------
570,000 NYC XXX (Atlantic Veal & Lamb) 7.250 12/01/2008 03/16/2006(c) 575,865
---------------------------------------------------------------------------------------------------------------------------
255,000 NYC XXX
(Brooklyn Heights Montessori School) 7.500 01/01/2007 09/23/2004(c) 256,999
---------------------------------------------------------------------------------------------------------------------------
670,000 NYC XXX (Chardan Corp.) 6.250 11/01/2008 01/24/2006(c) 662,952
---------------------------------------------------------------------------------------------------------------------------
235,000 NYC XXX (College of Aeronautics) 5.500 05/01/2012 05/01/2012 233,792
---------------------------------------------------------------------------------------------------------------------------
550,000 NYC XXX (College of Aeronautics) 5.500 05/01/2013 05/01/2013 542,437
---------------------------------------------------------------------------------------------------------------------------
195,000 NYC XXX (College of Mount St. Xxxxxxx) 7.000 05/01/2008 04/02/2003(g) 204,740
---------------------------------------------------------------------------------------------------------------------------
360,000 NYC XXX (College of New Xxxxxxxx) 6.200 09/01/2010(s) 09/01/2005(b) 380,934
---------------------------------------------------------------------------------------------------------------------------
500,000 NYC XXX (College of New Xxxxxxxx) 6.300 09/01/2015(s) 09/01/2005(b) 522,640
---------------------------------------------------------------------------------------------------------------------------
595,000 NYC XXX (Comprehensive Care Management) 5.750 11/01/2008 01/23/2006(c) 585,058
---------------------------------------------------------------------------------------------------------------------------
235,000 NYC XXX (Comprehensive Care Management) 5.750 11/01/2008 01/09/2006(c) 231,080
---------------------------------------------------------------------------------------------------------------------------
490,000 NYC XXX (Comprehensive Care Management) 7.250 12/01/2006 01/25/2005(c) 514,833
---------------------------------------------------------------------------------------------------------------------------
578,397 NYC XXX (Cummins Engine) 6.500 03/01/2005 08/22/2003(c) 574,661
---------------------------------------------------------------------------------------------------------------------------
205,000 NYC XXX (Elmhurst Hospital Parking Garage) 7.400 07/30/2002 07/30/2002 209,489
---------------------------------------------------------------------------------------------------------------------------
755,000 NYC XXX (Xxxxx Cosmetics) 5.500 11/01/2008 01/22/2006(c) 729,043
---------------------------------------------------------------------------------------------------------------------------
1,015,000 NYC XXX (Friends Seminary School) 6.250 09/15/2010 02/20/2007(c) 1,045,491
---------------------------------------------------------------------------------------------------------------------------
1,060,000 NYC XXX (Xxxxxxxxx Truck Sales) 7.250 12/01/2007 01/19/2006(c) 1,061,993
---------------------------------------------------------------------------------------------------------------------------
19,545,000 NYC XXX (Japan Airlines) 6.000 11/01/2015 09/10/2004(g) 20,608,248
---------------------------------------------------------------------------------------------------------------------------
415,000 NYC XXX (JBFS) 6.500 12/15/2002 12/15/2002 416,150
---------------------------------------------------------------------------------------------------------------------------
385,000 NYC XXX (Xxxxx Xxxx) 6.500 11/01/2007 07/15/2005(c) 382,012
---------------------------------------------------------------------------------------------------------------------------
375,000 NYC XXX (Xxxxxx Manufacturing) 7.375 12/01/2010 06/09/2007(c) 379,455
---------------------------------------------------------------------------------------------------------------------------
755,000 NYC XXX (MediSys Health Network) 5.750 03/15/2006 11/16/2004(c) 735,793
---------------------------------------------------------------------------------------------------------------------------
650,000 NYC XXX (Morrisons Pastry) 5.750 11/01/2009 06/27/2005(c) 610,519
---------------------------------------------------------------------------------------------------------------------------
190,000 NYC XXX (Xxxxxxxxxxx-Xxxxxxx School) 5.850 01/15/2020(s) 01/15/2005(b) 195,548
---------------------------------------------------------------------------------------------------------------------------
1,880,000 NYC XXX (NYC Outward Bound Center) 6.750 11/01/2010(s) 05/01/2002(b) 1,899,533
---------------------------------------------------------------------------------------------------------------------------
195,000 NYC XXX
(Ohel Children's Home & Family Services) 7.125 03/15/2003 09/18/2002(c) 205,799
---------------------------------------------------------------------------------------------------------------------------
2,080,000 NYC XXX (Polytechnic University) 6.000 11/01/2020(s) 11/01/2010(b) 2,139,051
---------------------------------------------------------------------------------------------------------------------------
585,000 NYC XXX (Precision Gear) 5.875 11/01/2009 08/30/2006(c) 554,557
---------------------------------------------------------------------------------------------------------------------------
495,000 NYC XXX (Precision Gear) 5.875 11/01/2009 08/15/2006(c) 469,240
---------------------------------------------------------------------------------------------------------------------------
175,000 NYC XXX (Precision Gear) 6.500 11/01/2008 02/13/2006(c) 173,715
---------------------------------------------------------------------------------------------------------------------------
410,000 NYC XXX (Promotional Slideguide) 7.000 12/01/2005 07/06/2004(c) 421,677
---------------------------------------------------------------------------------------------------------------------------
2,150,000 NYC XXX
(Special Needs Facilities Pooled Program) 5.950 07/01/2008 01/27/2005(c) 2,021,430
---------------------------------------------------------------------------------------------------------------------------
135,000 NYC XXX (Streamline Plastics) 7.125 12/01/2005 07/18/2004(c) 135,984
---------------------------------------------------------------------------------------------------------------------------
30,000 NYC XXX (Terminal One Group Association) 5.900 01/01/2006 01/01/2006 30,634
---------------------------------------------------------------------------------------------------------------------------
48,195,000 NYC XXX (Terminal One Group Association) 6.000 01/01/2015(s) 01/01/2006(b) 49,084,198
---------------------------------------------------------------------------------------------------------------------------
2,185,000 NYC XXX (Terminal One Group Association) 6.000 01/01/2019(s) 01/01/2006(c) 2,223,762
---------------------------------------------------------------------------------------------------------------------------
95,000 NYC XXX (Terminal One Group Association) 6.100 01/01/2009 01/01/2006(b) 97,227
---------------------------------------------------------------------------------------------------------------------------
10,045,000 NYC XXX (Terminal One Group Association) 6.125 01/01/2024 01/01/2006(b) 10,231,636
---------------------------------------------------------------------------------------------------------------------------
935,000 NYC XXX (Ulano) 6.250 11/01/2006 12/15/2004(c) 912,616
---------------------------------------------------------------------------------------------------------------------------
160,000 NYC XXX (United Nations School) 6.050 12/01/2005 12/01/2005 171,566
---------------------------------------------------------------------------------------------------------------------------
170,000 NYC XXX (United Nations School) 6.100 12/01/2006 12/01/2006 182,684
---------------------------------------------------------------------------------------------------------------------------
180,000 NYC XXX (United Nations School) 6.150 12/01/2007 12/01/2007 193,221
16 | LIMITED TERM NEW YORK MUNICIPAL FUND
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
---------------------------------------------------------------------------------------------------------------------------
New York Continued
$ 500,000 NYC XXX (USTA National Tennis Center) 6.375% 11/15/2014(s) 11/15/2004(b) $ 552,310
---------------------------------------------------------------------------------------------------------------------------
1,800,000 NYC XXX (Visy Paper) 7.550 01/01/2005 08/01/2003(c) 1,830,492
---------------------------------------------------------------------------------------------------------------------------
4,000,000 NYC XXX (Visy Paper) 7.800 01/01/2016 10/04/2007(g) 4,179,440
---------------------------------------------------------------------------------------------------------------------------
465,000 NYC XXX (World Casing Corp.) 5.950 11/01/2007 07/09/2005(c) 452,566
---------------------------------------------------------------------------------------------------------------------------
1,000,000 NYC XXX (Zeluck, Inc.)(w) 6.250 11/01/2011 05/02/2007(c) 1,001,670
---------------------------------------------------------------------------------------------------------------------------
20,000 NYC Municipal Water Finance Authority 5.500 06/15/2019(s) 06/15/2005(b) 20,209
---------------------------------------------------------------------------------------------------------------------------
50,000 NYC Municipal Water Finance Authority 5.500 06/15/2020(s) 06/15/2002(b) 50,074
---------------------------------------------------------------------------------------------------------------------------
140,000 NYC Municipal Water Finance Authority 5.500 06/15/2020(s) 06/15/2002(b) 140,207
---------------------------------------------------------------------------------------------------------------------------
1,000,000 NYC Municipal Water Finance Authority 5.500 06/15/2024(s) 06/15/2007(b) 1,011,600
---------------------------------------------------------------------------------------------------------------------------
855,000 NYC Municipal Water Finance Authority 5.750 06/15/2013(s) 06/15/2002(a) 920,989
---------------------------------------------------------------------------------------------------------------------------
50,000 NYC Municipal Water Finance Authority 5.750 06/15/2013(s) 06/15/2002(a) 55,574
---------------------------------------------------------------------------------------------------------------------------
40,000 NYC Municipal Water Finance Authority 5.750 06/15/2018(s) 06/15/2004(b) 40,707
---------------------------------------------------------------------------------------------------------------------------
50,000 NYC Municipal Water Finance Authority 6.000 06/15/2017 06/15/2002(b) 51,526
---------------------------------------------------------------------------------------------------------------------------
50,000 NYC Municipal Water Finance Authority 6.000 06/15/2017(s) 06/15/2002(b) 51,526
---------------------------------------------------------------------------------------------------------------------------
25,000 NYC Public Hsg. Authority 6.000 01/01/2004 07/01/2002(b) 25,629
---------------------------------------------------------------------------------------------------------------------------
4,520,000 NYC TFA, Series C 5.500 11/01/2029(s) 05/01/2012(b) 4,581,879
---------------------------------------------------------------------------------------------------------------------------
20,000 NYC Transit Authority (Xxxxxxxxxx Plaza) 6.000 01/01/2024 07/01/2002(b) 20,054
---------------------------------------------------------------------------------------------------------------------------
30,000 NYS DA
(Xxxxxx Xxxxx X. Xxxxxx Nursing Home) 5.625 07/01/2018(s) 07/01/2008(b) 30,341
---------------------------------------------------------------------------------------------------------------------------
265,000 NYS DA (Brooklyn Law School) 6.375 07/01/2007(s) 07/01/2002(b) 273,944
---------------------------------------------------------------------------------------------------------------------------
565,000 NYS DA (Brooklyn Law School) 6.400 07/01/2011(s) 07/01/2002(b) 578,989
---------------------------------------------------------------------------------------------------------------------------
15,000,000 NYS DA (Catholic Health Services) 6.500 07/01/2020(s) 07/01/2010(b) 16,181,700
---------------------------------------------------------------------------------------------------------------------------
15,000 NYS DA (City University) 0.000 07/01/2004 09/25/2003(c) 13,584
---------------------------------------------------------------------------------------------------------------------------
60,000 NYS DA (City University) 0.000 07/01/2004 09/25/2003(c) 53,735
---------------------------------------------------------------------------------------------------------------------------
35,000 NYS DA (City University) 0.000 07/01/2005 11/25/2003(c) 29,350
---------------------------------------------------------------------------------------------------------------------------
11,020,000 NYS DA (City University) 5.375 07/01/2024 10/16/2022(c) 11,005,674
---------------------------------------------------------------------------------------------------------------------------
240,000 NYS DA (City University) 5.375 07/01/2025(s) 07/01/2007(b) 240,905
---------------------------------------------------------------------------------------------------------------------------
75,000 NYS DA (City University) 5.500 07/01/2012(s) 07/01/2005(b) 78,265
---------------------------------------------------------------------------------------------------------------------------
1,900,000 NYS DA (City University) 6.000 07/01/2010 07/01/2006(b) 2,046,034
---------------------------------------------------------------------------------------------------------------------------
20,000 NYS DA (College of Saint Rose) 6.000 07/01/2011(s) 07/01/2002(b) 20,850
---------------------------------------------------------------------------------------------------------------------------
5,000 NYS DA (College of Saint Rose) 6.000 07/01/2011(s) 07/01/2002(b) 5,200
---------------------------------------------------------------------------------------------------------------------------
10,000 NYS DA (Dept. of Education) 6.125 07/01/2019(s) 07/01/2006(b) 10,770
---------------------------------------------------------------------------------------------------------------------------
5,000 NYS DA (Dept. of Health) 5.500 07/01/2014 07/01/2006(b) 5,168
---------------------------------------------------------------------------------------------------------------------------
50,000 NYS DA (Dept. of Health) 5.900 07/01/2009 07/01/2004(b) 52,615
---------------------------------------------------------------------------------------------------------------------------
25,000 NYS DA (Dept. of Health) 7.400 07/01/2004 07/01/2002(b) 25,505
---------------------------------------------------------------------------------------------------------------------------
10,000,000 NYS DA (Xxxxxxx Xxxxxxxxx
Home & Hospital Obligated Group) 5.500 07/01/2027(s) 07/01/2009(b) 10,085,500
---------------------------------------------------------------------------------------------------------------------------
40,000 NYS DA (Jewish Geriatric) 7.150 08/01/2014 08/01/2004(b) 44,692
---------------------------------------------------------------------------------------------------------------------------
50,000 NYS DA (Jewish Geriatric) 7.350 08/01/2029 08/01/2004(b) 55,819
--------------------------------------------------------------------------------------------------------------------------
35,000 NYS DA (JGB Health Facilities) 7.000 07/01/2009(s) 07/01/2002(b) 35,499
---------------------------------------------------------------------------------------------------------------------------
3,880,000 NYS DA (KMH Homes) 6.950 08/01/2031 02/01/2002(b) 3,969,900
---------------------------------------------------------------------------------------------------------------------------
1,000,000 NYS DA (Lenox Hill Obligated Group) 5.750 07/01/2017 07/01/2012(b) 1,031,410
---------------------------------------------------------------------------------------------------------------------------
25,000 NYS DA (Manhattan College) 6.500 07/01/2019(s) 07/01/2002(b) 26,125
---------------------------------------------------------------------------------------------------------------------------
20,000 NYS DA (Marist College) 7.125 07/01/2010(s) 07/01/2002(b) 20,407
---------------------------------------------------------------------------------------------------------------------------
5,060,000 NYS DA (Xxxxxx Xxxxxx
Memorial Home Association) 6.875 07/01/2019(s) 07/01/2010(b) 5,613,109
17 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF INVESTMENTS Continued
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
---------------------------------------------------------------------------------------------------------------------------
New York Continued
$ 4,750,000 NYS DA (Mount Sinai School of Medicine) 6.750% 07/01/2009(s) 07/01/2002(b) $ 4,869,652
---------------------------------------------------------------------------------------------------------------------------
2,030,000 NYS DA (Mount Sinai School of Medicine) 6.750 07/01/2015(s) 07/01/2002(b) 2,080,851
---------------------------------------------------------------------------------------------------------------------------
885,000 NYS DA (MSH/NYU Hospital
Center/HJDOI Obligated Group) 6.000 07/01/2013 07/01/2011(b) 921,727
---------------------------------------------------------------------------------------------------------------------------
3,000,000 NYS DA (MSH/NYU Hospital
Center/HJDOI Obligated Group) 6.000 07/01/2014 07/01/2011(b) 3,099,750
---------------------------------------------------------------------------------------------------------------------------
14,540,000 NYS DA (MSH/NYU Hospital
Center/HJDOI Obligated Group) 6.500 07/01/2015 07/01/2010(b) 15,654,636
---------------------------------------------------------------------------------------------------------------------------
11,830,000 NYS DA (MSH/NYU Hospital
Center/HJDOI Obligated Group) 6.500 07/01/2016 07/01/2011(b) 12,718,906
---------------------------------------------------------------------------------------------------------------------------
12,000,000 NYS DA (MSH/NYU Hospital
Center/HJDOI Obligated Group) 6.500 07/01/2017 07/01/2010(b) 12,864,960
---------------------------------------------------------------------------------------------------------------------------
5,000,000 NYS DA (MSH/NYU Hospital
Center/HJDOI Obligated Group) 6.625 07/01/2018 07/01/2011(b) 5,388,200
---------------------------------------------------------------------------------------------------------------------------
5,000,000 NYS DA (MSH/NYU Hospital
Center/HJDOI Obligated Group) 6.625 07/01/2019 07/01/2010(b) 5,369,800
---------------------------------------------------------------------------------------------------------------------------
1,750,000 NYS DA (MSH/NYU Hospital
Center/HJDOI Obligated Group) 6.750 07/01/2020 07/01/2010(b) 1,898,680
---------------------------------------------------------------------------------------------------------------------------
70,000 NYS DA (New Hope Community) 5.700 07/01/2017(s) 07/01/2005(b) 71,362
---------------------------------------------------------------------------------------------------------------------------
50,000 NYS DA (Nursing Homes) 5.500 07/01/2010(s) 07/01/2007(b) 51,968
---------------------------------------------------------------------------------------------------------------------------
1,400,000 NYS DA (NY Hospital Medical Center) 5.550 08/15/2029(s) 08/15/2011(b) 1,442,084
---------------------------------------------------------------------------------------------------------------------------
2,680,000 NYS DA (Nyack Hospital) 6.000 07/01/2006 08/11/2004(c) 2,484,548
---------------------------------------------------------------------------------------------------------------------------
2,325,000 NYS DA (Nyack Hospital) 6.250 07/01/2013 05/10/2009(c) 1,951,861
---------------------------------------------------------------------------------------------------------------------------
25,000 NYS DA (Our Lady of Mercy Hospital) 6.300 08/01/2032(s) 08/01/2002(b) 25,661
---------------------------------------------------------------------------------------------------------------------------
2,000,000 NYS DA (Park Ridge Hsg.) 6.375 08/01/2020(s) 08/01/2010(b) 2,155,800
---------------------------------------------------------------------------------------------------------------------------
1,470,000 NYS DA (Park Ridge Hsg.) 6.500 08/01/2025(s) 08/01/2010(b) 1,595,979
---------------------------------------------------------------------------------------------------------------------------
685,000 NYS DA (Pooled Capital Program) 7.800 12/01/2005(s) 06/01/2002(b) 704,324
---------------------------------------------------------------------------------------------------------------------------
20,000 NYS DA (St. Vincent's Hospital) 5.750 08/01/2015(s) 08/01/2007(b) 20,861
---------------------------------------------------------------------------------------------------------------------------
25,000 NYS DA (St. Vincent's Hospital) 7.375 08/01/2011 02/01/2002(b) 25,637
---------------------------------------------------------------------------------------------------------------------------
1,000,000 NYS DA (State University Dormitory Facilities) 5.500 07/01/2020 07/01/2011(b) 1,025,660
---------------------------------------------------------------------------------------------------------------------------
7,820,000 NYS DA (State University Dormitory Facilities) 5.750 07/01/2023 07/01/2011(b) 8,106,603
---------------------------------------------------------------------------------------------------------------------------
1,150,000 NYS DA (State University Educational Facilities) 5.750 05/15/2010 05/15/2006(b) 1,226,429
---------------------------------------------------------------------------------------------------------------------------
2,045,000 NYS DA (State University Educational Facilities) 6.000 05/15/2017 05/15/2002(b) 2,062,485
---------------------------------------------------------------------------------------------------------------------------
105,000 NYS DA (State University Educational Facilities) 6.000 05/15/2017 05/15/2002(b) 105,318
---------------------------------------------------------------------------------------------------------------------------
155,000 NYS DA (Suffolk County Judicial Facilities) 9.250 04/15/2006(s) 04/15/2002(b) 166,848
---------------------------------------------------------------------------------------------------------------------------
30,000 NYS DA (Suffolk County Judicial Facilities) 9.500 04/15/2014(s) 04/15/2002(b) 34,440
---------------------------------------------------------------------------------------------------------------------------
3,500,000 NYS DA (Teresian House) 5.250 07/01/2017 11/02/2013(c) 3,454,395
---------------------------------------------------------------------------------------------------------------------------
145,000 NYS DA (University of Rochester) 6.500 07/01/2009(s) 07/01/2002(b) 145,710
---------------------------------------------------------------------------------------------------------------------------
20,000 NYS DA (University of Rochester) 6.500 07/01/2009(s) 07/01/2002(b) 20,098
---------------------------------------------------------------------------------------------------------------------------
60,000 NYS DA (Upstate Community Colleges) 5.500 07/01/2014(s) 07/01/2005(b) 62,041
---------------------------------------------------------------------------------------------------------------------------
55,000 NYS DA (Upstate Community Colleges) 5.625 07/01/2012(s) 07/01/2004(b) 57,082
---------------------------------------------------------------------------------------------------------------------------
35,000 NYS DA (Upstate Community Colleges) 5.875 07/01/2016(s) 07/01/2009(b) 36,818
---------------------------------------------------------------------------------------------------------------------------
20,000 NYS DA (WHELC) 5.800 02/01/2028 08/01/2005(b) 20,308
---------------------------------------------------------------------------------------------------------------------------
195,000 NYS EFC (Consolidated Water) 7.150 11/01/2014(s) 11/01/2004(b) 199,272
---------------------------------------------------------------------------------------------------------------------------
20,000 NYS EFC (New Rochelle Water) 6.400 12/01/2024 06/01/2002(b) 20,255
---------------------------------------------------------------------------------------------------------------------------
85,000 NYS EFC (NYS Water Services) 6.600 06/15/2005 06/15/2002(b) 87,134
---------------------------------------------------------------------------------------------------------------------------
25,000 NYS EFC (NYS Water Services) 6.600 03/15/2012 03/15/2002(b) 25,623
18 | LIMITED TERM NEW YORK MUNICIPAL FUND
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
---------------------------------------------------------------------------------------------------------------------
New York Continued
$ 2,025,000 NYS EFC (NYS Water Services) 6.700% 09/15/2004 03/15/2002(b) $ 2,055,598
---------------------------------------------------------------------------------------------------------------------
200,000 NYS EFC (NYS Water Services) 6.850 03/15/2003 03/15/2002(b) 202,164
---------------------------------------------------------------------------------------------------------------------
2,370,000 NYS EFC (NYS Water Services) 6.875 06/15/2010(s) 06/15/2002(b) 2,525,827
---------------------------------------------------------------------------------------------------------------------
1,705,000 NYS EFC (NYS Water Services) 6.875 06/15/2014(s) 11/15/2004(b) 1,876,114
---------------------------------------------------------------------------------------------------------------------
545,000 NYS EFC (NYS Water Services) 6.900 05/15/2015 08/05/2004(g) 610,242
---------------------------------------------------------------------------------------------------------------------
750,000 NYS EFC (NYS Water Services) 6.900 11/15/2015(s) 11/15/2004(b) 839,782
---------------------------------------------------------------------------------------------------------------------
5,000 NYS EFC (NYS Water Services) 7.050 06/15/2004 06/15/2002(b) 5,127
