-----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, DhPcaQAZU5MyRceepNcJSuZtFxEVS0IvAleZf9xeDAYg/DVQCYc+Zx2wXsGTXJ2w 9ZM//og8cwiiwIL3e7Lu5w== 0000935069-03-001556.txt : 20031119 0000935069-03-001556.hdr.sgml : 20031119 20031119151503 ACCESSION NUMBER: 0000935069-03-001556 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030930 FILED AS OF DATE: 20031119 EFFECTIVENESS DATE: 20031119 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER INTERNATIONAL BOND FUND CENTRAL INDEX KEY: 0000939800 IRS NUMBER: 841308320 STATE OF INCORPORATION: MA FISCAL YEAR END: 0931 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-07255 FILM NUMBER: 031012709 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 BUSINESS PHONE: 3037683200 MAIL ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 N-CSR 1 ra0880_9431vef.txt RA0880_9431VEF 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 811-07255 Oppenheimer International Bond Fund (Exact name of registrant as specified in charter) 6803 South Tucson Way, Centennial, Colorado 80112-3924 (Address of principal executive offices) (Zip code) Robert G. Zack, Esq. OppenheimerFunds, Inc. 498 Seventh Avenue, New York, New York 10018 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 -------------- Date of fiscal year end: September 30 Date of reporting period: October 1, 2002 - September 30, 2003 ITEM 1. REPORTS TO STOCKHOLDERS. FUND PERFORMANCE DISCUSSION How has the Fund performed? Below is a discussion by OppenheimerFunds, Inc., of the Fund's performance during its fiscal year ended September 30, 2003, followed by a graphical comparison of the Fund's performance to an appropriate broad-based market index. Management's Discussion of Fund Performance. The Fund's positive returns during its fiscal year were driven primarily by its investments in emerging-market bonds. Debt securities from some Latin American nations rallied strongly after languishing before the reporting period. High levels of liquidity and declining interest rates in most industrialized nations caused investors to look elsewhere for high yields, which they found in emerging-markets debt securities. In addition, the Federal Reserve Board's accommodative monetary policy provided liquidity to support substantial capital flows from the United States and Europe into the emerging markets. As demand for emerging-market bonds strengthened, their prices rose sharply. As a result, the Fund benefited from emerging-markets fixed-income investments denominated in U.S. dollars, euros and local currencies. The Fund received particularly strong returns from its investments in Brazil's debt securities and currency-related instruments, such as interest-rate swaps, as it became clearer that Brazil's new government was likely to pursue a sound economic policy. The Fund also achieved gains in Indonesian bonds, which recovered from depressed prices in the wake of a terrorist attack in Bali and rising international reserve. The Fund also received positive contributions to performance through its investments in the local currencies of some Asian nations. The Fund's investments in developed-market debt did not contribute substantially to its performance. Volatile changes in the exchange rate between the euro and a generally weakening U.S. dollar largely offset gains in local currency terms. Euro-denominated debt comprised a portion of the Fund's developed-market exposure during the reporting period. After signs of stronger global growth began to emerge and sovereign emerging markets spreads tightened to historical lows, making bonds less attractive, the Fund established positions in equity securities designed to provide participation in potential gains in international stock markets. In the few months since those positions were established, the Fund has enjoyed strong returns from its diversified investments in the stock markets of Asia, Russia and Brazil. In addition, the Fund's relatively short duration--a measure of sensitivity to changing interest rates--helped it avoid the full brunt of the international bond markets' declines in July and August, when signs of a more robust economic recovery convinced many investors that U.S. interest rates had reached their lows for the current economic cycle. Of course, the Fund's duration-management strategy and its composition may change as 5 | OPPENHEIMER INTERNATIONAL BOND FUND FUND PERFORMANCE DISCUSSION economic and market conditions evolve. The Fund's holdings, strategies and management are subject to change. 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 September 30, 2003. In the case of Class A, Class B and Class C shares, performance is measured from inception of the Class on June 15, 1995. In the case of Class N shares, performance is measured from inception of the Class on March 1, 2001. 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. The performance of each class of the Fund's shares is compared to two indices because the Fund invests in debt securities issued by governments in both developed countries and emerging market countries and in debt securities issued by companies located in those countries. In the Manager's view, no single index adequately combines both types of investments. Performance is compared to the Citigroup Non-US Dollar World Government Bond Index (formerly Salomon Brothers Non-US Dollar World Government Bond Index), a subset of the Citigroup World Government Bond Index. The Citigroup Non-US Dollar World Government Bond Index is a market capitalization weighted benchmark that tracks the performance of 13 government bond markets including Australia, Canada, Japan and 10 European countries. Thus, the index does not reflect the performance of the fixed income markets in either the United States or in any emerging market countries. In addition, it is comprised of only government bonds and does not reflect the performance of corporate bonds. Index performance reflects the reinvestment of dividends but does not consider the effect of capital gains or transaction costs, and none of the data in the graphs that follow shows the effect of taxes. Indices may not be purchased directly by investors and indices performance does not depict or predict actual Fund performance. The Fund's performance reflects the effects of Fund 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 securities or countries in the indices. 6 | OPPENHEIMER INTERNATIONAL BOND FUND Class A Shares Comparison of Change in Value of $10,000 Hypothetical Investments in: Oppenheimer International Bond Fund (Class A) Citigroup Non-US Dollar World Government Bond Index Oppenheimer International Citigroup Non-USD Date Bond Fund (Class A) World Government Bond Index 06/15/1995 $ 9,525 $10,000 06/30/1995 9,570 10,050 09/30/1995 10,014 9,806 12/31/1995 10,473 10,009 03/31/1996 10,860 9,840 06/30/1996 11,362 9,879 09/30/1996 11,898 10,201 12/31/1996 12,492 10,418 03/31/1997 12,584 9,815 06/30/1997 12,934 10,092 09/30/1997 13,246 10,114 12/31/1997 12,799 9,974 03/31/1998 12,978 10,015 06/30/1998 12,850 10,182 09/30/1998 11,591 11,160 12/31/1998 12,242 11,748 03/31/1999 12,216 11,179 06/30/1999 12,635 10,678 09/30/1999 12,818 11,331 12/31/1999 13,589 11,152 03/31/2000 14,150 11,023 06/30/2000 13,986 10,935 09/30/2000 13,962 10,441 12/31/2000 14,519 10,858 03/31/2001 14,144 10,326 06/30/2001 14,206 10,122 09/30/2001 14,157 10,907 12/31/2001 14,830 10,474 03/31/2002 15,149 10,279 06/30/2002 16,368 11,715 09/30/2002 16,532 12,047 12/31/2002 17,917 12,777 03/31/2003 18,452 13,254 06/30/2003 19,889 13,812 09/30/2003 20,941 14,192 Average Annual Total Returns of Class A Shares of the Fund at 9/30/03* 1-Year 20.65% 5-Year 11.47% Since Inception 9.32% Class B Shares Comparison of Change in Value of $10,000 Hypothetical Investments in: Oppenheimer International Bond Fund (Class B) Citigroup Non-US Dollar World Government Bond Index Oppenheimer International Citigroup Non-USD Date Bond Fund (Class B) World Government Bond Index 06/15/1995 $10,000 $10,000 06/30/1995 10,045 10,050 09/30/1995 10,492 9,806 12/31/1995 10,929 10,009 03/31/1996 11,312 9,840 06/30/1996 11,837 9,879 09/30/1996 12,350 10,201 12/31/1996 12,943 10,418 03/31/1997 13,014 9,815 06/30/1997 13,352 10,092 09/30/1997 13,649 10,114 12/31/1997 13,165 9,974 03/31/1998 13,324 10,015 06/30/1998 13,168 10,182 09/30/1998 11,852 11,160 12/31/1998 12,496 11,748 03/31/1999 12,447 11,179 06/30/1999 12,850 10,678 09/30/1999 13,013 11,331 12/31/1999 13,773 11,152 03/31/2000 14,318 11,023 06/30/2000 14,094 10,935 09/30/2000 14,046 10,441 12/31/2000 14,614 10,858 03/31/2001 14,208 10,326 06/30/2001 14,252 10,122 09/30/2001 14,203 10,907 12/31/2001 14,878 10,474 03/31/2002 15,198 10,279 06/30/2002 16,421 11,715 09/30/2002 16,585 12,047 12/31/2002 17,974 12,777 03/31/2003 18,512 13,254 06/30/2003 19,954 13,812 09/30/2003 21,009 14,192 Average Annual Total Returns of Class B Shares of the Fund at 9/30/03* 1-Year 20.48% 5-Year 11.43% Since Inception 9.37% *See Notes on page 9 for further details. The performance information for the Citigroup Non-US Dollar World Government Bond Index in the graphs begins on 5/31/95 for Class A, B and C and 2/28/01 for Class N. Past performance cannot guarantee future results. Graphs are not drawn to same scale. 7 | OPPENHEIMER INTERNATIONAL BOND FUND FUND PERFORMANCE DISCUSSION Class C Shares Comparison of Change in Value of $10,000 Hypothetical Investments in: Oppenheimer International Bond Fund (Class C) Citigroup Non-US Dollar World Government Bond Index Oppenheimer International Citigroup Non-USD Date Bond Fund (Class C) World Government Bond Index 06/15/1995 $10,000 $10,000 06/30/1995 10,045 10,050 09/30/1995 10,473 9,806 12/31/1995 10,929 10,009 03/31/1996 11,311 9,840 06/30/1996 11,814 9,879 09/30/1996 12,350 10,201 12/31/1996 12,943 10,418 03/31/1997 12,990 9,815 06/30/1997 13,352 10,092 09/30/1997 13,649 10,114 12/31/1997 13,165 9,974 03/31/1998 13,324 10,015 06/30/1998 13,169 10,182 09/30/1998 11,853 11,160 12/31/1998 12,497 11,748 03/31/1999 12,448 11,179 06/30/1999 12,852 10,678 09/30/1999 13,014 11,331 12/31/1999 13,774 11,152 03/31/2000 14,319 11,023 06/30/2000 14,097 10,935 09/30/2000 14,049 10,441 12/31/2000 14,617 10,858 03/31/2001 14,210 10,326 06/30/2001 14,246 10,122 09/30/2001 14,169 10,907 12/31/2001 14,779 10,474 03/31/2002 15,105 10,279 06/30/2002 16,292 11,715 09/30/2002 16,422 12,047 12/31/2002 17,724 12,777 03/31/2003 18,221 13,254 06/30/2003 19,607 13,812 09/30/2003 20,606 14,192 Average Annual Total Returns of Class C Shares of the Fund at 9/30/03* 1-Year 24.48% 5-Year 11.69% Since Inception 9.11% Class N Shares Comparison of Change in Value of $10,000 Hypothetical Investments in: Oppenheimer International Bond Fund (Class N) Citigroup Non-US Dollar World Government Bond Index Oppenheimer International Citigroup Non-USD Date Bond Fund (Class N) World Government Bond Index 03/01/2001 $10,000 $10,000 03/31/2001 9,706 9,598 06/30/2001 9,747 9,409 09/30/2001 9,712 10,139 12/31/2001 10,144 9,736 03/31/2002 10,380 9,554 06/30/2002 11,208 10,889 09/30/2002 11,287 11,198 12/31/2002 12,225 11,877 03/31/2003 12,583 12,320 06/30/2003 13,552 12,838 09/30/2003 14,257 13,192 Average Annual Total Returns of Class N Shares of the Fund at 9/30/03* 1-Year 25.31% Since Inception 14.73% *See Notes on page 9 for further details. The performance information for the Citigroup Non-US Dollar World Government Bond Index in the graphs begins on 5/31/95 for Class A, B and C and 2/28/01 for Class N. Past performance cannot guarantee future results. Graphs are not drawn to same scale. 8 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES In reviewing performance and rankings, please remember that past performance cannot guarantee future results. 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 the original cost. Because of ongoing market volatility, the Fund's performance may be subject to substantial fluctuations, and current performance may be more or less than the results shown. For updates on the Fund's performance, visit our website at www.oppenheimerfunds.com. 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. For more complete information about the Fund, including charges, expenses and risks, please refer to the prospectus. To obtain a copy, call your financial advisor, call OppenheimerFunds Distributor, Inc. at 1.800.CALL OPP (1.800.225.5677) or visit the OppenheimerFunds website at www.oppenheimerfunds.com. Read the prospectus carefully before you invest or send money. Class A shares of the Fund were first publicly offered on 6/15/95. 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 6/15/95. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to Class A shares 72 months after purchase, the "since inception" return for Class B uses Class A performance for the period after conversion. Class B shares are subject to an annual 0.75% asset-based sales charge. Class C shares of the Fund were first publicly offered on 6/15/95. 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. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 9 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS September 30, 2003
