-----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, FPXGwhM9zLuJxAS8FD3p69nLe+qosjJTDpgDkHrOB4358uwpEfkLnipPIAyO7lJD XbibGdh3SY8H3KCVfPXEaw== 0000935069-06-000684.txt : 20060303 0000935069-06-000684.hdr.sgml : 20060303 20060303155714 ACCESSION NUMBER: 0000935069-06-000684 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060303 DATE AS OF CHANGE: 20060303 EFFECTIVENESS DATE: 20060303 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: 06663941 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 0000701265 S000008824 Oppenheimer Core Bond Fund C000024033 A C000024034 B C000024035 C C000024036 N C000024037 Y N-CSR 1 ra285_18659-ncsr.txt RA285_18659_NCSR 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 INTEGRITY FUNDS (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: DECEMBER 31, 2005 ITEM 1. REPORTS TO STOCKHOLDERS. TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CORPORATE BONDS & NOTES--TOP TEN INDUSTRIES - -------------------------------------------------------------------------------- Media 2.5% - -------------------------------------------------------------------------------- Electric Utilities 2.5 - -------------------------------------------------------------------------------- Diversified Financial Services 2.1 - -------------------------------------------------------------------------------- Automobiles 2.1 - -------------------------------------------------------------------------------- Insurance 2.0 - -------------------------------------------------------------------------------- Diversified Telecommunication Services 1.9 - -------------------------------------------------------------------------------- Real Estate 1.7 - -------------------------------------------------------------------------------- Food & Staples Retailing 1.5 - -------------------------------------------------------------------------------- Commercial Banks 1.4 - -------------------------------------------------------------------------------- Oil & Gas 1.4 Portfolio holdings and allocations are subject to change. Percentages are as of December 31, 2005, and are based on net assets. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CREDIT ALLOCATION Distribution of investments by ratings category, as a percentage of total investments at value, is as follows: [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] Treasury 1.0% Agency 46.1 AAA 23.6 AA 2.3 A 5.8 BBB 12.3 BB 3.5 B 0.2 Not Rated 5.2 Portfolio holdings and allocations are subject to change. Percentages are as of December 31, 2005, and are based on the total market value of investments. - -------------------------------------------------------------------------------- 10 | | OPPENHEIMER CORE BOND FUND 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, 2005, FOLLOWED BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED MARKET INDEX. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. The Oppenheimer Core Bond Fund delivered a favorable, competitive yield and total return for the 12-month period ended December 31, 2005, during which the Fund outpaced the median of its peer group of similarly managed funds while only slightly trailing its primary benchmark, the Citigroup Broad Investment Grade Bond Index. The Fund's positive fiscal-year results can be attributed primarily to active management of the portfolio's exposure to interest-rate risk, and secondarily, to sector decisions and individual security selection among corporate bonds and agency and mortgage-related securities. Throughout the period, we generally kept the portfolio's duration, or interest-rate sensitivity, significantly lower than that of our benchmark. Since the year was underscored by generally rising rates, this decision proved to be the most prominent contributor to performance for the year. At the same time, while maintaining our less-than-market exposure to interest-rate risk, we made slight adjustments to our interest-rate positioning at various points throughout the year so as to capitalize on interest-rate shifts and movements in the yield curve as they occurred. As such, our flexible, active management of the portfolio's duration, while maintaining an overall short duration position, also substantially benefited returns. Although our overall exposure to the mortgage sector did not support performance as strongly as it did last year, successful security selection within the mortgage category added to returns this year. For example, our decision to invest in seasoned, older mortgage securities that were showing reasonably good levels of prepayment activity helped performance, as these mortgages managed to fare well amidst a generally struggling mortgage market. Within the portfolio's exposure to the credit (corporate bond) sector, our decision to underweight longer-term, BBB-rated credit securities added to performance, since this segment of the investment grade corporate bond market--generally considered to be among the riskiest types of credit securities in that market--underperformed the corporate sector as a whole. Our substantially underweighted exposure to these bonds supported the Fund's returns for the year, as did our decision to underweight industrial bonds, which also lagged. At the same time, the fact that we chose to overweight our exposure to the financials sector, particularly to brokerage companies, definitively added to returns, as this sector of the high-grade corporate market fared well amidst positive earnings results throughout 2005. Finally, our tactical allocation to high-yield bonds in general helped buoy performance this year. On the negative side, security selection within the high-yield, or "junk" allocation 11 | OPPENHEIMER CORE BOND FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- of the portfolio detracted from returns. Our decision to own a few, select high-yield bonds issued by companies in the auto, auto parts and homebuilding sectors cost us a few basis points of performance, as some of the bonds in these sectors struggled. Similarly, had we maintained the underweighted exposure to longer-maturity industrial bonds that we established early in the period, we might have preserved a few basis points of performance. Our decision to move to a neutral exposure to these bonds later in the year hurt us when these types of corporate bonds lagged the general market. 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, 2005. In the case of Class A, Class B and Class C shares, performance is measured over a ten-fiscal-year period. 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 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. Past performance cannot guarantee future results. Beginning January 21, 2005, the Fund changed its primary benchmark index from the Lehman Brothers Credit Index to the Citigroup Broad Investment Grade Bond Index ("Citigroup Index") because the Fund believes that the Citigroup Index is a more appropriate benchmark reflecting the types of securities in which the Fund invests. The Citigroup Index consists of securities having a higher grade and a lower modified duration than the securities in the Lehman Brothers Credit Index. The Fund's performance is compared to the performance of its former primary benchmark, the Lehman Brothers Credit 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. Performance is also compared to its primary benchmark, the Citigroup Broad Investment Grade Bond Index, a market-capitalization weighted index that includes fixed-rate Treasury, government-sponsored, corporate and mortgage securities. The Fund has also added a secondary benchmark, the Lehman Brothers Aggregate Bond Index, an unmanaged index of U.S. corporate and government bonds, to which its performance is compared. 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. 12 | OPPENHEIMER CORE BOND FUND CLASS A SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Core Bond Fund (Class A) Lehman Brothers Credit Index Citigroup Broad Investment Grade Bond Index Lehman Brothers Aggregate Bond Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Core Bond Fund Lehman Brothers Lehman Aggregate Citigroup BIG (Class A) Credit Index ** Bond Index Bond Index 12/31/1995 9,525 10,000 10,000 10,000 03/31/1996 9,399 9,742 9,823 9,825 06/30/1996 9,446 9,785 9,879 9,874 09/30/1996 9,658 9,981 10,061 10,058 12/31/1996 9,988 10,328 10,363 10,362 03/31/1997 9,974 10,225 10,305 10,308 06/30/1997 10,358 10,646 10,684 10,680 09/30/1997 10,728 11,063 11,039 11,035 12/31/1997 11,000 11,385 11,364 11,360 03/31/1998 11,188 11,559 11,540 11,543 06/30/1998 11,420 11,857 11,810 11,810 09/30/1998 11,612 12,287 12,309 12,300 12/31/1998 11,617 12,361 12,351 12,350 03/31/1999 11,564 12,274 12,289 12,293 06/30/1999 11,416 12,082 12,181 12,179 09/30/1999 11,374 12,116 12,264 12,267 12/31/1999 11,426 12,120 12,249 12,248 03/31/2000 11,529 12,293 12,519 12,516 06/30/2000 11,627 12,444 12,737 12,728 09/30/2000 11,848 12,826 13,121 13,116 12/31/2000 12,088 13,258 13,673 13,667 03/31/2001 12,567 13,824 14,088 14,089 06/30/2001 12,695 13,971 14,168 14,161 09/30/2001 13,158 14,507 14,821 14,829 12/31/2001 12,940 14,637 14,828 14,832 03/31/2002 12,886 14,598 14,842 14,842 06/30/2002 13,255 15,020 15,390 15,364 09/30/2002 13,913 15,694 16,095 16,071 12/31/2002 14,242 16,177 16,348 16,328 03/31/2003 14,486 16,565 16,576 16,557 06/30/2003 14,909 17,360 16,991 16,982 09/30/2003 14,973 17,335 16,966 16,953 12/31/2003 15,078 17,421 17,019 17,014 03/31/2004 15,476 17,992 17,472 17,471 06/30/2004 15,115 17,376 17,045 17,045 09/30/2004 15,627 18,105 17,590 17,601 12/31/2004 15,816 18,335 17,758 17,776 03/31/2005 15,757 18,141 17,673 17,686 06/30/2005 16,155 18,789 18,204 18,239 09/30/2005 16,103 18,601 18,082 18,116 12/31/2005 16,188 18,693 18,189 18,232
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT 12/31/05 1-Year -2.51% 5-Year 4.99% 10-Year 4.94% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE 1% CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, 10-YEAR RETURNS FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 18 FOR FURTHER INFORMATION. 13 | OPPENHEIMER CORE BOND FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS B SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Core Bond Fund (Class B) Lehman Brothers Credit Index Citigroup Broad Investment Grade Bond Index Lehman Brothers Aggregate Bond Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Core Bond Fund Lehman Brothers Lehman Aggregate Citigroup Big (Class B) Credit Index ** Bond Index Bond Index 12/31/1995 10,000 10,000 10,000 10,000 03/31/1996 9,840 9,742 9,823 9,825 06/30/1996 9,879 9,785 9,879 9,874 09/30/1996 10,083 9,981 10,061 10,058 12/31/1996 10,399 10,328 10,363 10,362 03/31/1997 10,374 10,225 10,305 10,308 06/30/1997 10,753 10,646 10,684 10,680 09/30/1997 11,116 11,063 11,039 11,035 12/31/1997 11,377 11,385 11,364 11,360 03/31/1998 11,550 11,559 11,540 11,543 06/30/1998 11,766 11,857 11,810 11,810 09/30/1998 11,942 12,287 12,309 12,300 12/31/1998 11,924 12,361 12,351 12,350 03/31/1999 11,848 12,274 12,289 12,293 06/30/1999 11,662 12,082 12,181 12,179 09/30/1999 11,609 12,116 12,264 12,267 12/31/1999 11,628 12,120 12,249 12,248 03/31/2000 11,723 12,293 12,519 12,516 06/30/2000 11,799 12,444 12,737 12,728 09/30/2000 12,002 12,826 13,121 13,116 12/31/2000 12,222 13,258 13,673 13,667 03/31/2001 12,669 13,824 14,088 14,089 06/30/2001 12,788 13,971 14,168 14,161 09/30/2001 13,216 14,507 14,821 14,829 12/31/2001 12,993 14,637 14,828 14,832 03/31/2002 12,939 14,598 14,842 14,842 06/30/2002 13,309 15,020 15,390 15,364 09/30/2002 13,970 15,694 16,095 16,071 12/31/2002 14,300 16,177 16,348 16,328 03/31/2003 14,545 16,565 16,576 16,557 06/30/2003 14,970 17,360 16,991 16,982 09/30/2003 15,034 17,335 16,966 16,953 12/31/2003 15,139 17,421 17,019 17,014 03/31/2004 15,539 17,992 17,472 17,471 06/30/2004 15,176 17,376 17,045 17,045 09/30/2004 15,690 18,105 17,590 17,601 12/31/2004 15,881 18,335 17,758 17,776 03/31/2005 15,821 18,141 17,673 17,686 06/30/2005 16,220 18,789 18,204 18,239 09/30/2005 16,169 18,601 18,082 18,116 12/31/2005 16,255 18,693 18,189 18,232
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT 12/31/05 1-Year -3.40% 5-Year 4.87% 10-Year 4.98% 14 | OPPENHEIMER CORE BOND FUND CLASS C SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Core Bond Fund (Class C) Lehman Brothers Credit Index Citigroup Broad Investment Grade Bond Index Lehman Brothers Aggregate Bond Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Core Bond Fund Lehman Brothers Lehman Aggregate Citigroup Big (Class C) Credit Index ** Bond Index Bond Index 12/31/1995 10,000 10,000 10,000 10,000 03/31/1996 9,841 9,742 9,823 9,825 06/30/1996 9,871 9,785 9,879 9,874 09/30/1996 10,085 9,981 10,061 10,058 12/31/1996 10,400 10,328 10,363 10,362 03/31/1997 10,375 10,225 10,305 10,308 06/30/1997 10,754 10,646 10,684 10,680 09/30/1997 11,116 11,063 11,039 11,035 12/31/1997 11,377 11,385 11,364 11,360 03/31/1998 11,549 11,559 11,540 11,543 06/30/1998 11,766 11,857 11,810 11,810 09/30/1998 11,941 12,287 12,309 12,300 12/31/1998 11,924 12,361 12,351 12,350 03/31/1999 11,848 12,274 12,289 12,293 06/30/1999 11,663 12,082 12,181 12,179 09/30/1999 11,609 12,116 12,264 12,267 12/31/1999 11,629 12,120 12,249 12,248 03/31/2000 11,724 12,293 12,519 12,516 06/30/2000 11,789 12,444 12,737 12,728 09/30/2000 12,003 12,826 13,121 13,116 12/31/2000 12,223 13,258 13,673 13,667 03/31/2001 12,671 13,824 14,088 14,089 06/30/2001 12,789 13,971 14,168 14,161 09/30/2001 13,217 14,507 14,821 14,829 12/31/2001 12,974 14,637 14,828 14,832 03/31/2002 12,897 14,598 14,842 14,842 06/30/2002 13,255 15,020 15,390 15,364 09/30/2002 13,889 15,694 16,095 16,071 12/31/2002 14,176 16,177 16,348 16,328 03/31/2003 14,408 16,565 16,576 16,557 06/30/2003 14,787 17,360 16,991 16,982 09/30/2003 14,835 17,335 16,966 16,953 12/31/2003 14,910 17,421 17,019 17,014 03/31/2004 15,275 17,992 17,472 17,471 06/30/2004 14,891 17,376 17,045 17,045 09/30/2004 15,366 18,105 17,590 17,601 12/31/2004 15,524 18,335 17,758 17,776 03/31/2005 15,437 18,141 17,673 17,686 06/30/2005 15,797 18,789 18,204 18,239 09/30/2005 15,701 18,601 18,082 18,116 12/31/2005 15,755 18,693 18,189 18,232
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT 12/31/05 1-Year 0.51% 5-Year 5.21% 10-Year 4.65% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE 1% CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, 10-YEAR RETURNS FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 18 FOR FURTHER INFORMATION. 15 | OPPENHEIMER CORE BOND FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS N SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Core Bond Fund (Class N) Lehman Brothers Credit Index Citigroup Broad Investment Grade Bond Index Lehman Brothers Aggregate Bond Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Core Bond Fund Lehman Brothers Lehman Aggregate Citigroup Big (Class N) Credit Index ** Bond Index Bond Index 03/01/2001 10,000 10,000 10,000 10,000 03/31/2001 10,025 10,062 10,050 10,052 06/30/2001 10,136 10,169 10,107 10,104 09/30/2001 10,496 10,559 10,573 10,580 12/31/2001 10,318 10,653 10,578 10,582 03/31/2002 10,268 10,625 10,588 10,589 06/30/2002 10,567 10,932 10,979 10,962 09/30/2002 11,088 11,423 11,482 11,467 12/31/2002 11,321 11,775 11,663 11,650 03/31/2003 11,519 12,057 11,825 11,814 06/30/2003 11,833 12,635 12,121 12,116 09/30/2003 11,883 12,617 12,103 12,096 12/31/2003 11,944 12,680 12,141 12,140 03/31/2004 12,261 13,095 12,464 12,466 06/30/2004 11,968 12,647 12,159 12,162 09/30/2004 12,365 13,178 12,548 12,558 12/31/2004 12,507 13,345 12,668 12,683 03/31/2005 12,453 13,204 12,607 12,619 06/30/2005 12,759 13,675 12,986 13,013 09/30/2005 12,698 13,538 12,899 12,925 12/31/2005 12,757 13,606 12,976 13,009
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT 12/31/05 1-Year 1.01% 5-Year N/A Since Inception (3/1/01) 5.17% 16 | OPPENHEIMER CORE BOND FUND CLASS Y SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Core Bond Fund (Class Y) Lehman Brothers Credit Index Citigroup Broad Investment Grade Bond Index Lehman Brothers Aggregate Bond Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Core Bond Fund Lehman Brothers Lehman Aggregate Citigroup Big (Class Y) Credit Index ** Bond Index Bond Index 04/27/1998 10,000 10,000 10,000 10,000 06/30/1998 10,254 10,193 10,180 10,179 09/30/1998 10,436 10,563 10,611 10,601 12/31/1998 10,440 10,627 10,647 10,644 03/31/1999 10,405 10,551 10,594 10,595 06/30/1999 10,272 10,386 10,501 10,497 09/30/1999 10,250 10,416 10,572 10,573 12/31/1999 10,297 10,419 10,559 10,556 03/31/2000 10,380 10,568 10,792 10,787 06/30/2000 10,471 10,698 10,980 10,970 09/30/2000 10,667 11,026 11,311 11,304 12/31/2000 11,031 11,397 11,787 11,779 03/31/2001 11,464 11,884 12,145 12,143 06/30/2001 11,594 12,011 12,213 12,205 09/30/2001 12,027 12,471 12,776 12,780 12/31/2001 11,836 12,583 12,782 12,783 03/31/2002 11,797 12,550 12,794 12,791 06/30/2002 12,163 12,913 13,267 13,242 09/30/2002 12,784 13,492 13,874 13,851 12/31/2002 13,088 13,907 14,093 14,072 03/31/2003 13,340 14,241 14,289 14,270 06/30/2003 13,732 14,924 14,646 14,636 09/30/2003 13,820 14,902 14,625 14,611 12/31/2003 13,920 14,976 14,671 14,664 03/31/2004 14,316 15,467 15,061 15,058 06/30/2004 13,992 14,937 14,693 14,690 09/30/2004 14,477 15,565 15,163 15,169 12/31/2004 14,657 15,762 15,308 15,320 03/31/2005 14,611 15,596 15,234 15,243 06/30/2005 14,989 16,152 15,693 15,719 09/30/2005 14,937 15,990 15,587 15,613 12/31/2005 15,024 16,070 15,680 15,714