---------------------------------------------------------------------------------------------------------------------
210,000 NYS EFC (NYS Water Services) 7.200 03/15/2011(s) 03/15/2002(b) 212,444
---------------------------------------------------------------------------------------------------------------------
640,000 NYS EFC (NYS Water Services) 7.250 06/15/2010(s) 06/15/2002(b) 656,358
---------------------------------------------------------------------------------------------------------------------
400,000 NYS EFC (NYS Water Services) 7.500 03/15/2011(s) 03/15/2002(b) 402,276
---------------------------------------------------------------------------------------------------------------------
14,915,000 NYS EFC (NYS Water Services) 7.500 06/15/2012(s) 06/15/2002(b) 15,345,298
---------------------------------------------------------------------------------------------------------------------
450,000 NYS EFC (NYS Water Services) 7.500 06/15/2012(s) 06/15/2002(b) 462,982
---------------------------------------------------------------------------------------------------------------------
50,000 NYS EFC (State Park Infrastructure) 5.750 03/15/2013(s) 03/15/2004(b) 51,951
---------------------------------------------------------------------------------------------------------------------
22,810,000 NYS ERDA (Brooklyn Union Gas) 6.750 02/01/2024 05/06/2002(b) 23,578,697
---------------------------------------------------------------------------------------------------------------------
13,505,000 NYS ERDA (Brooklyn Union Gas) 6.750 02/01/2024 05/12/2002(b) 13,969,842
---------------------------------------------------------------------------------------------------------------------
25,000 NYS ERDA (Con Ed) 6.000 03/15/2028 03/15/2005(b) 25,576
---------------------------------------------------------------------------------------------------------------------
4,000,000 NYS ERDA (Con Ed) 6.100 08/15/2020 07/01/2005(b) 4,154,240
---------------------------------------------------------------------------------------------------------------------
29,380,000 NYS ERDA (Con Ed) 7.125 12/01/2029 12/01/2004(b) 32,926,754
---------------------------------------------------------------------------------------------------------------------
3,020,000 NYS ERDA (LILCO) 6.900 08/01/2022 02/01/2002(b) 3,166,983
---------------------------------------------------------------------------------------------------------------------
2,045,000 NYS ERDA (LILCO) 7.150 09/01/2019 06/15/2002(b) 2,116,391
---------------------------------------------------------------------------------------------------------------------
12,750,000 NYS ERDA (LILCO) 7.150 06/01/2020 06/15/2002(b) 13,195,102
---------------------------------------------------------------------------------------------------------------------
860,000 NYS ERDA (LILCO) 7.150 12/01/2020 06/15/2002(b) 890,023
---------------------------------------------------------------------------------------------------------------------
940,000 NYS ERDA (LILCO) 7.150 02/01/2022 06/15/2002(b) 972,815
---------------------------------------------------------------------------------------------------------------------
21,500,000 NYS ERDA (NIMO) 6.625 10/01/2013 04/01/2002(b) 22,225,625
---------------------------------------------------------------------------------------------------------------------
45,000 NYS ERDA (RG&E) 6.350 05/15/2032 05/15/2002(b) 46,577
---------------------------------------------------------------------------------------------------------------------
3,575,000 NYS ERDA (RG&E) 6.500 05/15/2032 05/15/2002(b) 3,662,587
---------------------------------------------------------------------------------------------------------------------
40,000 NYS GO 6.600 12/01/2014 06/01/2002(b) 41,292
---------------------------------------------------------------------------------------------------------------------
114,000 NYS HFA (General Hsg.) 6.500 11/01/2003 05/01/2002(b) 115,352
---------------------------------------------------------------------------------------------------------------------
10,000 NYS HFA (General Hsg.) 6.600 11/01/2005 05/01/2002(b) 10,119
---------------------------------------------------------------------------------------------------------------------
30,000 NYS HFA (General Hsg.) 6.600 11/01/2006 05/01/2002(b) 30,358
---------------------------------------------------------------------------------------------------------------------
1,435,000 NYS HFA (Health Facility) 6.000 05/01/2007 05/01/2007 1,549,384
---------------------------------------------------------------------------------------------------------------------
2,165,000 NYS HFA (Health Facility) 6.000 05/01/2008 05/01/2006(b) 2,316,593
---------------------------------------------------------------------------------------------------------------------
1,175,000 NYS HFA (HELP-Bronx Hsg.) 8.050 11/01/2005(s) 05/01/2002(b) 1,235,642
---------------------------------------------------------------------------------------------------------------------
5,000 NYS HFA (Hospital & Nursing Home) 5.500 11/01/2005 05/01/2002(a) 5,425
---------------------------------------------------------------------------------------------------------------------
5,000 NYS HFA (Hospital & Nursing Home) 5.500 11/01/2012 05/01/2002(a) 5,388
---------------------------------------------------------------------------------------------------------------------
15,000 NYS HFA (Hospital & Nursing Home) 5.875 11/01/2010 05/01/2002(a) 16,662
---------------------------------------------------------------------------------------------------------------------
10,000 NYS HFA (Hospital & Nursing Home) 5.875 11/01/2011 05/01/2002(a) 11,067
---------------------------------------------------------------------------------------------------------------------
5,000 NYS HFA (Hospital & Nursing Home) 5.900 11/01/2003 05/01/2002(a) 5,314
---------------------------------------------------------------------------------------------------------------------
30,000 NYS HFA (Hospital & Nursing Home) 5.900 11/01/2005 05/01/2002(a) 32,980
---------------------------------------------------------------------------------------------------------------------
5,000 NYS HFA (Hospital & Nursing Home) 5.900 11/01/2010 05/01/2002(a) 5,606
---------------------------------------------------------------------------------------------------------------------
35,000 NYS HFA (Hospital & Nursing Home) 6.000 11/01/2014 05/01/2002(b) 38,764
---------------------------------------------------------------------------------------------------------------------
10,000 NYS HFA (Hospital & Nursing Home) 6.875 11/01/2004 05/01/2002(a) 11,105
---------------------------------------------------------------------------------------------------------------------
5,000 NYS HFA (Hospital & Nursing Home) 6.875 11/01/2005 05/01/2002(a) 5,679
---------------------------------------------------------------------------------------------------------------------
325,000 NYS HFA (Hospital & Nursing Home) 6.875 11/01/2007 05/01/2002(a) 361,969
---------------------------------------------------------------------------------------------------------------------
5,000 NYS HFA (Hospital & Nursing Home) 6.875 11/01/2009 05/01/2002(a) 5,927
---------------------------------------------------------------------------------------------------------------------
3,000 NYS HFA (Hospital & Nursing Home) 6.875 11/01/2010 05/01/2002(a) 3,585
19 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF INVESTMENTS Continued
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
---------------------------------------------------------------------------------------------------------------------
New York Continued
$ 590,000 NYS HFA (Hospital & Nursing Home) 7.000% 11/01/2017 05/01/2002(a) $ 695,191
---------------------------------------------------------------------------------------------------------------------
70,000 NYS HFA (Meadow Manor) 7.750 11/01/2019(s) 05/01/2002(b) 70,239
---------------------------------------------------------------------------------------------------------------------
155,000 NYS HFA (Monroe County Health Facilities) 7.625 05/01/2005(s) 05/01/2002(b) 159,346
---------------------------------------------------------------------------------------------------------------------
10,000 NYS HFA (Multifamily Hsg.) 0.000 11/01/2010 11/01/2006(b) 6,258
---------------------------------------------------------------------------------------------------------------------
200,000 NYS HFA (Multifamily Hsg.) 0.000 11/01/2011 11/01/2006(b) 117,480
---------------------------------------------------------------------------------------------------------------------
130,000 NYS HFA (Multifamily Hsg.) 0.000 11/01/2013 11/01/2006(b) 67,181
---------------------------------------------------------------------------------------------------------------------
30,000 NYS HFA (Multifamily Hsg.) 5.850 08/15/2013(s) 02/15/2005(b) 30,390
---------------------------------------------------------------------------------------------------------------------
5,000 NYS HFA (Multifamily Hsg.) 6.000 08/15/2003 08/15/2003 5,210
---------------------------------------------------------------------------------------------------------------------
1,000,000 NYS HFA (Multifamily Hsg.) 6.100 08/15/2016(s) 08/15/2008(b) 1,022,840
---------------------------------------------------------------------------------------------------------------------
35,000 NYS HFA (Multifamily Hsg.) 6.200 08/15/2012(s) 08/15/2002(b) 35,854
---------------------------------------------------------------------------------------------------------------------
150,000 NYS HFA (Multifamily Hsg.) 6.250 08/15/2023(s) 08/15/2004(b) 152,811
---------------------------------------------------------------------------------------------------------------------
1,000,000 NYS HFA (Multifamily Hsg.) 6.450 08/15/2014(s) 08/15/2002(b) 1,026,900
---------------------------------------------------------------------------------------------------------------------
1,500,000 NYS HFA (Multifamily Hsg.) 6.500 08/15/2024(s) 08/15/2002(b) 1,542,225
---------------------------------------------------------------------------------------------------------------------
725,000 NYS HFA (Multifamily Hsg.) 6.625 08/15/2012 02/15/2003(b) 748,548
---------------------------------------------------------------------------------------------------------------------
1,620,000 NYS HFA (Multifamily Hsg.) 6.700 08/15/2025(s) 02/15/2003(b) 1,671,759
---------------------------------------------------------------------------------------------------------------------
350,000 NYS HFA (Multifamily Hsg.) 6.850 11/01/2019(s) 11/01/2004(b) 368,868
---------------------------------------------------------------------------------------------------------------------
455,000 NYS HFA (Multifamily Hsg.) 6.900 08/15/2007(s) 08/15/2002(b) 470,202
---------------------------------------------------------------------------------------------------------------------
200,000 NYS HFA (Multifamily Hsg.) 6.950 08/15/2012(s) 08/15/2002(b) 206,140
---------------------------------------------------------------------------------------------------------------------
75,000 NYS HFA (Multifamily Hsg.) 7.000 08/15/2011(s) 02/15/2002(b) 76,763
---------------------------------------------------------------------------------------------------------------------
20,000 NYS HFA (Multifamily Hsg.) 7.000 08/15/2022 08/15/2002(b) 20,551
---------------------------------------------------------------------------------------------------------------------
995,000 NYS HFA (Multifamily Hsg.) 7.000 08/15/2023(s) 02/15/2002(b) 1,016,064
---------------------------------------------------------------------------------------------------------------------
255,000 NYS HFA (Multifamily Hsg.) 7.100 08/15/2035(s) 02/15/2002(b) 261,010
---------------------------------------------------------------------------------------------------------------------
40,000 NYS HFA (Multifamily Hsg.) 7.300 11/01/2004 05/01/2002(b) 40,445
---------------------------------------------------------------------------------------------------------------------
394,000 NYS HFA (Multifamily Hsg.) 7.450 11/01/2028(s) 11/01/2002(b) 411,970
---------------------------------------------------------------------------------------------------------------------
105,000 NYS HFA (Multifamily Hsg.) 7.450 11/01/2028(s) 05/01/2002(b) 109,935
---------------------------------------------------------------------------------------------------------------------
1,940,000 NYS HFA (Multifamily Hsg.) 7.750 11/01/2020(s) 05/01/2002(b) 2,051,763
---------------------------------------------------------------------------------------------------------------------
10,000 NYS HFA (Multifamily Hsg.) 8.300 05/15/2005(s) 05/01/2002(b) 10,035
---------------------------------------------------------------------------------------------------------------------
5,000 NYS HFA (Nonprofit Hsg.) 6.000 11/01/2012 05/01/2002(b) 5,056
---------------------------------------------------------------------------------------------------------------------
45,000 NYS HFA (Nonprofit Hsg.) 6.200 11/01/2004 05/01/2002(b) 45,963
---------------------------------------------------------------------------------------------------------------------
10,000 NYS HFA (Nonprofit Hsg.) 6.200 11/01/2005 05/01/2002(b) 10,214
---------------------------------------------------------------------------------------------------------------------
10,000 NYS HFA (Nonprofit Hsg.) 6.200 11/01/2006 05/01/2002(b) 10,214
---------------------------------------------------------------------------------------------------------------------
25,000 NYS HFA (Nonprofit Hsg.) 6.200 11/01/2007 05/01/2002(b) 25,535
---------------------------------------------------------------------------------------------------------------------
45,000 NYS HFA (Nonprofit Hsg.) 6.200 11/01/2008 05/01/2002(b) 45,963
---------------------------------------------------------------------------------------------------------------------
10,000 NYS HFA (Nonprofit Hsg.) 6.200 11/01/2009 05/01/2002(b) 10,214
---------------------------------------------------------------------------------------------------------------------
75,000 NYS HFA (Nonprofit Hsg.) 6.200 11/01/2011 05/01/2002(b) 76,606
---------------------------------------------------------------------------------------------------------------------
55,000 NYS HFA (Nonprofit Hsg.) 6.200 11/01/2012 05/01/2002(b) 56,178
---------------------------------------------------------------------------------------------------------------------
15,000 NYS HFA (Nonprofit Hsg.) 6.200 11/01/2013 05/01/2002(b) 15,321
---------------------------------------------------------------------------------------------------------------------
20,000 NYS HFA (Nonprofit Hsg.) 6.400 11/01/2002 05/01/2002(b) 20,234
---------------------------------------------------------------------------------------------------------------------
30,000 NYS HFA (Nonprofit Hsg.) 6.400 11/01/2004 05/01/2002(b) 30,341
---------------------------------------------------------------------------------------------------------------------
145,000 NYS HFA (Nonprofit Hsg.) 6.400 11/01/2005 05/01/2002(b) 146,720
---------------------------------------------------------------------------------------------------------------------
120,000 NYS HFA (Nonprofit Hsg.) 6.400 11/01/2006 05/01/2002(b) 121,360
---------------------------------------------------------------------------------------------------------------------
5,000 NYS HFA (Nonprofit Hsg.) 6.400 11/01/2007 05/01/2002(b) 5,056
---------------------------------------------------------------------------------------------------------------------
35,000 NYS HFA (Nonprofit Hsg.) 6.400 11/01/2008 05/01/2002(b) 35,409
---------------------------------------------------------------------------------------------------------------------
80,000 NYS HFA (Nonprofit Hsg.) 6.400 11/01/2009 05/01/2002(b) 81,960
---------------------------------------------------------------------------------------------------------------------
5,000 NYS HFA (Nonprofit Hsg.) 6.400 11/01/2011 05/01/2002(b) 5,057
20 | LIMITED TERM NEW YORK MUNICIPAL FUND
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
----------------------------------------------------------------------------------------------------------------------
New York Continued
$ 765,000 NYS HFA (Nonprofit Hsg.) 6.400% 11/01/2012 05/01/2002(b) $ 774,142
----------------------------------------------------------------------------------------------------------------------
55,000 NYS HFA (Nonprofit Hsg.) 6.400 11/01/2013 05/01/2002(b) 57,426
----------------------------------------------------------------------------------------------------------------------
60,000 NYS HFA (Nonprofit Hsg.) 6.500 11/01/2002 05/01/2002(b) 60,816
----------------------------------------------------------------------------------------------------------------------
5,000 NYS HFA (Nonprofit Hsg.) 6.500 11/01/2003 05/01/2002(b) 5,059
----------------------------------------------------------------------------------------------------------------------
10,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2002 05/01/2002(b) 10,237
----------------------------------------------------------------------------------------------------------------------
230,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2003 05/01/2002(b) 235,039
----------------------------------------------------------------------------------------------------------------------
75,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2005 05/01/2002(b) 76,642
----------------------------------------------------------------------------------------------------------------------
50,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2005 05/01/2002(b) 50,596
----------------------------------------------------------------------------------------------------------------------
45,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2006 05/01/2002(b) 45,985
----------------------------------------------------------------------------------------------------------------------
15,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2006 05/01/2002(b) 15,179
----------------------------------------------------------------------------------------------------------------------
180,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2007 05/01/2002(b) 183,940
----------------------------------------------------------------------------------------------------------------------
115,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2007 05/01/2002(b) 116,371
----------------------------------------------------------------------------------------------------------------------
25,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2008 05/01/2002(b) 25,547
----------------------------------------------------------------------------------------------------------------------
70,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2008 05/01/2002(b) 73,070
----------------------------------------------------------------------------------------------------------------------
10,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2009 05/01/2002(b) 10,119
----------------------------------------------------------------------------------------------------------------------
20,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2009 05/01/2002(b) 20,438
----------------------------------------------------------------------------------------------------------------------
20,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2010 05/01/2002(b) 20,438
----------------------------------------------------------------------------------------------------------------------
65,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2011 05/01/2002(b) 66,424
----------------------------------------------------------------------------------------------------------------------
5,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2011 05/01/2002(b) 5,060
----------------------------------------------------------------------------------------------------------------------
25,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2012 05/01/2002(b) 25,542
----------------------------------------------------------------------------------------------------------------------
25,000 NYS HFA (Nonprofit Hsg.) 6.600 11/01/2013 05/01/2002(b) 25,542
----------------------------------------------------------------------------------------------------------------------
100,000 NYS HFA (Nonprofit Hsg.) 6.750 11/01/2004 05/01/2002(b) 104,406
----------------------------------------------------------------------------------------------------------------------
5,000 NYS HFA (Nonprofit Hsg.) 6.750 11/01/2005 05/01/2002(b) 5,110
----------------------------------------------------------------------------------------------------------------------
25,000 NYS HFA (Nonprofit Hsg.) 6.750 11/01/2007 05/01/2002(b) 25,550
----------------------------------------------------------------------------------------------------------------------
15,000 NYS HFA (Nonprofit Hsg.) 6.750 11/01/2008 05/01/2002(b) 15,330
----------------------------------------------------------------------------------------------------------------------
85,000 NYS HFA (Nonprofit Hsg.) 6.750 11/01/2009 05/01/2002(b) 86,871
----------------------------------------------------------------------------------------------------------------------
45,000 NYS HFA (Nonprofit Hsg.) 6.750 11/01/2010 05/01/2002(b) 45,990
----------------------------------------------------------------------------------------------------------------------
1,420,000 NYS HFA (Nonprofit Hsg.) 6.750 11/01/2011 05/01/2002(b) 1,470,808
----------------------------------------------------------------------------------------------------------------------
30,000 NYS HFA (Nonprofit Hsg.) 6.750 11/01/2012 05/01/2002(b) 30,653
----------------------------------------------------------------------------------------------------------------------
61,000 NYS HFA (Nonprofit Hsg.) 6.875 11/01/2010 05/01/2002(b) 61,784
----------------------------------------------------------------------------------------------------------------------
1,165,000 NYS HFA (Nonprofit Hsg.) 8.400 11/01/2002 05/01/2002(b) 1,214,559
----------------------------------------------------------------------------------------------------------------------
1,265,000 NYS HFA (Nonprofit Hsg.) 8.400 11/01/2003 05/01/2002(b) 1,318,813
----------------------------------------------------------------------------------------------------------------------
1,360,000 NYS HFA (Nonprofit Hsg.) 8.400 11/01/2004 05/01/2002(b) 1,417,854
----------------------------------------------------------------------------------------------------------------------
1,480,000 NYS HFA (Nonprofit Hsg.) 8.400 11/01/2005 05/01/2002(b) 1,542,959
----------------------------------------------------------------------------------------------------------------------
1,600,000 NYS HFA (Nonprofit Hsg.) 8.400 11/01/2006 05/01/2002(b) 1,668,064
----------------------------------------------------------------------------------------------------------------------
1,745,000 NYS HFA (Nonprofit Hsg.) 8.400 11/01/2007 05/01/2002(b) 1,819,232
----------------------------------------------------------------------------------------------------------------------
1,895,000 NYS HFA (Nonprofit Hsg.) 8.400 11/01/2008 05/01/2002(b) 1,975,613
----------------------------------------------------------------------------------------------------------------------
195,000 NYS HFA (Phillips Village) 6.700 02/15/2002 02/15/2002 195,267
----------------------------------------------------------------------------------------------------------------------
250,000 NYS HFA (Phillips Village) 6.700 08/15/2002 08/15/2002 251,918
----------------------------------------------------------------------------------------------------------------------
175,000 NYS HFA (Phillips Village) 6.900 02/15/2004 02/15/2004 178,738
----------------------------------------------------------------------------------------------------------------------
85,000 NYS HFA (Phillips Village) 6.900 08/15/2004 08/15/2004 87,220
----------------------------------------------------------------------------------------------------------------------
4,185,000 NYS HFA (Service Contract) 5.500 09/15/2022(s) 03/15/2005(b) 4,201,070
----------------------------------------------------------------------------------------------------------------------
380,000 NYS HFA (Simeon Dewitt) 8.000 11/01/2018(s) 05/01/2002(b) 391,400
----------------------------------------------------------------------------------------------------------------------
300,000 NYS HFA, Series A 6.100 11/01/2015(s) 05/01/2008(b) 316,005
----------------------------------------------------------------------------------------------------------------------
5,000 NYS LGAC 5.375 04/01/2014(s) 04/01/2006(b) 5,104
21 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF INVESTMENTS Continued
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
--------------------------------------------------------------------------------------------------------------------------
New York Continued
$ 565,000 NYS LGSC (SCSB) 6.375% 12/15/2009 10/04/2006(c) $ 555,350
--------------------------------------------------------------------------------------------------------------------------
950,000 NYS Medcare (Beth Israel Medical Center) 7.125 11/01/2006 12/20/2004(c) 845,557
--------------------------------------------------------------------------------------------------------------------------
545,000 NYS Medcare (Beth Israel Medical Center) 7.200 11/01/2014 09/12/2011(c) 484,750
--------------------------------------------------------------------------------------------------------------------------
335,000 NYS Medcare (Beth Israel Medical Center) 7.400 11/01/2004(s) 05/01/2002(b) 342,454
--------------------------------------------------------------------------------------------------------------------------
20,000 NYS Medcare (Buffalo General Hospital) 6.000 08/15/2014(s) 08/15/2004(b) 21,380
--------------------------------------------------------------------------------------------------------------------------
35,000 NYS Medcare (Buffalo General Hospital) 6.125 08/15/2024 08/15/2006(b) 37,314
--------------------------------------------------------------------------------------------------------------------------
10,000 NYS Medcare (Central Suffolk Hospital) 5.875 11/01/2005 05/28/2004(c) 9,906
--------------------------------------------------------------------------------------------------------------------------
70,000 NYS Medcare (Hospital & Nursing Home) 5.650 08/15/2013 08/15/2005(b) 73,559
--------------------------------------------------------------------------------------------------------------------------