Principal Market Value Amount See Note 1 - --------------------------------------------------------------------------------------------------------------- Foreign Government Obligations--77.4% - --------------------------------------------------------------------------------------------------------------- Argentina--2.3% Argentina (Republic of) Bonds: 1.162%, 8/3/12 1 $14,025,000 $ 8,462,839 1.278%, 5/3/05 2,3 693,000 637,560 Series PRE8, 2%, 1/3/10 2,3,4 [ARP] 5,820,000 1,763,485 Series PR12, 2%, 1/3/16 2,3,4 [ARP] 11,505,972 2,676,497 - --------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Disc. Bonds, 2.345%, 3/31/23 2,3 660,000 326,700 - --------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Treasury Bills, 14.75%, 10/8/04 5 [ARP] 412,000 125,050 - --------------------------------------------------------------------------------------------------------------- Buenos Aires (Province of) Bonds, Bonos de Consolidacion de Deudas, Series PBA1, 3.257%, 4/1/07 2,4 [ARP] 2,237,889 739,657 - --------------------------------------------------------------------------------------------------------------- JPMorgan Chase Bank, Argentina (Republic of) Treasury Bills, 8.84%, 2/20/04 4 [ARP] 785,000 257,669 -------------- 14,989,457 - --------------------------------------------------------------------------------------------------------------- Austria--1.0% Austria (Republic of) Nts.: 3.40%, 10/20/04 [EUR] 1,580,000 1,864,093 5.50%, 10/20/07 [EUR] 2,440,000 3,109,597 Series 98-3, 3.90%, 10/20/05 [EUR] 1,435,000 1,723,861 -------------- 6,697,551 - --------------------------------------------------------------------------------------------------------------- Belgium--3.4% Belgium (Kingdom of) Bonds: 5%, 9/28/11 [EUR] 1,950,000 2,449,816 Series 19, 6.50%, 3/31/05 [EUR] 7,460,000 9,231,381 Series 28, 5.75%, 3/28/08 [EUR] 8,405,000 10,840,255 -------------- 22,521,452 - --------------------------------------------------------------------------------------------------------------- Brazil--4.0% Brazil (Federal Republic of) Bonds: 11.50%, 4/2/09 [EUR] 6,930,000 8,521,259 Series 15 yr., 2.188%, 4/15/09 1 21,177 19,139 - --------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Sr. Unsec. Unsub. Nts., 12%, 11/17/06 [EUR] 5,730,000 7,390,203 - --------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Unsec. Bonds, 10%, 7/30/07 [GBP] 5,495,000 8,809,865 - --------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Unsec. Unsub. Bonds: 10%, 8/7/11 1,314,000 1,294,290 11%, 8/17/39 200 190 Cl. B, 8.875%, 4/15/24 81,000 64,881 -------------- 26,099,827 - --------------------------------------------------------------------------------------------------------------- Canada--0.7% Canada (Government of) Bonds, 5.50%, 6/1/10 [CAD] 6,000,000 4,789,685 - --------------------------------------------------------------------------------------------------------------- Colombia--1.9% Colombia (Republic of) Sr. Unsec. Unsub. Bonds, 11.25%, 10/20/05 [EUR] 9,535,000 12,494,755 - --------------------------------------------------------------------------------------------------------------- Denmark--0.8% Denmark (Kingdom of) Nts., 4%, 8/15/08 [DKK] 33,200,000 5,343,283 - --------------------------------------------------------------------------------------------------------------- Dominican Republic--0.2% Dominican Republic Unsec. Unsub. Bonds, 9.50%, 9/27/06 1,570,000 1,554,300
10 | OPPENHEIMER INTERNATIONAL BOND FUND
Principal Market Value Amount See Note 1 - --------------------------------------------------------------------------------------------------------------- Finland--2.2% Finland (Republic of) Bonds, 5%, 4/25/09 [EUR] 1,680,000 $ 2,120,726 - --------------------------------------------------------------------------------------------------------------- Finland (Republic of) Sr. Unsec. Unsub. Bonds: 2.75%, 7/4/06 [EUR] 3,470,000 4,059,273 5%, 7/4/07 [EUR] 6,915,000 8,641,711 -------------- 14,821,710 - --------------------------------------------------------------------------------------------------------------- France--4.0% France (Government of) Obligations Assimilables du Tresor Bonds, 5.50%, 10/25/07 [EUR] 3,615,000 4,605,152 - --------------------------------------------------------------------------------------------------------------- France (Government of) Treasury Nts.: 3.50%, 7/12/04 [EUR] 5,180,000 6,100,774 3 yr., 3.50%, 1/12/05 [EUR] 7,090,000 8,402,594 5 yr., 4.75%, 7/12/07 [EUR] 6,085,000 7,545,193 -------------- 26,653,713 - --------------------------------------------------------------------------------------------------------------- Germany--6.7% Germany (Republic of) Bonds: 2%, 6/17/05 [EUR] 7,865,000 9,127,126 3%, 12/10/04 [EUR] 2,385,000 2,806,892 5.375%, 1/4/10 [EUR] 5,630,000 7,227,136 Series 01, 5%, 7/4/11 [EUR] 3,635,000 4,572,212 Series 02, 5%, 7/4/12 [EUR] 4,200,000 5,274,572 Series 140, 4.50%, 8/17/07 6 [EUR] 12,380,000 15,202,859 -------------- 44,210,797 - --------------------------------------------------------------------------------------------------------------- Great Britain--1.5% United Kingdom Treasury Nts., 7.50%, 12/7/06 7,8 [GBP] 5,325,000 9,684,762 - --------------------------------------------------------------------------------------------------------------- Greece--5.2% Greece (Republic of) Bonds: 3.50%, 4/18/08 [EUR] 20,740,000 24,463,486 5.35%, 5/18/11 [EUR] 7,520,000 9,611,087 -------------- 34,074,573 - --------------------------------------------------------------------------------------------------------------- Guatemala--0.4% Guatemala (Republic of) Nts.: 10.25%, 11/8/11 9 160,000 184,000 10.25%, 11/8/11 1,940,000 2,231,000 -------------- 2,415,000 - --------------------------------------------------------------------------------------------------------------- Italy--4.1% Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali: 3.50%, 1/15/08 [EUR] 4,500,000 5,326,417 4%, 3/1/05 [EUR] 1,135,000 1,355,998 4.50%, 7/1/04 [EUR] 5,870,000 6,961,004 5%, 10/15/07 6 [EUR] 10,625,000 13,319,901 -------------- 26,963,320
11 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued
Principal Market Value Amount See Note 1 - --------------------------------------------------------------------------------------------------------------- Ivory Coast--0.1% Ivory Coast (Government of) Past Due Interest Bonds, 1.90%, 3/29/18 2,3,4 [FRF] 16,007,500 $ 507,986 - --------------------------------------------------------------------------------------------------------------- Japan--22.3% Japan (Government of) Bonds, 5 yr., Series 14, 0.40%, 6/20/06 6 [JPY] 16,372,800,000 146,911,860 - --------------------------------------------------------------------------------------------------------------- Mexico--0.3% United Mexican States Bonds, 6.75%, 6/6/06 6 [JPY] 120,000,000 1,229,164 - --------------------------------------------------------------------------------------------------------------- United Mexican States Unsec. Unsub. Nts., Series 6 BR, 6.75%, 6/6/06 [JPY] 85,000,000 870,657 -------------- 2,099,821 - --------------------------------------------------------------------------------------------------------------- Nigeria--0.3% Central Bank of Nigeria Gtd. Bonds, Series WW, 6.25%, 11/15/20 1,375,000 1,223,750 - --------------------------------------------------------------------------------------------------------------- Nigeria (Federal Republic of) Promissory Nts., Series RC, 5.092%, 1/5/10 755,202 633,081 -------------- 1,856,831 - --------------------------------------------------------------------------------------------------------------- Peru--0.6% Peru (Republic of) Sr. Nts., 4.53%, 2/28/16 5 6,568,457 3,916,771 - --------------------------------------------------------------------------------------------------------------- Philippines--2.2% Philippines (Republic of) Nts., 9.875%, 3/16/10 540,000 611,550 - --------------------------------------------------------------------------------------------------------------- Philippines (Republic of) Unsec. Unsub. Nts., 9.375%, 12/7/06 [EUR] 11,075,000 14,088,784 -------------- 14,700,334 - --------------------------------------------------------------------------------------------------------------- Portugal--1.3% Portugal (Republic of) Obrig Do Tes Medio Prazo Unsec Unsub. Bonds, 5.85%, 5/20/10 [EUR] 6,465,000 8,505,828 - --------------------------------------------------------------------------------------------------------------- Russia--3.0% Ministry Finance of Russia Debs., Series V, 3%, 5/14/08 10,420,000 9,325,900 - --------------------------------------------------------------------------------------------------------------- Russian Federation Unsec. Unsub. Nts.: 8.75%, 7/24/05 1,430,000 1,578,362 10%, 6/26/07 7,435,000 8,866,238 -------------- 19,770,500 - --------------------------------------------------------------------------------------------------------------- Spain--2.5% Spain (Kingdom of) Bonds, Bonos y Obligacion del Estado, 4.80%, 10/31/06 [EUR] 5,500,000 6,809,052 - --------------------------------------------------------------------------------------------------------------- Spain (Kingdom of) Treasury Bills, 2.02%, 10/10/03 5 [EUR] 8,175,000 9,515,434 -------------- 16,324,486 - --------------------------------------------------------------------------------------------------------------- Sweden--2.2% Sweden (Kingdom of) Debs., Series 1040, 6.50%, 5/5/08 [SEK] 102,770,000 14,753,741 - --------------------------------------------------------------------------------------------------------------- The Netherlands--3.4% The Netherlands (Government of) Bonds: 5%, 7/15/11 [EUR] 1,850,000 2,330,648 Series 1, 5.75%, 2/15/07 [EUR] 15,880,000 20,231,396 -------------- 22,562,044 - --------------------------------------------------------------------------------------------------------------- Turkey--0.2% Turkey (Republic of) Sr. Unsec. Unsub. Nts., 11.875%, 1/15/30 955,000 1,107,800
12 | OPPENHEIMER INTERNATIONAL BOND FUND
Principal Market Value Amount See Note 1 - --------------------------------------------------------------------------------------------------------------- Ukraine--0.6% Ukraine (Government of) Bonds, 7.65%, 6/11/13 $ 2,460,000 $ 2,460,000 - --------------------------------------------------------------------------------------------------------------- Ukraine (Government of) Sr. Unsec. Nts., 11%, 3/15/07 1,215,212 1,360,734 -------------- 3,820,734 - --------------------------------------------------------------------------------------------------------------- Venezuela--0.0% Venezuela (Republic of) Collateralized Par Bonds, Series W-B, 6.75%, 3/31/20 159,000 140,715 -------------- Total Foreign Government Obligations (Cost $486,067,431) 510,293,636 - --------------------------------------------------------------------------------------------------------------- Loan Participations--2.2% Algeria (Republic of) Loan Participation Bonds, 0.938%, 3/4/10 1,4 [JPY] 230,311,880 1,906,776 - --------------------------------------------------------------------------------------------------------------- Algeria (Republic of) Loan Participation Nts., 2.063%, 3/4/10 1,4 880,750 846,621 - --------------------------------------------------------------------------------------------------------------- Algeria (Republic of) Loan Participation Nts., 2.063%, 9/4/06 1,4 985,714 966,000 - --------------------------------------------------------------------------------------------------------------- Deutsche Bank AG, OAO Gazprom Loan Participation Nts., 6.50%, 8/4/05 3,005,000 3,015,818 - --------------------------------------------------------------------------------------------------------------- Deutsche Bank AG, Indonesian Rupiah Loan Participation Nts.: 2.636%, 5/21/04 5,390,000 4,945,325 2.636%, 3/25/05 3,155,000 2,736,962 -------------- Total Loan Participations (Cost $13,331,428) 14,417,502 - --------------------------------------------------------------------------------------------------------------- Corporate Bonds and Notes--2.5% Capital Gaming International, Inc., 11.50% Promissory Nts., 8/1/1995 2,3,4 2,000 -- - --------------------------------------------------------------------------------------------------------------- Mexican Williams, 1.258% Sr. Nts., 11/15/08 1,4 500,000 521,250 - --------------------------------------------------------------------------------------------------------------- Ongko International Finance Co. BV, 10.50% Sec. Nts., 3/29/04 2,3,4 550,000 3,438 - --------------------------------------------------------------------------------------------------------------- Pemex Project Funding Master Trust, 6.625% Bonds, 4/4/10 9 [EUR] 4,950,000 6,134,891 - --------------------------------------------------------------------------------------------------------------- Petroleos Mexicanos, 7.375% Unsec. Nts., 8/13/07 4 [ITL] 14,895,000,000 9,771,872 -------------- Total Corporate Bonds and Notes (Cost $15,304,663) 16,431,451 Shares - --------------------------------------------------------------------------------------------------------------- Common Stocks--2.2% AO VimpelCom, Sponsored ADR 3 7,375 448,842 - --------------------------------------------------------------------------------------------------------------- Banco Bradesco SA, Sponsored ADR 14,100 284,397 - --------------------------------------------------------------------------------------------------------------- Banco Itau Holding Financeira SA, ADR 20,400 738,480 - --------------------------------------------------------------------------------------------------------------- Bank Pekao SA, Sponsored GDR 19,204 549,868 - --------------------------------------------------------------------------------------------------------------- Cesky Telecom AS, GDR 3 44,233 435,695 - --------------------------------------------------------------------------------------------------------------- Companhia de Bebidas das Americas, ADR 48,800 1,056,520 - --------------------------------------------------------------------------------------------------------------- Companhia Siderurgica Nacional SA, Sponsored ADR 23,600 838,272 - --------------------------------------------------------------------------------------------------------------- Companhia Vale do Rio Doce, ADR 21,390 873,140 - --------------------------------------------------------------------------------------------------------------- Gedeon Richter Rt., GDR, S Shares 3,805 372,890 - --------------------------------------------------------------------------------------------------------------- iShares MSCI Brazil Index Fund 3 70,115 889,759 - --------------------------------------------------------------------------------------------------------------- iShares MSCI Hong Kong Index Fund 225 2,131 - --------------------------------------------------------------------------------------------------------------- JSC Mining & Metallurgical Co. Norilsk Nickel, ADR 10,185 505,431 - --------------------------------------------------------------------------------------------------------------- KGHM Polska Miedz SA, GDR 3 17,559 182,613 - --------------------------------------------------------------------------------------------------------------- Komercni Banka AS, GDR 29,434 858,001 - --------------------------------------------------------------------------------------------------------------- LUKOIL, Sponsored ADR 4,785 395,050
