-----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, O5r2/xz2XIY3V7IL4eksdJElpS0/eREknnv93+VB2Vce9a45CZxUrs/PmEiK66pc KerlXbdxg2mIoE5K+n9jVQ== 0000935069-04-000311.txt : 20040302 0000935069-04-000311.hdr.sgml : 20040302 20040302111939 ACCESSION NUMBER: 0000935069-04-000311 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040302 EFFECTIVENESS DATE: 20040302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER INTEGRITY FUNDS CENTRAL INDEX KEY: 0000701265 IRS NUMBER: 042509354 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-03420 FILM NUMBER: 04641449 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 BUSINESS PHONE: 303768-3200 MAIL ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: 3RD FL CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 FORMER COMPANY: FORMER CONFORMED NAME: MASSMUTUAL INTEGRITY FUNDS DATE OF NAME CHANGE: 19910329 FORMER COMPANY: FORMER CONFORMED NAME: MASSMUTUAL LIQUID ASSETS TRUST DATE OF NAME CHANGE: 19880403 N-CSR 1 ra0285_9466vef.txt RA0285_9466VEF 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 811-3420 OPPENHEIMER BOND 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: DECEMBER 31 ----------- Date of reporting period: JANUARY 1, 2003 - DECEMBER 31, 2003 ITEM 1. REPORTS TO STOCKHOLDERS. FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED DECEMBER 31, 2003, FOLLOWED BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED MARKET INDEX. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. Oppenheimer Bond Fund delivered a competitive yield and total return in the 12 months ended December 31, 2003, largely on the strength of our investments in corporate bonds. Throughout the period, we maintained an above-average weighting in a diverse group of investment-grade bonds as well as a modest investment in bonds rated BBB and below, including investments in high-yield (i.e., non-investment grade, also known as "junk bonds") issues. These "junk bonds" represented such diverse industries as automotive manufacturing, telecommunications and media, among others. Emphasizing this portion of the credit spectrum proved very beneficial as beaten-down BBB and high-yield bonds rapidly regained ground and were major contributors to both yield and total return. We also maintained a position in high-coupon mortgage-backed securities throughout the year. These securities gave a boost to the Fund's yield but also increased its volatility. We entered the year anticipating that interest rates and prepayment levels would stabilize. As it turned out, economic woes and the impending war with Iraq exerted a downward pressure on interest rates early in the period, and prepayments continued to rise as homeowners refinanced in record numbers. Our mortgage-backed securities, which generated monthly income from older mortgages with higher coupons, were more sensitive to this change in interest rates. That risk led to price weakness, and for several months our holdings underperformed in comparison to lower-coupon mortgage backed securities. Following the mid-summer turnaround in rates, however, the market showed renewed interest in these securities and their prices recovered significantly. Expecting a year of stable or possibly rising rates, we shortened the Fund's duration early on. Initially, when rates declined, this positioning hurt the Fund. But, as the economic picture brightened and rates quickly reversed course, our short duration proved to be an advantage, insulating the Fund from rapid price declines and making it more competitive. By August rates had reached levels that, in our opinion, seemed reasonable in light of the economic situation. We extended the duration to neutral (i.e., roughly the same as the benchmark index). Our investments in Treasury and agency securities performed well but accounted for a much lesser portion of the fund's overall results. 6 | OPPENHEIMER BOND FUND COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the performance of a hypothetical $10,000 investment in each class of shares of the Fund held until December 31, 2003. In the case of Class A and Class B shares, performance is measured for the ten year period commencing December 31, 1993. In the case of Class C shares, performance is measured from inception of the class on July 11, 1995. In the case of Class N shares, performance is measured from inception of the class on March 1, 2001. In the case of Class Y shares, performance is measured from inception of the class on April 27, 1998. The performance information for the Lehman Brothers Credit Index in the graphs begins on December 31, 1993 for Class A and Class B, June 30, 1995 for Class C, February 28, 2001 for Class N and April 30, 1998 for Class Y shares. The Fund's performance reflects the deduction of the maximum initial sales charge on Class A shares, the applicable contingent deferred sales charge on Class B, Class C and Class N shares, and reinvestments of all dividends and capital gains distributions. There are no sales charges on Class Y shares. Past performance cannot guarantee future results. The Fund's performance is compared to the performance of the Lehman Brothers Credit Index, formerly known as Lehman Brothers Corporate Bond Index, a broad-based, unmanaged index of publicly-issued non-convertible investment grade corporate debt of U.S. issuers, widely recognized as a measure of the U.S. fixed-rate corporate bond market. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs, and none of the data in the graphs shows the effect of taxes. The Fund's performance reflects the effects of the Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the investments in the index. 7 | OPPENHEIMER BOND FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS A SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Bond Fund (Class A) Lehman Brothers Credit Index [LINE CHART] Oppenheimer Bond Fund (Class A) Lehman Brothers Credit Index 12/31/1993 $ 9,525 $10,000 03/31/1994 9,224 9,648 06/30/1994 9,094 9,496 09/30/1994 9,136 9,566 12/31/1994 9,157 9,607 03/31/1995 9,611 10,176 06/30/1995 10,210 10,933 09/30/1995 10,305 11,191 12/31/1995 10,707 11,744 03/31/1996 10,566 11,440 06/30/1996 10,618 11,492 09/30/1996 10,857 11,722 12/31/1996 11,228 12,130 03/31/1997 11,212 12,008 06/30/1997 11,644 12,502 09/30/1997 12,059 12,992 12/31/1997 12,366 13,371 03/31/1998 12,577 13,575 06/30/1998 12,837 13,925 09/30/1998 13,054 14,430 12/31/1998 13,059 14,517 03/31/1999 13,000 14,414 06/30/1999 12,833 14,188 09/30/1999 12,786 14,228 12/31/1999 12,844 14,233 03/31/2000 12,961 14,437 06/30/2000 13,070 14,615 09/30/2000 13,319 15,063 12/31/2000 13,589 15,570 03/31/2001 14,127 16,235 06/30/2001 14,272 16,408 09/30/2001 14,791 17,037 12/31/2001 14,547 17,189 03/31/2002 14,486 17,144 06/30/2002 14,901 17,640 09/30/2002 15,641 18,431 12/31/2002 16,010 18,998 03/31/2003 16,284 19,454 06/30/2003 16,760 20,387 09/30/2003 16,832 20,358 12/31/2003 16,949 20,459 AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES OF THE FUND WITH SALES CHARGE AT 12/31/03 1-Year 0.84% 5-Year 4.33% 10-Year 5.42% Inception Date 4/15/88 8 | OPPENHEIMER BOND FUND CLASS B SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Bond Fund (Class B) Lehman Brothers Credit Index [LINE CHART] Oppenheimer Bond Fund (Class B) Lehman Brothers Credit Index 12/31/1993 $10,000 $10,000 03/31/1994 9,662 9,648 06/30/1994 9,518 9,496 09/30/1994 9,543 9,566 12/31/1994 9,547 9,607 03/31/1995 10,002 10,176 06/30/1995 10,606 10,933 09/30/1995 10,684 11,191 12/31/1995 11,080 11,744 03/31/1996 10,902 11,440 06/30/1996 10,946 11,492 09/30/1996 11,172 11,722 12/31/1996 11,522 12,130 03/31/1997 11,494 12,008 06/30/1997 11,914 12,502 09/30/1997 12,316 12,992 12/31/1997 12,606 13,371 03/31/1998 12,797 13,575 06/30/1998 13,037 13,925 09/30/1998 13,231 14,430 12/31/1998 13,212 14,517 03/31/1999 13,127 14,414 06/30/1999 12,922 14,188 09/30/1999 12,863 14,228 12/31/1999 12,905 14,233 03/31/2000 13,022 14,437 06/30/2000 13,132 14,615 09/30/2000 13,382 15,063 12/31/2000 13,653 15,570 03/31/2001 14,194 16,235 06/30/2001 14,339 16,408 09/30/2001 14,861 17,037 12/31/2001 14,615 17,189 03/31/2002 14,554 17,144 06/30/2002 14,971 17,640 09/30/2002 15,714 18,431 12/31/2002 16,086 18,998 03/31/2003 16,361 19,454 06/30/2003 16,839 20,387 09/30/2003 16,911 20,358 12/31/2003 17,029 20,459 AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES OF THE FUND WITH SALES CHARGE AT 12/31/03 1-Year 0.05% 5-Year 4.22% 10-Year 5.47% Inception Date 5/3/93 THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR MORE CURRENT PERFORMANCE DATA, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800 CALL OPP (255.5677). FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE ON CLASS Y SHARES. SEE PAGE 13 FOR FURTHER DETAILS. GRAPHS ARE NOT DRAWN TO SAME SCALE. 9 | OPPENHEIMER BOND FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS C SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Bond Fund (Class C) Lehman Brothers Credit Index [LINE CHART] Oppenheimer Bond Fund (Class C) Lehman Brothers Credit Index 07/11/1995 $10,000 $10,000 09/30/1995 10,007 10,236 12/31/1995 10,376 10,742 03/31/1996 10,212 10,464 06/30/1996 10,243 10,512 09/30/1996 10,464 10,722 12/31/1996 10,791 11,095 03/31/1997 10,766 10,983 06/30/1997 11,158 11,436 09/30/1997 11,535 11,883 12/31/1997 11,805 12,230 03/31/1998 11,984 12,417 06/30/1998 12,208 12,737 09/30/1998 12,391 13,199 12/31/1998 12,373 13,279 03/31/1999 12,294 13,184 06/30/1999 12,102 12,978 09/30/1999 12,046 13,015 12/31/1999 12,067 13,019 03/31/2000 12,165 13,205 06/30/2000 12,232 13,368 09/30/2000 12,455 13,778 12/31/2000 12,683 14,241 03/31/2001 13,148 14,850 06/30/2001 13,271 15,008 09/30/2001 13,714 15,583 12/31/2001 13,462 15,723 03/31/2002 13,382 15,681 06/30/2002 13,753 16,135 09/30/2002 14,411 16,859 12/31/2002 14,709 17,378 03/31/2003 14,950 17,794 06/30/2003 15,343 18,648 09/30/2003 15,393 18,621 12/31/2003 15,471 18,714 AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES OF THE FUND WITH SALES CHARGE AT 12/31/03 1-Year 4.18% 5-Year 4.57% Since Inception 5.29% Inception Date 7/11/95 10 | OPPENHEIMER BOND FUND CLASS N SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Bond Fund (Class N) Lehman Brothers Credit Index [LINE CHART] Oppenheimer Bond Fund (Class N) Lehman Brothers Credit Index 03/01/2001 $10,000 $10,000 03/31/2001 10,025 10,062 06/30/2001 10,136 10,169 09/30/2001 10,496 10,559 12/31/2001 10,318 10,653 03/31/2002 10,268 10,625 06/30/2002 10,567 10,932 09/30/2002 11,088 11,423 12/31/2002 11,321 11,775 03/31/2003 11,519 12,057 06/30/2003 11,833 12,635 09/30/2003 11,883 12,617 12/31/2003 11,944 12,680 AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES OF THE FUND WITH SALES CHARGE AT 12/31/03 1-Year 4.51% Since Inception 6.47% Inception Date 3/1/01 THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR MORE CURRENT PERFORMANCE DATA, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800 CALL OPP (255.5677). FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE ON CLASS Y SHARES. SEE PAGE 13 FOR FURTHER DETAILS. GRAPHS ARE NOT DRAWN TO SAME SCALE. 11 | OPPENHEIMER BOND FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS Y SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Bond Fund (Class Y) Lehman Brothers Credit Index [LINE CHART] Oppenheimer Bond Fund (Class Y) Lehman Brothers Credit Index 04/27/1998 $10,000 $10,000 06/30/1998 10,254 10,193 09/30/1998 10,436 10,563 12/31/1998 10,440 10,627 03/31/1999 10,405 10,551 06/30/1999 10,272 10,386 09/30/1999 10,250 10,416 12/31/1999 10,297 10,419 03/31/2000 10,380 10,568 06/30/2000 10,471 10,698 09/30/2000 10,667 11,026 12/31/2000 11,031 11,397 03/31/2001 11,464 11,884 06/30/2001 11,594 12,011 09/30/2001 12,027 12,471 12/31/2001 11,836 12,583 03/31/2002 11,797 12,550 06/30/2002 12,163 12,913 09/30/2002 12,784 13,492 12/31/2002 13,088 13,907 03/31/2003 13,340 14,241 06/30/2003 13,732 14,924 09/30/2003 13,820 14,902 12/31/2003 13,920 14,976 AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 12/31/03 1-Year 6.35% 5-Year 5.92% Since Inception 6.00% Inception Date 4/27/98 THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR MORE CURRENT PERFORMANCE DATA, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800 CALL OPP (255.5677). FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE ON CLASS Y SHARES. SEE PAGE 13 FOR FURTHER DETAILS. GRAPHS ARE NOT DRAWN TO SAME SCALE. 12 | OPPENHEIMER BOND FUND NOTES - -------------------------------------------------------------------------------- Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. 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 funds, and may be obtained by asking your financial advisor, calling us at 1.800.CALL OPP (1.800.225.5677) or visit the OppenheimerFunds website at www.oppenheimerfunds.com. Read the prospectus carefully before you invest or send money. CLASS A shares of the Fund were first publicly offered on 4/15/88. The Fund's maximum sales charge for Class A shares was lower prior to 3/29/91, so actual performance may have been higher. Unless otherwise noted, Class A returns include the current maximum initial sales charge of 4.75%. CLASS B shares of the Fund were first publicly offered on 5/3/93. 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 7/11/95. 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 an annual 0.75% 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 4/27/98. 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. 13 | OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS DECEMBER 31, 2003 - --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------- ASSET-BACKED SECURITIES--23.1% AQ Finance NIM Trust, Home Equity Collateralized Mtg. Obligations, Series 2002-1, Cl. Note, 9.50%, 6/25/32 1 $ 53,087 $ 53,087 - ----------------------------------------------------------------------------------- Bank One Auto Securitization Trust, Automobile Receivables, Series 2003-1, Cl. A2, 1.29%, 8/21/06 3,990,000 3,989,074 - ----------------------------------------------------------------------------------- BMW Vehicle Owner Trust, Automobile Loan Certificates, Series 2003-A, Cl. A2, 1.45%, 11/25/05 1 6,045,141 6,054,963 - ----------------------------------------------------------------------------------- Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed Nts., Series 2002-4, Cl. A2B, 1.74%, 1/17/05 1 1,638,579 1,641,098 - ----------------------------------------------------------------------------------- Caterpillar Financial Asset Trust, Equipment Loan Pass-Through Certificates, Series 2003-A, Cl. A2, 1.25%, 10/25/05 3,120,000 3,121,270 - ----------------------------------------------------------------------------------- Centex Home Equity Co. LLC, Home Equity Loan Asset-Backed Certificates: Series 2003-B, Cl. AF1, 1.64%, 2/25/18 1 1,471,840 1,471,452 Series 2003-C, Cl. AF1, 2.14%, 7/25/18 4,266,695 4,276,609 - ----------------------------------------------------------------------------------- Chase Funding Mortgage Loan Asset-Backed Certificates, Home Equity Mtg. Obligations: Series 2003-3, Cl. 1A1, 1.199%, 8/25/17 2 2,289,211 2,289,497 Series 2003-4, Cl. 1A1, 1.24%, 9/25/17 2 5,035,453 5,036,693 - ----------------------------------------------------------------------------------- Chase Manhattan Auto Owner Trust, Automobile Loan Pass-Through Certificates: Series 2003-A, Cl. A2, 1.26%, 1/16/06 1 1,970,000 1,971,292 Series 2003-B, Cl. A2, 1.287%, 3/15/06 2,430,000 2,430,828 - ----------------------------------------------------------------------------------- CitiFinancial Mortgage Securities, Inc., Home Equity Collateralized Mtg. Obligations: Series 2002-1, Cl. AF1, 2.474%, 9/25/32 1,961,466 1,966,313 Series 2003-2, Cl. AF1, 1.219%, 5/25/33 1,2 2,339,347 2,339,248 Series 2003-3, Cl. AF1, 1.261%, 8/25/33 1,2 3,252,197 3,252,272 - ----------------------------------------------------------------------------------- DaimlerChrysler Auto Trust, Automobile Loan Pass-Through Certificates: Series 2002-B, Cl. A2, 2.20%, 4/6/05 759,563 760,817 Series 2003-A, Cl. A2, 1.52%, 12/8/05 6,920,000 6,932,525 Series 2003-B, Cl. A2, 1.61%, 7/8/06 7,480,000 7,423,152 - ----------------------------------------------------------------------------------- Ford Credit Auto Owner Trust, Automobile Loan Pass-Through Certificates, Series 2002-D, Cl. A2A, 2.10%, 3/15/05 2,040,669 2,045,740 - ----------------------------------------------------------------------------------- Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts.: Series 2002-2, Cl. A1, 1.91%, 4/16/07 2,813,382 2,823,004 Series 2003-3, Cl. A1, 1.50%, 1/15/08 6,128,608 6,139,132 - ----------------------------------------------------------------------------------- Honda Auto Receivables Owner Trust, Automobile Receivables Obligations: Series 2002-3, Cl. A2, 2.26%, 12/18/04 463,097 463,628 Series 2002-4, Cl. A2, 1.66%, 6/15/05 1,837,397 1,840,560 Series 2003-2, Cl. A2, 1.34%, 12/21/05 5,646,000 5,651,754 Series 2003-3, Cl. A2, 1.52%, 4/21/06 7,690,000 7,702,616 Series 2003-4, Cl. A2, 1.58%, 7/17/06 6,460,000 6,470,505 - ----------------------------------------------------------------------------------- Household Automotive Trust, Automobile Loan Certificates: Series 2002-2, Cl. A2, 2.15%, 12/19/05 744,567 745,924 Series 2003-2, Cl. A2, 1.56%, 12/18/06 3,270,000 3,274,386 - ----------------------------------------------------------------------------------- Lease Investment Flight Trust, Collateralized Aviation Obligations, Series 1A, Cl. D2, 8%, 7/15/31 1 3,022,949 45,344 - ----------------------------------------------------------------------------------- Litigation Settlement Monetized Fee Trust, Asset-Backed Certificates, Series 2001-1A, Cl. A1, 8.33%, 4/25/31 1 2,472,112 2,435,803
