-----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, QVaVpP2ObhGmVybiTlq1QXGO+eswkdLx6mFfYkBDEM4hKfbGM5/EPZ8Pd14NaKad xyZMu0Obr9Tp6uvmAwfByw== 0000935069-04-001860.txt : 20041124 0000935069-04-001860.hdr.sgml : 20041124 20041124121813 ACCESSION NUMBER: 0000935069-04-001860 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20040930 FILED AS OF DATE: 20041124 DATE AS OF CHANGE: 20041124 EFFECTIVENESS DATE: 20041124 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: 041165987 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 ra880_11829ncsr.txt RA880_11829NCSR.TXT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-07255 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. Two World Financial Center, New York, New York 10281-1008 (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 Date of fiscal year end: September 30 Date of reporting period: October 1, 2003 - September 30, 2004 ITEM 1. REPORTS TO STOCKHOLDERS. TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- TOP TEN GEOGRAPHICAL HOLDINGS - -------------------------------------------------------------------------------- United States 19.0% - -------------------------------------------------------------------------------- Japan 6.9 - -------------------------------------------------------------------------------- Great Britain 6.7 - -------------------------------------------------------------------------------- Spain 4.1 - -------------------------------------------------------------------------------- Ireland 4.0 - -------------------------------------------------------------------------------- Greece 4.0 - -------------------------------------------------------------------------------- Austria 3.9 - -------------------------------------------------------------------------------- Portugal 3.8 - -------------------------------------------------------------------------------- Belgium 3.7 - -------------------------------------------------------------------------------- France 3.6 Portfolio holdings and allocations are subject to change. Percentages are as of September 30, 2004, and are based on total investments. - -------------------------------------------------------------------------------- REGIONAL ALLOCATION [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Europe 47.2% United States 19.0 Asia 11.9 Latin America 11.0 Emerging Europe 7.5 Middle East/Africa 3.2 Supranational 0.2 Portfolio holdings and allocations are subject to change. Percentages are as of September 30, 2004, and are based on total investments. - -------------------------------------------------------------------------------- 9 | OPPENHEIMER INTERNATIONAL BOND FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED SEPTEMBER 30, 2004, 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 performance during its recent fiscal year was driven primarily by good results from its investments in the emerging markets and favorable movements in foreign currency exchange rates. The Fund's relatively heavy exposure to emerging-market bonds contributed positively to performance, and debt securities from Brazil and Russia proved particularly beneficial as these nations reformed their financial systems and instilled greater confidence among investors and rating agencies. Brazil's economy benefited during the reporting period from greater global demand for basic materials, and Russia continued to emerge as a major force in the global oil industry. The Fund also avoided some of the weaker emerging markets, such as Turkey, sheltering the Fund from the brunt of weakness in those countries. The Fund's investments in the foreign currencies of major industrialized regions, including the Euro and Yen, fared well when the U.S. dollar weakened during the first half of the reporting period. We believe that the U.S. current account deficit and a ballooning U.S. federal budget deficit were factors in the U.S. dollar's decline. However, the Fund's performance was hindered by its duration posture, which for much of the reporting period was set in a range that we considered shorter than industry averages. While this stance helped preserve value during declining markets, it limited the Fund's participation in market rallies. Nonetheless, we have continued to maintain the Fund's average duration in a relatively short position in anticipation of higher interest rates. We also recently reduced the Fund's exposure to emerging markets debt by taking profits in securities that had gained value. We have redeployed some of those assets to bonds in developed markets, such as the United Kingdom and Australia, where interest rates have already risen and restrictive monetary policies may be nearing an end. COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the performance of a hypothetical $10,000 investment in each class of shares of the Fund held until September 30, 2004. 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. 10 | OPPENHEIMER INTERNATIONAL BOND FUND The Fund's performance is compared to the Citigroup 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. 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 in the index. 11 | OPPENHEIMER INTERNATIONAL BOND FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- 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 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.] Oppenheimer International Bond Fund Citigroup Non-US Dollar Date (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 12/31/2003 22,554 15,144 03/31/2004 23,709 15,382 06/30/2004 22,464 14,861 09/30/2004 23,362 15,349 AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT 9/30/04 1-Year 6.26% 5-Year 11.66% Since Inception (6/15/95) 9.56% 12 | OPPENHEIMER INTERNATIONAL BOND FUND 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 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.] Oppenheimer International Bond Fund Citigroup Non-US Dollar Date (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 12/31/2003 22,627 15,144 03/31/2004 23,785 15,382 06/30/2004 22,536 14,861 09/30/2004 23,440 15,349 AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT 9/30/04 1-Year 5.66% 5-Year 11.61% Since Inception (6/15/95) 9.60% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, SINCE-INCEPTION RETURNS FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 16 FOR FURTHER INFORMATION. 13 | 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 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.] Oppenheimer International Bond Fund Citigroup Non-US Dollar Date (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 12/31/2003 22,154 15,144 03/31/2004 23,288 15,382 06/30/2004 21,982 14,861 09/30/2004 22,821 15,349 AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT 9/30/04 1-Year 9.75% 5-Year 11.89% Since Inception (6/15/95) 9.29% 14 | OPPENHEIMER INTERNATIONAL BOND FUND 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 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.] Oppenheimer International Bond Fund Citigroup Non-US Dollar Date (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 12/31/2003 15,315 14,077 03/31/2004 16,115 14,298 06/30/2004 15,227 13,814 09/30/2004 15,824 14,268 AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT 9/30/04 1-Year 10.00% Since Inception (3/1/01) 13.68% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE PAGE 16 FOR FURTHER INFORMATION. 15 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES - -------------------------------------------------------------------------------- Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund's total returns shown do not reflect the deduction of income taxes on an individual's investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares. Investors should consider the Fund's investment objectives, risks, and other charges and expenses carefully before investing. The Fund's prospectus contains this and other information about the Fund, and may be obtained by asking your financial advisor, calling us at 1.800.525.7048 or visiting our website at www.oppenheimerfunds.com. Read the prospectus carefully before investing. The Fund's investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc. CLASS A shares of the Fund were first publicly offered on 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. CLASS Y shares of the Fund were first publicly offered on 9/27/04. Class Y shares are offered only to certain institutional investors under special agreement with the Distributor. This Class has a limited operating history. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 16 | OPPENHEIMER INTERNATIONAL BOND FUND FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Actual Expense examples for Classes A, B, C and N are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended September 30, 2004. The Actual Expense examples for Class Y are based on an investment of $1,000.00 invested at the beginning of the period, September 27, 2004 (inception of offering) and held for the period ended September 30, 2004. The Hypothetical Examples for Comparison Purposes for all classes are based on an investment of $1,000.00 invested on April 1, 2004 and held for the six months ended September 30, 2004. ACTUAL EXPENSES. The "actual" lines of the table provide information about actual account values and actual expenses. You may use the information on this line for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the "actual" line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 17 | OPPENHEIMER INTERNATIONAL BOND FUND FUND EXPENSES - -------------------------------------------------------------------------------- 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to exceptions described in the Statement of Additional Information). Therefore, the "hypothetical" lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. 18 | OPPENHEIMER INTERNATIONAL BOND FUND BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED (4/1/04) (9/30/04) SEPTEMBER 30, 2004 1,2 - -------------------------------------------------------------------------------- Class A Actual $1,000.00 $ 985.40 $5.62 - -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,019.35 5.72 - -------------------------------------------------------------------------------- Class B Actual 1,000.00 979.50 9.80 - -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,015.15 9.97 - -------------------------------------------------------------------------------- Class C Actual 1,000.00 979.90 9.30 - -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,015.65 9.47 - -------------------------------------------------------------------------------- Class N Actual 1,000.00 981.90 7.31 - -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,017.65 7.44 - -------------------------------------------------------------------------------- Class Y Actual 1 1,000.00 1,009.20 0.10 - -------------------------------------------------------------------------------- Class Y Hypothetical 1,000.00 1,019.15 5.92 Hypothetical assumes 5% annual return before expenses. 1. Actual expenses paid for Classes A, B, C and N are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). Actual expenses paid for Class Y are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 3/366 [to reflect the period from September 27, 2004 (inception of offering) to September 30, 2004]. 2. Hypothetical expenses paid for all classes are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). Those annualized expense ratios based on the 6-month period ended September 30, 2004 for Classes A, B, C and N and for the period from September 27, 2004 (inception of offering) to September 30, 2004 for Class Y are as follows: CLASS EXPENSE RATIOS - --------------------------- Class A 1.13% - --------------------------- Class B 1.97 - --------------------------- Class C 1.87 - --------------------------- Class N 1.47 - --------------------------- Class Y 1.17 19 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS September 30, 2004 - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS--10.9% - ---------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp. Nts., 3.75%, 7/15/09 [EUR] 16,635,000 $ 20,764,657 - ---------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn. Sr. Unsec. Nts., 2.125%, 10/9/07 [JPY] 510,000,000 4,886,061 - ---------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 2.25%, 4/30/06 1,2 151,000,000 150,610,722 ---------------- Total U.S. Government Obligations (Cost $175,283,161) 176,261,440 - ---------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS--66.5% - ---------------------------------------------------------------------------------------------------------------------- ARGENTINA--1.7% Argentina (Republic of) Bonds: 1.389%, 5/3/05 3 396,000 389,285 1.98%, 8/3/12 3 15,620,000 11,381,294 Series PRE8, 2%, 1/3/10 4,5,6 [ARP] 15,670,000 6,833,613 Series PR12, 2%, 1/3/16 4,5,6 [ARP] 18,075,972 6,300,213 - ---------------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Disc. Bonds, 3/31/23 4,6 660,000 339,900 - ---------------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Letras del Banco Central de la Republica Treasury Bills, 14.75%, 10/8/04 7 [ARP] 412,000 138,105 - ---------------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Unsec. Bonds: Series 4BR, 5%, 12/20/49 4,5 [JPY] 119,000,000 281,234 Series 4RG, 5%, 12/20/49 4,5 [JPY] 178,000,000 420,670 - ---------------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Unsec. Unsub. Bonds, Series 6RG, 5.125%, 6/14/04 4,5 [JPY] 494,000,000 1,167,477 - ---------------------------------------------------------------------------------------------------------------------- Buenos Aires (Province of) Bonds, Bonos de Consolidacion de Deudas, Series PBA1, 4/1/07 4,6 [ARP] 1,599,187 627,003 ---------------- 27,878,794 - ---------------------------------------------------------------------------------------------------------------------- AUSTRALIA--2.9% Queensland Treasury Corp. Unsec. Nts., Series 09G, 6%, 7/14/09 [AUD] 62,395,000 46,371,134 - ---------------------------------------------------------------------------------------------------------------------- AUSTRIA--3.9% Austria (Republic of) Nts.: 3.40%, 10/20/04 [EUR] 1,580,000 1,966,126 3.80%, 10/20/13 [EUR] 29,045,000 35,656,554 5.50%, 10/20/07 [EUR] 2,440,000 3,261,592 Series 98-1, 5%, 1/15/08 [EUR] 9,795,000 12,947,585 - ---------------------------------------------------------------------------------------------------------------------- Austria (Republic of) Sr. Unsec. Unsub. Nts., Series 1, 5%, 7/15/12 [EUR] 6,525,000 8,753,693 ---------------- 62,585,550 - ---------------------------------------------------------------------------------------------------------------------- BELGIUM--3.7% Belgium (Kingdom of) Bonds: 5%, 9/28/11 [EUR] 3,545,000 4,755,265 5.50%, 3/28/28 [EUR] 5,400,000 7,535,024 Series 19, 6.50%, 3/31/05 [EUR] 7,460,000 9,471,529 Series 32, 3.75%, 3/28/09 [EUR] 19,125,000 24,258,116 Series 35, 5.75%, 9/28/10 [EUR] 9,415,000 13,084,764 ---------------- 59,104,698