2,780,000 NYS Medcare (Hospital & Nursing Home) 5.950 08/15/2009 03/18/2003(c) 2,897,566
--------------------------------------------------------------------------------------------------------------------------
460,000 NYS Medcare (Hospital & Nursing Home) 6.125 02/15/2014 02/15/2004(a) 482,172
--------------------------------------------------------------------------------------------------------------------------
1,930,000 NYS Medcare (Hospital & Nursing Home) 6.125 02/15/2014(s) 02/15/2006(b) 2,023,798
--------------------------------------------------------------------------------------------------------------------------
5,000 NYS Medcare (Hospital & Nursing Home) 6.125 02/15/2015(s) 02/15/2006(b) 5,524
--------------------------------------------------------------------------------------------------------------------------
20,000 NYS Medcare (Hospital & Nursing Home) 6.125 02/15/2015(s) 02/15/2006(b) 21,162
--------------------------------------------------------------------------------------------------------------------------
2,775,000 NYS Medcare (Hospital & Nursing Home) 6.200 08/15/2013(s) 02/15/2005(b) 2,935,895
--------------------------------------------------------------------------------------------------------------------------
155,000 NYS Medcare (Hospital & Nursing Home) 6.200 08/15/2022 08/15/2002(b) 159,139
--------------------------------------------------------------------------------------------------------------------------
200,000 NYS Medcare (Hospital & Nursing Home) 6.250 08/15/2012(s) 08/15/2004(a) 218,398
--------------------------------------------------------------------------------------------------------------------------
90,000 NYS Medcare (Hospital & Nursing Home) 6.250 02/15/2015 08/15/2005(b) 95,972
--------------------------------------------------------------------------------------------------------------------------
220,000 NYS Medcare (Hospital & Nursing Home) 6.400 11/01/2014(s) 05/01/2002(b) 228,208
--------------------------------------------------------------------------------------------------------------------------
570,000 NYS Medcare (Hospital & Nursing Home) 6.500 08/15/2012(s) 08/15/2002(b) 594,339
--------------------------------------------------------------------------------------------------------------------------
715,000 NYS Medcare (Hospital & Nursing Home) 6.500 02/15/2019(s) 08/15/2002(b) 745,674
--------------------------------------------------------------------------------------------------------------------------
45,000 NYS Medcare (Hospital & Nursing Home) 6.550 08/15/2012 08/15/2002(b) 47,092
--------------------------------------------------------------------------------------------------------------------------
1,535,000 NYS Medcare (Hospital & Nursing Home) 6.850 02/15/2012(s) 02/15/2002(b) 1,573,160
--------------------------------------------------------------------------------------------------------------------------
6,975,000 NYS Medcare (Hospital & Nursing Home) 6.875 02/15/2032 02/15/2002(b) 7,155,792
--------------------------------------------------------------------------------------------------------------------------
50,000 NYS Medcare (Hospital & Nursing Home) 7.000 08/15/2032(s) 08/15/2002(b) 52,483
--------------------------------------------------------------------------------------------------------------------------
85,000 NYS Medcare (Hospital & Nursing Home) 7.250 11/01/2002 05/01/2002(b) 86,208
--------------------------------------------------------------------------------------------------------------------------
395,000 NYS Medcare (Hospital & Nursing Home) 7.250 11/01/2003 05/01/2002(b) 400,376
--------------------------------------------------------------------------------------------------------------------------
70,000 NYS Medcare (Hospital & Nursing Home) 7.300 08/15/2011 02/15/2002(b) 71,774
--------------------------------------------------------------------------------------------------------------------------
305,000 NYS Medcare (Hospital & Nursing Home) 7.350 02/15/2029 02/15/2002(b) 306,403
--------------------------------------------------------------------------------------------------------------------------
95,000 NYS Medcare (Hospital & Nursing Home) 7.350 02/15/2029 02/15/2002(b) 97,722
--------------------------------------------------------------------------------------------------------------------------
1,825,000 NYS Medcare (Hospital & Nursing Home) 7.400 11/01/2016(s) 05/01/2002(b) 1,900,190
--------------------------------------------------------------------------------------------------------------------------
5,425,000 NYS Medcare (Hospital & Nursing Home) 7.450 08/15/2031 02/15/2002(a) 5,631,421
--------------------------------------------------------------------------------------------------------------------------
10,000 NYS Medcare (Hospital & Nursing Home) 7.750 08/15/2010(s) 02/15/2002(b) 10,339
--------------------------------------------------------------------------------------------------------------------------
135,000 NYS Medcare (Hospital & Nursing Home) 8.625 02/15/2006 02/15/2002(b) 135,871
--------------------------------------------------------------------------------------------------------------------------
825,000 NYS Medcare (Hospital & Nursing Home) 9.000 02/15/2026 02/15/2002(b) 846,615
--------------------------------------------------------------------------------------------------------------------------
2,735,000 NYS Medcare (Hospital & Nursing Home) 9.375 11/01/2016(s) 05/01/2002(b) 2,945,595
--------------------------------------------------------------------------------------------------------------------------
1,820,000 NYS Medcare (Hospital & Nursing Home) 10.000 11/01/2006(s) 05/01/2002(b) 1,939,392
--------------------------------------------------------------------------------------------------------------------------
1,915,000 NYS Medcare (Huntington Hospital) 6.500 11/01/2014(s) 11/01/2006(b) 1,946,444
--------------------------------------------------------------------------------------------------------------------------
1,060,000 NYS Medcare (Insured Mtg. Nursing) 6.500 11/01/2015 11/01/2002(b) 1,113,795
--------------------------------------------------------------------------------------------------------------------------
1,865,000 NYS Medcare (Long Term Health Care) 6.450 11/01/2014(s) 05/01/2002(b) 1,935,031
--------------------------------------------------------------------------------------------------------------------------
45,000 NYS Medcare (Long Term Health Care) 6.700 11/01/2007 05/01/2002(b) 46,602
--------------------------------------------------------------------------------------------------------------------------
215,000 NYS Medcare (Long Term Health Care) 6.800 11/01/2014(s) 05/01/2002(b) 223,379
--------------------------------------------------------------------------------------------------------------------------
130,000 NYS Medcare (Long Term Health Care) 7.100 11/01/2012(s) 05/01/2002(b) 133,296
--------------------------------------------------------------------------------------------------------------------------
235,000 NYS Medcare (Long Term Health Care) 7.300 11/01/2005(s) 05/01/2002(b) 236,297
--------------------------------------------------------------------------------------------------------------------------
35,000 NYS Medcare (Long Term Health Care) 7.375 11/01/2011(s) 05/01/2002(b) 35,432
--------------------------------------------------------------------------------------------------------------------------
5,000 NYS Medcare (Mental Health) 0.000 02/15/2003 02/15/2002(b) 4,714
--------------------------------------------------------------------------------------------------------------------------
5,000 NYS Medcare (Mental Health) 0.000 08/15/2003 02/15/2002(b) 4,542
22 | LIMITED TERM NEW YORK MUNICIPAL FUND
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
---------------------------------------------------------------------------------------------------------------------
New York Continued
$ 325,000 NYS Medcare (Mental Health) 5.500% 08/15/2021(s) 02/15/2002(b) $ 325,049
---------------------------------------------------------------------------------------------------------------------
5,000 NYS Medcare (Mental Health) 5.700 02/15/2003 02/15/2002(b) 5,015
---------------------------------------------------------------------------------------------------------------------
70,000 NYS Medcare (Mental Health) 5.900 08/15/2022(s) 08/15/2002(b) 71,252
---------------------------------------------------------------------------------------------------------------------
10,000 NYS Medcare (Mental Health) 6.100 08/15/2013(s) 08/15/2002(b) 10,453
---------------------------------------------------------------------------------------------------------------------
5,000 NYS Medcare (Mental Health) 6.375 08/15/2010 02/15/2002(a) 5,130
---------------------------------------------------------------------------------------------------------------------
5,000 NYS Medcare (Mental Health) 6.375 08/15/2014 08/15/2004(b) 5,575
---------------------------------------------------------------------------------------------------------------------
5,000 NYS Medcare (Mental Health) 6.500 08/15/2024 08/15/2004(a) 5,457
---------------------------------------------------------------------------------------------------------------------
5,000 NYS Medcare (Mental Health) 7.100 02/15/2002 02/15/2002 5,021
---------------------------------------------------------------------------------------------------------------------
10,000 NYS Medcare (Mental Health) 7.200 02/15/2004 02/15/2002(b) 10,034
---------------------------------------------------------------------------------------------------------------------
150,000 NYS Medcare (Mental Health) 7.375 02/15/2014(s) 02/15/2002(b) 150,779
---------------------------------------------------------------------------------------------------------------------
15,000 NYS Medcare (Mental Health) 7.400 02/15/2002 02/15/2002 15,099
---------------------------------------------------------------------------------------------------------------------
10,000 NYS Medcare (Mental Health) 7.400 08/15/2002 02/15/2002(b) 10,066
---------------------------------------------------------------------------------------------------------------------
5,000 NYS Medcare (Mental Health) 7.400 02/15/2003 02/15/2002(b) 5,121
---------------------------------------------------------------------------------------------------------------------
110,000 NYS Medcare (Mental Health) 7.600 02/15/2002 02/15/2002 110,750
---------------------------------------------------------------------------------------------------------------------
5,000 NYS Medcare (Mental Health) 7.750 08/15/2010(s) 02/15/2002(b) 5,040
---------------------------------------------------------------------------------------------------------------------
10,000 NYS Medcare (Mental Health) 7.750 08/15/2010(s) 02/15/2002(b) 10,339
---------------------------------------------------------------------------------------------------------------------
50,000 NYS Medcare (Mental Health) 8.875 08/15/2007(s) 02/15/2002(b) 51,535
---------------------------------------------------------------------------------------------------------------------
85,000 NYS Medcare (Montefiore Medical Center) 5.700 02/15/2012 02/15/2007(b) 91,809
---------------------------------------------------------------------------------------------------------------------
65,000 NYS Medcare
(Our Lady of Mercy Medical Center) 6.250 08/15/2015(s) 02/15/2005(b) 67,410
---------------------------------------------------------------------------------------------------------------------
30,000 NYS Medcare (Our Lady of Victory Hospital) 6.625 11/01/2016(s) 05/01/2002(b) 30,747
---------------------------------------------------------------------------------------------------------------------
25,000 NYS Medcare (Secured Hospital) 6.125 08/15/2013(s) 02/15/2004(b) 26,789
---------------------------------------------------------------------------------------------------------------------
235,000 NYS Medcare (Sisters of Charity Hospital) 6.600 11/01/2007(s) 05/01/2002(b) 240,859
---------------------------------------------------------------------------------------------------------------------
595,000 NYS Medcare (Sisters of Charity Hospital) 6.600 11/01/2010(s) 05/01/2002(b) 615,974
---------------------------------------------------------------------------------------------------------------------
7,110,000 NYS Medcare (Sisters of Charity Hospital) 6.625 11/01/2018(s) 05/01/2002(b) 7,336,454
---------------------------------------------------------------------------------------------------------------------
80,000 NYS Medcare (St. Luke's Hospital) 5.600 08/15/2013(s) 08/15/2005(b) 83,675
---------------------------------------------------------------------------------------------------------------------
70,000 NYS Medcare (St. Luke's Hospital) 5.625 08/15/2018(s) 08/15/2005(b) 71,047
---------------------------------------------------------------------------------------------------------------------
2,930,000 NYS Medcare (St. Luke's Hospital) 7.500 11/01/2011(s) 05/01/2002(b) 3,013,066
---------------------------------------------------------------------------------------------------------------------
3,755,000 NYS Muni Bond Bank Agency
(Special Program-City of Buffalo) 6.875 03/15/2006(s) 03/15/2002(b) 3,857,699
---------------------------------------------------------------------------------------------------------------------
10,000 NYS Power Authority 5.500 01/01/2010(s) 07/01/2002(a) 10,711
---------------------------------------------------------------------------------------------------------------------
250,000 NYS Thruway Authority 0.000 01/01/2005 01/01/2005 225,850
---------------------------------------------------------------------------------------------------------------------
385,000 NYS Thruway Authority 0.000 01/01/2006 01/01/2006 331,246
---------------------------------------------------------------------------------------------------------------------
50,000 NYS Thruway Authority 5.500 04/01/2015(s) 04/01/2007(b) 51,524
---------------------------------------------------------------------------------------------------------------------
45,000 NYS Thruway Authority 5.750 04/01/2016(s) 04/01/2008(b) 46,997
---------------------------------------------------------------------------------------------------------------------
25,000 NYS UDC (Correctional Facilities) 0.000 01/01/2003 01/01/2003 24,552
---------------------------------------------------------------------------------------------------------------------
30,000 NYS UDC (Correctional Facilities) 0.000 01/01/2007 01/01/2007 24,448
---------------------------------------------------------------------------------------------------------------------
12,110,000 NYS UDC (Correctional Facilities) 5.250 01/01/2021 03/02/2019(c) 11,888,750
---------------------------------------------------------------------------------------------------------------------
23,815,000 NYS UDC (Correctional Facilities) 5.375 01/01/2023 12/06/2018(c) 23,666,871
---------------------------------------------------------------------------------------------------------------------
90,000 NYS UDC (Correctional Facilities) 5.750 01/01/2013(s) 01/01/2005(b) 94,172
---------------------------------------------------------------------------------------------------------------------
85,000 NYS UDC (Correctional Facilities) 5.750 01/01/2013(s) 01/01/2005(b) 88,941
---------------------------------------------------------------------------------------------------------------------
15,000 NYS UDC (Correctional Facilities) 6.750 01/01/2026 07/01/2002(b) 15,361
---------------------------------------------------------------------------------------------------------------------
35,000 NYS UDC (South Mall) CAB 0.000 01/01/2003 01/01/2003 34,288
---------------------------------------------------------------------------------------------------------------------
130,000 NYS UDC (South Mall) CAB 0.000 01/01/2005 06/24/2004(c) 113,870
---------------------------------------------------------------------------------------------------------------------
50,000 NYS UDC (South Mall) CAB 0.000 01/01/2005 06/24/2004(c) 43,903
---------------------------------------------------------------------------------------------------------------------
1,025,000 NYS UDC (South Mall) CAB 0.000 01/01/2011 04/08/2008(c) 603,664
23 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF INVESTMENTS Continued
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
---------------------------------------------------------------------------------------------------------------------
New York Continued
$ 710,000 NYS UDC (South Mall) CAB 0.000% 01/01/2011 04/08/2008(c) $ 420,966
---------------------------------------------------------------------------------------------------------------------
550,000 NYS UDC (South Mall) CAB 0.000 01/01/2011 04/08/2008(c) 326,101
---------------------------------------------------------------------------------------------------------------------
6,000,000 NYS UDC (Sub. Lien) 5.500 07/01/2022(s) 07/01/2008(b) 6,037,440
---------------------------------------------------------------------------------------------------------------------
6,630,000 NYS UDC (Sub. Lien) 5.600 07/01/2026(s) 07/01/2008(b) 6,704,389
---------------------------------------------------------------------------------------------------------------------
1,780,000 Oneida County IDA (Bonide Products) 5.750 11/01/2007 04/08/2005(c) 1,728,914
---------------------------------------------------------------------------------------------------------------------
2,285,000 Oneida County IDA (Faxton Hospital) 6.625 01/01/2015(s) 01/01/2010(b) 2,558,012
---------------------------------------------------------------------------------------------------------------------
1,000,000 Oneida County IDA (Presbyterian Home) 6.250 06/01/2015 06/01/2010(b) 1,079,760
---------------------------------------------------------------------------------------------------------------------
3,895,000 Oneida Healthcare Corp. 5.500 02/01/2016(s) 02/01/2013(b) 3,993,972
---------------------------------------------------------------------------------------------------------------------
75,000 Oneida Healthcare Corp. 7.100 08/01/2011 02/01/2002(b) 76,842
---------------------------------------------------------------------------------------------------------------------
1,150,000 Oneida-Herkimer SWMA 6.600 04/01/2004 04/01/2004 1,216,505
---------------------------------------------------------------------------------------------------------------------
155,000 Oneida-Herkimer SWMA 6.750 04/01/2014(s) 04/01/2005(b) 157,455
---------------------------------------------------------------------------------------------------------------------
85,000 Onondaga County IDA (Coltec Industries) 7.250 06/01/2008(s) 06/01/2002(b) 86,139
---------------------------------------------------------------------------------------------------------------------
2,605,000 Onondaga County IDA (Le Moyne College) 5.000 12/01/2012 12/01/2012 2,556,599
---------------------------------------------------------------------------------------------------------------------
510,000 Onondaga County IDA (Le Moyne College) 5.500 03/01/2014 04/08/2012 505,502
---------------------------------------------------------------------------------------------------------------------
11,885,000 Onondaga County Res Rec 6.875 05/01/2006 05/01/2002(g) 12,196,506
---------------------------------------------------------------------------------------------------------------------
14,730,000 Onondaga County Res Rec 7.000 05/01/2015(s) 05/01/2002(b) 15,081,752
---------------------------------------------------------------------------------------------------------------------
200,000 Orange County IDA (Glen Arden) 5.350 01/01/2007 01/01/2007 201,358
---------------------------------------------------------------------------------------------------------------------
230,000 Orange County IDA (Glen Arden) 5.400 01/01/2008 01/01/2008 229,837
---------------------------------------------------------------------------------------------------------------------
570,000 Orange County IDA (Kingston Manufacturing)(i) 7.250 11/01/2003 05/08/2003(c) 557,101
---------------------------------------------------------------------------------------------------------------------
40,000 Orange County IDA (Mental Health) 6.000 05/01/2008 05/01/2006(b) 42,922
---------------------------------------------------------------------------------------------------------------------
60,000 Orange County IDA (Mental Health) 6.125 05/01/2016(s) 05/01/2008(b) 62,123
---------------------------------------------------------------------------------------------------------------------
5,065,000 Orange County IDA
(St. Luke's Cornwall Hospital Obligated Group) 6.000 12/01/2016(s) 12/01/2012(b) 5,388,198
---------------------------------------------------------------------------------------------------------------------
1,920,000 Orange County IDA
(St. Luke's Cornwall Hospital Obligated Group) 6.000 12/01/2016(s) 12/01/2012(b) 2,042,515
---------------------------------------------------------------------------------------------------------------------
1,805,000 Oswego County Res Rec 6.500 06/01/2004 05/23/2003(c) 1,879,655
---------------------------------------------------------------------------------------------------------------------
50,000 Philadelphia, NY GO 7.500 12/15/2009 12/15/2009 59,440
---------------------------------------------------------------------------------------------------------------------
11,390,000 Port Authority NY/NJ (Delta Air Lines) 6.950 06/01/2008 06/01/2008 11,248,195
---------------------------------------------------------------------------------------------------------------------
52,305,000 Port Authority NY/NJ
(JFK International Air Terminal) 5.750 12/01/2022(s) 12/01/2009(b) 54,030,019
---------------------------------------------------------------------------------------------------------------------
20,000 Port Authority NY/NJ
(JFK International Air Terminal) 5.750 12/01/2025(s) 12/01/2007(b) 20,497
---------------------------------------------------------------------------------------------------------------------
4,165,000 Port Authority NY/NJ (KIAC) 6.750 10/01/2011 10/01/2008(b) 4,325,269
---------------------------------------------------------------------------------------------------------------------
275,000 Port Authority NY/NJ (KIAC) 6.750 10/01/2019(s) 10/01/2008(b) 281,306
---------------------------------------------------------------------------------------------------------------------
14,850,000 Port Authority NY/NJ (KIAC) 7.000 10/01/2007 05/02/2005(c) 15,550,326
---------------------------------------------------------------------------------------------------------------------
15,000 Port Authority NY/NJ, 100th Series 5.750 12/15/2015 06/15/2005(b) 15,549
---------------------------------------------------------------------------------------------------------------------
50,000 Port Authority NY/NJ, 76th Series 6.500 11/01/2011 05/01/2002(b) 50,562
---------------------------------------------------------------------------------------------------------------------
9,455,000 Port Authority NY/NJ, 76th Series 6.500 11/01/2026 05/01/2002(b) 9,557,492
---------------------------------------------------------------------------------------------------------------------
90,000 Port Authority NY/NJ, 76th Series 6.500 11/01/2026(s) 05/01/2002(b) 90,983
---------------------------------------------------------------------------------------------------------------------
8,335,000 Port Authority NY/NJ, 77th Series 6.250 01/15/2027(s) 01/15/2002(b) 8,423,601
---------------------------------------------------------------------------------------------------------------------
390,000 Port Authority NY/NJ, 78th Series 6.500 10/15/2008 04/15/2002(b) 396,139
---------------------------------------------------------------------------------------------------------------------
25,000 Port Authority NY/NJ, 78th Series 6.500 04/15/2011(s) 04/15/2002(b) 25,371
---------------------------------------------------------------------------------------------------------------------
30,000 Port Authority NY/NJ, 83rd Series 6.375 10/15/2017(s) 10/15/2002(b) 30,616
---------------------------------------------------------------------------------------------------------------------
10,000 Port Authority NY/NJ, 84th Series 6.000 01/15/2028(s) 01/15/2003(b) 10,158
---------------------------------------------------------------------------------------------------------------------
10,000 Port Authority NY/NJ, 95th Series 6.000 07/15/2015 07/16/2006(b) 10,284
---------------------------------------------------------------------------------------------------------------------
5,000 Port Authority NY/NJ, 95th Series 6.125 07/15/2029(s) 07/15/2004(b) 5,134
24 | LIMITED TERM NEW YORK MUNICIPAL FUND
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
-------------------------------------------------------------------------------------------------------------------
New York Continued
$ 3,300,000 Port Authority NY/NJ, 96th Series 6.600% 10/01/2023(s) 10/01/2004(b) $3,447,444
-------------------------------------------------------------------------------------------------------------------
10,000 Port Authority NY/NJ, 97th Series 6.500 07/15/2019 01/15/2005(b) 10,485
-------------------------------------------------------------------------------------------------------------------
500,000 Port Chester CDC (Section 8 Hsg.), Series A 5.500 08/01/2017(s) 08/01/2013(b) 510,720
-------------------------------------------------------------------------------------------------------------------
25,000 Port Chester IDA (Nadel Industries) 7.000 02/01/2016 02/01/2008(a) 27,685
-------------------------------------------------------------------------------------------------------------------
1,745,000 Poughkeepsie IDA
(Eastman & Bixby Redevelopment Corp.) 5.900 08/01/2020 05/17/2009(g) 1,788,555
-------------------------------------------------------------------------------------------------------------------
980,000 Putnam County IDA (Brewster Plastics) 7.375 12/01/2008 03/15/2006(c) 993,789
-------------------------------------------------------------------------------------------------------------------
2,000,000 Rensselaer County Tobacco Asset
Securitization Corp.(w) 5.200 06/01/2025 12/22/2008(c) 1,985,180
-------------------------------------------------------------------------------------------------------------------
160,000 Rensselaer Hsg. Authority (Renwyck) 7.650 01/01/2011 12/30/2002(g) 168,123
-------------------------------------------------------------------------------------------------------------------
1,115,000 Rensselaer Municipal Leasing Corp.
