-----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, QbJ/gaXkge8GqE5O5n6MgVRdyHuJ4un4WLRwghE2EvqsMgtqAIvSx4HY/6OeI0F9 viNFGd+2dnpyNS0VEexUwA== 0000935069-06-001271.txt : 20060428 0000935069-06-001271.hdr.sgml : 20060428 20060428164935 ACCESSION NUMBER: 0000935069-06-001271 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060228 FILED AS OF DATE: 20060428 DATE AS OF CHANGE: 20060428 EFFECTIVENESS DATE: 20060428 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: 06790820 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 0001015986 S000006967 OPPENHEIMER DEVELOPING MARKETS FUND C000019011 A C000019012 B C000019013 C C000019014 N C000019015 Y N-CSRS 1 rs785_31955ncsrs.txt RS785_31955NCSRS 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: FEBRUARY 28, 2006 ITEM 1. REPORTS TO STOCKHOLDERS. TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TOP TEN GEOGRAPHICAL HOLDINGS - -------------------------------------------------------------------------------- Korea, Republic of South 19.9% - -------------------------------------------------------------------------------- India 15.9 - -------------------------------------------------------------------------------- Brazil 14.1 - -------------------------------------------------------------------------------- Taiwan 10.3 - -------------------------------------------------------------------------------- Mexico 7.1 - -------------------------------------------------------------------------------- South Africa 4.9 - -------------------------------------------------------------------------------- Indonesia 4.9 - -------------------------------------------------------------------------------- Turkey 3.6 - -------------------------------------------------------------------------------- Egypt 3.3 - -------------------------------------------------------------------------------- Hong Kong 3.1 Portfolio holdings and allocations are subject to change. Percentages are as of February 28, 2006, and are based on the total market value of investments. TOP TEN COMMON STOCK HOLDINGS - -------------------------------------------------------------------------------- Hynix Semiconductor, Inc. 1.5% - -------------------------------------------------------------------------------- Hyundai Motor Co. 1.5 - -------------------------------------------------------------------------------- Petroleo Brasileiro SA, ADR 1.4 - -------------------------------------------------------------------------------- Companhia Brasileira de Distribuicao Grupo Pao de Acucar, Sponsored ADR 1.4 - -------------------------------------------------------------------------------- Kia Motors Corp. 1.4 - -------------------------------------------------------------------------------- Infosys Technologies Ltd. 1.3 - -------------------------------------------------------------------------------- PT Telekomunikasi Indonesia Tbk 1.3 - -------------------------------------------------------------------------------- Hyundai Heavy Industries Co. Ltd. 1.2 - -------------------------------------------------------------------------------- Housing Development Finance Corp. Ltd. 1.2 - -------------------------------------------------------------------------------- Sadia SA, Preference 1.2 Portfolio holdings and allocations are subject to change. Percentages are as of February 28, 2006, and are based on net assets. For up-to-date Top 10 Fund holdings, please visit www.oppenheimerfunds.com. - -------------------------------------------------------------------------------- 8 | OPPENHEIMER DEVELOPING MARKETS FUND - -------------------------------------------------------------------------------- REGIONAL ALLOCATION [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Asia 58.8% Latin America 22.7 Middle East/Africa 13.9 Europe 2.7 United States/Canada 1.6 Emerging Europe 0.3 Portfolio holdings and allocations are subject to change. Percentages are as of February 28, 2006, and are based on the total market value of 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 the 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. CLASS Y shares of the Fund were first publicly offered on 9/7/05. Class Y shares are offered only to certain institutional investors under special agreements with the Distributor. 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. These 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, 2006. 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. 12 | OPPENHEIMER DEVELOPING MARKETS FUND - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED (9/1/05) (2/28/06) FEBRUARY 28, 2006 1,2 - -------------------------------------------------------------------------------- Class A Actual $1,000.00 $1,334.20 $ 7.78 - -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,018.15 6.73 - -------------------------------------------------------------------------------- Class B Actual 1,000.00 1,329.40 12.24 - -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,014.33 10.59 - -------------------------------------------------------------------------------- Class C Actual 1,000.00 1,329.30 11.95 - -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,014.58 10.34 - -------------------------------------------------------------------------------- Class N Actual 1,000.00 1,332.10 9.52 - -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,016.66 8.23 ENDING EXPENSES BEGINNING ACCOUNT PAID DURING ACCOUNT VALUE PERIOD ENDED VALUE (2/28/06) FEBRUARY 28, 2006 2,3 - -------------------------------------------------------------------------------- Class Y Actual $1,000.00 $1,293.80 $ 5.36 - -------------------------------------------------------------------------------- Class Y Hypothetical 1,000.00 1,020.13 4.72 Hypothetical assumes 5% annual return before expenses. 1. Actual expenses paid for Classes A, B, C and N 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). 2. Hypothetical expenses paid for all classes 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). 3. Actual expenses paid for Class Y are equal to the Fund's annualized expense ratio or that class, multiplied by the average account value over the period, multiplied by 175/365 [to reflect the period from September 7, 2005 (inception of offering) to February 28, 2006]. Those annualized expense ratios based on the 6-month period ended February 28, 2006 for Classes A, B, C and N, and for the period from September 7, 2005 (inception of offering) to February 28, 2006 for Class Y are as follows: CLASS EXPENSE RATIOS - ---------------------------- Class A 1.34% - ---------------------------- Class B 2.11 - ---------------------------- Class C 2.06 - ---------------------------- Class N 1.64 - ---------------------------- Class Y 0.94 - -------------------------------------------------------------------------------- 13 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENT OF INVESTMENTS February 28, 2006 / Unaudited - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMMON STOCKS--96.8% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--17.1% - -------------------------------------------------------------------------------- AUTO COMPONENTS--1.4% Amtek Auto Ltd. 1 9,513,158 $ 74,547,491 - -------------------------------------------------------------------------------- Hyundai Mobis 518,570 43,739,323 - -------------------------------------------------------------------------------- Rico Auto Industries Ltd. 1,2 7,715,655 15,113,314 -------------- 133,400,128 - -------------------------------------------------------------------------------- AUTOMOBILES--5.5% Bajaj Auto Ltd. 2 523,100 30,733,233 - -------------------------------------------------------------------------------- China Motor Corp. 2 12,480,000 14,033,428 - -------------------------------------------------------------------------------- Hyundai Motor Co. 1,599,255 136,042,205 - -------------------------------------------------------------------------------- Hyundai Motor Co. Ltd., Preference 359,820 19,302,251 - -------------------------------------------------------------------------------- Kia Motors Corp. 5,866,635 125,976,284 - -------------------------------------------------------------------------------- Mahindra & Mahindra Ltd. 2 3,678,697 48,699,492 - -------------------------------------------------------------------------------- PT Astra International Tbk 66,702,500 70,797,181 - -------------------------------------------------------------------------------- Ssangyong Motor Co. 1,2 9,903,959 68,077,774 -------------- 513,661,848 - -------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--0.7% Danubius Hotel & Spa Rt. 2 142,733 3,876,567 - -------------------------------------------------------------------------------- Hongkong & Shanghai Hotels Ltd. (The) 2 13,587,500 16,101,805 - -------------------------------------------------------------------------------- Intralot SA Integrated Lottery 727,660 17,346,347 - -------------------------------------------------------------------------------- Jollibee Foods Corp. 38,294,000 26,665,068 -------------- 63,989,787 - -------------------------------------------------------------------------------- HOUSEHOLD DURABLES--5.3% Consorcio Ara SA de CV 2 6,957,000 29,554,797 - -------------------------------------------------------------------------------- Corporacion GEO SA de CV, Series B 2 19,813,100 77,550,081 - -------------------------------------------------------------------------------- Cyrela Brazil Realty SA Empreendimentos e Participacoes 2 339,400 6,234,987 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- HOUSEHOLD DURABLES Continued Cyrela Brazil Realty SA Empreendimentos e Participacoes, GDR 2,3 589,620 $ 106,824,404 - -------------------------------------------------------------------------------- Humax Co. Ltd. 1 2,978,563 84,262,852 - -------------------------------------------------------------------------------- LG Electronics, Inc. 605,640 49,686,070 - -------------------------------------------------------------------------------- LG Electronics, Inc., Preference 411,010 21,052,051 - -------------------------------------------------------------------------------- Rossi Residencial SA 2 550,000 7,329,880 - -------------------------------------------------------------------------------- SARE Holding SA de CV, Cl. B 1,2 45,577,904 56,042,330 - -------------------------------------------------------------------------------- Steinhoff International Holdings Ltd. 2 17,641,600 57,878,796 -------------- 496,416,248 - -------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL--0.6% GS Home Shopping, Inc. 1 524,524 53,356,794 - -------------------------------------------------------------------------------- MEDIA--2.1% Corporacion Interamericana de Entretenimiento SA de CV 2 11,154,039 22,361,319 - -------------------------------------------------------------------------------- Grupo Televisa SA, Sponsored GDR 2 706,700 55,447,682 - -------------------------------------------------------------------------------- Shaw Brothers Ltd. 6,985,000 8,193,390 - -------------------------------------------------------------------------------- Singapore Press Holdings Ltd. 10,547,000 28,768,595 - -------------------------------------------------------------------------------- Television Broadcasts Ltd. 4,584,000 25,592,298 - -------------------------------------------------------------------------------- Yedang Entertainment Co. Ltd. 1,2 2,639,997 29,674,718 - -------------------------------------------------------------------------------- Zee Telefilms Ltd. 7,379,661 29,435,305 -------------- 199,473,307 - -------------------------------------------------------------------------------- MULTILINE RETAIL--1.1% Lojas Americanas SA, Preference 1 2,324,246,000 100,040,539 - -------------------------------------------------------------------------------- SPECIALTY RETAIL--0.3% JD Group Ltd. 1,610,192 23,919,560 14 | OPPENHEIMER DEVELOPING MARKETS FUND VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS--0.1% Folli-Follie SA 2 296,650 $ 8,755,995 - -------------------------------------------------------------------------------- CONSUMER STAPLES--8.7% - -------------------------------------------------------------------------------- BEVERAGES--1.3% Companhia de Bebidas das Americas, ADR 238,200 8,503,740 - -------------------------------------------------------------------------------- Companhia de Bebidas das Americas, ADR, Preference 948,500 40,254,340 - -------------------------------------------------------------------------------- Fomento Economico Mexicano SA de CV, Sponsored ADR 2 456,900 39,745,731 - -------------------------------------------------------------------------------- Serm Suk Public Co. Ltd. 2 7,255,600 3,988,632 - -------------------------------------------------------------------------------- United Breweries Holdings Ltd. 2 1,303,297 17,470,837 - -------------------------------------------------------------------------------- United Breweries Ltd. 713,389 17,631,552 -------------- 127,594,832 - -------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--2.6% Companhia Brasileira de Distribuicao Grupo Pao de Acucar, Sponsored ADR 2 3,176,900 135,018,250 - -------------------------------------------------------------------------------- Dairy Farm International Holdings Ltd. 2 3,929,100 13,830,432 - -------------------------------------------------------------------------------- Jeronimo Martins Sociedade Gestora de Participacoes SA 2 1,600,732 26,047,245 - -------------------------------------------------------------------------------- Massmart Holdings Ltd. 3,767,712 37,052,958 - -------------------------------------------------------------------------------- President Chain Store Corp. 2 12,892,074 28,028,690 -------------- 239,977,575 - -------------------------------------------------------------------------------- FOOD PRODUCTS--1.5% Sadia SA, Preference 1 33,932,000 108,659,101 - -------------------------------------------------------------------------------- Tiger Brands Ltd. 907,200 22,391,803 - -------------------------------------------------------------------------------- Uni-President Enterprises Corp. 2 14,130,000 8,055,500 -------------- 139,106,404 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS--0.3% Able C&C 1,2 656,655 $ 11,114,452 - -------------------------------------------------------------------------------- Trent Ltd. 2 701,326 14,041,212 -------------- 25,155,664 - -------------------------------------------------------------------------------- PERSONAL PRODUCTS--0.8% Amore Pacific Corp. 129,475 45,269,580 - -------------------------------------------------------------------------------- Natura Cosmeticos SA 590,100 34,458,394 -------------- 79,727,974 - -------------------------------------------------------------------------------- TOBACCO--2.2% Eastern Tobacco Co. 888,822 48,794,332 - -------------------------------------------------------------------------------- ITC Ltd. 2 17,976,925 70,019,666 - -------------------------------------------------------------------------------- KT&G Corp. 505,673 29,944,591 - -------------------------------------------------------------------------------- PT Gudang Garam Tbk 2 46,571,500 55,520,699 -------------- 204,279,288 - -------------------------------------------------------------------------------- ENERGY--5.7% - -------------------------------------------------------------------------------- OIL & GAS--5.7% Bharat Petroleum Corp. Ltd. 2 5,615,631 54,935,990 - -------------------------------------------------------------------------------- Det Norske Oljeselskap ASA 7,004,686 46,134,604 - -------------------------------------------------------------------------------- Hindustan Petroleum Corp. Ltd. 2 6,067,163 44,357,779 - -------------------------------------------------------------------------------- Oil & Natural Gas Corp. Ltd. 1,182,510 30,351,313 - -------------------------------------------------------------------------------- Pearl Energy Ltd. 2 3,935,000 4,777,781 - -------------------------------------------------------------------------------- Petroleo Brasileiro SA, ADR 1,545,200 135,266,808 - -------------------------------------------------------------------------------- Reliance Industries Ltd. 2 5,010,963 80,226,338 - -------------------------------------------------------------------------------- Reliance Natural Resources 2 5,010,963 507,038 - -------------------------------------------------------------------------------- S-Oil Corp. 839,750 60,365,139 - -------------------------------------------------------------------------------- S-Oil Corp., Preference 215,948 11,520,865 - -------------------------------------------------------------------------------- 15 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- OIL & GAS Continued Sinopec Zhenhai Refining & Chemical Co. Ltd., Cl. H 19,722,000 $ 26,692,919 - -------------------------------------------------------------------------------- SK Corp. 607,922 37,442,386 -------------- 532,578,960 - -------------------------------------------------------------------------------- FINANCIALS--22.3% - -------------------------------------------------------------------------------- CAPITAL MARKETS--0.1% Mirae Asset Securities Co. Ltd. 2 127,991 8,356,982 - -------------------------------------------------------------------------------- COMMERCIAL BANKS--12.8% Banco Bradesco SA, Preference 2,190,946 90,382,326 - -------------------------------------------------------------------------------- Banco Latinoamericano de Exportaciones SA, Cl. E 1 3,824,185 69,179,507 - -------------------------------------------------------------------------------- Banco Nossa Caixa SA 1,360,500 31,060,532 - -------------------------------------------------------------------------------- Bank Hapoalim Ltd. 16,081,325 73,542,958 - -------------------------------------------------------------------------------- Bank Leumi Le-Israel 20,900,600 75,541,660 - -------------------------------------------------------------------------------- Commercial International Bank, Sponsored GDR 2,3 1,783,400 21,953,654 - -------------------------------------------------------------------------------- Commercial International Bank, Sponsored GDR, S Shares 2 2,406,908 29,629,037 - -------------------------------------------------------------------------------- Daegu Bank 1,667,800 25,785,932 - -------------------------------------------------------------------------------- Grupo Financiero Banorte SA de CV 11,748,400 28,667,218 - -------------------------------------------------------------------------------- Grupo Financiero Inbursa SA de CV 2 23,827,500 37,305,107 - -------------------------------------------------------------------------------- Hana Financial Group, Inc. 1,261,823 53,655,813 - -------------------------------------------------------------------------------- HSBC Holdings plc 3,230,857 55,399,564 - -------------------------------------------------------------------------------- HSBC Holdings plc, Sponsored ADR 3,307 283,377 - -------------------------------------------------------------------------------- ICICI Bank Ltd., Sponsored ADR 2 2,300,200 70,639,142 - -------------------------------------------------------------------------------- Industrial Bank of Korea 2 2,078,790 34,060,543 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMMERCIAL BANKS Continued Israel Discount Bank, Cl. A 2 7,358,253 $ 13,924,909 - -------------------------------------------------------------------------------- Jeonbuk Bank 1 2,466,548 21,352,092 - -------------------------------------------------------------------------------- Kookmin Bank, Sponsored ADR 422,800 32,027,100 - -------------------------------------------------------------------------------- Orszagos Takarekpenztar es Kereskedelmi Bank Rt. 2 243,600 9,122,047 - -------------------------------------------------------------------------------- PT Bank Mandiri 2 227,089,500 39,919,878 - -------------------------------------------------------------------------------- Shinhan Financial Group Co. Ltd. 1,288,130 50,742,505 - -------------------------------------------------------------------------------- Standard Bank Group Ltd. 2 5,835,561 74,411,754 - -------------------------------------------------------------------------------- Standard Chartered plc 2 858,890 22,448,142 - -------------------------------------------------------------------------------- TMB Bank Public Co. Ltd. 2 527,198,600 63,360,469 - -------------------------------------------------------------------------------- Turkiye Vakiflar Bankasi TAO, Cl. D 2 11,185,600 73,632,804 - -------------------------------------------------------------------------------- Woori Finance Holdings Co. Ltd. 2 4,613,240 90,998,657 -------------- 1,189,026,727 - -------------------------------------------------------------------------------- CONSUMER FINANCE--0.2% Tisco Bank Public Co. Ltd. 1,2 30,360,180 21,850,386 - -------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--2.6% Fubon Financial Holding Co. Ltd. 2 82,613,000 74,083,244 - -------------------------------------------------------------------------------- Fubon Financial Holding Co. Ltd., GDR 2 1,624,400 14,538,380 - -------------------------------------------------------------------------------- Guoco Group Ltd. 2,560,000 31,893,167 - -------------------------------------------------------------------------------- Haci Omer Sabanci Holding AS 2 9,094,751 71,660,685 - -------------------------------------------------------------------------------- Haci Omer Sabanci Holding AS, Sponsored ADR 2 11,889,500 23,481,763 - -------------------------------------------------------------------------------- Kiatnakin Bank Public Co. Ltd. 2 24,376,620 23,243,740 - -------------------------------------------------------------------------------- Korea Investment Holdings Co. Ltd. 2 133,360 5,038,870 16 | OPPENHEIMER DEVELOPING MARKETS FUND VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES Continued Reliance Capital Ventures Ltd. 2 5,010,963 $ 2,710,617 -------------- 246,650,466 - -------------------------------------------------------------------------------- INSURANCE--1.8% Aksigorta AS 2 6,491,905 68,305,171 - -------------------------------------------------------------------------------- Cathay Financial Holding Co. Ltd. 