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 12/31/05 1-Year 2.50% 5-Year 6.37% Since Inception (4/27/98) 5.44% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE 1% CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, 10-YEAR RETURNS FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 18 FOR FURTHER INFORMATION. 17 | OPPENHEIMER CORE 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 FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. The Fund's investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc. CLASS A shares of the Fund were first publicly offered on 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 "10-year" 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. 18 | OPPENHEIMER CORE BOND FUND 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. 19 | OPPENHEIMER CORE BOND FUND FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended December 31, 2005. ACTUAL EXPENSES. The "actual" lines of the table provide information about actual account values and actual expenses. You may use the information on this line for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the "actual" line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to exceptions described in 20 | OPPENHEIMER CORE BOND FUND the Statement of Additional Information). Therefore, the "hypothetical" lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED (7/1/05) (12/31/05) DECEMBER 31, 2005 - -------------------------------------------------------------------------------- Class A Actual $1,000.00 $1,002.10 $4.50 - -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,020.72 4.54 - -------------------------------------------------------------------------------- Class B Actual 1,000.00 997.40 8.24 - -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,016.99 8.32 - -------------------------------------------------------------------------------- Class C Actual 1,000.00 997.30 8.29 - -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,016.94 8.37 - -------------------------------------------------------------------------------- Class N Actual 1,000.00 999.80 5.81 - -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,019.41 5.87 - -------------------------------------------------------------------------------- Class Y Actual 1,000.00 1,002.30 3.29 - -------------------------------------------------------------------------------- Class Y Hypothetical 1,000.00 1,021.93 3.32 Hypothetical assumes 5% annual return before expenses. Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Those annualized expense ratios based on the 6-month period ended December 31, 2005 are as follows: CLASS EXPENSE RATIOS - ------------------------------- Class A 0.89% - ------------------------------- Class B 1.63 - ------------------------------- Class C 1.64 - ------------------------------- Class N 1.15 - ------------------------------- Class Y 0.65 The expense ratios reflect voluntary waivers or reimbursements of expenses by the Fund's Manager and Transfer Agent that can be terminated at any time, without advance notice. The "Financial Highlights" tables in the Fund's financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements. - -------------------------------------------------------------------------------- 21 | OPPENHEIMER CORE BOND FUND STATEMENT OF INVESTMENTS December 31, 2005 - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------- ASSET-BACKED SECURITIES--11.9% - ---------------------------------------------------------------------------------------------------------------------------- Ace Securities Corp., Home Equity Loan Pass-Through Certificates, Series 2002-HE7, Cl. A2B, 4.559%, 11/25/35 1 $ 1,910,000 $ 1,911,180 - ---------------------------------------------------------------------------------------------------------------------------- Aesop Funding II LLC, Automobile Asset-Backed Certificates, Series 2005-1A, Cl. A2, 4.43%, 4/20/08 1 890,000 890,635 - ---------------------------------------------------------------------------------------------------------------------------- BMW Vehicle Owner Trust, Automobile Loan Certificates, Series 2005-A, Cl. A2, 3.66%, 12/26/07 2,706,725 2,698,419 - ---------------------------------------------------------------------------------------------------------------------------- Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed Nts.: Series 2004-2, Cl. A3, 3.58%, 1/15/09 2,850,000 2,797,731 Series 2005-1, Cl. A2B, 3.73%, 7/16/07 1,384,477 1,382,690 - ---------------------------------------------------------------------------------------------------------------------------- Centex Home Equity Co. LLC, Home Equity Loan Asset-Backed Certificates: Series 2004-D, Cl. AF1, 2.98%, 4/25/20 249,302 248,600 Series 2005-B, Cl. AF1, 4.02%, 3/26/35 544,864 542,059 Series 2005-C, Cl. AF1, 4.196%, 6/25/35 1,822,667 1,813,054 Series 2005-D, Cl. AF1, 5.04%, 10/25/35 4,018,349 4,007,752 Series 2005-D, Cl. AV2, 4.649%, 10/25/35 1 3,640,000 3,642,249 - ---------------------------------------------------------------------------------------------------------------------------- Chase Manhattan Auto Owner Trust, Automobile Loan Pass-Through Certificates, Series 2005-A, Cl. A2, 3.72%, 12/15/07 3,190,000 3,176,309 - ---------------------------------------------------------------------------------------------------------------------------- CIT Equipment Collateral, Equipment Receivable-Backed Nts., Series 2004-DFS, Cl. A2, 2.66%, 11/20/06 1,160,789 1,157,474 - ---------------------------------------------------------------------------------------------------------------------------- Citibank Credit Card Issuance Trust, Credit Card Receivable Nts., Series 2003-C4, Cl. C4, 5%, 6/10/15 430,000 422,094 - ---------------------------------------------------------------------------------------------------------------------------- Citigroup Mortgage Loan Trust, Inc., CMO, Series 2005-WF2, Cl. AF2, 4.922%, 8/25/35 1 4,692,759 4,678,030 - ---------------------------------------------------------------------------------------------------------------------------- Consumer Credit Reference Index Securities Program, Credit Card Asset-Backed Certificates, Series 2002-B, Cl. FX, 10.421%, 3/22/07 2 4,090,000 4,086,427 - ---------------------------------------------------------------------------------------------------------------------------- Countrywide Asset-Backed Certificates, Inc., Home Equity Asset-Backed Certificates: Series 2002-4, Cl. A1, 4.749%, 2/25/33 1 45,508 45,598 Series 2005-7, Cl. AF1B, 4.317%, 11/25/35 1 2,235,225 2,223,574 Series 2005-16, Cl. 2AF2, 5.382%, 5/25/36 1 1,360,000 1,360,000 Series 2005-17, Cl. 1AF1, 4.58%, 12/27/35 1 2,850,000 2,849,909 Series 2005-17, Cl. 1AF2, 5.363%, 12/27/35 1 910,000 910,224 - ---------------------------------------------------------------------------------------------------------------------------- DaimlerChrysler Auto Trust, Automobile Loan Pass-Through Certificates: Series 2004-B, Cl. A2, 2.48%, 2/8/07 29,331 29,335 Series 2004-C, Cl. A2, 2.62%, 6/8/07 1,424,480 1,420,964 Series 2005-A, Cl. A2, 3.17%, 9/8/07 1,926,224 1,920,555 Series 2005-B, Cl. A2, 3.75%, 12/8/07 4,618,401 4,607,622 - ---------------------------------------------------------------------------------------------------------------------------- Equity One ABS, Inc., Home Equity Asset-Backed Security, Series 2004-3, Cl. AF2, 3.80%, 7/25/34 1 3,350,000 3,336,709 - ---------------------------------------------------------------------------------------------------------------------------- First Franklin Mortgage Loan Asset-Backed Certificates, Home Equity Receivables, Series 2005-FF10, Cl. A3, 4.589%, 11/25/35 1 5,480,000 5,483,384 - ---------------------------------------------------------------------------------------------------------------------------- Ford Credit Auto Owner Trust, Automobile Loan Pass-Through Certificates: Series 2005-A, Cl. A3, 3.48%, 11/17/08 2,060,000 2,035,247 Series 2005-B, Cl. A2, 3.78%, 9/15/07 2,005,195 2,001,022
22 | OPPENHEIMER CORE BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------- ASSET-BACKED SECURITIES Continued - ---------------------------------------------------------------------------------------------------------------------------- Honda Auto Receivables Owner Trust, Automobile Receivable Obligations: Series 2005-1, Cl. A2, 3.21%, 5/21/07 $ 838,856 $ 836,563 Series 2005-3, Cl. A2, 3.73%, 10/18/07 2,960,000 2,945,859 - ---------------------------------------------------------------------------------------------------------------------------- Household Home Equity Loan Trust, Home Equity Loan Pass-Through Certificates, Series 2005-3, Cl. A1, 4.63%, 1/20/35 1 2,716,190 2,718,129 - ---------------------------------------------------------------------------------------------------------------------------- Lehman XS Trust, Home Equity Mtg. Pass-Through Certificates: Series 2005-2, Cl. 2A1B, 3.63%, 8/25/35 1 3,790,935 3,796,288 Series 2005-4, Cl. 2A1B, 5.17%, 10/25/35 2,763,253 2,764,984 Series 2005-10, Cl. 2-A3B, 5.55%, 12/25/06 2,570,000 2,569,598 - ---------------------------------------------------------------------------------------------------------------------------- Litigation Settlement Monetized Fee Trust, Asset-Backed Certificates, Series 2001-1A, Cl. A1, 8.33%, 4/25/31 3 1,879,398 1,910,220 - ---------------------------------------------------------------------------------------------------------------------------- MBNA Credit Card Master Note Trust, Credit Card Receivables, Series 2003-C7, Cl. C7, 5.719%, 3/15/16 1 4,070,000 4,316,856 - ---------------------------------------------------------------------------------------------------------------------------- NC Finance Trust, CMO, Series 1999-I, Cl. ECFD, 1.079%, 1/25/29 3 1,750,658 402,651 - ---------------------------------------------------------------------------------------------------------------------------- Nissan Auto Lease Trust, Automobile Lease Obligations, Series 2004-A, Cl. A2, 2.55%, 1/15/07 189,088 189,040 - ---------------------------------------------------------------------------------------------------------------------------- Nissan Auto Receivables Owner Trust, Automobile Receivable Nts., Series 2005-C, Cl. A2, 3.99%, 1/15/08 5,530,000 5,507,723 - ---------------------------------------------------------------------------------------------------------------------------- Onyx Acceptance Owner Trust, Automobile Receivable Obligations, Series 2005-B, Cl. A2, 4.03%, 4/15/08 2,480,000 2,472,377 - ---------------------------------------------------------------------------------------------------------------------------- Popular ABS Mortgage Pass-Through Trust, Home Equity Pass-Through Certificates: Series 2004-5, Cl. A F2, 3.735%, 11/10/34 1 780,000 770,664 Series 2005-1, Cl. A F2, 3.914%, 5/25/35 1 570,000 562,150 Series 2005-2, Cl. A F2, 4.415%, 4/25/35 1 1,030,000 1,019,909 Series 2005-6, Cl. A3, 5.68%, 1/25/36 1 1,430,000 1,430,000 - ---------------------------------------------------------------------------------------------------------------------------- Residential Asset Mortgage Products, Inc., Home Equity Asset-Backed Pass-Through Certificates, Series 2004-RS7, Cl. AI3, 4.45%, 7/25/28 2,350,000 2,338,192 - ---------------------------------------------------------------------------------------------------------------------------- Structured Asset Securities Corp., CMO Pass-Through Certificates, Series 2005-4XS, Cl. 3A1, 5.18%, 3/26/35 3,724,946 3,726,352 - ---------------------------------------------------------------------------------------------------------------------------- Structured Asset Securities Corp., Home Equity Obligations, Series 2003-25XS, Cl. A4, 4.51%, 8/25/33 1,012,375 1,009,240 - ---------------------------------------------------------------------------------------------------------------------------- Tobacco Settlement Authority, Asset-Backed Securities, Series 2001-A, 6.79%, 6/1/10 1,230,000 1,285,215 - ---------------------------------------------------------------------------------------------------------------------------- USAA Auto Owner Trust, Automobile Loan Asset-Backed Nts.: Series 2004-2, Cl. A2, 2.41%, 2/15/07 67,029 67,007 Series 2004-3, Cl. A2, 2.79%, 6/15/07 636,441 635,426 - ---------------------------------------------------------------------------------------------------------------------------- Volkswagen Auto Lease Trust, Automobile Lease Asset-Backed Securities: Series 2004-A, Cl. A2, 2.47%, 1/22/07 672,016 670,905 Series 2005-A, Cl. A2, 3.52%, 4/20/07 2,378,194 2,370,902 - ---------------------------------------------------------------------------------------------------------------------------- Wachovia Auto Owner Trust, Automobile Receivable Nts., Series 2004-B, Cl. A2, 2.40%, 5/21/07 311,033 310,599 - ---------------------------------------------------------------------------------------------------------------------------- Wells Fargo Home Equity Trust, Home Equity Asset-Backed Certificates, Series 2004-2, Cl. AI1B, 2.94%, 9/25/18 1 1,286,839 1,277,763
23 | OPPENHEIMER CORE BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------- ASSET-BACKED SECURITIES Continued - ---------------------------------------------------------------------------------------------------------------------------- Whole Auto Loan Trust, Automobile Loan Receivable Certificates, Series 2004-1, Cl. A2A, 2.59%, 5/15/07 $ 1,015,079 $ 1,011,338 --------------- Total Asset-Backed Securities (Cost $112,256,404) 110,594,796 - ---------------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS--70.9% - ---------------------------------------------------------------------------------------------------------------------------- GOVERNMENT AGENCY--58.1% - ---------------------------------------------------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED--58.0% Fannie Mae Whole Loan, CMO Pass-Through Certificates, Trust 2004-W9, Cl.2A2, 7%, 2/25/44 2,212,300 2,318,075 - ---------------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp.: 4.50%, 5/1/19 29,132,588 28,396,131 5%, 1/1/36 4 14,202,000 13,749,311 6%, 5/1/18-10/1/34 18,336,891 18,572,792 6.50%, 4/1/18-4/1/34 3,977,862 4,091,281 7%, 2/1/29-2/1/35 14,455,830 15,074,348 8%, 4/1/16 991,345 1,056,325 9%, 3/1/17-5/1/25 277,417 299,847 12.50%, 4/1/14 1,899 2,101 13.50%, 11/1/10 3,962 4,385 - ---------------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., CMO Gtd. Real Estate Mtg Investment Conduit Multiclass Pass-Through Certificates: Series 2075, Cl. D, 6.50%, 8/15/28 605,695 624,009 Series 2326, Cl. ZP, 6.50%, 6/15/31 1,270,628 1,309,143 Series 2456, Cl. BD, 6%, 3/15/30 381,887 382,674 Series 2500, Cl. FD, 4.869%, 3/15/32 1 564,748 570,963 Series 2526, Cl. FE, 4.769%, 6/15/29 1 790,032 795,724 Series 2551, Cl. FD, 4.769%, 1/15/33 1 613,398 619,124 Series 2583, Cl. KA, 5.50%, 3/15/22 2,014,119 2,017,963 - ---------------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., CMO Pass-Through Participation Certificates, Series 151, Cl. F, 9%, 5/15/21 50,585 50,508 - ---------------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment Conduit Multiclass Pass-Through Certificates, Series 2195, Cl. LH, 6.50%, 10/15/29 3,627,708 3,687,504 - ---------------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security: Series 176, Cl. IO, 13.464%, 6/1/26 5 987,994 210,305 Series 183, Cl. IO, 11.095%, 4/1/27 5 1,522,275 316,681 Series 184, Cl. IO, 16.691%, 12/1/26 5 1,649,895 326,254 Series 192, Cl. IO, 15.433%, 2/1/28 5 395,663 80,877 Series 200, Cl. IO, 14.015%, 1/1/29 5 469,810 102,134 Series 206, Cl. IO,(8.685)%, 12/1/29 5 599,028 127,085 Series 2003-118, Cl. S, 20.029%, 12/25/33 5 8,471,938 925,484 Series 2130, Cl. SC, 7.80%, 3/15/29 5 1,092,649 81,478 Series 2134, Cl. SB, 11.861%, 3/15/29 5 1,173,749 89,343 Series 2796, Cl. SD, 12.317%, 7/15/26 5 1,726,334 133,979 Series 2920, Cl. S, 14.307%, 1/15/35 5 7,151,366 345,701 Series 3000, Cl. SE, 20.785%, 7/15/25 5 9,511,795 347,620
24 | OPPENHEIMER CORE BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED Continued Federal Home Loan Mortgage Corp., Principal-Only Stripped Mtg.-Backed Security, Series 176, Cl. PO, 4.49%, 6/1/26 6 $ 419,059 $ 353,506 - ---------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn.: 5%, 6/1/18-7/1/18 8,938,827 8,858,834 5%, 1/1/36 4 59,240,000 57,407,233 5.50%, 3/1/33-1/1/34 68,703,164 68,220,800 5.50%, 1/1/21-1/1/36 4 117,837,000 117,001,994 6%, 8/1/16-11/1/32 57,721,324 58,776,996 6.50%, 11/1/31-1/1/34 5,958,590 6,139,029 6.50%, 1/1/36 4 40,237,000 41,280,667 7%, 1/1/09-11/1/17 3,389,929 3,524,208 7.50%, 2/1/08-3/1/08 22,658 23,088 8%, 8/1/17 12,549 12,915 8.50%, 7/1/32 122,971 133,156 - ---------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn. Grantor Trust, CMO, Trust 2002-T1, Cl. A2, 7%, 11/25/31 2,485,910 2,573,744 - ---------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., CMO Gtd. Real Estate Mtg Investment Conduit Pass-Through Certificates: Trust 1992-34, Cl. G, 8%, 3/25/22 37,714 38,418 Trust 1993-87, Cl. Z, 6.50%, 6/25/23 477,429 492,742 Trust 2001-51, Cl. OD, 6.50%, 10/25/31 3,491,241 3,595,793 Trust 2001-70, Cl. LR, 6%, 9/25/30 641,426 647,577 Trust 2001-72, Cl. NH, 6%, 4/25/30 384,571 387,554 Trust 2001-74, Cl. PD, 6%, 5/25/30 154,214 154,602 Trust 2002-77, Cl. WF, 4.77%, 12/18/32 1 952,231 959,511 Trust 2003-17, Cl. EQ, 5.50%, 3/25/23 6,305,000 6,352,863 Trust 2003-23, Cl. EQ, 5.50%, 4/25/23 8,316,000 8,376,600 Trust 2003-28, Cl. KG, 5.50%, 4/25/23 1,074,000 1,097,464 Trust 2004-101, Cl. BG, 5%, 1/25/20 2,417,000 2,385,323 Trust 2005-71, Cl. DB, 4.50%, 8/25/25 1,170,000 1,098,923 Trust 2005-100, Cl. BQ, 5.50%, 11/25/25 2,300,000 2,268,469 Trust 2005-104, Cl. MC, 5.50%, 12/25/25 11,000,000 10,973,437 Trust 2005-109, Cl. AH, 5.50%, 12/25/25 10,000,000 9,950,920 - ---------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., CMO Gtd. Real Estate Mtg Investment Conduit Pass-Through Certificates, Interest-Only Stripped Mtg.-Backed Security: Trust 2002-38, Cl. SO, 8.585%, 4/25/32 5 518,870 30,307 Trust 2002-47, Cl. NS, 9.594%, 4/25/32 5 2,048,901 165,216 Trust 2002-51, Cl. S, 9.762%, 8/25/32 5 1,881,334 152,389 Trust 2002-77, Cl. IS, 11.079%, 12/18/32 5 884,000 74,332 - ---------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security: Trust 222, Cl. 2, 13.682%, 6/1/23 5 3,208,972 761,273 Trust 240, Cl. 2, 15.615%, 9/1/23 5 3,775,611 786,248 Trust 252, Cl. 2, 7.415%, 11/1/23 5 2,523,350 557,213 Trust 273, Cl. 2, 14.617%, 8/1/26 5 739,788 152,694 Trust 301, Cl. 2, 7.705%, 4/1/29 5 1,970,725 427,675
25 | OPPENHEIMER CORE BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED Continued Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security: Continued Trust 303, Cl. IO, (5.181)%, 11/1/29 5 $ 255,653 $ 54,759 Trust 319, Cl. 2, 13.424%, 2/1/32 5 756,133 171,439 Trust 321, Cl. 2, 11.397%, 3/1/32 5 4,418,744 997,281 Trust 322, Cl. 2, 16.345%, 4/1/32 5 7,982,678 1,704,581 Trust 324, Cl. 2, 7.565%, 6/1/32 5 3,919,208 867,960 Trust 329, Cl. 2, 11.403%, 1/1/33 5 3,490,810 773,645 Trust 331, Cl. 9, (13.274)%, 2/1/33 5 2,204,517 500,186 Trust 333, Cl. 2, 11.615%, 3/1/33 5 14,019,961 3,141,628 Trust 334, Cl. 17, 2.19%, 2/1/33 5 311,947 69,124 Trust 338, Cl. 2, 10.364%, 6/1/33 5 16,923,054 3,781,852 Trust 346, Cl. 2, 11.782%, 12/1/33 5 24,708,893 5,479,013 Trust 350, Cl. 2, 12.23%, 2/1/34 5 10,218,760 2,266,192 Trust 2001-65, Cl. S, 21.164%, 11/25/31 5 4,404,526 407,630 Trust 2001-81, Cl. S, 11.605%, 1/25/32 5 821,503 71,528 Trust 2002-52, Cl. SD, 6.658%, 9/25/32 5 2,315,557 190,582 Trust 2002-75, Cl. SA, 21.814%, 11/25/32 5 4,050,634 364,920 Trust 2002-77, Cl. SH, 12.545%, 12/18/32 5 1,059,267 99,776 Trust 2003-4, Cl. S, 20.563%, 2/25/33 5 2,339,953 248,416 Trust 2004-54, Cl. DS, 6.243%, 11/25/30 5 359,758 20,712 Trust 2005-6, Cl. SE, 13.927%, 2/25/35 5 4,919,815 255,962 Trust 2005-19, Cl. SA, 12.727%, 3/25/35 5 25,333,845 1,410,411 Trust 2005-40, Cl. SA, 13.682%, 5/25/35 5 4,684,250 249,587 Trust 2005-71, Cl. SA, 19.968%, 8/25/25 5 6,109,631 365,100 - ---------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Principal-Only Stripped Mtg.-Backed Security: Trust 322, Cl. 1, 3.379%, 4/1/32 6 2,781,659 2,224,124 Trust 1993-184, Cl. M, 5.779%, 9/25/23 6 905,745 760,289 --------------- 539,379,559 - ---------------------------------------------------------------------------------------------------------------------------- GNMA/GUARANTEED--0.1% Government National Mortgage Assn.: 4.75%, 7/20/25-7/20/27 1 36,236 36,517 7%, 7/15/09 24,242 24,988 8%, 7/15/06-10/15/06 6,117 6,176 8.50%, 8/15/17-12/15/17 358,790 387,188 9%, 2/15/09-6/15/09 16,725 17,602 10%, 11/15/09 20,528 21,846 10.50%, 12/15/17-5/15/21 29,842 33,574 11%, 10/20/19 66,675 72,965 12%, 5/15/14 347 398 - ---------------------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security: Series 2001-21, Cl. SB, 3.873%, 1/16/27 5 2,013,848 138,672 Series 2002-15, Cl. SM, 0.947%, 2/16/32 5 2,051,223 142,634 Series 2002-76, Cl. SY, 5.131%, 12/16/26 5 819,896 35,951 Series 2004-11, Cl. SM, (0.493)%, 1/17/30 5 296,462 12,503 --------------- 931,014