14 | OPPENHEIMER BOND FUND
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------- ASSET-BACKED SECURITIES Continued M&I Auto Loan Trust, Automobile Loan Certificates: Series 2002-1, Cl. A2, 1.95%, 7/20/05 $ 148,891 $ 149,045 Series 2002-1, Cl. A3, 2.49%, 10/22/07 4,920,000 4,962,738 Series 2003-1, Cl. A2, 1.60%, 7/20/06 5,490,000 5,492,108 - ----------------------------------------------------------------------------------- MMCA Auto Lease Trust, Auto Retail Installment Contracts, Series 2002-A, Cl. A2, 1.29%, 5/16/05 2,3 1,123,769 1,124,606 - ----------------------------------------------------------------------------------- MSF Funding LLC, Collateralized Mtg. Obligations, Series 2000-1, Cl. C, 8.491%, 7/25/07 1,2 401,919 60,288 - ----------------------------------------------------------------------------------- NC Finance Trust, Collateralized Mtg. Obligations, Series 1999-I, Cl. ECFD, 8.75%, 12/25/28 1 1,791,755 519,108 - ----------------------------------------------------------------------------------- Nissan Auto Lease Trust, Auto Lease Obligations: Series 2002-A, Cl. A2, 1.86%, 11/15/04 1 2,217,485 2,219,579 Series 2003-A, Cl. A2, 1.69%, 12/15/05 4,000,000 4,011,082 - ----------------------------------------------------------------------------------- Nissan Auto Receivables Owner Trust, Automobile Receivable Nts., Series 2003-B, Cl. A2, 1.20%, 11/15/05 7,540,000 7,542,947 - ----------------------------------------------------------------------------------- Salomon Smith Barney Auto Loan Trust, Asset-Backed Auto Loan Obligations, Series 2002-1, Cl. A2, 1.83%, 9/15/05 1 2,071,720 2,076,055 - ----------------------------------------------------------------------------------- Tobacco Settlement Authority, Asset-Backed Securities, Series 2001-A, 6.79%, 6/1/10 1,330,000 1,347,676 - ----------------------------------------------------------------------------------- Toyota Auto Receivables Owner Trust, Automobile Mtg.-Backed Obligations: Series 2002-B, Cl. A3, 3.76%, 6/15/06 1,906,482 1,931,995 Series 2003-A, Cl. A2, 1.28%, 8/15/05 7,093,973 7,100,439 Series 2003-B, Cl. A2, 1.43%, 2/15/06 4,800,000 4,802,484 - ----------------------------------------------------------------------------------- USAA Auto Owner Trust, Automobile Loan Asset-Backed Nts.: Series 2002-1, Cl. A3, 2.41%, 10/16/06 2,786,136 2,806,155 Series 2003-1, Cl. A2, 1.22%, 4/17/06 4,500,000 4,501,717 - ----------------------------------------------------------------------------------- Volkswagen Auto Lease Trust, Automobile Lease Asset-Backed Securities, Series 2002-A, Cl. A2, 1.77%, 2/20/05 2,954,186 2,959,191 - ----------------------------------------------------------------------------------- Volkswagen Auto Loan Enhanced Trust, Automobile Loan Receivables: Series 2003-1, Cl. A2, 1.11%, 12/20/05 3,150,000 3,148,831 Series 2003-2, Cl. A2, 1.55%, 6/20/06 3,720,000 3,726,004 - ----------------------------------------------------------------------------------- Whole Auto Loan Trust, Automobile Loan Receivables: Series 2002-1, Cl. A2, 1.88%, 6/15/05 7,186,330 7,205,882 Series 2003-1, Cl. A2A, 1.40%, 4/15/06 7,130,000 7,136,197 -------------- Total Asset-Backed Securities (Cost $173,186,974) 169,472,713 - ----------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS--41.7% - ----------------------------------------------------------------------------------- GOVERNMENT AGENCY--38.5% - ----------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED--38.3% Federal Home Loan Mortgage Corp.: 5%, 1/1/34 4 4,581,000 4,522,308 7%, 9/1/33-11/1/33 9,832,093 10,427,780 8%, 4/1/16 2,119,793 2,275,303 9%, 3/1/17-5/1/25 594,976 662,834 12.50%, 4/1/14 3,562 4,085 13.50%, 11/1/10 6,791 7,797 - ----------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Gtd. Mtg. Pass-Through Participation Certificates, Series 151, Cl. F, 9%, 5/15/21 118,510 118,710
15 | OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS CONTINUED - --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED Continued Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment Conduit Multiclass Pass-Through Certificates: Series 2500, Cl. FD, 1.62%, 3/15/32 2 $ 1,698,814 $ 1,687,731 Series 2526, Cl. FE, 1.52%, 6/15/29 2 1,955,383 1,949,822 Series 2551, Cl. FD, 1.52%, 1/15/33 2 1,694,293 1,701,180 - ----------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security: Series 176, Cl. IO, (0.11)%, 6/1/26 5 2,401,211 401,346 Series 177, Cl. B, (2.489)%, 7/1/26 5 4,025,899 710,549 Series 183, Cl. IO, 3.34%, 4/1/27 5 3,882,983 661,236 Series 184, Cl. IO, 0.119%, 12/1/26 5 3,814,176 642,496 Series 206, Cl. IO, (20.375)%, 12/15/29 5 1,608,875 291,006 - ----------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Structured Pass- Through Securities, Collateralized Mtg. Obligations: Series H006, Cl. A1, 1.724%, 4/15/08 1,117,886 1,117,017 Series T-42, Cl. A2, 5.50%, 2/25/42 754,999 767,952 - ----------------------------------------------------------------------------------- Federal National Mortgage Assn.: 5%, 1/1/34 4 17,613,000 17,431,375 5.50%, 1/14/34 4 25,757,000 26,095,061 6.50%, 1/25/34 4 75,378,000 78,840,715 7%, 1/1/09-11/1/33 5,773,872 6,124,697 7%, 7/1/32-1/25/34 4 107,078,811 113,403,779 7.50%, 2/1/08-3/1/08 45,254 48,060 8.50%, 7/1/32 642,245 693,569 - ----------------------------------------------------------------------------------- Federal National Mortgage Assn., Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates: Trust 1992-34, Cl. G, 8%, 3/25/22 96,783 101,912 Trust 2002-77, Cl. WF, 1.52%, 12/18/32 2 2,938,340 2,947,481 - ----------------------------------------------------------------------------------- Federal National Mortgage Assn., Gtd. Mtg. Pass-Through Certificates, 8%, 8/1/17 42,370 45,633 - ----------------------------------------------------------------------------------- Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Trust 2003-81, Cl. PA, 5%, 2/25/12 1,464,826 1,500,345 - ----------------------------------------------------------------------------------- Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates Interest-Only Stripped Mtg.-Backed Security: Trust 2002-47, Cl. NS, 24.442%, 4/25/32 5 5,686,487 583,812 Trust 2002-51, Cl. S, 24.442%, 8/25/32 5 5,221,423 531,139 - ----------------------------------------------------------------------------------- Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security: Trust 222, Cl. 2, (2.144)%, 6/1/23 5 5,057,342 949,832 Trust 240, Cl. 2, (4.525)%, 9/1/23 5 7,993,109 1,477,763 Trust 252, Cl. 2, (6.48)%, 11/1/23 5 5,589,587 1,120,601 Trust 273, Cl. 2, (0.977)%, 7/1/26 5 1,738,603 293,535 Trust 303, Cl. IO, (17.835)%, 11/1/29 5 660,587 122,601 Trust 2002-52, Cl. SD, 6.90%, 9/25/32 5 7,145,215 655,603 -------------- 280,916,665
16 | OPPENHEIMER BOND FUND
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------- GNMA/GUARANTEED--0.2% Government National Mortgage Assn.: 4.75%, 7/20/25-7/20/27 $ 74,010 $ 75,785 7%, 7/15/09 42,498 45,611 8%, 6/15/05-10/15/06 126,924 132,995 8.50%, 8/15/17-12/15/17 711,584 789,837 9%, 2/15/09-6/15/09 30,500 33,523 10%, 11/15/09 28,421 31,295 10.50%, 12/15/17-5/15/21 77,359 87,778 11%, 10/20/19 108,432 122,634 12%, 5/15/14 762 879 -------------- 1,320,337 - ----------------------------------------------------------------------------------- PRIVATE--3.2% - ----------------------------------------------------------------------------------- COMMERCIAL--1.9% Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates: Series 1996-D2, Cl. A3, 7.515%, 2/14/29 2 127 134 Series 1996-MD6, Cl. A3, 7.361%, 11/13/29 2 800,000 901,582 - ----------------------------------------------------------------------------------- Asset Securitization Corp., Interest-Only Stripped Mtg.-Backed Security Collateralized Mtg. Obligations, Series 1997-D4, Cl. PS1, 8.347%, 4/14/29 5 48,836,513 2,214,775 - ----------------------------------------------------------------------------------- Capital Lease Funding Securitization LP, Interest-Only Corporate-Backed Pass-Through Certificates, Series 1997-CTL1, 9.268%, 6/22/24 3,5 11,223,749 424,321 - ----------------------------------------------------------------------------------- Commercial Mortgage Acceptance Corp., Commercial Mtg. Obligations, Series 1996-C1, Cl. D, 7.699%, 12/25/20 1,2 236,181 236,789 - ----------------------------------------------------------------------------------- Commercial Mortgage Acceptance Corp., Interest-Only Stripped Mtg.- Backed Security, Series 1996-C1, Cl. X-2, (33.333)%, 12/25/20 1,5 3,874,342 1,211 - ----------------------------------------------------------------------------------- DLJ Commercial Mortgage Corp., Commercial Mtg. Pass-Through Certificates, Series 1999-STF1, Cl. B6, 7/5/08 1,6 21,426,669 21,427 - ----------------------------------------------------------------------------------- DLJ Mortgage Acceptance Corp., Commercial Mtg. Obligations, Series 1996-CF1, Cl. A3, 8.033%, 3/13/28 2 2,000,000 2,152,815 - ----------------------------------------------------------------------------------- J.P. Morgan Commercial Mortgage Finance Corp., Commercial Mtg. Obligations, Series 2000-C9, Cl. A2, 7.77%, 10/15/32 5,000,000 5,859,437 - ----------------------------------------------------------------------------------- Lehman Brothers Commercial Conduit Mortgage Trust, Interest-Only Stripped Mtg.-Backed Security, Series 1998-C1, Cl. IO, 10.431%, 2/18/28 5 14,843,344 525,950 - ----------------------------------------------------------------------------------- Lehman Structured Securities Corp., Collateralized Mtg. Obligations, Series 2002-GE1, Cl. A, 2.514%, 7/26/24 1 409,830 390,329 - ----------------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Inc., Interest-Only Commercial Mtg. Pass-Through Certificates, Series 1999-C1, Cl. X, 10.241%, 5/18/32 5 268,759,911 1,266,316 -------------- 13,995,086 - ----------------------------------------------------------------------------------- OTHER--0.3% CIT Equipment Collateral, Equipment Receivable-Backed Nts., Series 2003-EF1, Cl. A2, 1.49%, 12/20/05 1,900,000 1,900,923 - ----------------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VI, Inc., Interest-Only Stripped Mtg.-Backed Security, Series 1987-3, Cl. B, (21.587)%, 10/23/17 5 33,453 8,554 - ----------------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VI, Inc., Principal-Only Stripped Mtg.-Backed Security, Series 1987-3, Cl. A, 2.521%, 10/23/17 7 49,510 45,483 -------------- 1,954,960
17 | OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS CONTINUED - --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------- RESIDENTIAL--1.0% ARC Net Interest Margin Trust, Collateralized Mtg. Obligations, Series 2001-6A, Cl. A, 7.25%, 10/27/31 1 $ 28,158 $ 26,593 - ----------------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Inc., Commercial Mtg. Pass-Through Certificates, Series 1996-B, Cl. 1, 6.865%, 4/25/26 1,2 340,699 296,195 - ----------------------------------------------------------------------------------- Structured Asset Securities Corp., Collateralized Mtg. Obligations Pass-Through Certificates, Series 2002-AL1, Cl. B2, 3.45%, 2/25/32 3,002,277 2,708,557 - ----------------------------------------------------------------------------------- Washington Mutual Mortgage Securities Corp., Collateralized Mtg. Obligations Pass-Through Certificates, Series 2003-AR7, Cl. A1, 1.507%, 8/25/33 2 4,107,008 4,110,122 -------------- 7,141,467 -------------- Total Mortgage-Backed Obligations (Cost $302,588,390) 305,328,515 - ----------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS--26.2% Federal Home Loan Bank Unsec. Bonds: 2.875%, 12/15/06 19,320,000 19,472,203 4.875%, 11/15/13 1,800,000 1,823,002 - ----------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp. Unsec. Nts., 4.50%, 1/15/13 4,020,000 4,007,052 - ----------------------------------------------------------------------------------- Federal National Mortgage Assn. Unsec. Nts.: 4.25%, 7/15/07 8,600,000 8,989,098 5.25%, 6/15/06 15,000,000 16,055,160 5.50%, 2/15/06 8,375,000 8,970,329 6.375%, 6/15/09 20,400,000 23,095,248 - ----------------------------------------------------------------------------------- Freddie Mac Unsec. Nts., 6.875%, 9/15/10 7,600,000 8,838,884 - ----------------------------------------------------------------------------------- Tennessee Valley Authority Bonds: 5.375%, 11/13/08 2,590,000 2,797,089 7.125%, 5/1/30 1,754,000 2,110,985 - ----------------------------------------------------------------------------------- U.S. Treasury Bonds: 4.25%, 8/15/13 10,447,000 10,463,329 5.375%, 2/15/31 4,842,000 5,051,005 5.50%, 8/15/28 8 25,259,000 26,317,731 6.125%, 11/15/27 13,752,000 15,508,612 6.25%, 5/15/30 4,189,000 4,835,350 8.875%, 8/15/17 6,664,000 9,439,976 STRIPS, 2.99%, 2/15/10 9 2,490,000 1,982,234 STRIPS, 3.42%, 2/15/11 9 10,959,000 8,242,395 STRIPS, 4.96%, 2/15/16 9 2,721,000 1,500,637 STRIPS, 5.52%, 11/15/26 9 7,170,000 2,040,797 - ----------------------------------------------------------------------------------- U.S. Treasury Nts.: 3%, 11/15/07 6,200,000 6,255,223 3.25%, 12/15/08 609,000 613,330 6.50%, 2/15/10 3,000,000 3,487,032 -------------- Total U.S. Government Obligations (Cost $192,936,591) 191,896,701 - ----------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS--0.4% United Mexican States Nts., 7.50%, 1/14/12 (Cost $2,393,099) 2,370,000 2,679,285
