-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Dh4is9rEpzn7Q+5YUHu2G6WoNh8mOYWrpLE5baSHBuo2xKEegPqvRaaCTpgLP3Mt qb71w/wEdLgIAQhhyn2YVw== 0000935069-05-000972.txt : 20050426 0000935069-05-000972.hdr.sgml : 20050426 20050426153631 ACCESSION NUMBER: 0000935069-05-000972 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050228 FILED AS OF DATE: 20050426 DATE AS OF CHANGE: 20050426 EFFECTIVENESS DATE: 20050426 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER DEVELOPING MARKETS FUND CENTRAL INDEX KEY: 0001015986 IRS NUMBER: 936305075 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-07657 FILM NUMBER: 05772956 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 BUSINESS PHONE: 303-768-3200 MAIL ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 N-CSRS 1 rs785_15525n-csr.txt RS785_15525N-CSR.TXT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-07657 OPPENHEIMER DEVELOPING MARKETS FUND (Exact name of registrant as specified in charter) 6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924 (Address of principal executive offices) (Zip code) Robert G. Zack, Esq. OppenheimerFunds, Inc. TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008 (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 Date of fiscal year end: AUGUST 31 Date of reporting period: SEPTEMBER 1, 2004 - FEBRUARY 28, 2005 ITEM 1. REPORTS TO STOCKHOLDERS. TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- TOP TEN GEOGRAPHICAL HOLDINGS - -------------------------------------------------------------------------------- Brazil 16.9% - -------------------------------------------------------------------------------- India 15.9 - -------------------------------------------------------------------------------- Korea, Republic of (South) 9.6 - -------------------------------------------------------------------------------- Mexico 8.5 - -------------------------------------------------------------------------------- Taiwan 7.9 - -------------------------------------------------------------------------------- South Africa 7.0 - -------------------------------------------------------------------------------- Indonesia 4.9 - -------------------------------------------------------------------------------- Turkey 4.6 - -------------------------------------------------------------------------------- Egypt 3.3 - -------------------------------------------------------------------------------- United Kingdom 2.7 Portfolio holdings and allocations are subject to change. Percentages are as of February 28, 2005, and are based on total investments. TOP TEN COMMON STOCK HOLDINGS - -------------------------------------------------------------------------------- Companhia Vale do Rio Doce, Sponsored ADR 2.3% - -------------------------------------------------------------------------------- Corporacion GEO SA de CV, Series B 2.1 - -------------------------------------------------------------------------------- Banco Bradesco SA, Preference 1.9 - -------------------------------------------------------------------------------- SK Corp. 1.8 - -------------------------------------------------------------------------------- Tele Norte Leste Participacoes SA 1.8 - -------------------------------------------------------------------------------- Housing Development Finance Corp. Ltd. 1.7 - -------------------------------------------------------------------------------- Empresa Brasileira de Aeronautica SA, Preference 1.6 - -------------------------------------------------------------------------------- Hyundai Heavy Industries Co. Ltd. 1.6 - -------------------------------------------------------------------------------- LG Home Shopping, Inc. 1.6 - -------------------------------------------------------------------------------- SM Prime Holdings, Inc. 1.5 Portfolio holdings and allocations are subject to change. Percentages are as of February 28, 2005, and are based on net assets. For more current Fund holdings, please visit www.oppenheimerfunds.com. - -------------------------------------------------------------------------------- 8 | OPPENHEIMER DEVELOPING MARKETS FUND - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL] REGIONAL ALLOCATION Asia 46.2% Latin America 26.9 Middle East/Africa 17.9 Europe 5.7 United States 2.7 Emerging Europe 0.6 Portfolio holdings and allocations are subject to change. Percentages are as of February 28, 2005, and are based on total investments. - -------------------------------------------------------------------------------- 9 | OPPENHEIMER DEVELOPING MARKETS FUND NOTES - -------------------------------------------------------------------------------- Total returns include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. Cumulative total returns are not annualized. The Fund's total returns shown do not reflect the deduction of income taxes on an individual's investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares. INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. The Fund's investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc. CLASS A shares of the Fund were first publicly offered on 11/18/96. Unless otherwise noted, Class A returns include the maximum initial sales charge of 5.75%. CLASS B shares of the Fund were first publicly offered on 11/18/96. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to Class A shares 72 months after purchase, the "since inception" return for Class B uses Class A performance for the period after conversion. Class B shares are subject to an annual 0.75% asset-based sales charge. CLASS C shares of the Fund were first publicly offered on 11/18/96. Unless otherwise noted, Class C returns include the contingent deferred sales charge of 1% for 1-year period. Class C shares are subject to a 0.75% annual asset-based sales charge. CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares are offered only through retirement plans. Unless otherwise noted, Class N returns include the contingent deferred sales charge of 1% for the 1-year period. Class N shares are subject to an annual 0.25% asset-based sales charge. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 10 | OPPENHEIMER DEVELOPING MARKETS FUND FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended February 28, 2005. ACTUAL EXPENSES. The "actual" lines of the table provide information about actual account values and actual expenses. You may use the information on this line for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the "actual" line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), redemption fees, or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to 11 | OPPENHEIMER DEVELOPING MARKETS FUND FUND EXPENSES - -------------------------------------------------------------------------------- exceptions described in the Statement of Additional Information). Therefore, the "hypothetical" lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED (9/1/04) (2/28/05) FEBRUARY 28, 2005 - -------------------------------------------------------------------------------- Class A Actual $ 1,000.00 $ 1,395.40 $ 8.34 - -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,017.85 7.03 - -------------------------------------------------------------------------------- Class B Actual 1,000.00 1,389.10 13.39 - -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,013.64 11.30 - -------------------------------------------------------------------------------- Class C Actual 1,000.00 1,390.10 12.92 - -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,014.03 10.89 - -------------------------------------------------------------------------------- Class N Actual 1,000.00 1,392.80 10.66 - -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,015.92 8.99 Hypothetical assumes 5% annual return before expenses. Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Those annualized expense ratios based on the 6-month period ended February 28, 2005 are as follows: CLASS EXPENSE RATIOS - -------------------------- Class A 1.40% - -------------------------- Class B 2.25 - -------------------------- Class C 2.17 - -------------------------- Class N 1.79 The expense ratios reflect voluntary waivers or reimbursements of expenses by the Fund's Transfer Agent that can be terminated at any time, without advance notice. The "Financial Highlights" tables in the Fund's financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements. - -------------------------------------------------------------------------------- 12 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENT OF INVESTMENTS February 28, 2005 / Unaudited - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMMON STOCKS--96.4% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--17.7% - -------------------------------------------------------------------------------- AUTO COMPONENTS--1.4% Amtek Auto Ltd. 3,700,000 $ 14,578,839 - -------------------------------------------------------------------------------- Hyundai Autonet Co. Ltd. 1 10,200,000 34,066,613 ---------------- 48,645,452 - -------------------------------------------------------------------------------- AUTOMOBILES--1.9% Bajaj Auto Ltd. 528,000 12,456,284 - -------------------------------------------------------------------------------- Hero Honda Motors Ltd. 617,693 7,699,059 - -------------------------------------------------------------------------------- PT Astra International Tbk 34,960,000 40,754,277 - -------------------------------------------------------------------------------- Ssangyong Motor Co. 2 796,530 6,026,720 ---------------- 66,936,340 - -------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--2.6% Danubius Hotel & Spa Rt. 2 228,490 7,254,316 - -------------------------------------------------------------------------------- Hongkong & Shanghai Hotels Ltd. (The) 19,156,000 17,439,219 - -------------------------------------------------------------------------------- Intralot SA Integrated Lottery 1,471,310 47,731,852 - -------------------------------------------------------------------------------- Jollibee Foods Corp. 36,994,700 19,962,386 ---------------- 92,387,773 - -------------------------------------------------------------------------------- HOUSEHOLD DURABLES--3.2% Corporacion GEO SA de CV, Series B 1,2 28,915,000 72,801,276 - -------------------------------------------------------------------------------- Steinhoff International Holdings Ltd. 17,805,600 41,618,920 ---------------- 114,420,196 - -------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL--1.6% LG Home Shopping, Inc. 1 687,900 55,282,129 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- MEDIA--4.3% Corporacion Interamericana de Entretenimiento SA de CV 2 5,300,000 $ 15,253,894 - -------------------------------------------------------------------------------- Grupo Televisa SA, Sponsored GDR 478,100 30,813,545 - -------------------------------------------------------------------------------- Shaw Brothers Ltd. 3 6,293,000 6,616,609 - -------------------------------------------------------------------------------- Singapore Press Holdings Ltd. 14,370,500 40,400,419 - -------------------------------------------------------------------------------- Television Broadcasts Ltd. 4,125,000 18,564,999 - -------------------------------------------------------------------------------- Zee Telefilms Ltd. 12,479,156 40,539,752 ---------------- 152,189,218 - -------------------------------------------------------------------------------- MULTILINE RETAIL--1.2% Lojas Americanas SA, Preference 1 2,226,500,000 40,849,266 - -------------------------------------------------------------------------------- SPECIALTY RETAIL--1.2% Courts (Singapore) Ltd. 1 11,425,000 3,838,856 - -------------------------------------------------------------------------------- JD Group Ltd. 3,447,600 38,429,839 ---------------- 42,268,695 - -------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS--0.3% Folli-Follie SA 330,000 10,434,852 - -------------------------------------------------------------------------------- CONSUMER STAPLES--11.1% - -------------------------------------------------------------------------------- BEVERAGES--2.7% Coca-Cola Femsa SA de CV, Sponsored ADR 1,288,350 33,110,595 - -------------------------------------------------------------------------------- Companhia de Bebidas das Americas, ADR 1,191,000 35,872,920 - -------------------------------------------------------------------------------- Fomento Economico Mexicano SA de CV, Sponsored ADR 52,100 3,147,882 - -------------------------------------------------------------------------------- Serm Suk Public Co. Ltd. 7,323,000 4,289,623 - -------------------------------------------------------------------------------- United Breweries Holdings Ltd. 1,2 1,850,000 4,177,488 13 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- BEVERAGES Continued United Breweries Ltd. 1,2 1,462,826 $ 12,695,246 ---------------- 93,293,754 - -------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--3.6% Companhia Brasileira de Distribuicao Grupo Pao de Acucar, Sponsored ADR 1,838,800 44,094,424 - -------------------------------------------------------------------------------- Dairy Farm International Holdings Ltd. 5,782,600 15,323,890 - -------------------------------------------------------------------------------- Jeronimo Martins Sociedade Gestora de Participacoes SA 2 1,615,632 23,318,841 - -------------------------------------------------------------------------------- Massmart Holdings Ltd. 2 3,058,500 23,864,823 - -------------------------------------------------------------------------------- President Chain Store Corp. 11,646,074 19,672,422 ---------------- 126,274,400 - -------------------------------------------------------------------------------- FOOD PRODUCTS--1.2% Sadia SA, Preference 14,005,000 26,668,463 - -------------------------------------------------------------------------------- Tiger Brands Ltd. 945,000 16,497,492 ---------------- 43,165,955 - -------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS--0.2% Trent Ltd. 637,569 8,365,857 - -------------------------------------------------------------------------------- PERSONAL PRODUCTS--1.2% Amore Pacific Corp. 125,955 29,090,652 - -------------------------------------------------------------------------------- Natura Cosmeticos SA 479,700 14,127,897 ---------------- 43,218,549 - -------------------------------------------------------------------------------- TOBACCO--2.2% Eastern Tobacco Co. 3 806,691 25,161,946 - -------------------------------------------------------------------------------- ITC Ltd. 1,223,900 36,285,349 - -------------------------------------------------------------------------------- PT Gudang Garam 8,860,000 14,727,616 ---------------- 76,174,911 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- ENERGY--4.2% - -------------------------------------------------------------------------------- OIL & GAS--4.2% Bharat Petroleum Corp. Ltd. 3,409,955 $ 33,404,517 - -------------------------------------------------------------------------------- Oil & Natural Gas Corp. Ltd. 663,090 12,934,545 - -------------------------------------------------------------------------------- Reliance Industries Ltd. 2,930,000 37,311,955 - -------------------------------------------------------------------------------- SK Corp. 1,025,000 64,380,298 ---------------- 148,031,315 - -------------------------------------------------------------------------------- FINANCIALS--26.6% - -------------------------------------------------------------------------------- COMMERCIAL BANKS--14.0% Banco Bradesco SA 2 69,263 2,182,981 - -------------------------------------------------------------------------------- Banco Bradesco SA, Preference 2,105,860 66,413,082 - -------------------------------------------------------------------------------- Banco Latinoamericano de Exportaciones SA, Cl. E 1,175,000 25,955,750 - -------------------------------------------------------------------------------- Bank Hapoalim Ltd. 5,185,263 18,892,414 - -------------------------------------------------------------------------------- Bank Leumi Le-Israel 6,062,600 17,914,131 - -------------------------------------------------------------------------------- Commercial International Bank, Sponsored GDR 1 1,589,508 13,304,182 - -------------------------------------------------------------------------------- Commercial International Bank, Sponsored GDR 1,4 1,800,000 15,066,000 - -------------------------------------------------------------------------------- Grupo