13 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued
Market Value Shares See Note 1 - --------------------------------------------------------------------------------------------------------------- Common Stocks Continued Magyar Tavkozlesi Rt, Sponsored ADR 25,098 $ 469,082 - --------------------------------------------------------------------------------------------------------------- MOL Magyar Olaj-es Gazipari Rt, Sponsored GDR 16,308 451,732 - --------------------------------------------------------------------------------------------------------------- OAO Gazprom, Sponsored ADR 18,105 449,004 - --------------------------------------------------------------------------------------------------------------- OTP Bank Ltd., GDR, S Shares 3 31,439 748,248 - --------------------------------------------------------------------------------------------------------------- Petroleo Brasileiro SA, Sponsored ADR 38,277 877,692 - --------------------------------------------------------------------------------------------------------------- Polski Koncern Naftowy Orlen SA, GDR 45,128 546,049 - --------------------------------------------------------------------------------------------------------------- Sibneft, Sponsored ADR 3 15,405 450,596 - --------------------------------------------------------------------------------------------------------------- Surgutneftegaz, Sponsored ADR 17,405 394,223 - --------------------------------------------------------------------------------------------------------------- Telekomunikacja Polska SA, GDR 140,595 503,330 - --------------------------------------------------------------------------------------------------------------- Uniao de Bancos Brasileiros SA (Unibanco), Sponsored ADR 27,000 534,600 - --------------------------------------------------------------------------------------------------------------- YUKOS, ADR 7,485 464,145 -------------- Total Common Stocks (Cost $13,340,250) 14,319,790 Units - --------------------------------------------------------------------------------------------------------------- Rights, Warrants and Certificates--2.8% Chesapeake Energy Corp. Wts., Exp. 9/1/04 3 66 3 - --------------------------------------------------------------------------------------------------------------- ICG Communications, Inc. Wts., Exp. 9/15/05 3,4 495 5 - --------------------------------------------------------------------------------------------------------------- Loral Space & Communications Ltd. Wts., Exp. 1/15/07 3,4 50 -- - --------------------------------------------------------------------------------------------------------------- Morgan Stanley Capital I, Inc. All Country Asia Free (except for Japan) Wts., Exp. 3/4/05 3 427,760 5,500,181 - --------------------------------------------------------------------------------------------------------------- Morgan Stanley Capital I, Inc. Basket of countries Wts., Exp. 3/4/05 3 338,332 4,046,045 - --------------------------------------------------------------------------------------------------------------- Morgan Stanley Capital III, Inc. All Country Asia Free (except for Japan) Wts., Exp. 3/4/05 3 827,508 8,926,081 - --------------------------------------------------------------------------------------------------------------- Protection One, Inc. Wts., Exp. 6/30/05 3,4 640 -- - --------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Oil Linked Payment Obligation Wts., Exp. 4/15/20 3,4 500 -- -------------- Total Rights, Warrants and Certificates (Cost $15,748,122) 18,472,315 Principal Amount - --------------------------------------------------------------------------------------------------------------- Structured Notes--9.2% Citigroup Global Capital Markets Holdings, Inc., OAO Gazprom Russia Local Market Unsec. Credit Linked Nts., 15.208%, 11/8/05 1 $ 4,406,270 4,735,194 - --------------------------------------------------------------------------------------------------------------- Citigroup Global Markets Holdings, Inc., Argentine Peso Linked Nts., 7/6/04 1,165,000 1,144,263 - --------------------------------------------------------------------------------------------------------------- Credit Suisse First Boston Corp. (Nassau Branch), U.S. Dollar/ Philippine Peso Linked Nts., 12.50%, 3/5/12 1 [PHP] 119,085,000 2,174,888 - --------------------------------------------------------------------------------------------------------------- Credit Suisse First Boston International, U.S. Dollar/ South African Rand Linked Nts., Series FBi 43, 1.065%, 5/23/22 1 2,100,000 2,037,210 - --------------------------------------------------------------------------------------------------------------- Deutsche Bank AG, Basket of Emerging Market Currencies Linked Nts.: 0.85%, 1/20/04 11,340,000 11,490,822 0.85%, 3/24/04 8,490,000 8,532,450 - --------------------------------------------------------------------------------------------------------------- Deutsche Bank AG, Indonesian Rupiah Linked Nts.: 14%, 6/22/09 3,867,352 4,501,598 14%, 6/22/09 2,145,123 2,360,922 14%, 6/22/09 1,855,000 2,128,983
14 | OPPENHEIMER INTERNATIONAL BOND FUND
Principal Market Value Amount See Note 1 - --------------------------------------------------------------------------------------------------------------- Structured Notes Continued Deutsche Bank AG, Peru Credit Default Linked Nts., 4.716%, 4/29/06 1 $ 2,250,000 $ 2,293,200 - --------------------------------------------------------------------------------------------------------------- Deutsche Bank AG, Turkish Lira Treasury Bill Linked Nts., 0.985%, 8/20/04 4,730,000 5,169,417 - --------------------------------------------------------------------------------------------------------------- Deutsche Bank AG, Venezuela (Republic of) Credit Linked Certificate of Deposit, 8.18%, 9/20/06 1 2,180,000 2,122,666 - --------------------------------------------------------------------------------------------------------------- Deutsche Bank AG, Venezuela (Republic of) Credit Linked Nts., 1.094%, 6/15/04 1 2,800,000 2,939,160 - --------------------------------------------------------------------------------------------------------------- JPMorgan Chase Bank, EMBI Plus/EMBI Global Uruguay Linked Certificate of Deposit, 0.30%, 10/21/03 1,581,823 1,564,064 - --------------------------------------------------------------------------------------------------------------- JPMorgan Chase Bank, Venezuela (Republic of) Credit Linked Certificate of Deposit: 7.79%, 9/20/05 1 2,410,000 2,408,072 7.84%, 9/20/05 1 2,410,000 2,410,241 - --------------------------------------------------------------------------------------------------------------- JPMorgan Chase Bank, Venezuela (Republic of) Credit Linked Default Bonds, 7.94%, 9/20/05 1 2,410,000 2,414,579 -------------- Total Structured Notes (Cost $59,229,113) 60,427,729 Dates Strike Contracts - --------------------------------------------------------------------------------------------------------------- Options Purchased--0.2% Chilean Peso Call 3,4 3/22/04 655CLP 6,378,824 134,478 - --------------------------------------------------------------------------------------------------------------- Euro Call 3,4 4/1/04 1.20EUR 56,025,000 1,042,065 - --------------------------------------------------------------------------------------------------------------- Japanese Yen Call 3,4 6/1/04 107JPY 1,917,000,000 393,752 - --------------------------------------------------------------------------------------------------------------- Japanese Yen Put 3,4 2/25/04 122EUR 12,755,000 125,892 -------------- Total Options Purchased (Cost $1,616,881) 1,696,187 Principal Amount - --------------------------------------------------------------------------------------------------------------- Joint Repurchase Agreements--4.1% Undivided interest of 4.27% in joint repurchase agreement (Principal Amount/Market Value $626,785,000, with a maturity value of $626,801,192) with Banc One Capital Markets, Inc., 0.93%, dated 9/30/03, to be repurchased at $26,770,692 on 10/1/03, collateralized by U.S. Treasury Nts., 7.25%, 5/15/04, with a value of $53,265,500, U.S. Treasury Bonds, 1.75%--9%, 9/30/05--8/15/23, with a value of $448,490,782 and U.S. Treasury Bills, 2/5/04--2/19/04, with a value of $138,244,579 (Cost $26,770,000) $26,770,000 26,770,000 - --------------------------------------------------------------------------------------------------------------- Total Investments, at Value (Cost $631,407,888) 100.6% 662,828,610 - --------------------------------------------------------------------------------------------------------------- Liabilities in Excess of Other Assets (0.6) (3,996,399) -------------------------------- Net Assets 100.0% $658,832,211 ================================
15 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued Footnotes to Statement of Investments Principal amount and strike are reported in U.S. Dollars, except for those denoted in the following currencies: ARP Argentine Peso GBP British Pound Sterling CAD Canadian Dollar ITL Italian Lira CLP Chilean Peso JPY Japanese Yen DKK Danish Krone PHP Philippines Peso EUR Euro SEK Swedish Krona FRF French Franc 1. Represents the current interest rate for a variable or increasing rate security. 2. Issuer is in default. See Note 1 of Notes to Financial Statements. 3. Non-income producing security. 4. Identifies issues considered to be illiquid or restricted. See Note 11 of Notes to Financial Statements. 5. Zero coupon bond reflects effective yield on the date of purchase. 6. Delayed settlement security to be delivered and settled after September 30, 2003. See Note 1 of Notes to Financial Statements. 7. A sufficient amount of securities has been designated to cover outstanding foreign currency contracts. See Note 5 of Notes to Financial Statements. 8. A sufficient amount of liquid assets has been designated to cover outstanding written options, as follows:
Contracts Expiration Exercise Premium Market Value Subject to Call Dates Price Received See Note 1 - ------------------------------------------------------------------------------------------------ Chilean Peso 6,378,797 3/22/04 665.00CLP $ 149,901 $ 189,132 Japanese Yen 25,510,000 4/28/04 141.00JPY 355,505 87,244 Japanese Yen 12,755,000 2/25/04 132.00JPY 146,582 197,830 Japanese Yen 9,840,000,000 10/23/03-10/30/03 110.00JPY 896,782 731,752 Thailand Baht 2,660,000 10/27/03 40.00THB 17,423 17,556 -------------------------- 1,566,193 1,223,514 ========================== Contracts Subject to Put - ------------------------------------------------------------------------------------------------ Japanese Yen 2,161,000,000 6/1/04 120.00JPY 403,387 132,685 Thailand Baht 2,660,000 10/27/03 40.50THB 10,773 6,251 -------------------------- 414,160 138,936 -------------------------- $1,980,353 $1,362,450 ==========================
9. 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 $6,318,891 or 0.96% of the Fund's net assets as of September 30, 2003. 16 | OPPENHEIMER INTERNATIONAL BOND FUND Distribution of investments representing geographic holdings, as a percentage of total investments at value, is as follows: Geographic Holdings Market Value Percent - -------------------------------------------------------------------------- Japan $146,911,860 22.2% United States 47,828,261 7.2 Germany 44,210,797 6.7 Philippines 36,898,494 5.6 Greece 34,074,573 5.1 Brazil 31,302,928 4.7 Russia 30,628,803 4.6 Italy 26,963,320 4.1 France 26,653,713 4.0 The Netherlands 22,562,044 3.4 Belgium 22,521,452 3.4 Mexico 18,527,834 2.8 Indonesia 16,677,228 2.5 Spain 16,324,486 2.5 Argentina 16,133,720 2.4 Finland 14,821,710 2.2 Sweden 14,753,741 2.2 Colombia 12,494,755 1.9 Venezuela 12,435,433 1.9 Great Britain 9,684,762 1.5 Portugal 8,505,828 1.3 Austria 6,697,551 1.0 Turkey 6,277,217 0.9 Peru 6,209,971 0.9 Denmark 5,343,283 0.8 Canada 4,789,685 0.7 Ukraine 3,820,734 0.6 Algeria 3,719,397 0.6 Guatemala 2,415,000 0.4 Hungary 2,041,952 0.3 South Africa 2,037,210 0.3 Nigeria 1,856,831 0.3 Poland 1,781,860 0.3 Uruguay 1,564,064 0.2 Dominican Republic 1,554,300 0.2 Czech Republic 1,293,696 0.2 Ivory Coast 507,986 0.1 Hong Kong 2,131 -- --------------------------- Total $662,828,610 100.0% =========================== See accompanying Notes to Financial Statements. 17 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF ASSETS AND LIABILITIES September 30, 2003