18 | OPPENHEIMER BOND FUND
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES--30.7% - ----------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--7.7% - ----------------------------------------------------------------------------------- AUTO COMPONENTS--0.5% Delphi Corp., 6.55% Nts., 6/15/06 $ 3,145,000 $ 3,376,623 - ----------------------------------------------------------------------------------- AUTOMOBILES--2.7% American Honda Finance Corp., 3.85% Nts., 11/6/08 945,000 952,586 - ----------------------------------------------------------------------------------- DaimlerChrysler NA Holding Corp., 6.40% Nts., 5/15/06 3,765,000 4,036,065 - ----------------------------------------------------------------------------------- Ford Motor Co., 8.90% Unsec. Unsub. Debs., 1/15/32 1,090,000 1,224,988 - ----------------------------------------------------------------------------------- General Motors Acceptance Corp., 6.875% Unsec. Unsub. Nts., 8/28/12 1,505,000 1,621,773 - ----------------------------------------------------------------------------------- General Motors Corp., 8.375% Sr. Unsec. Debs., 7/15/33 4,980,000 5,798,229 - ----------------------------------------------------------------------------------- Hertz Corp. (The), 7.625% Sr. Nts., 6/1/12 5,900,000 6,401,494 -------------- 20,035,135 - ----------------------------------------------------------------------------------- HOUSEHOLD DURABLES--0.8% Beazer Homes USA, Inc., 8.625% Sr. Unsec. Nts., 5/15/11 1,685,000 1,861,925 - ----------------------------------------------------------------------------------- D.R. Horton, Inc., 9.375% Sr. Unsec. Sub. Nts., 3/15/11 1,555,000 1,772,700 - ----------------------------------------------------------------------------------- Pulte Homes, Inc., 8.375% Sr. Nts., 8/15/04 725,000 745,135 - ----------------------------------------------------------------------------------- Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 1,685,000 1,868,244 -------------- 6,248,004 - ----------------------------------------------------------------------------------- MEDIA--3.1% British Sky Broadcasting Group plc, 8.20% Sr. Unsec. Nts., 7/15/09 1,550,000 1,847,809 - ----------------------------------------------------------------------------------- Liberty Media Corp., 3.50% Nts., 9/25/06 1,810,000 1,820,451 - ----------------------------------------------------------------------------------- News America Holdings, Inc., 7.75% Sr. Unsec. Debs., 12/1/45 2,575,000 3,055,289 - ----------------------------------------------------------------------------------- TCI Communications, Inc., 9.80% Sr. Unsec. Debs., 2/1/12 4,960,000 6,479,645 - ----------------------------------------------------------------------------------- Time Warner Cos., Inc., 9.125% Debs., 1/15/13 3,080,000 3,920,711 - ----------------------------------------------------------------------------------- Time Warner Entertainment Co. LP: 8.375% Sr. Debs., 3/15/23 567,000 704,790 10.15% Sr. Nts., 5/1/12 1,037,000 1,386,385 - ----------------------------------------------------------------------------------- Walt Disney Co. (The), 6.75% Sr. Nts., 3/30/06 3,130,000 3,406,110 -------------- 22,621,190 - ----------------------------------------------------------------------------------- MULTILINE RETAIL--0.3% May Department Stores Co., 10.625% Debs., 11/1/10 405,000 542,324 - ----------------------------------------------------------------------------------- Sears Roebuck Acceptance Corp., 3.07% Nts., Series VII, 2/25/04 2 1,660,000 1,662,862 -------------- 2,205,186 - ----------------------------------------------------------------------------------- SPECIALTY RETAIL--0.3% Gap, Inc. (The), 6.90% Nts., 9/15/07 1,775,000 1,968,031 - ----------------------------------------------------------------------------------- CONSUMER STAPLES--1.3% - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--1.3% Kroger Co. (The), 7.80% Sr. Nts., 8/15/07 4,645,000 5,304,242 - ----------------------------------------------------------------------------------- Real Time Data Co., 13% Disc. Nts., 5/31/09 1,6,10,11 476,601 --
19 | OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS CONTINUED - --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------- FOOD & STAPLES RETAILING Continued Safeway, Inc.: 3.80% Sr. Unsec. Nts., 8/15/05 $ 850,000 $ 868,226 4.80% Sr. Unsec. Nts., 7/16/07 3,490,000 3,625,311 -------------- 9,797,779 - ----------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS--0.0% Styling Technology Corp., 10.875% Sr. Unsec. Sub. Nts., 7/1/08 1,6,10 145,000 -- - ----------------------------------------------------------------------------------- ENERGY--0.5% - ----------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--0.0% Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08 200,000 189,000 - ----------------------------------------------------------------------------------- OIL & GAS--0.5% Petroleos Mexicanos, 9.50% Sr. Sub. Nts., 9/15/27 1,570,000 1,860,450 - ----------------------------------------------------------------------------------- PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 3 1,700,000 1,658,053 -------------- 3,518,503 - ----------------------------------------------------------------------------------- FINANCIALS--8.4% - ----------------------------------------------------------------------------------- CAPITAL MARKETS--0.5% Credit Suisse First Boston, Inc. (USA), 6.125% Nts., 11/15/11 3,575,000 3,898,330 - ----------------------------------------------------------------------------------- COMMERCIAL BANKS--1.0% Dime Capital Trust I, 9.33% Capital Securities, Series A, 5/6/27 2,990,000 3,664,078 - ----------------------------------------------------------------------------------- Household Finance Corp., 7% Nts., 5/15/12 2,875,000 3,283,851 -------------- 6,947,929 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--1.9% CIT Group, Inc., 7.75% Sr. Unsec. Unsub. Nts., 4/2/12 3,205,000 3,792,454 - ----------------------------------------------------------------------------------- Citigroup, Inc., 6.625% Unsec. Sub. Nts., 6/15/32 1,790,000 1,945,549 - ----------------------------------------------------------------------------------- Franklin Resources, Inc., 3.70% Nts., 4/15/08 1,500,000 1,493,322 - ----------------------------------------------------------------------------------- Merrill Lynch & Co., Inc., 3.375% Nts., Series B, 9/14/07 2,190,000 2,220,204 - ----------------------------------------------------------------------------------- Morgan Stanley, 6.60% Nts., 4/1/12 3,580,000 4,004,724 -------------- 13,456,253 - ----------------------------------------------------------------------------------- INSURANCE--3.8% AXA, 8.60% Unsec. Sub. Nts., 12/15/30 2,730,000 3,453,570 - ----------------------------------------------------------------------------------- Farmers Insurance Exchange, 8.625% Nts., 5/1/24 3 1,500,000 1,572,092 - ----------------------------------------------------------------------------------- Hartford Financial Services Group, Inc. (The), 2.375% Nts., 6/1/06 1,275,000 1,269,350 - ----------------------------------------------------------------------------------- John Hancock Global Funding II: 5% Nts., 7/27/07 3 3,650,000 3,880,647 7.90% Nts., 7/2/10 3 2,415,000 2,881,501 - ----------------------------------------------------------------------------------- Nationwide Financial Services, Inc., 5.90% Nts., 7/1/12 2,985,000 3,120,623 - ----------------------------------------------------------------------------------- Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 3 4,820,000 5,967,213 - ----------------------------------------------------------------------------------- Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 3 4,680,000 5,740,689 -------------- 27,885,685
20 | OPPENHEIMER BOND FUND
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------- REAL ESTATE--1.2% EOP Operating LP: 6.763% Sr. Unsec. Nts., 6/15/07 $ 560,000 $ 620,717 7.75% Unsec. Nts., 11/15/07 3,363,000 3,858,488 - ----------------------------------------------------------------------------------- Shopping Center Associates, 6.75% Sr. Unsec. Nts., 1/15/04 3 700,000 700,920 - ----------------------------------------------------------------------------------- Vornado Realty LP, 5.625% Sr. Unsec. Unsub. Nts., 6/15/07 3,500,000 3,739,684 -------------- 8,919,809 - ----------------------------------------------------------------------------------- HEALTH CARE--1.4% - ----------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--0.9% Aetna, Inc., 7.375% Sr. Unsec. Nts., 3/1/06 1,395,000 1,535,555 - ----------------------------------------------------------------------------------- Cardinal Health, Inc., 4.45% Nts., 6/30/05 2,980,000 3,093,055 - ----------------------------------------------------------------------------------- Health Net, Inc., 8.375% Sr. Unsec. Unsub. Nts., 4/15/11 1,710,000 2,057,576 -------------- 6,686,186 - ----------------------------------------------------------------------------------- PHARMACEUTICALS--0.5% Wyeth, 5.875% Nts., 3/15/04 3,750,000 3,783,945 - ----------------------------------------------------------------------------------- INDUSTRIALS--3.3% - ----------------------------------------------------------------------------------- AEROSPACE & DEFENSE--1.0% Boeing Capital Corp., 7.375% Sr. Nts., 9/27/10 3,452,000 3,973,293 - ----------------------------------------------------------------------------------- Northrop Grumman Corp., 7.125% Sr. Nts., 2/15/11 2,270,000 2,629,187 - ----------------------------------------------------------------------------------- Raytheon Co., 6.50% Unsec. Nts., 7/15/05 830,000 884,835 -------------- 7,487,315 - ----------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--0.7% Allied Waste North America, Inc., 10% Sr. Unsec. Sub. Nts., Series B, 8/1/09 1,510,000 1,638,350 - ----------------------------------------------------------------------------------- Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 1 150,000 143,625 - ----------------------------------------------------------------------------------- Protection One, Inc./Protection One Alarm Monitoring, Inc., 7.375% Sr. Unsec. Nts., 8/15/05 1 100,000 92,500 - ----------------------------------------------------------------------------------- Safety-Kleen Corp., 9.25% Sr. Unsec. Nts., 5/15/09 1,6,10 500,000 25,000 - ----------------------------------------------------------------------------------- Waste Management, Inc.: 7% Sr. Nts., 7/15/28 700,000 755,710 7.375% Sr. Unsub. Nts., 8/1/10 1,890,000 2,186,849 -------------- 4,842,034 - ----------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--1.3% General Electric Capital Corp., 6.75% Nts., Series A, 3/15/32 800,000 888,641 - ----------------------------------------------------------------------------------- Hutchison Whampoa International Ltd., 7.45% Sr. Bonds, 11/24/33 3 1,765,000 1,845,050 - ----------------------------------------------------------------------------------- Tyco International Group SA, 6.75% Sr. Unsub. Nts., 2/15/11 5,900,000 6,475,250 -------------- 9,208,941 - ----------------------------------------------------------------------------------- MARINE--0.0% Navigator Gas Transport plc, 10.50% First Priority Ship Mtg. Nts., 6/30/07 1,6,10 300,000 127,500 - ----------------------------------------------------------------------------------- ROAD & RAIL--0.3% CSX Corp., 6.25% Unsec. Nts., 10/15/08 2,175,000 2,386,138
21 | OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS CONTINUED - --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--0.0% - ----------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--0.0% Orion Network Systems, Inc., 12.50% Sr. Disc. Nts., 1/15/07 1,6 $ 200,000 $ 105,500 - ----------------------------------------------------------------------------------- MATERIALS--0.9% - ----------------------------------------------------------------------------------- CHEMICALS--0.0% Morton International, Inc., 9.65% Credit Sensitive Nts., 6/1/20 85,000 113,267 - ----------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS--0.9% MeadWestvaco Corp., 2.75% Nts., 12/1/05 2,865,000 2,842,089 - ----------------------------------------------------------------------------------- Weyerhaeuser Co., 5.50% Unsec. Unsub. Nts., 3/15/05 3,190,000 3,321,932 -------------- 6,164,021 - ----------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--3.1% - ----------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--2.6% British Telecommunications plc, 7.875% Nts., 12/15/05 2,740,000 3,021,168 - ----------------------------------------------------------------------------------- Citizens Communications Co., 9.25% Sr. Nts., 5/15/11 1,960,000 2,321,022 - ----------------------------------------------------------------------------------- Deutsche Telekom International Finance BV, 8.50% Unsub. Nts., 6/15/10 2,800,000 3,390,722 - ----------------------------------------------------------------------------------- France Telecom SA: 8.45% Sr. Unsec. Nts., 3/1/06 1,675,000 1,872,084 9.75% Sr. Unsec. Nts., 3/1/31 2 1,270,000 1,693,215 - ----------------------------------------------------------------------------------- Sprint Capital Corp., 8.75% Nts., 3/15/32 3,825,000 4,534,583 - ----------------------------------------------------------------------------------- Telefonos de Mexico SA, 8.25% Sr. Unsec. Nts., 1/26/06 1,700,000 1,882,886 -------------- 18,715,680 - ----------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--0.5% AT&T Wireless Services, Inc., 7.50% Sr. Unsec. Nts., 5/1/07 2,745,000 3,079,950 - ----------------------------------------------------------------------------------- Rogers Wireless Communications, Inc., 9.625% Sr. Sec. Nts., 5/1/11 621,000 745,200 -------------- 3,825,150 - ----------------------------------------------------------------------------------- UTILITIES--4.1% - ----------------------------------------------------------------------------------- ELECTRIC UTILITIES--3.1% CenterPoint Energy, Inc., 5.875% Nts., 6/1/08 3 2,655,000 2,768,528 - ----------------------------------------------------------------------------------- Dominion Resources, Inc., 8.125% Sr. Unsub. Nts., 6/15/10 3,175,000 3,814,467 - ----------------------------------------------------------------------------------- DTE Energy Co., 6.375% Sr. Nts., 4/15/33 2,270,000 2,232,186 - ----------------------------------------------------------------------------------- MidAmerican Energy Holdings Co., 5.875% Sr. Nts., 10/1/12 3,975,000 4,175,030 - ----------------------------------------------------------------------------------- Niagara Mohawk Power Corp., 5.375% Sr. Unsec. Nts., 10/1/04 1,210,000 1,243,285 - ----------------------------------------------------------------------------------- Progress Energy, Inc., 6.55% Sr. Unsec. Nts., 3/1/04 4,020,000 4,050,178 - ----------------------------------------------------------------------------------- PSEG Energy Holdings, 7.75% Unsec. Nts., 4/16/07 1,810,000 1,929,913 - ----------------------------------------------------------------------------------- South Carolina Electric & Gas Co., 9% Bonds, 7/15/06 500,000 576,241 - ----------------------------------------------------------------------------------- TECO Energy, Inc., 10.50% Sr. Unsec. Nts., 12/1/07 1,795,000 2,104,638 -------------- 22,894,466