(Rensselaer County Nursing Home) 6.250 06/01/2004 06/16/2003(c) 1,144,971
-------------------------------------------------------------------------------------------------------------------
60,000 Rensselaer Municipal Leasing Corp.
(Rensselaer County Nursing Home) 6.900 06/01/2024 06/01/2006(b) 61,134
-------------------------------------------------------------------------------------------------------------------
1,700,000 Riverhead HDC (Riverpointe Apartments) 5.850 08/01/2010 06/28/2008(g) 1,751,255
-------------------------------------------------------------------------------------------------------------------
1,730,000 Rochester Hsg. Authority
(Crossroads Apartments) 7.300 07/01/2005 11/03/2003(c) 1,804,546
-------------------------------------------------------------------------------------------------------------------
580,000 Rochester Hsg. Authority (Stonewood Village) 5.900 09/01/2009 07/29/2005(g) 585,116
-------------------------------------------------------------------------------------------------------------------
265,000 Rockland County IDA (Dominican College) 7.000 03/01/2003 09/06/2002(c) 273,337
-------------------------------------------------------------------------------------------------------------------
10,200,000 Rockland County Tobacco Asset
Securitization Corp.(w) 5.500 08/15/2025 06/12/2012(c) 10,192,554
-------------------------------------------------------------------------------------------------------------------
305,000 Rockland Gardens Hsg. Corp. 10.500 05/01/2011 05/01/2002(b) 312,344
-------------------------------------------------------------------------------------------------------------------
50,000 Rome GO 6.900 12/15/2007 12/15/2003(b) 53,312
-------------------------------------------------------------------------------------------------------------------
240,000 Rome Hsg. Corp. 7.000 01/01/2026(s) 07/01/2002(b) 246,602
-------------------------------------------------------------------------------------------------------------------
225,000 Roxbury CSD GO 6.400 06/15/2010 06/15/2005(b) 239,596
-------------------------------------------------------------------------------------------------------------------
235,000 Roxbury CSD GO 6.400 06/15/2011 06/15/2005(b) 249,471
-------------------------------------------------------------------------------------------------------------------
1,250,000 Saratoga County IDA (Saratoga Sheraton) 6.750 12/31/2007 08/15/2004(c) 1,234,725
-------------------------------------------------------------------------------------------------------------------
220,000 Schuyler County IDA (Cargill) 7.900 04/01/2007 04/01/2002(b) 224,004
-------------------------------------------------------------------------------------------------------------------
25,000 Scotia GO 6.100 01/15/2012 07/15/2003(b) 26,767
-------------------------------------------------------------------------------------------------------------------
30,000 SONYMA, Series 27 5.650 04/01/2015(s) 10/01/2005(b) 30,593
-------------------------------------------------------------------------------------------------------------------
3,500,000 SONYMA, Series 27 5.800 10/01/2020(s) 04/01/2010(b) 3,588,620
-------------------------------------------------------------------------------------------------------------------
480,000 SONYMA, Series 28 6.650 04/01/2022(s) 04/01/2002(b) 481,699
-------------------------------------------------------------------------------------------------------------------
50,000 SONYMA, Series 29-A 6.100 10/01/2015 03/05/2008(g) 52,365
-------------------------------------------------------------------------------------------------------------------
25,000 SONYMA, Series 29-B 6.450 04/01/2015(s) 03/01/2003(b) 25,460
-------------------------------------------------------------------------------------------------------------------
540,000 SONYMA, Series 30-B 6.000 04/01/2019 01/22/2004(c) 564,262
-------------------------------------------------------------------------------------------------------------------
10,000 SONYMA, Series 34 5.550 09/30/2025(s) 03/01/2006(b) 10,018
-------------------------------------------------------------------------------------------------------------------
1,220,000 SONYMA, Series 36-A 6.125 10/01/2020 01/22/2004(c) 1,253,172
-------------------------------------------------------------------------------------------------------------------
100,000 SONYMA, Series 39 5.750 10/01/2010(s) 04/01/2006(b) 104,163
-------------------------------------------------------------------------------------------------------------------
155,000 SONYMA, Series 39 6.000 10/01/2017(s) 04/01/2006(b) 159,600
-------------------------------------------------------------------------------------------------------------------
1,560,000 SONYMA, Series 40-A 6.350 04/01/2021 06/01/2006(b) 1,610,232
-------------------------------------------------------------------------------------------------------------------
95,000 SONYMA, Series 40-B 6.400 10/01/2012(s) 08/01/2004(b) 98,807
-------------------------------------------------------------------------------------------------------------------
20,000 SONYMA, Series 41-A 6.450 10/01/2014(s) 06/01/2004(b) 20,870
-------------------------------------------------------------------------------------------------------------------
40,000 SONYMA, Series 41-A 6.450 10/01/2014(s) 06/01/2004(b) 41,796
-------------------------------------------------------------------------------------------------------------------
50,000 SONYMA, Series 41-B 6.250 10/01/2014(s) 08/01/2006(b) 52,201
-------------------------------------------------------------------------------------------------------------------
700,000 SONYMA, Series 42 6.400 10/01/2020(s) 09/01/2004(b) 719,243
-------------------------------------------------------------------------------------------------------------------
50,000 SONYMA, Series 43 6.100 04/01/2009 09/01/2004(b) 52,773
25 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF INVESTMENTS Continued
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
-----------------------------------------------------------------------------------------------------------------------
New York Continued
$ 25,000 SONYMA, Series 43 6.100% 10/01/2009 09/01/2004(b) $ 26,386
-----------------------------------------------------------------------------------------------------------------------
785,000 SONYMA, Series 43 6.450 10/01/2017(s) 09/01/2004(b) 825,859
-----------------------------------------------------------------------------------------------------------------------
225,000 SONYMA, Series 46 6.500 04/01/2013(s) 03/28/2007(b) 237,688
-----------------------------------------------------------------------------------------------------------------------
140,000 SONYMA, Series 46 6.600 10/01/2019(s) 03/28/2005(b) 146,763
-----------------------------------------------------------------------------------------------------------------------
18,650,000 SONYMA, Series 46 6.650 10/01/2025(s) 03/28/2005(b) 19,415,210
-----------------------------------------------------------------------------------------------------------------------
65,000 SONYMA, Series 47 6.375 10/01/2017(s) 03/28/2007(b) 68,167
-----------------------------------------------------------------------------------------------------------------------
50,000 SONYMA, Series 48 6.000 04/01/2013 06/29/2007(b) 52,230
-----------------------------------------------------------------------------------------------------------------------
20,000 SONYMA, Series 48 6.000 04/01/2013(s) 06/29/2007(b) 20,990
-----------------------------------------------------------------------------------------------------------------------
40,000 SONYMA, Series 48 6.100 04/01/2025(s) 06/29/2007(b) 41,205
-----------------------------------------------------------------------------------------------------------------------
20,000 SONYMA, Series 48 6.100 04/01/2025(s) 06/29/2007(b) 20,698
-----------------------------------------------------------------------------------------------------------------------
510,000 SONYMA, Series 50 6.250 04/01/2010 09/13/2007(b) 522,439
-----------------------------------------------------------------------------------------------------------------------
5,110,000 SONYMA, Series 50 6.625 04/01/2025(s) 09/13/2007(b) 5,329,168
-----------------------------------------------------------------------------------------------------------------------
95,000 SONYMA, Series 51 6.400 10/01/2017(s) 09/13/2007(b) 98,421
-----------------------------------------------------------------------------------------------------------------------
10,000 SONYMA, Series 52 6.100 04/01/2026(s) 01/04/2008(b) 10,320
-----------------------------------------------------------------------------------------------------------------------
50,000 SONYMA, Series 53 5.750 10/01/2011(s) 01/04/2008(b) 52,667
-----------------------------------------------------------------------------------------------------------------------
290,000 SONYMA, Series 54 6.100 10/01/2015 03/05/2008(g) 303,088
-----------------------------------------------------------------------------------------------------------------------
415,000 SONYMA, Series 56 5.875 10/01/2019(s) 07/01/2008(b) 424,844
-----------------------------------------------------------------------------------------------------------------------
100,000 SONYMA, Series 56 6.500 10/01/2026(s) 07/01/2008(b) 105,404
-----------------------------------------------------------------------------------------------------------------------
25,000 SONYMA, Series 60 6.000 10/01/2022(s) 01/01/2009(b) 25,821
-----------------------------------------------------------------------------------------------------------------------
570,000 SONYMA, Series 70 5.375 10/01/2017(s) 03/01/2010(b) 576,150
-----------------------------------------------------------------------------------------------------------------------
5,000,000 SONYMA, Series 82 5.550 10/01/2019(s) 10/01/2009(b) 5,020,150
-----------------------------------------------------------------------------------------------------------------------
3,935,000 SONYMA, Series 84 5.950 04/01/2030(s) 09/01/2009(b) 4,032,824
-----------------------------------------------------------------------------------------------------------------------
3,000,000 SONYMA, Series 90 5.750 10/01/2021 01/20/2004(c) 3,123,660
-----------------------------------------------------------------------------------------------------------------------
1,000,000 SONYMA, Series 95 5.500 10/01/2017(s) 04/01/2010(b) 1,025,900
-----------------------------------------------------------------------------------------------------------------------
5,000 SONYMA, Series MM-1 7.600 10/01/2002 02/04/2002(b) 5,047
-----------------------------------------------------------------------------------------------------------------------
10,000 SONYMA, Series MM-2 7.550 04/01/2002 04/01/2002 10,029
-----------------------------------------------------------------------------------------------------------------------
35,000 SONYMA, Series QQ 7.600 10/01/2012 04/01/2002(b) 35,107
-----------------------------------------------------------------------------------------------------------------------
1,305,000 SONYMA, Series QQ 7.700 10/01/2012 04/01/2002(b) 1,309,280
-----------------------------------------------------------------------------------------------------------------------
105,000 Springville HDC (Springbrook) 5.950 01/01/2010 07/29/2006(c) 106,600
-----------------------------------------------------------------------------------------------------------------------
1,030,000 St. Casimer's EHC 7.375 09/01/2010(s) 03/01/2002(b) 1,055,822
-----------------------------------------------------------------------------------------------------------------------
880,000 St. Lawrence IDA (PACES) 5.875 06/30/2007 03/03/2005(c) 864,195
-----------------------------------------------------------------------------------------------------------------------
1,065,000 Suffolk County IDA (ACLD) 5.750 03/01/2006 03/26/2004(c) 1,031,399
-----------------------------------------------------------------------------------------------------------------------
1,025,000 Suffolk County IDA (ALIA-CCDRCA) 7.000 06/01/2016 10/11/2010(c) 1,020,162
-----------------------------------------------------------------------------------------------------------------------
1,230,000 Suffolk County IDA (ALIA-FREE) 7.000 06/01/2016 10/11/2010(c) 1,224,194
-----------------------------------------------------------------------------------------------------------------------
580,000 Suffolk County IDA (ALIA-WORCA) 7.000 06/01/2016 10/11/2010(c) 577,262
-----------------------------------------------------------------------------------------------------------------------
240,000 Suffolk County IDA (Dowling College) 6.500 12/01/2006 12/01/2006 241,836
-----------------------------------------------------------------------------------------------------------------------
50,000 Suffolk County IDA (Dowling College) 6.625 06/01/2024 12/29/2016(c) 43,757
-----------------------------------------------------------------------------------------------------------------------
1,810,000 Suffolk County IDA
(Huntington First Aid Squad) 6.025 11/01/2008 01/25/2006(c) 1,733,980
-----------------------------------------------------------------------------------------------------------------------
290,000 Suffolk County IDA (Mattituck-Laurel Library) 6.000 09/01/2019(s) 09/01/2010(b) 314,085
-----------------------------------------------------------------------------------------------------------------------
15,000 Suffolk County IDA (OBPWC) 7.000 11/01/2002 11/01/2002 14,934
-----------------------------------------------------------------------------------------------------------------------
670,000 Suffolk County IDA (Rimland Facilities)(i) 3.562(v) 12/01/2004 06/01/2002(b) 669,732
-----------------------------------------------------------------------------------------------------------------------
40,000 Suffolk County Water Authority 5.625 06/01/2016(s) 06/01/2004(b) 41,390
-----------------------------------------------------------------------------------------------------------------------
2,120,000 Sunnybrook EHC 11.250 12/01/2014(s) 04/01/2002(b) 2,269,693
-----------------------------------------------------------------------------------------------------------------------
3,130,000 Syracuse COP (Hancock International Airport) 6.500 01/01/2017(s) 07/01/2002(b) 3,199,830
26 | LIMITED TERM NEW YORK MUNICIPAL FUND
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
-------------------------------------------------------------------------------------------------------------------------
New York Continued
$1,105,000 Syracuse COP (Hancock International Airport) 6.600% 01/01/2005 07/01/2002(b) $ 1,129,619
-------------------------------------------------------------------------------------------------------------------------
1,825,000 Syracuse COP (Hancock International Airport) 6.625 01/01/2012(s) 07/01/2002(b) 1,863,307
-------------------------------------------------------------------------------------------------------------------------
3,650,000 Syracuse COP (Hancock International Airport) 6.625 01/01/2012(s) 07/01/2002(b) 3,739,936
-------------------------------------------------------------------------------------------------------------------------
1,210,000 Syracuse COP (Hancock International Airport) 6.700 01/01/2007 07/01/2002(b) 1,236,233
-------------------------------------------------------------------------------------------------------------------------
2,815,000 Syracuse IDA (Crouse Irving Health Hospital)(i) 5.125 01/01/2009 10/05/2005(c) 1,452,230
-------------------------------------------------------------------------------------------------------------------------
595,000 Syracuse IDA (Pavilion on James Senior Hsg.)(i) 6.500 08/01/2007 04/06/2005(c) 478,517
-------------------------------------------------------------------------------------------------------------------------
1,175,000 Syracuse SCHC (East Hill Village Apartments) 6.125 11/01/2010 01/09/2007(c) 1,222,259
-------------------------------------------------------------------------------------------------------------------------
245,000 Tompkins County IDA (Kendall at Ithaca) 7.875 06/01/2015(s) 06/01/2005(b) 253,306
-------------------------------------------------------------------------------------------------------------------------
295,000 Tompkins Healthcare Corp.
(Reconstruction Home) 10.800 02/01/2028(s) 02/01/2005(b) 349,897
-------------------------------------------------------------------------------------------------------------------------
3,175,000 Tonawanda HDC (Tonawanda Towers) 6.150 10/01/2011 03/19/2007(g) 3,263,170
-------------------------------------------------------------------------------------------------------------------------
20,000 Triborough Bridge & Tunnel Authority 6.000 01/01/2014(s) 01/22/2002(b) 20,053
-------------------------------------------------------------------------------------------------------------------------
1,430,000 Triborough Bridge & Tunnel Authority 6.000 01/01/2014(s) 01/22/2002(b) 1,433,804
-------------------------------------------------------------------------------------------------------------------------
490,000 Triborough Bridge & Tunnel Authority 6.500 01/01/2019(s) 01/22/2002(b) 498,786
-------------------------------------------------------------------------------------------------------------------------
2,500,000 TSASC, Inc. (TFABs) 5.900 07/15/2017 07/15/2010(b) 2,581,950
-------------------------------------------------------------------------------------------------------------------------
4,000,000 TSASC, Inc. (TFABs) 6.000 07/15/2019 07/15/2010(b) 4,116,880
-------------------------------------------------------------------------------------------------------------------------
3,525,000 TSASC, Inc. (TFABs) 6.000 07/15/2020 07/15/2010(b) 3,635,227
-------------------------------------------------------------------------------------------------------------------------
10,000 TSASC, Inc. (TFABs) 6.000 07/15/2020(s) 07/15/2010(b) 10,306
-------------------------------------------------------------------------------------------------------------------------
90,000 TSASC, Inc. (TFABs) 6.000 07/15/2021(s) 07/15/2010(b) 92,753
-------------------------------------------------------------------------------------------------------------------------
13,425,000 TSASC, Inc. (TFABs) 6.250 07/15/2027(s) 07/15/2010(b) 14,024,426
-------------------------------------------------------------------------------------------------------------------------
250,000 TSASC, Inc. (TFABs) 6.250 07/15/2034(s) 07/15/2010(b) 260,645
-------------------------------------------------------------------------------------------------------------------------
80,000 Tupper Lake HDC 8.125 10/01/2010 04/01/2002(b) 80,571
-------------------------------------------------------------------------------------------------------------------------
1,300,000 Ulster County IDA (Benedictine Hospital) 6.050 06/01/2005 12/29/2003(c) 1,269,658
-------------------------------------------------------------------------------------------------------------------------
605,000 Ulster County Tobacco Asset
Securitization Corp. 6.000 06/01/2040(s) 06/01/2012(b) 614,565
-------------------------------------------------------------------------------------------------------------------------
7,500,000 Ulster County Tobacco Asset
Securitization Corp. 6.750 06/01/2030(s) 06/01/2012(b) 8,065,950
-------------------------------------------------------------------------------------------------------------------------
455,000 Union Hsg. Authority (Methodist Homes) 6.800 11/01/2004 11/24/2003(c) 464,227
-------------------------------------------------------------------------------------------------------------------------
390,000 Utica IDA (Utica College Civic Facility) 5.300 08/01/2008 11/30/2004(c) 376,561
-------------------------------------------------------------------------------------------------------------------------
2,155,000 Utica IDA (Utica College Civic Facility) 6.375 12/01/2011 09/22/2008(c) 2,151,724
-------------------------------------------------------------------------------------------------------------------------
100,000 Utica SCHC (Steinhorst Apartments) 6.500 04/15/2008 10/08/2004(g) 106,336
-------------------------------------------------------------------------------------------------------------------------
100,000 Watervliet EHC 8.000 11/15/2002 11/15/2002 100,315
-------------------------------------------------------------------------------------------------------------------------
330,000 Westchester County IDA
(Beth Abraham Hospital) 7.250 12/01/2009 11/03/2006(c) 340,524
-------------------------------------------------------------------------------------------------------------------------
275,000 Westchester County IDA (JBFS) 6.500 12/15/2002 12/15/2002 276,295
-------------------------------------------------------------------------------------------------------------------------
315,000 Westchester County IDA (JDAM) 6.250 04/01/2005 10/26/2003(c) 323,937
-------------------------------------------------------------------------------------------------------------------------
1,130,000 Westchester County IDA (JDAM) 6.750 04/01/2016(s) 04/01/2006(b) 1,180,669
-------------------------------------------------------------------------------------------------------------------------
50,000 Westchester County IDA
(Westchester Airport) 5.950 08/01/2024(s) 02/01/2002(b) 50,016
-------------------------------------------------------------------------------------------------------------------------
1,325,000 Yonkers IDA (Hudson Scenic Studio) 5.875 11/01/2007 07/03/2005(c) 1,269,999
-------------------------------------------------------------------------------------------------------------------------
165,000 Yonkers IDA (Philipsburgh Hall Associates) 6.750 11/01/2008 02/08/2006(c) 166,414
-------------------------------------------------------------------------------------------------------------------------
2,850,000 Yonkers IDA (St. John's Riverside Hospital) 6.625 02/01/2026(s) 02/01/2011(b) 2,995,949
-------------------------------------------------------------------------------------------------------------------------
3,000,000 Yonkers IDA (St. John's Riverside Hospital) 6.800 07/01/2016 09/17/2010(c) 3,060,870
-------------------------------------------------------------------------------------------------------------------------
1,000,000 Yonkers IDA (St. Joseph's Hospital), Series 98-B 5.900 03/01/2008 03/01/2006(c) 907,660
-------------
1,330,851,618
27 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF INVESTMENTS Continued
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
--------------------------------------------------------------------------------------------------------------------------------
Other States--2.7%
$ 345,000 Alliance Airport Authority, TX
(American Airlines) 7.500% 12/01/2029 09/09/2029(c) $ 320,408
--------------------------------------------------------------------------------------------------------------------------------
5,000 Chicago, IL O'Hare International Airport,
Series B 7.250 01/01/2009(s) 07/01/2002(b) 5,009
--------------------------------------------------------------------------------------------------------------------------------
265,000 Dallas-Fort Worth, TX International Airport
(American Airlines) 7.250 11/01/2030 11/01/2030 242,427
--------------------------------------------------------------------------------------------------------------------------------
3,370,000 Gulf Coast Waste Disposal Authority, TX
(Champion International Corp.) 7.250 04/01/2017 04/01/2002(b) 3,455,396
--------------------------------------------------------------------------------------------------------------------------------
16,800,000 Gulf Coast Waste Disposal Authority, TX
(Champion International Corp.) 7.450 05/01/2026 04/01/2002(b) 17,275,272
--------------------------------------------------------------------------------------------------------------------------------
2,500,000 IL DFA Pollution Control
(Commonwealth Edison Corp.) 7.250 06/01/2011 06/01/2002(b) 2,553,575
--------------------------------------------------------------------------------------------------------------------------------
1,550,000 Kenton County, KY Airport (Delta Air Lines) 7.125 02/01/2021 02/01/2021 1,446,863
--------------------------------------------------------------------------------------------------------------------------------
11,550,000 Kenton County, KY Airport (Delta Air Lines) 7.500 02/01/2012 02/01/2012 11,281,694
--------------------------------------------------------------------------------------------------------------------------------
1,000,000 Lawrenceburg, IN Pollution Control
(Indiana Michigan Power Company) 7.000 04/01/2015 04/01/2002(b) 1,025,730
--------------------------------------------------------------------------------------------------------------------------------
5,000 MA HFA (Single Family Hsg.), Series 22 6.800 04/01/2024(s) 06/01/2002(b) 5,041
--------------------------------------------------------------------------------------------------------------------------------
30,000 MD Community Devel. Hsg.