- ----------------------------------------------------------------------------------------------------------- Assets Investments, at value (cost $631,407,888)--see accompanying statement $662,828,610 - ----------------------------------------------------------------------------------------------------------- Cash--foreign currencies (cost $56,551) 56,910 - ----------------------------------------------------------------------------------------------------------- Cash used for collateral on futures 2,603,000 - ----------------------------------------------------------------------------------------------------------- Unrealized appreciation on foreign currency contracts 10,125,070 - ----------------------------------------------------------------------------------------------------------- Receivables and other assets: Interest, dividends and principal paydowns 10,008,101 Investments sold 8,278,397 Shares of beneficial interest sold 6,800,655 Swap contract 40,502 Futures margins 30,711 Other 1,318 -------------- Total assets 700,773,274 - ----------------------------------------------------------------------------------------------------------- Liabilities Bank overdraft 3,051,625 - ----------------------------------------------------------------------------------------------------------- Unrealized depreciation on foreign currency contracts 4,455,025 - ----------------------------------------------------------------------------------------------------------- Options written, at value (premiums received $1,980,353)--see accompanying statement 1,362,450 - ----------------------------------------------------------------------------------------------------------- Swaptions written, at value (premiums received $694,082)--see accompanying statement 385,103 - ----------------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased (including $19,627,024 purchased on a delayed settlement basis) 28,851,761 Shares of beneficial interest redeemed 1,478,665 Closed foreign currency contracts 1,411,015 Distribution and service plan fees 358,108 Dividends 323,390 Transfer and shareholder servicing agent fees 109,770 Shareholder reports 69,354 Trustees' compensation 3,818 Other 80,979 -------------- Total liabilities 41,941,063 - ----------------------------------------------------------------------------------------------------------- Net Assets $658,832,211 ============== - ----------------------------------------------------------------------------------------------------------- Composition of Net Assets Par value of shares of beneficial interest $ 123,769 - ----------------------------------------------------------------------------------------------------------- Additional paid-in capital 605,854,999 - ----------------------------------------------------------------------------------------------------------- Undistributed net investment income 16,341,168 - ----------------------------------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (2,526,989) - ----------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 39,039,264 -------------- Net Assets $658,832,211 ==============
18 | OPPENHEIMER INTERNATIONAL BOND FUND
- ----------------------------------------------------------------------------------------------- Net Asset Value Per Share Class A Shares: Net asset value and redemption price per share (based on net assets of $429,283,472 and 80,561,757 shares of beneficial interest outstanding) $5.33 Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price) $5.60 - ----------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $134,660,832 and 25,342,022 shares of beneficial interest outstanding) $5.31 - ----------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $90,247,950 and 16,992,803 shares of beneficial interest outstanding) $5.31 - ----------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $4,639,957 and 872,550 shares of beneficial interest outstanding) $5.32
See accompanying Notes to Financial Statements. 19 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF OPERATIONS For the Year Ended September 30, 2003
- -------------------------------------------------------------------------------------------- Investment Income Interest (net of foreign withholding taxes of $415,233) $ 24,161,698 - -------------------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $25,472) 210,167 -------------- Total investment income 24,371,865 - -------------------------------------------------------------------------------------------- Expenses Management fees 3,415,246 - -------------------------------------------------------------------------------------------- Distribution and service plan fees: Class A 686,288 Class B 1,191,405 Class C 630,580 Class N 13,217 - -------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 546,180 Class B 288,433 Class C 145,602 Class N 7,552 - -------------------------------------------------------------------------------------------- Custodian fees and expenses 152,643 - -------------------------------------------------------------------------------------------- Shareholder reports 62,606 - -------------------------------------------------------------------------------------------- Trustees' compensation 17,813 - -------------------------------------------------------------------------------------------- Other 67,350 -------------- Total expenses 7,224,915 Less reduction to custodian expenses (10,974) -------------- Net expenses 7,213,941 - -------------------------------------------------------------------------------------------- Net Investment Income 17,157,924 - -------------------------------------------------------------------------------------------- Realized and Unrealized Gain Net realized gain on: Investments (including premiums on options exercised) 30,092,917 Closing of futures contracts 1,352,893 Closing and expiration of option contracts written 464,723 Foreign currency transactions 19,673,918 -------------- Net realized gain 51,584,451 - -------------------------------------------------------------------------------------------- Net change in unrealized appreciation on: Investments 14,853,158 Translation of assets and liabilities denominated in foreign currencies 22,000,665 Futures contracts 660,842 -------------- Net change in unrealized appreciation 37,514,665 - -------------------------------------------------------------------------------------------- Net Increase in Net Assets Resulting from Operations $106,257,040 ==============
See accompanying Notes to Financial Statements. 20 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENTS OF CHANGES IN NET ASSETS
Year Ended September 30, 2003 2002 - -------------------------------------------------------------------------------------------------------------- Operations Net investment income $ 17,157,924 $ 11,988,533 - -------------------------------------------------------------------------------------------------------------- Net realized gain 51,584,451 16,219,263 - -------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation 37,514,665 6,716,986 -------------------------------- Net increase in net assets resulting from operations 106,257,040 34,924,782 - -------------------------------------------------------------------------------------------------------------- Dividends and/or Distributions to Shareholders Dividends from net investment income: Class A (11,257,243) (5,960,008) Class B (3,817,825) (3,128,518) Class C (1,988,035) (1,038,402) Class N (94,512) (12,245) - -------------------------------------------------------------------------------------------------------------- Tax return of capital distribution: Class A -- (1,001,844) Class B -- (633,014) Class C -- (212,641) Class N -- (2,205) - -------------------------------------------------------------------------------------------------------------- Beneficial Interest Transactions Net increase in net assets resulting from beneficial interest transactions: Class A 193,984,034 50,685,955 Class B 11,875,148 7,421,458 Class C 39,379,694 10,958,666 Class N 2,842,914 1,158,705 - -------------------------------------------------------------------------------------------------------------- Net Assets Total increase 337,181,215 93,160,689 - -------------------------------------------------------------------------------------------------------------- Beginning of period 321,650,996 228,490,307 -------------------------------- End of period [including undistributed (overdistributed) net investment income of $16,341,168 and $(896,072), respectively] $ 658,832,211 $ 321,650,996 ================================
See accompanying Notes to Financial Statements. 21 | OPPENHEIMER INTERNATIONAL BOND FUND FINANCIAL HIGHLIGHTS
Class A Year Ended September 30, 2003 2002 2001 2000 1999 - ------------------------------------------------------------------------------------------------------------ Per Share Operating Data Net asset value, beginning of period $4.38 $3.95 $4.19 $4.23 $4.32 - ------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .20 .24 .30 .45 .58 Net realized and unrealized gain (loss) .95 .41 (.24) (.08) (.14) ------------------------------------------------------------ Total from investment operations 1.15 .65 .06 .37 .44 - ------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.20) (.19) -- (.21) (.53) Tax return of capital distribution -- (.03) (.30) (.20) -- ------------------------------------------------------------ Total dividends and/or distributions to shareholders (.20) (.22) (.30) (.41) (.53) - ------------------------------------------------------------------------------------------------------------ Net asset value, end of period $5.33 $4.38 $3.95 $4.19 $4.23 ============================================================ - ------------------------------------------------------------------------------------------------------------ Total Return, at Net Asset Value 1 26.67% 16.78% 1.40% 8.93% 10.58% - ------------------------------------------------------------------------------------------------------------ Ratios/Supplemental Data Net assets, end of period (in thousands) $429,283 $181,456 $118,733 $100,928 $102,236 - ------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $285,391 $134,912 $117,000 $110,968 $101,948 - ------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 2 Net investment income 3.94% 5.16% 7.10% 10.23% 13.47% Total expenses 1.22% 1.37% 1.38% 1.31% 1.26% Expenses after expense reimbursement or fee waiver and reduction to custodian expenses N/A 3 N/A 3 N/A 3 1.29% 1.25% - ------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 341% 372% 377% 288% 285% 1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 2. Annualized for periods of less than one full year. 3. Reduction to custodian expenses less than 0.01%.
See accompanying Notes to Financial Statements. 22 | OPPENHEIMER INTERNATIONAL BOND FUND
Class B Year Ended September 30, 2003 2002 2001 2000 1999 - ------------------------------------------------------------------------------------------------------------ Per Share Operating Data Net asset value, beginning of period $4.37 $3.94 $4.17 $4.22 $4.31 - ------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .16 .21 .26 .42 .55 Net realized and unrealized gain (loss) .94 .40 (.22) (.09) (.14) ------------------------------------------------------------ Total from investment operations 1.10 .61 .04 .33 .41 - ------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.16) (.15) -- (.20) (.50) Tax return of capital distribution -- (.03) (.27) (.18) -- ------------------------------------------------------------ Total dividends and/or distributions to shareholders (.16) (.18) (.27) (.38) (.50) - ------------------------------------------------------------------------------------------------------------ Net asset value, end of period $5.31 $4.37 $3.94 $4.17 $4.22 ============================================================ - ------------------------------------------------------------------------------------------------------------ Total Return, at Net Asset Value 1 25.48% 15.90% 0.85% 7.94% 9.79% - ------------------------------------------------------------------------------------------------------------ Ratios/Supplemental Data Net assets, end of period (in thousands) $134,661 $100,049 $84,427 $ 98,272 $118,632 - ------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $119,232 $ 85,244 $93,455 $115,116 $122,878 - ------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 2 Net investment income 3.20% 4.41% 6.40% 9.63% 12.70% Total expenses 2.03% 2.14% 2.14% 2.05% 2.02% Expenses after expense reimbursement or fee waiver and reduction to custodian expenses N/A 3 N/A 3 N/A 3 2.03% 2.01% - ------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 341% 372% 377% 288% 285% 1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 2. Annualized for periods of less than one full year. 3. Reduction to custodian expenses less than 0.01%.
See accompanying Notes to Financial Statements. 23 | OPPENHEIMER INTERNATIONAL BOND FUND FINANCIAL HIGHLIGHTS Continued
Class C Year Ended September 30, 2003 2002 2001 2000 1999 - ------------------------------------------------------------------------------------------------------------ Per Share Operating Data Net asset value, beginning of period $4.37 $3.94 $4.17 $4.22 $4.31 - ------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .16 .21 .26 .41 .55 Net realized and unrealized gain (loss) .94 .40 (.22) (.08) (.14) ------------------------------------------------------------ Total from investment operations 1.10 .61 .04 .33 .41 - ------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.16) (.15) -- (.19) (.50) Tax return of capital distribution -- (.03) (.27) (.19) -- ------------------------------------------------------------ Total dividends and/or distributions to shareholders (.16) (.18) (.27) (.38) (.50) - ------------------------------------------------------------------------------------------------------------ Net asset value, end of period $5.31 $4.37 $3.94 $4.17 $4.22 ============================================================ - ------------------------------------------------------------------------------------------------------------ Total Return, at Net Asset Value 1 25.48% 15.90% 0.85% 7.95% 9.80% - ------------------------------------------------------------------------------------------------------------ Ratios/Supplemental Data Net assets, end of period (in thousands) $90,248 $38,865 $25,221 $27,663 $29,456 - ------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $63,198 $28,635 $27,125 $30,710 $28,918 - ------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 2 Net investment income 3.15% 4.37% 6.39% 9.55% 12.76% Total expenses 2.02% 2.14% 2.14% 2.05% 2.02% Expenses after expense reimbursement or fee waiver and reduction to custodian expenses N/A 3 N/A 3 N/A 3 2.03% 2.01% - ------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 341% 372% 377% 288% 285% 1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 2. Annualized for periods of less than one full year. 3. Reduction to custodian expenses less than 0.01%. See accompanying Notes to Financial Statements.