22 | OPPENHEIMER BOND FUND
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------- GAS UTILITIES--1.0% Kinder Morgan, Inc., 6.50% Sr. Unsec. Nts., 9/1/12 $ 1,880,000 $ 2,078,054 - ----------------------------------------------------------------------------------- NiSource Finance Corp., 7.875% Sr. Unsec. Nts., 11/15/10 4,230,000 5,037,977 -------------- 7,116,031 -------------- Total Corporate Bonds and Notes (Cost $211,893,833) 224,523,631 SHARES - ----------------------------------------------------------------------------------- COMMON STOCKS--0.0% Chesapeake Energy Corp. 181 2,458 - ----------------------------------------------------------------------------------- Geotek Communications, Inc., Series B, Escrow Shares 1,10,12 25 -- -------------- Total Common Stocks (Cost $109) 2,458 UNITS - ----------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.0% Chesapeake Energy Corp. Wts., Exp. 9/1/04 10 534 60 - ----------------------------------------------------------------------------------- Concentric Network Corp. Wts., Exp. 12/15/07 1,10 50 -- - ----------------------------------------------------------------------------------- e.spire Communications, Inc. Wts., Exp. 11/1/05 1,10 300 3 - ----------------------------------------------------------------------------------- HF Holdings, Inc. Wts., Exp. 9/27/09 1,10 1,063 143 - ----------------------------------------------------------------------------------- ICG Communications, Inc. Wts., Exp. 9/15/05 1,10 1,980 20 - ----------------------------------------------------------------------------------- Long Distance International, Inc. Wts., Exp. 4/13/08 1,10 150 -- - ----------------------------------------------------------------------------------- Loral Space & Communications Ltd. Wts., Exp. 1/15/07 1,10 200 2 - ----------------------------------------------------------------------------------- Pathmark Stores, Inc. Wts., Exp. 9/19/10 10 2,028 1,906 - ----------------------------------------------------------------------------------- Real Time Data Co. Wts., Exp. 5/31/04 1,10 121,440 -- -------------- Total Rights, Warrants and Certificates (Cost $26,229) 2,134 PRINCIPAL AMOUNT - ----------------------------------------------------------------------------------- STRUCTURED NOTES--7.0% Deutsche Bank AG, COUNTS Corp. Sec. Credit Linked Nts., Series 2003-1, 2.89%, 1/7/05 1,2 $ 14,500,000 14,294,100 - ----------------------------------------------------------------------------------- JPMorgan Chase Bank, TRAC-X NA High Yield T2 Credit Default Swap Bonds, 6.05%, 3/25/09 3 21,960,000 22,591,350 - ----------------------------------------------------------------------------------- UBS AG, High Grade Credit Linked Nts., 2.814%, 12/10/04 1,2 14,500,000 14,626,866 -------------- Total Structured Notes (Cost $50,960,000) 51,512,316 - ----------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--3.4% Undivided interest of 22.45% in joint repurchase agreement (Principal Amount/Market Value $109,556,000, with a maturity value of $109,560,869) with Banc One Capital Markets, Inc., 0.80%, dated 12/31/03, to be repurchased at $24,600,093 on 1/2/04, collateralized by U.S. Treasury Bonds, 4.25%, 11/30/13, with a value of $111,861,618 (Cost $24,599,000) 24,599,000 24,599,000 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $958,584,225) 132.5% 970,016,753 - ----------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (32.5) (237,746,757) -------------------------- NET ASSETS 100.0% $732,269,996 ==========================
23 | OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS CONTINUED - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Identifies issues considered to be illiquid or restricted. See Note 8 of Notes to Financial Statements. 2. Represents the current interest rate for a variable or increasing rate 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 $51,154,970 or 6.99% of the Fund's net assets as of December 31, 2003. 4. When-issued security to be delivered and settled after December 31, 2003. See Note 1 of Notes to Financial Statements. 5. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. These securities amount to $12,882,646 or 1.76% of the Fund's net assets as of December 31, 2003. 6. Issue is in default. See Note 1 of Notes to Financial Statements. 7. Principal-Only Strips represent the right to receive the monthly principal payments on an underlying pool of mortgage loans. The value of these securities generally increases as interest rates decline and prepayment rates rise. The price of these securities is typically more volatile than that of coupon-bearing bonds of the same maturity. Interest rates disclosed represent current yields based upon the current cost basis and estimated timing of future cash flows. 8. Securities with an aggregate market value of $4,063,469 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to Financial Statements. 9. Zero coupon bond reflects effective yield on the date of purchase. 10. Non-income producing security. 11. Interest or dividend is paid-in-kind. 12. Received as the result of issuer reorganization. Currently has minimal market value. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 24 | OPPENHEIMER BOND FUND STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2003 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ASSETS Investments, at value (cost $958,584,225)--see accompanying statement (including securities loaned of approximately $124,585,000) $ 970,016,753 - -------------------------------------------------------------------------------- Collateral for securities loaned 126,958,792 - -------------------------------------------------------------------------------- Receivables and other assets: Investments sold on a when-issued basis 9,203,663 Interest, dividends and principal paydowns 7,355,413 Shares of beneficial interest sold 1,009,252 Futures margins 71,449 Swap contracts 14,305 Other 5,458 --------------- Total assets 1,114,635,085 - -------------------------------------------------------------------------------- LIABILITIES Bank overdraft 3,046,871 - -------------------------------------------------------------------------------- Return of collateral for securities loaned 126,958,792 - -------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased (including $248,930,616 purchased on a when-issued basis) 249,641,250 Shares of beneficial interest redeemed 1,991,155 Distribution and service plan fees 430,077 Transfer and shareholder servicing agent fees 159,053 Shareholder reports 101,579 Trustees' compensation 4,197 Other 32,115 --------------- Total liabilities 382,365,089 - -------------------------------------------------------------------------------- NET ASSETS $ 732,269,996 =============== - -------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS Par value of shares of beneficial interest $ 70,562 - -------------------------------------------------------------------------------- Additional paid-in capital 734,333,540 - -------------------------------------------------------------------------------- Accumulated net investment loss (153,625) - -------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (14,134,735) - -------------------------------------------------------------------------------- Net unrealized appreciation on investments 12,154,254 --------------- NET ASSETS $ 732,269,996 =============== 25 | OPPENHEIMER BOND FUND STATEMENT OF ASSETS AND LIABILITIES CONTINUED - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE Class A Shares: Net asset value and redemption price per share (based on net assets of $382,966,195 and 36,897,323 shares of beneficial interest outstanding) $10.38 Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price) $10.90 - -------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $197,774,328 and 19,063,533 shares of beneficial interest outstanding) $10.37 - -------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $90,582,741 and 8,722,042 shares of beneficial interest outstanding) $10.39 - -------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $17,731,759 and 1,709,112 shares of beneficial interest outstanding) $10.37 - -------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $43,214,973 and 4,170,188 shares of beneficial interest outstanding) $10.36 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 26 | OPPENHEIMER BOND FUND STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INVESTMENT INCOME Interest $32,372,128 - -------------------------------------------------------------------------------- Fee income 1,125,212 - -------------------------------------------------------------------------------- Portfolio lending fees 60,075 - -------------------------------------------------------------------------------- Dividends 8,864 ------------- Total investment income 33,566,279 - -------------------------------------------------------------------------------- EXPENSES Management fees 4,181,296 - -------------------------------------------------------------------------------- Distribution and service plan fees: Class A 941,996 Class B 2,169,057 Class C 963,615 Class N 76,596 - -------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 955,209 Class B 586,876 Class C 231,884 Class N 62,032 Class Y 12,308 - -------------------------------------------------------------------------------- Shareholder reports 225,850 - -------------------------------------------------------------------------------- Custodian fees and expenses 36,708 - -------------------------------------------------------------------------------- Trustees' compensation 18,358 - -------------------------------------------------------------------------------- Other 46,506 ------------- Total expenses 10,508,291 Less reduction to custodian expenses (8,690) Less voluntary waiver of transfer and shareholder servicing agent fees--Class A (7,315) Less voluntary waiver of transfer and shareholder servicing agent fees--Class B (3,615) Less voluntary waiver of transfer and shareholder servicing agent fees--Class C (1,065) Less voluntary waiver of transfer and shareholder servicing agent fees--Class N (9,907) ------------- Net expenses 10,477,699 - -------------------------------------------------------------------------------- NET INVESTMENT INCOME 23,088,580 - -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Investments 21,289,204 Closing of futures contracts 866,933 Foreign currency transactions (27,850) ------------- Net realized gain 22,128,287 - -------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments (6,819,806) Futures contracts 1,968,156 ------------- Net change in unrealized appreciation (4,851,650) - -------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $40,365,217 ============= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 27 | OPPENHEIMER BOND FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2003 2002 - ----------------------------------------------------------------------------------- OPERATIONS Net investment income $ 23,088,580 $ 30,464,992 - ----------------------------------------------------------------------------------- Net realized gain (loss) 22,128,287 (7,612,737) - ----------------------------------------------------------------------------------- Net change in unrealized appreciation (4,851,650) 34,687,515 --------------------------- Net increase in net assets resulting from operations 40,365,217 57,539,770 - ----------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income: Class A (12,883,312) (17,305,847) Class B (5,633,516) (8,774,067) Class C (2,529,340) (3,484,678) Class N (458,521) (336,619) Class Y (1,457,612) (566,370) - ----------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS Net increase (decrease) in net assets resulting from beneficial interest transactions: Class A 17,502,933 62,352,666 Class B (24,959,463) 47,304,042 Class C (2,398,431) 30,141,408 Class N 6,099,045 8,695,344 Class Y 17,894,037 19,741,029 - ----------------------------------------------------------------------------------- NET ASSETS Total increase 31,541,037 195,306,678 - ----------------------------------------------------------------------------------- Beginning of period 700,728,959 505,422,281 --------------------------- End of period [including accumulated net investment income (loss) of $(153,625) and $19,856, respectively] $732,269,996 $700,728,959 ===========================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 | OPPENHEIMER BOND FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
CLASS A YEAR ENDED DECEMBER 31 2003 2002 2001 2000 1999 - ------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA Net asset value, beginning of period $10.14 $ 9.74 $9.79 $9.97 $10.86 - ------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .35 .54 .73 .73 .71 Net realized and unrealized gain (loss) .24 .40 (.05) (.18) (.89) -------------------------------------------------- Total from investment operations .59 .94 .68 .55 (.18) - ------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.35) (.54) (.73) (.73) (.71) - ------------------------------------------------------------------------------------------------ Net asset value, end of period $10.38 $10.14 $9.74 $9.79 $ 9.97 ================================================== - ------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 1 5.87% 10.06% 7.05% 5.80% (1.65)% - ------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $382,966 $356,480 $280,132 $202,833 $220,502 - ------------------------------------------------------------------------------------------------ Average net assets (in thousands) $382,420 $316,279 $237,232 $205,883 $251,190 - ------------------------------------------------------------------------------------------------ Ratios to average net assets: 2 Net investment income 3.39% 5.47% 7.31% 7.48% 6.88% Total expenses 1.10% 3,4 1.10% 3 1.23% 3 1.31% 3 1.24% 3 - ------------------------------------------------------------------------------------------------ Portfolio turnover rate 111% 151% 162% 255% 238% 1. 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 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. 2. Annualized for periods of less than one full year. 3. Reduction to custodian expenses less than 0.01%. 4. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 29 | OPPENHEIMER BOND FUND FINANCIAL HIGHLIGHTS CONTINUED - --------------------------------------------------------------------------------