2 6,355,000 12,259,380 - -------------------------------------------------------------------------------- Liberty Life Assn. Africa Ltd. 2 2,228,783 30,548,834 - -------------------------------------------------------------------------------- Old Mutual plc 18,351,640 60,438,184 -------------- 171,551,569 - -------------------------------------------------------------------------------- REAL ESTATE--3.6% Hang Lung Development Co. 15,450,000 33,978,848 - -------------------------------------------------------------------------------- Henderson Land Development Co. Ltd. 15,602,000 83,098,156 - -------------------------------------------------------------------------------- Link REIT (The) 2 19,891,000 43,364,229 - -------------------------------------------------------------------------------- Medinet Nasr for Housing & Development Co. 1 1,304,396 26,880,738 - -------------------------------------------------------------------------------- Midland Holdings Ltd. 1 68,526,000 42,683,521 - -------------------------------------------------------------------------------- SM Prime Holdings, Inc. 2 443,971,755 68,699,691 - -------------------------------------------------------------------------------- Solidere, GDR 2,3 1,557,045 31,919,423 -------------- 330,624,606 - -------------------------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE--1.2% Housing Development Finance Corp. Ltd. 2 3,554,700 109,267,650 - -------------------------------------------------------------------------------- HEALTH CARE--2.1% - -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--0.9% Diagnosticos da America 1,2 3,440,200 85,782,242 - -------------------------------------------------------------------------------- PHARMACEUTICALS--1.2% Cipla Ltd. 2 2,096,973 26,151,183 - -------------------------------------------------------------------------------- Divi's Laboratories Ltd. 1,2 788,816 30,497,916 - -------------------------------------------------------------------------------- Ranbaxy Laboratories Ltd. 2,822,975 27,279,909 - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- PHARMACEUTICALS Continued Sun Pharmaceutical Industries Ltd. 1,402,063 $ 24,489,184 -------------- 108,418,192 - -------------------------------------------------------------------------------- INDUSTRIALS--10.8% - -------------------------------------------------------------------------------- AEROSPACE & DEFENSE--1.0% Bharat Electronics Ltd. 637,400 15,836,745 - -------------------------------------------------------------------------------- Empresa Brasileira de Aeronautica SA 3,094,000 30,087,638 - -------------------------------------------------------------------------------- Empresa Brasileira de Aeronautica SA, Preference 4,544,500 46,012,126 -------------- 91,936,509 - -------------------------------------------------------------------------------- AIR FREIGHT & LOGISTICS--0.4% Sinotrans Ltd. 1 91,054,000 39,013,363 - -------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING--3.0% Continental Engineering Corp. 2 14,307,000 6,005,733 - -------------------------------------------------------------------------------- Empresas ICA SA de CV 2 17,906,583 54,104,377 - -------------------------------------------------------------------------------- Gafisa SA 2 695,600 8,058,281 - -------------------------------------------------------------------------------- GS Engineering & Construction Corp. 324,560 17,559,628 - -------------------------------------------------------------------------------- Hyundai Development Co. 556,520 25,312,660 - -------------------------------------------------------------------------------- Hyundai Engineering & Construction Co. Ltd. 2 1,394,074 67,261,000 - -------------------------------------------------------------------------------- Impulsora del Desarrollo y el Empleo en America Latina SA de CV 2 36,252,500 45,579,516 - -------------------------------------------------------------------------------- Joongang Construction Co. Ltd. 2 325,260 7,911,445 - -------------------------------------------------------------------------------- Kolon Engineering & Construction Co. Ltd. 388,900 4,655,682 - -------------------------------------------------------------------------------- Kyeryong Construction Industrial Co. Ltd. 1 614,082 20,426,981 - -------------------------------------------------------------------------------- Murray & Roberts Holdings Ltd. 2 7,157,100 26,449,585 -------------- 283,324,888 17 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT--1.9% Bharat Heavy Electricals Ltd. 1,049,461 $ 48,046,470 - -------------------------------------------------------------------------------- Merry Electronics Co. Ltd. 1,2 8,319,000 26,140,255 - -------------------------------------------------------------------------------- Motech Industries, Inc. 1,2 4,537,000 100,827,404 -------------- 175,014,129 - -------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--1.0% Koc Holding AS 2 11,493,206 69,689,273 - -------------------------------------------------------------------------------- LG Chemical Ltd. 704,130 24,411,253 -------------- 94,100,526 - -------------------------------------------------------------------------------- MACHINERY--2.4% Hyundai Heavy Industries Co. Ltd. 1,469,406 116,563,095 - -------------------------------------------------------------------------------- Larsen & Toubro Ltd. 2 1,877,531 101,645,351 -------------- 218,208,446 - -------------------------------------------------------------------------------- ROAD & RAIL--1.0% All America Latina Logistica 1,288,920 70,713,059 - -------------------------------------------------------------------------------- All America Latina Logistica, GDR 4 118,900 6,500,263 - -------------------------------------------------------------------------------- Gateway Distriparks Ltd. 2,828,000 15,770,372 -------------- 92,983,694 - -------------------------------------------------------------------------------- TRADING COMPANIES & DISTRIBUTORS--0.0% LG International Corp. 135,900 3,197,227 - -------------------------------------------------------------------------------- TRANSPORTATION INFRASTRUCTURE--0.1% Grupo Aeroportuario del Pacifico SA de CV, ADR 2 355,800 10,247,040 - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--13.2% - -------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--0.4% Inventec Appliances Corp. 2 6,125,000 37,547,178 - -------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--3.5% High Tech Computer Corp. 2 1,672,400 36,114,929 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS Continued Hon Hai Precision Industry Co. Ltd. 2 14,500,000 $ 91,589,490 - -------------------------------------------------------------------------------- Lite-On Technology Corp. 2 59,653,075 80,570,691 - -------------------------------------------------------------------------------- Mitac International Corp. 2 28,000,000 39,391,395 - -------------------------------------------------------------------------------- Quanta Computer, Inc. 2 54,330,650 82,835,350 -------------- 330,501,855 - -------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--0.8% AU Optronics Corp. 2 10,495,000 16,928,685 - -------------------------------------------------------------------------------- Synnex Technology International Corp. 2 28,680,080 35,573,357 - -------------------------------------------------------------------------------- Varitronix International Ltd. 1 29,336,000 21,408,413 -------------- 73,910,455 - -------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--1.1% Inventec Co. Ltd. 2 58,936,000 36,000,244 - -------------------------------------------------------------------------------- Mobilians Co. Ltd. 1,2 387,602 4,413,841 - -------------------------------------------------------------------------------- NCsoft Corp. 2 405,471 27,120,630 - -------------------------------------------------------------------------------- NHN Corp. 2 111,064 31,235,048 -------------- 98,769,763 - -------------------------------------------------------------------------------- IT SERVICES--3.2% HCL Technologies Ltd. 5,098,816 70,243,316 - -------------------------------------------------------------------------------- Infosys Technologies Ltd. 1,897,600 121,247,104 - -------------------------------------------------------------------------------- Tata Consultancy Services Ltd. 2,706,335 103,962,384 -------------- 295,452,804 - -------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--4.1% Hynix Semiconductor, Inc. 2 4,140,428 139,517,345 - -------------------------------------------------------------------------------- Mtekvision Co. Ltd. 1 909,675 27,809,544 18 | OPPENHEIMER DEVELOPING MARKETS FUND VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT Continued Powerchip Semiconductor Corp. 2 58,000,000 $ 35,436,560 - -------------------------------------------------------------------------------- Sunplus Technology Co. Ltd. 1,2 50,919,000 60,984,685 - -------------------------------------------------------------------------------- Telechips, Inc. 1 655,280 17,990,400 - -------------------------------------------------------------------------------- United Microelectronics Corp. 2 179,576,000 105,176,402 -------------- 386,914,936 - -------------------------------------------------------------------------------- SOFTWARE--0.1% Patni Computer Systems Ltd. 2 673,135 7,073,702 - -------------------------------------------------------------------------------- MATERIALS--5.0% - -------------------------------------------------------------------------------- CHEMICALS--0.5% Finetec Corp. 1 1,913,045 21,287,841 - -------------------------------------------------------------------------------- Jubilant Organosys Ltd. 2 94,160 2,315,241 - -------------------------------------------------------------------------------- Petkim Petrokimya Holding AS 2 3,753,102 20,898,112 -------------- 44,501,194 - -------------------------------------------------------------------------------- CONSTRUCTION MATERIALS--1.0% Cemex SA de CV, Sponsored ADR 2 1,502,994 92,824,909 - -------------------------------------------------------------------------------- METALS & MINING--3.5% Anglo Platinum Ltd. 2 1,250,261 99,761,601 - -------------------------------------------------------------------------------- Companhia de Minas Buenaventura SA, Sponsored ADR 401,700 10,532,574 - -------------------------------------------------------------------------------- Companhia Vale do Rio Doce, Sponsored ADR 1,470,700 59,857,490 - -------------------------------------------------------------------------------- Harmony Gold Mining Co. Ltd., Sponsored ADR 2 1,086,000 15,193,140 - -------------------------------------------------------------------------------- Highland Gold Mining Ltd. 2 2,215,226 11,540,671 - -------------------------------------------------------------------------------- Impala Platinum Holdings Ltd. 376,467 63,758,929 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- METALS & MINING Continued PT Aneka Tambang Tbk 1,2 148,199,900 $ 64,486,093 -------------- 325,130,498 - -------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS--0.0% Suzano Bahia Sul Paper e