26 | OPPENHEIMER CORE BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------- NON-AGENCY--12.8% - ---------------------------------------------------------------------------------------------------------------------------- COMMERCIAL--10.1% Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates, Series 1996-MD6, Cl. A3, 7.408%, 11/13/29 1 $ 800,000 $ 830,458 - ---------------------------------------------------------------------------------------------------------------------------- Asset Securitization Corp., Interest-Only Stripped Mtg.-Backed Security Collateralized Mtg. Obligations, Series 1997-D4, Cl. PS1, 4.501%, 4/14/29 5 40,459,738 1,158,666 - ---------------------------------------------------------------------------------------------------------------------------- Banc of America Commercial Mortgage, Inc., Commercial Mtg Pass-Through Certificates: Series 2004-6, Cl. A3, 4.512%, 12/10/42 2,160,000 2,092,774 Series 2005-2, Cl. A4, 4.783%, 7/10/43 1 3,980,000 3,907,625 Series 2005-3, Cl. A2, 4.501%, 7/10/43 3,330,000 3,251,342 Series 2005-6, Cl. A4, 5.182%, 9/10/47 1 10,299,000 10,363,369 - ---------------------------------------------------------------------------------------------------------------------------- Banc of America Funding Corp., CMO Pass-Through Certificates, Series 2004-2, Cl. 2A1, 6.50%, 7/20/32 2,492,796 2,495,501 - ---------------------------------------------------------------------------------------------------------------------------- Banc of America Mortgage Securities, Inc., CMO Pass-Through Certificates: Series 2004-8, Cl. 5A1, 6.50%, 5/25/32 2,090,550 2,123,214 Series 2004-E, Cl. 2A9, 3.712%, 6/25/34 1 54,757 54,739 Series 2005-E, Cl. 2A2, 4.983%, 6/25/35 1 681,450 678,357 - ---------------------------------------------------------------------------------------------------------------------------- Bear Stearns Commercial Mortgage Securities, Inc., Commercial Mtg Obligations, Series 2005-PWR7, Cl. A2, 4.945%, 2/11/41 1,210,000 1,196,695 - ---------------------------------------------------------------------------------------------------------------------------- Capital Lease Funding Securitization LP, Interest-Only Corporate-Backed Pass-Through Certificates, Series 1997-CTL1, 6.722%, 6/22/24 5 8,610,342 334,752 - ---------------------------------------------------------------------------------------------------------------------------- Citigroup/Deutsche Bank Commercial Mortgage Trust, Commercial Mtg Obligations, Series 2005-CD1, Cl. A4, 5.225%, 7/15/44 7 4,360,000 4,408,168 - ---------------------------------------------------------------------------------------------------------------------------- Countrywide Alternative Loan Trust, CMO: Series 2004-J9, Cl. 1A1, 4.559%, 10/25/34 1 703,741 704,286 Series 2005-J3, Cl. 3A1, 6.50%, 9/25/34 5,124,563 5,189,335 - ---------------------------------------------------------------------------------------------------------------------------- First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates, Series 1997-CHL1, Cl. D, 7.674%, 4/29/39 1,2 2,690,000 2,703,450 - ---------------------------------------------------------------------------------------------------------------------------- First Union National Bank/Lehman Brothers/Bank of America Commercial Mtg. Trust, Pass-Through Certificates, Series 1998-C2, Cl. A2, 6.56%, 11/18/35 1,603,030 1,648,558 - ---------------------------------------------------------------------------------------------------------------------------- GE Capital Commercial Mortgage Corp., Commercial Mtg. Obligations: Series 2004-C3, Cl. A2, 4.433%, 7/10/39 1,730,000 1,700,741 Series 2005-C3, Cl. A2, 4.853%, 7/10/45 2,100,000 2,086,077 Series 2005-CA, Cl. A3, 4.578%, 6/10/48 1,000,000 973,358 - ---------------------------------------------------------------------------------------------------------------------------- GMAC Commercial Mortgage Securities, Inc., Commercial Mtg Pass-Through Certificates: Series 1997-C1, Cl. A3, 6.869%, 7/15/29 1,016,945 1,040,106 Series 2004-C3, Cl. A4, 4.547%, 12/10/41 1,410,000 1,365,722 - ---------------------------------------------------------------------------------------------------------------------------- Greenwich Capital Commercial Funding Corp., Commercial Mtg Pass-Through Certificates: Series 2005-GG3, Cl. A2, 4.305%, 8/10/42 1,850,000 1,802,605 Series 2005-GG5, Cl. A2, 5.117%, 4/10/37 7 2,550,000 2,557,785 - ---------------------------------------------------------------------------------------------------------------------------- GS Mortgage Securities Corp. II, Commercial Mtg. Pass-Through Certificates: Series 2004-C1, Cl. A1, 3.659%, 10/10/28 1,601,040 1,551,610 Series 2004-GG2, Cl. A3, 4.602%, 8/10/38 1,100,000 1,086,531
27 | OPPENHEIMER CORE BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------- COMMERCIAL Continued JP Morgan Commercial Mortgage Finance Corp., Commercial Mtg Obligations, Series 2000-C9, Cl. A2, 7.77%, 10/15/32 $ 5,000,000 $ 5,429,159 - ---------------------------------------------------------------------------------------------------------------------------- JPMorgan Chase Commercial Mortgage Securities Corp., Commercial Mtg. Pass-Through Certificates, Series 2005-LDP2, Cl. A2, 4.575%, 7/15/42 800,000 784,171 - ---------------------------------------------------------------------------------------------------------------------------- LB-UBS Commercial Mortgage Trust, Commercial Mtg. Pass-Through Certificates, Series 2005-C5, Cl. A2, 4.885%, 9/15/30 2,520,000 2,503,496 - ---------------------------------------------------------------------------------------------------------------------------- Lehman Brothers Commercial Conduit Mortgage Trust, Interest-Only Stripped Mtg.-Backed Security, Series 1998-C1, Cl. IO, 9.07%, 2/18/30 5 11,236,330 290,578 - ---------------------------------------------------------------------------------------------------------------------------- Lehman Structured Securities Corp., CMO, Series 2002-GE1, Cl. A, 2.514%, 7/26/24 3 226,346 182,952 - ---------------------------------------------------------------------------------------------------------------------------- Mastr Alternative Loan Trust, CMO Pass-Through Certificates: Series 2004-6, Cl. 10A1, 6%, 7/25/34 3,097,567 3,114,560 Series 2004-9, Cl. A3, 4.70%, 8/25/34 1 4,007,696 3,989,419 - ---------------------------------------------------------------------------------------------------------------------------- Mastr Seasoned Securities Trust, Mtg. Pass-Through Certificates, Series 2004-2, Cl. A1, 6.50%, 8/25/32 5,806,108 5,862,354 - ---------------------------------------------------------------------------------------------------------------------------- Nomura Asset Securities Corp., Commercial Mtg. Pass-Through Certificates, Series 1998-D6, Cl. A1B, 6.59%, 3/15/30 7 2,010,000 2,078,641 - ---------------------------------------------------------------------------------------------------------------------------- Residential Accredit Loans, Inc., Mtg. Asset-Backed Pass-Through Certificates, Series 2003-QS1, Cl. A2, 5.75%, 1/25/33 2,070,620 2,074,613 - ---------------------------------------------------------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Inc., Interest-Only Commercial Mtg. Pass-Through Certificates, Series 1999-C1, Cl. X, (2.705)%, 5/18/32 5 223,072,181 640,753 - ---------------------------------------------------------------------------------------------------------------------------- Wachovia Bank Commercial Mortgage Trust, Commercial Mtg. Obligations: Series 2005-C17, Cl. A2, 4.782%, 3/15/42 3,560,000 3,520,729 Series 2005-C20, Cl. A5, 5.087%, 7/15/42 1 2,520,000 2,503,474 - ---------------------------------------------------------------------------------------------------------------------------- Washington Mutual Mortgage Securities Corp., CMO Pass-Through Certificates, Series 2005-AR5, Cl. A1, 4.681%, 5/25/35 1 2,823,384 2,821,356 - ---------------------------------------------------------------------------------------------------------------------------- Wells Fargo Mortgage-Backed Securities Trust, CMO, Series 2004-DD, Cl. 2A1, 4.522%, 1/25/35 1 1,219,964 1,216,233 --------------- 94,318,312 - ---------------------------------------------------------------------------------------------------------------------------- OTHER--1.7% Ford Credit Auto Owner Trust, Automobile Loan Pass-Through Certificates, Series 2005-C, Cl. A2, 4.24%, 3/15/08 4,800,000 4,783,294 - ---------------------------------------------------------------------------------------------------------------------------- JP Morgan Mortgage Trust, CMO Pass-Through Certificates, Series 2005-S2, Cl. 3A1, 6.754%, 9/25/32 1 3,232,533 3,291,591 - ---------------------------------------------------------------------------------------------------------------------------- JPMorgan Chase Commercial Mortgage Securities Corp., Commercial Mtg Pass-Through Certificates, Series 2005-LDP4, Cl. A2, 4.79%, 10/15/42 3,150,000 3,109,905 - ---------------------------------------------------------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VI, Inc., Interest-Only Stripped Mtg.-Backed Security, Series 1987-3, Cl. B, (1.041)%, 10/23/17 5 17,847 4,411 - ---------------------------------------------------------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VI, Inc., Principal-Only Stripped Mtg.-Backed Security, Series1987-3, Cl. A, 1.903%, 10/23/17 6 26,413 23,567 - ---------------------------------------------------------------------------------------------------------------------------- Washington Mutual Mortgage Securities Corp., CMO Pass-Through Certificates, Series 2005-AR8, Cl. 2AB1, 4.629%, 7/25/45 1 4,158,753 4,158,103 --------------- 15,370,871
28 | OPPENHEIMER CORE BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------- RESIDENTIAL--1.0% Countrywide Alternative Loan Trust, CMO, Series 2005-J1, Cl. 3A1, 6.50%, 8/25/32 7 $ 6,755,050 $ 6,875,378 - ---------------------------------------------------------------------------------------------------------------------------- Structured Asset Securities Corp., CMO Pass-Through Certificates, Series 2002-AL1, Cl. B2, 3.45%, 2/25/32 2,685,094 2,347,091 --------------- 9,222,469 --------------- Total Mortgage-Backed Obligations (Cost $662,409,383) 659,222,225 - ---------------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS--9.1% - ---------------------------------------------------------------------------------------------------------------------------- Fannie Mae Unsec. Nts., 3.58%, 1/31/07 8 9,150,000 8,702,528 - ---------------------------------------------------------------------------------------------------------------------------- Federal Home Loan Bank Unsec. Bonds, 3.50%, 11/15/07 400,000 391,135 - ---------------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp. Unsec. Nts.: 4.125%, 7/12/10 9 12,399,000 12,103,222 4.375%, 11/16/07 2,455,000 2,439,772 5.50%, 9/15/11 1,800,000 1,865,374 6.625%, 9/15/09 3,435,000 3,652,480 - ---------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn. Unsec. Nts.: 4%, 2/28/07 905,000 897,408 4.75%, 12/15/10 2,745,000 2,748,030 6%, 5/15/11 7,280,000 7,708,421 6.625%, 9/15/09 2,870,000 3,054,291 7.25%, 5/15/30 7 2,180,000 2,894,458 - ---------------------------------------------------------------------------------------------------------------------------- Tennessee Valley Authority Bonds: 4.65%, 6/15/35 3,718,000 3,528,858 5.375%, 11/13/08 2,000,000 2,037,054 Series A, 6.79%, 5/23/12 18,831,000 20,866,970 - ---------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds: 5.50%, 8/15/28 7 1,819,000 2,045,878 8.875%, 8/15/17 7 5,464,000 7,594,534 STRIPS, 3.86%, 2/15/13 7,8 1,520,000 1,112,669 - ---------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 4.875%, 2/15/12 7 1,275,000 1,309,416 --------------- Total U.S. Government Obligations (Cost $86,276,171) 84,952,498 - ---------------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS--0.5% - ---------------------------------------------------------------------------------------------------------------------------- United Mexican States Nts., 7.50%, 1/14/12 (Cost $3,861,965) 3,695,000 4,129,163 - ---------------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES--29.2% - ---------------------------------------------------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--8.7% - ---------------------------------------------------------------------------------------------------------------------------- AUTO COMPONENTS--0.5% Dana Corp., 6.50% Unsec. Nts., 3/1/09 7 2,905,000 2,338,525 - ---------------------------------------------------------------------------------------------------------------------------- Lear Corp., 8.11% Sr. Unsec. Nts., Series B, 5/15/09 2,660,000 2,477,439 --------------- 4,815,964
29 | OPPENHEIMER CORE BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES--2.1% DaimlerChrysler NA Holdings Corp., 8% Nts., 6/15/10 $ 3,955,000 $ 4,329,408 - ---------------------------------------------------------------------------------------------------------------------------- Ford Motor Credit Co.: 5.80% Sr. Unsec. Nts., 1/12/09 5,850,000 5,106,570 7.375% Nts., 10/28/09 620,000 550,308 - ---------------------------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp.: 6.15% Nts., 4/5/07 7,210,000 6,812,181 8% Bonds, 11/1/31 7 3,160,000 3,034,924 --------------- 19,833,391 - ---------------------------------------------------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--1.2% Harrah's Operating Co., Inc., 5.625% Sr. Unsec. Bonds, 6/1/15 2,170,000 2,135,697 - ---------------------------------------------------------------------------------------------------------------------------- Hilton Hotels Corp., 8.25% Sr. Unsec. Nts., 2/15/11 1,920,000 2,106,346 - ---------------------------------------------------------------------------------------------------------------------------- Starwood Hotels & Resorts Worldwide, Inc., 7.375% Nts., 5/1/07 2,740,000 2,808,500 - ---------------------------------------------------------------------------------------------------------------------------- Yum! Brands, Inc., 8.50% Sr. Unsec. Nts., 4/15/06 4,154,000 4,194,875 --------------- 11,245,418 - ---------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD DURABLES--1.1% Beazer Homes USA, Inc., 6.875% Sr. Unsec. Nts., 7/15/15 1,930,000 1,860,038 - ---------------------------------------------------------------------------------------------------------------------------- D.R. Horton, Inc., 6.125% Nts., 1/15/14 1,660,000 1,662,963 - ---------------------------------------------------------------------------------------------------------------------------- K. Hovnanian Enterprises, Inc., 6.50% Sr. Nts., 1/15/14 1,915,000 1,840,939 - ---------------------------------------------------------------------------------------------------------------------------- KB Home, 5.75% Sr. Unsec. Unsub. Nts., 2/1/14 2,665,000 2,526,074 - ---------------------------------------------------------------------------------------------------------------------------- Lennar Corp., 5.95% Sr. Unsec. Nts., 3/1/13 7 2,140,000 2,157,017 --------------- 10,047,031 - ---------------------------------------------------------------------------------------------------------------------------- MEDIA--2.5% British Sky Broadcasting Group plc, 7.30% Unsec. Nts., 10/15/06 823,000 836,474 - ---------------------------------------------------------------------------------------------------------------------------- Chancellor Media CCU, 8% Sr. Unsec. Nts., 11/1/08 4,275,000 4,547,835 - ---------------------------------------------------------------------------------------------------------------------------- Cox Communications, Inc., 4.625% Unsec. Nts., 1/15/10 4,185,000 4,054,964 - ---------------------------------------------------------------------------------------------------------------------------- Liberty Media Corp., 5.70% Sr. Unsec. Nts., 5/15/13 7 2,350,000 2,201,388 - ---------------------------------------------------------------------------------------------------------------------------- TCI Communications, Inc., 9.80% Sr. Unsec. Debs., 2/1/12 3,400,000 4,106,588 - ---------------------------------------------------------------------------------------------------------------------------- Time Warner Entertainment Co. LP: 8.375% Sr. Nts., 7/15/33 2,340,000 2,772,355 10.15% Sr. Nts., 5/1/12 1,037,000 1,264,102 - ---------------------------------------------------------------------------------------------------------------------------- Univision Communications, Inc., 3.50% Sr. Unsec. Nts., 10/15/07 7 3,580,000 3,474,326 --------------- 23,258,032 - ---------------------------------------------------------------------------------------------------------------------------- MULTILINE RETAIL--1.0% Federated Department Stores, Inc., 6.625% Sr. Unsec. Nts., 9/1/08 2,800,000 2,903,569 - ---------------------------------------------------------------------------------------------------------------------------- J.C. Penney Co., Inc. (Holding Co.), 7.40% Nts., 4/1/37 4,035,000 4,528,133 - ---------------------------------------------------------------------------------------------------------------------------- May Department Stores Co., 7.90% Unsec. Debs., 10/15/07 1,515,000 1,577,997 --------------- 9,009,699