CLASS B YEAR ENDED DECEMBER 31 2003 2002 2001 2000 1999 - ----------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ----------------------------------------------------------------------------------------------- Net asset value, beginning of period $10.13 $ 9.73 $9.79 $9.96 $10.86 - ----------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .27 .47 .65 .66 .63 Net realized and unrealized gain (loss) .24 .40 (.05) (.17) (.90) ------------------------------------------------- Total from investment operations .51 .87 .60 .49 (.27) - ----------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.27) (.47) (.66) (.66) (.63) - ----------------------------------------------------------------------------------------------- Net asset value, end of period $10.37 $10.13 $9.73 $9.79 $ 9.96 ================================================= - ----------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 1 5.05% 9.26% 6.14% 5.11% (2.48)% - ----------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $197,774 $217,789 $161,998 $83,637 $94,845 - ----------------------------------------------------------------------------------------------- Average net assets (in thousands) $216,853 $187,343 $118,521 $83,394 $95,285 - ----------------------------------------------------------------------------------------------- Ratios to average net assets: 2 Net investment income 2.61% 4.68% 6.60% 6.71% 6.13% Total expenses 1.87% 3,4 1.85% 3 1.99% 3 2.07% 3 1.99% 3 - ----------------------------------------------------------------------------------------------- Portfolio turnover rate 111% 151% 162% 255% 238% 1. 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 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. 2. Annualized for periods of less than one full year. 3. Reduction to custodian expenses less than 0.01%. 4. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 30 | OPPENHEIMER BOND FUND
CLASS C YEAR ENDED DECEMBER 31 2003 2002 2001 2000 1999 - ----------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $10.14 $ 9.74 $ 9.80 $ 9.97 $10.87 - ----------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .27 .47 .65 .66 .63 Net realized and unrealized gain (loss) .25 .40 (.05) (.17) (.90) ------------------------------------------------- Total from investment operations .52 .87 .60 .49 (.27) - ----------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.27) (.47) (.66) (.66) (.63) - ----------------------------------------------------------------------------------------------- Net asset value, end of period $10.39 $10.14 $9.74 $9.80 $ 9.97 ================================================= - ----------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 1 5.18% 9.26% 6.14% 5.11% (2.47)% - ----------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $90,583 $90,800 $57,049 $24,303 $24,143 - ----------------------------------------------------------------------------------------------- Average net assets (in thousands) $96,361 $75,531 $36,886 $22,605 $24,218 - ----------------------------------------------------------------------------------------------- Ratios to average net assets: 2 Net investment income 2.64% 4.61% 6.65% 6.71% 6.13% Total expenses 1.84% 3,4 1.83% 3 1.98% 3 2.07% 3 1.99% 3 - ----------------------------------------------------------------------------------------------- Portfolio turnover rate 111% 151% 162% 255% 238% 1. 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 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. 2. Annualized for periods of less than one full year. 3. Reduction to custodian expenses less than 0.01%. 4. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 31 | OPPENHEIMER BOND FUND FINANCIAL HIGHLIGHTS CONTINUED - --------------------------------------------------------------------------------
CLASS N YEAR ENDED DECEMBER 31 2003 2002 2001 1 - -------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $10.13 $ 9.73 $10.02 - -------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .31 .51 .61 Net realized and unrealized gain (loss) .24 .40 (.29) ---------------------------- Total from investment operations .55 .91 .32 - -------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.31) (.51) (.61) - -------------------------------------------------------------------------------------- Net asset value, end of period $10.37 $10.13 $ 9.73 ============================ - -------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 5.51% 9.73% 3.18% - -------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $17,732 $11,302 $2,176 - -------------------------------------------------------------------------------------- Average net assets (in thousands) $15,338 $ 7,071 $ 768 - -------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 3.03% 4.76% 7.87% Total expenses 1.50% 1.44% 1.37% Expenses after expense reimbursement or fee waiver and reduction to custodian expenses 1.44% N/A 4 N/A 4 - -------------------------------------------------------------------------------------- Portfolio turnover rate 111% 151% 162% 1. For the period from March 1, 2001 (inception of offering) to December 31, 2001. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 32 | OPPENHEIMER BOND FUND
CLASS Y YEAR ENDED DECEMBER 31 2003 2002 2001 2000 1999 - --------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $10.12 $ 9.72 $ 9.78 $9.95 $10.86 - --------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .39 .59 .76 .85 .76 Net realized and unrealized gain (loss) .24 .40 (.05) (.18) (.91) ---------------------------------------------- Total from investment operations .63 .99 .71 .67 (.15) - --------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.39) (.59) (.77) (.84) (.76) - --------------------------------------------------------------------------------------------- Net asset value, end of period $10.36 $10.12 $9.72 $9.78 $ 9.95 ============================================== - --------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 1 6.35% 10.58% 7.30% 7.13% (1.37)% - --------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $43,215 $24,358 $4,067 $877 $186 - --------------------------------------------------------------------------------------------- Average net assets (in thousands) $38,398 $10,243 $2,286 $340 $ 31 - --------------------------------------------------------------------------------------------- Ratios to average net assets: 2 Net investment income 3.80% 5.53% 7.85% 7.92% 7.94% Total expenses 0.63% 0.63% 0.94% 0.83% 0.83% Expenses after expense reimbursement or fee waiver and reduction to custodian expenses N/A 3 N/A 3 0.92% N/A 3 N/A 3 - --------------------------------------------------------------------------------------------- Portfolio turnover rate 111% 151% 162% 255% 238% 1. 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. 2. Annualized for periods of less than one full year. 3. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 33 | OPPENHEIMER BOND FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Bond Fund (the Fund) is a separate fund of Oppenheimer Integrity Funds, an open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund's investment objective is to seek a high level of current income by investing mainly in debt instruments. 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. 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 by minor amounts due to each class having its own expenses directly attributable to that class. Classes 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 following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. Securities listed or traded on National Stock Exchanges or other domestic or foreign exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. 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 (including restricted securities) for which quotations are not readily available are valued primarily using dealer-supplied valuations, a portfolio pricing service authorized by the Board of Trustees, or at their fair value. 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 foreign 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). 34 | OPPENHEIMER BOND FUND - -------------------------------------------------------------------------------- STRUCTURED NOTES. The Fund invests in index-linked structured notes whose principal and/or interest depend on the performance of an underlying index. The structured notes are leveraged, which increases the volatility of each note's market value relative to the change in the underlying index. Fluctuations in value of these securities are recorded as unrealized gains and losses in the accompanying financial statements. The Fund records a realized gain or loss when a structured note is sold or matures. As of December 31, 2003, the market value of these securities comprised 7.0% of the Fund's net assets, and resulted in unrealized gains of $552,325. - -------------------------------------------------------------------------------- SECURITIES ON A WHEN ISSUED BASIS. Delivery and payment for securities that have been purchased by the Fund on a when issued basis can take place a month or more after the trade date. Normally the settlement date occurs within six months after the trade date; however, the Fund may, from time to time, purchase securities whose settlement date extends six months or more beyond trade date. During this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The Fund maintains segregated assets with a market value equal to or greater than the amount of its purchase commitments. The purchase of securities on a when issued basis may increase the volatility of the Fund's net asset value to the extent the Fund executes such purchases while remaining substantially fully invested. As of December 31, 2003, the Fund had entered into net when issued commitments of $239,726,953. In connection with its ability to purchase securities on a when issued basis, the Fund may enter into forward roll transactions with respect to mortgage-related securities. Forward roll transactions require the sale of securities for delivery in the current month, and a simultaneous agreement with the same counterparty to repurchase similar (same type, coupon and maturity) but not identical securities on a specified future date. The Fund records the incremental difference between the forward purchase and sale of each forward roll as fee income or realized gain (loss) on investments. Risks of entering into forward roll transactions include the potential inability of the counterparty to meet the terms of the agreement; the potential of the Fund to receive inferior securities to what was sold to the counterparty at redelivery; counterparty credit risk; and the potential pay down speed variance between the mortgage-related pools. - -------------------------------------------------------------------------------- SECURITY CREDIT RISK. The Fund invests in high-yield securities, which may be subject to a greater degree of credit risk, market fluctuations and loss of income and principal, and may be more sensitive to economic conditions than lower-yielding, higher-rated fixed-income securities. The Fund may acquire securities in default, and is not obligated to dispose of securities whose issuers subsequently default. As of December 31, 2003, securities with an aggregate market value of $279,427, representing 0.04% of the Fund's net assets, were in default. 35 | OPPENHEIMER BOND FUND NOTES TO FINANCIAL STATEMENTS CONTINUED - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. 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. Secured by U.S. government securities, these balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders, therefore, no federal income or excise tax provision is required. The tax components of capital shown in the table below represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes. NET UNREALIZED APPRECIATION BASED ON COST OF SECURITIES AND UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME INCOME GAIN CARRYFORWARD 1,2 TAX PURPOSES ------------------------------------------------------------------ $-- $-- $12,872,589 $10,892,107 1. As of December 31, 2003, the Fund had $12,872,589 of net capital loss carryforwards available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. As of December 31, 2003, details of the capital loss carryforwards were as follows: 36 | OPPENHEIMER BOND FUND EXPIRING ---------------------- 2008 $ 4,642,447 2010 8,230,142 ----------- Total $12,872,589 =========== 2. During the fiscal year December 31, 2003, the Fund utilized $21,308,857 of capital loss carryforward to offset capital gains realized in that fiscal year. During the fiscal year December 31, 2002, the Fund did not utilize any capital loss carryforwards. 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. Accordingly, the following amounts have been reclassified for December 31, 2003. Net assets of the Fund were unaffected by the reclassifications. REDUCTION TO INCREASE TO ACCUMULATED ACCUMULATED NET INCREASE TO NET INVESTMENT REALIZED LOSS PAID-IN CAPITAL INCOME ON INVESTMENTS ----------------------------------------------------------- $1,790,099 $299,760 $1,490,339 The tax character of distributions paid during the years ended December 31, 2003 and December 31, 2002 was as follows: YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 ----------------------------------------------------------- Distributions paid from: Ordinary income $22,962,301 $30,467,581 The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of December 31, 2003 are noted below. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. Federal tax cost of securities $ 959,138,951 Federal tax cost of other investments 185,187,703 -------------- Total federal tax cost $1,144,326,654 ============== Gross unrealized appreciation $ 21,173,879 Gross unrealized depreciation (10,281,772) -------------- Net unrealized appreciation $ 10,892,107 ============== 37 | OPPENHEIMER BOND FUND NOTES TO FINANCIAL STATEMENTS CONTINUED - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued TRUSTEES' COMPENSATION. 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. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or are invested in other Oppenheimer funds selected by the Trustee. Deferral of trustees' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance to the Plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income distributions, if any, are declared daily and paid monthly. 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. - -------------------------------------------------------------------------------- EXPENSE OFFSET ARRANGEMENT. The reduction of custodian fees, if applicable, represents earnings on cash balances maintained by the Fund. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
YEAR ENDED DECEMBER 31, 2003 YEAR ENDED DECEMBER 31, 2002 SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------ CLASS A Sold 17,721,848 $ 181,436,083 19,523,565 $ 190,912,803 Dividends and/or distributions reinvested 1,002,817 10,309,580 1,332,946 13,008,001 Redeemed (16,990,568) (174,242,730) (14,464,664) (141,568,138) --------------------------------------------------------- Net increase 1,734,097 $ 17,502,933 6,391,847 $ 62,352,666 =========================================================
38 | OPPENHEIMER BOND FUND
YEAR ENDED DECEMBER 31, 2003 YEAR ENDED DECEMBER 31, 2002 SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------- CLASS B Sold 6,543,598 $ 66,993,404 11,531,204 $112,485,723 Dividends and/or distributions reinvested 416,679 4,280,170 627,150 6,115,604 Redeemed (9,390,171) (96,233,037) (7,311,701) (71,297,285) ------------------------------------------------------- Net increase (decrease) (2,429,894) $(24,959,463) 4,846,653 $ 47,304,042 ======================================================= - ----------------------------------------------------------------------------------- CLASS C Sold 4,137,840 $ 42,416,735 6,200,611 $ 60,525,606 Dividends and/or distributions reinvested 188,926 1,943,214 248,419 2,427,454 Redeemed (4,556,213) (46,758,380) (3,353,754) (32,811,652) ------------------------------------------------------- Net increase (decrease) (229,447) $ (2,398,431) 3,095,276 $ 30,141,408 ======================================================= - ----------------------------------------------------------------------------------- CLASS N Sold 1,180,184 $ 12,109,063 1,312,556 $ 12,804,206 Dividends and/or distributions reinvested 43,725 449,358 33,325 325,615 Redeemed (630,145) (6,459,376) (454,081) (4,434,477) ------------------------------------------------------- Net increase 593,764 $ 6,099,045 891,800 $ 8,695,344 ======================================================= - ----------------------------------------------------------------------------------- CLASS Y Sold 2,667,388 $ 27,169,896 3,708,804 $ 36,157,404 Dividends and/or distributions reinvested 22,711 233,571 3,715 36,236 Redeemed (926,456) (9,509,430) (1,724,443) (16,452,611) ------------------------------------------------------- Net increase 1,763,643 $ 17,894,037 1,988,076 $ 19,741,029 =======================================================