Celulose SA 59,600 405,847 - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--10.1% - -------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--5.0% Bharti Tele-Ventures Ltd. 2 6,843,100 55,803,529 - -------------------------------------------------------------------------------- Magyar Telekom 2 3,851,880 17,676,555 - -------------------------------------------------------------------------------- Orascom Telecom Holding SAE 1,501,426 89,885,675 - -------------------------------------------------------------------------------- PT Indosat Tbk 2 178,089,000 101,378,043 - -------------------------------------------------------------------------------- PT Telekomunikasi Indonesia Tbk 2 175,207,000 116,625,728 - -------------------------------------------------------------------------------- Tele Norte Leste Participacoes SA 3,192,585 83,892,745 - -------------------------------------------------------------------------------- Tele Norte Leste Participacoes SA, Preference 253,100 4,827,196 -------------- 470,089,471 - -------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--5.1% Advanced Info Service Public Co. Ltd. 2 16,188,900 38,865,532 - -------------------------------------------------------------------------------- America Movil SA de CV, Series L 2,969,700 103,137,681 - -------------------------------------------------------------------------------- Hutchison Telecommunications International Ltd. 2 12,401,000 19,017,505 - -------------------------------------------------------------------------------- Reliance Communication Ventures Ltd. 2 5,010,963 20,776,115 - -------------------------------------------------------------------------------- Shin Corp. Public Co. Ltd. (Holding Co.) 2 68,995,400 85,560,647 - -------------------------------------------------------------------------------- SK Telecom Co. Ltd. 157,288 32,659,719 - -------------------------------------------------------------------------------- SK Telecom Co. Ltd., ADR 3,477,000 83,969,550 19 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES Continued Telesp Celular Participacoes SA, ADR 2 475,200 $ 2,352,240 - -------------------------------------------------------------------------------- Vodafone Egypt Telecommunications Co. SAE 4,769,594 84,066,304 -------------- 470,405,293 - -------------------------------------------------------------------------------- UTILITIES--1.8% - -------------------------------------------------------------------------------- ELECTRIC UTILITIES--1.2% Centrais Electricas Brasileiras SA, Preference, Cl. B 2 1,570,596,700 34,503,572 - -------------------------------------------------------------------------------- Companhia Energetica de Minas Gerais, Preference 55,967,000 2,872,806 - -------------------------------------------------------------------------------- Eletropaulo Metropolitana SA, Preference 2 1,137,757,400 56,102,933 - -------------------------------------------------------------------------------- NTPC Ltd. 5,253,619 15,562,103 - -------------------------------------------------------------------------------- Reliance Energy Ventures Ltd. 2 5,010,963 4,844,025 -------------- 113,885,439 - -------------------------------------------------------------------------------- GAS UTILITIES--0.6% Gail India Ltd. 9,409,920 57,979,130 -------------- Total Common Stocks (Cost $6,295,030,751) 9,026,382,019 PRINCIPAL AMOUNT - -------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES--0.0% - -------------------------------------------------------------------------------- Trent Ltd., 2% Sec. Debs., 7/7/10 [INR] (Cost $743,371) 32,425,500 638,623 VALUE UNITS SEE NOTE 1 - -------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.0% - -------------------------------------------------------------------------------- Trent Ltd. Wts., Exp. 1/7/10 2 (Cost $0) 63,757 $ 483,848 PRINCIPAL AMOUNT - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--1.5% - -------------------------------------------------------------------------------- Undivided interest of 35.40% in joint repurchase agreement (Principal Amount/Value $400,738,000, with a maturity value of $400,787,981) with Cantor Fitzgerald & Co./Cantor Fitzgerald Securities, 4.49%, dated 2/28/06, to be repurchased at $141,863,691 on 3/1/06, collateralized by U.S. Treasury Bills, 5/4/06, with a value of $49,625,000 and U.S. Treasury Bonds, 2.375%--8%, 8/15/06-- 11/15/21, with a value of $359,989,701 (Cost $141,846,000) $141,846,000 141,846,000 - -------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $6,437,620,122) 98.3% 9,169,350,490 - -------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.7 156,171,328 ------------------------------ NET ASSETS 100.0% $9,325,521,818 ============================== 20 | OPPENHEIMER DEVELOPING MARKETS FUND FOOTNOTES TO STATEMENT OF INVESTMENTS Principal amount is reported in U.S. Dollars, except for those denoted in the following currency: INR Indian Rupee 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, 2006. The aggregate fair value of securities of affiliated companies held by the Fund as of February 28, 2006 amounts to $1,303,904,587. Transactions during the period in which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES AUGUST 31, 2005 ADDITIONS REDUCTIONS FEBRUARY 28, 2006 - ------------------------------------------------------------------------------------------------------------------------- Able C&C 537,778 124,981 6,104 656,655 Aksigorta AS* 8,762,905 -- 2,271,000 6,491,905 Amtek Auto Ltd. 7,296,853 2,304,705 88,400 9,513,158 Banco Latinoamericano de Exportaciones SA, Cl. E 3,805,885 53,800 35,500 3,824,185 Coca-Cola Femsa SA de CV, Sponsored ADR 1,360,000 -- 1,360,000 -- Companhia Brasileira de Distribuicao Grupo Pao de Acucar, Sponsored ADR* 2,892,100 311,400 26,600 3,176,900 Corporacion GEO SA de CV, Series B* 28,915,000 -- 9,101,900 19,813,100 Courts (Singapore) Ltd. 11,425,000 -- 11,425,000 -- Diagnosticos da America 2,139,100 1,388,000 86,900 3,440,200 Divi's Laboratories Ltd. 796,149 -- 7,333 788,816 Finetec Corp. 1,538,406 388,809 14,170 1,913,045 GS Home Shopping, Inc. 698,292 -- 173,768 524,524 Humax Co. Ltd. 1,272,452 1,726,804 20,693 2,978,563 Jeonbuk Bank -- 2,477,728** 11,180 2,466,548 Kiatnakin Finance Public Co. Ltd.* 25,718,220 2,408,200 3,749,800 24,376,620 Kyeryong Construction Industrial Co. Ltd. 657,218 -- 43,136 614,082 Lojas Americanas SA, Preference 2,226,500,000 390,164,000 292,418,000 2,324,246,000 Medinet Nasr for Housing & Development Co. 1,316,496 -- 12,100 1,304,396 Merry Electronics Co. Ltd. -- 8,319,000 -- 8,319,000 Midland Holdings Ltd. 31,122,000 37,766,000 362,000 68,526,000 Mobilians Co. Ltd. -- 489,222 101,620 387,602 Motech Industries, Inc. -- 4,965,000 428,000 4,537,000 Mtekvision Co. Ltd. 823,668 94,289 8,282 909,675 PT Aneka Tambang Tbk 178,972,100 -- 30,772,200 148,199,900 Rico Auto Industries Ltd. -- 7,715,655 -- 7,715,655 Sadia SA, Preference 16,547,000 17,567,000 182,000 33,932,000 SARE Holding SA de CV, Cl. B 1,174,416 44,753,009 349,521 45,577,904 Sinotrans Ltd. 91,900,000 -- 846,000 91,054,000 Ssangyong Motor Co. 7,796,210 2,204,829 97,080 9,903,959 Sunplus Technology Co. Ltd. -- 50,919,000 -- 50,919,000 Telechips, Inc. 608,145 55,376 8,241 655,280 Tisco Bank Public Co. Ltd. 16,493,280 14,035,600 168,700 30,360,180 United Breweries Holdings Ltd.* 1,465,724 -- 162,427 1,303,297 United Breweries Ltd.* 719,989 -- 6,600 713,389 Varitronix International Ltd. 11,577,000 17,968,000 209,000 29,336,000 Yedang Entertainment Co. Ltd. -- 2,651,447 11,450 2,639,997
21 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENT OF INVESTMENTS Unaudited / Continued - --------------------------------------------------------------------------------
VALUE DIVIDEND REALIZED SEE NOTE 1 INCOME GAIN (LOSS) - ------------------------------------------------------------------------------------------------------------------------- Able C&C $ 11,114,452 $ -- $ (188,251) Aksigorta AS* --* -- 14,464,637 Amtek Auto Ltd. 74,547,491 295,112 (84,640) Banco Latinoamericano de Exportaciones SA, Cl. E 69,179,507 1,144,511 (234,655) Coca-Cola Femsa SA de CV, Sponsored ADR -- -- 8,232,349 Companhia Brasileira de Distribuicao Grupo Pao de Acucar, Sponsored ADR* --* -- (1,991) Corporacion GEO SA de CV, Series B* --* -- 21,160,038 Courts (Singapore) Ltd. -- -- (42,532) Diagnosticos da America 85,782,242 -- 407,443 Divi's Laboratories Ltd. 30,497,916 -- (3,105) Finetec Corp. 21,287,841 196,259 4,240 GS Home Shopping, Inc. 53,356,794 1,354,360 4,853,769 Humax Co. Ltd. 84,262,852 288,509 (51,016) Jeonbuk Bank 21,352,092 168,841 (13,030) Kiatnakin Finance Public Co. Ltd.* --* -- (1,296,841) Kyeryong Construction Industrial Co. Ltd. 20,426,981 421,850 (247,668) Lojas Americanas SA, Preference 100,040,539 867,140 6,477,936 Medinet Nasr for Housing & Development Co. 26,880,738 736,147 62,731 Merry Electronics Co. Ltd. 26,140,255 -- -- Midland Holdings Ltd. 42,683,521 401,111 (66,976) Mobilians Co. Ltd. 4,413,841 -- (599,781) Motech Industries, Inc. 100,827,404 -- 942,526 Mtekvision Co. Ltd. 27,809,544 749,461 2,448 PT Aneka Tambang Tbk 64,486,093 -- 3,078,632 Rico Auto Industries Ltd. 15,113,314 -- -- Sadia SA, Preference 108,659,101 2,140,927 (51,719) SARE Holding SA de CV, Cl. B 56,042,330 -- 4,501 Sinotrans Ltd. 39,013,363 431,658 (82,801) Ssangyong Motor Co. 68,077,774 -- (89,623) Sunplus Technology Co. Ltd. 60,984,685 -- -- Telechips, Inc. 17,990,400 84,971 (4,476) Tisco Bank Public Co. Ltd. 21,850,386 -- (16,586) United Breweries Holdings Ltd.* --* -- 1,471,001 United Breweries Ltd.* --* 24,376 26,490 Varitronix International Ltd. 21,408,413 216,174 (38,609) Yedang Entertainment Co. Ltd. 29,674,718 -- (17,652) --------------------------------------------------------- $1,303,904,587 $9,521,407 $58,056,789 =========================================================