(People's Resource Center) 6.100 06/01/2016(s) 04/01/2002(b) 30,671
--------------------------------------------------------------------------------------------------------------------------------
15,000 Montgomery County, MD HOC
(Multifamily Mtg.), Series C 7.150 07/01/2023(s) 07/01/2002(b) 15,373
--------------------------------------------------------------------------------------------------------------------------------
150,000 NH HE&H Facilities Authority
(Elliot Hospital of Manchester) 6.250 10/01/2021(s) 04/01/2002(b) 153,434
--------------------------------------------------------------------------------------------------------------------------------
5,000 NH Hsg. Finance Authority
(Single Family Residential Mtg.) 7.550 07/01/2011(s) 07/01/2002(b) 5,103
--------------------------------------------------------------------------------------------------------------------------------
2,000,000 NJ EDA (Jersey Central Power & Light) 7.100 07/01/2015 07/01/2002(b) 2,082,700
--------------------------------------------------------------------------------------------------------------------------------
10,000 Pulaski County, AR
(Arkansas Children's Hospital) 6.100 03/01/2013(s) 03/01/2005(b) 10,166
--------------------------------------------------------------------------------------------------------------------------------
1,950,000 St. Charles Parish, LA
(Louisiana Power & Light Company) 7.500 06/01/2021 06/01/2002(b) 1,993,095
--------------------------------------------------------------------------------------------------------------------------------
5,000 University of AL
(University of Alabama-Birmingham) 6.750 07/01/2007(s) 07/01/2002(b) 5,115
---------------
41,907,072
--------------------------------------------------------------------------------------------------------------------------------
U.S. Possessions--11.5%(q)
25,000 Guam Airport Authority, Series A 6.500 10/01/2023(s) 10/01/2003(b) 25,529
--------------------------------------------------------------------------------------------------------------------------------
9,615,000 Guam Airport Authority, Series B 6.400 10/01/2005 07/09/2003(g) 9,966,044
--------------------------------------------------------------------------------------------------------------------------------
15,845,000 Guam Airport Authority, Series B 6.600 10/01/2010(s) 10/01/2003(b) 16,296,583
--------------------------------------------------------------------------------------------------------------------------------
40,625,000 Guam Airport Authority, Series B 6.700 10/01/2023(s) 10/01/2003(b) 41,836,844
--------------------------------------------------------------------------------------------------------------------------------
1,100,000 Guam EDA (TASC) 5.000 05/15/2022 11/22/2004(c) 1,090,221
--------------------------------------------------------------------------------------------------------------------------------
1,950,000 Guam EDA (TASC) 5.400 05/15/2031 07/14/2010(c) 1,961,271
--------------------------------------------------------------------------------------------------------------------------------
2,500,000 Guam EDA (TASC) 5.500 05/15/2041(s) 05/15/2011(b) 2,513,450
--------------------------------------------------------------------------------------------------------------------------------
14,075,000 Guam GO, Series A 5.375 11/15/2013 12/23/2011(c) 13,946,355
--------------------------------------------------------------------------------------------------------------------------------
500,000 Guam GO, Series A 5.400 11/15/2018 12/22/2016(c) 491,765
--------------------------------------------------------------------------------------------------------------------------------
2,470,000 Guam GO, Series A 5.625 09/01/2002 03/01/2002(b) 2,482,745
--------------------------------------------------------------------------------------------------------------------------------
3,630,000 Guam GO, Series A 5.700 09/01/2003 03/01/2003(b) 3,644,847
--------------------------------------------------------------------------------------------------------------------------------
5,250,000 Guam GO, Series A 5.750 09/01/2004 03/01/2002(b) 5,267,483
--------------------------------------------------------------------------------------------------------------------------------
1,975,000 Guam GO, Series A 5.900 09/01/2005 03/01/2002(b) 1,980,826
--------------------------------------------------------------------------------------------------------------------------------
1,000,000 Guam GO, Series A 6.000 09/01/2006 03/01/2002(b) 1,002,540
--------------------------------------------------------------------------------------------------------------------------------
80,000 Guam Highway, Series A 6.300 05/01/2012(s) 05/01/2002(b) 82,870
28 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF INVESTMENTS Continued
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
-------------------------------------------------------------------------------------------------------------------------------
U.S. Possessions Continued
$1,005,000 Guam Water System 7.000% 07/01/2009 01/01/2002(b) $ 1,015,050
-------------------------------------------------------------------------------------------------------------------------------
3,000,000 Northern Mariana Islands, Series A 6.000 06/01/2020(s) 06/01/2010(b) 3,078,480
-------------------------------------------------------------------------------------------------------------------------------
39,981 Puerto Rico Aquadilla Bus Lease(i) 8.500 02/02/2002 02/02/2002 39,992
-------------------------------------------------------------------------------------------------------------------------------
95,759 Puerto Rico Aquadilla Equipment Lease(i) 8.000 01/26/2002 01/26/2002 95,812
-------------------------------------------------------------------------------------------------------------------------------
85,000 Puerto Rico Children's Trust Fund (TASC) 6.000 07/01/2026(s) 07/01/2010(b) 88,764
-------------------------------------------------------------------------------------------------------------------------------
1,048,278 Puerto Rico Dept. of Corrections
Equipment Lease(i) 9.000 01/08/2003 07/14/2002(c) 1,062,441
-------------------------------------------------------------------------------------------------------------------------------
1,157,264 Puerto Rico Dept. of Corrections
Furniture Lease(i) 7.000 04/25/2004 05/07/2003(c) 1,155,343
-------------------------------------------------------------------------------------------------------------------------------
25,000 Puerto Rico Electric Power Authority 6.000 07/01/2016(s) 07/01/2004(b) 26,765
-------------------------------------------------------------------------------------------------------------------------------
30,000 Puerto Rico Electric Power Authority 6.000 07/01/2016(s) 07/01/2004(b) 32,229
-------------------------------------------------------------------------------------------------------------------------------
5,000,000 Puerto Rico GO 5.250 07/01/2027(s) 07/01/2011(b) 5,027,100
-------------------------------------------------------------------------------------------------------------------------------
5,000 Puerto Rico GO 6.000 07/01/2014(s) 07/01/2002(b) 5,179
-------------------------------------------------------------------------------------------------------------------------------
1,800,000 Puerto Rico GO YCN 10.084(r) 07/01/2008(s) 07/01/2002(b) 1,887,750
-------------------------------------------------------------------------------------------------------------------------------
400,000 Puerto Rico GO YCN 10.132(r) 07/01/2020(s) 07/01/2002(b) 428,000
-------------------------------------------------------------------------------------------------------------------------------
55,000 Puerto Rico HBFA 5.850 10/01/2009 04/01/2007(b) 57,899
-------------------------------------------------------------------------------------------------------------------------------
470,000 Puerto Rico HBFA 6.100 10/01/2015 04/01/2007(b) 488,908
-------------------------------------------------------------------------------------------------------------------------------
90,000 Puerto Rico HBFA (Affordable Hsg. Mtg.) 6.250 04/01/2029(s) 04/01/2007(b) 92,826
-------------------------------------------------------------------------------------------------------------------------------
1,403,611 Puerto Rico Health Dept. Equipment Lease(i,u) 7.099 07/23/2003 10/16/2002(c) 1,400,383
-------------------------------------------------------------------------------------------------------------------------------
100,000 Puerto Rico HFC 6.000 02/01/2009(s) 02/01/2002(b) 102,093
-------------------------------------------------------------------------------------------------------------------------------
10,000 Puerto Rico HFC 7.100 04/01/2002 04/01/2002 10,065
-------------------------------------------------------------------------------------------------------------------------------
590,000 Puerto Rico HFC 7.200 04/01/2003 04/01/2002(b) 593,882
-------------------------------------------------------------------------------------------------------------------------------
80,000 Puerto Rico HFC 7.250 10/01/2004 04/01/2002(b) 80,536
-------------------------------------------------------------------------------------------------------------------------------
85,000 Puerto Rico HFC 7.300 04/01/2006 04/01/2002(b) 85,580
-------------------------------------------------------------------------------------------------------------------------------
115,000 Puerto Rico HFC 7.300 10/01/2006 04/01/2002(b) 115,784
-------------------------------------------------------------------------------------------------------------------------------
50,000 Puerto Rico HFC 7.400 04/01/2007 04/01/2002(b) 50,353
-------------------------------------------------------------------------------------------------------------------------------
3,470,000 Puerto Rico HFC 7.500 10/01/2015(s) 04/01/2002(b) 3,606,059
-------------------------------------------------------------------------------------------------------------------------------
7,035,000 Puerto Rico HFC 7.500 04/01/2022(s) 04/01/2002(b) 7,310,842
-------------------------------------------------------------------------------------------------------------------------------
1,365,000 Puerto Rico Highway &
Transportation Authority 6.625 07/01/2012(s) 07/01/2002(b) 1,412,789
-------------------------------------------------------------------------------------------------------------------------------
6,250,000 Puerto Rico IMEPCF (PepsiCo) 6.250 11/15/2013 11/15/2002(b) 6,620,875
-------------------------------------------------------------------------------------------------------------------------------
7,175,000 Puerto Rico IMEPCF (PepsiCo) 6.250 11/15/2013 11/15/2002(b) 7,600,765
-------------------------------------------------------------------------------------------------------------------------------
310,000 Puerto Rico IMEPCF (Squibb) 6.500 07/01/2004(s) 07/01/2002(b) 311,541
-------------------------------------------------------------------------------------------------------------------------------
3,525,000 Puerto Rico Infrastructure 7.500 07/01/2009(s) 07/01/2002(b) 3,576,818
-------------------------------------------------------------------------------------------------------------------------------
1,915,000 Puerto Rico Infrastructure 7.750 07/01/2008(s) 07/01/2002(b) 1,943,151
-------------------------------------------------------------------------------------------------------------------------------
3,140,000 Puerto Rico Infrastructure 7.900 07/01/2007(s) 07/01/2002(b) 3,186,158
-------------------------------------------------------------------------------------------------------------------------------
750,000 Puerto Rico ITEMECF
(Hospital de la Concepcion) 6.375 11/15/2015 11/15/2010(b) 830,513
-------------------------------------------------------------------------------------------------------------------------------
2,000,000 Puerto Rico ITEMECF
(Hospital de la Concepcion) 6.500 11/15/2020 11/15/2010(b) 2,205,200
-------------------------------------------------------------------------------------------------------------------------------
1,870,000 Puerto Rico ITEMECF
(Mennonite General Hospital) 6.375 07/01/2006 08/13/2004(c) 1,914,057
-------------------------------------------------------------------------------------------------------------------------------
1,925,000 Puerto Rico ITEMECF
(Mennonite General Hospital) 6.500 07/01/2012 10/09/2009(c) 1,945,270
-------------------------------------------------------------------------------------------------------------------------------
905,000 Puerto Rico ITEMECF (Polytech University) 5.700 08/01/2013 07/15/2009(c) 898,140
-------------------------------------------------------------------------------------------------------------------------------
1,045,000 Puerto Rico ITEMECF
(Ryder Memorial Hospital) 6.400 05/01/2009 02/26/2006(g) 1,074,532
29 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF INVESTMENTS Continued
Effective
Principal Maturity Market Value
Amount Coupon Maturity (Unaudited)* See Note 1
-----------------------------------------------------------------------------------------------------------------------------------
U.S. Possessions Continued
$ 500,000 Puerto Rico ITEMECF
(University of the Sacred Heart) 5.250% 09/01/2021 01/04/2018(c) $ 488,870
-----------------------------------------------------------------------------------------------------------------------------------
91,357 Puerto Rico Natural Resources Dept.
Equipment Lease(i) 7.250 01/25/2002 01/25/2002 91,340
-----------------------------------------------------------------------------------------------------------------------------------
549,973 Puerto Rico Natural Resources Dept.
Equipment Lease(i) 7.250 10/26/2003 02/02/2003(c) 551,354
-----------------------------------------------------------------------------------------------------------------------------------
5,973 Puerto Rico Office of the Governor
Computer Lease(i) 6.906 09/30/2002 06/08/2002(c) 5,971
-----------------------------------------------------------------------------------------------------------------------------------
60,000 Puerto Rico Port Authority 5.700 07/01/2003(s) 07/01/2002(b) 60,054
-----------------------------------------------------------------------------------------------------------------------------------
5,000 Puerto Rico Port Authority 5.750 07/01/2002 07/01/2002 5,015
-----------------------------------------------------------------------------------------------------------------------------------
30,000 Puerto Rico Port Authority 6.000 07/01/2021(s) 07/01/2002(b) 30,080
-----------------------------------------------------------------------------------------------------------------------------------
195,000 Puerto Rico Port Authority 7.300 07/01/2007(s) 07/01/2002(b) 197,184
-----------------------------------------------------------------------------------------------------------------------------------
465,000 Puerto Rico Port Authority, Series D 7.000 07/01/2014(s) 07/01/2002(b) 482,135
-----------------------------------------------------------------------------------------------------------------------------------
5,000 Puerto Rico Public Buildings Authority 5.750 07/01/2015(s) 07/01/2003(b) 5,134
-----------------------------------------------------------------------------------------------------------------------------------
295,000 Puerto Rico Public Buildings Authority 6.000 07/01/2012(s) 07/01/2002(b) 296,269
-----------------------------------------------------------------------------------------------------------------------------------
8,835,000 Puerto Rico Public Buildings Authority 6.000 07/01/2012(s) 07/01/2002(b) 8,922,467
-----------------------------------------------------------------------------------------------------------------------------------
139,485 Puerto Rico State Courts
Telephone System Lease(i) 7.250 06/04/2002 06/04/2002 139,035
-----------------------------------------------------------------------------------------------------------------------------------
980,000 Puerto Rico Urban Renewal 7.875 10/01/2004(s) 04/01/2002(b) 995,876
-----------------------------------------------------------------------------------------------------------------------------------
18,311 Puerto Rico Vocational Rehab. Vehicle Lease(i,u) 8.000 02/17/2002 02/17/2002 18,309
-----------------------------------------------------------------------------------------------------------------------------------
240,000 University of Puerto Rico 5.500 06/01/2012(s) 06/01/2002(b) 243,336
-----------------------------------------------------------------------------------------------------------------------------------
60,000 V.I. HFA 6.500 03/01/2025(s) 03/01/2005(b) 61,417
-----------------------------------------------------------------------------------------------------------------------------------
2,750,000 V.I. Public Finance Authority 6.125 10/01/2029(s) 10/01/2011(b) 2,883,375
-----------------------------------------------------------------------------------------------------------------------------------
250,000 V.I. Public Finance Authority 6.500 10/01/2024(s) 10/01/2010(b) 267,575
---------------
179,792,093
-----------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $1,537,739,047)--99.2% 1,552,550,783
-----------------------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities--0.8% 13,148,851
----------------
Net Assets--100.0% $1,565,699,634
================
Footnotes to Statement of Investments
* Call Date, Put Date or Average Life of Sinking Fund, if applicable, as
detailed:
a. Date of prerefunded call, or maturity date if escrowed to maturity.
b. Optional call date; corresponds to the most conservative yield
calculation.
c. Average life due to mandatory, or expected, sinking fund principal
payments prior to maturity.
d. Date of mandatory put.
e. Date of planned principal payment.
f. Effective maturity corresponding to variable coupon payment date.
g. Average life due to mandatory, or expected, sinking fund principal
payments prior to the applicable optional call date.
i. Illiquid security--See Note 5 of Notes to Financial Statements.
q. All income earned on securities categorized as U.S. Possessions is exempt
from federal, New York State and New York City income taxes
for the year ended December 31, 2001.
r. Represents the current interest rate for a variable rate bond known as
an "inverse floater"--See Note 1 of Notes to Financial Statements.
s. Security also has mandatory sinking fund principal payments prior to
maturity and an average life which is shorter than the stated
final maturity.
t. Non-income-accruing security.
u. Issuer is in default.
v. Represents the current interest rate for a variable or increasing
rate security.
w. When-issued security or forward purchase commitment to be delivered and
settled after December 31, 2001.
As of December 31, 2001, securities subject to the alternative minimum tax
amount to $543,361,344 or 34.7% of the Fund's net assets.
See accompanying Notes to Financial Statements.
30 | LIMITED TERM NEW YORK MUNICIPAL FUND
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
==================================================================
Portfolio Abbreviations December 31, 2001
To simplify the listing of securities in the Statement of Investments,
abbreviations are used per the table below:
ACDS Association for Children with Down Syndrome ITEMECF Industrial, Tourist, Educational, Medical and
XXXX Adults and Children with Learning and Environmental Community Facilities
Developmental Disabilities JBFS Jewish Board of Family Services
ALIA Alliance of Long Island Agencies JCC Jewish Community Center
ASMF Amsterdam Sludge Management Facility JDAM Xxxxx Xxxxxxx Xxxxxx Memorial
CAB Capital Appreciation Bond L.I. Long Island
CARS Complimentary Auction Rate Security LGAC Local Government Assistance Corporation
CCDRCA Catholic Charities of the Diocese of LGSC Local Government Services Corporation
Rockville Centre and Affiliates LILCO Long Island Lighting Corporation
CDC Community Development Corporation LIMO Limited Interest Municipal Obligation
CFGA Child and Family Guidance Association MSH Mount Sinai Hospital
CMA Community Mainstreaming Associates MTA Metropolitan Transportation Authority
Con Ed Consolidated Edison Company NIMO Niagara Mohawk Power Corporation
COP Certificates of Participation NYC New York City
CRR Center for Rapid Recovery NYS New York State
CSD Central School District NYU New York University
DA Dormitory Authority OBPWC Ocean Bay Park Water Corporation
DFA Development Finance Authority PACES Potsdam Auxiliary and College Educational Service
DIAMONDS Direct Investment of Accrued Municipals PRAMS Prudential Receipts of Accrual Municipal Securities
EDA Economic Development Authority Res Rec Resource Recovery Facility
EFC Environmental Facilities Corporation RG&E Rochester Gas and Electric
EHC Elderly Housing Corporation RITES Residual Interest Tax Exempt Security
ERDA Energy Research and Development Authority SCHC Senior Citizen Housing Corporation
FREE Family Residences and Essential Enterprises SCSB Xxxxxxxx Community Services Board
GO General Obligation SONYMA State of New York Mortgage Agency
GRIA Greater Rochester International Airport SWMA Solid Waste Management Authority
HBFA Housing Bank and Finance Agency TASC Tobacco Settlement Asset-Backed Bonds
HDC Housing Development Corporation TFA Transitional Finance Authority
HE&H Higher Educational and Health TFABs Tobacco Flexible Amortization Bonds
HELP Homeless Economic Loan Program UDC Urban Development Corporation
HFA Housing Finance Agency UFSD Union Free School District
HFC Housing Finance Corporation USTA United States Tennis Association
HJDOI Hospital for Joint Diseases Orthopaedic Institute V.I. United States Virgin Islands
HKSB Xxxxx Xxxxxx Services for the Blind WHELC Wartburg Home of the Evangelical
HOC Housing Opportunities Commission Lutheran Xxxxxx
XXX Industrial Development Agency WORCA Working Organization for Retarded Children
IMEPCF Industrial, Medical and Environmental Pollution and Adults
Control Facilities YCN Yield Curve Note
31 | LIMITED TERM NEW YORK MUNICIPAL FUND
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
================================================================================
Industry Concentrations December 31, 2001
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 $ 261,639,684 16.8%
Special Assessment 238,720,949 15.4
Hospital/Healthcare 210,503,726 13.6
General Obligation 156,368,382 10.1
Electric Utilities 111,593,750 7.2
Municipal Leases 96,584,795 6.2
Multifamily Housing 81,209,351 5.2
Resource Recovery 68,464,213 4.4
Higher Education 53,711,136 3.5
Single Family Housing 52,575,346 3.4
Water Utilities 39,120,411 2.5
Gas Utilities 37,548,539 2.4
Nonprofit Organization 32,265,749 2.1
Highways/Railways 25,399,594 1.6
Pollution Control 24,574,163 1.6
Manufacturing, Non-Durable Goods 20,845,666 1.3
Sales Tax Revenue 11,945,050 0.8
Manufacturing, Durable Goods 9,545,324 0.6
Adult Living Facilities 9,115,542 0.6
Parking Fee Revenue 7,066,659 0.5
Education 3,752,754 0.2
----------------------------
$ 1,552,550,783 100.0%
============================
===============================================================================
Summary of Ratings December 31, 2001 / Unaudited
Distribution of investments by rating category, as a percentage of total
investments at value, is as follows:
Ratings Percent
-----------------------------------------------------------------------------------
AAA 19.5%
AA 16.7
A 35.4
BBB 23.4
BB 2.0
B 0.0
CCC 0.0
CC 0.0
C 0.0
D 0.1
Not Rated 2.9
------
100.0%
======
Bonds rated by any nationally recognized statistical rating organization are
included in the equivalent Standard & Poor's rating category. As a general
matter, unrated bonds may be backed by mortgage liens or equipment liens on
the underlying property, and also may be guaranteed. Bonds which are backed by
a letter of credit or by other financial institutions or agencies may be
assigned an investment-grade rating by the Manager, which reflects the quality
of the guarantor, institution or agency. Unrated bonds may also be assigned a
rating when the issuer has rated bonds outstanding with comparable credit
characteristics, or when, in the opinion of the Manager, the bond itself
possesses credit characteristics which allow for rating. The unrated bonds
in the portfolio are predominantly smaller issuers which have not applied for
a bond rating. Only those unrated bonds which subsequent to purchase have not
been designated investment grade by the Manager are included in the
"Not Rated" category.