24 | OPPENHEIMER INTERNATIONAL BOND FUND
Class N Year Ended September 30, 2003 2002 2001 1 - ------------------------------------------------------------------------------------ Per Share Operating Data Net asset value, beginning of period $4.37 $3.95 $4.23 - ------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .18 .21 .16 Net realized and unrealized gain (loss) .95 .42 (.28) ------------------------------------ Total from investment operations 1.13 .63 (.12) - ------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.18) (.18) -- Tax return of capital distribution -- (.03) (.16) ------------------------------------ Total dividends and/or distributions to shareholders (.18) (.21) (.16) - ------------------------------------------------------------------------------------ Net asset value, end of period $5.32 $4.37 $3.95 ==================================== - ------------------------------------------------------------------------------------ Total Return, at Net Asset Value 2 26.31% 16.23% (2.88)% - ------------------------------------------------------------------------------------ Ratios/Supplemental Data Net assets, end of period (in thousands) $4,640 $1,280 $109 - ------------------------------------------------------------------------------------ Average net assets (in thousands) $2,653 $ 297 $ 34 - ------------------------------------------------------------------------------------ Ratios to average net assets: 3 Net investment income 3.56% 4.87% 6.56% Total expenses 1.57% 4 1.57% 4 1.39% 4 - ------------------------------------------------------------------------------------ Portfolio turnover rate 341% 372% 377% 1. For the period from March 1, 2001 (inception of offering) to September 30, 2001. 2. Assumes an investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. See accompanying Notes to Financial Statements.
25 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. Significant Accounting Policies Oppenheimer International Bond Fund (the Fund) is a registered investment company organized as a Massachusetts Business Trust. The Fund is registered as a non-diversified, open-end management investment company under the Investment Company Act of 1940, as amended. The Fund's investment objective is to seek total return. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C and Class N shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. All classes of shares have identical rights and voting privileges. Earnings, net assets and net asset value per share may differ by minor amounts due to each class having its own expenses directly attributable to that class. Classes A, B, C and N have separate distribution and/or service plans. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- Securities Valuation. Securities listed or traded on National Stock Exchanges or other domestic or foreign exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. Securities traded on NASDAQ are valued based on the closing price provided by NASDAQ prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing bid and asked prices, and if not, at the closing bid price. Securities (including restricted securities) for which quotations are not readily available are valued primarily using dealer-supplied valuations, a portfolio pricing service authorized by the Board of Trustees, or at their fair value. 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). - -------------------------------------------------------------------------------- Structured Notes. The Fund invests in foreign currency-linked structured notes whose market values and redemption prices are linked to foreign currency exchange rates. The Fund also invests in "index-linked" notes whose principal and/or interest payments depend on the performance of an underlying index. The structured notes are leveraged, increasing the volatility of each note's market value relative to the change in the underlying foreign currency exchange rate or underlying index. Fluctuations in value of these securities are recorded as unrealized gains and losses in the accompanying financial statements. The Fund records a realized gain or loss when a structured note is sold or matures. As of September 30, 2003, the market value of these securities comprised 9.2% of the Fund's net assets and resulted in unrealized gains of $1,198,616. The Fund also 26 | OPPENHEIMER INTERNATIONAL BOND FUND - -------------------------------------------------------------------------------- hedges a portion of the foreign currency exposure generated by these securities, as discussed in Note 5. - -------------------------------------------------------------------------------- Securities on a Delayed Settlement Basis. Delivery and payment for securities that have been purchased by the Fund on a delayed settlement basis can take place a month or more after the trade date. Normally the settlement date occurs within six months after the trade date; however, the Fund may, from time to time, purchase securities whose settlement date extends six months or more beyond trade date. During this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The Fund maintains segregated assets with a market value equal to or greater than the amount of its purchase commitments. The purchase of securities on a delayed settlement basis may increase the volatility of the Fund's net asset value to the extent the Fund makes such purchases while remaining substantially fully invested. As of September 30, 2003, the Fund had entered into delayed settlement purchase commitments of $19,627,024. - -------------------------------------------------------------------------------- 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 September 30, 2003, securities with an aggregate market value of $6,655,323, representing 1.01% of the Fund's net assets, were in default. - -------------------------------------------------------------------------------- Foreign Currency Translation. The Fund's accounting records are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- Joint Repurchase Agreements. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. Secured by U.S. government securities, these balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. 27 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- 1. Significant Accounting Policies Continued Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- Federal Taxes. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders, therefore, no federal income or excise tax provision is required. The tax components of capital shown in the table below represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes. Net Unrealized Appreciation Based on Cost of Securities and Undistributed Undistributed Accumulated Other Investments Net Investment Long-Term Loss for Federal Income Income Gain Carryforward 1,2 Tax Purposes ------------------------------------------------------------------- $23,532,998 $-- $2,082,181 $33,151,592 1. As of September 30, 2003, the Fund had $2,082,181 of net capital loss carryforwards available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. As of September 30, 2003, details of the capital loss carryforwards were as follows: Expiring ---------------------- 2008 $ 783,099 2009 1,299,082 ---------- Total $2,082,181 ========== 2. During the fiscal years ended September 30, 2003 and September 30, 2002, the Fund utilized $34,133,620 and $32,731, respectively, of capital loss carryforwards to offset capital gains realized in the respective fiscal years. During the fiscal year $3,670,346 of unused capital loss carryforward expired. 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 September 30, 2003. Net assets of the Fund were unaffected by the reclassifications. From From Net Ordinary Capital Tax Return Investment Loss Gain of Capital Loss ------------------------------------------------------- $17,236,931 $20,246,886 $-- $-- 28 | OPPENHEIMER INTERNATIONAL BOND FUND The tax character of distributions paid during the years ended September 30, 2003 and September 30, 2002 was as follows: Year Ended Year Ended September 30, 2003 September 30, 2002 --------------------------------------------------------------- Distributions paid from: Ordinary income $17,157,615 $10,139,173 Return of capital -- 1,849,704 ------------------------------- Total $17,157,615 $11,988,877 =============================== 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 September 30, 2003 are noted below. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. Federal tax cost of securities and other investments $1,073,747,443 ============== Gross unrealized appreciation $ 42,029,461 Gross unrealized depreciation (8,877,869) -------------- Net unrealized appreciation $ 33,151,592 ============== The Manager believes that an additional ordinary income distribution for tax purposes is likely to occur in December, 2003. The dollar and per share amounts cannot be estimated as of September 30, 2003. - -------------------------------------------------------------------------------- Trustees' Compensation. The Board of Trustees has adopted a deferred compensation plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or are invested in other selected Oppenheimer funds. Deferral of trustees' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. 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. 29 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- 1. Significant Accounting Policies Continued Expense Offset Arrangement. The reduction of custodian fees represents earnings on cash balances maintained by the Fund. - -------------------------------------------------------------------------------- Security Transactions. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- Other. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 2. Shares of Beneficial Interest The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
Year Ended September 30, 2003 Year Ended September 30, 2002 Shares Amount Shares Amount - --------------------------------------------------------------------------------------------- Class A Sold 66,619,226 $ 327,783,210 29,697,373 $ 129,350,915 Dividends and/or distributions reinvested 1,800,877 8,831,110 1,145,883 4,834,797 Redeemed (29,286,342) (142,630,286) (19,476,112) (83,499,757) ---------------------------------------------------------------- Net increase 39,133,761 $ 193,984,034 11,367,144 $ 50,685,955 ================================================================ - --------------------------------------------------------------------------------------------- Class B Sold 14,881,963 $ 71,989,537 9,030,170 $ 39,252,375 Dividends and/or distributions reinvested 560,961 2,725,698 515,987 2,162,691 Redeemed (13,006,585) (62,840,087) (8,090,580) (33,993,608) ---------------------------------------------------------------- Net increase 2,436,339 $ 11,875,148 1,455,577 $ 7,421,458 ================================================================ - --------------------------------------------------------------------------------------------- Class C Sold 12,729,289 $ 62,063,352 4,734,148 $ 20,471,644 Dividends and/or distributions reinvested 292,444 1,431,897 180,877 759,597 Redeemed (4,932,108) (24,115,555) (2,420,774) (10,272,575) ---------------------------------------------------------------- Net increase 8,089,625 $ 39,379,694 2,494,251 $ 10,958,666 ================================================================ - --------------------------------------------------------------------------------------------- Class N Sold 682,672 $ 3,342,355 292,426 $ 1,277,397 Dividends and/or distributions reinvested 15,660 77,211 2,942 12,571 Redeemed (118,748) (576,652) (29,964) (131,263) ---------------------------------------------------------------- Net increase 579,584 $ 2,842,914 265,404 $ 1,158,705 ================================================================
30 | OPPENHEIMER INTERNATIONAL BOND FUND - -------------------------------------------------------------------------------- 3. Purchases and Sales of Securities The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the year ended September 30, 2003, were $1,553,007,279 and $1,297,399,494, respectively. - -------------------------------------------------------------------------------- 4. Fees and Other Transactions with Affiliates Management Fees. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for fee at an annual rate of 0.75% of the first $200 million of average annual net assets of the Fund, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the next $200 million, 0.60% of the next $200 million and 0.50% of average annual net assets in excess of $1 billion. - -------------------------------------------------------------------------------- Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a per account fee. For the year ended September 30, 2003, the Fund paid $933,703 to OFS for services to the Fund. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes, up to an annual rate of 0.35% of average net assets per class. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- Distribution and Service Plan (12b-1) Fees. Under its General Distributor's Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the different classes of shares of the Fund. The compensation paid to (or retained by) the Distributor from the sale of shares or on the redemption of shares is shown in the table below for the period indicated.
Aggregate Class A Concessions Concessions Concessions Concessions Front-End Front-End on Class A on Class B on Class C on Class N Sales Charges Sales Charges Shares Shares Shares Shares on Class A Retained by Advanced by Advanced by Advanced by Advanced by Year Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1 - ---------------------------------------------------------------------------------------------------------- September 30, 2003 $1,607,039 $328,223 $366,872 $1,414,536 $474,412 $21,566 1. The Distributor advances concession payments to dealers for certain sales of Class A shares and for sales of Class B, Class C and Class N shares from its own resources at the time of sale.