* No longer an affiliate as of February 28, 2006 ** A portion of the transactions (81,974) was the result of a stock dividend. 2. Non-income producing security. 3. 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 $160,697,481 or 1.72% of the Fund's net assets as of February 28, 2006. 4. Illiquid security. The aggregate value of illiquid securities as of February 28, 2006 was $6,500,263, which represents 0.07% of the Fund's net assets. In addition, the Fund has restricted currency of $7,172,139, which represents 0.08% of the Fund's net assets. See Note 6 of Notes to Financial Statements. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 22 | OPPENHEIMER DEVELOPING MARKETS FUND DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS: GEOGRAPHIC HOLDINGS VALUE PERCENT - -------------------------------------------------------------------------------- Korea, Republic of South $ 1,822,148,718 19.9% India 1,461,334,219 15.9 Brazil 1,296,001,739 14.1 Taiwan 942,120,980 10.3 Mexico 652,567,788 7.1 South Africa 451,366,960 4.9 Indonesia 448,727,622 4.9 Turkey 327,667,808 3.6 Egypt 301,209,740 3.3 Hong Kong 284,905,414 3.1 Thailand 236,869,406 2.6 Israel 163,009,527 1.8 United States 141,846,000 1.5 United Kingdom 138,569,267 1.5 Philippines 95,364,759 1.0 Panama 69,179,507 0.8 China 65,706,282 0.7 Norway 46,134,604 0.5 Bermuda 35,238,845 0.4 Singapore 33,546,376 0.4 Lebanon 31,919,423 0.4 Hungary 30,675,169 0.3 Greece 26,102,342 0.3 Portugal 26,047,245 0.3 Cayman Islands 19,017,505 0.2 Jersey, Channel Islands 11,540,671 0.1 Peru 10,532,574 0.1 ---------------------------------- Total $ 9,169,350,490 100.0% ================================== 23 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited - -------------------------------------------------------------------------------- February 28, 2006 - -------------------------------------------------------------------------------- ASSETS - -------------------------------------------------------------------------------- Investments, at value--see accompanying statement of investments: Unaffiliated companies (cost $5,531,862,629) $7,865,445,903 Affiliated companies (cost $905,757,493) 1,303,904,587 --------------- 9,169,350,490 - -------------------------------------------------------------------------------- Cash 8,199,774 - -------------------------------------------------------------------------------- Cash--foreign currencies (cost $155,304,022) 155,234,011 - -------------------------------------------------------------------------------- Unrealized appreciation on foreign currency contracts 143,734 - -------------------------------------------------------------------------------- Receivables and other assets: Shares of beneficial interest sold 129,893,531 Investments sold 40,668,467 Interest and dividends 24,187,520 Other 71,365 --------------- Total assets 9,527,748,892 - -------------------------------------------------------------------------------- LIABILITIES - -------------------------------------------------------------------------------- Unrealized depreciation on foreign currency contracts 7,645 - -------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 154,650,757 Shares of beneficial interest redeemed 25,647,975 Foreign capital gains tax 16,233,466 Distribution and service plan fees 3,290,473 Transfer and shareholder servicing agent fees 965,001 Trustees' compensation 261,819 Shareholder communications 144,905 Other 1,025,033 --------------- Total liabilities 202,227,074 - -------------------------------------------------------------------------------- NET ASSETS $9,325,521,818 =============== - -------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - -------------------------------------------------------------------------------- Paid-in capital $6,285,817,686 - -------------------------------------------------------------------------------- Accumulated net investment loss (45,632,510) - -------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 369,442,528 - -------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 2,715,894,114 --------------- NET ASSETS $9,325,521,818 =============== 24 | 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 $7,571,123,463 and 190,625,707 shares of beneficial interest outstanding) $ 39.72 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 42.14 - -------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $366,631,076 and 9,310,816 shares of beneficial interest outstanding) $ 39.38 - -------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $987,826,667 and 25,377,822 shares of beneficial interest outstanding) $ 38.92 - -------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $217,986,830 and 5,569,766 shares of beneficial interest outstanding) $ 39.14 - -------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $181,953,782 and 4,584,885 shares of beneficial interest outstanding) $ 39.69 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 25 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENT OF OPERATIONS Unaudited - -------------------------------------------------------------------------------- For the Six Months Ended February 28, 2006 - -------------------------------------------------------------------------------- INVESTMENT INCOME - -------------------------------------------------------------------------------- Dividends: Unaffiliated companies (net of foreign withholding taxes of $4,898,505) $ 47,825,138 Affiliated companies (net of foreign withholding taxes of $969,947) 9,521,407 - -------------------------------------------------------------------------------- Interest (net of foreign withholding taxes of $2) 3,612,318 - -------------------------------------------------------------------------------- Other income 13,931 ------------- Total investment income 60,972,794 - -------------------------------------------------------------------------------- EXPENSES - -------------------------------------------------------------------------------- Management fees 28,729,389 - -------------------------------------------------------------------------------- Distribution and service plan fees: Class A 6,753,012 Class B 1,421,186 Class C 3,331,056 Class N 358,292 - -------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 4,340,830 Class B 241,955 Class C 427,789 Class N 165,506 Class Y 5,547 - -------------------------------------------------------------------------------- Shareholder communications: Class A 243,967 Class B 27,866 Class C 32,237 Class N 2,351 Class Y 29 - -------------------------------------------------------------------------------- Custodian fees and expenses 1,882,882 - -------------------------------------------------------------------------------- Trustees' compensation 156,205 - -------------------------------------------------------------------------------- Other 388,628 ------------- Total expenses 48,508,727 - -------------------------------------------------------------------------------- NET INVESTMENT INCOME 12,464,067 26 | OPPENHEIMER DEVELOPING MARKETS FUND - -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN - -------------------------------------------------------------------------------- Net realized gain on: Investments: Unaffiliated companies $ 370,698,301 Affiliated companies 58,056,789 Foreign currency transactions 19,668,492 --------------- Net realized gain 448,423,582 - -------------------------------------------------------------------------------- Net change in unrealized appreciation on: Investments (net of foreign capital gains tax of $16,233,466) 1,284,318,573 Translation of assets and liabilities denominated in foreign currencies 143,893,861 --------------- Net change in unrealized appreciation 1,428,212,434 - -------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,889,100,083 =============== SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 27 | OPPENHEIMER DEVELOPING MARKETS FUND STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2006 AUGUST 31, (UNAUDITED) 2005 - -------------------------------------------------------------------------------------------------------------------- OPERATIONS - -------------------------------------------------------------------------------------------------------------------- Net investment income $ 12,464,067 $ 61,764,538 - -------------------------------------------------------------------------------------------------------------------- Net realized gain 448,423,582 160,898,642 - -------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation 1,428,212,434 952,477,007 ----------------------------------- Net increase in net assets resulting from operations 1,889,100,083 1,175,140,187 - -------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - -------------------------------------------------------------------------------------------------------------------- Dividends from net investment income: Class A (68,674,341) (31,307,183) Class B (1,913,075) (879,176) Class C (5,631,507) (1,898,747) Class N (1,612,601) (545,843) Class Y (1,210,159) -- - -------------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A (168,966,174) (10,889,372) Class B (8,946,574) (742,531) Class C (20,858,213) (1,173,811) Class N (4,578,511) (217,007) Class Y (2,421,013) -- - -------------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - -------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from beneficial interest transactions: Class A 2,142,232,098 1,608,133,391 Class B 74,279,519 42,129,047 Class C 378,428,165 173,879,187 Class N 84,775,119 53,161,881 Class Y 165,990,240 -- - -------------------------------------------------------------------------------------------------------------------- NET ASSETS - -------------------------------------------------------------------------------------------------------------------- Total increase 4,449,993,056 3,004,790,023 - -------------------------------------------------------------------------------------------------------------------- Beginning of period 4,875,528,762 1,870,738,739 ----------------------------------- End of period (including accumulated net investment income (loss) of $(45,632,510) and $20,945,106, respectively) $ 9,325,521,818 $ 4,875,528,762 ===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 | OPPENHEIMER DEVELOPING MARKETS FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2006 AUGUST 31, CLASS A (UNAUDITED) 2005 2004 2003 2002 2001 - ---------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 31.11 $ 21.09 $ 16.92 $ 13.43 $ 12.93 $ 16.85 - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .08 1 .55 1 .48 .19 .25 .21 Net realized and unrealized gain (loss) 10.09 9.97 4.31 3.50 .45 (3.54) ---------------------------------------------------------------------------------- Total from investment operations 10.17 10.52 4.79 3.69 .70 (3.33) - ---------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.45) (.37) (.62) (.20) (.20) (.20) Distributions from net realized gain (1.11) (.13) -- -- -- (.39) ---------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (1.56) (.50) (.62) (.20) (.20) (.59) - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 39.72 $ 31.11 $ 21.09 $ 16.92 $ 13.43 $ 12.93 ================================================================================== - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 33.42% 50.42% 28.61% 27.93% 5.44% (20.08)% - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 7,571,123 $4,104,558 $1,549,854 $588,450 $337,405 $167,178 - ---------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 5,574,079 $2,739,224 $1,145,452 $374,841 $257,746 $153,027 - ---------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 0.48% 2.01% 1.64% 1.42% 1.91% 1.76% Total expenses 1.34% 1.43% 1.52% 1.81% 1.81% 1.69% Expenses after payments and waivers and reduction to custodian expenses 1.34% 1.43% 1.52% 1.76% 1.77% 1.69% - ---------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 23% 28% 15% 6% 10% 16%