30 | OPPENHEIMER CORE BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------- SPECIALTY RETAIL--0.3% Gap, Inc. (The): 6.90% Nts., 9/15/07 $ 2,095,000 $ 2,141,524 9.55% Unsub. Nts., 12/15/08 1 507,000 563,792 --------------- 2,705,316 - ---------------------------------------------------------------------------------------------------------------------------- CONSUMER STAPLES--2.5% - ---------------------------------------------------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--1.5% Albertson's, Inc., 8% Sr. Unsec. Debs., 5/1/31 7 2,465,000 2,431,676 - ---------------------------------------------------------------------------------------------------------------------------- Delhaize America, Inc., 9% Unsub. Debs., 4/15/31 2,905,000 3,429,695 - ---------------------------------------------------------------------------------------------------------------------------- Kroger Co. (The), 6.80% Sr. Unsec. Nts., 4/1/11 5,150,000 5,407,031 - ---------------------------------------------------------------------------------------------------------------------------- Real Time Data Co., 11% Disc. Nts., 5/31/09 3,10 476,601 -- - ---------------------------------------------------------------------------------------------------------------------------- Safeway, Inc., 7.50% Sr. Unsec. Nts., 9/15/09 2,690,000 2,875,427 --------------- 14,143,829 - ---------------------------------------------------------------------------------------------------------------------------- FOOD PRODUCTS--1.0% Archer Daniels Midland Co., 5.375% Nts., 9/15/35 2,145,000 2,064,867 - ---------------------------------------------------------------------------------------------------------------------------- ConAgra Foods, Inc., 6% Nts., 9/15/06 1,615,000 1,626,460 - ---------------------------------------------------------------------------------------------------------------------------- General Mills, Inc., 3.875% Nts., 11/30/07 3,025,000 2,967,059 - ---------------------------------------------------------------------------------------------------------------------------- Kraft Foods, Inc., 5.25% Nts., 6/1/07 1,950,000 1,958,574 --------------- 8,616,960 - ---------------------------------------------------------------------------------------------------------------------------- ENERGY--1.4% - ---------------------------------------------------------------------------------------------------------------------------- OIL & GAS--1.4% Kinder Morgan, Inc., 6.50% Sr. Unsec. Nts., 9/1/12 2,125,000 2,254,234 - ---------------------------------------------------------------------------------------------------------------------------- Pemex Project Funding Master Trust, 5.75% Unsec. Unsub. Nts., Series 12, 12/15/15 2,7 3,360,000 3,347,400 - ---------------------------------------------------------------------------------------------------------------------------- Petroleum Export Ltd. Cayman SPV, 4.623% Sr. Nts., Cl. A1, 6/15/10 2 5,757,000 5,705,953 - ---------------------------------------------------------------------------------------------------------------------------- PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 2 1,461,490 1,388,700 --------------- 12,696,287 - ---------------------------------------------------------------------------------------------------------------------------- FINANCIALS--8.3% - ---------------------------------------------------------------------------------------------------------------------------- CAPITAL MARKETS--0.8% Credit Suisse First Boston, Inc. (USA), 5.50% Nts., 8/15/13 4,320,000 4,413,614 - ---------------------------------------------------------------------------------------------------------------------------- JPMorgan Chase Capital XV, 5.875% Sub. Nts., Series O, 3/15/35 7 3,120,000 3,112,765 --------------- 7,526,379 - ---------------------------------------------------------------------------------------------------------------------------- COMMERCIAL BANKS--1.4% Barclays Bank plc, 6.278% Perpetual Bonds 11 3,690,000 3,715,424 - ---------------------------------------------------------------------------------------------------------------------------- HSBC Finance Corp., 4.75% Sr. Unsec. Nts., 7/15/13 4,205,000 4,069,128 - ---------------------------------------------------------------------------------------------------------------------------- National City Bank, 6.20% Sub. Nts., 12/15/11 216,000 228,835 - ---------------------------------------------------------------------------------------------------------------------------- Popular North America, Inc., 5.20% Nts., 12/12/07 4,535,000 4,532,674
31 | OPPENHEIMER CORE BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------- COMMERCIAL BANKS Continued Socgen Real Estate LLC, 7.64% Bonds 1,2,11 $ 185,000 $ 192,560 --------------- 12,738,621 - ---------------------------------------------------------------------------------------------------------------------------- CONSUMER FINANCE--0.1% MBNA America Bank NA, 7.125% Sub. Nts., 11/15/12 515,000 576,511 - ---------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--2.1% CIT Group, Inc.: 4.75% Sr. Nts., 8/15/08 695,000 692,774 7.75% Sr. Unsec. Unsub. Nts., 4/2/12 1,325,000 1,504,610 - ---------------------------------------------------------------------------------------------------------------------------- Citigroup, Inc., 6.625% Unsec. Sub. Nts., 6/15/32 1,600,000 1,813,965 - ---------------------------------------------------------------------------------------------------------------------------- Goldman Sachs Group, Inc. (The), 5.70% Sr. Unsec. Nts., 9/1/12 6,485,000 6,680,166 - ---------------------------------------------------------------------------------------------------------------------------- MBNA Corp., 7.50% Sr. Nts., Series F, 3/15/12 2,630,000 2,965,969 - ---------------------------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc., 5% Sr. Unsub. Nts., Series C, 2/3/14 4,045,000 4,001,201 - ---------------------------------------------------------------------------------------------------------------------------- Morgan Stanley, 6.60% Nts., 4/1/12 2,045,000 2,200,925 --------------- 19,859,610 - ---------------------------------------------------------------------------------------------------------------------------- INSURANCE--2.0% Allstate Financial Global Funding II, 4.25% Nts., 9/10/08 2 635,000 624,533 - ---------------------------------------------------------------------------------------------------------------------------- Marsh & McLennan Cos., Inc., 5.875% Sr. Unsec. Bonds, 8/1/33 2,780,000 2,670,037 - ---------------------------------------------------------------------------------------------------------------------------- MetLife, Inc., 5.70% Sr. Unsec. Nts., 6/15/35 7 2,040,000 2,054,855 - ---------------------------------------------------------------------------------------------------------------------------- Nationwide Financial Services, Inc.: 5.90% Nts., 7/1/12 1,430,000 1,492,873 6.25% Sr. Unsec. Nts., 11/15/11 680,000 716,585 - ---------------------------------------------------------------------------------------------------------------------------- Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 2 3,310,000 4,205,666 - ---------------------------------------------------------------------------------------------------------------------------- Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 3,185,000 4,133,534 - ---------------------------------------------------------------------------------------------------------------------------- Travelers Property Casualty Corp., 3.75% Sr. Unsec. Nts., 3/15/08 2,845,000 2,776,202 --------------- 18,674,285 - ---------------------------------------------------------------------------------------------------------------------------- REAL ESTATE--1.7% EOP Operating LP: 6.763% Sr. Unsec. Nts., 6/15/07 7 560,000 571,834 8.10% Unsec. Nts., 8/1/10 2,690,000 2,973,908 - ---------------------------------------------------------------------------------------------------------------------------- iStar Financial, Inc.: 5.125% Sr. Unsec. Nts., Series B, 4/1/11 7 1,365,000 1,331,548 5.15% Sr. Unsec. Nts., 3/1/12 1,770,000 1,716,387 - ---------------------------------------------------------------------------------------------------------------------------- Liberty Property Trust, 5.65% Sr. Nts., 8/15/14 2,255,000 2,287,655 - ---------------------------------------------------------------------------------------------------------------------------- Simon Property Group LP, 5.375% Nts., 6/1/11 2 3,075,000 3,085,784 - ---------------------------------------------------------------------------------------------------------------------------- Vornado Realty LP, 5.625% Sr. Unsec. Unsub. Nts., 6/15/07 4,120,000 4,150,245 --------------- 16,117,361 - ---------------------------------------------------------------------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE--0.2% Countrywide Financial Corp., 4.50% Nts., Series A, 6/15/10 1,970,000 1,914,139
32 | OPPENHEIMER CORE BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------- HEALTH CARE--0.6% - ---------------------------------------------------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--0.6% Aetna, Inc., 7.375% Sr. Unsec. Nts., 3/1/06 $ 3,200,000 $ 3,212,806 - ---------------------------------------------------------------------------------------------------------------------------- HCA, Inc., 7.125% Sr. Unsec. Nts., 6/1/06 2,085,000 2,112,522 --------------- 5,325,328 - ---------------------------------------------------------------------------------------------------------------------------- INDUSTRIALS--1.4% - ---------------------------------------------------------------------------------------------------------------------------- AIR FREIGHT & LOGISTICS--0.4% FedEx Corp., 2.65% Unsec. Nts., 4/1/07 4,220,000 4,106,094 - ---------------------------------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--0.2% Allied Waste North America, Inc., 8.875% Sr. Nts., Series B, 4/1/08 1,885,000 1,998,100 - ---------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--0.8% Tyco International Group SA: 6.125% Unsec. Unsub. Nts., 11/1/08 3,901,000 3,984,602 6.125% Unsec. Unsub. Nts., 1/15/09 575,000 588,078 6.375% Sr. Unsec. Unsub. Nts., 2/15/06 2,590,000 2,594,302 --------------- 7,166,982 - ---------------------------------------------------------------------------------------------------------------------------- MARINE--0.0% Navigator Gas Transport plc, 10.50% First Priority Ship Mtg. Nts., 6/30/07 3,10 57,000 64,695 - ---------------------------------------------------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--0.0% - ---------------------------------------------------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--0.0% Orion Network Systems, Inc., 12.50% Sr. Unsub. Disc. Nts., 1/15/07 10 200,000 2,000 - ---------------------------------------------------------------------------------------------------------------------------- MATERIALS--0.0% - ---------------------------------------------------------------------------------------------------------------------------- CHEMICALS--0.0% Morton International, Inc., 9.65% Credit Sensitive Nts., 6/1/20 85,000 119,194 - ---------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--2.3% - ---------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--1.9% British Telecommunications plc, 8.875% Bonds, 12/15/30 1,810,000 2,428,835 - ---------------------------------------------------------------------------------------------------------------------------- Deutsche Telekom International Finance BV, 8% Unsub. Nts., 6/15/10 1 2,525,000 2,865,453 - ---------------------------------------------------------------------------------------------------------------------------- France Telecom SA, 8.50% Sr. Unsec. Nts., 3/1/31 1 675,000 903,365 - ---------------------------------------------------------------------------------------------------------------------------- SBC Communications, Inc., 5.30% Nts., 11/15/10 3,310,000 3,323,551 - ---------------------------------------------------------------------------------------------------------------------------- Sprint Capital Corp., 8.75% Nts., 3/15/32 2,705,000 3,600,623 - ---------------------------------------------------------------------------------------------------------------------------- Verizon Global Funding Corp.: 5.85% Nts., 9/15/35 7 2,090,000 2,021,009 7.25% Sr. Unsec. Unsub. Nts., 12/1/10 2,665,000 2,894,864 --------------- 18,037,700 - ---------------------------------------------------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--0.4% AT&T Wireless Services, Inc., 8.125% Sr. Unsec. Nts., 5/1/12 3,035,000 3,511,146 - ---------------------------------------------------------------------------------------------------------------------------- Loral Skynet Corp., 14% Sr. Sec. Nts., 10/15/15 12 34,000 41,140 --------------- 3,552,286
33 | OPPENHEIMER CORE BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------- UTILITIES--4.0% - ---------------------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES--2.5% CenterPoint Energy, Inc., 7.25% Sr. Nts., Series B, 9/1/10 $ 2,380,000 $ 2,555,646 - ---------------------------------------------------------------------------------------------------------------------------- Dominion Resources, Inc., 8.125% Sr. Unsub. Nts., 6/15/10 2,740,000 3,048,313 - ---------------------------------------------------------------------------------------------------------------------------- DTE Energy Co., 6.45% Sr. Unsub. Nts., 6/1/06 1,035,000 1,041,736 - ---------------------------------------------------------------------------------------------------------------------------- FirstEnergy Corp.: 5.50% Sr. Unsub. Nts., Series A, 11/15/06 1,770,000 1,776,731 7.375% Sr. Unsub. Nts., Series C, 11/15/31 2,212,000 2,618,302 - ---------------------------------------------------------------------------------------------------------------------------- IPALCO Enterprises, Inc., 8.375% Sr. Sec. Nts., 11/14/08 1 1,435,000 1,510,338 - ---------------------------------------------------------------------------------------------------------------------------- MidAmerican Energy Holdings Co., 5.875% Sr. Unsec. Nts., 10/1/12 3,465,000 3,582,093 - ---------------------------------------------------------------------------------------------------------------------------- Portland General Electric Co., 8.125% First Mortgage Nts., 2/1/10 2 1,505,000 1,662,572 - ---------------------------------------------------------------------------------------------------------------------------- PSE&G Energy Holdings LLC, 7.75% Unsec. Nts., 4/16/07 1,810,000 1,882,400 - ---------------------------------------------------------------------------------------------------------------------------- PSE&G Power LLC, 6.875% Sr. Unsec. Nts., 4/15/06 645,000 648,386 - ---------------------------------------------------------------------------------------------------------------------------- TXU Energy Co., 6.125% Nts., 3/15/08 2,830,000 2,877,971 --------------- 23,204,488 - ---------------------------------------------------------------------------------------------------------------------------- ENERGY TRADERS--0.4% Constellation Energy Group, Inc., 7.60% Unsec. Nts., 4/1/32 3,065,000 3,698,870 - ---------------------------------------------------------------------------------------------------------------------------- GAS UTILITIES--0.7% NiSource Finance Corp., 7.875% Sr. Unsec. Nts., 11/15/10 2,525,000 2,800,472 - ---------------------------------------------------------------------------------------------------------------------------- Sempra Energy, 7.95% Sr. Unsec. Unsub. Nts., 3/1/10 3,223,000 3,543,527 --------------- 6,343,999 - ---------------------------------------------------------------------------------------------------------------------------- MULTI-UTILITIES & UNREGULATED POWER--0.4% PSEG Funding Trust I, 5.381% Nts., 11/16/07 3,935,000 3,942,727 --------------- Total Corporate Bonds and Notes (Cost $272,782,986) 271,341,296 SHARES - ----------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS--0.0% - ---------------------------------------------------------------------------------------------------------------------------- Loral Skynet Corp., 12% Cum., Series A, Non-Vtg.3,13 (Cost $53,392) 284 53,179 - ---------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--0.0% - ---------------------------------------------------------------------------------------------------------------------------- Chesapeake Energy Corp. 181 5,743 - ---------------------------------------------------------------------------------------------------------------------------- Geotek Communications, Inc., Series B, Escrow Shares 3,13,14 25 -- - ---------------------------------------------------------------------------------------------------------------------------- Loral Space & Communications Ltd. 13 2,154 60,851 --------------- Total Common Stocks (Cost $62,790) 66,594 UNITS - ----------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.0% - ---------------------------------------------------------------------------------------------------------------------------- Concentric Network Corp. Wts., Exp. 12/15/07 3,13 50 -- - ---------------------------------------------------------------------------------------------------------------------------- HF Holdings, Inc. Wts., Exp. 9/27/09 3,13 1,063 -- - ---------------------------------------------------------------------------------------------------------------------------- Long Distance International, Inc. Wts., Exp. 4/13/08 2,13 150 --
34 | OPPENHEIMER CORE BOND FUND