32 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF ASSETS AND LIABILITIES December 31, 2001
=========================================================================================================
Assets
Investments, at value (cost $1,537,739,047)--see accompanying statement $1,552,550,783
---------------------------------------------------------------------------------------------------------
Cash 891,997
---------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest 28,023,922
Investments sold 11,748,855
Shares of beneficial interest sold 8,800,423
Other 817,770
---------------
Total assets 1,602,833,750
=========================================================================================================
Liabilities
Payables and other liabilities:
Investments purchased (including $27,784,192 purchased
on a when-issued or forward commitment basis) 28,134,560
Note payable to bank (interest rate 2.3125% at December 31, 2001) 5,200,000
Shares of beneficial interest redeemed 3,366,469
Shareholder reports 176,212
Trustees'compensation 130,306
Other 126,569
---------------
Total liabilities 37,134,116
=========================================================================================================
Net Assets $1,565,699,634
===============
=========================================================================================================
Composition Of Net Assets
Paid-in capital $1,581,206,322
---------------------------------------------------------------------------------------------------------
Undistributed (overdistributed) net investment income 5,181,782
---------------------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investment transactions (35,500,206)
---------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on investments 14,811,736
---------------
Net Assets $1,565,699,634
===============
=========================================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$1,124,845,513 and 343,886,681 shares of beneficial interest outstanding) $3.27
Maximum offering price per share (net asset value plus sales charge
of 3.50% of offering price) $3.39
---------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $153,471,095
and 46,970,369 shares of beneficial interest outstanding) $3.27
---------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $261,857,095
and 80,273,624 shares of beneficial interest outstanding) $3.26
---------------------------------------------------------------------------------------------------------
Class X Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $25,525,931
and 7,784,166 shares of beneficial interest outstanding) $3.28
See accompanying Notes to Financial Statements.
33 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF OPERATIONS For the Year Ended December 31, 2001
=======================================================================================================
Investment Income
Interest $ 73,880,299
=======================================================================================================
Expenses
Management fees 5,333,664
-------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 2,417,500
Class B 1,138,107
Class C 1,500,628
Class X 222,461
-------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 359,916
Class B 47,748
Class C 57,986
Class X 14,185
-------------------------------------------------------------------------------------------------------
Interest expense 456,595
-------------------------------------------------------------------------------------------------------
Accounting service fees 389,893
-------------------------------------------------------------------------------------------------------
Shareholder reports 104,853
-------------------------------------------------------------------------------------------------------
Custodian fees and expenses 99,746
-------------------------------------------------------------------------------------------------------
Other 97,890
-------------
Total expenses 12,241,172
Less reduction to custodian expenses (29,877)
-------------
Net expenses 12,211,295
=======================================================================================================
Net Investment Income 61,669,004
=======================================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on investments (2,533,378)
-------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (4,895,257)
-------------
Net realized and unrealized gain (loss) (7,428,635)
=======================================================================================================
Net Increase in Net Assets Resulting from Operations $ 54,240,369
=============
See accompanying Notes to Financial Statements.
34 | LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended December 31, 2001 2000
===================================================================================================================
Operations
Net investment income (loss) $ 61,669,004 $ 55,532,243
-------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (2,533,378) (7,633,941)
-------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (4,895,257) 34,684,890
--------------------------------
Net increase (decrease) in net assets resulting from operations 54,240,369 82,583,192
===================================================================================================================
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A (46,987,073) (44,847,231)
Class B (4,462,285) (3,406,138)
Class C (5,813,232) (4,210,488)
Class X (1,254,737) (1,457,394)
===================================================================================================================
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 200,015,912 (121,748,106)
Class B 61,199,956 1,834,641
Class C 161,546,894 (20,002,042)
Class X (7,159,748) (7,670,046)
===================================================================================================================
Net Assets
Total increase (decrease) 411,326,056 (118,923,612)
-------------------------------------------------------------------------------------------------------------------
Beginning of period 1,154,373,578 1,273,297,190
-------------------------------
End of period [including undistributed (overdistributed) net investment income
of $5,181,782 and $2,030,105, respectively] $1,565,699,634 $1,154,373,578
===============================
See accompanying Notes to Financial Statements.
35 | LIMITED TERM NEW YORK MUNICIPAL FUND
FINANCIAL HIGHLIGHTS
Class A Year Ended December 31, 2001 2000 1999 1998 1997
==========================================================================================================================
Per Share Operating Data
Net asset value, beginning of period $ 3.27 $ 3.19 $ 3.37 $ 3.34 $ 3.26
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .16 .16 .15 .16 .17
Net realized and unrealized gain (loss) - .07 (.18) .03 1.08
-----------------------------------------------------------
Total income (loss) from investment operations .16 .23 (.03) .19 .25
--------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.16) (.15) (.15) (.16) (.17)
--------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 3.27 $ 3.27 $ 3.19 $ 3.37 $ 3.34
===========================================================
==========================================================================================================================
Total Return, at Net Asset Value(1) 4.85% 7.47% (0.87)% 5.94% 8.01%
==========================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $1,124,846 $927,079 $1,025,714 $979,316 $771,828
--------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 996,671 $945,492 $1,060,745 $884,849 $677,376
--------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 4.95% 4.88% 4.64% 4.80% 5.27%
Expenses 0.78% 0.85% 0.81% 0.82%(3) 0.83%
Expenses, net of interest expense and
reduction to custodian expense(4) 0.74% 0.78% 0.77% 0.80% 0.80%
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 23% 37% 37% 25% 27%
1. Assumes a $1,000 hypothetical initial investment on the business day
before the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total
returns. Total returns are not annualized for periods of less than one full
year.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
4. During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.
See accompanying Notes to Financial Statements.
36 | LIMITED TERM NEW YORK MUNICIPAL FUND
Class B Year Ended December 31, 2001 2000 1999 1998 1997(1)
====================================================================================================================
Per Share Operating Data
Net asset value, beginning of period $ 3.27 $ 3.19 $ 3.37 $ 3.34 $ 3.25
--------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .13 .13 .13 .14 .10
Net realized and unrealized gain (loss) - .08 (.18) .03 .09
----------------------------------------------------
Total income (loss) from investment operations .13 .21 (.05) .17 .19
--------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.13) (.13) (.13) (.14) (.10)
--------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 3.27 $ 3.27 $ 3.19 $ 3.37 $ 3.34
====================================================
====================================================================================================================
Total Return, at Net Asset Value(2) 4.06% 6.65% (1.64)% 5.13% 5.89%
====================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $153,471 $92,786 $88,758 $64,388 $21,500
====================================================================================================================
Average net assets (in thousands) $113,976 $86,107 $78,263 $43,620 $ 9,873
--------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 4.17% 4.09% 3.84% 3.97% 4.18%
Expenses 1.54% 1.63% 1.59% 1.59%(4) 1.56%
Expenses, net of interest expense and
reduction to custodian expense(5) 1.50% 1.56% 1.55% 1.57% 1.54%
--------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 23% 37% 37% 25% 27%
1. For the period from May 1, 1997 (inception of offering) to December 31,
1997.
2. Assumes a $1,000 hypothetical initial investment on the business day
before the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
5. During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.
See accompanying Notes to Financial Statements.
37 | LIMITED TERM NEW YORK MUNICIPAL FUND
FINANCIAL HIGHLIGHTS Continued
Class C Year Ended December 31, 2001 2000 1999 1998 1997(1)
=====================================================================================================================
Per Share Operating Data
Net asset value, beginning of period $ 3.26 $ 3.18 $ 3.36 $ 3.33 $ 3.25
---------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .13 .13 .13 .14 .10
Net realized and unrealized gain (loss) - .08 (.18) .03 .08
-------------------------------------------------------
Total income (loss) from investment operations .13 .21 (.05) .17 .18
---------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.13) (.13) (.13) (.14) (.10)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 3.26 $ 3.26 $ 3.18 $ 3.36 $ 3.33
=======================================================
=====================================================================================================================
Total Return, at Net Asset Value(2) 4.06% 6.67% (1.63)% 5.15% 5.58%
=====================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $261,857 $101,858 $119,329 $94,870 $26,862
---------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $150,504 $105,452 $116,249 $61,717 $12,705
---------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 4.13% 4.11% 3.86% 3.98% 4.22%
Expenses 1.53% 1.62% 1.57% 1.57%(4) 1.54%
Expenses, net of interest expense and
reduction to custodian expense(5) 1.49% 1.55% 1.53% 1.55% 1.51%
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 23% 37% 37% 25% 27%
1. For the period from May 1, 1997 (inception of offering) to December 31,
1997.
2. Assumes a $1,000 hypothetical initial investment on the business day
before the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total
returns. Total returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
5. During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.
See accompanying Notes to Financial Statements.
38 | LIMITED TERM NEW YORK MUNICIPAL FUND
Class X Year Ended December 31, 2001 2000 1999 1998 1997
=====================================================================================================================
Per Share Operating Data
Net asset value, beginning of period $ 3.28 $ 3.20 $ 3.38 $ 3.35 $ 3.27
---------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .15 .14 .13 .15 .16
Net realized and unrealized gain (loss) (.01) .08 (.18) .03 .08
---------------------------------------------------
Total income (loss) from investment operations .14 .22 (.05) .18 .24
---------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.14) (.14) (.13) (.15) (.16)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 3.28 $ 3.28 $ 3.20 $ 3.38 $ 3.35
===================================================
=====================================================================================================================
Total Return, at Net Asset Value(1) 4.30% 6.88% (1.39)% 5.38% 7.44%
=====================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $25,526 $32,651 $39,496 $47,424 $52,510
---------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $29,642 $34,684 $44,237 $49,866 $49,563
---------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 4.46% 4.34% 4.11% 4.30% 4.75%
Expenses 1.31% 1.39% 1.34% 1.35%(3) 1.35%
Expenses, net of interest expense and
reduction to custodian expense(4) 1.27% 1.32% 1.30% 1.32% 1.32%
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 23% 37% 37% 25% 27%
1. Assumes a $1,000 hypothetical initial investment on the business day
before the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total
returns. Total returns are not annualized for periods of less than one
full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
4. During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.
See accompanying Notes to Financial Statements.
39 | LIMITED TERM NEW YORK MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS
===============================================================================
1. Significant Accounting Policies
Limited Term New York Municipal Fund (the Fund) is a separate series of
Rochester Portfolio Series, a diversified, open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Fund's investment objective is to seek as high a level of income exempt from
federal income tax and New York State and New York City personal income taxes
as is consistent with its investment policies and prudent investment
management. The Fund's investment advisor is OppenheimerFunds, Inc. (the
Manager).
The Fund offers Class A, Class B and Class C shares. As of January 6,
1998, the Fund is no longer offering Class X shares (Class X shares were
designated as Class B shares prior to May 1, 1997). 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). Class X shares
may also be subject to a CDSC. All classes of shares have identical rights to
earnings, assets and voting privileges, except that each class has its own
expenses directly attributable to that class and exclusive voting rights with
respect to matters affecting that class. Classes A, B, C and X have separate
distribution and/or service plans. Class B and Class X shares will
automatically convert to Class A shares six years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
-------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges
or other domestic or foreign exchanges are valued based on the last sale price
of the security traded on that exchange prior to the time when the Fund's
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
(including restricted securities) for which quotations are not readily
available are valued primarily using dealer-supplied valuations, a portfolio
pricing service authorized by the Board of Trustees, or at their fair value.
Fair value is determined in good faith under 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 Purchased on a When-Issued or Forward Commitment Basis. Delivery and
payment for securities that have been purchased by the Fund on a when-issued
basis can take place a month or more after the trade date. Normally the
settlement date occurs within six months after the trade date; however, the
Fund may, from time to time, purchase securities whose settlement date extends
beyond six months or more after trade date. During this period, such securities
do not earn interest, are subject to market fluctuation and may increase or
decrease in value prior to their delivery. The Fund maintains segregated assets
with a market value equal to or greater than the amount of its commitments.
These transactions may increase the volatility of the Fund's net asset value to
the extent the Fund executes such transactions while remaining substantially
fully invested. As of December 31, 2001, the Fund had entered into outstanding
net when-issued or forward commitment transactions of $27,784,192.
-------------------------------------------------------------------------------
Inverse Floating Rate Securities. The Fund invests 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
Fund intends to invest no more than 5% of its total assets in inverse floaters.
Inverse floaters amount to $22,712,816 as of December 31, 2001. Including the
effect of leverage, inverse floaters represent 2.20% of the Fund's total assets
as of December 31, 2001.
40 | LIMITED TERM NEW YORK MUNICIPAL FUND
-------------------------------------------------------------------------------
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 daily
to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
-------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
As of December 31, 2001, the Fund had available for federal income tax purposes
unused capital loss carryovers as follows:
Expiring
------------------------------------------------------
2002 $ 6,750,004
------------------------------------------------------
2003 2,250,684
------------------------------------------------------
2004 244,677
------------------------------------------------------
2006 484,870
------------------------------------------------------
2007 15,555,960
------------------------------------------------------
2008 7,670,334
------------------------------------------------------
2009 2,543,678
-----------
Total Capital Loss Carryover $35,500,207
===========
-------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted an unfunded retirement plan for
the Fund's independent Board of Trustees. Benefits are based on years of
service and fees paid to each trustee during the years of service. During the
year ended December 31, 2001, the Fund's projected benefit obligations were
decreased by $143,985 and payments of $2,627 were made to retired trustees,
resulting in an accumulated liability of $122,506 as of December 31, 2001.
The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or
a portion of annual compensation they are entitled to receive from the Fund.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the Board of Trustees in shares of one
or more Xxxxxxxxxxx funds selected by the trustee. The amount paid to the Board
of Trustees under the plan will be determined based upon the performance of the
selected funds. Deferral of trustees' fees under the plan will not affect the
net assets of the Fund, and will not materially affect the Fund's assets,
liabilities or net investment income per share.
-------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
-------------------------------------------------------------------------------
Classification of Dividends and Distributions to Shareholders. 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 realized
gain was recorded by the Fund.
41 | LIMITED TERM NEW YORK MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS Continued
-------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
Investment Income. Interest income, which includes accretion of discount and
amortization of premium, is accrued as earned.
-------------------------------------------------------------------------------
Security Transactions. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
-------------------------------------------------------------------------------
Other. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.
-------------------------------------------------------------------------------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
Year Ended December 31, 2001 Year Ended December 31, 2000
Shares Amount Shares Amount
-----------------------------------------------------------------------------------------------------------------------------
Class A
Sold 104,874,745 $ 345,581,785 30,497,760 $ 97,989,808
Dividends and/or distributions reinvested 9,203,545 30,259,146 8,746,099 28,077,543
Redeemed (53,458,873) (175,825,019) (77,375,199) (247,815,457)
--------------------------------------------------------------
Net increase (decrease) 60,619,417 $ 200,015,912 (38,131,340) $(121,748,106)
==============================================================
-----------------------------------------------------------------------------------------------------------------------------
Class B
Sold 21,666,955 $ 71,297,469 5,527,602 $ 17,764,247
Dividends and/or distributions reinvested 914,062 3,002,247 715,828 2,296,395
Redeemed (3,991,598) (13,099,760) (5,700,634) (18,226,001)
--------------------------------------------------------------
Net increase (decrease) 18,589,419 $ 61,199,956 542,796 $ 1,834,641
==============================================================
-----------------------------------------------------------------------------------------------------------------------------
Class C
Sold 54,464,526 $ 179,215,562 5,349,627 $ 17,125,175
Dividends and/or distributions reinvested 1,299,814 4,263,310 965,305 3,092,089
Redeemed (6,690,465) (21,931,978) (12,593,417) (40,219,306)
--------------------------------------------------------------
Net increase (decrease) 49,073,875 $ 161,546,894 (6,278,485) $ (20,002,042)
==============================================================
-----------------------------------------------------------------------------------------------------------------------------
Class X
Sold - $ - - $ -
Dividends and/or distributions reinvested 247,588 816,174 302,132 971,839
Redeemed (2,416,640) (7,975,922) (2,697,344) (8,641,885)
--------------------------------------------------------------
Net increase (decrease) (2,169,052) $ (7,159,748) (2,395,212) $ (7,670,046)
==============================================================
42 | LIMITED TERM NEW YORK MUNICIPAL FUND
-------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended December 31, 2001, were
$713,765,903 and $298,278,591, respectively.
As of December 31, 2001, unrealized appreciation (depreciation) based on cost
of securities for federal income tax purposes of $1,537,739,047 was:
Gross unrealized appreciation $ 25,879,104
Gross unrealized depreciation (11,067,368)
------------
Net unrealized appreciation (depreciation) $ 14,811,736
============
===============================================================================
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund which provides for a fee of
0.50% of the first $100 million of average daily net assets, 0.45% of the next
$150 million, 0.40% of the next $1.75 billion, and 0.39% of average daily net
assets in excess of $2 billion. The Fund's management fee for the year ended
December 31, 2001, was $5,333,664, or 0.41% of average annual net assets for
each class of shares.
-------------------------------------------------------------------------------
Accounting Fees. Accounting fees paid to the Manager were in accordance with
the accounting services agreement with the Fund, which provides for an annual
fee of $12,000 for the first $30 million of net assets and $9,000 for each
additional $30 million of net assets. During the year ended December 31, 2001,
the Fund paid $389,893 to the Manager for accounting and pricing services.
-------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS an agreed upon per account fee.
OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees for all classes, to 0.35% per annum, effective October 1, 2001. This
undertaking may be amended or withdrawn at any time.
-------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.
Aggregate Class A Commissions Commissions Commissions
Front-End Front-End on Class A on Class B on Class C
Sales Charges Sales Charges Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by
Year Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
---------------------------------------------------------------------------------------------------------------------------
December 31,2001 $3,175,203 $580,635 $532,158 $1,801,030 $1,714,796
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
Class A Class B Class C Class X
Contingent Deferred Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges Sales Charges
Year Ended Retained by Distributor Retained by Distributor Retained by Distributor Retained by Distributor
--------------------------------------------------------------------------------------------------------------------
December 31,2001 $26,204 $205,542 $39,182 $3,703
43 | LIMITED TERM NEW YORK MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS Continued
-------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
Distribution and Service Plan Fees Continued
The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B, Class C and Class X shares under Rule 12b-1 of the
Investment Company Act. Under those plans the Fund pays the Distributor for all
or a portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
-------------------------------------------------------------------------------
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements
to the Distributor at a rate of up to 0.25% of average annual net assets of
Class A shares purchased. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.25% of the average annual net
assets consisting of Class A shares of the Fund. For the year ended December
31, 2001, payments under the Class A plan totaled $2,417,500, all of which were
paid by the Distributor to recipients, and included $47,298 paid to an
affiliate of the Manager. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
years.
-------------------------------------------------------------------------------
Class B, Class C and Class X Distribution and Service Plan Fees. Under each
plan, service fees and distribution fees are computed on the average of the net
asset value of shares in the respective class, determined as of the close of
each regular business day during the period. The Class B, Class C and Class X
plans provide for the Distributor to be compensated at a flat rate, whether the
Distributor's distribution expenses are more or less than the amounts paid by
the Fund under the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B and Class
X shares. The Distributor retains the asset-based sales charge on Class C
shares during the first year the shares are outstanding. The asset-based sales
charges on Class B and Class C shares allow investors to buy shares without a
front-end sales charge while allowing the Distributor to compensate dealers
that sell those shares.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and asset-based sales charges from the
Fund under the plans. If any plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares before the plan was
terminated. The plans allow for the carryforward of distribution expenses, to
be recovered from asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the year ended December 31, 2001,
were as follows:
Distributor's
Distributor's Aggregate
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
-----------------------------------------------------------------------------------
Class B Plan $ 1,138,107 $853,216 $2,973,970 1.94%
Class C Plan 1,500,628 423,984 4,861,376 1.86
Class X Plan 222,461 148,502 - -
44 | LIMITED TERM NEW YORK MUNICIPAL FUND
===============================================================================
5. Illiquid Securities
As of December 31, 2001, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund intends to invest no more than 15% of its net assets (determined at the
time of purchase and reviewed periodically) in illiquid securities. The
aggregate value of illiquid securities subject to this limitation as of
December 31, 2001, was $28,461,000, which represents 1.82% of the Fund's net
assets.
===============================================================================
6. Bank Borrowings
The Fund may borrow up to 10% of its total assets from a bank to purchase
portfolio securities, or for temporary and emergency purposes. The purchase of
securities with borrowed funds creates leverage in the Fund. The Fund has
entered into an agreement which enables it to participate with certain other
Xxxxxxxxxxx funds in an unsecured line of credit with a bank, which permits
borrowings up to $250 million, collectively. Interest is charged to each fund,
based on its borrowings, at a rate equal to the Federal Funds Rate plus 0.625%.
The Fund also pays a commitment fee equal to its pro rata share of the average
unutilized amount of the credit facility at a rate of 0.09% per annum.
The Fund had borrowings outstanding of $5,200,000 as of December 31, 2001.
For the year ended December 31, 2001, the average monthly loan balance was
$9,133,366 at an average interest rate of 4.757%. The Fund had gross borrowings
and gross loan repayments of $412,600,000 and $431,900,000, respectively,
during the year ended December 31, 2001. The maximum amount of borrowings
outstanding at any monthend was $43,400,000.
A-6
Appendix A
MUNICIPAL BOND RATINGS DEFINITIONS
Below are summaries of the rating definitions used by the nationally-recognized rating agencies listed below for municipal
securities. Those ratings represent the opinion of the agency as to the credit quality of issues that they rate. The
summaries below are based upon publicly-available information provided by the rating organizations.
Xxxxx'x Investors Service, Inc. ("Moody's")
LONG-TERM BOND RATINGS
Aaa: Bonds rated "Aaa" are judged to be the best quality. They carry the smallest degree of investment risk. Interest
payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, the changes that can be expected are most unlikely to impair the fundamentally
strong position of such issues.
Aa: Bonds rated "Aa" are judged to be of high quality by all standards. Together with the "Aaa" group, they comprise what
are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be
as large as with Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other
elements present which make the long-term risk appear somewhat larger than the of "Aaa" securities.
A: Bonds rated "A" possess many favorable investment attributes and are to be considered as upper-medium-grade
obligations. Factors giving security to principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment some time in the future.
Baa: Bonds rated "Baa" are considered medium-grade obligations; that is, they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and have speculative characteristics as well.
Ba: Bonds rated "Ba" are judged to have speculative elements. Their future cannot be considered well-assured. Often the
protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and
bad times over the future. Uncertainty of position characterizes bonds in this class.
B: Bonds rated "B" generally lack characteristics of the desirable investment. Assurance of interest and principal payments
or of maintenance of other terms of the contract over any long period of time may be small.