20 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------- BRAZIL--2.7% Brazil (Federal Republic of) Bonds, Series 15 yr., 2.125%, 4/15/09 3 $ 17,648 $ 17,339 - ---------------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Debt Capitalization Bonds, Series 20 yr., 8%, 4/15/14 27,753,602 27,458,720 - ---------------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Nts., 12%, 4/15/10 2,290,000 2,739,985 - ---------------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Unsec. Bonds, 4.75%, 4/10/07 6 [JPY] 500,000,000 4,613,007 - ---------------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Unsec. Unsub. Bonds: 10%, 8/7/11 1,530,000 1,696,005 11%, 2/4/10 [EUR] 840,000 1,186,740 11%, 8/17/40 5,345,200 5,998,651 Cl. B, 8.875%, 4/15/24 81,000 77,760 ---------------- 43,788,207 - ---------------------------------------------------------------------------------------------------------------------- BULGARIA--0.2% Bulgaria (Republic of) Bonds: 8.25%, 1/15/15 1,505,000 1,862,438 8.25%, 1/15/15 8 1,505,000 1,862,438 ---------------- 3,724,876 - ---------------------------------------------------------------------------------------------------------------------- COLOMBIA--0.6% Colombia (Republic of) Unsec. Unsub. Bonds, 5.50%, 4/27/05 [JPY] 960,000,000 8,885,770 - ---------------------------------------------------------------------------------------------------------------------- DENMARK--0.7% Denmark (Kingdom of) Nts., 4%, 8/15/08 [DKK] 61,610,000 10,584,071 - ---------------------------------------------------------------------------------------------------------------------- EL SALVADOR--0.1% El Salvador (Republic of) Bonds, 7.625%, 9/21/34 8 1,185,000 1,220,550 - ---------------------------------------------------------------------------------------------------------------------- FINLAND--3.1% Finland (Republic of) Bonds, 5.375%, 7/4/13 [EUR] 20,985,000 28,885,122 - ---------------------------------------------------------------------------------------------------------------------- Finland (Republic of) Sr. Unsec. Unsub. Bonds: 2.75%, 7/4/06 [EUR] 3,470,000 4,333,084 5%, 7/4/07 [EUR] 12,415,000 16,326,084 ---------------- 49,544,290 - ---------------------------------------------------------------------------------------------------------------------- FRANCE--3.2% France (Government of) Obligations Assimilables du Tresor Bonds: 4%, 10/25/13 [EUR] 13,960,000 17,415,169 5.50%, 10/25/07 [EUR] 12,375,000 16,544,426 5.50%, 10/25/10 [EUR] 3,080,000 4,232,637 5.75%, 10/25/32 [EUR] 5,300,000 7,722,022 - ---------------------------------------------------------------------------------------------------------------------- France (Government of) Treasury Nts., 5 yr., 5%, 7/12/05 [EUR] 5,050,000 6,412,539 ---------------- 52,326,793
21 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------- GERMANY--2.5% Germany (Republic of) Bonds: 2%, 6/17/05 [EUR] 7,865,000 $ 9,766,143 3%, 12/10/04 [EUR] 2,385,000 2,970,969 5.375%, 1/4/10 [EUR] 7,205,000 9,811,743 Series 01, 5%, 7/4/11 [EUR] 9,135,000 12,273,007 Series 02, 5%, 7/4/12 [EUR] 4,200,000 5,642,239 ---------------- 40,464,101 - ---------------------------------------------------------------------------------------------------------------------- GREECE--4.0% Greece (Republic of) Bonds: 5.35%, 5/18/11 [EUR] 25,040,000 34,021,060 6.50%, 1/11/14 [EUR] 14,195,000 20,846,349 - ---------------------------------------------------------------------------------------------------------------------- Greece (Republic of) Sr. Unsub. Bonds, 4.65%, 4/19/07 [EUR] 6,980,000 9,072,390 ---------------- 63,939,799 - ---------------------------------------------------------------------------------------------------------------------- GUATEMALA--0.0% Guatemala (Republic of) Nts.: 10.25%, 11/8/11 525,000 614,250 10.25%, 11/8/11 8 160,000 187,200 ---------------- 801,450 - ---------------------------------------------------------------------------------------------------------------------- HUNGARY--0.6% Hungary (Government of) Bonds, Series 05/I, 8.50%, 10/12/05 [HUF] 1,918,660,000 9,474,926 - ---------------------------------------------------------------------------------------------------------------------- IRELAND--4.0% Ireland (Republic of) Treasury Bonds, 3.25%, 4/18/09 [EUR] 52,335,000 65,027,825 - ---------------------------------------------------------------------------------------------------------------------- ITALY--3.2% Italy (Republic of) Treasury Bonds: Buoni del Tesoro Poliennali, 4%, 3/1/05 [EUR] 6,980,000 8,748,123 Buoni del Tesoro Poliennali, 4.25%, 2/1/19 [EUR] 13,785,000 16,828,266 Buoni del Tesoro Poliennali, 4.50%, 3/1/07 [EUR] 14,745,000 19,094,957 Buoni del Tesoro Poliennali, 5%, 10/15/07 [EUR] 5,125,000 6,765,687 ---------------- 51,437,033 - ---------------------------------------------------------------------------------------------------------------------- IVORY COAST--0.0% Ivory Coast (Government of) Past Due Interest Bonds, 1.90%, 3/29/18 4,5,6 [FRF] 16,007,500 527,316 - ---------------------------------------------------------------------------------------------------------------------- JAPAN--4.5% Japan (Government of) Bonds, 5 yr., Series 14, 0.40%, 6/20/06 [JPY] 7,893,800,000 72,114,956 - ---------------------------------------------------------------------------------------------------------------------- KOREA, REPUBLIC OF SOUTH--0.2% Korea (Republic of) Nts.: 4.25%, 6/1/13 1,445,000 1,389,006 8.875%, 4/15/08 2,160,000 2,535,300 ---------------- 3,924,306
22 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------- MEXICO--0.8% Mexican Williams Sr. Nts., 2.31%, 11/15/08 3,6 $ 500,000 $ 516,875 - ---------------------------------------------------------------------------------------------------------------------- United Mexican States Bonds: 7.50%, 4/8/33 6,500,000 6,847,750 Series M20, 8%, 12/7/23 [MXN] 43,415,000 2,935,046 - ---------------------------------------------------------------------------------------------------------------------- United Mexican States Unsec. Unsub. Nts., Series 6 BR, 6.75%, 6/6/06 [JPY] 205,000,000 2,050,466 ---------------- 12,350,137 - ---------------------------------------------------------------------------------------------------------------------- NEW ZEALAND--0.3% New Zealand (Government of) Bonds, 7%, 7/15/09 [NZD] 7,110,000 4,983,816 - ---------------------------------------------------------------------------------------------------------------------- NIGERIA--0.1% Central Bank of Nigeria Gtd. Bonds, Series WW, 6.25%, 11/15/20 1,375,000 1,285,625 - ---------------------------------------------------------------------------------------------------------------------- Nigeria (Federal Republic of) Promissory Nts., Series RC, 5.092%, 1/5/10 654,554 592,311 ---------------- 1,877,936 - ---------------------------------------------------------------------------------------------------------------------- PERU--0.4% Peru (Republic of) Sr. Nts., 4.53%, 2/28/16 7 5,860,848 3,350,647 - ---------------------------------------------------------------------------------------------------------------------- Peru (Republic of) Unsec. Unsub. Bonds, 8.75%, 11/21/33 3,400,000 3,391,500 ---------------- 6,742,147 - ---------------------------------------------------------------------------------------------------------------------- POLAND--2.7% Poland (Republic of) Bonds: Series 0K0805, 5.15%, 8/12/05 7 [PLZ] 102,160,000 27,411,901 Series WS0922, 5.75%, 9/23/22 [PLZ] 10,000,000 2,607,235 Series DS0509, 6%, 5/24/09 [PLZ] 50,015,000 13,702,057 ---------------- 43,721,193 - ---------------------------------------------------------------------------------------------------------------------- PORTUGAL--3.7% Portugal (Republic of) Obrig Do Tes Medio Prazo Nts., 4.875%, 8/17/07 [EUR] 9,710,000 12,733,609 - ---------------------------------------------------------------------------------------------------------------------- Portugal (Republic of) Obrig Do Tes Medio Prazo Unsec. Unsub. Nts., 5.85%, 5/20/10 [EUR] 34,195,000 47,601,510 ---------------- 60,335,119 - ---------------------------------------------------------------------------------------------------------------------- RUSSIA--1.4% Aries Vermoegensverwaltungs GmbH Unsub. Nts., Series B, 7.75%, 10/25/09 6 [EUR] 2,500,000 3,294,272 - ---------------------------------------------------------------------------------------------------------------------- Ministry Finance of Russian Debs.: Series V, 3%, 5/14/08 10,615,000 9,632,348 Series VI, 3%, 5/14/06 3,590,000 3,515,867 - ---------------------------------------------------------------------------------------------------------------------- Russian Federation Unsub. Nts., 5%, 3/31/30 3 5,730,000 5,525,869 ---------------- 21,968,356 - ---------------------------------------------------------------------------------------------------------------------- SPAIN--4.1% Spain (Kingdom of) Bonds: Bonos y Obligacion del Estado, 4.25%, 10/31/07 [EUR] 8,945,000 11,560,802 Bonos y Obligacion del Estado, 4.80%, 10/31/06 [EUR] 5,500,000 7,140,523
23 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------- SPAIN Continued Spain (Kingdom of) Bonds: Continued Bonos y Obligacion del Estado, 5.35%, 10/31/11 [EUR] 21,360,000 $ 29,261,302 Bonos y Obligacion del Estado, 5.75%, 7/30/32 [EUR] 5,200,000 7,561,320 - ---------------------------------------------------------------------------------------------------------------------- Spain (Kingdom of) Treasury Bills, 2.03%, 10/22/04 7 [EUR] 8,420,000 10,461,016 ---------------- 65,984,963 - ---------------------------------------------------------------------------------------------------------------------- SWEDEN--0.6% Sweden (Kingdom of) Bonds, Series 1043, 5%, 1/28/09 [SEK] 65,420,000 9,471,761 - ---------------------------------------------------------------------------------------------------------------------- THE NETHERLANDS--3.1% Netherlands (Kingdom of the) Bonds: 3.75%, 7/15/09 [EUR] 8,000,000 10,145,196 4.25%, 7/15/13 [EUR] 9,660,000 12,283,158 5%, 7/15/11 [EUR] 15,405,000 20,670,022 5.50%, 1/15/28 [EUR] 5,300,000 7,421,852 ---------------- 50,520,228 - ---------------------------------------------------------------------------------------------------------------------- TURKEY--0.1% Turkey (Republic of) Nts., 7.25%, 3/15/15 9 1,915,000 1,895,850 - ---------------------------------------------------------------------------------------------------------------------- UNITED KINGDOM--6.2% United Kingdom Treasury Nts., 4%, 3/7/09 [GBP] 56,685,000 99,616,042 - ---------------------------------------------------------------------------------------------------------------------- VENEZUELA--1.2% Venezuela (Republic of) Collateralized Par Bonds, Series W-B, 6.75%, 3/31/20 159,000 155,224 - ---------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Debs., Series DL, 2.75%, 12/18/07 3 13,362 13,309 - ---------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Front-Loaded Interest Reduction Bonds, Series A, 2.063%, 3/31/07 3 10,213,775 10,162,706 - ---------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Nts.: 8.50%, 10/8/14 9 2,610,000 2,556,821 10.75%, 9/13/13 4,350,000 4,904,625 - ---------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Sr. Unsec. Unsub. Bonds, 11%, 3/5/08 [EUR] 840,000 1,194,836 ---------------- 18,987,521 ---------------- Total Foreign Government Obligations (Cost $1,033,520,851) 1,072,181,514 - ---------------------------------------------------------------------------------------------------------------------- LOAN PARTICIPATIONS--1.1% - ---------------------------------------------------------------------------------------------------------------------- Algeria (Republic of) Loan Participation Nts.: 0.938%, 3/4/10 3,6 [JPY] 194,879,283 1,722,675 2%, 9/4/06 3,6 657,141 652,212 2.183%, 3/4/10 3,6 745,250 734,071 - ---------------------------------------------------------------------------------------------------------------------- Deutsche Bank AG: Indonesia (Republic of) Rupiah Loan Participation Nts., 2.636%, 3/21/05 3 5,390,000 5,364,667 Indonesia (Republic of) Rupiah Loan Participation Nts., 2.636%, 1/25/06 3 3,155,000 3,084,959 OAO Gazprom Loan Participation Nts., 6.50%, 8/4/05 6 3,005,000 3,079,524 - ---------------------------------------------------------------------------------------------------------------------- Morgan Stanley Bank AG, OAO Gazprom Unsec. Loan Participation Nts., 9.625%, 3/1/13 3,020,000 3,355,975 ---------------- Total Loan Participations (Cost $17,356,188) 17,994,083