VALUE UNITS SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES Continued - ---------------------------------------------------------------------------------------------------------------------------- Loral Space & Communications Ltd. Wts., Exp. 1/15/07 3,13 200 $ -- - ---------------------------------------------------------------------------------------------------------------------------- Pathmark Stores, Inc. Wts., Exp. 9/19/10 13 2,028 568 --------------- Total Rights, Warrants and Certificates (Cost $25,015) 568 PRINCIPAL AMOUNT - ---------------------------------------------------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--0.3% - ---------------------------------------------------------------------------------------------------------------------------- Undivided interest of 0.22% in joint repurchase agreement (Principal Amount/Value $1,414,200,000, with a maturity value of $1,414,844,247) with UBS Warburg LLC, 4.10%, dated 12/30/05, to be repurchased at $3,127,424 on 1/3/06, collateralized by Federal Home Loan Mortgage Corp., 5%, 1/1/35, with a value of $157,513,104 and Federal National Mortgage Assn., 5%--5.50%, 3/1/34--10/1/35, with a value of $1,301,420,187 (Cost $3,126,000) $ 3,126,000 3,126,000 - ---------------------------------------------------------------------------------------------------------------------------- Total Investments, at Value (excluding Investments Purchased with Cash Collateral from Securities Loaned) (Cost $1,140,854,106) 1,133,486,319 - ---------------------------------------------------------------------------------------------------------------------------- INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED--4.0% - ---------------------------------------------------------------------------------------------------------------------------- ASSET-BACKED FLOATING NOTE--0.6% Trust Money Market Securities, Series A-2, 4.44%, 1/17/06 15 2,000,000 2,000,000 - ---------------------------------------------------------------------------------------------------------------------------- Whitehawk CDO Funding Corp., 4.56%, 3/15/06 15 3,000,000 3,000,000 --------------- 5,000,000 - ---------------------------------------------------------------------------------------------------------------------------- DOMESTIC FLOATING CERTIFICATE OF DEPOSIT--0.2% Washington Mutual Bank, 4.36%, 1/20/06 15 1,999,949 1,999,949 - ---------------------------------------------------------------------------------------------------------------------------- FUNDING AGREEMENT/GIC--0.2% Protective Life Insurance Co., 4.36%, 1/30/06 15 2,000,000 2,000,000 - ---------------------------------------------------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--2.4% Undivided interest of 0.72% in joint repurchase agreement (Principal Amount/Value $3,150,000,000, with a maturity value of $3,151,501,500) with Nomura Securities, 4.29%, dated 12/30/05, to be repurchased at $22,667,587 on 1/3/06, collateralized by U.S. Agency Mortgages, 3.34%--9.50%, 6/1/08--5/1/38, with a value of $3,213,000,000 15 22,656,787 22,656,787 - ---------------------------------------------------------------------------------------------------------------------------- MASTER FLOATING NOTE--0.4% Bear Stearns, 4.37%, 1/3/06 15 4,000,000 4,000,000 - ---------------------------------------------------------------------------------------------------------------------------- MEDIUM-TERM FLOATING NOTE--0.2% American Express Credit Corp., 4.40%, 1/17/06 15 1,899,977 1,899,977 --------------- Total Investments Purchased with Cash Collateral from Securities Loaned (Cost $37,556,713) 37,556,713 - ---------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $1,178,410,819) 125.9% 1,171,043,032 - ---------------------------------------------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (25.9) (240,718,561) ---------------------------------- NET ASSETS 100.0% $ 930,324,471 ==================================
35 | OPPENHEIMER CORE BOND FUND STATEMENT OF INVESTMENTS Continued - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Represents the current interest rate for a variable or increasing rate security. 2. 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 $27,003,045 or 2.90% of the Fund's net assets as of December 31, 2005. 3. Illiquid or restricted security. The aggregate value of illiquid or restricted securities as of December 31, 2005 was $2,613,697, which represents 0.28% of the Fund's net assets, none of which is considered restricted. See Note 7 of Notes to Financial Statements. 4. When-issued security or forward commitment to be delivered and settled after December 31, 2005. 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 $32,445,492 or 3.49% of the Fund's net assets as of December 31, 2005. 6. 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. These securities amount to $3,361,486 or 0.36% of the Fund's net assets as of December 31, 2005. 7. Partial or fully-loaned security. See Note 8 of Notes to Financial Statements. 8. Zero coupon bond reflects effective yield on the date of purchase. 9. All or a portion of the security is held in collateralized accounts to cover initial margin requirements on open futures sales contracts. The aggregate market value of such securities is $3,806,966. See Note 5 of Notes to Financial Statements. 10. Issue is in default. Non-income producing. See Note 1 of Notes to Financial Statements. 11. This bond has no contractual maturity date, is not redeemable and contractually pays an indefinite stream of interest. 12. Interest or dividend is paid-in-kind. 13. Non-income producing security. 14. Received as the result of issuer reorganization. 15. The security has been segregated to satisfy the forward commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 8 of Notes to Financial Statements. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 36 | OPPENHEIMER CORE BOND FUND STATEMENT OF ASSETS AND LIABILITIES December 31, 2005 - -------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- ASSETS - ---------------------------------------------------------------------------------------------------- Investments, at value (including securities loaned of $48,959,258) (cost $1,178,410,819)--see accompanying statement of investments $1,171,043,032 - ---------------------------------------------------------------------------------------------------- Cash 1,012,753 - ---------------------------------------------------------------------------------------------------- Unrealized appreciation on swap contracts 43,981 - ---------------------------------------------------------------------------------------------------- Receivables and other assets: Investments sold (including $66,242,815 sold on a when-issued basis or forward commitment) 69,132,450 Interest 8,011,380 Shares of beneficial interest sold 2,677,184 Other 30,318 --------------- Total assets 1,251,951,098 - ---------------------------------------------------------------------------------------------------- LIABILITIES - ---------------------------------------------------------------------------------------------------- Return of collateral for securities loaned 37,556,713 - ---------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased (including $277,324,641 purchased on a when-issued basis or forward commitment) 282,273,239 Shares of beneficial interest redeemed 932,366 Distribution and service plan fees 461,973 Transfer and shareholder servicing agent fees 181,606 Shareholder communications 73,565 Futures margins 43,956 Trustees' compensation 32,939 Other 70,270 --------------- Total liabilities 321,626,627 - ---------------------------------------------------------------------------------------------------- NET ASSETS $ 930,324,471 =============== - ---------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - ---------------------------------------------------------------------------------------------------- Par value of shares of beneficial interest $ 90,917 - ---------------------------------------------------------------------------------------------------- Additional paid-in capital 944,956,509 - ---------------------------------------------------------------------------------------------------- Accumulated net investment loss (86,008) - ---------------------------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (8,460,004) - ---------------------------------------------------------------------------------------------------- Net unrealized depreciation on investments (6,176,943) --------------- NET ASSETS $ 930,324,471 ===============
37 | OPPENHEIMER CORE 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 $488,889,540 and 47,765,801 shares of beneficial interest outstanding) $10.24 Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price) $10.75 - ------------------------------------------------------------------------------------------------------------------ Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $125,068,898 and 12,224,185 shares of beneficial interest outstanding) $10.23 - ------------------------------------------------------------------------------------------------------------------ Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $109,207,064 and 10,663,164 shares of beneficial interest outstanding) $10.24 - ------------------------------------------------------------------------------------------------------------------ Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $35,836,067 and 3,502,531 shares of beneficial interest outstanding) $10.23 - ------------------------------------------------------------------------------------------------------------------ Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $171,322,902 and 16,761,479 shares of beneficial interest outstanding) $10.22
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 38 | OPPENHEIMER CORE BOND FUND STATEMENT OF OPERATIONS For the Year Ended December 31, 2005 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INVESTMENT INCOME - -------------------------------------------------------------------------------- Interest $ 35,153,138 - -------------------------------------------------------------------------------- Fee income 3,558,542 - -------------------------------------------------------------------------------- Portfolio lending fees 143,123 - -------------------------------------------------------------------------------- Dividends 35 - -------------------------------------------------------------------------------- Other income 27,478 ------------ Total investment income 38,882,316 - -------------------------------------------------------------------------------- EXPENSES - -------------------------------------------------------------------------------- Management fees 4,290,641 - -------------------------------------------------------------------------------- Distribution and service plan fees: Class A 1,042,340 Class B 1,352,642 Class C 946,463 Class N 151,192 - -------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 921,089 Class B 402,233 Class C 242,759 Class N 117,136 Class Y 168,718 - -------------------------------------------------------------------------------- Shareholder communications: Class A 113,544 Class B 59,631 Class C 29,288 Class N 4,693 - -------------------------------------------------------------------------------- Custodian fees and expenses 27,100 - -------------------------------------------------------------------------------- Trustees' compensation 17,655 - -------------------------------------------------------------------------------- Administration service fees 1,500 - -------------------------------------------------------------------------------- Other 89,266 ------------- Total expenses 9,977,890 Less reduction to custodian expenses (22,368) Less waivers and reimbursements of expenses (1,411,701) ------------- Net expenses 8,543,821 - -------------------------------------------------------------------------------- NET INVESTMENT INCOME 30,338,495 39 | OPPENHEIMER CORE BOND FUND STATEMENT OF OPERATIONS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - -------------------------------------------------------------------------------- Net realized gain (loss) on: Investments $ (7,211,002) Closing and expiration of futures contracts 4,462,585 Foreign currency transactions (1,666) Swap contracts (396,754) ------------- Net realized loss (3,146,837) - -------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments (12,163,741) Futures contracts 480,784 Swap contracts 32,193 ------------- Net change in unrealized depreciation (11,650,764) - -------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 15,540,894 ============= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 40 | OPPENHEIMER CORE BOND FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2005 2004 - -------------------------------------------------------------------------------------- OPERATIONS - -------------------------------------------------------------------------------------- Net investment income $ 30,338,495 $ 22,568,565 - -------------------------------------------------------------------------------------- Net realized gain (loss) (3,146,837) 13,788,328 - -------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) (11,650,764) (6,680,433) ------------------------------ Net increase in net assets resulting from operations 15,540,894 29,676,460 - -------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - -------------------------------------------------------------------------------------- Dividends from net investment income: Class A (18,178,321) (14,770,071) Class B (4,744,426) (5,647,015) Class C (3,359,283) (2,956,677) Class N (1,226,750) (870,216) Class Y (4,277,387) (2,000,794) - -------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - -------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from beneficial interest transactions: Class A 153,603,323 (40,358,244) Class B (20,719,422) (50,192,314) Class C 26,483,304 (6,332,036) Class N 10,895,909 7,706,597 Class Y 135,190,630 (5,409,686) - -------------------------------------------------------------------------------------- NET ASSETS - -------------------------------------------------------------------------------------- Total increase (decrease) 289,208,471 (91,153,996) - -------------------------------------------------------------------------------------- Beginning of period 641,116,000 732,269,996 ------------------------------ End of period (including accumulated net investment loss of $86,008 and $1,366,730, respectively) $930,324,471 $641,116,000 ==============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 41 | OPPENHEIMER CORE BOND FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
CLASS A YEAR ENDED DECEMBER 31, 2005 2004 2003 2002 2001 - ------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.44 $ 10.38 $ 10.14 $ 9.74 $ 9.79 - ------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .42 1 .38 1 .35 .54 .73 Net realized and unrealized gain (loss) (.18) .12 .24 .40 (.05) ----------------------------------------------------------------------- Total from investment operations .24 .50 .59 .94 .68 - ------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.44) (.44) (.35) (.54) (.73) - ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.24 $ 10.44 $ 10.38 $ 10.14 $ 9.74 ======================================================================= - ------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 2.35% 4.90% 5.87% 10.06% 7.05% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $488,889 $344,205 $382,966 $356,480 $280,132 - ------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $423,182 $353,046 $382,420 $316,279 $237,232 - ------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 4.12% 3.63% 3.39% 5.47% 7.31% Total expenses 1.06% 1.10% 1.10% 1.10% 1.23% Expenses after payments and waivers and reduction to custodian expenses 0.90% 0.93% 1.10% 1.10% 1.23% - ------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 98% 4 94% 4 111% 151% 162%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods 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. The portfolio turnover rate excludes purchases and sales of To Be Announced (TBA) mortgage-related securities as follows: PURCHASE TRANSACTIONS SALE TRANSACTIONS ----------------------------------------------------------------------------- Year Ended December 31, 2005 $3,609,072,810 $3,584,424,906 Year Ended December 31, 2004 3,447,306,025 3,473,854,068 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 42 | OPPENHEIMER CORE BOND FUND
CLASS B YEAR ENDED DECEMBER 31, 2005 2004 2003 2002 2001 - -------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.44 $ 10.37 $ 10.13 $ 9.73 $ 9.79 - -------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .35 1 .30 1 .27 .47 .65 Net realized and unrealized gain (loss) (.20) .13 .24 .40 (.05) ---------------------------------------------------------------------- Total from investment operations .15 .43 .51 .87 .60 - -------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.36) (.36) (.27) (.47) (.66) - -------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.23 $ 10.44 $ 10.37 $ 10.13 $ 9.73 ======================================================================= - -------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 1.50% 4.21% 5.05% 9.26% 6.14% - -------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $125,069 $148,445 $197,774 $217,789 $161,998 - -------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $135,296 $167,685 $216,853 $187,343 $118,521 - -------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 3.37% 2.86% 2.61% 4.68% 6.60% Total expenses 1.91% 1.91% 1.87% 1.85% 1.99% Expenses after payments and waivers and reduction to custodian expenses 1.65% 1.69% 1.87% 1.85% 1.99% - -------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 98% 4 94% 4 111% 151% 162%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods 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. The portfolio turnover rate excludes purchases and sales of To Be Announced (TBA) mortgage-related securities as follows: PURCHASE TRANSACTIONS SALE TRANSACTIONS ----------------------------------------------------------------------------- Year Ended December 31, 2005 $3,609,072,810 $3,584,424,906 Year Ended December 31, 2004 3,447,306,025 3,473,854,068 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 43 | OPPENHEIMER CORE BOND FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS C YEAR ENDED DECEMBER 31, 2005 2004 2003 2002 2001 - --------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.45 $ 10.39 $ 10.14 $ 9.74 $ 9.80 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .35 1 .30 1 .27 .47 .65 Net realized and unrealized gain (loss) (.20) .12 .25 .40 (.05) ----------------------------------------------------------------------- Total from investment operations .15 .42 .52 .87 .60 - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.36) (.36) (.27) (.47) (.66) - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.24 $ 10.45 $ 10.39 $ 10.14 $ 9.74 ======================================================================= - --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 1.49% 4.12% 5.18% 9.26% 6.14% - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $109,207 $84,696 $90,583 $90,800 $57,049 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 94,742 $86,020 $96,361 $75,531 $36,886 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 3.37% 2.87% 2.64% 4.61% 6.65% Total expenses 1.86% 1.87% 1.84% 1.83% 1.98% Expenses after payments and waivers and reduction to custodian expenses 1.65% 1.68% 1.84% 1.83% 1.98% - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 98% 4 94% 4 111% 151% 162%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods 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. The portfolio turnover rate excludes purchases and sales of To Be Announced (TBA) mortgage-related securities as follows: PURCHASE TRANSACTIONS SALE TRANSACTIONS ----------------------------------------------------------------------------- Year Ended December 31, 2005 $3,609,072,810 $3,584,424,906 Year Ended December 31, 2004 3,447,306,025 3,473,854,068 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 44 | OPPENHEIMER CORE BOND FUND