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. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 29 | OPPENHEIMER DEVELOPING MARKETS FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2006 AUGUST 31, CLASS B (UNAUDITED) 2005 2004 2003 2002 2001 - ---------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 30.78 $ 20.87 $ 16.79 $ 13.32 $ 12.82 $ 16.70 - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.05) 1 .31 1 .12 .09 .15 .12 Net realized and unrealized gain (loss) 10.00 9.88 4.46 3.47 .44 (3.53) ---------------------------------------------------------------------------------- Total from investment operations 9.95 10.19 4.58 3.56 .59 (3.41) - ---------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.24) (.15) (.50) (.09) (.09) (.08) Distributions from net realized gain (1.11) (.13) -- -- -- (.39) ---------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (1.35) (.28) (.50) (.09) (.09) (.47) - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 39.38 $ 30.78 $ 20.87 $ 16.79 $ 13.32 $ 12.82 ================================================================================== - --------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 32.94% 49.14% 27.50% 26.98% 4.61% (20.67)% - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 366,631 $ 222,723 $ 119,749 $ 84,705 $ 63,005 $ 45,393 - ---------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 287,984 $ 169,763 $ 117,271 $ 62,676 $ 54,744 $ 48,135 - ---------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income (loss) (0.30)% 1.15% 0.61% 0.66% 1.14% 0.92% Total expenses 2.11% 2.24% 2.41% 2.67% 2.58% 2.46% Expenses after payments and waivers and reduction to custodian expenses 2.11% 2.24% 2.41% 2.52% 2.54% 2.46% - ---------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 23% 28% 15% 6% 10% 16%
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. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 30 | OPPENHEIMER DEVELOPING MARKETS FUND
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2006 AUGUST 31, CLASS C (UNAUDITED) 2005 2004 2003 2002 2001 - ---------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 30.49 $ 20.70 $ 16.67 $ 13.25 $ 12.78 $ 16.68 - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.04) 1 .34 1 .31 .10 .17 .12 Net realized and unrealized gain (loss) 9.88 9.79 4.25 3.44 .41 (3.52) ---------------------------------------------------------------------------------- Total from investment operations 9.84 10.13 4.56 3.54 .58 (3.40) - ---------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.30) (.21) (.53) (.12) (.11) (.11) Distributions from net realized gain (1.11) (.13) -- -- -- (.39) ---------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (1.41) (.34) (.53) (.12) (.11) (.50) - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 38.92 $ 30.49 $ 20.70 $ 16.67 $ 13.25 $ 12.78 ================================================================================== - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 32.93% 49.29% 27.60% 27.05% 4.54% (20.68)% - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 987,827 $ 450,012 $ 175,025 $ 77,081 $ 46,722 $ 20,864 - ---------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 675,432 $ 294,791 $ 145,460 $ 52,236 $ 33,334 $ 19,646 - ---------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income (loss) (0.23)% 1.28% 0.83% 0.66% 1.15% 0.94% Total expenses 2.06% 2.17% 2.31% 2.57% 2.57% 2.46% Expenses after payments and waivers and reduction to custodian expenses 2.06% 2.17% 2.31% 2.52% 2.53% 2.46% - ---------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 23% 28% 15% 6% 10% 16%
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. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 31 | OPPENHEIMER DEVELOPING MARKETS FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2006 AUGUST 31, CLASS N (UNAUDITED) 2005 2004 2003 2002 2001 1 - ---------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 30.67 $ 20.84 $ 16.77 $ 13.36 $ 12.91 $ 15.26 - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .03 2 .45 2 .45 .22 .32 .05 Net realized and unrealized gain (loss) 9.94 9.83 4.22 3.41 .34 (2.40) ---------------------------------------------------------------------------------- Total from investment operations 9.97 10.28 4.67 3.63 .66 (2.35) - ---------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.39) (.32) (.60) (.22) (.21) -- Distributions from net realized gain (1.11) (.13) -- -- -- -- ---------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (1.50) (.45) (.60) (.22) (.21) -- - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 39.14 $ 30.67 $ 20.84 $ 16.77 $ 13.36 $ 12.91 ================================================================================== - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 33.21% 49.84% 28.16% 27.73% 5.13% (15.40)% - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 217,987 $ 98,236 $ 26,110 $ 8,709 $ 1,741 $ 77 - ---------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 148,575 $ 57,727 $ 18,770 $ 4,196 $ 686 $ 35 - ---------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 0.19% 1.67% 1.31% 1.27% 1.68% 1.63% Total expenses 1.64% 1.82% 1.99% 2.08% 2.04% 1.96% Expenses after payments and waivers and reduction to custodian expenses 1.64% 1.80% 1.88% 1.99% 2.00% 1.96% - ---------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 23% 28% 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. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 32 | OPPENHEIMER DEVELOPING MARKETS FUND PERIOD ENDED FEBRUARY 28, 2006 1 CLASS Y (UNAUDITED) - -------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------- Net asset value, beginning of period $ 32.15 - -------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .17 Net realized and unrealized gain 9.04 ----------- Total from investment operations 9.21 - -------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.56) Distributions from net realized gain (1.11) ----------- Total dividends and/or distributions to shareholders (1.67) - -------------------------------------------------------------------------------- Net asset value, end of period $ 39.69 =========== - -------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 29.38% - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 181,954 - -------------------------------------------------------------------------------- Average net assets (in thousands) $ 80,929 - -------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 0.98% Total expenses 0.94% - -------------------------------------------------------------------------------- Portfolio turnover rate 23% 1. For the period from September 7, 2005 (inception of offering) to February 28, 2006. 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. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 33 | 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, Class N and Class Y 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. Class Y shares are sold to certain institutional investors without either a front-end sales charge or a CDSC, however, the institutional investor 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. No such plan has been adopted for Class Y shares. 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 may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities listed or traded on National Stock Exchanges or other domestic exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the 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. Securities traded on foreign exchanges are valued based on the last sale price on the principal exchange on which the security is traded, as identified by the portfolio pricing service, prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the official closing price on the principal exchange. Corporate, government and municipal debt instruments having a remaining maturity in excess of sixty days and all mortgage-backed securities will be valued at the 34 | OPPENHEIMER DEVELOPING MARKETS FUND mean between the "bid" and "asked" prices. Futures contracts traded on a commodities or futures exchange will be valued at the final settlement price or official closing price on the principal exchange as reported by such principal exchange at its trading session ending at, or most recently prior to, the time when the Fund's assets are valued. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign and domestic securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the 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 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. 35 | OPPENHEIMER DEVELOPING MARKETS FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued 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. 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. 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, 2006, the Fund's projected benefit obligations were increased by $91,228 and payments of $21,653 were made to retired trustees, resulting in an accumulated liability of $193,167 as of February 28, 2006. 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. 36 | OPPENHEIMER DEVELOPING MARKETS FUND - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- 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, to the extent they are not offset by positive cash balances maintained by the Fund, 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. At February 28, 2006, the Fund had $8,896 of such earnings on cash balances available to offset future custodian fees or interest expenses incurred during the next fiscal year. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- INDEMNIFICATIONS. The Fund's organizational documents provide current and former trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 37 | OPPENHEIMER DEVELOPING MARKETS FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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, 2006 1 YEAR ENDED AUGUST 31, 2005 SHARES AMOUNT SHARES AMOUNT - -------------------------------------------------------------------------------------------------------------- CLASS A Sold 74,428,050 $2,697,285,168 88,754,718 $ 2,427,698,410 Dividends and/or distributions reinvested 5,747,451 200,471,052 1,371,503 34,603,027 Redeemed (21,495,943) (755,524,122) 2 (31,652,270) (854,168,046) 3 --------------------------------------------------------------------- Net increase 58,679,558 $2,142,232,098 58,473,951 $ 1,608,133,391 ===================================================================== - -------------------------------------------------------------------------------------------------------------- CLASS B Sold 2,783,132 $ 99,603,402 2,990,642 $ 82,326,626 Dividends and/or distributions reinvested 273,772 9,483,455 57,208 1,437,052 Redeemed (980,958) (34,807,338) 2 (1,550,934) (41,634,631) 3 --------------------------------------------------------------------- Net increase 2,075,946 $ 74,279,519 1,496,916 $ 42,129,047 ===================================================================== - -------------------------------------------------------------------------------------------------------------- CLASS C Sold 11,389,203 $ 406,591,148 8,093,292 $ 221,658,558 Dividends and/or distributions reinvested 599,499 20,526,830 103,479 2,573,527 Redeemed (1,369,962) (48,689,813) 2 (1,891,282) (50,352,898) 3 --------------------------------------------------------------------- Net increase 10,618,740 $ 378,428,165 6,305,489 $ 173,879,187 ===================================================================== - -------------------------------------------------------------------------------------------------------------- CLASS N Sold 2,815,619 $ 101,315,091 2,555,275 $ 69,740,342 Dividends and/or distributions reinvested 172,439 5,930,182 30,025 749,123 Redeemed (621,494) (22,470,154) 2 (634,917) (17,327,584) 3 --------------------------------------------------------------------- Net increase 2,366,564 $ 84,775,119 1,950,383 $ 53,161,881 ===================================================================== - -------------------------------------------------------------------------------------------------------------- CLASS Y Sold 5,042,262 $ 181,372,798 -- $ -- Dividends and/or distributions reinvested 53,371 1,858,366 -- -- Redeemed (510,748) (17,240,924) 2 -- -- --------------------------------------------------------------------- Net increase 4,584,885 $ 165,990,240 -- $ -- =====================================================================