24 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES--6.9% - ---------------------------------------------------------------------------------------------------------------------- Capital Gaming International, Inc., 11.50% Promissory Nts., 8/1/1995 4,5,6 $ 2,000 $ -- - ---------------------------------------------------------------------------------------------------------------------- European Investment Bank Nts., 2.125%, 9/20/07 [JPY] 136,000,000 1,305,373 - ---------------------------------------------------------------------------------------------------------------------- Gazprom International SA, 7.201% Sr. Unsec. Bonds, 2/1/20 7,850,000 7,969,556 - ---------------------------------------------------------------------------------------------------------------------- General Electric Capital Corp., 1.40% Sr. Unsec. Unsub. Nts., 11/2/06 [JPY] 4,101,000,000 38,174,098 - ---------------------------------------------------------------------------------------------------------------------- Inter-American Development Bank, 1.90% Unsec. Bonds, 7/8/09 [JPY] 113,000,000 1,092,510 - ---------------------------------------------------------------------------------------------------------------------- International Bank for Reconstruction and Development (The), 2% Nts., 2/18/08 [JPY] 121,000,000 1,162,371 - ---------------------------------------------------------------------------------------------------------------------- Japan (Government of) Unsec. Unsub. Nts., 2.875%, 7/28/05 [JPY] 3,320,000,000 30,882,956 - ---------------------------------------------------------------------------------------------------------------------- KfW International Finance, Inc., 2.05% Unsec. Unsub. Nts., 9/21/09 [JPY] 104,000,000 1,011,990 - ---------------------------------------------------------------------------------------------------------------------- Ongko International Finance Co. BV, 10.50% Sec. Nts., 3/29/10 4,5,6 550,000 3,438 - ---------------------------------------------------------------------------------------------------------------------- Petroleos Mexicanos, 7.375% Unsec. Nts., 8/13/07 [ITL] 14,895,000,000 10,506,882 - ---------------------------------------------------------------------------------------------------------------------- Pfizer, Inc., 0.80% Unsec. Nts., Series INTL, 3/18/08 [JPY] 1,980,000,000 18,199,118 ---------------- Total Corporate Bonds and Notes (Cost $111,387,048) 110,308,292 SHARES - ---------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--1.6% - ---------------------------------------------------------------------------------------------------------------------- BASF AG 9,224 542,598 - ---------------------------------------------------------------------------------------------------------------------- Berkeley Group plc (The) 22,830 524,571 - ---------------------------------------------------------------------------------------------------------------------- Brambles Industries plc 114,390 532,203 - ---------------------------------------------------------------------------------------------------------------------- British Land Co. plc 38,554 519,782 - ---------------------------------------------------------------------------------------------------------------------- CNP Assurances SA 8,242 536,083 - ---------------------------------------------------------------------------------------------------------------------- Corus Group plc 5 630,456 582,645 - ---------------------------------------------------------------------------------------------------------------------- DaimlerChrysler AG 12,005 494,930 - ---------------------------------------------------------------------------------------------------------------------- E.ON AG 7,030 518,014 - ---------------------------------------------------------------------------------------------------------------------- Gecina SA 6,004 507,747 - ---------------------------------------------------------------------------------------------------------------------- Heidelberger Zement AG 11,342 531,071 - ---------------------------------------------------------------------------------------------------------------------- Hilton Group plc 106,590 534,544 - ---------------------------------------------------------------------------------------------------------------------- Hokkaido Electric Power Co. 27,424 491,820 - ---------------------------------------------------------------------------------------------------------------------- Japan Real Estate Investment Corp. 65 516,975 - ---------------------------------------------------------------------------------------------------------------------- Karstadt Quelle AG 31,462 494,574 - ---------------------------------------------------------------------------------------------------------------------- Kawasaki Kisen Kaisha Ltd. 77,943 534,191 - ---------------------------------------------------------------------------------------------------------------------- Kelda Group plc 52,585 510,270 - ---------------------------------------------------------------------------------------------------------------------- Klepierre 6,911 500,221 - ---------------------------------------------------------------------------------------------------------------------- Lafarge SA 5,825 510,358 - ---------------------------------------------------------------------------------------------------------------------- Land Securities Group plc 24,125 512,796 - ---------------------------------------------------------------------------------------------------------------------- Leopalace21 Corp. 26,000 480,934 - ---------------------------------------------------------------------------------------------------------------------- Liberty International plc 33,441 501,145 - ---------------------------------------------------------------------------------------------------------------------- Lloyds TSB Group plc 66,521 520,138 - ---------------------------------------------------------------------------------------------------------------------- MAN AG 14,732 503,840
25 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
VALUE SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------- COMMON STOCKS Continued - ---------------------------------------------------------------------------------------------------------------------- Mitsui O.S.K. Lines Ltd. 84,301 $ 506,503 - ---------------------------------------------------------------------------------------------------------------------- Nippon Building Fund, Inc. 67 528,010 - ---------------------------------------------------------------------------------------------------------------------- Nippon Mining Holdings, Inc. 108,668 551,168 - ---------------------------------------------------------------------------------------------------------------------- Novar plc 226,450 476,003 - ---------------------------------------------------------------------------------------------------------------------- Omron Corp. 23,603 522,413 - ---------------------------------------------------------------------------------------------------------------------- PSA Peugeot Citroen 8,331 513,898 - ---------------------------------------------------------------------------------------------------------------------- Rakuten, Inc. 72 469,245 - ---------------------------------------------------------------------------------------------------------------------- RWE AG 10,213 487,734 - ---------------------------------------------------------------------------------------------------------------------- Sammy Corp. 10,061 493,836 - ---------------------------------------------------------------------------------------------------------------------- ScottishPower plc 68,960 527,962 - ---------------------------------------------------------------------------------------------------------------------- Severn Trent plc 32,030 509,601 - ---------------------------------------------------------------------------------------------------------------------- Showa Shell Sekiyu K.K. 56,398 501,361 - ---------------------------------------------------------------------------------------------------------------------- Societe Generale, Cl. A 5,845 517,926 - ---------------------------------------------------------------------------------------------------------------------- Suez SA 25,774 553,249 - ---------------------------------------------------------------------------------------------------------------------- Sumitomo Bakelite Co. Ltd. 80,931 488,462 - ---------------------------------------------------------------------------------------------------------------------- Tate & Lyle plc 77,590 542,715 - ---------------------------------------------------------------------------------------------------------------------- Technip SA 3,332 538,699 - ---------------------------------------------------------------------------------------------------------------------- ThyssenKrupp AG 26,817 520,942 - ---------------------------------------------------------------------------------------------------------------------- Tohoku Electric Power Co. 29,100 480,878 - ---------------------------------------------------------------------------------------------------------------------- TonenGeneral Sekiyu K.K. 59,852 517,377 - ---------------------------------------------------------------------------------------------------------------------- Trend Micro, Inc. 11,500 495,478 - ---------------------------------------------------------------------------------------------------------------------- TUI AG 27,742 517,175 - ---------------------------------------------------------------------------------------------------------------------- Unibail 4,418 532,686 - ---------------------------------------------------------------------------------------------------------------------- United Utilities plc 50,100 504,314 - ---------------------------------------------------------------------------------------------------------------------- Vinci 4,675 538,673 - ---------------------------------------------------------------------------------------------------------------------- Volkswagen AG, Preference 18,860 514,842 - ---------------------------------------------------------------------------------------------------------------------- William Hill plc 51,044 493,467 ---------------- Total Common Stocks (Cost $24,057,563) 25,746,067 UNITS - ---------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.0% - ---------------------------------------------------------------------------------------------------------------------- ICG Communications, Inc. Wts., Exp. 9/15/05 5,6 495 5 - ---------------------------------------------------------------------------------------------------------------------- Loral Space & Communications Ltd. Wts., Exp. 1/15/07 5,6 50 1 - ---------------------------------------------------------------------------------------------------------------------- Protection One, Inc. Wts., Exp. 6/30/05 5,6 640 -- - ---------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Oil Linked Payment Obligation Wts., Exp. 4/15/20 5,6 500 -- ---------------- Total Rights, Warrants and Certificates (Cost $481) 6
26 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------- STRUCTURED NOTES--8.3% - ---------------------------------------------------------------------------------------------------------------------- Citigroup Global Markets Holdings, Inc.: Brazilian Real Linked Unsec. Nts., 1.12%, 2/2/05 $ 9,500,000 $ 10,523,340 Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 3/15/07 10 [COP] 22,700,000,000 10,104,232 Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 3/15/07 [COP] 7,400,000,000 3,293,891 Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 31,110,000,000 13,389,519 Indonesia (Republic of) Recapitalization Unsec. Credit Linked Nts., 13.15%, 3/17/10 9,523,810 9,681,734 OAO Gazprom Russian Local Market Unsec. Credit Linked Nts., 15.462%, 11/8/05 10 4,406,270 5,206,901 Peruvian Sol Unsec. Linked Nts., 1.466%, 1/14/05 [PEN] 17,650,000 5,488,228 - ---------------------------------------------------------------------------------------------------------------------- Credit Suisse First Boston, Inc. (Nassau Branch): Turkey (Republic of) Credit Linked Nts., Series EM 868, 25.01%, 8/25/05 4,070,000 3,337,441 Turkey (Republic of) Credit Linked Nts., Series EM 872, 23.57%, 10/20/05 3 19,769,000 20,865,240 - ---------------------------------------------------------------------------------------------------------------------- Credit Suisse First Boston, Inc. (USA), U.S. Dollar/South African Rand Linked Nts., Series FBi 43, 1.44%, 5/23/22 2,100,000 2,043,300 - ---------------------------------------------------------------------------------------------------------------------- Deutsche Bank AG: Korea (Republic of) Credit Bonds, 1.56%, 6/20/09 7,225,000 7,296,528 OAO Gazprom I Credit Nts., 5.588%, 10/20/07 1,435,000 1,499,013 OAO Gazprom II Credit Nts., 5.338%, 4/20/07 1,435,000 1,494,249 Romania (The State of) 3 yr. Linked Nts., 12.89%, 9/27/07 [ROL] 56,400,000,000 1,707,480 Russian Federation Linked Nts., 15%, 3/11/05 [RUR] 141,112,000 5,044,144 Ukraine (Republic of) Credit Linked Nts., 6.541%, 8/5/11 7,740,000 7,964,460 - ---------------------------------------------------------------------------------------------------------------------- Lehman Brothers International: Turkey (Republic of) Treasury Bills Total Return Linked Nts., 25.70%, 1/26/05 9,368,029 7,741,739 Turkey (Republic of) Treasury Bills Total Return Linked Nts., 28.25%, 5/26/05 11,674,353 10,027,102 - ---------------------------------------------------------------------------------------------------------------------- Morgan Stanley Capital Services, Inc., Venezuela (Republic of) Credit Bonds, 5%, 9/20/09 3,260,000 3,401,622 - ---------------------------------------------------------------------------------------------------------------------- UBS AG, OAO Gazprom III Credit Nts., 4.705%, 7/5/06 3,590,000 3,731,149 ---------------- Total Structured Notes (Cost $130,985,113) 133,841,312
DATE STRIKE CONTRACTS - ---------------------------------------------------------------------------------------------------------------------- OPTIONS PURCHASED--0.0% - ---------------------------------------------------------------------------------------------------------------------- Japanese Yen Put 5,6 (Cost $978,607) 10/8/04 111.55JPY 14,995,000,000JPY 209,930
PRINCIPAL AMOUNT - ---------------------------------------------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--4.5% - ---------------------------------------------------------------------------------------------------------------------- Undivided interest of 4.98% in joint repurchase agreement (Principal Amount/ Value $1,446,038,000, with a maturity value of $1,446,110,302) with UBS Warburg LLC, 1.80%, dated 9/30/04, to be repurchased at $72,068,603 on 10/1/04, collateralized by Federal National Mortgage Assn., 5%, with a 3/1/34, value of $1,477,979,332 (Cost $72,065,000) $ 72,065,000 72,065,000 - ---------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $1,565,634,012) 99.8% 1,608,607,644 - ---------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.2 2,862,758 ----------------------------------- NET ASSETS 100.0% $ 1,611,470,402 ===================================
27 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS Principal amount, strike, contracts and exercise price are reported in U.S. Dollars, except for those denoted in the following currencies: ARP Argentine Peso AUD Australian Dollar COP Colombian Peso DKK Danish Krone EUR Euro FRF French Franc GBP British Pound Sterling HUF Hungarian Forint ITL Italian Lira JPY Japanese Yen MXN Mexican Nuevo Peso NZD New Zealand Dollar PEN Peruvian New Sol PLZ Polish Zloty ROL Romanian Leu RUR Russian Ruble SEK Swedish Krona 1. A sufficient amount of securities has been designated to cover outstanding foreign currency contracts. See Note 5 of Notes to Financial Statements. 2. A sufficient amount of liquid assets has been designated to cover outstanding written call options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM VALUE SUBJECT TO CALL DATES PRICE RECEIVED SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------ Japanese Yen (JPY) 14,995,000,000JPY 10/8/04 104.400JPY $ 1,075,791 $ -- New Zealand (Government of) Bonds, 7%, 7/15/09 7,110NZD 12/9/04 6.205NZD 21,095 27,100 -------------------------- $ 1,096,886 $ 27,100 ==========================