CLASS N YEAR ENDED DECEMBER 31, 2005 2004 2003 2002 2001 1 - --------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.44 $ 10.37 $ 10.13 $ 9.73 $10.02 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .40 2 .35 2 .31 .51 .61 Net realized and unrealized gain (loss) (.19) .13 .24 .40 (.29) ----------------------------------------------------------------------- Total from investment operations .21 .48 .55 .91 .32 - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.42) (.41) (.31) (.51) (.61) - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.23 $ 10.44 $ 10.37 $ 10.13 $ 9.73 ======================================================================= - --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 1.99% 4.71% 5.51% 9.73% 3.18% - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $35,836 $25,580 $17,732 $11,302 $2,176 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $30,274 $21,411 $15,338 $ 7,071 $ 768 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 3.87% 3.38% 3.03% 4.76% 7.87% Total expenses 1.47% 1.51% 1.50% 1.44% 1.37% Expenses after payments and waivers and reduction to custodian expenses 1.15% 1.20% 1.44% 1.44% 1.37% - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 98% 5 94% 5 111% 151% 162%
1. For the period from March 1, 2001 (inception of offering) to December 31, 2001. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. The portfolio turnover rate excludes purchases and sales of To Be Announced (TBA) mortgage-related securities as follows: PURCHASE TRANSACTIONS SALE TRANSACTIONS ----------------------------------------------------------------------------- Year Ended December 31, 2005 $3,609,072,810 $3,584,424,906 Year Ended December 31, 2004 3,447,306,025 3,473,854,068 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 45 | OPPENHEIMER CORE BOND FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS Y YEAR ENDED DECEMBER 31, 2005 2004 2003 2002 2001 - --------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.43 $ 10.36 $ 10.12 $ 9.72 $ 9.78 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .45 1 .41 1 .39 .59 .76 Net realized and unrealized gain (loss) (.19) .13 .24 .40 (.05) ----------------------------------------------------------------------- Total from investment operations .26 .54 .63 .99 .71 - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.47) (.47) (.39) (.59) (.77) - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.22 $ 10.43 $ 10.36 $ 10.12 $ 9.72 ======================================================================= - --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 2.50% 5.30% 6.35% 10.58% 7.30% - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $171,323 $38,190 $43,215 $24,358 $4,067 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 91,172 $45,333 $38,398 $10,243 $2,286 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 4.39% 3.92% 3.80% 5.53% 7.85% Total expenses 0.76% 0.64% 0.63% 0.63% 0.94% Expenses after payments and waivers and reduction to custodian expenses 0.65% 0.64% 0.63% 0.63% 0.92% - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 98% 4 94% 4 111% 151% 162%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods 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. The portfolio turnover rate excludes purchases and sales of To Be Announced (TBA) mortgage-related securities as follows: PURCHASE TRANSACTIONS SALE TRANSACTIONS ----------------------------------------------------------------------------- Year Ended December 31, 2005 $3,609,072,810 $3,584,424,906 Year Ended December 31, 2004 3,447,306,025 3,473,854,068 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 46 | OPPENHEIMER CORE BOND FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Core 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. On January 14, 2005, shareholders of the Fund approved a modification to the Fund's investment objective. Effective January 21, 2005, the Fund's investment objective is to seek total return by investing mainly in debt instruments. Previously, the Fund's investment objective was 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, however, the institutional investor may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and N have separate distribution and/or service plans. No such plan has been adopted for Class Y shares. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Securities may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities listed or traded on National Stock Exchanges or other domestic exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. Securities traded on NASDAQ are valued based on the closing price provided by NASDAQ prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing "bid" and "asked" prices, and if not, at the closing bid price. Securities traded on foreign exchanges are valued based on the last sale price on the principal exchange on which the security is traded, in the country that is identified by the portfolio pricing service, prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the official closing price on the principal exchange. Corporate, government and municipal 47 | OPPENHEIMER CORE BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued debt instruments having a remaining maturity in excess of sixty days and all mortgage-backed securities will be valued at the mean between the "bid" and "asked" prices. Futures contracts traded on a commodities or futures exchange will be valued at the final settlement price or official closing price on the principal exchange as reported by such principal exchange at its trading session ending at, or most recently prior to, the time when the Fund's assets are valued. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign and domestic securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund's assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board of Trustees. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment for securities that have been purchased by the Fund on a when-issued basis or forward commitment can take place up to ten days 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 internally designated 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 or forward commitment may increase the volatility of the Fund's net asset value to the extent the Fund executes such transactions while remaining substantially fully invested. The Fund may also sell securities that it purchased on a when-issued basis or forward commitment prior to settlement of the original purchase. As of December 31, 2005, the Fund had purchased $277,324,641 of securities issued on a when-issued basis or forward commitment and sold $66,242,815 of securities issued on a when-issued basis or forward commitment. In connection with its ability to purchase or sell 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 realized gain (loss) on investments or as fee income in the case of such transactions that have an associated fee in lieu of a difference in the forward purchase and sale price. 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 48 | OPPENHEIMER CORE BOND FUND receive inferior securities at redelivery as compared to the securities sold to the counter-party; 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, 2005, securities with an aggregate market value of $66,695, representing 0.01% of the Fund's net assets, were in default. - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. These balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders, therefore, no federal income or excise tax provision is required. 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. 49 | OPPENHEIMER CORE BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued NET UNREALIZED DEPRECIATION BASED ON COST OF SECURITIES AND UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME INCOME GAIN CARRYFORWARD 1,2,3 TAX PURPOSES --------------------------------------------------------------------------- $334,650 $ -- $7,251,448 $7,500,369 1. As of December 31, 2005, the Fund had $7,251,448 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, 2005, details of the capital loss carryforwards were as follows: EXPIRING ---------------------------- 2010 $2,007,359 2013 5,244,089 ---------------------------- Total $7,251,448 ---------------------------- 2. During the fiscal year ended December 31, 2005, the Fund did not utilize any capital loss carryforward. 3. During the fiscal year ended December 31, 2004, the Fund utilized $10,865,230 of capital loss carryforward to offset capital gains realized in that fiscal year. 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, 2005. Net assets of the Fund were unaffected by the reclassifications. REDUCTION TO INCREASE TO ACCUMULATED ACCUMULATED NET INVESTMENT NET REALIZED LOSS LOSS ON INVESTMENTS ------------------------------------------- $2,728,394 $2,728,394 The tax character of distributions paid during the years ended December 31, 2005 and December 31, 2004 was as follows: YEAR ENDED YEAR ENDED DECEMBER 31, 2005 DECEMBER 31, 2004 ---------------------------------------------------------------------- Distributions paid from: Ordinary income $31,786,167 $26,244,773 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, 2005 are noted below. The primary difference between book and tax appreciation or depreciation of securities and other investments, 50 | OPPENHEIMER CORE BOND FUND 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 $1,178,464,133 Federal tax cost of other investments (163,066,646) -------------- Total federal tax cost $1,015,397,487 ============== Gross unrealized appreciation $ 6,954,358 Gross unrealized depreciation (14,454,727) -------------- Net unrealized depreciation $ (7,500,369) ============== - -------------------------------------------------------------------------------- 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. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. Deferral of trustees' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance to the Plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income 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. - -------------------------------------------------------------------------------- CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts to the extent they are not offset by positive cash balances maintained by the Fund. The Reduction to Custodian Expenses line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. At December 31, 2005, the Fund had 51 | OPPENHEIMER CORE BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued $14,669 of such earnings on cash balances available to offset future custodian fees or interest expenses incurred during the next fiscal year. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
YEAR ENDED DECEMBER 31, 2005 YEAR ENDED DECEMBER 31, 2004 SHARES AMOUNT SHARES AMOUNT - -------------------------------------------------------------------------------------------------- CLASS A Sold 22,484,859 $ 233,172,087 9,562,646 $ 99,724,382 Dividends and/or distributions reinvested 1,468,476 15,183,663 1,163,350 12,097,690 Redeemed (9,157,866) (94,752,427) (14,652,987) (152,180,316) ------------------------------------------------------------------- Net increase (decrease) 14,795,469 $ 153,603,323 (3,926,991) $ (40,358,244) =================================================================== - -------------------------------------------------------------------------------------------------- CLASS B Sold 2,411,315 $ 24,979,660 2,207,444 $ 22,976,953 Dividends and/or distributions reinvested 379,150 3,922,040 432,832 4,499,401 Redeemed (4,791,597) (49,621,122) (7,478,492) (77,668,668) ------------------------------------------------------------------- Net decrease (2,001,132) $ (20,719,422) (4,838,216) $ (50,192,314) =================================================================== - -------------------------------------------------------------------------------------------------- CLASS C Sold 4,590,226 $ 47,533,624 2,121,902 $ 22,129,587 Dividends and/or distributions reinvested 273,806 2,832,425 235,133 2,447,087 Redeemed (2,308,506) (23,882,745) (2,971,439) (30,908,710) ------------------------------------------------------------------- Net increase (decrease) 2,555,526 $ 26,483,304 (614,404) $ (6,332,036) =================================================================== - -------------------------------------------------------------------------------------------------- CLASS N Sold 2,021,843 $ 20,942,281 1,560,717 $ 16,256,014 Dividends and/or distributions reinvested 103,371 1,068,388 79,094 822,229 Redeemed (1,073,761) (11,114,760) (897,845) (9,371,646) ------------------------------------------------------------------- Net increase 1,051,453 $ 10,895,909 741,966 $ 7,706,597 ===================================================================
52 | OPPENHEIMER CORE BOND FUND
YEAR ENDED DECEMBER 31, 2005 YEAR ENDED DECEMBER 31, 2004 SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------------------ CLASS Y Sold 13,663,394 $141,043,009 4,235,213 $ 44,071,154 Dividends and/or distributions reinvested 415,195 4,276,823 72,990 761,028 Redeemed (980,307) (10,129,202) (4,815,194) (50,241,868) ----------------------------------------------------------------- Net increase (decrease) 13,098,282 $135,190,630 (506,991) $ (5,409,686) =================================================================
- -------------------------------------------------------------------------------- 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, 2005, were as follows:
PURCHASES SALES - ----------------------------------------------------------------------------------------- Investment securities $ 877,186,446 $ 539,681,432 U.S. government and government agency obligations 125,944,817 152,910,783 To Be Announced (TBA) mortgage-related securities 3,609,072,810 3,584,424,906 - -----------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- ADMINISTRATION SERVICE FEES. The Fund pays the Manager a fee of $1,500 per year for preparing and filing the Fund's tax returns. - -------------------------------------------------------------------------------- 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, 2005, the Fund paid $1,818,810 to OFS for services to the Fund. Additionally, Class Y shares are subject to minimum fees of $10,000 per annum for assets of $10 million or more. The Class Y shares are subject to the minimum fees in the event that the per account fee does not equal or exceed the applicable minimum fees. OFS may voluntarily waive the minimum fees. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. - -------------------------------------------------------------------------------- SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made periodically at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. The Distributor 53 | OPPENHEIMER CORE BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued currently uses all of those fees to pay dealers, brokers, banks and other financial institutions periodically for providing personal services and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. Fees incurred by the Fund under the plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares to compensate the Distributor for its services in connection with the distribution of those shares and servicing accounts. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% on Class B and Class C shares and 0.25% on Class N shares. The Distributor also receives a service fee of 0.25% per year under each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the plan at December 31, 2005 for Class B, Class C and Class N shares were $3,043,749, $1,973,766 and $566,745, 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, 2005 $525,061 $1,136 $418,007 $17,923 $19,749 - -----------------------------------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. Effective March 1, 2004, the Manager has voluntarily undertaken to limit the "Total Expenses" for all classes of shares so that total expenses as percentages of average daily net assets, will not exceed the following annual rates: 0.90% for the Class A shares; 1.65% for the Class B and Class C shares, respectively; 1.15% for the Class N shares and 0.65% for the Class Y shares. During the year ended December 31, 2005, the Manager reimbursed the Fund $673,792, $353,012, $193,931, 54 | OPPENHEIMER CORE BOND FUND $86,056 and $93,972 for Class A, Class B, Class C, Class N and Class Y, respectively. The Manager may terminate this voluntary expense limitation arrangement at any time without notice to shareholders. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. During the year ended December 31, 2005, OFS waived $10,938 for Class N shares. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- 5. 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 stocks 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 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 in the Statement of Operations as the closing and expiration of futures contracts. The net change in unrealized appreciation and depreciation is reported in 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. 55 | OPPENHEIMER CORE BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5. FUTURES CONTRACTS Continued As of December 31, 2005, the Fund had outstanding futures contracts as follows:
UNREALIZED EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION CONTRACT DESCRIPTION DATES CONTRACTS DECEMBER 31, 2005 (DEPRECIATION) - ----------------------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE U.S. Long Bonds 3/22/06 766 $ 87,467,625 $1,463,110 ----------- CONTRACTS TO SELL Euro-Bundesobligation, 10 yr. 3/8/06 75 10,818,426 (81,008) U.S. Treasury Nts., 2 yr. 3/31/06 738 151,428,375 (80,898) U.S. Treasury Nts., 5 yr. 3/22/06 461 49,024,469 (96,121) U.S. Treasury Nts., 10 yr. 3/22/06 360 39,386,250 (56,916) ----------- (314,943) ----------- $1,148,167 ===========
- -------------------------------------------------------------------------------- 6. 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 unrealized gain (loss) related to the valuation of such contracts as well as the amount due to (owed by) the Fund at termination or settlement is combined and separately disclosed as an asset (liability) on the Statement of Assets and Liabilities. The Fund also records any periodic payments received from (paid to) the counterparty under such contracts as realized gain (loss) on the Statement of Operations. Total return swaps are subject to risks (if the counterparty fails to meet its obligations). As of December 31, 2005, the Fund had entered into the following total return swap agreements:
SWAP NOTIONAL TERMINATION UNREALIZED COUNTERPARTY SWAP DESCRIPTION AMOUNT DATE APPRECIATION - ------------------------------------------------------------------------------------------------------------------ Received or paid monthly. If the sum of the Lehman Brothers CMBS Index Payer Payment Amount and the Floating Rate Payer Payment Amount is positive, the Counterparty will pay such amount to the Fund. If the sums are negative, then the Fund shall pay Goldman Sachs the absolute value of such amount to Group, Inc. (The) the Counterparty. $15,570 6/1/06 $43,981