1. For the six months ended February 28, 2006, for Class A, Class B, Class C and Class N shares and for the period from September 7, 2005 (inception of offering) to February 28, 2006, for Class Y shares. 2. Net of redemption fees of $62,195, $3,213, $7,536, $1,658 and $903 for Class A, Class B, Class C, Class N and Class Y, respectively. 3. Net of redemption fees of $67,827, $4,203, $7,299 and $1,429 for Class A, Class B, Class C and Class N, respectively. 38 | OPPENHEIMER DEVELOPING MARKETS FUND - -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the six months ended February 28, 2006, were as follows: PURCHASES SALES - -------------------------------------------------------------------------------- Investment securities $3,920,195,961 $1,479,515,807 - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Effective January 1, 2006 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, 0.85% of the next $6 billion, 0.80% of the next $3 billion and 0.75% of average annual net assets over $10 billion. Prior to January 1, 2006 the advisory fee was 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, 2006, the Fund paid $4,932,743 to OFS for services to the Fund. Additionally, Class Y shares are subject to minimum fees of $10,000 per annum for assets of $10 million or more. The Class Y shares are subject to the minimum fees in the event that the per account fee does not equal or exceed the applicable minimum fees. OFS may voluntarily waive the minimum fees. - -------------------------------------------------------------------------------- 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 periodically 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 periodically for providing personal services and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. 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 shares 39 | OPPENHEIMER DEVELOPING MARKETS FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued and servicing accounts. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% on Class B and Class C shares and 0.25% on Class N shares. The Distributor also receives a service fee of 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, 2006 for Class B, Class C and Class N shares were $3,797,985, $7,570,034 and $1,187,202, 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 RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY SIX MONTHS ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - ---------------------------------------------------------------------------------------------------------- February 28, 2006 $1,343,370 $-- $150,543 $83,944 $26,675
- -------------------------------------------------------------------------------- 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. 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 40 | 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, 2006, the Fund had outstanding foreign currency contracts as follows:
CONTRACT EXPIRATION AMOUNT VALUATION AS OF UNREALIZED UNREALIZED CONTRACT DESCRIPTION DATES (000S) FEB. 28, 2006 APPRECIATION DEPRECIATION - --------------------------------------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE Hungarian Forint [HUF] 3/1/06 56,286 HUF $ 264,925 $ 360 $ -- Indian Rupee [INR] 3/1/06 1,082,539 INR 24,450,352 107,214 -- Indonesian Rupiah [IDR] 3/1/06 56,420,072 IDR 6,144,304 3,010 -- Norwegian Krone [NOK] 3/1/06 73,863 NOK 10,945,984 31,621 -- South African Rand [ZAR] 3/6/06 6,454 ZAR 1,045,252 -- 3,515 Thailand Baht [THB] 3/1/06-3/2/06 24,185 THB 618,385 1,529 -- ---------------------------- 143,734 3,515 ---------------------------- CONTRACTS TO SELL South African Rand [ZAR] 3/7/06 10,288 ZAR 1,665,878 -- 4,130 ---------------------------- Total unrealized appreciation and depreciation $ 143,734 $ 7,645 ============================
- -------------------------------------------------------------------------------- 6. ILLIQUID OR RESTRICTED SECURITIES AND CURRENCY As of February 28, 2006, investments in securities included issues that are illiquid or restricted. Restricted securities are purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Trustees as reflecting fair value. A security may also 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 or restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limitation. Securities that are illiquid or restricted are marked with the applicable footnote on the Statement of Investments. Information concerning currency is as follows:
ACQUISITION VALUATION AS OF UNREALIZED CURRENCY DATES COST FEBRUARY 28, 2006 DEPRECIATION - ------------------------------------------------------------------------------------------ Argentine Peso [ARP] 9/14/05-2/22/06 $7,209,012 $7,172,139 $36,873
41 | OPPENHEIMER DEVELOPING MARKETS FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 7. LITIGATION A complaint was filed as a putative class action against the Manager and the Transfer Agent (and other defendants) in the U.S. District Court for the Southern District of New York on January 10, 2005 and was amended on March 4, 2005. The complaint alleged, among other things, that the Manager charged excessive fees for distribution and other costs, and that by permitting and/or participating in those actions, the Directors/Trustees and the Officers of the funds breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law. The plaintiffs sought unspecified damages, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. Seven of the eight counts in the complaint, including the claims against certain of the Oppenheimer funds, as nominal defendants, and against certain present and former Directors, Trustees and Officers of the funds, and the Distributor, as defendants, were dismissed with prejudice, by court order dated March 10, 2006, in response to motions to dismiss the suit that had been filed by the defendants. The remaining count against the Manager and the Transfer Agent was dismissed with prejudice by court order dated April 5, 2006. The time in which plaintiffs may file an appeal to those decisions has not yet lapsed. 42 | 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. 43 | OPPENHEIMER DEVELOPING MARKETS FUND BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Each year, the Board of Trustees (the "Board"), including a majority of the independent Trustees, is required to determine whether to renew the Fund's investment advisory agreement (the "Agreement"). The Investment Company Act of 1940, as amended, requires that the Board request and evaluate, and that the Manager provide, such information as may be reasonably necessary to evaluate the terms of the Agreement. The Board employs an independent consultant to prepare a report that provides information, including comparative information that the Board requests for that purpose. In addition, the Board receives information throughout the year regarding Fund services, fees, expenses and performance. The Manager and the independent consultant provided information to the Board on the following factors: (i) the nature, quality and extent of the Manager's services, (ii) the investment performance of the Fund and the Manager, (iii) the fees and expenses of the Fund, including comparative expense information, (iv) the profitability of the Manager and its affiliates, including an analysis of the cost of providing services by the Manager and its affiliates, (v) the extent to which economies of scale are realized as the Fund grows and whether fee levels reflect these economies of scale for Fund investors and (vi) other benefits to the Manager from its relationship with the Fund. The Board was aware that there are alternatives to retaining the Manager. NATURE AND EXTENT OF SERVICES. The Board considered information on the nature and extent of the services provided to the Fund and information regarding the Manager's key personnel that provide such services. The Manager's duties include providing the Fund with the services of the portfolio manager and the Manager's investment team, who provide research, analysis and other advisory services in regard to the Fund's investments; securities trading services; oversight of third party service providers; monitoring compliance with applicable Fund policies and procedures and adherence to the Fund's investment restrictions. The Manager is responsible for providing certain administrative services to the Fund as well. Those services include providing, and supervising the activities of, all administrative and clerical personnel that are necessary in order to provide effective corporate administration for the Fund; compiling and maintaining records with respect to the Fund's operations; preparing and filing reports required by the Securities and Exchange Commission; preparing periodic reports regarding the operations of the Fund for its shareholders; preparing proxy materials for shareholder meetings; and preparing the registration statements required by Federal and state securities laws for the sale of the Fund's shares. The Manager also provides the Fund with office space, facilities and equipment. 