3. Represents the current interest rate for a variable or increasing rate security. 4. Issue is in default. See Note 1 of Notes to Financial Statements. 5. Non-income producing security. 6. Illiquid or restricted security. See Note 11 of Notes to Financial Statements. 7. Zero coupon bond reflects effective yield on the date of purchase. 8. 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 $3,270,188 or 0.20% of the Fund's net assets as of September 30, 2004. 9. When-issued security or forward commitment to be delivered and settled after September 30, 2004. See Note 1 of Notes to Financial Statements. 10. All or a portion of the security is held in collateralized accounts to cover initial margin requirements on open futures sales contracts with an aggregate market value of $14,790,443. See Note 6 of Notes to Financial Statements. 28 | OPPENHEIMER INTERNATIONAL BOND FUND DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS: GEOGRAPHIC HOLDINGS VALUE PERCENT - --------------------------------------------------------------------------- United States $ 305,921,582 19.0% Japan 110,576,563 6.9 Great Britain 107,408,198 6.7 Spain 65,984,963 4.1 Ireland 65,027,825 4.0 Greece 63,939,799 4.0 Austria 62,585,550 3.9 Portugal 60,335,119 3.8 Belgium 59,104,698 3.7 France 57,576,333 3.6 Brazil 54,311,547 3.4 Russia 53,348,867 3.3 Italy 51,437,033 3.2 The Netherlands 50,520,228 3.1 Finland 49,544,290 3.1 Australia 46,371,134 2.9 Germany 45,589,821 2.8 Turkey 43,867,372 2.7 Poland 43,721,193 2.7 Colombia 35,673,412 2.2 Argentina 27,878,794 1.7 Mexico 22,857,019 1.4 Venezuela 22,389,143 1.4 Indonesia 18,134,798 1.1 Peru 12,230,375 0.8 Korea, Republic of South 11,220,834 0.7 Denmark 10,584,071 0.7 Hungary 9,474,926 0.6 Sweden 9,471,761 0.6 Ukraine 7,964,460 0.5 New Zealand 4,983,816 0.3 Bulgaria 3,724,876 0.2 Supranational 3,560,254 0.2 Algeria 3,108,958 0.2 South Africa 2,043,300 0.1 Nigeria 1,877,936 0.1 Romania 1,707,480 0.1 El Salvador 1,220,550 0.1 Guatemala 801,450 0.1 Ivory Coast 527,316 -- -------------------------------- TOTAL $ 1,608,607,644 100.0% ================================ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 29 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF ASSETS AND LIABILITIES September 30, 2004 - --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------- ASSETS - ---------------------------------------------------------------------------------------------------------------------- Investments, at value (including securities loaned of approximately $151,985,000) (cost $1,565,634,012)--see accompanying statement of investments $ 1,608,607,644 - ---------------------------------------------------------------------------------------------------------------------- Collateral for securities loaned 155,142,317 - ---------------------------------------------------------------------------------------------------------------------- Unrealized appreciation on foreign currency contracts 3,355,102 - ---------------------------------------------------------------------------------------------------------------------- Receivables and other assets: Interest, dividends and principal paydowns 21,385,506 Shares of beneficial interest sold 13,734,037 Investments sold 535,563 Futures margins 131,127 Other 10,934 ---------------- Total assets 1,802,902,230 - ---------------------------------------------------------------------------------------------------------------------- LIABILITIES - ---------------------------------------------------------------------------------------------------------------------- Bank overdraft 89,592 - ---------------------------------------------------------------------------------------------------------------------- Bank overdraft-foreign currencies (cost $532,050) 543,718 - ---------------------------------------------------------------------------------------------------------------------- Options written, at value (premiums received $1,096,886)--see accompanying statement of investments 27,100 - ---------------------------------------------------------------------------------------------------------------------- Swaptions written, at value (premiums received $791,373) 1,045,863 - ---------------------------------------------------------------------------------------------------------------------- Return of collateral for securities loaned 155,142,317 - ---------------------------------------------------------------------------------------------------------------------- Unrealized depreciation on foreign currency contracts 7,967,087 - ---------------------------------------------------------------------------------------------------------------------- Unrealized depreciation on swap contracts 2,451,716 - ---------------------------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased (including $4,368,635 purchased on a when-issued basis or forward commitment) 9,502,430 Closed foreign currency contracts 9,759,128 Shares of beneficial interest redeemed 2,691,739 Distribution and service plan fees 908,429 Dividends 707,681 Transfer and shareholder servicing agent fees 244,871 Shareholder communications 103,808 Trustees' compensation 17,309 Other 229,040 ---------------- Total liabilities 191,431,828 - ---------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 1,611,470,402 ================
30 | OPPENHEIMER INTERNATIONAL BOND FUND
- ---------------------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - ---------------------------------------------------------------------------------------------------------------------- Par value of shares of beneficial interest $ 286,670 - ---------------------------------------------------------------------------------------------------------------------- Additional paid-in capital 1,512,692,070 - ---------------------------------------------------------------------------------------------------------------------- Accumulated net investment income 44,819,377 - ---------------------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 16,866,869 - ---------------------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 36,805,416 ---------------- NET ASSETS $ 1,611,470,402 ================ - ---------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - ---------------------------------------------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $1,177,628,477 and 209,317,185 shares of beneficial interest outstanding) $ 5.63 Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price) $ 5.91 - ---------------------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $167,621,429 and 29,885,779 shares of beneficial interest outstanding) $ 5.61 - ---------------------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $233,311,139 and 41,609,376 shares of beneficial interest outstanding) $ 5.61 - ---------------------------------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $18,641,018 and 3,320,854 shares of beneficial interest outstanding) $ 5.61 - ---------------------------------------------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $14,268,339 and 2,536,575 shares of beneficial interest outstanding) $ 5.63
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 31 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF OPERATIONS For the Year Ended September 30, 2004 - --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME - ---------------------------------------------------------------------------------------------------------------------- Interest $ 37,536,465 - ---------------------------------------------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $75,375) 638,192 - ---------------------------------------------------------------------------------------------------------------------- Portfolio lending fees 43,240 ----------------- Total investment income 38,217,897 - ---------------------------------------------------------------------------------------------------------------------- EXPENSES - ---------------------------------------------------------------------------------------------------------------------- Management fees 7,484,558 - ---------------------------------------------------------------------------------------------------------------------- Distribution and service plan fees: Class A 1,987,821 Class B 1,529,196 Class C 1,703,454 Class N 53,586 - ---------------------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 1,450,702 Class B 387,581 Class C 303,793 Class N 30,206 Class Y 3 - ---------------------------------------------------------------------------------------------------------------------- Shareholder communications: Class A 127,694 Class B 45,892 Class C 26,433 Class N 2,175 - ---------------------------------------------------------------------------------------------------------------------- Custodian fees and expenses 344,485 - ---------------------------------------------------------------------------------------------------------------------- Trustees' compensation 31,233 - ---------------------------------------------------------------------------------------------------------------------- Other 143,861 ----------------- Total expenses 15,652,673 Less reduction to custodian expenses (28,349) Less payments and waivers of expenses (17,908) ----------------- Net expenses 15,606,416 - ---------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME 22,611,481
32 | OPPENHEIMER INTERNATIONAL BOND FUND
- ---------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - ---------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on: Investments (including premiums on options exercised) $ 12,632,724 Closing of futures contracts (1,812,061) Closing and expiration of option contracts written 2,688,999 Closing and expiration of swaption contracts (226,999) Foreign currency transactions 52,057,715 Swap contracts 12,508,030 ----------------- Net realized gain 77,848,408 - ---------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation on: Investments 9,901,970 Translation of assets and liabilities denominated in foreign currencies (8,651,844) Futures contracts (880,170) Option contracts 451,883 Swaption contracts (563,469) Swap contracts (2,492,218) ----------------- Net change in unrealized appreciation (2,233,848) - ---------------------------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 98,226,041 =================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 33 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2004 2003 - ---------------------------------------------------------------------------------------------------------------------- OPERATIONS - ---------------------------------------------------------------------------------------------------------------------- Net investment income $ 22,611,481 $ 17,157,924 - ---------------------------------------------------------------------------------------------------------------------- Net realized gain 77,848,408 51,584,451 - ---------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (2,233,848) 37,514,665 ------------------------------------ Net increase in net assets resulting from operations 98,226,041 106,257,040 - ---------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - ---------------------------------------------------------------------------------------------------------------------- Dividends from net investment income: Class A (35,086,382) (11,257,243) Class B (6,602,563) (3,817,825) Class C (6,093,022) (1,988,035) Class N (397,275) (94,512) Class Y (2,820) -- - ---------------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - ---------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from beneficial interest transactions: Class A 713,652,173 193,984,034 Class B 25,122,862 11,875,148 Class C 136,111,001 39,379,694 Class N 13,528,377 2,842,914 Class Y 14,179,799 -- - ---------------------------------------------------------------------------------------------------------------------- NET ASSETS - ---------------------------------------------------------------------------------------------------------------------- Total increase 952,638,191 337,181,215 - ---------------------------------------------------------------------------------------------------------------------- Beginning of period 658,832,211 321,650,996 ------------------------------------ End of period (including accumulated net investment income of $44,819,377 and $16,341,168, respectively) $ 1,611,470,402 $ 658,832,211 ====================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 34 | OPPENHEIMER INTERNATIONAL BOND FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
CLASS A YEAR ENDED SEPTEMBER 30, 2004 2003 2002 2001 2000 - -------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 5.33 $ 4.38 $ 3.95 $ 4.19 $ 4.23 - -------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .13 .20 .24 .30 .45 Net realized and unrealized gain (loss) .47 .95 .41 (.24) (.08) ------------------------------------------------------------------------------- Total from investment operations .60 1.15 .65 .06 .37 - -------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.30) (.20) (.19) -- (.21) Tax return of capital distribution -- -- (.03) (.30) (.20) ------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.30) (.20) (.22) (.30) (.41) - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 5.63 $ 5.33 $ 4.38 $ 3.95 $ 4.19 =============================================================================== - -------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 1 11.56% 26.67% 16.78% 1.40% 8.93% - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 1,177,628 $ 429,283 $ 181,456 $ 118,733 $ 100,928 - -------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 811,608 $ 285,391 $ 134,912 $ 117,000 $ 110,968 - -------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 2 Net investment income 2.19% 3.94% 5.16% 7.10% 10.23% Total expenses 1.13% 1.22% 1.37% 1.38% 1.31% Expenses after payments and waivers and reduction to custodian expenses N/A 3,4 N/A 3 N/A 3 N/A 3 1.29% - -------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 133% 341% 372% 377% 288%