Financiero Banorte SA de CV 3,800,000 26,285,864 - -------------------------------------------------------------------------------- Grupo Financiero Inbursa SA de CV 24,049,000 49,501,369 - -------------------------------------------------------------------------------- HDFC Bank Ltd. 331,195 4,451,582 - -------------------------------------------------------------------------------- HSBC Holdings plc 2,649,968 45,221,570 - -------------------------------------------------------------------------------- HSBC Holdings plc, Sponsored ADR 142,458 11,893,818 - -------------------------------------------------------------------------------- ICICI Bank Ltd. 871,655 7,600,656 - -------------------------------------------------------------------------------- ICICI Bank Ltd., Sponsored ADR 1,925,000 43,601,250 - -------------------------------------------------------------------------------- PT Bank Mandiri 191,888,500 37,489,145 - -------------------------------------------------------------------------------- Taishin Financial Holdings Co. Ltd. 7,000,000 6,621,622 14 | OPPENHEIMER DEVELOPING MARKETS FUND VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMMERCIAL BANKS Continued Thai Military Bank Public Co. Ltd. 2 110,000,000 $ 12,494,156 - -------------------------------------------------------------------------------- Uniao de Bancos Brasileiros SA, Sponsored GDR 998,200 37,632,140 - -------------------------------------------------------------------------------- Yapi ve Kredi Bankasi AS 2 11,487,363 51,482,726 ---------------- 494,004,438 - -------------------------------------------------------------------------------- CONSUMER FINANCE--0.3% Tisco Finance Public Co. Ltd. 13,304,780 9,481,047 - -------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--4.9% Fubon Financial Holding Co. Ltd. 36,147,000 38,319,652 - -------------------------------------------------------------------------------- Fubon Financial Holding Co. Ltd., GDR 1,639,500 16,994,260 - -------------------------------------------------------------------------------- Guoco Group Ltd. 2,584,000 25,512,152 - -------------------------------------------------------------------------------- Haci Omer Sabanci Holding AS 6,295,132 27,231,475 - -------------------------------------------------------------------------------- Haci Omer Sabanci Holding AS, Sponsored ADR 12,000,000 12,900,000 - -------------------------------------------------------------------------------- Kiatnakin Finance Public Co. Ltd. 12,500,020 12,094,685 - -------------------------------------------------------------------------------- Old Mutual plc 13,855,890 37,752,473 ---------------- 170,804,697 - -------------------------------------------------------------------------------- INSURANCE--2.6% Aksigorta AS 1 8,762,905 42,687,573 - -------------------------------------------------------------------------------- Cathay Financial Holding Co. Ltd. 3,683,000 7,465,541 - -------------------------------------------------------------------------------- Sanlam Ltd. 18,300,000 41,895,820 ---------------- 92,048,934 - -------------------------------------------------------------------------------- REAL ESTATE--3.1% Brazil Realty SA Empreendimentos e Participacoes 1,3 394,000 742,650 - -------------------------------------------------------------------------------- Brazil Realty SA, GDR 1,3 435,720 7,701,351 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- REAL ESTATE Continued Hang Lung Development Co. 4,669,000 $ 8,501,119 - -------------------------------------------------------------------------------- IRSA Inversiones y Representaciones SA, Sponsored GDR 2 163,300 2,681,386 - -------------------------------------------------------------------------------- Medinet Nasr for Housing & Development Co. 1,3 1,316,496 15,885,321 - -------------------------------------------------------------------------------- SM Prime Holdings, Inc. 346,977,812 54,582,206 - -------------------------------------------------------------------------------- Solidere, GDR 2 53,075 490,944 - -------------------------------------------------------------------------------- Solidere, GDR 2,4 2,129,378 19,696,747 ---------------- 110,281,724 - -------------------------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE--1.7% Housing Development Finance Corp. Ltd. 3,420,407 60,903,846 - -------------------------------------------------------------------------------- HEALTH CARE--3.6% - -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--0.3% Diagnosticos da America 2 871,900 10,776,671 - -------------------------------------------------------------------------------- PHARMACEUTICALS--3.3% Divi's Laboratories Ltd. 1 954,666 22,975,169 - -------------------------------------------------------------------------------- Pliva d.d., GDR 4 1,000,000 14,900,000 - -------------------------------------------------------------------------------- Sun Pharmaceutical Industries Ltd. 2,884,238 31,590,217 - -------------------------------------------------------------------------------- Teva Pharmaceutical Industries Ltd., Sponsored ADR 1,575,600 47,441,316 ---------------- 116,906,702 - -------------------------------------------------------------------------------- INDUSTRIALS--6.1% - -------------------------------------------------------------------------------- AEROSPACE & DEFENSE--1.6% Empresa Brasileira de Aeronautica SA 112,400 718,509 - -------------------------------------------------------------------------------- Empresa Brasileira de Aeronautica SA, Preference 6,790,800 57,180,162 ---------------- 57,898,671 15 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- AIR FREIGHT & LOGISTICS--0.8% Sinotrans Ltd. 87,603,000 $ 29,652,643 - -------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING--0.2% Kyeryong Construction Industrial Co. Ltd. 330,260 6,772,878 - -------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT--0.4% Bharat Heavy Electricals Ltd. 749,926 14,742,619 - -------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--0.4% Bidvest Group Ltd. 536,900 6,961,631 - -------------------------------------------------------------------------------- Murray & Roberts Holdings Ltd. 2,181,943 5,706,260 ---------------- 12,667,891 - -------------------------------------------------------------------------------- MACHINERY--2.3% Hyundai Heavy Industries Co. Ltd. 1,110,000 55,472,374 - -------------------------------------------------------------------------------- Larsen & Toubro Ltd. 949,250 23,603,531 ---------------- 79,075,905 - -------------------------------------------------------------------------------- ROAD & RAIL--0.4% All America Latina Logistica, Preference 420,400 13,647,980 - -------------------------------------------------------------------------------- TRADING COMPANIES & DISTRIBUTORS--0.0% LG International Corp. 137,160 1,467,865 - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--7.3% - -------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--4.3% Benq Corp. 31,934,850 35,654,417 - -------------------------------------------------------------------------------- High Tech Computer Corp. 6,609,000 39,762,307 - -------------------------------------------------------------------------------- Lite-On Technology Corp. 34,440,270 37,343,536 - -------------------------------------------------------------------------------- Quanta Computer, Inc. 21,553,000 38,487,500 ---------------- 151,247,760 - -------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--1.0% Synnex Technology International Corp. 23,302,800 34,864,228 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- IT SERVICES--1.5% HCL Technologies Ltd. 4,118,600 $ 31,848,054 - -------------------------------------------------------------------------------- Hughes Software Systems Ltd. 1,259,205 14,821,216 - -------------------------------------------------------------------------------- NIIT Ltd. 470,303 2,121,830 - -------------------------------------------------------------------------------- NIIT Technologies Ltd. 2 1,276,324 3,902,193 ---------------- 52,693,293 - -------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.1% Telechips, Inc. 226,052 3,920,651 - -------------------------------------------------------------------------------- SOFTWARE--0.4% Mphasis