Caa: Bonds rated "Caa" are of poor standing. Such issues may be in default or there may be present elements of danger with
respect to principal or interest.
Ca: Bonds rated "Ca" represent obligations which are speculative in a high degree. Such issues are often in default or have
other marked shortcomings.
C: Bonds rated "C" are the lowest class of rated bonds and can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Con. (...): Bonds for which the security depends on the completion of some act or the fulfillment of some condition are rated
conditionally. These bonds are secured by (a) earnings of projects under construction, (b) earnings of projects unseasoned
in operating experience, (c) rentals that begin when facilities are completed, or (d) payments to which some other limiting
condition attaches. The parenthetical rating denotes probable credit stature upon completion of construction or elimination
of the basis of the condition.
Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from "Aa" through "Caa." The modifier
"1" indicates that the obligation ranks in the higher end of its generic rating category; the modifier "2" indicates a
mid-range ranking; and the modifier "3" indicates a ranking in the lower end of that generic rating category. Advanced
refunded issues that are secured by certain assets are identified with a # symbol.
SHORT-TERM RATINGS - U.S. TAX-EXEMPT MUNICIPALS
There are three ratings for short-term obligations that are investment grade. Short-term speculative obligations are
designated "SG." For variable rate demand obligations, a two-component rating is assigned. The first (MIG) element
represents an evaluation by Moody's of the degree of risk associated with scheduled principal and interest payments. The
second element (VMIG) represents an evaluation of the degree of risk associated with the demand feature.
MIG 1/VMIG 1: Denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable
liquidity support or demonstrated broad-based access to the market for refinancing..
MIG 2/VMIG 2: Denotes strong credit quality. Margins of protection are ample although not as large as in the preceding
group.
MIG 3/VMIG 3: Denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for
refinancing is likely to be less well established.
SG: Denotes speculative-grade credit quality. Debt instruments in this category may lack margins of protection.
Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. ("Standard & Poor's")
LONG-TERM CREDIT RATINGS
AAA: Bonds rated `AAA' has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial
commitment on the obligation is extremely strong.
AA: Bonds rated `AA' differs from the highest-rated obligations only in small degree. The obligor's capacity to meet its
financial commitment on the obligation is very strong.
A: Bonds rated `A' are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions
than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the
obligation is still strong.
BBB: Bonds rated `BBB' exhibits adequate protection parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the
obligation.
BB, B, CCC, CC, and C
Obligations rated `BB', `B', `CCC', `CC', and `C' are regarded as having significant speculative characteristics. `BB'
indicates the least degree of speculation and `C' the highest. While such obligations will likely have some quality and
protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.
BB: Bonds rated `BB' are less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial, or economic conditions, which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.
B: Bonds rated `B' are more vulnerable to nonpayment than obligations rated `BB', but the obligor currently has the
capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.
CCC: Bonds rated `CCC' are currently vulnerable to nonpayment and are dependent upon favorable business, financial, and
economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business,
financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the
obligation.
CC: Bonds rated `CC' are currently highly vulnerable to nonpayment.
C: The `C' rating may be used to cover a situation where a bankruptcy petition has been filed or similar action has been
taken, but payments on this obligation are being continued.
D: Bonds rated `D' are in payment default. The `D' rating category is used when payments on an obligation are not made on
the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will
be made during such grace period. The `D' rating also will be used upon the filing of a bankruptcy petition or the taking
of a similar action if payments on an obligation are jeopardized.
The ratings from `AA' to `CCC' may be modified by the addition of a plus or minus sign to show relative standing within the
major rating categories.
c: The `c' subscript is used to provide additional information to investors that the bank may terminate its obligation to
purchase tendered bonds if the long-term credit rating of the issuer is below an investment-grade level and/or the issuer's
bonds are deemed taxable.
p: The letter `p' indicates that the rating is provisional. A provisional rating assumes the successful completion of the
project financed by the debt being rated and indicates that payment of debt service requirements is largely or entirely
dependent upon the successful, timely completion of the project. This rating, however, while addressing credit quality
subsequent to completion of the project, makes no comment on the likelihood of or the risk of default upon failure of such
completion. The investor should exercise his own judgment with respect to such likelihood and risk.
r: The `r' highlights derivative, hybrid, and certain other obligations that Standard & Poor's believes may experience high
volatility or high variability in expected returns as a result of noncredit risks. Examples of such obligations are
securities with principal or interest return indexed to equities, commodities, or currencies; certain swaps and options;
and interest-only and principal-only mortgage securities. The absence of an `r' symbol should not be taken as an indication
that an obligation will exhibit no volatility or variability in total return.
SHORT-TERM ISSUE CREDIT RATINGS
SP-1: Strong capacity to pay principal and interest. An issue with a very strong capacity to pay debt service is given a
(+) designation.
SP-2: Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic
changes over the term of the notes.
SP-3: Speculative capacity to pay principal and interest.
Fitch, Inc.
INTERNATIONAL LONG-TERM CREDIT RATINGS
Investment Grade:
AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of credit risk. They are assigned only in the case
of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be
adversely affected by foreseeable events.
AA: Very High Credit Quality. "AA" ratings denote a very low expectation of credit risk. They indicate a very strong
capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.
A: High Credit Quality. "A" ratings denote a low expectation of credit risk. The capacity for timely payment of financial
commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.
BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a low expectation of credit risk. The capacity for
timely payment of financial commitments is considered adequate, but adverse changes in circumstances and in economic
conditions are more likely to impair this capacity. This is the lowest investment-grade category.
Speculative Grade:
BB: Speculative. "BB" ratings indicate that there is a possibility of credit risk developing, particularly as the result of
adverse economic change over time. However, business or financial alternatives may be available to allow financial
commitments to be met. Securities rated in this category are not investment grade.
B: Highly Speculative. "B" ratings indicate that significant credit risk is present, but a limited margin of safety
remains. Financial commitments are currently being met. However, capacity for continued payment is contingent upon a
sustained, favorable business and economic environment.
CCC, CC C: High Default Risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant
upon sustained, favorable business or economic developments. A "CC" rating indicates that default of some kind appears
probable. "C" ratings signal imminent default.
DDD, DD, and D: Default. The ratings of obligations in this category are based on their prospects for achieving partial or
full recovery in a reorganization or liquidation of the obligor. While expected recovery values are highly speculative and
cannot be estimated with any precision, the following serve as general guidelines. "DDD" obligations have the highest
potential for recovery, around 90%-100% of outstanding amounts and accrued interest. "DD" indicates potential recoveries in
the range of 50%-90%, and "D" the lowest recovery potential, i.e., below 50%.
Entities rated in this category have defaulted on some or all of their obligations. Entities rated "DDD" have the highest
prospect for resumption of performance or continued operation with or without a formal reorganization process. Entities
rated "DD" and "D" are generally undergoing a formal reorganization or liquidation process; those rated "DD" are likely to
satisfy a higher portion of their outstanding obligations, while entities rated "D" have a poor prospect for repaying all
obligations.
Plus (+) and minus (-) signs may be appended to a rating symbol to denote relative status within the major rating
categories. Plus and minus signs are not added to the "AAA" category or to categories below "CCC," nor to short-term
ratings other than "F1" (see below).
INTERNATIONAL SHORT-TERM CREDIT RATINGS
F1: Highest credit quality. Strongest capacity for timely payment of financial commitments. May have an added "+" to denote
any exceptionally strong credit feature.
F2: Good credit quality. A satisfactory capacity for timely payment of financial commitments, but the margin of safety is
not as great as in the case of higher ratings.
F3: Fair credit quality. Capacity for timely payment of financial commitments is adequate. However, near-term adverse
changes could result in a reduction to non-investment grade.
B: Speculative. Minimal capacity for timely payment of financial commitments, plus vulnerability to near-term adverse
changes in financial and economic conditions.
C: High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon a
sustained, favorable business and economic environment.
D: Default. Denotes actual or imminent payment default.
B-1
Appendix B
Municipal Bond Industry Classifications
Adult Living Facilities
Airlines
Bond Anticipation Notes
Education
Electric Utilities
Gas Utilities
General Obligation
Higher Education
Highways/Railways
Hospital/Healthcare
Hotels/Gaming
Manufacturing, Durable Goods
Manufacturing, Non Durable Goods
Marine/Aviation Facilities
Multi-Family Housing
Municipal Leases
Non Profit Organization
Paper
Parking Fee Revenue
Pollution Control
Resource Recovery
Revenue Anticipation Notes
Sales Tax Revenue
Sewer Utilities
Single Family Housing
Special Assessment
Special Tax
Sports Facility Revenue
Student Loans
Tax Anticipation Notes
Tax & Revenue Anticipation Notes
Telephone Utilities
Water Utilities
C-12
Appendix C
OppenheimerFunds Special Sales Charge Arrangements and Waivers
--------------------------------------------------------------
In certain cases, the initial sales charge that applies to purchases of Class A shares1 of the Xxxxxxxxxxx funds or the
contingent deferred sales charge that may apply to Class A, Class B or Class C shares may be waived.2 That is because of
the economies of sales efforts realized by OppenheimerFunds Distributor, Inc., (referred to in this document as the
"Distributor"), or by dealers or other financial institutions that offer those shares to certain classes of investors.
Not all waivers apply to all funds. For example, waivers relating to Retirement Plans do not apply to Xxxxxxxxxxx municipal
funds, because shares of those funds are not available for purchase by or on behalf of retirement plans. Other waivers
apply only to shareholders of certain funds.
For the purposes of some of the waivers described below and in the Prospectus and Statement of Additional Information of
the applicable Xxxxxxxxxxx funds, the term "Retirement Plan" refers to the following types of plans:
1) plans qualified under Sections 401(a) or 401(k) of the Internal Revenue Code,
2) non-qualified deferred compensation plans,
3) employee benefit plans3
4) Group Retirement Plans4
5) 403(b)(7) custodial plan accounts
6) Individual Retirement Accounts ("IRAs"), including traditional IRAs, Xxxx IRAs, SEP-IRAs, SARSEPs or SIMPLE
plans
The interpretation of these provisions as to the applicability of a special arrangement or waiver in a particular case is
in the sole discretion of the Distributor or the transfer agent (referred to in this document as the "Transfer Agent") of
the particular Xxxxxxxxxxx fund. These waivers and special arrangements may be amended or terminated at any time by a
particular fund, the Distributor, and/or OppenheimerFunds, Inc. (referred to in this document as the "Manager").
Waivers that apply at the time shares are redeemed must be requested by the shareholder and/or dealer in the redemption
request.
I. Applicability of Class A Contingent Deferred Sales Charges in Certain Cases
-----------------------------------------------------------------------------------------------------------------------------
Purchases of Class A Shares of Xxxxxxxxxxx Funds That Are Not Subject to Initial Sales Charge but May Be Subject to the
Class A Contingent Deferred Sales Charge (unless a waiver applies).
There is no initial sales charge on purchases of Class A shares of any of the Xxxxxxxxxxx funds in the cases listed
below. However, these purchases may be subject to the Class A contingent deferred sales charge if redeemed within 18 months
(24 months in the case of Xxxxxxxxxxx Rochester National Municipals and Rochester Fund Municipals) of the beginning of the
calendar month of their purchase, as described in the Prospectus (unless a waiver described elsewhere in this Appendix
applies to the redemption). Additionally, on shares purchased under these waivers that are subject to the Class A
contingent deferred sales charge, the Distributor will pay the applicable concession described in the Prospectus under
"Class A Contingent Deferred Sales Charge."5 This waiver provision applies to:
|_| Purchases of Class A shares aggregating $1 million or more.
|_| Purchases of Class A shares by a Retirement Plan that was permitted to purchase such shares at net asset value but
subject to a contingent deferred sales charge prior to March 1, 2001. That included plans (other than XXX or
403(b)(7) Custodial Plans) that: 1) bought shares costing $500,000 or more, 2) had at the time of purchase 100 or
more eligible employees or total plan assets of $500,000 or more, or 3) certified to the Distributor that it
projects to have annual plan purchases of $200,000 or more.
|_| Purchases by an OppenheimerFunds-sponsored Rollover XXX, if the purchases are made:
1) through a broker, dealer, bank or registered investment advisor that has made special arrangements with the
Distributor for those purchases, or
2) by a direct rollover of a distribution from a qualified Retirement Plan if the administrator of that Plan has
made special arrangements with the Distributor for those purchases.
|_| Purchases of Class A shares by Retirement Plans that have any of the following record-keeping arrangements:
1) The record keeping is performed by Xxxxxxx Xxxxx Xxxxxx Xxxxxx & Xxxxx, Inc. ("Xxxxxxx Xxxxx") on a daily
valuation basis for the Retirement Plan. On the date the plan sponsor signs the record-keeping service
agreement with Xxxxxxx Xxxxx, the Plan must have $3 million or more of its assets invested in (a) mutual
funds, other than those advised or managed by Xxxxxxx Xxxxx Investment Management, L.P. ("MLIM"), that are
made available under a Service Agreement between Xxxxxxx Xxxxx and the mutual fund's principal underwriter or
distributor, and (b) funds advised or managed by MLIM (the funds described in (a) and (b) are referred to as
"Applicable Investments").
2) The record keeping for the Retirement Plan is performed on a daily valuation basis by a record keeper whose
services are provided under a contract or arrangement between the Retirement Plan and Xxxxxxx Xxxxx. On the
date the plan sponsor signs the record keeping service agreement with Xxxxxxx Xxxxx, the Plan must have $3
million or more of its assets (excluding assets invested in money market funds) invested in Applicable
Investments.
3) The record keeping for a Retirement Plan is handled under a service agreement with Xxxxxxx Xxxxx and on the
date the plan sponsor signs that agreement, the Plan has 500 or more eligible employees (as determined by the
Xxxxxxx Xxxxx plan conversion manager).
|_| Purchases by a Retirement Plan whose record keeper had a cost-allocation agreement with the Transfer Agent on or
before March 1, 2001.
II. Waivers of Class A Sales Charges of Xxxxxxxxxxx Funds
-----------------------------------------------------------------------------------------------------------------------------
A. Waivers of Initial and Contingent Deferred Sales Charges for Certain Purchasers.
Class A shares purchased by the following investors are not subject to any Class A sales charges (and no concessions are
paid by the Distributor on such purchases):
|_| The Manager or its affiliates.
|_| Present or former officers, directors, trustees and employees (and their "immediate families") of the Fund, the
Manager and its affiliates, and retirement plans established by them for their employees. The term "immediate
family" refers to one's spouse, children, grandchildren, grandparents, parents, parents-in-law, brothers and
sisters, sons- and daughters-in-law, a sibling's spouse, a spouse's siblings, aunts, uncles, nieces and nephews;
relatives by virtue of a remarriage (step-children, step-parents, etc.) are included.
|_| Registered management investment companies, or separate accounts of insurance companies having an agreement with
the Manager or the Distributor for that purpose.
|_| Dealers or brokers that have a sales agreement with the Distributor, if they purchase shares for their own
accounts or for retirement plans for their employees.
|_| Employees and registered representatives (and their spouses) of dealers or brokers described above or financial
institutions that have entered into sales arrangements with such dealers or brokers (and which are identified as
such to the Distributor) or with the Distributor. The purchaser must certify to the Distributor at the time of
purchase that the purchase is for the purchaser's own account (or for the benefit of such employee's spouse or
minor children).
|_| Dealers, brokers, banks or registered investment advisors that have entered into an agreement with the Distributor
providing specifically for the use of shares of the Fund in particular investment products made available to their
clients. Those clients may be charged a transaction fee by their dealer, broker, bank or advisor for the purchase
or sale of Fund shares.
|_| Investment advisors and financial planners who have entered into an agreement for this purpose with the
Distributor and who charge an advisory, consulting or other fee for their services and buy shares for their own
accounts or the accounts of their clients.
|_| "Rabbi trusts" that buy shares for their own accounts, if the purchases are made through a broker or agent or
other financial intermediary that has made special arrangements with the Distributor for those purchases.
|_| Clients of investment advisors or financial planners (that have entered into an agreement for this purpose with
the Distributor) who buy shares for their own accounts may also purchase shares without sales charge but only if
their accounts are linked to a master account of their investment advisor or financial planner on the books and
records of the broker, agent or financial intermediary with which the Distributor has made such special
arrangements . Each of these investors may be charged a fee by the broker, agent or financial intermediary for
purchasing shares.
|_| Directors, trustees, officers or full-time employees of OpCap Advisors or its affiliates, their relatives or any
trust, pension, profit sharing or other benefit plan which beneficially owns shares for those persons.
|_| Accounts for which Xxxxxxxxxxx Capital (or its successor) is the investment advisor (the Distributor must be
advised of this arrangement) and persons who are directors or trustees of the company or trust which is the
beneficial owner of such accounts.
|_| A unit investment trust that has entered into an appropriate agreement with the Distributor.
|_| Dealers, brokers, banks, or registered investment advisors that have entered into an agreement with the
Distributor to sell shares to defined contribution employee retirement plans for which the dealer, broker or
investment advisor provides administration services.
|-|
Retirement Plans and deferred compensation plans and trusts used to fund those plans (including, for example, plans
qualified or created under sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue Code), in each case if
those purchases are made through a broker, agent or other financial intermediary that has made special
arrangements with the Distributor for those purchases.
|_| A TRAC-2000 401(k) plan (sponsored by the former Quest for Value Advisors) whose Class B or Class C shares of a
Former Quest for Value Fund were exchanged for Class A shares of that Fund due to the termination of the Class B
and Class C TRAC-2000 program on November 24, 1995.
|_| A qualified Retirement Plan that had agreed with the former Quest for Value Advisors to purchase shares of any of
the Former Quest for Value Funds at net asset value, with such shares to be held through DCXchange, a sub-transfer
agency mutual fund clearinghouse, if that arrangement was consummated and share purchases commenced by December
31, 1996.
B. Waivers of Initial and Contingent Deferred Sales Charges in Certain Transactions.
Class A shares issued or purchased in the following transactions are not subject to sales charges (and no concessions are
paid by the Distributor on such purchases):
|_| Shares issued in plans of reorganization, such as mergers, asset acquisitions and exchange offers, to which the
Fund is a party.
|_| Shares purchased by the reinvestment of dividends or other distributions reinvested from the Fund or other
Xxxxxxxxxxx funds (other than Xxxxxxxxxxx Cash Reserves) or unit investment trusts for which reinvestment
arrangements have been made with the Distributor.
|_| Shares purchased through a broker-dealer that has entered into a special agreement with the Distributor to allow
the broker's customers to purchase and pay for shares of Xxxxxxxxxxx funds using the proceeds of shares redeemed
in the prior 30 days from a mutual fund (other than a fund managed by the Manager or any of its subsidiaries) on
which an initial sales charge or contingent deferred sales charge was paid. This waiver also applies to shares
purchased by exchange of shares of Xxxxxxxxxxx Money Market Fund, Inc. that were purchased and paid for in this
manner. This waiver must be requested when the purchase order is placed for shares of the Fund, and the
Distributor may require evidence of qualification for this waiver.
|_| Shares purchased with the proceeds of maturing principal units of any Qualified Unit Investment Liquid Trust
Series.
|_| Shares purchased by the reinvestment of loan repayments by a participant in a Retirement Plan for which the
Manager or an affiliate acts as sponsor.
C. Waivers of the Class A Contingent Deferred Sales Charge for Certain Redemptions.
The Class A contingent deferred sales charge is also waived if shares that would otherwise be subject to the contingent
deferred sales charge are redeemed in the following cases:
|_| To make Automatic Withdrawal Plan payments that are limited annually to no more than 12% of the account value
adjusted annually.
|_| Involuntary redemptions of shares by operation of law or involuntary redemptions of small accounts (please refer
to "Shareholder Account Rules and Policies," in the applicable fund Prospectus).
|_| For distributions from Retirement Plans, deferred compensation plans or other employee benefit plans for any of
the following purposes:
1) Following the death or disability (as defined in the Internal Revenue Code) of the participant or beneficiary.
The death or disability must occur after the participant's account was established.
2) To return excess contributions.
3) To return contributions made due to a mistake of fact.
4) Hardship withdrawals, as defined in the plan.6
5) Under a Qualified Domestic Relations Order, as defined in the Internal Revenue Code, or, in the case of an
XXX, a divorce or separation agreement described in Section 71(b) of the Internal Revenue Code.
6) To meet the minimum distribution requirements of the Internal Revenue Code.
7) To make "substantially equal periodic payments" as described in Section 72(t) of the Internal Revenue Code.
8) For loans to participants or beneficiaries.
9) Separation from service.7
10) Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the Manager
or a subsidiary of the Manager) if the plan has made special arrangements with the Distributor.
11) Plan termination or "in-service distributions," if the redemption proceeds are rolled over directly to an
OppenheimerFunds-sponsored XXX.
|_| For distributions from 401(k) plans sponsored by broker-dealers that have entered into a special agreement with
the Distributor allowing this waiver.
|_| For distributions from retirement plans that have $10 million or more in plan assets and that have entered into a
special agreement with the Distributor.
|_| For distributions from retirement plans which are part of a retirement plan product or platform offered by certain
banks, broker-dealers, financial advisors, insurance companies or record keepers which have entered into a special
agreement with the Distributor.
III. Waivers of Class B, Class C and Class N Sales Charges of Xxxxxxxxxxx Funds
-------------------------------------------------------------------------------------------------------------------------------
The Class B, Class C and Class N contingent deferred sales charges will not be applied to shares purchased in certain types
of transactions or redeemed in certain circumstances described below.
A. Waivers for Redemptions in Certain Cases.
The Class B, Class C and Class N contingent deferred sales charges will be waived for redemptions of shares in the
following cases:
|_| Shares redeemed involuntarily, as described in "Shareholder Account Rules and Policies," in the applicable
Prospectus.
|_| Redemptions from accounts other than Retirement Plans following the death or disability of the last surviving
shareholder, including a trustee of a grantor trust or revocable living trust for which the trustee is also the
sole beneficiary. The death or disability must have occurred after the account was established, and for disability
you must provide evidence of a determination of disability by the Social Security Administration.
|_| Distributions from accounts for which the broker-dealer of record has entered into a special agreement with the
Distributor allowing this waiver.
|_| Redemptions of Class B shares held by Retirement Plans whose records are maintained on a daily valuation basis by
Xxxxxxx Xxxxx or an independent record keeper under a contract with Xxxxxxx Xxxxx.
|_| Redemptions of Class C shares of Xxxxxxxxxxx U.S. Government Trust from accounts of clients of financial
institutions that have entered into a special arrangement with the Distributor for this purpose.
|_| Redemptions requested in writing by a Retirement Plan sponsor of Class C shares of an Xxxxxxxxxxx fund in amounts
of $500,000 or more and made more than 12 months after the Retirement Plan's first purchase of Class C shares, if
the redemption proceeds are invested in Class N shares of one or more Xxxxxxxxxxx funds.
|_| Distributions8 from Retirement Plans or other employee benefit plans for any of the following purposes:
1) Following the death or disability (as defined in the Internal Revenue Code) of the participant or beneficiary.