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%. 4. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 35 | OPPENHEIMER INTERNATIONAL BOND FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS B YEAR ENDED SEPTEMBER 30, 2004 2003 2002 2001 2000 - --------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 5.31 $ 4.37 $ 3.94 $ 4.17 $ 4.22 - --------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .08 .16 .21 .26 .42 Net realized and unrealized gain (loss) .47 .94 .40 (.22) (.09) -------------------------------------------------------------------------------- Total from investment operations .55 1.10 .61 .04 .33 - --------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.25) (.16) (.15) -- (.20) Tax return of capital distribution -- -- (.03) (.27) (.18) -------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.25) (.16) (.18) (.27) (.38) - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 5.61 $ 5.31 $ 4.37 $ 3.94 $ 4.17 ================================================================================ - --------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 1 10.66% 25.48% 15.90% 0.85% 7.94% - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 167,621 $ 134,661 $ 100,049 $ 84,427 $ 98,272 - --------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 153,117 $ 119,232 $ 85,244 $ 93,455 $ 115,116 - --------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 2 Net investment income 1.40% 3.20% 4.41% 6.40% 9.63% Total expenses 1.98% 2.03% 2.14% 2.14% 2.05% Expenses after payments and waivers and reduction to custodian expenses N/A 3,4 N/A 3 N/A 3 N/A 3 2.03% - --------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 133% 341% 372% 377% 288%
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%. 4. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 36 | OPPENHEIMER INTERNATIONAL BOND FUND
CLASS C YEAR ENDED SEPTEMBER 30, 2004 2003 2002 2001 2000 - --------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 5.31 $ 4.37 $ 3.94 $ 4.17 $ 4.22 - --------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .09 .16 .21 .26 .41 Net realized and unrealized gain (loss) .46 .94 .40 (.22) (.08) -------------------------------------------------------------------------------- Total from investment operations .55 1.10 .61 .04 .33 - --------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.25) (.16) (.15) -- (.19) Tax return of capital distribution -- -- (.03) (.27) (.19) -------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.25) (.16) (.18) (.27) (.38) - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 5.61 $ 5.31 $ 4.37 $ 3.94 $ 4.17 ================================================================================ - --------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 1 10.75% 25.48% 15.90% 0.85% 7.95% - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 233,311 $ 90,248 $ 38,865 $ 25,221 $ 27,663 - --------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 170,796 $ 63,198 $ 28,635 $ 27,125 $ 30,710 - --------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 2 Net investment income 1.46% 3.15% 4.37% 6.39% 9.55% Total expenses 1.88% 2.02% 2.14% 2.14% 2.05% Expenses after payments and waivers and reduction to custodian expenses N/A 3,4 N/A 3 N/A 3 N/A 3 2.03% - --------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 133% 341% 372% 377% 288%
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%. 4. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 37 | OPPENHEIMER INTERNATIONAL BOND FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS N YEAR ENDED SEPTEMBER 30, 2004 2003 2002 2001 1 - ------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 5.32 $ 4.37 $ 3.95 $ 4.23 - ------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .12 .18 .21 .16 Net realized and unrealized gain (loss) .45 .95 .42 (.28) ----------------------------------------------------------------- Total from investment operations .57 1.13 .63 (.12) - ------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.28) (.18) (.18) -- Tax return of capital distribution -- -- (.03) (.16) ----------------------------------------------------------------- Total dividends and/or distributions to shareholders (.28) (.18) (.21) (.16) - ------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 5.61 $ 5.32 $ 4.37 $ 3.95 ================================================================= - ------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 2 11.00% 26.31% 16.23% (2.88)% - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $ 18,641 $ 4,640 $ 1,280 $ 109 - ------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $ 10,769 $ 2,653 $ 297 $ 34 - ------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 3 Net investment income 1.83% 3.56% 4.87% 6.56% Total expenses 1.49% 4,5 1.57% 4 1.57% 4 1.39% 4 - ------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 133% 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, 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%. 5. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 38 | OPPENHEIMER INTERNATIONAL BOND FUND CLASS Y PERIOD ENDED SEPTEMBER 30, 2004 1 - --------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------- Net asset value, beginning of period $ 5.58 - --------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income -- 2 Net realized and unrealized gain .05 -------------- Total from investment operations .05 - --------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- 2 Tax return of capital distribution -- -------------- Total dividends and/or distributions to shareholders -- - --------------------------------------------------------------------------- Net asset value, end of period $ 5.63 ============== - --------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 0.92% - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 14,268 - --------------------------------------------------------------------------- Average net assets (in thousands) $ 7,086 - --------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 4.84% Total expenses 1.17% 5 - --------------------------------------------------------------------------- Portfolio turnover rate 133% 1. For the period from September 27, 2004 (inception of offering) to September 30, 2004. 2. Less than $0.005 per share. 3. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. Reduction to custodian expenses less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 39 | 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, Class N and Class Y shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. Class Y shares are sold to certain institutional investors without either a front-end sales charge or a CDSC, however, the institutional investor may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ by minor amounts due to each class having its own expenses directly attributable to that class. Class A, B, C and N have separate distribution and/or service plans. No such plan has been adopted for Class Y shares. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Securities listed or traded on National Stock Exchanges or other domestic or foreign exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. Securities traded on NASDAQ are valued based on the closing price provided by NASDAQ prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing bid and asked prices, and if not, at the closing bid price. Corporate, government and municipal debt instruments having a remaining maturity in excess of 60 days and all mortgage-backed securities will be valued at the mean between the "bid" and "asked" prices. Securities may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign and domestic securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund's assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board of Trustees. Short-term "money market type" debt securities with 40 | OPPENHEIMER INTERNATIONAL BOND FUND remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- STRUCTURED NOTES. The Fund invests in structured notes whose market values, interest rates and/or redemption prices are linked to the performance of underlying foreign currencies, interest rate spreads, stock market indices, prices of individual securities, commodities or other financial instruments or the occurrence of other specific events. The structured notes are often leveraged, increasing the volatility of each note's market value relative to the change in the underlying linked financial element or event. 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, 2004, the market value of these securities comprised 8.3% of the Fund's net assets and resulted in unrealized gains of $2,856,199. - -------------------------------------------------------------------------------- SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment for securities that have been purchased by the Fund on a when-issued basis or forward commitment can take place up to ten days or more after the trade date. Normally the settlement date occurs within six months after the trade date; however, the Fund may, from time to time, purchase securities whose settlement date extends six months or more beyond trade date. During this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The Fund maintains internally designated assets with a market value equal to or greater than the amount of its purchase commitments. The purchase of securities on a when-issued basis or forward commitment may increase the volatility of the Fund's net asset value to the extent the Fund executes such transactions while remaining substantially fully invested. The Fund may also sell securities that it purchased on a when-issued basis or forward commitment prior to settlement of the original purchase. As of September 30, 2004, the Fund had purchased $4,368,635 of securities on a when-issued basis or forward commitment. - -------------------------------------------------------------------------------- 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, 2004, securities with an aggregate market value of $16,500,864, representing 1.02% 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 as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open. 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. Foreign exchange rates may be 41 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued valued primarily using dealer supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. These balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders, therefore, no federal income or excise tax provision is required. 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. 42 | OPPENHEIMER INTERNATIONAL BOND FUND 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 1,2,3,4 TAX PURPOSES --------------------------------------------------------------------------- $ 63,726,906 $-- $985,396 $33,373,297 1. As of September 30, 2004, the Fund had $629,834 of post-October losses available to offset future realized capital gains, if any. Such losses, if unutilized, will expire in 2013. 2. The Fund had $355,562 of straddle losses which were deferred. 3. During the fiscal year ended September 30, 2004, the Fund utilized $3,556,158 of capital loss carryforward to offset capital gains realized in that fiscal year. 4. During the fiscal year ended September 30, 2003, the Fund utilized $34,133,620 of capital loss carryforward to offset capital gains realized in that fiscal year. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund. Accordingly, the following amounts have been reclassified for September 30, 2004. Net assets of the Fund were unaffected by the reclassifications. REDUCTION TO REDUCTION TO ACCUMULATED NET INCREASE TO ACCUMULATED NET REALIZED GAIN PAID-IN CAPITAL INVESTMENT LOSS ON INVESTMENTS 5 ------------------------------------------------------------- $ 4,405,760 $54,048,790 $58,454,550 5. $2,931,783 was distributed in connection with Fund share redemptions. The tax character of distributions paid during the years ended September 30, 2004 and September 30, 2003 was as follows: YEAR ENDED YEAR ENDED SEPTEMBER 30, 2004 SEPTEMBER 30, 2003 ------------------------------------------------------------------- Distributions paid from: Ordinary income $48,182,062 $17,157,615 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, 2004 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. 43 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued Federal tax cost of securities $ 1,566,262,346 Federal tax cost of other investments 238,544,957 ---------------- Total federal tax cost $ 1,804,807,303 ================ Gross unrealized appreciation $ 56,675,862 Gross unrealized depreciation (23,302,565) ---------------- Net unrealized appreciation $ 33,373,297 ================ - -------------------------------------------------------------------------------- TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred compensation plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. Deferral of trustees' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance to the Plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income distributions, if any, are declared daily and paid monthly. Capital gain distributions, if any, are declared and paid annually. - -------------------------------------------------------------------------------- INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- EXPENSE OFFSET ARRANGEMENT. The reduction of custodian fees, if applicable, represents earnings on cash balances maintained by the Fund. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of 44 | OPPENHEIMER INTERNATIONAL BOND FUND 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, 2004 1 YEAR ENDED SEPTEMBER 30, 2003 SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------------------ CLASS A Sold 172,839,291 $ 957,396,128 66,619,226 $ 327,783,210 Dividends and/or distributions reinvested 5,072,488 27,463,043 1,800,877 8,831,110 Redeemed (49,156,351) (271,206,998) (29,286,342) (142,630,286) -------------------------------------------------------------------- Net increase 128,755,428 $ 713,652,173 39,133,761 $ 193,984,034 ==================================================================== - ------------------------------------------------------------------------------------------------ CLASS B Sold 14,676,405 $ 80,808,899 14,881,963 $ 71,989,537 Dividends and/or distributions reinvested 944,780 5,057,584 560,961 2,725,698 Redeemed (11,077,428) (60,743,621) (13,006,585) (62,840,087) -------------------------------------------------------------------- Net increase 4,543,757 $ 25,122,862 2,436,339 $ 11,875,148 ==================================================================== - ------------------------------------------------------------------------------------------------ CLASS C Sold 30,576,433 $ 168,801,488 12,729,289 $ 62,063,352 Dividends and/or distributions reinvested 830,062 4,457,967 292,444 1,431,897 Redeemed (6,789,922) (37,148,454) (4,932,108) (24,115,555) -------------------------------------------------------------------- Net increase 24,616,573 $ 136,111,001 8,089,625 $ 39,379,694 ==================================================================== - ------------------------------------------------------------------------------------------------ CLASS N Sold 2,975,732 $ 16,429,938 682,672 $ 3,342,355 Dividends and/or distributions reinvested 66,020 357,127 15,660 77,211 Redeemed (593,448) (3,258,688) (118,748) (576,652) -------------------------------------------------------------------- Net increase 2,448,304 $ 13,528,377 579,584 $ 2,842,914 ==================================================================== - ------------------------------------------------------------------------------------------------ CLASS Y Sold 2,536,075 $ 14,176,984 -- $ -- Dividends and/or distributions reinvested 500 2,815 -- -- Redeemed -- -- -- -- -------------------------------------------------------------------- Net increase 2,536,575 $ 14,179,799 -- $ -- ====================================================================