- -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the year ended December 31, 2003, were $944,210,054 and $918,468,399, respectively. - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee at annual rate of 0.60% of the first $200 million of average annual net assets of the Fund, 0.57% of the next $200 million, 0.54% of the next $200 million, 0.51% of the next $200 million, 0.45% of the next $200 million and 0.35% of average annual net assets in excess of $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 year ended December 31, 2003, the Fund paid $1,730,004 to OFS for services to the Fund. 39 | OPPENHEIMER BOND FUND NOTES TO FINANCIAL STATEMENTS CONTINUED - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued Additionally, Class Y shares are subject to minimum fees of $5,000 for assets of less than $10 million and $10,000 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. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees up to an annual rate of 0.35% of average annual net assets for all classes. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- 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 distribution of these shares and servicing accounts. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% per year on Class B shares and on Class C shares and 0.25% per year 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 the 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 December 31, 2003 for Class B, Class C and Class N shares was $4,796,069, $1,495,270 and $320,169, 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 YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - -------------------------------------------------------------------------------------- December 31, 2003 $429,092 $37,749 $773,520 $21,673 $49,744
- -------------------------------------------------------------------------------- 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. 40 | OPPENHEIMER BOND FUND 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 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 gain or loss. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. As of December 31, 2003, the Fund had no outstanding foreign currency contracts. - -------------------------------------------------------------------------------- 6. FUTURES CONTRACTS A futures contract is a commitment to buy or sell a specific amount of a commodity or financial instrument at a negotiated price on a stipulated future date. Futures contracts are traded on a commodity exchange. The Fund may buy and sell futures contracts that relate to broadly based securities indices "financial futures" or debt securities "interest rate futures" in order to gain exposure to or protection from changes in market value of stock and bonds or interest rates. The Fund may also buy or write put or call options on these futures contracts. The Fund generally sells futures contracts as a hedge against increases in interest rates and decreases in market value of portfolio securities. The Fund may also purchase futures contracts to gain exposure to market changes as it may be more efficient or cost effective than actually buying fixed income securities. Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin) in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or has expired. Cash held by the broker to cover initial margin requirements on open futures contracts is noted in the Statement of Assets and Liabilities. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. The Statement of Assets and Liabilities reflects a receivable and/or payable for the daily mark to market for variation margin. Realized gains and losses are reported on the Statement of Operations as closing and expiration of futures contracts. The net change in unrealized appreciation and depreciation is reported on the Statement of Operations. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. 41 | OPPENHEIMER BOND FUND NOTES TO FINANCIAL STATEMENTS CONTINUED - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 6. FUTURES CONTRACTS Continued As of December 31, 2003, the Fund had outstanding futures contracts as follows:
UNREALIZED EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION CONTRACT DESCRIPTION DATES CONTRACTS DECEMBER 31, 2003 (DEPRECIATION) - ----------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE U.S. Treasury Nts., 10 yr. 3/22/04 688 $77,238,750 $1,152,014 ----------- CONTRACTS TO SELL U.S. Long Bonds 3/22/04 31 3,388,688 (39,554) U.S. Treasury Nts., 2 yr. 3/30/04 331 70,849,516 (271,461) U.S. Treasury Nts., 5 yr. 3/22/04 302 33,710,750 (133,578) ----------- (444,593) ----------- $ 707,421 ===========
- -------------------------------------------------------------------------------- 7. TOTAL RETURN SWAP CONTRACTS The Fund may enter into a total return swap transaction to maintain a total return on a particular investment, or portion of its portfolio, or for other non-speculative purposes. Because the principal amount is not exchanged, it represents neither an asset nor a liability to either counterparty, and is referred to as notional. The Fund records an increase or decrease to interest income, in the amount due to or owed by the Fund at termination or settlement. Total return swaps are subject to risks (if the counterparty fails to meet its obligations). As of December 31, 2003, the Fund had entered into the following total return swap agreements:
PAID BY RECEIVED BY SWAP NOTIONAL THE FUND AT THE FUND AT TERMINATION UNREALIZED COUNTERPARTY AMOUNT DECEMBER 31, 2003 DECEMBER 31, 2003 DATE APPRECIATION - ----------------------------------------------------------------------------------------- Value of total return of Lehman Deutsche Bank One-Month Brothers AG $15,634,000 LIBOR Flat CMBS Index 6/30/04 $14,305
- -------------------------------------------------------------------------------- 8. ILLIQUID OR RESTRICTED SECURITIES As of December 31, 2003, 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 intends to invest no 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. The aggregate value of illiquid or restricted securities subject to this limitation as of December 31, 2003 was 42 | OPPENHEIMER BOND FUND $54,527,392, which represents 7.45% of the Fund's net assets, of which zero is considered restricted. Information concerning restricted securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED SECURITY DATES COST DECEMBER 31, 2003 DEPRECIATION - ---------------------------------------------------------------------------------------------- STOCKS AND/OR WARRANTS Geotek Communications, Inc., Series B, Escrow Shares 1/14/01 $ 100 $-- $ 100 Real Time Data Co. Wts., Exp. 5/31/04 6/30/99 1,214 -- 1,214
- -------------------------------------------------------------------------------- 9. SECURITIES LENDING The Fund lends portfolio securities from time to time in order to earn additional income. In return, the Fund receives collateral in the form of US Treasury obligations or cash, against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the funds and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund could experience delays and cost in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. As of December 31, 2003, the Fund had on loan securities valued at approximately $124,585,000. Cash of $126,958,792 was received as collateral for the loans, and has been invested in approved instruments. - -------------------------------------------------------------------------------- 10. BORROWING AND LENDING ARRANGEMENTS The Fund entered into an "interfund borrowing and lending arrangement" with other funds in the Oppenheimer funds complex, to allow funds to borrow for liquidity purposes. The arrangement was initiated pursuant to exemptive relief granted by the Securities and Exchange Commission (the SEC) to allow these affiliated funds to lend money to, and borrow money from, each other, in an attempt to reduce borrowing costs below those of bank loan facilities. The SEC's order requires the Fund's Board of Trustees to adopt operating policies and procedures to administer interfund borrowing and lending. Under the arrangement the Fund may lend money to other Oppenheimer funds and may borrow from other Oppenheimer funds at a rate set by the Fund's Board of Trustees, based upon a recommendation by the Manager. The Fund's borrowings, if any, are subject to asset coverage requirements under the Investment Company Act and the provisions of the SEC order and other applicable regulations. If the Fund borrows money, there is a risk that the loan could be called on one day's notice, in which case the Fund might have to borrow from a bank at higher rates if a loan were not available from another Oppenheimer fund. If the Fund lends money to another fund, it will be subject to the risk that the other fund might not repay the loan in a timely manner, or at all. The Fund had no interfund borrowings or loans outstanding during the year ended or at December 31, 2003. 43 | OPPENHEIMER BOND FUND INDEPENDENT AUDITORS' REPORT - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER BOND FUND: We have audited the accompanying statement of assets and liabilities of Oppenheimer Bond Fund, a series of Oppenheimer Integrity Funds, including the statement of investments, as of December 31, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2003, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Bond Fund as of December 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Denver, Colorado February 12, 2004 44 | OPPENHEIMER BOND FUND FEDERAL INCOME TAX INFORMATION UNAUDITED - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In early 2004, if applicable, shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2003. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. None of the dividends paid by the Fund during the year ended December 31, 2003 are eligible for the corporate dividend-received deduction. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES 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 1.800.225.5677, (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 will be required to file new 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 first such filing is due no later than August 31, 2004, for the twelve months ended June 30, 2004. Once filed, the Fund's Form N-PX filing will be available (i) without charge, upon request, by calling the Fund toll-free at 1.800.225.5677, and (ii) on the SEC's website at www.sec.gov. 45 | OPPENHEIMER BOND FUND TRUSTEES AND OFFICERS UNAUDITED - --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD BY TRUSTEE; FUND, LENGTH OF SERVICE, AGE NUMBER OF PORTFOLIOS IN FUND COMPLEX CURRENTLY OVERSEEN BY TRUSTEES INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. TRUSTEES EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. WILLIAM L. ARMSTRONG, Chairman of the following private mortgage banking companies: Cherry Creek Mortgage Company Chairman of the Board (since 1991), Centennial State Mortgage Company (since 1994), The El Paso Mortgage Company (since 2003) and (since 1993), Transland Financial Services, Inc. (since 1997); Chairman of the following Trustee (since 1999) private companies: Great Frontier Insurance (insurance agency) (since 1995), Ambassador Media Age: 66 Corporation and Broadway Ventures (since 1984); a director of the following public companies: Helmerich & Payne, Inc. (oil and gas drilling/production company) (since 1992) and UNUMProvident (insurance company) (since 1991). Mr. Armstrong is also a Director/Trustee of Campus Crusade for Christ and the Bradley Foundation. Formerly a director of the following: Storage Technology Corporation (a publicly-held computer equipment company) (1991-February 2003), and International Family Entertainment (television channel) (1992-1997), Frontier Real Estate, Inc. (residential real estate brokerage) (1994-1999), and Frontier Title (title insurance agency) (1995-June 1999); a U.S. Senator (January 1979-January 1991). Oversees 38 portfolios in the OppenheimerFunds complex. ROBERT G. AVIS, Formerly, Director and President of A.G. Edwards Capital, Inc. (General Partner of private Trustee (since 1993) equity funds) (until February 2001); Chairman, President and Chief Executive Officer of A.G. Age: 72 Edwards Capital, Inc. (until March 2000); Vice Chairman and Director of A.G. Edwards, Inc. and Vice Chairman of A.G. Edwards & Sons, Inc. (its brokerage company subsidiary) (until March 1999); Chairman of A.G. Edwards Trust Company and A.G.E. Asset Management (investment advisor) (until March 1999); and a Director (until March 2000) of A.G. Edwards & Sons and A.G. Edwards Trust Company. Oversees 38 portfolios in the OppenheimerFunds complex. GEORGE C. BOWEN, Formerly (until April 1999): Senior Vice President (from September 1987) and Treasurer (from Trustee (since 1997) March 1985) of the Manager; Vice President (from June 1983) and Treasurer (since March 1985) of Age: 67 OppenheimerFunds Distributor, Inc. (a subsidiary of the Manager); Senior Vice President (since February 1992), Treasurer (since July 1991) Assistant Secretary and a director (since December 1991) of the Centennial Asset Management Corporation; Vice President (since October 1989) and Treasurer (since April 1986) of HarbourView Asset Management Corporation (an investment advisory subsidiary of the Manager); President, Treasurer and a director (June 1989-January 1990) of Centennial Capital Corporation (an investment advisory subsidiary of the Manager); Vice President and Treasurer (since August 1978) and Secretary (since April 1981) of Shareholder Services, Inc. (a transfer agent subsidiary of the Manager); Vice President, Treasurer and Secretary (since November 1989) of Shareholder Financial Services, Inc. (a transfer agent subsidiary of the Manager); Assistant Treasurer (since March 1998) of Oppenheimer Acquisition Corp. (the Manager's parent corporation); Treasurer (since November 1989) of Oppenheimer Partnership Holdings, Inc. (a holding company subsidiary of the Manager); Vice President and Treasurer (since July 1996) of Oppenheimer Real Asset Management, Inc. (an investment advisory subsidiary of the Manager); Chief Executive Officer and director (since March 1996) of MultiSource Services, Inc. (a broker-dealer subsidiary of the Manager); Treasurer (since October 1997) of OppenheimerFunds International Ltd. and OppenheimerFunds plc (offshore fund management subsidiaries of the Manager). Oversees 38 portfolios in the OppenheimerFunds complex.