BFL Ltd. 2,281,432 12,824,401 - -------------------------------------------------------------------------------- MATERIALS--9.0% - -------------------------------------------------------------------------------- CHEMICALS--0.6% Asian Paints Ltd. 2,622,800 21,401,664 - -------------------------------------------------------------------------------- CONSTRUCTION MATERIALS--1.2% Cemex SA de CV, Sponsored ADR 1,022,294 40,861,091 - -------------------------------------------------------------------------------- Ultra Tech Cement Ltd. 240,547 2,050,696 ---------------- 42,911,787 - -------------------------------------------------------------------------------- METALS & MINING--7.2% Anglo American Platinum Corp. Ltd. 1,130,000 44,570,204 - -------------------------------------------------------------------------------- Anglo American Platinum Corp. Ltd. 35,873 739,453 - -------------------------------------------------------------------------------- Companhia de Minas Buenaventura SA, Sponsored ADR, B Shares 965,000 22,349,400 - -------------------------------------------------------------------------------- Companhia Siderurgica Nacional SA, Sponsored ADR 1,568,400 40,433,352 - -------------------------------------------------------------------------------- Companhia Vale do Rio Doce, Sponsored ADR 2,810,000 80,899,900 - -------------------------------------------------------------------------------- Impala Platinum Holdings Ltd. 279,000 24,449,132 - -------------------------------------------------------------------------------- PT Aneka Tambang Tbk 1 174,425,000 40,478,574 ---------------- 253,920,015 16 | OPPENHEIMER DEVELOPING MARKETS FUND VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--8.5% - -------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--3.4% Portugal Telecom SA 1,675,000 $ 20,338,652 - -------------------------------------------------------------------------------- PT Telekomunikasi Indonesia Tbk 79,000,000 37,732,743 - -------------------------------------------------------------------------------- Tele Norte Leste Participacoes SA 3,150,000 62,415,991 ---------------- 120,487,386 - -------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--5.1% America Movil SA de CV, Series L 440,000 25,828,000 - -------------------------------------------------------------------------------- Orascom Telecom Holding SAE 2 330,000 23,124,034 - -------------------------------------------------------------------------------- SK Telecom Co. Ltd. 158,750 28,605,027 - -------------------------------------------------------------------------------- SK Telecom Co. Ltd., ADR 2,341,300 49,869,690 - -------------------------------------------------------------------------------- Turkcell Iletisim Hizmetleri AS, ADR 1,490,700 27,205,275 - -------------------------------------------------------------------------------- Vodafone Egypt Telecommunications Co. SAE 1,603,094 23,151,427 ---------------- 177,783,453 - -------------------------------------------------------------------------------- UTILITIES--2.3% - -------------------------------------------------------------------------------- ELECTRIC UTILITIES--1.7% Companhia Energetica de Minas Gerais, Preference 1,936,121,000 50,291,285 - -------------------------------------------------------------------------------- National Thermal Power Corp. Ltd. 2 3,615,800 7,701,120 ---------------- 57,992,405 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- GAS UTILITIES--0.6% Gail India Ltd. 3,237,690 $ 17,869,765 - -------------------------------------------------------------------------------- Transportadora de Gas del Sur SA, Cl. B 2,3 3,474,612 4,197,319 ---------------- 22,067,084 ---------------- Total Common Stocks (Cost $2,277,293,911) 3,395,187,300 - -------------------------------------------------------------------------------- PREFERRED STOCKS--0.4% - -------------------------------------------------------------------------------- United Breweries Ltd., Cv. 2 (Cost $3,831,273) 1,755,392 13,995,755 PRINCIPAL AMOUNT - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--2.6% - -------------------------------------------------------------------------------- Undivided interest of 23.27% in joint repurchase agreement (Principal Amount/Value $400,128,000, with a maturity value of $400,156,676) with Cantor Fitzgerald & Co./Cantor Fitzgerald Securities, 2.58%, dated 2/28/05, to be repurchased at $93,101,672 on 3/1/05, collateralized by U.S. Treasury Bonds, 1.625%--8.875%, 4/30/05--8/15/19, with a value of $408,693,720 (Cost $93,095,000) $93,095,000 93,095,000 - -------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $2,374,220,184) 99.4% 3,502,278,055 - -------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.6 21,260,438 --------------------------------- NET ASSETS 100.0% $3,523,538,493 ================================= 17 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Affiliated company. Represents ownership of at least 5% of the voting securities of the issuer, and is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended February 28, 2005. The aggregate fair value of securities of affiliated companies held by the Fund as of February 28, 2005 amounts to $382,551,694. Transactions during the period in which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES AUGUST 31, 2004 ADDITIONS REDUCTIONS FEB. 28, 2005 - ---------------------------------------------------------------------------------------------------------------- Aksigorta AS 8,762,905,700 -- 8,754,142,795* 8,762,905 Brazil Realty SA Empreendimentos e Participacoes 394,000 -- -- 394,000 Brazil Realty SA, GDR 435,720 -- -- 435,720 Commercial International Bank, Sponsored GDR 1,100,000 489,508 -- 1,589,508 Commercial International Bank, Sponsored GDR 1,800,000 -- -- 1,800,000 Corporacion GEO SA de CV, Series B 28,530,000 385,000 -- 28,915,000 Courts (Singapore) Ltd. 10,700,000 725,000 -- 11,425,000 Divi's Laboratories Ltd. 381,652 573,014 -- 954,666 Hyundai Autonet Co. Ltd. 10,200,000 -- -- 10,200,000 LG Home Shopping, Inc. 687,900 -- -- 687,900 Lojas Americanas SA, Preference 2,226,500,000 -- -- 2,226,500,000 Medinet Nasr for Housing & Development Co. 1,060,000 256,496 -- 1,316,496 PT Aneka Tambang Tbk 135,094,900 39,330,100 -- 174,425,000 PT Hero Supermarket Tbk 20,000,000 -- 20,000,000 -- United Breweries Holdings Ltd. 1,850,000 -- -- 1,850,000 United Breweries Ltd. 1,462,826 -- -- 1,462,826
UNREALIZED APPRECIATION DIVIDEND REALIZED (DEPRECIATION) INCOME GAIN - ---------------------------------------------------------------------------------------------------------------- Aksigorta AS $ 23,490,729 $ -- $ -- Brazil Realty SA Empreendimentos e Participacoes 336,262 34,596 -- Brazil Realty SA, GDR 1,637,632 373,455 -- Commercial International Bank, Sponsored GDR 6,123,335 -- -- Commercial International Bank, Sponsored GDR 7,752,754 -- -- Corporacion GEO SA de CV, Series B 59,785,440 -- -- Courts (Singapore) Ltd. (199,192) 30,600 -- Divi's Laboratories Ltd. (3,141,109) -- -- Hyundai Autonet Co. Ltd. 8,271,654 262,439 -- LG Home Shopping, Inc. 19,914,971 -- -- Lojas Americanas SA, Preference 34,619,765 1,076,545 -- Medinet Nasr for Housing & Development Co. 7,919,335 472,762 -- PT Aneka Tambang Tbk 22,724,893 306,515 -- PT Hero Supermarket Tbk* -- -- 3,986,401 United Breweries Holdings Ltd. 1,387,100 -- -- United Breweries Ltd. 9,535,588 -- -- --------------------------------------------- $ 200,159,157 $2,556,912 $3,986,401 =============================================