1. For the year ended September 30, 2004, for Class A, B, C and N shares and for the period from September 27, 2004 (inception of offering) to September 30, 2004 for Class Y shares. 45 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than U.S. government obligations and short-term obligations, for the year ended September 30, 2004, were $1,506,398,131 and $1,057,381,523, respectively. There were purchases of $566,162,511 and sales of $236,279,983 of U.S. government and government agency obligations for the year ended September 30, 2004. - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee at an annual rate of 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. - -------------------------------------------------------------------------------- ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for preparing and filing the Fund's tax returns. - -------------------------------------------------------------------------------- TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a per account fee. For the year ended September 30, 2004, the Fund paid $2,019,276 to OFS for services to the Fund. Additionally, Class Y shares are subject to minimum fees of $10,000 for assets of $10 million or more. The Class Y shares are subject to the minimum fees in the event that the per account fee does not equal or exceed the applicable minimum fees. OFS may voluntarily waive the minimum fees. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. - -------------------------------------------------------------------------------- SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions quarterly for providing personal services and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares to compensate the Distributor for its services in connection with the distribution of those shares and servicing accounts. Under the plans, the Fund pays the Distributor an annual asset- 46 | OPPENHEIMER INTERNATIONAL BOND FUND based sales charge of 0.75% per year on Class B and Class C shares and 0.25% per year on Class N shares. The Distributor also receives a service fee of up to 0.25% per year under each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the plan at September 30, 2004 for Class B, Class C and Class N shares were $6,272,974, $3,468,952 and $130,925, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - ----------------------------------------------------------------------------------------------------------- September 30, 2004 $822,275 $27,674 $353,364 $116,729 $1,248
- -------------------------------------------------------------------------------- PAYMENTS AND WAIVERS OF EXPENSES. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. During the year ended September 30, 2004, OFS waived $7,603, $7,798, $2,257 and $250 for Class A, Class B, Class C and Class N shares, respectively. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY CONTRACTS A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts to settle specific purchases or sales of securities denominated in a foreign currency and for protection from adverse exchange rate fluctuation. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using prevailing foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. 47 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY CONTRACTS Continued The Fund may realize a gain or loss upon the closing or settlement of the foreign transaction. Contracts closed or settled with the same broker are recorded as net realized gains or losses. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. As of September 30, 2004, the Fund had outstanding foreign currency contracts as follows:
CONTRACT VALUATION EXPIRATION AMOUNT AS OF UNREALIZED UNREALIZED CONTRACT DESCRIPTION DATES (000s) SEPT. 30, 2004 APPRECIATION DEPRECIATION - ----------------------------------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE Argentine Peso (ARP) 1/18/05-2/2/05 32,660ARP $ 10,675,380 $ 1,118 $ 13,900 Australian Dollar (AUD) 10/18/04 17,195AUD 12,490,856 450,745 -- Brazilian Real (BRR) 12/14/04-10/13/05 69,174BRR 23,396,425 731,427 -- British Pound Sterling (GBP) 10/18/04 7,160GBP 12,954,841 105,505 -- Columbian Peso (COP) 3/16/05 16,492,230COP 6,143,108 342,113 -- Euro (EUR) 11/16/04 44,415EUR 55,221,056 834,888 -- Japanese Yen (JPY) 3/15/05-4/1/05 32,006,300JPY 294,007,602 487,523 5,593,956 New Zealand Dollar (NZD) 10/18/04 19,895NZD 13,448,884 333,006 -- Polish Zloty (PLZ) 12/27/04 10,297PLZ 2,895,764 12,823 -- South African Rand (ZAR) 10/25/04 80,940ZAR 12,484,038 -- 13,646 ---------------------------- 3,299,148 5,621,502 ---------------------------- CONTRACTS TO SELL British Pound Sterling (GBP) 10/4/04-11/18/04 31,690GBP 57,377,355 -- 670,206 Euro (EUR) 11/17/04-12/27/04 35,617EUR 44,282,233 -- 1,194,961 Japanese Yen (JPY) 10/12/04-11/18/04 4,242,000JPY 38,600,909 55,954 315,166 Mexican Nuevo Peso (MXN) 10/26/04 31,210MXN 2,729,619 -- 20,888 Swiss Franc (CHF) 10/18/04 16,910CHF 13,589,755 -- 144,364 ---------------------------- 55,954 2,345,585 ---------------------------- Total unrealized appreciation and depreciation $ 3,355,102 $ 7,967,087 ============================
- -------------------------------------------------------------------------------- 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 stocks and bonds or interest rates. The Fund may also buy or write put or call options on these futures contracts. The Fund generally sells futures contracts as a hedge against increases in interest rates and decreases in market value of portfolio securities. The Fund may also purchase futures 48 | OPPENHEIMER INTERNATIONAL BOND FUND contracts to gain exposure to market changes as it may be more efficient or cost effective than actually buying securities. Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin) in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or has expired. Cash held by the broker to cover initial margin requirements on open futures contracts is noted in the Statement of Assets and Liabilities. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. The Statement of Assets and Liabilities reflects a receivable and/or payable for the daily mark to market for variation margin. Realized gains and losses are reported in the Statement of Operations as the closing and expiration of futures contracts. The net change in unrealized appreciation and depreciation is reported 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, 2004, the Fund had outstanding futures contracts as follows:
VALUATION UNREALIZED EXPIRATION NUMBER OF AS OF APPRECIATION CONTRACT DESCRIPTION DATES CONTRACTS SEPT. 30, 2004 (DEPRECIATION) - ------------------------------------------------------------------------------------------------- CONTRACTS TO SELL CAC-40 10 Index 12/17/04 68 $ 3,086,738 $ 2,114 DAX Index 12/17/04 42 5,105,803 79,656 FTSE 100 Index 12/17/04 65 5,422,850 (21,790) Japan (Government of) Bonds, 10 yr. 12/9/04 25 31,352,543 (445,395) Japan (Government of) Bonds, 10 yr. 12/8/04 23 2,885,897 (45,367) Nikkei 225 Index 12/9/04 60 5,939,190 226,345 --------------- $ (204,437) ===============
- -------------------------------------------------------------------------------- 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. 49 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 7. OPTION ACTIVITY Continued 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. Contracts 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 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, 2004 was as follows:
CALL OPTIONS PUT OPTIONS --------------------------------- -------------------------------- PRINCIPAL/ PRINCIPAL/ NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF CONTRACTS PREMIUMS CONTRACTS PREMIUMS - ---------------------------------------------------------------------------------------------------- Options outstanding as of September 30, 2003 9,887,303,797 $ 1,566,192 2,163,660,000 $ 414,161 Options written 15,096,642,110 3,363,750 3,870,000,000 666,309 Options closed or expired (136,183,797) (2,789,693) (6,033,660,000) (1,080,470) Options exercised (9,852,755,000) (1,043,363) -- -- -------------------------------------------------------------------- Options outstanding as of September 30, 2004 14,995,007,110 $ 1,096,886 -- $ -- ====================================================================
- -------------------------------------------------------------------------------- 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 unrealized gain (loss), 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. 50 | OPPENHEIMER INTERNATIONAL BOND FUND As of September 30, 2004, the Fund had entered into the following interest rate swap agreements:
FIXED RATE FLOATING RATE PAID BY RECEIVED BY THE FUND AT THE FUND AT UNREALIZED SWAP NOTIONAL SEPT. 30, SEPT. 30, FLOATING TERMINATION APPRECIATION COUNTERPARTY PRINCIPAL 2004 2004 RATE INDEX DATES (DEPRECIATION) - ---------------------------------------------------------------------------------------------------------------------------- Citigroup Global Markets 90 Day Holdings, Inc. 333,000,000TWD 2.02% 1.057% CPTW Rate 3/4/09 $ 95,928 Citigroup Global Markets 90 Day Holdings, Inc. 333,000,000TWD 2.02 1.112 CPTW Rate 3/23/09 109,241 Citigroup Global Markets Three-Month Holdings, Inc., LIBOR BBA 10 yr. 30,000,000 4.96 1.18 Rate 5/6/14 1,592,903 Deutsche Six-Month Bank AG 500,000,000INR 4.87 4.547 MIFOR Rate 3/22/09 539,025 Deutsche Bank AG, 5 yr. 454,000,000INR 4.83 4.50 IRS Rate 1/14/09 443,413 Deutsche 90 Day Bank AG, 5yr. 187,000,000TWD 1.024 1.02 CPTW Rate 8/19/09 (1,434) Three-Month Deutsche LIBOR BBA Bank AG, 10 yr. 36,000,000 5.32 1.68 Rate 5/12/14 3,072,327 JPMorgan Three-Month Chase Bank 13,500,000 3.342 1.289999 LIBOR flat 3/31/08 (91,996) JPMorgan Six-Month Chase Bank 8,000,000 1.289988 2.92 LIBOR flat 5/13/08 (75,512) JPMorgan Six-Month Chase Bank 3,880,000EUR 3.135 2.08 LIBOR flat 7/14/08 (400) JPMorgan Six-Month Chase Bank 1,080,000,000HUF 7.00 7.00 LIBOR flat 7/14/08 (517,245) JPMorgan Six-Month Chase Bank 231,500,000 1.17 3.535 LIBOR flat 12/23/08 1,408,585 JPMorgan Three-Month Chase Bank 66,000,000ZAR 9.78 9.78 LIBOR flat 2/20/11 344,867 JPMorgan Three-Month Chase Bank 66,000,000ZAR 9.68 9.68 LIBOR flat 2/18/11 295,586 Morgan Stanley Capital Services, Six-Month Inc. 147,000,000EUR 3.064 2.243 EURIBOR 12/3/05 (4,582,506) --------------- $ 2,632,782 ===============
51 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 8. INTEREST RATE SWAP CONTRACTS Continued Notional amount is reported in U.S. Dollars, except for those denoted in the following currencies. Index abbreviations and currencies are as follows: EUR Euro HUF Hungary Forints INR Indian Rupee TWD New Taiwan Dollar ZAR South African Rand CPTW Bloomberg Taiwan Secondary Commercial Papers EURIBOR Euro Interbank Offered Rate IRS India Swap Composites LIBOR London-Interbank Offered Rate LIBOR BBA London-Interbank Offered Rate British Bankers Association MIFOR Mumbai Interbank Forward Offer Rates - -------------------------------------------------------------------------------- 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 unrealized gain (loss), 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). The Fund pays an annual interest fee on the notional amount in exchange for the counterparty paying in a potential credit event. During the year ended September 30, 2004, the Fund entered into transactions to hedge credit risk. Information regarding the credit swaps is as follows:
VALUATION UNREALIZED EXPIRATION NOTIONAL AS OF APPRECIATION CONTRACT DESCRIPTION DATES AMOUNT SEPT. 30, 2004 (DEPRECIATION) - ----------------------------------------------------------------------------------------------- Deutsche Bank AG: Export-Import Bank of Korea Credit Bonds 6/20/09 $ 1,440,000 $ (11,952) $ (11,952) Korea Deposit Insurance Corp. Credit Bonds 6/20/09 1,440,000 (12,096) (12,096) Korea Development Bank Credit Bonds 6/20/09 1,440,000 (11,376) (11,376) Korea Electric Power Corp. Credit Bonds 6/20/09 1,440,000 (12,528) (12,528) Panama (Republic of) Credit Nts. 5/13/08 1,835,000 (91,281) (91,281) Philippines (Republic of) 10 yr. Credit Bonds 7/25/13 2,335,000 23,530 23,530 Samsung Electronic Co. Ltd. Credit Bonds 6/20/09 1,440,000 (10,800) (10,800) Turkey (Republic of) 2 yr. Credit Nts. 5/7/06 3,070,000 (146,682) (146,682)
52 | OPPENHEIMER INTERNATIONAL BOND FUND