46 | OPPENHEIMER BOND FUND
EDWARD L. CAMERON, A member of The Life Guard of Mount Vernon, George Washington's home (since June 2000). Trustee (since 1999) Formerly (March 2001-May 2002) Director of Genetic ID, Inc. and its subsidiaries (a privately Age: 65 held biotech company); a partner with PricewaterhouseCoopers LLP (from 1974-1999) (an accounting firm) and Chairman (from 1994-1998), Price Waterhouse LLP Global Investment Management Industry Services Group. Oversees 38 portfolios in the OppenheimerFunds complex. JON S. FOSSEL, Chairman and Director (since 1998) of Rocky Mountain Elk Foundation (a not-for-profit Trustee (since 1990) foundation); and a director (since October 1999) of P.R. Pharmaceuticals (a privately held Age: 61 company) and UNUMProvident (an insurance company) (since June 1, 2002). Formerly Chairman and a director (until October 1996) and President and Chief Executive Officer (until October 1995) of the Manager; President, Chief Executive Officer and a director of Oppenheimer Acquisition Corp., Shareholders Services Inc. and Shareholder Financial Services, Inc. (until October 1995). Oversees 38 portfolios in the OppenheimerFunds complex. SAM FREEDMAN, Director of Colorado Uplift (a non-profit charity (since September 1984). Formerly (until Trustee (since 1996) October 1994) Mr. Freedman held several positions in subsidiary or affiliated companies of the Age: 63 Manager. Oversees 38 portfolios in the OppenheimerFunds complex. BEVERLY L. HAMILTON, Trustee (since 1996) of MassMutual Institutional Funds and of MML Series Investment Fund Trustee (since 2002) (open-end investment companies); Director of MML Services (since April 1987) and America Funds Age: 57 Emerging Markets Growth Fund (since October 1991) (both are investment companies), The California Endowment (a philanthropy organization) (since April 2002), and Community Hospital of Monterey Peninsula, (since February 2002); a trustee (since February 2000) of Monterey International Studies (an educational organization), and an advisor to Unilever (Holland)'s pension fund and to Credit Suisse First Boston's Sprout venture capital unit. Mrs. Hamilton also is a member of the investment committees of the Rockefeller Foundation, the University of Michigan and Hartford Hospital. Formerly, President (February 1991-April 2000) ARCO Investment Management Company. Oversees 37 portfolios in the OppenheimerFunds complex. ROBERT J. MALONE, Chairman and CEO (since 2003) of Steele Street State Bank (a commercial ban ing entity); Trustee (since 2002) Director (since 2001) of Jones Knowledge, Inc. (a privately held company), U.S. Exploration, Age: 59 Inc., (since 1997), Colorado UpLIFT (a non-profit organization) (since 1986) and a trustee of the Gallagher Family Foundation (non-profit organization) (since 2000). Formerly, Chairman of U.S. Bank (a subsidiary of U.S. Bancorp and formerly Colorado National Bank,) (July 1996-April 1, 1999) and a director of Commercial Assets, Inc. (a REIT) (1993-2000). Oversees 37 portfolios in the OppenheimerFunds complex. F. WILLIAM MARSHALL, JR., Trustee (since 1996) of MassMutual Institutional Funds and of MML Series Investment Fund Trustee (since 2000) (open-end investment companies); Trustee (since 1987), Chairman of the Board (since 2003) and Age: 61 Chairman of the investment committee (since 1994) for the Worcester Polytech Institute; President and Treasurer (since January 1999) of the SIS Fund (a private not for profit charitable fund); Trustee (since 1995) of the Springfield Library and Museum Association; Trustee (since 1996) of the Community Music School of Springfield. Formerly, member of the investment committee of the Community Foundation of Western Massachusetts (1998-2003); Chairman (January 1999-July 1999) of SIS & Family Bank, F.S.B. (formerly SIS Bank); President, Chief Executive Officer and Director (May 1993-December 1998) of SIS Bankcorp, Inc. and SIS Bank (formerly Springfield
47 | OPPENHEIMER BOND FUND TRUSTEES AND OFFICERS UNAUDITED / CONTINUED - --------------------------------------------------------------------------------
F. WILLIAM MARSHALL, JR., Institution for Savings) and Executive Vice President (January 1999-July 1999) of Peoples Continued Heritage Financial Group, Inc. Oversees 38 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, AND OFFICER NEW YORK, NY 10281-1008. MR. MURPHY SERVES FOR AN INDEFINITE TERM, UNTIL HIS RESIGNATION, DEATH OR REMOVAL. JOHN V. MURPHY, Chairman, Chief Executive Officer and director (since June 2001) and President (since September President and Trustee 2000) of the Manager; President and a director or trustee of other Oppenheimer funds; President (since 2001) and a director (since July 2001) of Oppenheimer Acquisition Corp. and of Oppenheimer Age: 54 Partnership Holdings, Inc.; a director (since November 2001) of OppenheimerFunds Distributor, Inc.; Chairman and a director (since July 2001) of Shareholder Services, Inc. and of Shareholder Financial Services, Inc.; President and a director (since July 2001) of OppenheimerFunds Legacy Program (a charitable trust program established by the Manager); a director of the following investment advisory subsidiaries of OppenheimerFunds, Inc.: OFI Institutional Asset Management, Inc. and Centennial Asset Management Corporation (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 1, 2001) and a director (since July 2001) of Oppenheimer Real Asset Management, Inc.; a director (since November 2001) of Trinity Investment Management Corp. and Tremont Advisers, Inc. (investment advisory affiliates of the Manager); Executive Vice President (since February 1997) of Massachusetts Mutual Life Insurance Company (the Manager's parent company); a director (since June 1995) of DLB Acquisition Corporation (a holding company that owns shares of David L. Babson & Company, Inc.); formerly, Chief Operating Officer (September 2000-June 2001) of the Manager; President and trustee (November 1999-November 2001) of MML Series Investment Fund and MassMutual Institutional Funds (open-end investment companies); a director (September 1999-August 2000) of C.M. Life Insurance Company; President, Chief Executive Officer and director (September 1999-August 2000) of MML Bay State Life Insurance Company; a director (June 1989-June 1998) of Emerald Isle Bancorp and Hibernia Savings Bank (a wholly-owned subsidiary of Emerald Isle Bancorp). Oversees 72 portfolios as a Director/Officer and 10 portfolios as an Officer in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MESSRS. MANIOUDAKIS AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NY 10281-1008, FOR MR. WIXTED, 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH OFFICER SERVES FOR AN ANNUAL TERM OR UNTIL HIS OR HER EARLIER RESIGNATION, DEATH OR REMOVAL. ANGELO MANIOUDAKIS, Senior Vice President of the Manager (since April 2002); an officer of 12 portfolios in the Vice President (since 2002) OppenheimerFunds complex; formerly Executive Director and portfolio manager for Miller, Age: 36 Anderson & Sherrerd, a division of Morgan Stanley Investment Management (August 1993-April 2002).
48 | OPPENHEIMER BOND FUND
BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer (since March Treasurer (since 1999) 1999) of HarbourView Asset Management Corporation, Shareholder Services, Inc., Oppenheimer Real Age: 44 Asset Management Corporation, Shareholder Financial Services, Inc., Oppenheimer Partnership Holdings, Inc., OFI Private Investments, Inc. (since March 2000), OppenheimerFunds International Ltd. and OppenheimerFunds plc (offshore fund management subsidiaries of the Manager) (since May 2000) and OFI Institutional Asset Management, Inc. (since November 2000); Treasurer and Chief Financial Officer (since May 2000) of OFI Trust Company (a trust company subsidiary of the Manager); Assistant Treasurer (since March 1999) of Oppenheimer Acquisition Corp. and OppenheimerFunds Legacy Program (since April 2000); formerly Principal and Chief Operating Officer (March 1995-March 1999), Bankers Trust Company-Mutual Fund Services Division. An officer of 82 portfolios in the OppenheimerFunds complex. ROBERT G. ZACK, General Counsel (since November 2001) of the Manager; Executive Vice President (since January Vice President and Secretary 2004) and General Counsel (since February 2002) of OppenheimerFunds, Inc.; General Counsel and (since 2001) a director (since November 2001) of OppenheimerFunds Distributor, Inc.; Senior Vice President Age: 55 and General Counsel (since November 2001) of HarbourView Asset Management Corporation; Vice President and a director (since November 2000) of Oppenheimer Partnership Holdings, Inc.; Senior Vice President, General Counsel and a director (since November 2001) of Shareholder Services, Inc., Shareholder Financial Services, Inc., OFI Private Investments, Inc., OFI Trust Company and OFI Institutional Asset Management, Inc.; a director (since November 2001) of Oppenheimer Real Asset Management, Inc.; Assistant Secretary and a director (since November 2001) of OppenheimerFunds International Ltd.; Vice President (since November 2001) of OppenheimerFunds Legacy Program; Secretary (since November 2001) of Oppenheimer Acquisition Corp.; formerly Senior Vice President (May 1985-January 2004), Acting General Counsel (November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of Shareholder Services, Inc. (May 1985- November 2001), Shareholder Financial Services, Inc. (November 1989- November 2001); OppenheimerFunds International Ltd. and OppenheimerFunds plc (October 1997-November 2001). An officer of 82 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION ABOUT THE FUND'S TRUSTEES AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST. 49 | OPPENHEIMER BOND FUND ITEM 2. CODE OF ETHICS The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT The Board of Trustees of the Fund has determined that Edward L. Cameron, the Chairman of the Board's Audit Committee, and George C. Bowen, a member of the Board's Audit Committee, possess the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as "audit committee financial experts," and has designated Messrs. Cameron and Bowen as the Audit Committee's financial experts. Messrs. Cameron and Bowen are "independent" Trustees pursuant to paragraph (a)(2) of Item 3 to Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES (a) Audit Fees The principal accountant for the audit of the registrant's annual financial statements billed $16,000 in fiscal 2003 and $15,500 in fiscal 2002. (b) Audit-Related Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $75,000 in fiscal 2003 and $65,000 in fiscal 2002 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees would include, among others: due diligence related to mergers and acquisitions, accounting consultations and audits in connection with acquisitions, internal control reviews and consultation concerning financial accounting and reporting standards. (c) Tax Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $11,600 in fiscal 2003 and $6,500 in fiscal 2002 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees would include, among others: tax compliance, tax planning and tax advice. Tax compliance generally involves preparation of original and amended tax returns, claims for a refund and tax payment-planning services. Tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions and requests for rulings or technical advice from taxing authorities. (d) All Other Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $0 in fiscal 2003 and $3,500 in fiscal 2002 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees would include services provided to the registrant's Board of Trustees with respect to the annual renewal of the registrant's investment advisory agreement. (e) (1) During its regularly scheduled periodic meetings, the registrant's audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant. The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting. Pre-approval of non-audit services is waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit. (2) 100% (f) Not applicable as less than 50%. (g) The principal accountant for the audit of the registrant's annual financial statements billed $86,600 in fiscal 2003 and $75,000 in fiscal 2002 to the registrant and the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934. (h) The registrant's audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal account's independence. No such services were rendered. ITEM 5. NOT APPLICABLE ITEM 6. RESERVED ITEM 7. NOT APPLICABLE ITEM 8. NOT APPLICABLE ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable for fiscal periods ending December 31, 2003. ITEM 10. CONTROLS AND PROCEDURES (a) Based on their evaluation of registrant's disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940 (17 CFR 270.30a-2(c)) as of December 31, 2003, registrant's principal executive officer and principal financial officer found registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. (b) There have been no significant changes in registrant's internal controls over financial reporting that occurred during the registrant's second fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT) (B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS) EX-99.CODE ETH 3 ex99_code-285.txt EX99_CODE-285 EX-99.CODE ETH CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS OF THE OPPENHEIMER FUNDS AND OF OPPENHEIMERFUNDS, INC. This Code of Ethics for Principal Executive and Senior Financial Officers (referred to in this document as the "Code") has been adopted by each of the investment companies for which OppenheimerFunds, Inc. or one of its subsidiaries or affiliates (referred to collectively in this document as "OFI") acts as investment adviser (individually, a "Fund" and collectively, the "Funds"), and by OFI to effectuate compliance with Section 406 under the Sarbanes-Oxley Act of 2002 and the rules adopted to implement Section 406. This Code applies to each Fund's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions ("Covered Officers"). A listing of positions currently within the ambit of Covered Officers is attached as EXHIBIT A.(1) 1. Purpose of the Code This Code sets forth standards and procedures that are reasonably designed to deter wrongdoing and promote: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely, and understandable disclosure in reports and documents that a Fund files with, or submits to, the U.S. Securities and Exchange Commission ("SEC") and in other public ommunications made by the Fund; o compliance with applicable governmental laws, rules and regulations; o the prompt internal reporting of violations of this Code to the Code Administrator identified below; and o accountability for adherence to this Code. In general, the principles that govern honest and ethical conduct, including the avoidance of conflicts of interest between personal and professional relationships, reflect, at the minimum, the following: (1) the duty at all times in performing any responsibilities as a Fund financial officer, controller, accountant or principal executive officer to place the interests of the Funds ahead of personal interests; (2) the fundamental standard that Covered Officers should not take inappropriate advantage of their positions; (3) the duty to assure that a Fund's financial statements and reports to its shareholders are prepared honestly and accurately in accordance with applicable rules, regulations and accounting standards; and (4) the duty to conduct the Funds' business and affairs in an honest and ethical manner. - -------- 1 The obligations imposed by this Code on Covered Officers are separate from and in addition to any obligations that may be imposed on such persons as Covered Persons under the Code of Ethics adopted by the Oppenheimer Funds dated May 15, 2002, under Rule 17j-1 of the Investment Company Act of 1940, as amended and any other code of conduct applicable to Covered Officers in whatever capacity they serve. This Code does not incorporate by reference any provisions of the Rule 17j-1 Code of Ethics and accordingly, any violations or waivers granted under the Rule 17j-1 Code of Ethics will not be considered a violation or waiver under this Code. Each Covered Officer should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. It is acknowledged that, as a result of the contractual relationship between each Fund and OFI, of which the Covered Officers are also officers or employees, and subject to OFI's fiduciary duties to each Fund, the Covered Officers will, in the normal course of their duties, be involved in establishing policies and implementing decisions that will have different effects on OFI and the Funds. It is further acknowledged that the participation of the Covered Officers in such activities is inherent in the contractual relationship between each Fund and OFI and is consistent with the expectations of the Board of Trustees/Directors of the performance by the Covered Officers of their duties as officers of the Funds. 