*Due to share revaluation. 18 | OPPENHEIMER DEVELOPING MARKETS FUND 2. Non-income producing security. 3. Illiquid security. The aggregate value of illiquid securities as of February 28, 2005 was $60,305,196, which represents 1.71% of the Fund's net assets. See Note 6 of Notes to Financial Statements. 4. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $49,662,747 or 1.41% of the Fund's net assets as of February 28, 2005. DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS: GEOGRAPHIC HOLDINGS VALUE PERCENT - -------------------------------------------------------------------------------- Brazil $ 592,649,024 16.9% India 558,454,455 15.9 Korea, Republic of South 334,954,897 9.6 Mexico 297,603,516 8.5 Taiwan 275,185,485 7.9 South Africa 244,733,574 7.0 Indonesia 171,182,355 4.9 Turkey 161,507,049 4.6 Egypt 115,692,910 3.3 United Kingdom 94,867,861 2.7 United States 93,095,000 2.7 Israel 84,247,861 2.4 Hong Kong 76,634,098 2.2 Philippines 74,544,592 2.1 Singapore 59,563,165 1.7 Greece 58,166,704 1.7 Portugal 43,657,493 1.3 Thailand 38,359,511 1.1 China 29,652,643 0.8 Panama 25,955,750 0.7 Peru 22,349,400 0.6 Lebanon 20,187,691 0.6 Croatia 14,900,000 0.4 Hungary 7,254,316 0.2 Argentina 6,878,705 0.2 ------------------------------ Total $3,502,278,055 100.0% ============================== SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 19 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited - --------------------------------------------------------------------------------
February 28, 2005 - ------------------------------------------------------------------------------------------------------- ASSETS - ------------------------------------------------------------------------------------------------------- Investments, at value--see accompanying statement of investments: Unaffiliated companies (cost $2,191,827,647) $ 3,119,726,361 Affiliated companies (cost $182,392,537) 382,551,694 ---------------- 3,502,278,055 - ------------------------------------------------------------------------------------------------------- Cash 5,945,567 - ------------------------------------------------------------------------------------------------------- Cash--foreign currencies (cost $2,528,287) 2,687,118 - ------------------------------------------------------------------------------------------------------- Unrealized appreciation on foreign currency contracts 21,423 - ------------------------------------------------------------------------------------------------------- Receivables and other assets: Shares of beneficial interest sold 48,442,750 Interest and dividends 7,166,049 Investments sold 752,049 Other 37,321 ---------------- Total assets 3,567,330,332 - ------------------------------------------------------------------------------------------------------- LIABILITIES - ------------------------------------------------------------------------------------------------------- Unrealized depreciation on foreign currency contracts 1,462 - ------------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 31,199,152 Shares of beneficial interest redeemed 6,666,505 Foreign capital gains tax 3,568,298 Distribution and service plan fees 1,107,968 Transfer and shareholder servicing agent fees 502,395 Shareholder communications 220,578 Trustees' compensation 93,579 Other 431,902 ---------------- Total liabilities 43,791,839 - ------------------------------------------------------------------------------------------------------- NET ASSETS $ 3,523,538,493 ================ - ------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - ------------------------------------------------------------------------------------------------------- Paid-in capital $ 2,402,370,236 - ------------------------------------------------------------------------------------------------------- Accumulated net investment loss (31,561,479) - ------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 26,835,691 - ------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 1,125,894,045 ---------------- NET ASSETS $ 3,523,538,493 ================
20 | OPPENHEIMER DEVELOPING MARKETS FUND
- -------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - -------------------------------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $2,966,646,833 and 102,792,904 shares of beneficial interest outstanding) $28.86 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $30.62 - -------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $184,008,139 and 6,417,135 shares of beneficial interest outstanding) $28.67 - -------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $311,085,565 and 10,956,974 shares of beneficial interest outstanding) $28.39 - -------------------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $61,797,956 and 2,167,961 shares of beneficial interest outstanding) $28.51
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 21 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENT OF OPERATIONS Unaudited - --------------------------------------------------------------------------------
For the Six Months Ended February 28, 2005 - --------------------------------------------------------------------------------------- INVESTMENT INCOME - --------------------------------------------------------------------------------------- Dividends: Unaffiliated companies (net of foreign withholding taxes of $3,130,996) $ 26,066,920 Affiliated companies (net of foreign withholding taxes of $132,583) 2,556,912 - --------------------------------------------------------------------------------------- Interest 856,162 ------------- Total investment income 29,479,994 - --------------------------------------------------------------------------------------- EXPENSES - --------------------------------------------------------------------------------------- Management fees 11,138,071 - --------------------------------------------------------------------------------------- Distribution and service plan fees: Class A 2,283,018 Class B 718,144 Class C 1,125,876 Class N 98,179 - --------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 2,286,320 Class B 189,877 Class C 227,592 Class N 78,494 - --------------------------------------------------------------------------------------- Shareholder communications: Class A 105,261 Class B 23,555 Class C 18,408 Class N 1,520 - --------------------------------------------------------------------------------------- Custodian fees and expenses 897,215 - --------------------------------------------------------------------------------------- Trustees' compensation 40,426 - --------------------------------------------------------------------------------------- Other 121,248 ------------- Total expenses 19,353,204 Less reduction to custodian expenses (14,545) Less payments and waivers of expenses (10,008) ------------- Net expenses 19,328,651 - --------------------------------------------------------------------------------------- NET INVESTMENT INCOME 10,151,343
22 | OPPENHEIMER DEVELOPING MARKETS FUND
- -------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN - -------------------------------------------------------------------------------------- Net realized gain on: Investments: Unaffiliated companies $ 24,553,724 Affiliated companies 3,986,401 Foreign currency transactions 12,259,750 ------------ Net realized gain 40,799,875 - -------------------------------------------------------------------------------------- Net change in unrealized appreciation on: Investments (net of foreign capital gains tax of $3,568,298) 684,380,726 Translation of assets and liabilities denominated in foreign currencies 106,308,646 ------------ Net change in unrealized appreciation 790,689,372 - -------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $841,640,590 ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 23 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2005 AUGUST 31, (UNAUDITED) 2004 - ----------------------------------------------------------------------------------------------------------------- OPERATIONS - ----------------------------------------------------------------------------------------------------------------- Net investment income $ 10,151,343 $ 20,907,438 - ----------------------------------------------------------------------------------------------------------------- Net realized gain 40,799,875 44,208,693 - ----------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation 790,689,372 202,119,765 ----------------------------------- Net increase in net assets resulting from operations 841,640,590 267,235,896 - ----------------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - ----------------------------------------------------------------------------------------------------------------- Dividends from net investment income: Class A (31,307,052) (27,952,368) Class B (879,161) (2,748,497) Class C (1,898,968) (3,209,280) Class N (545,739) (455,621) - ----------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A (10,889,327) -- Class B (742,518) -- Class C (1,173,948) -- Class N (216,966) -- - ----------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - ----------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from beneficial interest transactions: Class A 752,895,907 774,658,690 Class B 18,251,948 13,494,351 Class C 64,622,340 76,067,428 Class N 23,042,648 14,703,179 - ----------------------------------------------------------------------------------------------------------------- NET ASSETS - ----------------------------------------------------------------------------------------------------------------- Total increase 1,652,799,754 1,111,793,778 - ----------------------------------------------------------------------------------------------------------------- Beginning of period 1,870,738,739 758,944,961 ----------------------------------- End of period (including accumulated net investment loss of $31,561,479 and $7,081,902, respectively) $ 3,523,538,493 $ 1,870,738,739 ===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 24 | OPPENHEIMER DEVELOPING MARKETS FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2005 AUGUST 31, CLASS A (UNAUDITED) 2004 2003 2002 2001 2000 - --------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 21.09 $ 16.92 $ 13.43 $ 12.93 $ 16.85 $ 11.40 - --------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .11 1 .48 .19 .25 .21 .20 Net realized and unrealized gain (loss) 8.16 4.31 3.50 .45 (3.54) 5.37 ------------------------------------------------------------------------------- Total from investment operations 8.27 4.79 3.69 .70 (3.33) 5.57 - --------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.37) (.62) (.20) (.20) (.20) (.12) Distributions from net realized gain (.13) -- -- -- (.39) -- ------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.50) (.62) (.20) (.20) (.59) (.12) - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 28.86 $ 21.09 $ 16.92 $ 13.43 $ 12.93 $ 16.85 =============================================================================== - --------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 39.54% 28.61% 27.93% 5.44% (20.08)% 49.12% - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 2,966,647 $ 1,549,854 $ 588,450 $ 337,405 $ 167,178 $ 114,137 - --------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 2,137,592 $ 1,145,452 $ 374,841 $ 257,746 $ 153,027 $ 77,848 - --------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 0.92% 1.64% 1.42% 1.91% 1.76% 1.56% Total expenses 1.40% 1.52% 1.81% 1.81% 1.69% 1.96% Expenses after payments and waivers and reduction to custodian expenses N/A 4 N/A 4 1.76% 1.77% N/A 4 N/A 4 - --------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 10% 15% 6% 10% 16% 22%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 25 | OPPENHEIMER DEVELOPING MARKETS FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2005 AUGUST 31, CLASS B (UNAUDITED) 2004 2003 2002 2001 2000 - ---------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 20.87 $ 16.79 $ 13.32 $ 12.82 $ 16.70 $ 11.30 - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .01 1 .12 .09 .15 .12 .11 Net realized and unrealized gain (loss) 8.07 4.46 3.47 .44 (3.53) 5.33 -------------------------------------------------------------------------------------- Total from investment operations 8.08 4.58 3.56 .59 (3.41) 5.44 - ---------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.15) (.50) (.09) (.09) (.08) (.04) Distributions from net realized gain (.13) -- -- -- (.39) -- -------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.28) (.50) (.09) (.09) (.47) (.04) - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 28.67 $ 20.87 $ 16.79 $ 13.32 $ 12.82 $ 16.70 ====================================================================================== - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 38.91% 27.50% 26.98% 4.61% (20.67)% 48.20% - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 184,008 $ 119,749 $ 84,705 $ 63,005 $ 45,393 $ 48,146 - ---------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 145,721 $ 117,271 $ 62,676 $ 54,744 $ 48,135 $ 37,333 - ---------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 0.10% 0.61% 0.66% 1.14% 0.92% 0.78% Total expenses 2.25% 2.41% 2.67% 2.58% 2.46% 2.72% Expenses after payments and waivers and reduction to custodian expenses N/A 4,5 N/A 4,5 2.52% 2.54% N/A 4 N/A 4 - ---------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 10% 15% 6% 10% 16% 22%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Voluntary waiver of transfer agent fees less than 0.01%. 5. Reduction to custodian expenses less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 26 | OPPENHEIMER DEVELOPING MARKETS FUND
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2005 AUGUST 31, CLASS C (UNAUDITED) 2004 2003 2002 2001 2000 - ---------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 20.70 $ 16.67 $ 13.25 $ 12.78 $ 16.68 $ 11.31 - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .02 1 .31 .10 .17 .12 .09 Net realized and unrealized gain (loss) 8.01 4.25 3.44 .41 (3.52) 5.32 -------------------------------------------------------------------------------------- Total from investment operations 8.03 4.56 3.54 .58 (3.40) 5.41 - ---------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.21) (.53) (.12) (.11) (.11) (.04) Distributions from net realized gain (.13) -- -- -- (.39) -- -------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.34) (.53) (.12) (.11) (.50) (.04) - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 28.39 $ 20.70 $ 16.67 $ 13.25 $ 12.78 $ 16.68 ====================================================================================== - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 39.01% 27.60% 27.05% 4.54% (20.68)% 47.93% - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 311,086 $ 175,025 $ 77,081 $ 46,722 $ 20,864 $ 16,363 - ---------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 228,407 $ 145,460 $ 52,236 $ 33,334 $ 19,646 $ 10,230 - ---------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 0.16% 0.83% 0.66% 1.15% 0.94% 0.82% Total expenses 2.17% 2.31% 2.57% 2.57% 2.46% 2.71% Expenses after payments and waivers and reduction to custodian expenses N/A 4 N/A 4 2.52% 2.53% N/A 4 N/A 4 - ---------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 10% 15% 6% 10% 16% 22%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 27 | OPPENHEIMER DEVELOPING MARKETS FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2005 AUGUST 31, CLASS N (UNAUDITED) 2004 2003 2002 2001 1 - ------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 20.84 $ 16.77 $ 13.36 $ 12.91 $ 15.26 - ------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .06 2 .45 .22 .32 .05 Net realized and unrealized gain (loss) 8.06 4.22 3.41 .34 (2.40) ------------------------------------------------------------------------ Total from investment operations 8.12 4.67 3.63 .66 (2.35) - ------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.32) (.60) (.22) (.21) -- Distributions from net realized gain (.13) -- -- -- -- ------------------------------------------------------------------------ Total dividends and/or distributions to shareholders (.45) (.60) (.22) (.21) -- - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 28.51 $ 20.84 $ 16.77 $ 13.36 $ 12.91 ======================================================================== - ------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 39.28% 28.16% 27.73% 5.13% (15.40)% - ------------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 61,798 $ 26,110 $ 8,709 $ 1,741 $ 77 - ------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 41,239 $ 18,770 $ 4,196 $ 686 $ 35 - ------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 0.52% 1.31% 1.27% 1.68% 1.63% Total expenses 1.83% 1.99% 2.08% 2.04% 1.96% Expenses after payments and waivers and reduction to custodian expenses 1.79% 1.88% 1.99% 2.00% N/A 5 - ------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 10% 15% 6% 10% 16%