44 | OPPENHEIMER DEVELOPING MARKETS FUND QUALITY OF SERVICES. The Board also considered the quality of the services provided and the quality of the Manager's resources that are available to the Fund. The Board took account of the facts that the Manager has had over forty years of experience as an investment adviser and that its assets under management rank it among the top mutual fund managers in the United States. The Board evaluated the Manager's administrative, accounting, legal and compliance services, and information the Board has received regarding the experience and professional qualifications of the Manager's personnel and the size and functions of its staff. In its evaluation of the quality of the portfolio management services provided, the Board considered the experience of Mark Madden and the Manager's Global investment team and analysts. Mr. Madden has had over 13 years of experience managing global/international investments. The Board members also considered their experiences with the Manager and its officers and other personnel through their service as directors or trustees of the Fund and other funds advised by the Manager. The Board considered information regarding the quality of services provided by affiliates of the Manager, which it also reviews at other times during the year in connection with the renewal of the Fund's service agreements. In light of the foregoing, the Board concluded that the Fund benefits from the services provided under the Agreement as a result of the Manager's experience, reputation, personnel, operations, and resources. INVESTMENT PERFORMANCE OF THE MANAGER AND THE FUND. During the year, the Manager provided information on the performance of the Fund and the Manager at each Board meeting, including comparative performance information. The Board also reviewed information, prepared by the Manager and by the independent consultant, comparing the Fund's historical performance to relevant market indices and to the performance of other emerging markets funds advised by the Manager and other investment advisers. The Board noted that the Fund's one-year, three-year, and five-year performance were all better than its peer group average. MANAGEMENT FEES AND EXPENSES. The Board reviewed the fees paid to the Manager and its affiliates and the other expenses borne by the Fund. The Board also evaluated the comparability of the fees charged and the services provided to the Fund to those of other clients or accounts advised by the Manager. The independent consultant provided comparative data in regard to the fees and expenses of the Fund, other emerging markets funds and other funds with comparable asset levels and distribution features. The Board noted that the Fund's contractual and actual management fees and total expenses were all lower than its peer group median and average. ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may realize economies of scale in managing and supporting the Fund, to what extent those 45 | OPPENHEIMER DEVELOPING MARKETS FUND BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited / Continued - -------------------------------------------------------------------------------- economies of scale benefit the Fund shareholders and the current level of Fund assets in relation to the Fund's breakpoint schedule for its management fees. The Board also noted the Fund's breakpoints, which are intended to share economies of scale that may exist as the Fund grows with its shareholders. Based on this evaluation, the Board requested and the Manager agreed to a revised breakpoint schedule that, effective January 1, 2006, reduced the management fee on average annual net assets over $7.0 billion to 0.80% and reduced the management fee on average annual net assets over $10.0 billion to 0.75%. PROFITS AND OTHER BENEFITS TO THE MANAGER. The Board considered information regarding the Manager's costs in serving as the Fund's investment adviser, including the costs associated with the personnel and systems necessary to manage the Fund, and information regarding the Manager's profitability from its relationship with the Fund. The Board considered that the Manager must be able to pay and retain experienced professional personnel at competitive rates to provide services to the Fund and that maintaining the financial viability of the Manager is important in order for the Manager to continue to provide significant services to the Fund and its shareholders. In addition to considering the profits realized by the Manager, the Board also considered information regarding the direct and indirect benefits the Manager receives as a result of its relationship with the Fund, including compensation paid to the Manager's affiliates for services provided and research provided to the Manager in connection with permissible brokerage arrangements (soft dollar arrangements). CONCLUSIONS. These factors were also considered by the independent Trustees meeting separately from the full Board, assisted by experienced counsel to the Fund and the independent Trustees. Fund counsel is independent of the Manager within the meaning and intent of the Securities and Exchange Commission Rules. Based on its review of the information it received and its evaluations described above, the Board, including a majority of the independent Trustees, concluded that the nature, extent and quality of the services provided to the Fund by the Manager are a benefit to the Fund and in the best interest of the Fund's shareholders and that the amount and structure of the compensation received by the Manager and its affiliates, and the revised fee structure adopted by the Board and the Manager, are reasonable in relation to the services provided. Accordingly, the Board elected to continue the advisory agreement for another year. In arriving at this decision, the Board did not single out any factor or factors as being more important than others, but considered all of the factors together. The Board judged the terms and conditions of the advisory agreement, including the management fee, in light of all of the surrounding circumstances. 46 | 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. AUDIT COMMITTEE OF LISTED REGISTRANTS Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS 1. The Fund's Governance Committee (the "Committee") will evaluate potential Board candidates to assess their qualifications. The Committee shall have the authority, upon approval of the Board, to retain an executive search firm to assist in this effort. The Committee may consider recommendations by business and personal contacts of current Board members and by executive search firms which the Committee may engage from time to time and may also consider shareholder recommendations. The Committee may consider the advice and recommendation of the Funds' investment manager and its affiliates in making the selection. 2. The Committee shall screen candidates for Board membership. The Committee has not established specific qualifications that it believes must be met by a trustee nominee. In evaluating trustee nominees, the Committee considers, among other things, an individual's background, skills, and experience; whether the individual is an "interested person" as defined in the Investment Company Act of 1940; and whether the individual would be deemed an "audit committee financial expert" within the meaning of applicable SEC rules. The Committee also considers whether the individual's background, skills, and experience will complement the background, skills, and experience of other nominees and will contribute to the Board. There are no differences in the manner in which the Committee evaluates nominees for trustees based on whether the nominee is recommended by a shareholder. 3. The Committee may consider nominations from shareholders for the Board at such times as the Committee meets to consider new nominees for the Board. The Committee shall have the sole discretion to determine the candidates to present to the Board and, in such cases where required, to shareholders. Recommendations for trustee nominees should, at a minimum, be accompanied by the following: o the name, address, and business, educational, and/or other pertinent background of the person being recommended; o a statement concerning whether the person is an "interested person" as defined in the Investment Company Act of 1940; o any other information that the Funds would be required to include in a proxy statement concerning the person if he or she was nominated; and o the name and address of the person submitting the recommendation and, if that person is a shareholder, the period for which that person held Fund shares. The recommendation also can include any additional information which the person submitting it believes would assist the Committee in evaluating the recommendation. 4. Shareholders should note that a person who owns securities issued by Massachusetts Mutual Life Insurance Company (the parent company of the Funds' investment adviser) would be deemed an "interested person" under the Investment Company Act of 1940. In addition, certain other relationships with Massachusetts Mutual Life Insurance Company or its subsidiaries, with registered broker-dealers, or with the Funds' outside legal counsel may cause a person to be deemed an "interested person." 5. Before the Committee decides to nominate an individual as a trustee, Committee members and other directors customarily interview the individual in person. In addition, the individual customarily is asked to complete a detailed questionnaire which is designed to elicit information which must be disclosed under SEC and stock exchange rules and to determine whether the individual is subject to any statutory disqualification from serving as a trustee of a registered investment company. ITEM 11. CONTROLS AND PROCEDURES. Based on their evaluation of the registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of February 28, 2006, the registrant's principal executive officer and principal financial officer found the registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by the registrant in the reports that it files under the Securities Exchange Act of 1934 (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. There have been no changes in the registrant's internal controls over financial reporting that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a) (1) Not applicable to semiannual reports. (2) Exhibits attached hereto. (3) Not applicable. (b) Exhibit attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Oppenheimer Developing Markets Fund By: /s/ John V. Murphy ---------------------------- John V. Murphy Principal Executive Officer Date: April 19, 2006 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ John V. Murphy ---------------------------- John V. Murphy Principal Executive Officer Date: April 19, 2006 By: /s/ Brian W. Wixted ---------------------------- Brian W. Wixted Principal Financial Officer Date: April 19, 2006 EX-99.CERT 2 rs785_31955cert.txt RS785_31955CERT 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 officer 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 second fiscal quarter of the period covered by this report 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 officer 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 19, 2006 /s/ John V. Murphy - ---------------------------- John V. Murphy Principal 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 officer 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 second fiscal quarter of the period covered by this report 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 officer 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 19, 2006 /s/ Brian W. Wixted - ---------------------------- Brian W. Wixted Principal Financial Officer EX-99.906CERT 3 rs785_31955ex906.txt RS785_31955EX906 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, Principal Executive Officer, and Brian W. Wixted, Principal Financial Officer, of Oppenheimer Developing Markets Fund (the "Registrant"), each certify to the best of his knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended February 28, 2006 (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. Principal Executive Officer Principal Financial Officer Oppenheimer Developing Markets Fund Oppenheimer Developing Markets Fund /s/ John V. Murphy /s/ Brian W. Wixted - ----------------------------------- ----------------------------------- John V. Murphy Brian W. Wixted Date: April 19, 2006 Date: April 19, 2006 -----END PRIVACY-ENHANCED MESSAGE-----