2. Prohibitions The specific provisions and reporting requirements of this Code are concerned primarily with promoting honest and ethical conduct and avoiding conflicts of interest in personal and professional relationships. No Covered Officer may use information concerning the business and affairs of a Fund, including the investment intentions of a Fund, or use his or her ability to influence such investment intentions, for personal gain to himself or herself, his or her family or friends or any other person or in a manner detrimental to the interests of a Fund or its shareholders. No Covered Officer may use his or her personal influence or personal relationships to influence the preparation and issuance of financial reports of a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund and its shareholders. No Covered Officer shall intentionally for any reason take any action or fail to take any action in connection with his or her official acts on behalf of a Fund that causes the Fund to violate applicable laws, rules and regulations. No Covered Officer shall, in connection with carrying out his or her official duties and responsibilities on behalf of a Fund: (i) employ any device, scheme or artifice to defraud a Fund or its shareholders; (ii) intentionally cause a Fund to make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading in its official documents, regulatory filings, financial statements or communications to the public; (iii) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any Fund or its shareholders; (iv) engage in any manipulative practice with respect to any Fund; (v) use his or her personal influence or personal relationships to influence any business decision, investment decisions, or financial reporting by a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund or its shareholders; (vi) intentionally cause a Fund to fail to comply with applicable laws, rules and regulations, including failure to comply with the requirement of full, fair, accurate, understandable and timely disclosure in reports and documents that a Fund files with, or submits to, the SEC and in other public communications made by the Fund; (vii) intentionally mislead or omit to provide material information to the Fund's independent auditors or to the Board of Trustees/Directors or the officers of the Fund or its investment adviser in connection with financial reporting matters; (viii) fail to notify the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser promptly if he or she becomes aware of any existing or potential violations of this Code or applicable laws; (ix) retaliate against others for, or otherwise discourage the reporting of, actual or apparent violations of this Code; or (x) fails to acknowledge or certify compliance with this Code if requested to do so. 3. Reports of Conflicts of Interests If a Covered Officer becomes aware of a conflict of interest under this Code or, to the Covered Officer's reasonable belief, the appearance of one, he or she must immediately report the matter to the Code's Administrator. If the Code Administrator is involved or believed to be involved in the conflict of interest or appearance of conflict of interest, the Covered Officer shall report the matter directly to the OFI's Chief Executive Officer. Upon receipt of a report of a conflict, the Code Administrator will take prompt steps to determine whether a conflict of interest exists. If the Code Administrator determines that an actual conflict of interest exists, the Code Administrator will take steps to resolve the conflict. If the Code Administrator determines that the appearance of a conflict exists, the Code Administrator will take appropriate steps to remedy such appearance. If the Code Administrator determines that no conflict or appearance of a conflict exists, the Code Administrator shall meet with the Covered Officer to advise him or her of such finding and of his or her reason for taking no action. In lieu of determining whether a conflict or appearance of conflict exists, the Code Administrator may in his or her discretion refer the matter to the Fund's Board of Trustees/Directors. 4. Waivers Any Covered Officer requesting a waiver of any of the provisions of this Code must submit a written request for such waiver to the Code Administrator, setting forth the basis of such request and all necessary facts upon which such request can be evaluated. The Code Administrator shall review such request and make a written determination thereon, which shall be binding. The Code Administrator may in reviewing such request, consult at his discretion with legal counsel to OFI or to the Fund. In determining whether to waive any of the provisions of this Code, the Code Administrator shall consider hether the proposed waiver: : (i) is prohibited by this Code; (ii) is consistent with honest and ethical conduct; and (iii) will result in a conflict of interest between the Covered Officer's personal and professional obligations to a Fund. In lieu of determining whether to grant a waiver, the Code Administrator in his or her discretion may refer the matter to the appropriate Fund's Board of Trustees/Directors. 5. Reporting Requirements (a) Each Covered Officer shall, upon becoming subject to this Code, be provided with a copy of this Code and shall affirm in writing that he or she has received, read, understands and shall adhere to this Code. (b) At least annually, all Covered Officers shall be provided with a copy of this Code and shall certify that they have read and understand this Code and recognize that they are subject thereto. (c) At least annually, all Covered Officers shall certify that they have complied with the requirements of this Code and that they have disclosed or reported any violations of this Code to the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser. (d) The Code Administrator shall submit a quarterly report to the Board of Trustees/Directors of each Fund containing (i) a description of any report of a conflict of interest or apparent conflict and the disposition thereof; (ii) a description of any request for a waiver from this Code and the disposition thereof; (iii) any violation of the Code that has been reported or found and the sanction imposed; (iv) interpretations issued under the Code by the Code Administrator; and (v) any other significant information arising under the Code including any proposed amendments. (e) Each Covered Officer shall notify the Code Administrator promptly if he or she knows of or has a reasonable belief that any violation of this Code has occurred or is likely to occur. Failure to do so is itself a violation of this Code. (f) Any changes to or waivers of this Code, including "implicit" waivers as defined in applicable SEC rules, will, to the extent required, be disclosed by the Code Administrator or his or her designee as provided by applicable SEC rules.(2) 6. Annual Renewal At least annually, the Board of Trustees/Directors of each Fund shall review the Code and determine whether any amendments (including any amendments that may be recommended by OFI or the Fund's legal counsel) are necessary or desirable, and shall consider whether to renew and/or amend the Code. 7. Sanctions Any violation of this Code of Ethics shall be subject to the imposition of such sanctions by OFI as may be deemed appropriate under the circumstances to achieve the purposes of this Code and may include, without limitation, a letter of censure, suspension from employment or termination of employment, in the sole discretion of OFI. 8. Administration and Construction (a) The administration of this Code of Ethics shall be the responsibility of OFI's General Counsel or his designee as the "Code Administrator" of this Code, acting under the terms of this Code and the oversight of the Trustees/Directors of the Funds. (b) The duties of such Code Administrator will include: (i) Continuous maintenance of a current list of the names of all Covered Officers; (ii) Furnishing all Covered Officers a copy of this Code and initially and periodically informing them of their duties and obligations thereunder; (iii) Maintaining or supervising the maintenance of all records required by this Code, including records of waivers granted hereunder; (iv) Issuing interpretations of this Code which appear to the Code Administrator to be consistent with the objectives of this Code and any applicable laws or regulations; (v) Conducting such inspections or investigations as shall reasonably be required to detect and report any violations of this Code, with his or her recommendations, to the Chief Executive Officer of OFI and to the Trustees/Directors of the - ----------- 2 An "implicit waiver" is the failure to take action within a reasonable period of time regarding a material departure from a provision of this Code that has been made known to the General Counsel, the Code Administrator, an executive officer of the Fund or OFI. affected Fund(s) or any committee appointed by them to deal with such information; and (vi) Periodically conducting educational training programs as needed to explain and reinforce the terms of this Code. (c) In carrying out the duties and responsibilities described under this Code, the Code Administrator may consult with legal counsel, who may include legal counsel to the applicable Funds, and such other persons as the Administrator shall deem necessary or desirable. The Code Administrator shall be protected from any liability hereunder or under any applicable law, rule or regulation, for decisions made in good faith based upon his or her reasonable judgment. 9. Required Records The Administrator shall maintain and cause to be maintained in an easily accessible place, the following records for the period required by applicable SEC rules (currently six years following the end of the fiscal year of OFI in which the applicable event or report occurred): (a) A copy of any Code which has been in effect during the period; (b) A record of any violation of any such Code and of any action taken as a result of such violation, during the period; (c) A copy of each annual report pursuant to the Code made by a Covered Officer during the period; (d) A copy of each report made by the Code Administrator pursuant to this Code during the period; (e) A list of all Covered Officers who are or have been required to make reports pursuant to this Code during the period, plus those person(s) who are or were responsible for reviewing these reports; (f) A record of any request to waive any requirement of this Code, the decision thereon and the reasons supporting the decision; and (g) A record of any report of any conflict of interest or appearance of a conflict of interest received by the Code Administrator or discovered by the Code Administrator during the period, the decision thereon and the reasons supporting the decision. 10. Amendments and Modifications This Code may not be amended or modified except by an amendment in writing which is approved or ratified by OFI and by a majority vote of the Independent Trustees/Directors of each of the applicable Funds. 11. Confidentiality. This Code is identified for the internal use of the Funds and OFI. Reports and records prepared or maintained under this Code are considered confidential and shall be maintained and protected accordingly to the extent permitted by applicable laws, rules and regulations. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trustees/Directors of the affected Fund(s) and their counsel, the independent auditors of the affected Funds and/or OFI, and to OFI, except as such disclosure may be required pursuant to applicable judicial or regulatory process. Dated as of: June 25, 2003 Adopted by Board I of the Oppenheimer Funds June 13, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by Board II of the Oppenheimer/Centennial Funds June 24, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by Board III of the Oppenheimer Funds June 9, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by Board IV of the Oppenheimer Funds May 21, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by the Boards of Directors of OppenheimerFunds, Inc. and its subsidiaries and affiliates that act as investment adviser to the Oppenheimer or Centennial funds June 1, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Senior Vice President and General Counsel EXHIBIT A POSITIONS COVERED BY THIS CODE OF ETHICS FOR SENIOR OFFICERS Each Oppenheimer or Centennial fund Principal Executive Officer Principal Financial Officer Treasurer Assistant Treasurer Personnel of OFI who by virtue of their jobs perform critical financial and accounting functions for OFI on behalf of a Fund, including: Treasurer Senior Vice President/Fund Accounting Vice President/Fund Accounting EX-99.CERT 4 ex99_302cert-285.txt EX99_302CERT-285 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 Bond Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) 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) 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 c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal controls 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: 2/11/04 /s/John V. Murphy --------------------------- John V. Murphy Chief Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, BRIAN W. WIXTED, certify that: --------------- 1. I have reviewed this report on Form N-CSR of Oppenheimer Bond Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) 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) 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 c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal controls 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: 2/11/04 /s/Brian W. Wixted ---------------------------- Brian W. Wixted Chief Financial Officer EX-99.906 5 ex99_906cert-285.txt EX99_9-28506CERT 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 2003 JOHN V. MURPHY, Chief Executive Officer, and BRIAN W. WIXTED, Chief Financial Officer, of Oppenheimer Bond Fund (the "Registrant"), each certify to the best of his or her knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended December 31, 2003 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Chief Executive Officer Chief Financial Officer Oppenheimer Bond Fund Oppenheimer Bond Fund /s/John V. Murphy /s/Brian W. Wixted - ---------------------------- --------------------------- John V. Murphy Brian W. Wixted Date: 2/11/04 Date: 2/11/04 -----END PRIVACY-ENHANCED MESSAGE-----