Abbreviations are as follows: CMBS Commercial Mortgage Backed Securities 56 | OPPENHEIMER CORE BOND FUND - -------------------------------------------------------------------------------- 7. ILLIQUID OR RESTRICTED SECURITIES As of December 31, 2005, investments in securities included issues that are illiquid or restricted. Restricted securities are purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Trustees as reflecting fair value. A security may also be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund will not invest more than 15% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid or restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limitation. Securities that are illiquid or restricted are marked with the applicable footnote on the Statement of Investments. Information concerning restricted securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED SECURITY DATE COST DECEMBER 31, 2005 DEPRECIATION - ------------------------------------------------------------------------------------------------------ Geotek Communications, Inc., Series B, Escrow Shares 1/4/01 $100 $-- $100 - ------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 8. 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 U.S. 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. The Fund retains a portion of the interest earned from the collateral. The Fund continues to receive the economic benefit of interest or dividends paid on the securities loaned in the form of a substitute payment received from the borrower. As of December 31, 2005, the Fund had on loan securities valued at $48,959,258. Collateral of $49,810,823 was received for the loans, of which $37,556,713 was received in cash and subsequently invested in approved instruments. - -------------------------------------------------------------------------------- 9. LITIGATION A consolidated amended complaint has been filed as putative derivative and class actions against the Manager, OFS and the Distributor, as well as 51 of the Oppenheimer funds (as "Nominal Defendants") including the Fund, 30 present and former Directors or Trustees and 8 present and former officers of the funds. This complaint, initially filed in the U.S. District Court for the Southern District of New York on January 10, 2005 and amended on March 4, 2005, consolidates into a single action and amends six individual 57 | OPPENHEIMER CORE BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 9. LITIGATION Continued previously-filed putative derivative and class action complaints. Like those prior complaints, the complaint alleges that the Manager charged excessive fees for distribution and other costs, improperly used assets of the funds in the form of directed brokerage commissions and 12b-1 fees to pay brokers to promote sales of the funds, and failed to properly disclose the use of assets of the funds to make those payments in violation of the Investment Company Act of 1940 and the Investment Advisers Act of 1940. Also, like those prior complaints, the complaint further alleges that by permitting and/or participating in those actions, the Directors/Trustees and the Officers breached their fiduciary duties to shareholders of the funds under the Investment Company Act of 1940 and at common law. The complaint seeks unspecified compensatory and punitive damages, rescission of the funds' investment advisory agreements, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. The defendants believe that the allegations contained in the Complaints are without merit and that they have meritorious defenses against the claims asserted. The defendants intend to defend these lawsuits vigorously and to contest any claimed liability. The defendants believe that it is premature to render any opinion as to the likelihood of an outcome unfavorable to them and that no estimate can yet be made with any degree of certainty as to the amount or range of any potential loss. - -------------------------------------------------------------------------------- 10. FUND REORGANIZATION On September 14, 2005, the Board of Trustees of Oppenheimer Total Return Bond Fund ("Total Return Bond Fund") approved a proposal to reorganize Total Return Bond Fund with and into the Fund. A Special Meeting of the Shareholders of Total Return Bond Fund is scheduled for March 15, 2006 to approve an Agreement and Plan of Reorganization between Total Return Bond Fund and the Fund, and the transactions contemplated thereby, including (a) the transfer of substantially all the assets of Total Return Bond Fund to the Fund in exchange for Class A, Class B, Class C, and Class N shares of the Fund, (b) the distribution of Class A, Class B, Class C, and Class N shares of the Fund to the Class A, Class B, Class C, and Class N shareholders of Total Return Bond Fund in complete liquidation of Total Return Bond Fund and (c) the cancellation of the outstanding shares of Total Return Bond Fund. 58 | OPPENHEIMER CORE BOND FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TO THE BOARD OF TRUSTEE AND SHAREHOLDERS OF OPPENHEIMER CORE BOND FUND: We have audited the accompanying statement of assets and liabilities of Oppenheimer Core Bond Fund, a series of Oppenheimer Integrity Funds, including the statement of investments, as of December 31, 2005, 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 each of the five years in the periods presented. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2005, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. 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 Core Bond Fund as of December 31, 2005, 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 each of the five years in the periods presented, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Denver, Colorado February 13, 2006 59 | OPPENHEIMER CORE BOND FUND FEDERAL INCOME TAX INFORMATION Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In early 2006, if applicable, shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2005. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Recent tax legislation allows a regulated investment company to designate distributions not designated as capital gain distributions, as either interest related dividends or short-term capital gain dividends, both of which are exempt from the U.S. withholding tax applicable to non U.S. taxpayers. For the fiscal year ended December 31, 2005, $31,371,839 or 98.70% of the ordinary distributions paid by the Fund qualifies as an interest related dividend. The Fund did not distribute a short-term capital gain. 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. 60 | OPPENHEIMER CORE BOND FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund's voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 61 | OPPENHEIMER CORE BOND FUND BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Each year, the Board of Trustees (the "Board"), including a majority of the independent Trustees, is required to determine whether to renew the Fund's investment advisory agreement (the "Agreement"). The Investment Company Act of 1940, as amended, requires that the Board request and evaluate, and that the Manager provide, such information as may be reasonably necessary to evaluate the terms of the Agreement. The Board employs an independent consultant to prepare a report that provides information, including comparative information, that the Board requests for that purpose. In addition, the Board receives information throughout the year regarding Fund services, fees, expenses and performance. The Manager and the independent consultant provided information to the Board on the following factors: (i) the nature, quality and extent of the Manager's services, (ii) the investment performance of the Fund and the Manager, (iii) the fees and expenses of the Fund, including comparative expense information, (iv) the profitability of the Manager, including an analysis of the cost of providing services, (v) whether economies of scale are realized as the Fund grows and whether fee levels reflect these economies of scale for Fund investors and (vi) other benefits to the Manager from its relationship with the Fund. Outlined below is a summary of the principal information considered by the Board as well as the Board's conclusions. NATURE, QUALITY, AND EXTENT OF SERVICES. The Board considered information on the nature and extent of the services provided to the Fund and information regarding the Manager's key personnel that provide such services. The Manager's duties include providing the Fund with the services of the portfolio manager and the Manager's investment team, who provide research, analysis and other advisory services in regard to the Fund's investments; securities trading services; oversight of third party service providers; monitoring compliance with applicable Fund policies and procedures and adherence to the Fund's investment restrictions. The Manager is responsible for providing certain administrative services to the Fund as well. Those services include providing and supervising all administrative and clerical personnel that are necessary in order to provide effective corporate administration for the Fund; compiling and maintaining records with respect to the Fund's operations; preparing and filing reports required by the Securities and Exchange Commission; preparing periodic reports regarding the operations of the Fund for its shareholders; preparing proxy materials for shareholder meetings; and preparing the registration statements required by Federal and state securities laws for the sale of the Fund's shares. The Manager also provides the Fund with office space, facilities and equipment. 62 | OPPENHEIMER CORE BOND FUND The Board also considered the quality of the services provided and the quality of the Manager's resources that are available to the Fund. The Board took account of the fact that the Manager has had over forty years of experience as an investment adviser and that its assets under management rank it among the top mutual fund managers in the United States. The Board evaluated the Manager's administrative, accounting, legal and compliance services, and information the Board has received regarding the experience and professional qualifications of the Manager's key personnel and the size and functions of its staff providing investment management services to the Fund. The Board also considered compliance reports from the Fund's Chief Compliance Officer. In its evaluation of the quality of the portfolio management services provided, the Board considered the experience of the Fund's portfolio managers and the Manager's fixed-income investment team and analysts. The Fund has been managed by a portfolio management team comprised of Angelo Manioudakis, Benjamin Gord, Charles Moon, Geoffrey Caan and Antulio N. Bomfim. Messrs. Manioudakis, Gord, Caan, Moon and Bomfim have each had between 11 and 15 years of experience managing fixed-income investments. The Board members also considered the totality of their experiences with the Manager, as directors or trustees of the Fund and other funds advised by the Manager. In light of the foregoing, the Board concluded that the Fund benefits from the services provided under the Agreement as a result of the Manager's experience, reputation, personnel, operations, and resources. INVESTMENT PERFORMANCE OF THE MANAGER AND THE FUND. During the year, the Manager provided information on the performance of the Fund and the Manager at each Board meeting, including comparative performance information. The Board also reviewed information, prepared by the Manager and by the independent consultant, comparing the Fund's historical performance to relevant market indices and to the performance of other intermediate investment-grade debt funds (including both funds advised by the Manager and funds advised by other investment advisers). The Board noted that the Fund's one-year, three-year, five-year and ten-year performance were all better than its peer group median. COSTS OF SERVICES AND PROFITS REALIZED BY THE MANAGER. The Board considered in formation regarding the Manager's costs in serving as the Fund's investment adviser, including the costs associated with the personnel and systems necessary to manage the Fund, and information regarding the Manager's profitability from its relationship with the Fund. The Board reviewed the fees paid to the Manager and the other expenses borne by the Fund. The Board also evaluated the comparability of the fees charged and the services provided to the Fund to the fees and services for other clients or accounts advised 63 | OPPENHEIMER CORE BOND FUND BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited / Continued - -------------------------------------------------------------------------------- by the Manager. The independent consultant provided comparative data in regard to the fees and expenses of the Fund, other intermediate investment-grade debt funds and other funds with comparable asset levels and distribution features. The Board noted that the Fund's contractual and actual management fees and total expenses, which are all lower than its peer group median and average. In light of this, the Board concluded that the management fee was reasonable. ECONOMIES OF SCALE. The Board considered whether the Manager may realize economies of scale in managing and supporting the Fund, whether those economies of scale benefit the Fund's shareholders and the current level of Fund assets in relation to the Fund's management fee breakpoints, which are intended to share with shareholders economies of scale that may exist as the Fund grows. OTHER BENEFITS TO THE MANAGER. In addition to considering the profits realized by the Manager, the Board considered information that was provided regarding the direct and indirect benefits the Manager receives as a result of its relationship with the Fund, including compensation paid to the Manager's affiliates. The Board also considered the nature and quality of services provided by affiliates of the Manager, which it reviews at other times during the year in connection with the renewal of the Fund's service agreements. The Board considered that the Manager must be able to pay and retain experienced professional personnel at competitive rates to provide services to the Fund and that maintaining the financial viability of the Manager is important in order for the Manager to continue to provide significant services to the Fund and its shareholders. CONCLUSIONS. These factors were also considered by the independent Trustees meeting separately from the full Board, assisted by experienced counsel to the Fund and to the independent Trustees. Fund counsel and the independent Trustees' counsel are both independent of the Manager within the meaning and intent of the Securities and Exchange Commission Rules. Based on its review of the information it received and its evaluations described above, the Board, including a majority of the independent Trustees, decided to continue the advisory agreement for another year. In arriving at this decision, the Board did not single out any factor or factors as being more important than others, but considered all of the factors together. The Board judged the terms and conditions of the advisory agreement, including the management fee, in light of all of the surrounding circumstances. 64 | OPPENHEIMER CORE BOND FUND TRUSTEES AND OFFICERS Unaudited - --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------- NAME, POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS FUND, LENGTH OF SERVICE, AGE HELD; NUMBER OF PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, TRUSTEES COLORADO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. WILLIAM L. ARMSTRONG, Chairman of the following private mortgage banking companies: Cherry Creek Chairman of the Board of Mortgage Company (since 1991), Centennial State Mortgage Company (since Trustees (since 2003), 1994), and The El Paso Mortgage Company (since 1993); Chairman of the fol- Trustee (since 1999) lowing private companies: Ambassador Media Corporation (since 1984) and Age: 68 Broadway Ventures (since 1984); Director of the following: Helmerich & Payne, Inc. (oil and gas drilling/production company) (since 1992), Campus Crusade for Christ (since 1991) and The Lynde and Harry Bradley Foundation, Inc. (non- profit organization) (since 2002); former Chairman of the following: Transland Financial Services, Inc. (private mortgage banking company) (1997-2003), Great Frontier Insurance (insurance agency) (1995-2000), Frontier Real Estate, Inc. (resi- dential real estate brokerage) (1994-2000) and Frontier Title (title insurance agency) (1995-2000); former Director of the following: UNUMProvident (insur- ance company) (1991-2004), Storage Technology Corporation (computer equipment company) (1991-2003) and International Family Entertainment (tele- vision channel) (1992-1997); U.S. Senator (January 1979-January 1991). Oversees 38 portfolios in the OppenheimerFunds complex. ROBERT G. AVIS, 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 Age: 74 Officer of A.G. Edwards Capital, Inc. (until March 2000); Director of A.G. Edwards & Sons, Inc. (brokerage company) (until 2000) and A.G. Edwards Trust Company (investment adviser) (until 2000); Vice Chairman and Director of A.G. Edwards, Inc. (until March 1999); Vice Chairman of A.G. Edwards & Sons, Inc. (until March 1999); Chairman of A.G. Edwards Trust Company (until March 1999) and A.G.E. Asset Management (investment adviser) (until March 1999). Oversees 38 portfo- lios in the OppenheimerFunds complex. GEORGE C. BOWEN, Assistant Secretary and Director of Centennial Asset Management Corporation Trustee (since 2001) (December 1991-April 1999); President, Treasurer and Director of Centennial Age: 69 Capital Corporation (June 1989-April 1999); Chief Executive Officer and Director of MultiSource Services, Inc. (March 1996-April 1999); Mr. Bowen held several positions with the Manager and with subsidiary or affiliated companies of the Manager (September 1987-April 1999). Oversees 38 portfolios in the OppenheimerFunds complex. EDWARD L. CAMERON, Member of The Life Guard of Mount Vernon (George Washington historical Trustee (since 2001) site) (since June 2000); Director of Genetic ID, Inc. (biotech company) (March Age: 67 2001-May 2002); Partner at PricewaterhouseCoopers LLP (accounting firm) (July 1974-June 1999); Chairman of Price Waterhouse LLP Global Investment Management Industry Services Group (July 1994-June 1998). Oversees 38 portfo- lios in the OppenheimerFunds complex.