VALUATION UNREALIZED EXPIRATION NOTIONAL AS OF APPRECIATION CONTRACT DESCRIPTION DATES AMOUNT SEPT. 30, 2004 (DEPRECIATION) - ----------------------------------------------------------------------------------------------- Deutsche Bank AG: Continued Turkey (Republic of) 5 yr. Credit Nts. 5/7/09 $ 1,445,000 $ 325,859 $ 325,859 United Mexican States Credit Bonds 9/20/13 2,790,000 (119,387) (119,387) Venezuela (Republic of) Credit Bonds 8/20/14 2,950,000 (308,796) (308,796) Venezuela (Republic of) Credit Bonds 9/28/09 6,960,000 (47,890) (47,890) Venezuela (Republic of) Credit Bonds 10/20/09 11,475,000 (3,482) (3,482) - ----------------------------------------------------------------------------------------------- JP Morgan Chase Bank: Chile (Republic of) Credit Bonds 12/20/13 8,500,000 (329,067) (329,067) Export-Import Bank of Korea Credit Bonds 6/20/09 720,000 (12,250) (12,250) Inter-American Development Bank Credit Bonds 12/20/13 15,910,000 (11,794) (11,794) Jordan (Kingdom of) Credit Nts. 6/6/06 390,000 (2,840) (2,840) Korea Deposit Insurance Corp. Credit Bonds 6/20/09 720,000 (12,257) (12,257) Korea Development Bank Credit Bonds 6/20/09 720,000 (11,930) (11,930) Korea Electric Power Co. Credit Bonds 6/20/09 720,000 (13,391) (13,391) Russian Federation Credit Bonds 10/9/13 550,000 7,789 7,789 Samsung Electronics Co. Ltd. Credit Bonds 6/20/09 720,000 (12,285) (12,285) - ----------------------------------------------------------------------------------------------- Lehman Brothers Special Financing, Inc.: Brazil (Federal Republic of) Credit Bonds 8/20/09 5,120,000 (456,613) (456,613) Brazil (Federal Republic of) Credit Bonds 10/20/09 840,000 1,688 1,688 Venezuela (Republic of) Credit Bonds 3/5/08 840,000 (12,953) (12,953) - ----------------------------------------------------------------------------------------------- Morgan Stanley Capital Services, Inc.: Brazil (Federal Republic of) Credit Bonds 8/20/09 5,770,000 (471,117) (471,117) Brazil (Federal Republic of) Credit Bonds 8/20/09 5,770,000 (483,389) (483,389) Philippines (Republic of) Credit Bonds 6/20/09 5,000,000 (125,353) (125,353) Philippines (Republic of) Credit Bonds 6/20/09 2,500,000 (67,701) (67,701) Philippines (Republic of) Credit Bonds 6/20/09 5,000,000 (155,499) (155,499)
53 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 9. CREDIT SWAP CONTRACTS Continued
VALUATION UNREALIZED EXPIRATION NOTIONAL AS OF APPRECIATION CONTRACT DESCRIPTION DATES AMOUNT SEPT. 30, 2004 (DEPRECIATION) - ----------------------------------------------------------------------------------------------- Morgan Stanley Capital Services, Inc.: Continued Turkey (Republic of) 2 yr. Credit Nts. 5/8/06 $ 3,070,000 $ (160,563) $ (160,563) Turkey (Republic of) 5 yr. Credit Nts. 5/8/09 1,445,000 165,652 165,652 Venezuela (Republic of) Credit Bonds 2/20/14 2,135,000 (447,650) (447,650) Venezuela (Republic of) Credit Bonds 8/20/06 4,890,000 182,963 182,963 Venezuela (Republic of) Credit Bonds 8/20/09 2,445,000 (171,844) (171,844) Venezuela (Republic of) Credit Bonds 7/20/14 5,000,000 (862,701) (862,701) - ----------------------------------------------------------------------------------------------- UBS AG: Venezuela (Republic of) Credit Bonds 6/20/14 6,040,000 (1,184,681) (1,184,681) Venezuela (Republic of) Credit Bonds 8/20/06 3,260,000 (117,954) (117,954) Venezuela (Republic of) Credit Bonds 8/20/09 1,630,000 108,123 108,123 --------------- $ (5,084,498) ===============
- -------------------------------------------------------------------------------- 10. SWAPTION ACTIVITY 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. Written swaption activity for the year ended September 30, 2004 was as follows: NOTIONAL AMOUNT OF AMOUNT PREMIUMS ------------------------------------------------------------------ Swaptions outstanding as of September 30, 2003 $ 79,335,000 $ 694,082 Swaptions written 168,910,000 1,451,074 Swaptions closed or expired (135,300,000) (1,353,783) --------------------------------- Swaptions outstanding as of September 30, 2004 $ 112,945,000 $ 791,373 ================================= 54 | OPPENHEIMER INTERNATIONAL BOND FUND As of September 30, 2004, the Fund had entered into the following swaption contracts:
NOTIONAL EXPIRATION EXERCISE PREMIUM VALUE SWAPTIONS AMOUNT DATES PRICE RECEIVED SEE NOTE 1 - --------------------------------------------------------------------------------------------------- Deutsche Bank AG 62,395,000GBP 11/4/04 5.997% $ 291,178 $ 542,058 Lehman Brothers International 50,550,000AUD 12/30/04 5.150 500,195 503,805 ------------------------- $ 791,373 $ 1,045,863 =========================
Notional amount is denoted in the following currencies: AUD Australian Dollar GBP British Pound Sterling - -------------------------------------------------------------------------------- 11. ILLIQUID OR RESTRICTED SECURITIES AND CURRENCY As of September 30, 2004, investments in securities included issues that are illiquid or restricted. Restricted securities are purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Trustees as reflecting fair value. A security may also be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund will not invest more than 10% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid or restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limitation. The aggregate value of illiquid or restricted securities subject to this limitation as of September 30, 2004 was $29,998,722, which represents 1.86% of the Fund's net assets, of which $544,667 is considered restricted. Information concerning restricted securities and currency is as follows:
ACQUISITION VALUATION AS OF UNREALIZED SECURITY DATE COST SEPTEMBER 30, 2004 DEPRECIATION - --------------------------------------------------------------------------------------------------- CURRENCY Argentine Peso 9/13/04 $548,747 $544,667 $4,080
- -------------------------------------------------------------------------------- 12. SECURITIES LENDING The Fund lends portfolio securities from time to time in order to earn additional income. In return, the Fund receives collateral in the form of US Treasury obligations or cash, against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the funds and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund could experience delays and cost in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. The Fund retains a portion of the interest earned from the collateral. The Fund also continues to receive interest or dividends paid on the securities loaned. As of September 30, 2004, the Fund had on loan securities valued at approximately $151,985,000. Cash of $155,142,317 was received as collateral for the loans, and has been invested in approved instruments. 55 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 13. LITIGATION Six complaints have been filed as putative derivative and class actions against the Manager, OFS and the Distributor (collectively, "OppenheimerFunds"), as well as 51 of the Oppenheimer funds (collectively, the "Funds") including this Fund, and nine Directors/ Trustees of certain of the Funds other than this Fund (collectively, the "Directors/Trustees"). The complaints allege that the Manager charged excessive fees for distribution and other costs, improperly used assets of the Funds in the form of directed brokerage commissions and 12b-1 fees to pay brokers to promote sales of the Funds, and failed to properly disclose the use of Fund assets to make those payments in violation of the Investment Company Act of 1940 and the Investment Advisers Act of 1940. The complaints further allege that by permitting and/or participating in those actions, the Directors/Trustees breached their fiduciary duties to Fund shareholders under the Investment Company Act of 1940 and at common law. By order dated October 27, 2004, these six actions, and future related actions, were consolidated by the U.S. District Court for the Southern District of New York into a single consolidated proceeding in contemplation of the filing of a superceding consolidated and amended complaint. OppenheimerFunds believes that it is premature to render any opinion as to the likelihood of an outcome unfavorable to them, the Funds or the Directors/Trustees and that no estimate can yet be made with any degree of certainty as to the amount or range of any potential loss. However, OppenheimerFunds, the Funds and the Directors/Trustees believe that the allegations contained in the complaints are without merit and intend to defend these lawsuits vigorously. 56 | OPPENHEIMER INTERNATIONAL BOND FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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, 2004, 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 presented. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. 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, 2004, 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, 2004, 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 presented, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Denver, Colorado November 16, 2004 57 | OPPENHEIMER INTERNATIONAL BOND FUND FEDERAL INCOME TAX INFORMATION Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In early 2005, if applicable, shareholders of record will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 2004. 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, 2004 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. $468,750 of the Fund's fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2005, 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. 58 | OPPENHEIMER INTERNATIONAL BOND FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file 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 Fund's Form N-PX filing is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 59 | OPPENHEIMER INTERNATIONAL BOND FUND TRUSTEES AND OFFICERS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- NAME, POSITION(S) HELD PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD WITH FUND, LENGTH OF BY TRUSTEE; NUMBER OF PORTFOLIOS IN FUND COMPLEX CURRENTLY OVERSEEN BY TRUSTEE SERVICE, AGE INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, TRUSTEES CO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. WILLIAM L. ARMSTRONG, Chairman of the following private mortgage banking companies: Cherry Creek Chairman of the Board Mortgage Company (since 1991), Centennial State Mortgage Company (since of Trustees (since 2003) 1994), The El Paso Mortgage Company (since 1993), Transland Financial Services, and Trustee (since 2000) Inc. (since 1997); Chairman of the following private companies: Great Frontier Age: 67 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 39 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: 73 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 39 portfolios in the OppenheimerFunds complex. GEORGE C. BOWEN, Formerly Assistant Secretary and a director (December 1991-April 1999) of Trustee (since 1998) Centennial Asset Management Corporation; President, Treasurer and a director Age: 68 (June 1989-April 1999) of Centennial Capital Corporation; Chief Executive Officer and a director of MultiSource Services, Inc. (March 1996-April 1999). Until April 1999 Mr. Bowen held several positions in subsidiary or affiliated companies of the Manager. Oversees 39 portfolios in the OppenheimerFunds complex. EDWARD L. CAMERON, A member of The Life Guard of Mount Vernon, George Washington's home Trustee (since 1999) (since June 2000). Formerly Director (March 2001-May 2002) of Genetic ID, Inc. Age: 66 and its subsidiaries (a privately held biotech company); a partner (July 1974-June 1999) with PricewaterhouseCoopers LLP (an accounting firm); and Chairman (July 1994-June 1998) of Price Waterhouse LLP Global Investment Management Industry Services Group. Oversees 39 portfolios in the OppenheimerFunds complex. JON S. FOSSEL, Director (since February 1998) of Rocky Mountain Elk Foundation (a not-for- Trustee (since 1990) profit foundation); a director (since 1997) of Putnam Lovell Finance (finance Age: 62 company); a director (since June 2002) of UNUMProvident (an insurance company). Formerly a director (October 1999-October 2003) of P.R. Pharmaceuticals (a privately held company); 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 (until October 1995) of
60 | OPPENHEIMER INTERNATIONAL BOND FUND JON S. FOSSEL, Oppenheimer Acquisition Corp., Shareholders Services Inc. and Shareholder Continued Financial Services, Inc. Oversees 39 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: 63 or affiliated companies of the Manager. Oversees 39 portfolios in the OppenheimerFunds complex. BEVERLY L. HAMILTON, Trustee of Monterey International Studies (an educational organization) Trustee (since 2002) (since February 2000); a director of The California Endowment Age: 57 (a philanthropic organization) (since April 2002) and of Community Hospital of Monterey Peninsula (educational organization) (since February 2002); a director of America Funds Emerging Markets Growth Fund (since October 1991) (an investment company); an advisor to Credit Suisse First Boston's Sprout venture capital unit. Mrs. Hamilton also is a member of the investment committees of the Rockefeller Foundation and of the University of Michigan. Formerly, Trustee of MassMutual Institutional Funds (open-end investment company) (1996-May 2004); a director of MML Series Investment Fund (April 1989-May 2004) and MML Services (April 1987-May 2004) (investment companies); member of the investment committee (2000-2003) of Hartford Hospital; an advisor (2000-2003) to Unilever (Holland)'s pension fund; and President (February 1991-April 2000) of ARCO Investment Management Company. Oversees 38 portfolios in the OppenheimerFunds complex. ROBERT J. MALONE, Chairman, Chief Executive Officer and Director of Steele Street State Bank Trustee (since 2002) (a commercial banking entity) (since August 2003); director of Colorado UpLIFT Age: 60 (a non-profit organization) (since 1986); trustee (since 2000) of the Gallagher Family Foundation (non-profit organization). Formerly, Chairman of U.S. Bank- Colorado (a subsidiary of U.S. Bancorp and formerly Colorado National Bank,) (July 1996-April 1, 1999), a director of: Commercial Assets, Inc. (a REIT) (1993- 2000), Jones Knowledge, Inc. (a privately held company) (2001-July 2004) and U.S. Exploration, Inc. (oil and gas exploration) (1997-February 2004). Oversees 38 portfolios in the OppenheimerFunds complex. F. WILLIAM MARSHALL, JR., Trustee of MassMutual Institutional Funds (since 1996) and MML Series Investment Trustee (since 2000) Fund (since 1987) (both open-end investment companies) and the Springfield Library Age: 62 and Museum Association (since 1995) (museums) and the Community Music School of Springfield (music school) (since 1996); Trustee (since 1987), Chairman of the Board (since 2003) and Chairman of the investment committee (since 1994) for the Worcester Polytech Institute (private university); and President and Treasurer (since January 1999) of the SIS Fund (a private not for profit charitable fund). 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) (commercial bank); and Executive Vice President (January 1999-July 1999) of Peoples Heritage Financial Group, Inc. (commercial bank). Oversees 39 portfolios in the OppenheimerFunds complex.