The death or disability must occur after the participant's account was established in an Xxxxxxxxxxx fund.
2) To return excess contributions made to a participant's account.
3) To return contributions made due to a mistake of fact.
4) To make hardship withdrawals, as defined in the plan.9
5) To make distributions required under a Qualified Domestic Relations Order or, in the case of an XXX, a divorce or
separation agreement described in Section 71(b) of the Internal Revenue Code.
6) To meet the minimum distribution requirements of the Internal Revenue Code.
7) To make "substantially equal periodic payments" as described in Section 72(t) of the Internal Revenue Code.
8) For loans to participants or beneficiaries.10
9) On account of the participant's separation from service.11
10) Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the Manager
or a subsidiary of the Manager) offered as an investment option in a Retirement Plan if the plan has made
special arrangements with the Distributor.
11) Distributions made on account of a plan termination or "in-service" distributions, if the redemption proceeds
are rolled over directly to an OppenheimerFunds-sponsored XXX.
12) For distributions from a participant's account under an Automatic Withdrawal Plan after the participant
reaches age 59 1/2, as long as the aggregate value of the distributions does not exceed 10% of the account's
value, adjusted annually.
13) Redemptions of Class B shares under an Automatic Withdrawal Plan for an account other than a Retirement Plan,
if the aggregate value of the redeemed shares does not exceed 10% of the account's value, adjusted annually.
14) For distributions from 401(k) plans sponsored by broker-dealers that have entered into a special arrangement
with the Distributor allowing this waiver.
|_| Redemptions of Class B shares or Class C shares under an Automatic Withdrawal Plan from an account other than a
Retirement Plan if the aggregate value of the redeemed shares does not exceed 10% of the account's value annually.
B. Waivers for Shares Sold or Issued in Certain Transactions.
The contingent deferred sales charge is also waived on Class B and Class C shares sold or issued in the following cases:
|_| Shares sold to the Manager or its affiliates.
|_| Shares sold to registered management investment companies or separate accounts of insurance companies having an
agreement with the Manager or the Distributor for that purpose.
|_| Shares issued in plans of reorganization to which the Fund is a party.
|_| Shares sold to present or former officers, directors, trustees or employees (and their "immediate families" as
defined above in Section I.A.) of the Fund, the Manager and its affiliates and retirement plans established by
them for their employees.
IV. Special Sales Charge Arrangements for Shareholders of Certain Xxxxxxxxxxx Funds Who Were Shareholders of Former Quest
for Value Funds
-----------------------------------------------------------------------------------------------------------------------------
The initial and contingent deferred sales charge rates and waivers for Class A, Class B and Class C shares described in the
Prospectus or Statement of Additional Information of the Xxxxxxxxxxx funds are modified as described below for certain
persons who were shareholders of the former Quest for Value Funds. To be eligible, those persons must have been
shareholders on November 24, 1995, when OppenheimerFunds, Inc. became the investment advisor to those former Quest for
Value Funds. Those funds include:
Xxxxxxxxxxx Quest Value Fund, Inc. Xxxxxxxxxxx Small Cap Value Fund
Xxxxxxxxxxx Quest Balanced Value Fund Xxxxxxxxxxx Quest Global Value Fund, Inc.
Xxxxxxxxxxx Quest Opportunity Value Fund
These arrangements also apply to shareholders of the following funds when they merged (were reorganized) into
various Xxxxxxxxxxx funds on November 24, 1995:
Quest for Value U.S. Government Income Fund Quest for Value New York Tax-Exempt Fund
Quest for Value Investment Quality Income Fund Quest for Value National Tax-Exempt Fund
Quest for Value Global Income Fund Quest for Value California Tax-Exempt Fund
All of the funds listed above are referred to in this Appendix as the "Former Quest for Value Funds." The waivers
of initial and contingent deferred sales charges described in this Appendix apply to shares of an Xxxxxxxxxxx fund that are
either:
|_| acquired by such shareholder pursuant to an exchange of shares of an Xxxxxxxxxxx fund that was one of the Former
Quest for Value Funds, or
|_| purchased by such shareholder by exchange of shares of another Xxxxxxxxxxx fund that were acquired pursuant to the
merger of any of the Former Quest for Value Funds into that other Xxxxxxxxxxx fund on November 24, 1995.
A. Reductions or Waivers of Class A Sales Charges.
|X| Reduced Class A Initial Sales Charge Rates for Certain Former Quest for Value Funds Shareholders.
Purchases by Groups and Associations. The following table sets forth the initial sales charge rates for Class A shares
purchased by members of "Associations" formed for any purpose other than the purchase of securities. The rates in the table
apply if that Association purchased shares of any of the Former Quest for Value Funds or received a proposal to purchase
such shares from OCC Distributors prior to November 24, 1995.
-------------------------------- ---------------------------- --------------------------------- ---------------------
Number of Eligible Employees Initial Sales Charge as a Initial Sales Charge as a % of Concession as % of
or Members % of Offering Price Net Amount Invested Offering Price
-------------------------------- ---------------------------- --------------------------------- ---------------------
-------------------------------- ---------------------------- --------------------------------- ---------------------
9 or Fewer 2.50% 2.56% 2.00%
-------------------------------- ---------------------------- --------------------------------- ---------------------
-------------------------------- ---------------------------- --------------------------------- ---------------------
At least 10 but not more than 2.00% 2.04% 1.60%
49
-------------------------------- ---------------------------- --------------------------------- ---------------------
-----------------------------------------------------------------------------------------------------------------------------
For purchases by Associations having 50 or more eligible employees or members, there is no initial sales charge on
purchases of Class A shares, but those shares are subject to the Class A contingent deferred sales charge described in the
applicable fund's Prospectus.
Purchases made under this arrangement qualify for the lower of either the sales charge rate in the table based on
the number of members of an Association, or the sales charge rate that applies under the Right of Accumulation described in
the applicable fund's Prospectus and Statement of Additional Information. Individuals who qualify under this arrangement
for reduced sales charge rates as members of Associations also may purchase shares for their individual or custodial
accounts at these reduced sales charge rates, upon request to the Distributor.
|X| Waiver of Class A Sales Charges for Certain Shareholders. Class A shares purchased by the following investors are
not subject to any Class A initial or contingent deferred sales charges:
o Shareholders who were shareholders of the AMA Family of Funds on February 28, 1991 and who acquired shares of any
of the Former Quest for Value Funds by merger of a portfolio of the AMA Family of Funds.
o Shareholders who acquired shares of any Former Quest for Value Fund by merger of any of the portfolios of the
Unified Funds.
|X| Waiver of Class A Contingent Deferred Sales Charge in Certain Transactions. The Class A contingent deferred sales
charge will not apply to redemptions of Class A shares purchased by the following investors who were shareholders of any
Former Quest for Value Fund:
Investors who purchased Class A shares from a dealer that is or was not permitted to receive a sales load or
redemption fee imposed on a shareholder with whom that dealer has a fiduciary relationship, under the Employee Retirement
Income Security Act of 1974 and regulations adopted under that law.
B. Class A, Class B and Class C Contingent Deferred Sales Charge Waivers.
I. Waivers for Redemptions of Shares Purchased Prior to March 6, 1995. In the following cases, the contingent
deferred sales charge will be waived for redemptions of Class A, Class B or Class C shares of an Xxxxxxxxxxx fund.
The shares must have been acquired by the merger of a Former Quest for Value Fund into the fund or by exchange
from an Xxxxxxxxxxx fund that was a Former Quest for Value Fund or into which such fund merged. Those shares must
have been purchased prior to March 6, 1995 in connection with:
o withdrawals under an automatic withdrawal plan holding only either Class B or Class C shares if the annual
withdrawal does not exceed 10% of the initial value of the account value, adjusted annually, and
o liquidation of a shareholder's account if the aggregate net asset value of shares held in the account is less than
the required minimum value of such accounts.
|X| Waivers for Redemptions of Shares Purchased on or After March 6, 1995 but Prior to November 24, 1995. In the
following cases, the contingent deferred sales charge will be waived for redemptions of Class A, Class B or Class C shares
of an Xxxxxxxxxxx fund. The shares must have been acquired by the merger of a Former Quest for Value Fund into the fund or
by exchange from an Xxxxxxxxxxx fund that was a Former Quest For Value Fund or into which such Former Quest for Value Fund
merged. Those shares must have been purchased on or after March 6, 1995, but prior to November 24, 1995:
o redemptions following the death or disability of the shareholder(s) (as evidenced by a determination of total
disability by the U.S. Social Security Administration);
o withdrawals under an automatic withdrawal plan (but only for Class B or Class C shares) where the annual
withdrawals do not exceed 10% of the initial value of the account value; adjusted annually, and
o liquidation of a shareholder's account if the aggregate net asset value of shares held in the account is less than
the required minimum account value.
A shareholder's account will be credited with the amount of any contingent deferred sales charge paid on the
redemption of any Class A, Class B or Class C shares of the Xxxxxxxxxxx fund described in this section if the proceeds are
invested in the same Class of shares in that fund or another Xxxxxxxxxxx fund within 90 days after redemption.
V. Special Sales Charge Arrangements for Shareholders of Certain Xxxxxxxxxxx Funds Who Were Shareholders of
Connecticut Mutual Investment Accounts, Inc.
-------------------------------------------------------------------------------------------------------------------------
The initial and contingent deferred sale charge rates and waivers for Class A and Class B shares described in the
respective Prospectus (or this Appendix) of the following Xxxxxxxxxxx funds (each is referred to as a "Fund" in this
section):
Xxxxxxxxxxx U. S. Government Trust,
Xxxxxxxxxxx Bond Fund,
Xxxxxxxxxxx Value Fund and
Xxxxxxxxxxx Disciplined Allocation Fund
are modified as described below for those Fund shareholders who were shareholders of the following funds (referred to as
the "Former Connecticut Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the investment advisor to the
Former Connecticut Mutual Funds:
Connecticut Mutual Liquid Account Connecticut Mutual Total Return Account
Connecticut Mutual Government Securities Account CMIA LifeSpan Capital Appreciation Account
Connecticut Mutual Income Account CMIA LifeSpan Balanced Account
Connecticut Mutual Growth Account CMIA Diversified Income Account
A. Prior Class A CDSC and Class A Sales Charge Waivers.
|X| Class A Contingent Deferred Sales Charge. Certain shareholders of a Fund and the other Former Connecticut Mutual
Funds are entitled to continue to make additional purchases of Class A shares at net asset value without a Class A initial
sales charge, but subject to the Class A contingent deferred sales charge that was in effect prior to March 18, 1996 (the
"prior Class A CDSC"). Under the prior Class A CDSC, if any of those shares are redeemed within one year of purchase, they
will be assessed a 1% contingent deferred sales charge on an amount equal to the current market value or the original
purchase price of the shares sold, whichever is smaller (in such redemptions, any shares not subject to the prior Class A
CDSC will be redeemed first).
Those shareholders who are eligible for the prior Class A CDSC are:
1) persons whose purchases of Class A shares of a Fund and other Former Connecticut Mutual Funds were $500,000
prior to March 18, 1996, as a result of direct purchases or purchases pursuant to the Fund's policies on
Combined Purchases or Rights of Accumulation, who still hold those shares in that Fund or other Former
Connecticut Mutual Funds, and
2) persons whose intended purchases under a Statement of Intention entered into prior to March 18, 1996, with the
former general distributor of the Former Connecticut Mutual Funds to purchase shares valued at $500,000 or
more over a 13-month period entitled those persons to purchase shares at net asset value without being subject
to the Class A initial sales charge
Any of the Class A shares of a Fund and the other Former Connecticut Mutual Funds that were purchased at net asset
value prior to March 18, 1996, remain subject to the prior Class A CDSC, or if any additional shares are purchased by those
shareholders at net asset value pursuant to this arrangement they will be subject to the prior Class A CDSC.
|X|
Class A Sales Charge Waivers. Additional Class A shares of a Fund may be purchased without a sales charge, by a
person who was in one (or more) of the categories below and acquired Class A shares prior to March 18, 1996, and still
holds Class A shares:
1) any purchaser, provided the total initial amount invested in the Fund or any one or more of the Former
Connecticut Mutual Funds totaled $500,000 or more, including investments made pursuant to the Combined
Purchases, Statement of Intention and Rights of Accumulation features available at the time of the initial
purchase and such investment is still held in one or more of the Former Connecticut Mutual Funds or a Fund
into which such Fund merged;
2) any participant in a qualified plan, provided that the total initial amount invested by the plan in the Fund
or any one or more of the Former Connecticut Mutual Funds totaled $500,000 or more;
3) Directors of the Fund or any one or more of the Former Connecticut Mutual Funds and members of their immediate
families;
4) employee benefit plans sponsored by Connecticut Mutual Financial Services, L.L.C. ("CMFS"), the prior
distributor of the Former Connecticut Mutual Funds, and its affiliated companies;
5) one or more members of a group of at least 1,000 persons (and persons who are retirees from such group)
engaged in a common business, profession, civic or charitable endeavor or other activity, and the spouses and
minor dependent children of such persons, pursuant to a marketing program between CMFS and such group; and
6) an institution acting as a fiduciary on behalf of an individual or individuals, if such institution was
directly compensated by the individual(s) for recommending the purchase of the shares of the Fund or any one
or more of the Former Connecticut Mutual Funds, provided the institution had an agreement with CMFS.
Purchases of Class A shares made pursuant to (1) and (2) above may be subject to the Class A CDSC of the Former
Connecticut Mutual Funds described above.
Additionally, Class A shares of a Fund may be purchased without a sales charge by any holder of a variable annuity
contract issued in New York State by Connecticut Mutual Life Insurance Company through the Panorama Separate Account which
is beyond the applicable surrender charge period and which was used to fund a qualified plan, if that holder exchanges the
variable annuity contract proceeds to buy Class A shares of the Fund.
B. Class A and Class B Contingent Deferred Sales Charge Waivers.
In addition to the waivers set forth in the Prospectus and in this Appendix, above, the contingent deferred sales charge
will be waived for redemptions of Class A and Class B shares of a Fund and exchanges of Class A or Class B shares of a Fund
into Class A or Class B shares of a Former Connecticut Mutual Fund provided that the Class A or Class B shares of the Fund
to be redeemed or exchanged were (i) acquired prior to March 18, 1996 or (ii) were acquired by exchange from an Xxxxxxxxxxx
fund that was a Former Connecticut Mutual Fund. Additionally, the shares of such Former Connecticut Mutual Fund must have
been purchased prior to March 18, 1996:
1) by the estate of a deceased shareholder;
2) upon the disability of a shareholder, as defined in Section 72(m)(7) of the Internal Revenue Code;
3) for retirement distributions (or loans) to participants or beneficiaries from retirement plans qualified under
Sections 401(a) or 403(b)(7)of the Code, or from IRAs, deferred compensation plans created under Section 457 of
the Code, or other employee benefit plans;
4) as tax-free returns of excess contributions to such retirement or employee benefit plans;
5) in whole or in part, in connection with shares sold to any state, county, or city, or any instrumentality,
department, authority, or agency thereof, that is prohibited by applicable investment laws from paying a sales
charge or concession in connection with the purchase of shares of any registered investment management company;
6) in connection with the redemption of shares of the Fund due to a combination with another investment company by
virtue of a merger, acquisition or similar reorganization transaction;
7) in connection with the Fund's right to involuntarily redeem or liquidate the Fund;
8) in connection with automatic redemptions of Class A shares and Class B shares in certain retirement plan accounts
pursuant to an Automatic Withdrawal Plan but limited to no more than 12% of the original value annually; or
9) as involuntary redemptions of shares by operation of law, or under procedures set forth in the Fund's Articles of
Incorporation, or as adopted by the Board of Directors of the Fund.
VI. Special Reduced Sales Charge for Former Shareholders of Advance America Funds, Inc.
-------------------------------------------------------------------------------------------------------------------------
Shareholders of Xxxxxxxxxxx Municipal Bond Fund, Xxxxxxxxxxx U.S. Government Trust, Xxxxxxxxxxx Strategic Income Fund and
Xxxxxxxxxxx Capital Income Fund who acquired (and still hold) shares of those funds as a result of the reorganization of
series of Advance America Funds, Inc. into those Xxxxxxxxxxx funds on October 18, 1991, and who held shares of Advance
America Funds, Inc. on March 30, 1990, may purchase Class A shares of those four Xxxxxxxxxxx funds at a maximum sales
charge rate of 4.50%.
VII. Sales Charge Waivers on Purchases of Class M Shares of Xxxxxxxxxxx Convertible Securities Fund
-----------------------------------------------------------------------------------------------------------------------------
Xxxxxxxxxxx Convertible Securities Fund (referred to as the "Fund" in this section) may sell Class M shares at net asset
value without any initial sales charge to the classes of investors listed below who, prior to March 11, 1996, owned shares
of the Fund's then-existing Class A and were permitted to purchase those shares at net asset value without sales charge:
|_| the Manager and its affiliates,
|_| present or former officers, directors, trustees and employees (and their "immediate families" as defined in the
Fund's Statement of Additional Information) of the Fund, the Manager and its affiliates, and retirement plans
established by them or the prior investment advisor of the Fund for their employees,
|_| registered management investment companies or separate accounts of insurance companies that had an agreement with
the Fund's prior investment advisor or distributor for that purpose,
|_| dealers or brokers that have a sales agreement with the Distributor, if they purchase shares for their own
accounts or for retirement plans for their employees,
|_| employees and registered representatives (and their spouses) of dealers or brokers described in the preceding
section or financial institutions that have entered into sales arrangements with those dealers or brokers (and
whose identity is made known to the Distributor) or with the Distributor, but only if the purchaser certifies to
the Distributor at the time of purchase that the purchaser meets these qualifications,
|_| dealers, brokers, or registered investment advisors that had entered into an agreement with the Distributor or the
prior distributor of the Fund specifically providing for the use of Class M shares of the Fund in specific
investment products made available to their clients, and
|_| dealers, brokers or registered investment advisors that had entered into an agreement with the Distributor or
prior distributor of the Fund's shares to sell shares to defined contribution employee retirement plans for which
the dealer, broker, or investment advisor provides administrative services.
Limited Term New York Municipal Fund
Internet Website
XXX.XXXXXXXXXXXXXXXX.XXX
------------------------
Investment Advisor
OppenheimerFunds, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Distributor
OppenheimerFunds Distributor, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Transfer Agent
OppenheimerFunds Services
X.X. Xxx 0000
Xxxxxx, Xxxxxxxx 00000
0.000.000.0000
Custodian Bank
Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Independent Auditors
KPMG LLP
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Legal Counsel
Mayer, Brown, Xxxx & Maw
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
1234
PX0355.001.0402
--------
1 Xx. Xxxxxx is a Trustee of Rochester Fund Municipals, Limited-Term New York Municipal Fund and Convertible Securities
Fund.
2 The address of each Trustee is 0000 X. Xxxxxx Xxx, Xxxxxxxxx, XX 00000-0000.
3 Each Trustee serves for an indefinite term, until his or her resignation, death or removal.
4 The address of the Officers is as follows: Messrs. Xxxxxx, Xxxxxxx and Xxxx and Xx. Xxxx is 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
XX 00000; Xx. Xxxxxx and Xx. Xxxx is 0000 X. Xxxxxx Xxx, Xxxxxxxxx, XX 00000-0000; Messrs. Fielding and Xxxxxx is 000
Xxxxxx Xxxx, Xxxxxxxxx, XX 00000.
5 Each Officer serves for an annual term or until his or her resignation, death or removal.
6 In accordance with Rule 12b-1 of the Investment Company Act, the term "Independent Trustees" in this Statement of
Additional Information refers to those Trustees who are not "interested persons" of the Fund and who do not have any direct
or indirect financial interest in the operation of the distribution plan or any agreement under the plan.
1 Certain waivers also apply to Class M shares of Xxxxxxxxxxx Convertible Securities Fund.
2 In the case of Xxxxxxxxxxx Senior Floating Rate Fund, a continuously-offered closed-end fund, references to contingent
deferred sales charges mean the Fund's Early Withdrawal Charges and references to "redemptions" mean "repurchases" of
shares.
3 An "employee benefit plan" means any plan or arrangement, whether or not it is "qualified" under the Internal Revenue
Code, under which Class N shares of an Xxxxxxxxxxx fund or funds are purchased by a fiduciary or other administrator for
the account of participants who are employees of a single employer or of affiliated employers. These may include, for
example, medical savings accounts, payroll deduction plans or similar plans. The fund accounts must be registered in the
name of the fiduciary or administrator purchasing the shares for the benefit of participants in the plan.
4 The term "Group Retirement Plan" means any qualified or non-qualified retirement plan for employees of a corporation or
sole proprietorship, members and employees of a partnership or association or other organized group of persons (the members
of which may include other groups), if the group has made special arrangements with the Distributor and all members of the
group participating in (or who are eligible to participate in) the plan purchase shares of an Xxxxxxxxxxx fund or funds
through a single investment dealer, broker or other financial institution designated by the group. Such plans include 457
plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b) plans other than plans for public school employees. The term "Group
Retirement Plan" also includes qualified retirement plans and non-qualified deferred compensation plans and IRAs that
purchase shares of an Xxxxxxxxxxx fund or funds through a single investment dealer, broker or other financial institution
that has made special arrangements with the Distributor.
5 However, that concession will not be paid on purchases of shares in amounts of $1 million or more (including any right of
accumulation) by a Retirement Plan that pays for the purchase with the redemption proceeds of Class C shares of one or more
Xxxxxxxxxxx funds held by the Plan for more than one year.
6 This provision does not apply to IRAs.
7 This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to IRAs.
8 The distribution must be requested prior to Plan termination or the elimination of the Xxxxxxxxxxx funds as an investment
option under the Plan.
9 This provision does not apply to IRAs.
10 This provision does not apply to loans from 403(b)(7) custodial plans.
11 This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to IRAs.