65 | OPPENHEIMER CORE BOND FUND TRUSTEES AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- JON S. FOSSEL, Director of UNUMProvident (insurance company) (since June 2002); Director of Trustee (since 1990) Northwestern Energy Corp. (public utility corporation) (since November 2004); Age: 64 Director of P.R. Pharmaceuticals (October 1999-October 2003); Director of Rocky Mountain Elk Foundation (non-profit organization) (February 1998- February 2003); Chairman and Director (until October 1996) and President and Chief Executive Officer (until October 1995) of the Manager; President, Chief Executive Officer and Director of the following: Oppenheimer Acquisition Corp. ("OAC") (parent holding company of the Manager), Shareholders Services, Inc. and Shareholder Financial Services, Inc. (until October 1995). Oversees 38 portfo- lios in the OppenheimerFunds complex. SAM FREEDMAN, Director of Colorado Uplift (charitable organization) (since September 1984). Mr. Trustee (since 1996) Freedman held several positions with the Manager and with subsidiary or affili- Age: 65 ated companies of the Manager (until October 1994). Oversees 38 portfolios in the OppenheimerFunds complex. BEVERLY L. HAMILTON, Trustee of Monterey Institute for International Studies (educational organization) Trustee (since 2002) (since February 2000); Director of The California Endowment (philanthropic Age: 59 organization) (since April 2002); Director of Community Hospital of Monterey Peninsula (since February 2002); Vice Chair of American Funds' Emerging Markets Growth Fund, Inc. (mutual fund) (since October 1991); President of ARCO Investment Management Company (February 1991-April 2000); Member of the investment committees of The Rockefeller Foundation and The University of Michigan; Advisor at Credit Suisse First Boston's Sprout venture capital unit (venture capital fund) (1994-January 2005); Trustee of MassMutual Institutional Funds (investment company) (1996-June 2004); Trustee of MML Series Investment Fund (investment company) (April 1989-June 2004); Member of the investment committee of Hartford Hospital (2000-2003); and Advisor to Unilever (Holland) pension fund (2000-2003). Oversees 38 portfolios in the OppenheimerFunds complex. ROBERT J. MALONE, Director of Jones International University (educational organization) (since Trustee (since 2002) August 2005); Chairman, Chief Executive Officer and Director of Steele Street Age: 61 State Bank (commercial banking) (since August 2003); Director of Colorado UpLIFT (charitable organization) (since 1986); Trustee of the Gallagher Family Foundation (non-profit organization) (since 2000); Former Chairman of U.S. Bank-Colorado (subsidiary of U.S. Bancorp and formerly Colorado National Bank) (July 1996-April 1999); Director of Commercial Assets, Inc. (real estate investment trust) (1993-2000); Director of Jones Knowledge, Inc. (2001-July 2004); and Director of U.S. Exploration, Inc. (oil and gas exploration) (1997- February 2004). Oversees 38 portfolios in the OppenheimerFunds complex. F. WILLIAM MARSHALL, JR., Trustee of MassMutual Select Funds (formerly MassMutual Institutional Funds) Trustee (since 2001) (investment company) (since 1996) and MML Series Investment Fund (invest- Age: 63 ment company) (since 1996), Trustee and Chairman of the Investment Committee (since 1994) of the Worcester Polytech Institute (private university); President and Treasurer of the SIS Funds (private charitable fund) (since January 1999); Chairman of SIS & Family Bank, F.S.B. (formerly SIS Bank) (commercial bank) (January 1999-July 1999); Member of the Investment Committee of the Community Foundation of Western Massachusetts (1998-2003); and Executive Vice President of Peoples Heritage Financial Group, Inc. (commercial bank) (January 1999-July 1999). Oversees 40 portfolios in the OppenheimerFunds complex.
66 | OPPENHEIMER CORE BOND FUND - ----------------------------------------------------------------------------------------------------------------------------- INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, AND OFFICER NEW YORK, NEW YORK 10281-1008. MR. MURPHY SERVES AS A TRUSTEE FOR AN INDEFINITE TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL AND AS AN OFFICER FOR AN ANNUAL TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS AN INTERESTED TRUSTEE DUE TO HIS POSITIONS WITH OPPENHEIMERFUNDS, INC. AND ITS AFFILIATES. JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June 2001) and President President and Trustee (since September 2000) of the Manager; President and Director or Trustee of (since 2001) other Oppenheimer funds; President and Director of OAC and of Oppenheimer Age: 56 Partnership Holdings, Inc. (holding company subsidiary of the Manager) (since July 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of the Manager) (since November 2001); Chairman and Director of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent sub- sidiaries of the Manager) (since July 2001); President and Director of OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since July 2001); Director of the following investment advisory subsidiaries of the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 2001) and Director (since July 2001) of Oppenheimer Real Asset Management, Inc.; Executive Vice President of Massachusetts Mutual Life Insurance Company (OAC's parent company) (since February 1997); Director of DLB Acquisition Corporation (holding company par- ent of Babson Capital Management LLC) (since June 1995); Member of the Investment Company Institute's Board of Governors (since October 3, 2003); Chief Operating Officer of the Manager (September 2000-June 2001); President and Trustee of MML Series Investment Fund and MassMutual Select Funds (open-end investment companies) (November 1999-November 2001); Director of C.M. Life Insurance Company (September 1999-August 2000); President, Chief Executive Officer and Director of MML Bay State Life Insurance Company (September 1999-August 2000); Director of Emerald Isle Bancorp and Hibernia Savings Bank (wholly-owned subsidiary of Emerald Isle Bancorp) (June 1989-June 1998). Oversees 87 portfolios in the OppenheimerFunds complex. - ----------------------------------------------------------------------------------------------------------------------------- OTHER OFFICERS OF THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS. THE FUND MANIOUDAKIS AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NEW YORK 10281-1008, FOR MESSRS. VANDEHEY AND WIXTED, 6803 S. TUCSON WAY, CENTENNIAL, COLORADO 80112-3924. EACH OFFICER SERVES FOR AN ANNUAL TERM OR UNTIL HIS OR HER RESIGNATION, RETIREMENT DEATH OR REMOVAL. ANGELO MANIOUDAKIS, Senior Vice President of the Manager (since April 2002), of HarbourView Asset Vice President and Portfolio Management Corporation (since April, 2002 and of OFI Institutional Asset Manager (since 2002 ) Management, Inc. (since June 2002); Executive Director and portfolio manager Age: 39 for Miller, Anderson & Sherrerd, a division of Morgan Stanley Investment Management (August 1993-April 2002). An officer of 14 portfolios in the OppenheimerFunds complex. MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since Vice President and Chief March 2004); Vice President of OppenheimerFunds Distributor, Inc., Centennial Compliance Officer Asset Management Corporation and Shareholder Services, Inc. (since June 1983); (since 2004) Vice President and Director of Internal Audit of the Manager (1997-February Age: 55 2004). An officer of 87 portfolios in the OppenheimerFunds complex.
67 | OPPENHEIMER CORE BOND FUND TRUSTEES AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer and Principal Treasurer of the following: HarbourView Asset Management Corporation, Financial and Accounting Shareholder Financial Services, Inc., Shareholder Services, Inc., Oppenheimer Real Officer (since 1999) Asset Management Corporation, and Oppenheimer Partnership Holdings, Inc. Age: 46 (since March 1999), OFI Private Investments, Inc. (since March 2000), OppenheimerFunds International Ltd. and OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program (since June 2003); Treasurer and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of the following: OAC (since March 1999), Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer of Bankers Trust Company-Mutual Fund Services Division (March 1995-March 1999). An officer of 87 portfolios in the OppenheimerFunds complex. ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since Vice President and Secretary March 2002) of the Manager; General Counsel and Director of the Distributor (since 2001) (since December 2001); General Counsel of Centennial Asset Management Age: 57 Corporation (since December 2001); Senior Vice President and General Counsel of HarbourView Asset Management Corporation (since December 2001); Secretary and General Counsel of OAC (since November 2001); Assistant Secretary (since September 1997) and Director (since November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset Management, Inc. (since November 2001); Senior Vice President, General Counsel and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since December 2001); Senior Vice President, General Counsel and Director of OFI Private Investments, Inc. and OFI Trust Company (since November 2001); Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice President and General Counsel of OFI Institutional Asset Management, Inc. (since November 2001); Director of OppenheimerFunds (Asia) Limited (since December 2003); Senior Vice President (May 1985-December 2003), Acting General Counsel (November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of the following: Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November 1989-November 2001), and OppenheimerFunds International Ltd. (September 1997-November 2001). An officer of 87 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION ABOUT THE FUND'S TRUSTEES AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE, UPON REQUEST, BY CALLING 1.800.525.7048. 68 | OPPENHEIMER CORE 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 registrant 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 $17,750 in fiscal 2005 and $17,500 in fiscal 2004. (b) Audit-Related Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $5,000 in fiscal 2005 and no such fees in fiscal 2004 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 services: seed money audit. (c) Tax Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. (d) All Other Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. (e) (1) During its regularly scheduled periodic meetings, the registrant's audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant. The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting. Under applicable laws, pre-approval of non-audit services maybe waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit. (2) 100% (f) Not applicable as less than 50%. (g) The principal accountant for the audit of the registrant's annual financial statements billed $5,000 in fiscal 2005 and no such fees in fiscal 2004 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 accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS 1. The Fund's Governance Committee (the "Committee") will evaluate potential Board candidates to assess their qualifications. The Committee shall have the authority, upon approval of the Board, to retain an executive search firm to assist in this effort. The Committee may consider recommendations by business and personal contacts of current Board members and by executive search firms which the Committee may engage from time to time and may also consider shareholder recommendations. The Committee may consider the advice and recommendation of the Funds' investment manager and its affiliates in making the selection. 2. The Committee shall screen candidates for Board membership. The Committee has not established specific qualifications that it believes must be met by a trustee nominee. In evaluating trustee nominees, the Committee considers, among other things, an individual's background, skills, and experience; whether the individual is an "interested person" as defined in the Investment Company Act of 1940; and whether the individual would be deemed an "audit committee financial expert" within the meaning of applicable SEC rules. The Committee also considers whether the individual's background, skills, and experience will complement the background, skills, and experience of other nominees and will contribute to the Board. There are no differences in the manner in which the Committee evaluates nominees for trustees based on whether the nominee is recommended by a shareholder. 3. The Committee may consider nominations from shareholders for the Board at such times as the Committee meets to consider new nominees for the Board. The Committee shall have the sole discretion to determine the candidates to present to the Board and, in such cases where required, to shareholders. Recommendations for trustee nominees should, at a minimum, be accompanied by the following: o the name, address, and business, educational, and/or other pertinent background of the person being recommended; o a statement concerning whether the person is an "interested person" as defined in the Investment Company Act of 1940; o any other information that the Funds would be required to include in a proxy statement concerning the person if he or she was nominated; and o the name and address of the person submitting the recommendation and, if that person is a shareholder, the period for which that person held Fund shares. The recommendation also can include any additional information which the person submitting it believes would assist the Committee in evaluating the recommendation. 4. Shareholders should note that a person who owns securities issued by Massachusetts Mutual Life Insurance Company (the parent company of the Funds' investment adviser) would be deemed an "interested person" under the Investment Company Act of 1940. In addition, certain other relationships with Massachusetts Mutual Life Insurance Company or its subsidiaries, with registered broker-dealers, or with the Funds' outside legal counsel may cause a person to be deemed an "interested person." 5. Before the Committee decides to nominate an individual as a trustee, Committee members and other directors customarily interview the individual in person. In addition, the individual customarily is asked to complete a detailed questionnaire which is designed to elicit information which must be disclosed under SEC and stock exchange rules and to determine whether the individual is subject to any statutory disqualification from serving as a trustee of a registered investment company. ITEM 11. CONTROLS AND PROCEDURES. Based on their evaluation of the registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of December 31, 2005, the registrant's principal executive officer and principal financial officer found the registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by the registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. There have been no changes in the registrant's internal controls over financial reporting that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a) (1) Exhibit attached hereto. (2) Exhibits attached hereto. (3) Not applicable. (b) Exhibit attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Oppenheimer Integrity Funds By: /s/ John V. Murphy ------------------- John V. Murphy Principal Executive Officer Date: February 14, 2006 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ John V. Murphy ------------------- John V. Murphy Principal Executive Officer Date: February 14, 2006 By: /s/ Brian W. Wixted ------------------- Brian W. Wixted Principal Financial Officer Date: February 14, 2006 EX-99.CODE ETH 2 ra285_18659-ethics.txt RA285_18659-ETHICS 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 communications 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 - ---------- 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. 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. 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 whether 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; - ---------- 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. (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 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 3 ra285_18659-ex302.txt RA285_18659-EX302 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 Integrity Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 14, 2006 /s/ John V. Murphy - ------------------ John V. Murphy Principal Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, Brian W. Wixted, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Integrity Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 14, 2006 /s/ Brian W. Wixted - ------------------------------------ Brian W. Wixted Principal Financial Officer EX-99.906 4 ra285_18659-ex906.txt RA285_18659-EX906 EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 John V. Murphy, Principal Executive Officer, and Brian W. Wixted, Principal Financial Officer, of Oppenheimer Integrity Funds (the "Registrant"), each certify to the best of his knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended December 31, 2005 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Principal Executive Officer Principal Financial Officer Oppenheimer Integrity Funds Oppenheimer Integrity Funds /s/ John V. Murphy /s/ Brian W. Wixted - ---------------------------- ---------------------------- John V. Murphy Brian W. Wixted Date: February 14, 2006 Date: February 14, 2006 -----END PRIVACY-ENHANCED MESSAGE-----