61 | OPPENHEIMER INTERNATIONAL BOND FUND TRUSTEES AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER, AND OFFICER 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NY 10281-1008. MR. MURPHY SERVES FOR AN INDEFINITE TERM, UNTIL HIS RESIGNATION, DEATH OR REMOVAL. JOHN V. MURPHY, Chairman, Chief Executive Officer and director (since June 2001) and President President and Trustee (since September 2000) of the Manager; President and a director or trustee (since 2001) of other Oppenheimer funds; President and a director (since July 2001) of Age: 55 Oppenheimer Acquisition Corp. (the Manager's parent holding company) and of Oppenheimer Partnership Holdings, Inc. (a holding company subsidiary of the Manager); a director (since November 2001) of OppenheimerFunds Distributor, Inc. (a subsidiary of the Manager); Chairman and a director (since July 2001) of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager); 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 the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 1, 2001) and a director (since July 2001) of Oppenheimer Real Asset Management, Inc.; 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 Babson Capital Management LLC); a member of the Investment Company Institute's Board of Governors (elected to serve from October 3, 2003 through September 30, 2006). 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 74 portfolios as Trustee/Director and 10 portfolios as Officer in the OppenheimerFunds complex. - -------------------------------------------------------------------------------------------------------------------- OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MESSRS. STEINMETZ AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NY 10281-1008, FOR MESSRS. VANDEHEY AND 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. ARTHUR P. STEINMETZ, Senior Vice President of the Manager (since March 1993) and of HarbourView Vice President and Portfolio Asset Management Corporation (since March 2000); an officer of 4 portfolios Manager (since 2002) in the OppenheimerFunds complex. Age: 46 BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer (since 1999) Treasurer of HarbourView Asset Management Corporation, Shareholder Financial Age: 45 Services, Inc., Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership Holdings, Inc. (since March 1999), of OFI Private Investments, Inc. (since March 2000), of OppenheimerFunds International Ltd. and OppenheimerFunds plc (since May 2000), of OFI Institutional Asset Management, Inc. (since November 2000), and of OppenheimerFunds Legacy Program (a Colorado non-profit corporation) (since June 2003); Treasurer
62 | OPPENHEIMER INTERNATIONAL BOND FUND BRIAN W. WIXTED, and Chief Financial Officer (since May 2000) of OFI Trust Company (a trust company Continued subsidiary of the Manager); Assistant Treasurer (since March 1999) of Oppenheimer Acquisition Corp. Formerly Assistant Treasurer of Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer (March 1995-March 1999) at Bankers Trust Company-Mutual Fund Services Division. An officer of 84 portfolios in the OppenheimerFunds complex. ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since Vice President and February 2002) of the Manager; General Counsel and a director Secretary (since 2001) (since November 2001) of the Distributor; General Counsel (since November 2001) Age: 56 of Centennial Asset Management Corporation; Senior Vice President and General Counsel (since November 2001) of HarbourView Asset Management Corporation; Secretary and General Counsel (since November 2001) of Oppenheimer Acquisition Corp.; Assistant Secretary and a director (since October 1997) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and a director (since November 2001) of Oppenheimer Partnership Holdings, Inc.; a director (since November 2001) of Oppenheimer Real Asset Management, Inc.; Senior Vice President, General Counsel and a director (since November 2001) of Shareholder Financial Services, Inc., Shareholder Services, Inc., OFI Private Investments, Inc. and OFI Trust Company; Vice President (since November 2001) of OppenheimerFunds Legacy Program; Senior Vice President and General Counsel (since November 2001) of OFI Institutional Asset Management, Inc.; a director (since June 2003) of OppenheimerFunds (Asia) Limited. Formerly Senior Vice President (May 1985-December 2003), Acting General Counsel (November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November 1989-November 2001); and OppenheimerFunds International Ltd. (October 1997-November 2001). An officer of 84 portfolios in the OppenheimerFunds complex. MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer (since March 2004) of the Vice President and Manager; Vice President (since June 1983) of OppenheimerFunds Distributor, Chief Compliance Officer Inc., Centennial Asset Management Corporation and Shareholder Services, Inc. (since 2004) Formerly (until February 2004) Vice President and Director of Internal Audit of Age: 54 OppenheimerFunds, Inc. An officer of 84 portfolios in the Oppenheimer funds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION ABOUT THE FUND'S TRUSTEES AND IS AVAILABLE WITHOUT CHARGE, UPON REQUEST, BY CALLING 1.800.525.7048. 63 | OPPENHEIMER INTERNATIONAL BOND FUND ITEM 2. CODE OF ETHICS The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT The Board of Trustees of the registrant has determined that Edward L. Cameron, the Chairman of the Board's Audit Committee, and George C. Bowen, a member of the Board's Audit Committee, possess the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as "audit committee financial experts," and has designated Messrs. Cameron and Bowen as the Audit Committee's financial experts. Messrs. Cameron and Bowen are "independent" Trustees pursuant to paragraph (a)(2) of Item 3 to Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES (a) Audit Fees The principal accountant for the audit of the registrant's annual financial statements billed $28,000 in fiscal 2004 and $17,000 in fiscal 2003. (b) Audit-Related Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed no such fees in fiscal 2004 and $35,859 in fiscal 2003 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees would include, among others: due diligence related to mergers and acquisitions, accounting consultations and audits in connection with acquisitions, internal control reviews and consultation concerning financial accounting and reporting standards. (c) Tax Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed no such fees in fiscal 2004 and $6,748 in fiscal 2003 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees would include, among others: tax compliance, tax planning and tax advice. Tax compliance generally involves preparation of original and amended tax returns, claims for a refund and tax payment-planning services. Tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions and requests for rulings or technical advice from taxing authorities. (d) All Other Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed no such fees in fiscal 2004 and $3,500 in fiscal 2003 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees would include services provided to the registrant's Board of Trustees with respect to the annual renewal of the registrant's investment advisory agreement. (e) (1) During its regularly scheduled periodic meetings, the registrant's audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant. The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting. Pre-approval of non-audit services is waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit. (2) 100% (f) Not applicable as less than 50%. (g) The principal accountant for the audit of the registrant's annual financial statements billed no such fees in fiscal 2004 and $46,107 in fiscal 2003 to the registrant and the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934. (h) The registrant's audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal account's independence. No such services were rendered. ITEM 5. NOT APPLICABLE ITEM 6. SCHEDULE OF INVESTMENTS Not applicable ITEM 7. NOT APPLICABLE ITEM 8. NOT APPLICABLE ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The registrant's Board of Trustees has established a Governance Committee, one function of which is to create and oversee the process by which shareholders can submit nominees for positions on the Board. The Governance Committee has not yet adopted a charter, but anticipates that it will do so by the end of this calendar year. The Committee has temporarily adopted the process previously adopted by the Audit Committee regarding shareholder submission of nominees for board positions. Shareholders may submit names of individuals, accompanied by complete and properly supported resumes, for the Governance Committee's consideration by mailing such information to the Committee in care of the Fund. The Committee may consider such persons at such time as it meets to consider possible nominees. The Committee, however, reserves solo discretion to determine the candidates for trustees and independent trustees to recommend to the Board and/or shareholders and may identify candidates other than those submitted by Shareholders. The Committee may, but need not, consider the advice and recommendation of the Manager and its affiliates in selecting nominees. The full Board elects new trustees except for those instances when a shareholder vote is required. Shareholders who desire to communicate with the Board should address correspondence to the Board of Trustees of the registrant, or to an individual Trustee c/o the Secretary of the Fund at 6803 South Tucson Way, Centennial, Colorado 80112 and may submit their correspondence electronically at www.oppenheimerfunds.com under the caption "contact us." If your correspondence is intended for a particular Trustee, please indicate the name of the Trustee for whom it is intended. The sender should indicate in the address whether it is intended for the entire board, the Independent Trustees as group, or to an individual Trustee. The Governance Committee will consider if a different process should be recommended to the Board. ITEM 10. CONTROLS AND PROCEDURES (a) Based on their evaluation of registrant's disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940 (17 CFR 270.30a-2(c)) as of September 30, 2004, registrant's principal executive officer and principal financial officer found registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. (b) There have been no significant changes in registrant's internal controls over financial reporting that occurred during the registrant's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)(NOT APPLICABLE TO SEMIANNUAL REPORTS) (B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS) EX-99.CODE ETH 2 ra880_11829ex99code-eth.txt RA880_11829EX99CODE-ETH.TXT 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. Each Covered Officer should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. - ---------- 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. 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 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 - ---------- 2. An "implicit waiver" is the failure to take action within a reasonable period of time regarding a material departure from a provision of this Code that has been made known to the General Counsel, the Code Administrator, an executive officer of the Fund or OFI. shall be protected from any liability hereunder or under any applicable law, rule or regulation, for decisions made in good faith based upon his or her reasonable judgment. 9. REQUIRED RECORDS The Administrator shall maintain and cause to be maintained in an easily accessible place, the following records for the period required by applicable SEC rules (currently six years following the end of the fiscal year of OFI in which the applicable event or report occurred): (a) A copy of any Code which has been in effect during the period; (b) A record of any violation of any such Code and of any action taken as a result of such violation, during the period; (c) A copy of each annual report pursuant to the Code made by a Covered Officer during the period; (d) A copy of each report made by the Code Administrator pursuant to this Code during the period; (e) A list of all Covered Officers who are or have been required to make reports pursuant to this Code during the period, plus those person(s) who are or were responsible for reviewing these reports; (f) A record of any request to waive any requirement of this Code, the decision thereon and the reasons supporting the decision; and (g) A record of any report of any conflict of interest or appearance of a conflict of interest received by the Code Administrator or discovered by the Code Administrator during the period, the decision thereon and the reasons supporting the decision. 10. AMENDMENTS AND MODIFICATIONS This Code may not be amended or modified except by an amendment in writing which is approved or ratified by OFI and by a majority vote of the Independent Trustees/Directors of each of the applicable Funds. 11. CONFIDENTIALITY. This Code is identified for the internal use of the Funds and OFI. Reports and records prepared or maintained under this Code are considered confidential and shall be maintained and protected accordingly to the extent permitted by applicable laws, rules and regulations. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trustees/Directors of the affected Fund(s) and their counsel, the independent auditors of the affected Funds and/or OFI, and to OFI, except as such disclosure may be required pursuant to applicable judicial or regulatory process. Dated as of: June 25, 2003 Adopted by Board I of the Oppenheimer Funds June 13, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board II of the Oppenheimer/Centennial Funds June 24, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board III of the Oppenheimer Funds June 9, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board IV of the Oppenheimer Funds May 21, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by the Boards of Directors of OppenheimerFunds, Inc. and its subsidiaries and affiliates that act as investment adviser to the Oppenheimer or Centennial funds June 1, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Senior Vice President and General Counsel EXHIBIT A POSITIONS COVERED BY THIS CODE OF ETHICS FOR SENIOR OFFICERS EACH OPPENHEIMER OR CENTENNIAL FUND Principal Executive Officer Principal Financial Officer Treasurer Assistant Treasurer PERSONNEL OF OFI WHO BY VIRTUE OF THEIR JOBS PERFORM CRITICAL FINANCIAL AND ACCOUNTING FUNCTIONS FOR OFI ON BEHALF OF A FUND, INCLUDING: Treasurer Senior Vice President/Fund Accounting Vice President/Fund Accounting EX-99.CERT 3 ra880_11829ex99cert.txt RA880_11829EX99CERT.TXT Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, JOHN V. MURPHY, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer 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-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 11/16/04 /s/ John V. Murphy ---------------------------- John V. Murphy Chief Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, BRIAN W. WIXTED, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer 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-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 11/16/04 /s/ Brian W. Wixted ---------------------------- Brian W. Wixted Chief Financial Officer EX-99.906 4 ra880_11829ex99-906cert.txt RA880_11829EX99-906CERT.TXT EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 JOHN V. MURPHY, Chief Executive Officer, and BRIAN W. WIXTED, Chief Financial Officer, of Oppenheimer 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, 2004 (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 Fund Oppenheimer International Bond Fund /s/ John V. Murphy /s/ Brian W. Wixted - ---------------------------- ---------------------------- John V. Murphy Brian W. Wixted Date: 11/16/04 Date: 11/16/04 -----END PRIVACY-ENHANCED MESSAGE-----