Class A Class B Class C Class N Contingent Contingent Contingent Contingent Deferred Deferred Deferred Deferred Sales Charges Sales Charges Sales Charges Sales Charges Retained by Retained by Retained by Retained by Year Ended Distributor Distributor Distributor Distributor - -------------------------------------------------------------------------------- September 30, 2003 $10,937 $475,852 $57,864 $6,737 - -------------------------------------------------------------------------------- Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class A shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. For the 31 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- 4. Fees and Other Transactions with Affiliates Continued year ended September 30, 2003, expense under the Class A Plan totaled $686,288, all of which were paid by the Distributor to recipients, which included $523 retained by the Distributor and $24,208 which was paid to an affiliate of the Manager. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. - -------------------------------------------------------------------------------- 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. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% per year on Class B shares and on Class C shares and the Fund pays the Distributor an annual asset-based sales charge of 0.25% per year on Class N shares. The Distributor also receives a service fee of 0.25% per year under each plan. Distribution fees paid to the Distributor for the year ended September 30, 2003, were as follows: Distributor's Distributor's Aggregate Aggregate Uncompensated Uncompensated Expenses as % Total Expenses Amount Retained Expenses of Net Assets Under Plan by Distributor Under Plan of Class - -------------------------------------------------------------------------------- Class B Plan $1,191,405 $892,047 $5,656,823 4.20% Class C Plan 630,580 290,571 1,803,279 2.00 Class N Plan 13,217 11,378 56,311 1.21 - -------------------------------------------------------------------------------- 5. Foreign Currency Contracts A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts to settle specific purchases or sales of securities denominated in a foreign currency and for protection from adverse exchange rate fluctuation. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using prevailing foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. The Fund may realize a gain or loss upon the closing or settlement of the foreign transaction. Contracts closed or settled with the same broker are recorded as net realized gain or loss. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. 32 | OPPENHEIMER INTERNATIONAL BOND FUND As of September 30, 2003, the Fund had outstanding foreign currency contracts as follows:
Contract Valuation Expiration Amount as of Unrealized Unrealized Contract Description Dates (000s) Sept. 30, 2003 Appreciation Depreciation - -------------------------------------------------------------------------------------------------------------- Contracts to Purchase Argentine Peso [ARP] 5/27/04-7/16/04 32,730ARP $ 10,539,381 $ 197,932 $125,478 British Pound Sterling [GBP] 11/20/03 4,310GBP 7,134,689 329,199 -- Chilean Peso [CLP] 11/25/03 4,402,364CLP 6,656,299 368,555 -- Euro [EUR] 11/26/03-6/17/04 50,030EUR 58,111,611 2,885,159 -- Japanese Yen [JPY] 10/14/03-3/17/04 17,543,000JPY 157,573,070 6,247,851 4,062 Swiss Franc [CHF] 10/29/03 5,430CHF 4,114,960 79,586 -- Turkish Lira [TRL] 10/27/03 1,831,456,000TRL 1,291,176 -- 9,573 --------------------------- 10,108,282 139,113 =========================== Contracts to Sell Australian Dollar [AUD] 10/29/03 6,765AUD 4,564,176 14,376 -- British Pound Sterling [GBP] 10/29/03 2,345GBP 3,887,686 -- 9,642 Euro [EUR] 10/14/03-4/27/04 102,245EUR 118,707,215 -- 4,075,920 Indonesia Rupiah [IDR] 11/12/03 38,581,800IDR 4,595,825 -- 191,912 Japanese Yen [JPY] 4/27/04 89,000JPY 802,059 -- 38,438 New Zealand Dollar [NZD] 10/29/03 7,310NZD 4,326,936 2,412 -- --------------------------- 16,788 4,315,912 --------------------------- Total unrealized appreciation and depreciation $10,125,070 $4,455,025 ===========================
- -------------------------------------------------------------------------------- 6. Futures Contracts A futures contract is a commitment to buy or sell a specific amount of a commodity or financial instrument at a negotiated price on a stipulated future date. Futures contracts are traded on a commodity exchange. The Fund may buy and sell futures contracts that relate to broadly based securities indices "financial futures" or debt securities "interest rate futures" in order to gain exposure to or protection from changes in market value of stock and bonds or interest rates. The Fund may also buy or write put or call options on these futures contracts. The Fund generally sells futures contracts as a hedge against increases in interest rates and decreases in market value of portfolio securities. The Fund may also purchase futures contracts to gain exposure to market changes as it may be more efficient or cost effective than actually buying fixed income securities. Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin) in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or has expired. Cash held by the broker to cover initial margin requirements on open futures contracts is noted in the Statement of Assets and Liabilities. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. The Statement of Assets and Liabilities reflects a receivable and/or payable for the daily mark to market for variation margin. Realized gains and 33 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- 6. Futures Contracts Continued losses are reported on the Statement of Operations as closing and expiration of futures contracts. The net change in unrealized appreciation and depreciation is reported on the Statement of Operations. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. As of September 30, 2003, the Fund had outstanding futures contracts as follows:
Unrealized Expiration Number of Valuation as of Appreciation Contract Description Dates Contracts Sept. 30, 2003 (Depreciation) - --------------------------------------------------------------------------------------------- Contracts to Purchase U.S. Long Bonds 12/19/03 43 $ 4,822,719 $218,887 ---------- Contracts to Sell Japan (Government of) Bonds, 10 yr. 12/11/03 22 26,975,429 299,333 Standard & Poor's 500 E-Mini 12/19/03 39 1,938,300 38,020 Standard & Poor's 500 Index 12/18/03 37 9,195,425 214,133 U.S. Treasury Nts., 5 yr. 12/19/03 153 17,360,719 (94,640) ---------- 456,846 ---------- $675,733 ==========
- -------------------------------------------------------------------------------- 7. Option Activity The Fund may buy and sell put and call options, or write put and covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Fund generally purchases put options or writes covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. Securities designated to cover outstanding call options are noted in the Statement of Investments where applicable. Shares subject to call, expiration date, exercise price, premium received and market value are detailed in a note to the Statement of Investments. Options written are reported as a liability in the Statement of Assets and Liabilities. Realized gains and losses are reported in the Statement of Operations. The risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases 34 | OPPENHEIMER INTERNATIONAL BOND FUND - -------------------------------------------------------------------------------- and the option is exercised. The risk in buying an option is that the Fund pays a premium whether or not the option is exercised. The Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Written option activity for the year ended September 30, 2003 was as follows:
Call Options Put Options ------------------------------- ------------------------------- Principal (000s)/ Principal (000s)/ Number of Amount of Number of Amount of Contracts Premiums Contracts Premiums - ----------------------------------------------------------------------------------------------- Options outstanding as of September 30, 2002 -- $ -- 1,970 $ 175,330 Options written 9,925,025,897 1,969,367 2,175,847,745 761,424 Options closed or expired (4,000,000) (44,400) (12,189,715) (522,593) Options exercised (33,722,100) (358,775) -- -- ------------------------------------------------------------ Options outstanding as of September 30, 2003 9,887,303,797 $1,566,192 2,163,660,000 $414,161 ============================================================
- -------------------------------------------------------------------------------- 8. Interest Rate Swap Contracts The Fund may enter into an interest rate swap transaction to maintain a total return or yield spread on a particular investment, or portion of its portfolio, or for other non-speculative purposes. Interest rate swaps involve the exchange of commitments to pay or receive interest, e.g., an exchange of floating rate payments for fixed rate payments. The coupon payments are based on an agreed upon principal amount and a specified index. Because the principal amount is not exchanged, it represents neither an asset nor a liability to either counterparty, and is referred to as notional. The Fund records an increase or decrease to interest income, in the amount due to or owed by the Fund at termination or settlement. Interest rate swaps are subject to credit risk (if the counterparty fails to meet its obligations) and interest rate risk. The Fund could be obligated to pay more under its swap agreements than it receives under them, as a result of interest rate changes. As of September 30, 2003, the Fund had entered into the following interest rate swap agreements:
Floating Rate Rate Paid by Received by the Fund at the Fund at Unrealized Swap Notional September 30, September 30, Floating Termination Appreciation Counterparty Principal 2003 2003 Rate Index Dates (Depreciation) - ------------------------------------------------------------------------------------------------------ JPMorgan Three-Month Chase Bank $ 13,500,000 3.342% 1.289999% Libor Flat 3/31/08 $(86,011) JPMorgan Six-Month Chase Bank 8,000,000 1.289999 2.92 LIBOR flat 5/13/08 19,144 JPMorgan Six-Month Chase Bank 3,880,000 3.135 2.081 LIBOR flat 7/14/08 40,449 JPMorgan Six-Month Chase Bank 1,080,000,000 9.13 7.00 LIBOR flat 7/14/08 (42,644) ----------- $(69,062) ===========
35 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- 9. Credit Swap Contracts The Fund may enter into a credit 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 a notional principal amount. The Fund records an increase or decrease to interest income, in the amount due to or owed by the Fund at termination or settlement. Credit swaps are subject to credit risks (if the counterparty fails to meet its obligations). During the year ended September 30, 2003, the Fund entered into a transaction to hedge credit risk. The Fund pays an annual 2% interest fee on the notional amount in exchange for the counterparty paying in a potential credit event. Information regarding the credit swap is as follows:
Unrealized Expiration Notional Valuation as of Appreciation Contract Description Dates Amount Sept. 30, 2003 (Depreciation) - -------------------------------------------------------------------------------------------------- Deutsche Bank AG, Colombia (Republic of) Credit Nts. 9/20/13 $5,725,000 $123,931 $123,931 Deutsche Bank AG, Colombia (Republic of) Credit Nts. 9/20/13 5,725,000 197,839 197,839 Deutsche Bank AG, Costa Rica (Republic of) Certificate of Deposit 5/10/08 1,835,000 (12,858) (12,858) Deutsche Bank AG, Costa Rica (Republic of) Credit Bonds 4/25/08 990,000 (32,135) (32,135) Deutsche Bank AG, United Mexican States Credit Bonds 9/20/13 2,790,000 (28,453) (28,453) Deutsche Bank AG, Panama (Republic of) Certificate of Deposit 5/13/08 1,835,000 (27,691) (27,691) Deutsche Bank AG, Philippines (Republic of) 5 yr. Credit Notes 7/25/08 2,335,000 (1,685) (1,685) Deutsche Bank AG, Philippines (Republic of) 10 yr. Credit Bonds 7/25/13 2,335,000 2,265 2,265 Deutsche Bank AG, Philippines (Republic of) Credit Nts. 12/20/08 670,000 (714) (714) Deutsche Bank AG, Russia Federation Credit Bonds 9/10/13 2,570,000 17,729 17,729 Deutsche Bank AG, Russia Federation Credit Bonds 9/20/13 3,490,000 11,405 11,405 Deutsche Bank AG, Turkey (Republic of) Credit Nts. 9/20/10 1,595,000 (9,182) (9,182) JPMorgan Chase Bank, Jordan (Kingdom of) Credit Nts. 6/6/06 390,000 2,333 2,333 JPMorgan Chase Bank, Peru (Republic of) Credit Default Bonds 9/20/08 1,800,000 (87,576) (87,576) JPMorgan Chase Bank, Peru (Republic of) Credit Default Bonds 9/20/08 900,000 (45,644) (45,644) ---------- $109,564 ==========
36 | OPPENHEIMER INTERNATIONAL BOND FUND - -------------------------------------------------------------------------------- 10. Swaption Transactions The Fund may enter into a swaption transaction, whereby a contract that grants the holder, in return for payment of the purchase price (the "premium") of the option, the right, but not the obligation, to enter into an interest rate swap at a preset rate within a specified period of time, with the writer of the contract. The writer receives premiums and bears the risk of unfavorable changes in the preset rate on the underlying interest rate swap. Swaption contracts written by the Fund do not give rise to counterparty credit risk as they obligate the Fund, not its counterparty, to perform. Swaptions written are reported as a liability in the Statement of Assets and Liabilities. As of September 30, 2003, the Fund had entered into the following swaption contracts:
Contracts Expiration Exercise Premium Market Value Swaptions Subject to Call Dates Price Received See Note 1 - ------------------------------------------------------------------------------------------ Deutsche Swaption 49,335,000 5/17/04 2.825% $439,082 $233,668 JPMorgan Chase Bank Swaption 30,000,000 5/10/04 2.920 255,000 151,435 ------------------------ $694,082 $385,103 ========================
- -------------------------------------------------------------------------------- 11. Illiquid or Restricted Securities As of September 30, 2003, investments in securities included issues that are illiquid or restricted. Restricted securities are often purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Trustees as reflecting fair value. A security may also be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund intends to invest no more than 10% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid or restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limitation. The aggregate value of illiquid or restricted securities subject to this limitation as of September 30, 2003 was $21,714,353, which represents 3.30% of the Fund's net assets, of which $56,910 is considered restricted. Information concerning restricted securities is as follows: Acquisition Valuation as of Unrealized Security Date Cost Sept. 30, 2003 Appreciation - ------------------------------------------------------------------------------- Currency Argentine Peso 8/6/03 $56,551 $56,910 $359 37 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- 12. Borrowing and Lending Arrangements The Fund entered into an "interfund borrowing and lending arrangement" with other funds in the Oppenheimer funds complex, to allow funds to borrow for liquidity purposes. The arrangement was initiated pursuant to exemptive relief granted by the Securities and Exchange Commission to allow these affiliated funds to lend money to, and borrow money from, each other, in an attempt to reduce borrowing costs below those of bank loan facilities. Under the arrangement the Fund may lend money to other Oppenheimer funds and may borrow from other Oppenheimer funds at a rate set by the Fund's Board of Trustees, based upon a recommendation by the Manager. The Fund's borrowings, if any, are subject to asset coverage requirements under the Investment Company Act and the provisions of the SEC order and other applicable regulations. If the Fund borrows money, there is a risk that the loan could be called on one day's notice, in which case the Fund might have to borrow from a bank at higher rates if a loan were not available from another Oppenheimer fund. If the Fund lends money to another fund, it will be subject to the risk that the other fund might not repay the loan in a timely manner, or at all. The Fund had no interfund borrowings or loans outstanding during the year ended or at September 30, 2003. 38 | OPPENHEIMER INTERNATIONAL BOND FUND INDEPENDENT AUDITORS' REPORT - -------------------------------------------------------------------------------- To the Board of Trustees and Shareholders of Oppenheimer International Bond Fund: We have audited the accompanying statement of assets and liabilities of Oppenheimer International Bond Fund, including the statement of investments, as of September 30, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2003, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer International Bond Fund as of September 30, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Denver, Colorado November 14, 2003 39 | OPPENHEIMER INTERNATIONAL BOND FUND FEDERAL income tax information Unaudited - -------------------------------------------------------------------------------- In early 2004, if applicable, shareholders of record will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 2003. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. A portion, if any, of the dividends paid by the Fund during the fiscal year ended September 30, 2003 which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. $235,639 of the Fund's fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2004, shareholders of record will receive information regarding the percentage of distributions that are eligible for lower individual income tax rates. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. - -------------------------------------------------------------------------------- PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES Unaudited - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.225.5677, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund will be required to file new Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The first such filing is due no later than August 31, 2004, for the twelve months ended June 30, 2004. Once filed, the Fund's Form N-PX filing will be available (i) without charge, upon request, by calling the Fund toll-free at 1.800.225.5677, and (ii) on the SEC's website at www.sec.gov. 40 | OPPENHEIMER INTERNATIONAL BOND FUND TRUSTEES AND OFFICERS Unaudited