1. For the period from March 1, 2001 (inception of offering) to August 31, 2001. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. Reduction to custodian expenses less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 | OPPENHEIMER DEVELOPING MARKETS FUND NOTES TO FINANCIAL STATEMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Developing Markets Fund (the Fund) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund's investment objective is to aggressively seek capital appreciation. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C and Class N shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and N have separate distribution and/or service plans. Class B shares will automatically convert to Class A shares six years after the date of purchase. The Fund assesses a 2% fee on the proceeds of fund shares that are redeemed (either by selling or exchanging to another Oppenheimer fund) within 30 days of their purchase. The fee, which is retained by the Fund, is accounted for as an addition to paid-in capital. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Securities 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. Securities traded on NASDAQ are valued based on the closing price provided by NASDAQ 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. Corporate, government and municipal debt instruments having a remaining maturity in excess of sixty days and all mortgage-backed securities will be valued at the mean between the "bid" and "asked" prices. Securities may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign and domestic securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund's assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board of Trustees. Short-term "money market type" debt securities 29 | OPPENHEIMER DEVELOPING MARKETS FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in U.S. dollars. The values of securities denominated in foreign currencies and amounts related to the purchase and sale of foreign securities and foreign investment income are translated into U.S. dollars as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Foreign exchange rates may be valued primarily using dealer supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. These balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders, therefore, no federal income or excise tax provision is required. 30 | OPPENHEIMER DEVELOPING MARKETS FUND Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund. As of February 28, 2005, it is estimated that the Fund will not utilize any capital loss carryforward to offset realized capital gains. During the year ended August 31, 2004, the Fund utilized $19,295,605 of capital loss carryforward to offset realized capital gains. Certain foreign countries impose a tax on capital gains which is accrued by the Fund based on unrealized appreciation, if any, on affected securities. The tax is paid when the gain is realized. - -------------------------------------------------------------------------------- TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the Fund's independent trustees. Benefits are based on years of service and fees paid to each trustee during the years of service. During the six months ended February 28, 2005, the Fund's projected benefit obligations were increased by $12,467 and payments of $3,518 were made to retired trustees, resulting in an accumulated liability of $62,716 as of February 28, 2005. 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 the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. Deferral of trustees' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance to the Plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually. - -------------------------------------------------------------------------------- INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. 31 | OPPENHEIMER DEVELOPING MARKETS FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 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:
SIX MONTHS ENDED FEBRUARY 28, 2005 YEAR ENDED AUGUST 31, 2004 SHARES AMOUNT SHARES AMOUNT - -------------------------------------------------------------------------------------------------- CLASS A Sold 41,722,364 $1,064,306,938 63,139,029 $ 1,266,479,821 Dividends and/or distributions reinvested 1,371,496 34,602,850 1,184,139 23,007,783 Redeemed (13,773,154) (346,013,881) 1 (25,627,852) (514,828,914) ----------------------------------------------------------------------- Net increase 29,320,706 $ 752,895,907 38,695,316 $ 774,658,690 ======================================================================= - -------------------------------------------------------------------------------------------------- CLASS B Sold 1,204,155 $ 31,183,381 2,655,996 $ 52,882,450 Dividends and/or distributions reinvested 57,206 1,437,023 126,635 2,449,139 Redeemed (582,180) (14,368,456) 1 (2,090,223) (41,837,238) ----------------------------------------------------------------------- Net increase 679,181 $ 18,251,948 692,408 $ 13,494,351 ======================================================================= - -------------------------------------------------------------------------------------------------- CLASS C Sold 3,249,457 $ 83,156,410 5,461,597 $ 108,717,047 Dividends and/or distributions reinvested 103,489 2,573,784 143,023 2,741,763 Redeemed (849,565) (21,107,854) 1 (1,775,168) (35,391,382) ----------------------------------------------------------------------- Net increase 2,503,381 $ 64,622,340 3,829,452 $ 76,067,428 =======================================================================
32 | OPPENHEIMER DEVELOPING MARKETS FUND
SIX MONTHS ENDED FEBRUARY 28, 2005 YEAR ENDED AUGUST 31, 2004 SHARES AMOUNT SHARES AMOUNT - -------------------------------------------------------------------------------------------------- CLASS N Sold 1,127,645 $ 28,471,252 1,134,305 $ 22,542,746 Dividends and/or distributions reinvested 30,019 748,977 23,641 454,865 Redeemed (242,522) (6,177,581) 1 (424,467) (8,294,432) ----------------------------------------------------------------------- Net increase 915,142 $ 23,042,648 733,479 $ 14,703,179 =======================================================================
1. Net of Redemption Fees of $33,429, $2,279, $3,572 and $645 for Class A, Class B, Class C and Class N, respectively. - -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the six months ended February 28, 2005, were $1,038,911,364 and $236,602,495, respectively. - -------------------------------------------------------------------------------- 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 at an annual rate of 1.00% of the first $250 million of average annual net assets of the Fund, 0.95% of the next $250 million, 0.90% of the next $500 million and 0.85% of average annual net assets over $1 billion. - -------------------------------------------------------------------------------- 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 a per account fee. For the six months ended February 28, 2005, the Fund paid $2,683,874 to OFS for services to the Fund. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. - -------------------------------------------------------------------------------- SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions quarterly for providing personal services and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares to compensate the Distributor for its services in connection with the distribution of those 33 | OPPENHEIMER DEVELOPING MARKETS FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued shares and servicing accounts. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% per year on Class B and Class C shares and 0.25% per year on Class N shares. The Distributor also receives a service fee of up to 0.25% per year under each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the plan at February 28, 2005 for Class B, Class C and Class N shares were $1,656,413, $1,892,561 and $384,411, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - -------------------------------------------------------------------------------------------------------- February 28, 2005 $ 565,060 $ 20,732 $ 108,199 $ 40,611 $ 14,015 - --------------------------------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. During the six months ended February 28, 2005, OFS waived $1,089 and $8,919 for Class B and Class N shares, respectively. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY CONTRACTS A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts to settle specific purchases or sales of securities denominated in a foreign currency and for protection from adverse exchange rate fluctuation. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using prevailing foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and 34 | OPPENHEIMER DEVELOPING MARKETS FUND Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. The Fund may realize a gain or loss upon the closing or settlement of the foreign transaction. Contracts closed or settled with the same broker are recorded as net realized gains or losses. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. As of February 28, 2005, the Fund had outstanding foreign currency contracts as follows:
CONTRACT VALUATION EXPIRATION AMOUNT AS OF UNREALIZED UNREALIZED CONTRACT DESCRIPTION DATES (000S) FEB. 28, 2005 APPRECIATION DEPRECIATION - ---------------------------------------------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE Hungary Forints [HUF] 3/2/05 39,446HUF $ 215,928 $ 55 $ -- Indian Rupee [INR] 3/1/05 69,617INR 1,594,337 -- 1,462 Singapore Dollar [SGD] 3/1/05-3/2/05 2,095SGD 1,291,538 6,982 -- Thailand Baht [THB] 3/1/05 117,417THB 3,070,517 14,386 -- --------------------------- Total unrealized appreciation and depreciation $ 21,423 $ 1,462 ===========================
- -------------------------------------------------------------------------------- 6. ILLIQUID SECURITIES As of February 28, 2005, 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 will not invest more than 10% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid securities. - -------------------------------------------------------------------------------- 7. LITIGATION A consolidated amended complaint has been filed as putative derivative and class actions against the Manager, OFS and the Distributor (collectively, the "Oppenheimer defendants"), as well as 51 of the Oppenheimer funds (as "Nominal Defendants") including the Fund, 30 present and former Directors or Trustees and 8 present and former officers of the funds. This complaint, initially filed in the U.S. District Court for the Southern District of New York on January 10, 2005 and amended on March 4, 2005, consolidates into a single action and amends six individual previously-filed putative derivative and class action complaints. Like those prior complaints, the complaint alleges that the Manager charged excessive fees for distribution and other costs, improperly used assets of the funds in the form of directed brokerage commissions and 12b-1 fees to pay brokers to promote sales of the funds, and failed to properly disclose the use of assets of the funds to make those payments in violation of the Investment Company Act of 1940 and the Investment Advisers Act of 1940. Also, like those prior complaints, the complaint further alleges that by permitting and/or participating in those actions, the Directors/Trustees and the Officers breached their fiduciary duties to shareholders of the funds under the Investment Company Act of 1940 and at common law. The complaint seeks unspecified compensatory and punitive damages, rescission of the funds' investment advisory 35 | OPPENHEIMER DEVELOPING MARKETS FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 7. LITIGATION Continued agreements, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. The Oppenheimer defendants believe that the allegations contained in the Complaints are without merit and that they, the funds named as Nominal Defendants, and the Directors/Trustees of those funds have meritorious defenses against the claims asserted. The Oppenheimer defendants intend to defend these lawsuits vigorously and to contest any claimed liability. The Oppenheimer defendants believe that it is premature to render any opinion as to the likelihood of an outcome unfavorable to them and that no estimate can yet be made with any degree of certainty as to the amount or range of any potential loss. 36 | OPPENHEIMER DEVELOPING MARKETS FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund's voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 37 | OPPENHEIMER DEVELOPING MARKETS FUND ITEM 2. CODE OF ETHICS Not applicable to semiannual reports. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT Not applicable to semiannual reports. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES Not applicable to semiannual reports. ITEM 5. NOT APPLICABLE ITEM 6. SCHEDULE OF INVESTMENTS Not applicable ITEM 7. DISCLOSURE OF PROXY POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES Not applicable. ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At a meeting of the Board of Trustees of the registrant held on February 18, 2004, the Board adopted (1) a policy that, should the Board determine that a vacancy exists or is likely to exist on the Board, the Governance Committee of the Board, which is comprised entirely of independent trustees, shall consider any candidates for Board membership recommended by the registrant's security holders and (2) a policy that security holders wishing to submit a nominee for election to the Board may do so by mailing their submission to the offices of OppenheimerFunds, Inc., Two World Financial Center, 225 Liberty Street - 11th Floor, New York, NY 10281-1008, to the attention of the Chair of the Governance Committee. Prior to February 18, 2004, the Board did not have a formalized policy with respect to consideration of security holder nominees or a procedure by which security holders may make their submissions. In addition to security holder nominees, the Governance Committee may also consider nominees recommended by independent Board members or recommended by any other Board members and is authorized under its Charter, upon Board approval, to retain an executive search firm to assist in screening potential candidates. Upon Board approval, the Governance Committee may also obtain legal, financial, or other external counsel that may be necessary or desirable in the screening process. ITEM 11. CONTROLS AND PROCEDURES (a) Based on their evaluation of registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of February 28, 2005, registrant's principal executive officer and principal financial officer found registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. (b) There have been no changes in registrant's internal controls over financial reporting that occurred during the registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)(NOT APPLICABLE TO SEMIANNUAL REPORTS) (B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Oppenheimer Developing Markets Fund By: _____________________________ John V. Murphy Chief Executive Officer Date: April 11, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: _____________________________ John V. Murphy Chief Executive Officer Date: April 11, 2005 By: _____________________________ Brian W. Wixted Chief Financial Officer Date: April 11, 2005 EX-99.CERT 2 rs785_15525ex99cert.txt RS785_15525EX99CERT.TXT Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, JOHN V. MURPHY, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Developing Markets Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: April 11, 2005 ---------------------------- John V. Murphy Chief Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, BRIAN W. WIXTED, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Developing Markets Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: April 11, 2005 ---------------------------- Brian W. Wixted Chief Financial Officer EX-99.906 3 rs785_15525ex906cert.txt RS785_15525EX906CERT.TXT EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 JOHN V. MURPHY, Chief Executive Officer, and BRIAN W. WIXTED, Chief Financial Officer, of Oppenheimer Developing Markets Fund (the "Registrant"), each certify to the best of his or her knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended February 28, 2005 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Chief Executive Officer Chief Financial Officer Oppenheimer Developing Markets Fund Oppenheimer Developing Markets Fund - ---------------------------- ---------------------------- John V. Murphy Brian W. Wixted Date: April 11, 2005 Date: April 11, 2005 -----END PRIVACY-ENHANCED MESSAGE-----