- -------------------------------------------------------------------------------------------------------------------------------- Name, Position(s) Held with Principal Occupation(s) During Past 5 Years; Other Trusteeships/Directorships Held Fund, Length of Service, Age by Trustee; Number of Portfolios in Fund Complex Currently Overseen by Trustee INDEPENDENT The address of each Trustee in the chart below is 6803 S. Tucson Way, TRUSTEES Centennial, CO 80112-3924. Each Trustee serves for an indefinite term, until his or her resignation, retirement, death or removal. James C. Swain, Formerly, Chief Executive Officer (until August 27, 2002) of the Board II Funds, Chairman and Trustee Vice Chairman (until January 2, 2002) of OppenheimerFunds, Inc. and President (since 1995) and a director (until 1997) of Centennial Asset Management Corporation (a Age: 69 wholly-owned investment advisory subsidiary of the Manager). Oversees 41 portfolios in the OppenheimerFunds complex. William L. Armstrong, Chairman of the following private mortgage banking companies: Cherry Creek Vice Chairman and Trustee Mortgage Company (since 1991), Centennial State Mortgage Company (since 1994), (since 1999) The El Paso Mortgage Company (since 1993), Transland Financial Services, Inc. Age: 66 (since 1997); Chairman of the following private companies: Great Frontier Insurance (insurance agency) (since 1995), Ambassador Media Corporation and Broadway Ventures (since 1984); a director of the following public companies: Helmerich & Payne, Inc. (oil and gas drilling/production company) (since 1992) and UNUMProvident (insurance company) (since 1991). Mr. Armstrong is also a Director/Trustee of Campus Crusade for Christ and the Bradley Foundation. Formerly a director of the following: Storage Technology Corporation (a publicly-held computer equipment company) (1991-February 2003), and International Family Entertainment (television channel) (1992-1997), Frontier Real Estate, Inc. (residential real estate brokerage) (1994-1999), and Frontier Title (title insurance agency) (1995-June 1999); a U.S. Senator (January 1979-January 1991). Oversees 41 portfolios in the OppenheimerFunds complex. Robert G. Avis, Formerly, Director and President of A.G. Edwards Capital, Inc. (General Partner Trustee (since 1995) of private equity funds) (until February 2001); Chairman, President and Chief Age: 72 Executive Officer of A.G. Edwards Capital, Inc. (until March 2000); Vice Chairman and Director of A.G. Edwards, Inc. and Vice Chairman of A.G. Edwards & Sons, Inc. (its brokerage company subsidiary) (until March 1999); Chairman of A.G. Edwards Trust Company and A.G.E. Asset Management (investment advisor) (until March 1999); and a Director (until March 2000) of A.G. Edwards & Sons and A.G. Edwards Trust Company. Oversees 41 portfolios in the OppenheimerFunds complex. George C. Bowen, Formerly (until April 1999): Senior Vice President (from September 1987) and Trustee (since 1997) Treasurer (from March 1985) of the Manager; Vice President (from June 1983) and Age: 67 Treasurer (since March 1985) of OppenheimerFunds Distributor, Inc. (a subsidiary of the Manager); Senior Vice President (since February 1992), Treasurer (since July 1991) Assistant Secretary and a director (since December 1991) of Centennial Asset Management Corporation; Vice President (since October 1989) and Treasurer (since April 1986) of HarbourView Asset Management Corporation (an investment advisory subsidiary of the Manager); President, Treasurer and a director (June 1989-January 1990) of Centennial Capital Corporation (an investment advisory subsidiary of the Manager); Vice President and Treasurer (since August 1978) and Secretary (since April 1981) of Shareholder Services, Inc. (a transfer agent subsidiary of the Manager); Vice President, Treasurer and Secretary (since November 1989) of Shareholder Financial Services, Inc. (a transfer agent subsidiary of the Manager); Assistant Treasurer (since March 1998) of Oppenheimer Acquisition Corp. (the Manager's parent corporation); Treasurer (since November 1989) of Oppenheimer Partnership Holdings, Inc. (a holding company subsidiary of the Manager); Vice President and Treasurer (since July
41 | OPPENHEIMER INTERNATIONAL BOND FUND TRUSTEES AND OFFICERS Unaudited / Continued
George C. Bowen, 1996) of Oppenheimer Real Asset Management, Inc. (an investment advisory Continued subsidiary of the Manager); Chief Executive Officer and director (since March 1996) of MultiSource Services, Inc. (a broker-dealer subsidiary of the Manager); Treasurer (since October 1997) of OppenheimerFunds International Ltd. and OppenheimerFunds plc (offshore fund management subsidiaries of the Manager). Oversees 41 portfolios in the OppenheimerFunds complex. Edward L. Cameron, A member of The Life Guard of Mount Vernon, George Washington's home (since June Trustee (since 1999) 2000). Formerly (March 2001 - May 2002) Director of Genetic ID, Inc. and its Age: 65 subsidiaries (a privately held biotech company); a partner with PricewaterhouseCoopers LLP (from 1974-1999) (an accounting firm) and Chairman (from 1994-1998), Price Waterhouse LLP Global Investment Management Industry Services Group. Oversees 41 portfolios in the OppenheimerFunds complex. Jon S. Fossel, Chairman and Director (since 1998) of Rocky Mountain Elk Foundation (a Trustee (since 1995) not-for-profit foundation); and a director (since October 1999) of P.R. Age: 61 Pharmaceuticals (a privately held company) and UNUMProvident (an insurance company) (since June 1, 2002). Formerly Chairman and a director (until October 1996) and President and Chief Executive Officer (until October 1995) of the Manager; President, Chief Executive Officer and a director of Oppenheimer Acquisition Corp., Shareholders Services Inc. and Shareholder Financials Services, Inc. (until October 1995). Oversees 41 portfolios in the OppenheimerFunds complex. Sam Freedman, Director of Colorado Uplift (a non-profit charity) (since September 1984). Trustee (since 1996) Formerly (until October 1994) Mr. Freedman held several positions in subsidiary Age: 62 or affiliated companies of the Manager. Oversees 41 portfolios in the OppenheimerFunds complex. Beverly L. Hamilton, Trustee (since 1996) of MassMutual Institutional Funds and of MML Series Trustee (since 2002) Investment Fund (open-end investment companies); Director of MML Services (since Age: 56 April 1987) and America Funds Emerging Markets Growth Fund (since October 1991) (both are investment companies), The California Endowment (a philanthropy organization) (since April 2002), and Community Hospital of Monterey Peninsula, (since February 2002); a trustee (since February 2000) of Monterey International Studies (an educational organization), and an advisor to Unilever (Holland)'s pension fund and to Credit Suisse First Boston's Sprout venture capital unit. Mrs. Hamilton also is a member of the investment committees of the Rockefeller Foundation, the University of Michigan and Hartford Hospital. Formerly, President (February 1991-April 2000) ARCO Investment Management Company. Oversees 42 portfolios in the OppenheimerFunds complex. Robert J. Malone, Chairman and CEO (since August 2003) of Steele Street Bank (a commercial banking Trustee (since 2002) entity), Director (since 2001) of Jones Knowledge, Inc. (a privately held Age: 59 company), U.S. Exploration, Inc., (since 1997), Colorado UpLIFT (a non-profit organization) (since 1986) and a trustee of the Gallagher Family Foundation (non-profit organization) (since 2000). Formerly, Chairman of U.S. Bank (a subsidiary of U.S. Bancorp and formerly Colorado National Bank) (July 1996-April 1, 1999) and a director of Commercial Assets, Inc. (a REIT) (1993-2000). Oversees 40 portfolios in the OppenheimerFunds complex. F. William Marshall, Jr., Trustee (since 1996) of MassMutual Institutional Funds and of MML Series Trustee (since 2000) Investment Fund (open-end investment companies); Trustee (since 1987), Chairman Age: 61 of the Board (since 2003) and Chairman of the investment committee (since 1994) for the Worcester Polytech Institute; President and Treasurer (since
42 | OPPENHEIMER INTERNATIONAL BOND FUND
F. William Marshall, Jr., January 1999) of the SIS Fund (a private not for profit charitable fund); Continued Trustee (since 1995) of the Springfield Library and Museum Association; Trustee (since 1996) of the Community Music School of Springfield. Formerly, member of the investment committee of the Community Foundation of Western Massachusetts (1998 - 2003); Chairman (January 1999-July 1999) of SIS & Family Bank, F.S.B. (formerly SIS Bank); President, Chief Executive Officer and Director (May 1993-December 1998) of SIS Bankcorp, Inc. and SIS Bank (formerly Springfield Institution for Savings) and Executive Vice President (January 1999-July 1999) of Peoples Heritage Financial Group, Inc. Oversees 43 portfolios in the OppenheimerFunds complex. - -------------------------------------------------------------------------------------------------------------------------------- INTERESTED TRUSTEE The address of Mr. Murphy in the chart below is Two World Financial Center, New AND OFFICER York, NY 10080. Mr. Murphy serves for an indefinite term, until his resignation, death or removal. John V. Murphy, Chairman, Chief Executive Officer and director (since June 2001) and President President and Trustee (since September 2000) of the Manager; President and a director or trustee of (since 2001) other Oppenheimer funds; President and a director (since July 2001) of Age: 54 Oppenheimer Acquisition Corp. and of Oppenheimer Partnership Holdings, Inc.; a director (since November 2001) of OppenheimerFunds Distributor, Inc.; Chairman and a director (since July 2001) of Shareholder Services, Inc. and of Shareholder Financial Services, Inc.; President and a director (since July 2001) of OppenheimerFunds Legacy Program (a charitable trust program established by the Manager); a director of the following investment advisory subsidiaries of OppenheimerFunds, Inc.: OFI Institutional Asset Management, Inc. and Centennial Asset Management Corporation (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 1, 2001) and a director (since July 2001) of Oppenheimer Real Asset Management, Inc.; a director (since November 2001) of Trinity Investment Management Corp. and Tremont Advisers, Inc. (investment advisory affiliates of the Manager); Executive Vice President (since February 1997) of Massachusetts Mutual Life Insurance Company (the Manager's parent company); a director (since June 1995) of DLB Acquisition Corporation (a holding company that owns the shares of David L. Babson & Company, Inc.); formerly, Chief Operating Officer (September 2000-June 2001) of the Manager; President and trustee (November 1999-November 2001) of MML Series Investment Fund and MassMutual Institutional Funds (open-end investment companies); a director (September 1999-August 2000) of C.M. Life Insurance Company; President, Chief Executive Officer and director (September 1999-August 2000) of MML Bay State Life Insurance Company; a director (June 1989-June 1998) of Emerald Isle Bancorp and Hibernia Savings Bank (a wholly-owned subsidiary of Emerald Isle Bancorp). Oversees 75 portfolios in the OppenheimerFunds complex.
43 | OPPENHEIMER INTERNATIONAL BOND FUND TRUSTEES AND OFFICERS Unaudited / Continued
- -------------------------------------------------------------------------------------------------------------------------------- OFFICERS The address of the Officers in the chart below is as follows: for Messrs. de'Rossi and Zack, Two World Financial Center, New York, NY 10080, for Mr. Wixted, 6803 S. Tucson Way, Centennial, CO 80112-3924. Each Officer serves for an annual term or until his or her earlier resignation, death or removal. Ruggero de'Rossi, Vice President of the Manager (since March 2000); an officer of 1 portfolio in Vice President (since 2000) the OppenheimerFunds complex. Prior to joining the Manager he was a Senior Vice Age: 40 President and Chief Emerging Markets Debt and Currency Strategist of ING Barings, a global investment bank (July 1998 - March 2000); before that he was a Vice President, head of emerging markets trading strategies at Citicorp Securities, after having run the bank's proprietary trading activity on international fixed income and foreign exchange derivatives (May 1995 - July 1998). Brian W. Wixted, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer Treasurer (since 1999) (since March 1999) of HarbourView Asset Management Corporation, Shareholder Age: 43 Services, Inc., Oppenheimer Real Asset Management Corporation, Shareholder Financial Services, Inc., Oppenheimer Partnership Holdings, Inc., OFI Private Investments, Inc. (since March 2000), OppenheimerFunds International Ltd. and OppenheimerFunds plc (offshore fund management subsidiaries of the Manager) (since May 2000) and OFI Institutional Asset Management, Inc. (since November 2000); Treasurer and Chief Financial Officer (since May 2000) of Oppenheimer Trust Company (a trust company subsidiary of the Manager); Assistant Treasurer (since March 1999) of Oppenheimer Acquisition Corp. and OppenheimerFunds Legacy Program (since April 2000); formerly Principal and Chief Operating Officer (March 1995-March 1999), Bankers Trust Company-Mutual Fund Services Division. An officer of 91 portfolios in the OppenheimerFunds complex. Robert G. Zack, Senior Vice President (since May 1985) and General Counsel (since February 2002) Vice President and Secretary of the Manager; General Counsel and a director (since November 2001) of (since 2001) OppenheimerFunds Distributor, Inc.; Senior Vice President and General Counsel Age: 55 (since November 2001) of HarbourView Asset Management Corporation; Vice President and a director (since November 2000) of Oppenheimer Partnership Holdings, Inc.; Senior Vice President, General Counsel and a director (since November 2001) of Shareholder Services, Inc., Shareholder Financial Services, Inc., OFI Private Investments, Inc., Oppenheimer Trust Company and OFI Institutional Asset Management, Inc.; General Counsel (since November 2001) of Centennial Asset Management Corporation; a director (since November 2001) of Oppenheimer Real Asset Management, Inc.; Assistant Secretary and a director (since November 2001) of OppenheimerFunds International Ltd.; Vice President (since November 2001) of OppenheimerFunds Legacy Program; Secretary (since November 2001) of Oppenheimer Acquisition Corp.; formerly Acting General Counsel (November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November 1989-November 2001); OppenheimerFunds International Ltd. And OppenheimerFunds plc (October 1997-November 2001). An officer of 91 portfolios in the OppenheimerFunds complex.
The Fund's Statement of Additional Information contains additional information about the Fund's Trustees and is available without charge upon request. 44 | OPPENHEIMER INTERNATIONAL BOND FUND ITEM 2. CODE OF ETHICS ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT The Board of Trustees of the Fund has determined that Edward L. Cameron, the Chairman of the Board's Audit Committee, and George C. Bowen, a member of the Board's Audit Committee, possess the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as "audit committee financial experts," and has designated Messrs. Cameron and Bowen as the Audit Committee's financial experts. Messrs. Cameron and Bowen are "independent" Trustees pursuant to paragraph (a)(2) of Item 3 to Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES - NOT REQUIRED ITEM 5. NOT APPLICABLE ITEM 6. RESERVED ITEM 7. NOT APPLICABLE ITEM 8. RESERVED ITEM 9. CONTROLS AND PROCEDURES (a) Based on their evaluation of registrant's disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940 (17 CFR 270.30a-2(c)) as of September 30, 2003, registrant's principal executive officer and principal financial officer found registrant's disclosure controls and procedures to be appropriately designed to ensure that information required to be disclosed by registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. (b) There have been no significant changes in registrant's internal controls or in other factors that could significantly affect registrant's internal controls subsequent to the date of the most recent evaluation as indicated, including no significant deficiencies or material weaknesses that required corrective action. ITEM 10. EXHIBITS. (A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT) (B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS) EX-99.CODE ETH 3 ex99_code-880.txt EX99_CODE-800 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 o accountability for adherence to this Code. In general, the principles that govern honest and ethical conduct, including the avoidance of conflicts of interest between personal and professional relationships, reflect, at the minimum, the following: (1) the duty at all times in performing any responsibilities as a Fund financial officer, controller, accountant or principal executive officer to place the interests of the Funds ahead of personal interests; (2) the fundamental standard that Covered Officers should not take inappropriate advantage of their positions; (3) the duty to assure that a Fund's financial statements and reports to its shareholders are prepared honestly and accurately in accordance with applicable rules, regulations and accounting standards; and (4) the duty to conduct the Funds' business and affairs in an honest and ethical manner. - --------------- 1 The obligations imposed by this Code on Covered Officers are separate from and in addition to any obligations that may be imposed on such persons as Covered Persons under the Code of Ethics adopted by the Oppenheimer Funds dated May 15, 2002, under Rule 17j-1 of the Investment Company Act of 1940, as amended and any other code of conduct applicable to Covered Officers in whatever capacity they serve. This Code does not incorporate by reference any provisions of the Rule 17j-1 Code of Ethics and accordingly, any violations or waivers granted under the Rule 17j-1 Code of Ethics will not be considered a violation or waiver under this Code. Each Covered Officer should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. It is acknowledged that, as a result of the contractual relationship between each Fund and OFI, of which the Covered Officers are also officers or employees, and subject to OFI's fiduciary duties to each Fund, the Covered Officers will, in the normal course of their duties, be involved in establishing policies and implementing decisions that will have different effects on OFI and the Funds. It is further acknowledged that the participation of the Covered Officers in such activities is inherent in the contractual relationship between each Fund and OFI and is consistent with the expectations of the Board of Trustees/Directors of the performance by the Covered Officers of their duties as officers of the Funds. 2. Prohibitions ------------ The specific provisions and reporting requirements of this Code are concerned primarily with promoting honest and ethical conduct and avoiding conflicts of interest in personal and professional relationships. No Covered Officer may use information concerning the business and affairs of a Fund, including the investment intentions of a Fund, or use his or her ability to influence such investment intentions, for personal gain to himself or herself, his or her family or friends or any other person or in a manner detrimental to the interests of a Fund or its shareholders. No Covered Officer may use his or her personal influence or personal relationships to influence the preparation and issuance of financial reports of a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund and its shareholders. No Covered Officer shall intentionally for any reason take any action or fail to take any action in connection with his or her official acts on behalf of a Fund that causes the Fund to violate applicable laws, rules and regulations. No Covered Officer shall, in connection with carrying out his or her official duties and responsibilities on behalf of a Fund: (i) employ any device, scheme or artifice to defraud a Fund or its shareholders; (ii) intentionally cause a Fund to make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading in its official documents, regulatory filings, financial statements or communications to the public; (iii) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any Fund or its shareholders; (iv) engage in any manipulative practice with respect to any Fund; (v) use his or her personal influence or personal relationships to influence any business decision, investment decisions, or financial reporting by a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund or its shareholders; (vi) intentionally cause a Fund to fail to comply with applicable laws, rules and regulations, including failure to comply with the requirement of full, fair, accurate, understandable and timely disclosure in reports and documents that a Fund files with, or submits to, the SEC and in other public communications made by the Fund; (vii) intentionally mislead or omit to provide material information to the Fund's independent auditors or to the Board of Trustees/Directors or the officers of the Fund or its investment adviser in connection with financial reporting matters; (viii) fail to notify the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser promptly if he or she becomes aware of any existing or potential violations of this Code or applicable laws; (ix) retaliate against others for, or otherwise discourage the reporting of, actual or apparent violations of this Code; or (x) fails to acknowledge or certify compliance with this Code if requested to do so. 3. Reports of Conflicts of Interests --------------------------------- If a Covered Officer becomes aware of a conflict of interest under this Code or, to the Covered Officer's reasonable belief, the appearance of one, he or she must immediately report the matter to the Code's Administrator. If the Code Administrator is involved or believed to be involved in the conflict of interest or appearance of conflict of interest, the Covered Officer shall report the matter directly to the OFI's Chief Executive Officer. Upon receipt of a report of a conflict, the Code Administrator will take prompt steps to determine whether a conflict of interest exists. If the Code Administrator determines that an actual conflict of interest exists, the Code Administrator will take steps to resolve the conflict. If the Code Administrator determines that the appearance of a conflict exists, the Code Administrator will take appropriate steps to remedy such appearance. If the Code Administrator determines that no conflict or appearance of a conflict exists, the Code Administrator shall meet with the Covered Officer to advise him or her of such finding and of his or her reason for taking no action. In lieu of determining whether a conflict or appearance of conflict exists, the Code Administrator may in his or her discretion refer the matter to the Fund's Board of Trustees/Directors. 4. Waivers ------- Any Covered Officer requesting a waiver of any of the provisions of this Code must submit a written request for such waiver to the Code Administrator, setting forth the basis of such request and all necessary facts upon which such request can be evaluated. The Code Administrator shall review such request and make a written determination thereon, which shall be binding. The Code Administrator may in reviewing such request, consult at his discretion with legal counsel to OFI or to the Fund. In determining whether to waive any of the provisions of this Code, the Code Administrator shall consider 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; (iv) Issuing interpretations of this Code which appear to the Code Administrator to be consistent with the objectives of this Code and any applicable laws or regulations; (v) Conducting such inspections or investigations as shall reasonably be required to detect and report any violations of this Code, with his or her recommendations, to the Chief Executive Officer of OFI and to the Trustees/Directors of the - ------------------ 2 An "implicit waiver" is the failure to take action within a reasonable period of time regarding a material departure from a provision of this Code that has been made known to the General Counsel, the Code Administrator, an executiv officer of the Fund or OFI. affected Fund(s) or any committee appointed by them to deal with such information; and (vi) Periodically conducting educational training programs as needed to explain and reinforce the terms of this Code. (c) In carrying out the duties and responsibilities described under this Code, the Code Administrator may consult with legal counsel, who may include legal counsel to the applicable Funds, and such other persons as the Administrator shall deem necessary or desirable. The Code Administrator shall be protected from any liability hereunder or under any applicable law, rule or regulation, for decisions made in good faith based upon his or her reasonable judgment. 9. Required Records ---------------- The Administrator shall maintain and cause to be maintained in an easily accessible place, the following records for the period required by applicable SEC rules (currently six years following the end of the fiscal year of OFI in which the applicable event or report occurred): (a) A copy of any Code which has been in effect during the period; (b) A record of any violation of any such Code and of any action taken as a result of such violation, during the period; (c) A copy of each annual report pursuant to the Code made by a Covered Officer during the period; (d) A copy of each report made by the Code Administrator pursuant to this Code during the period; (e) A list of all Covered Officers who are or have been required to make reports pursuant to this Code during the period, plus those person(s) who are or were responsible for reviewing these reports; (f) A record of any request to waive any requirement of this Code, the decision thereon and the reasons supporting the decision; and (g) A record of any report of any conflict of interest or appearance of a conflict of interest received by the Code Administrator or discovered by the Code Administrator during the period, the decision thereon and the reasons supporting the decision. 10. Amendments and Modifications ---------------------------- This Code may not be amended or modified except by an amendment in writing which is approved or ratified by OFI and by a majority vote of the Independent Trustees/Directors of each of the applicable Funds. 11. Confidentiality. ---------------- This Code is identified for the internal use of the Funds and OFI. Reports and records prepared or maintained under this Code are considered confidential and shall be maintained and protected accordingly to the extent permitted by applicable laws, rules and regulations. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trustees/Directors of the affected Fund(s) and their counsel, the independent auditors of the affected Funds and/or OFI, and to OFI, except as such disclosure may be required pursuant to applicable judicial or regulatory process. Dated as of: June 25, 2003 Adopted by Board I of the Oppenheimer Funds June 13, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by Board II of the Oppenheimer/Centennial Funds June 24, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by Board III of the Oppenheimer Funds June 9, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by Board IV of the Oppenheimer Funds May 21, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by the Boards of Directors of OppenheimerFunds, Inc. and its subsidiaries and affiliates that act as investment adviser to the Oppenheimer or Centennial funds June 1, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Senior Vice President and General Counsel EXHIBIT A - --------- POSITIONS COVERED BY THIS CODE OF ETHICS FOR SENIOR OFFICERS Each Oppenheimer or Centennial fund - ----------------------------------- Principal Executive Officer Principal Financial Officer Treasurer Assistant Treasurer Personnel of OFI who by virtue of their jobs perform critical financial and - --------------------------------------------------------------------------- accounting functions for OFI on behalf of a Fund, including: - ------------------------------------------------------------ Treasurer Senior Vice President/Fund Accounting Vice President/Fund Accounting EX-99.CERT 4 ex99_302cert-880.txt EX99_302CERT 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 International Bond Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. Date: 11/14/03 /s/John V. Murphy --------------------------- John V. Murphy Chief Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, Brian W. Wixted, certify that: --------------- 1. I have reviewed this report on Form N-CSR of Oppenheimer International Bond Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. Date: 11/14/03 /s/Brian W. Wixted ---------------------------- Brian W. Wixted Chief Financial Officer EX-99.CERT 5 ex99_906cert-880.txt EX99_906CERT-880 EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2003 John V. Murphy, Chief Executive Officer, and Brian W. Wixted, Chief -------------- --------------- Financial Officer, of Oppenheimer International Bond Fund (the "Registrant"), each certify to the best of his or her knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended September 30, 2003 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Chief Executive Officer Chief Financial Officer Oppenheimer International Bond Oppenheimer International Bond Fund Fund /s/John V. Murphy /s/Brian W. Wixted - ---------------------------- ---------------------------- John V. Murphy Brian W. Wixted Date: 11/14/03 Date: 11/14/03 -----END PRIVACY-ENHANCED MESSAGE-----