-----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, Lvc5D4WvvANBLOesCl7oGD2QUgQctrJry9myCqoTHEKliaWXvl/rlZY+OMLnkuEy rrxshExhAjUKZmgbPbvNaw== 0000935069-05-003284.txt : 20051130 0000935069-05-003284.hdr.sgml : 20051130 20051130165202 ACCESSION NUMBER: 0000935069-05-003284 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050930 FILED AS OF DATE: 20051130 DATE AS OF CHANGE: 20051130 EFFECTIVENESS DATE: 20051130 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: 051235063 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_18580ncsr.txt RA880_18580NCSR 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: September 30, 2005 ITEM 1. REPORTS TO STOCKHOLDERS. TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------ TOP TEN GEOGRAPHICAL HOLDINGS - -------------------------------------------------------------------------------- Japan 9.9% - -------------------------------------------------------------------------------- Brazil 9.3 - -------------------------------------------------------------------------------- United States 7.9 - -------------------------------------------------------------------------------- Turkey 6.2 - -------------------------------------------------------------------------------- United Kingdom 5.5 - -------------------------------------------------------------------------------- Germany 5.3 - -------------------------------------------------------------------------------- Russia 5.2 - -------------------------------------------------------------------------------- Peru 4.3 - -------------------------------------------------------------------------------- Colombia 3.9 - -------------------------------------------------------------------------------- Mexico 3.9 Portfolio holdings and allocations are subject to change. Percentages are as of September 30, 2005, and are based on total market value of investments. - ------------------------------------------------------------------------------ - -------------------------------------------------------------------------------- REGIONAL ALLOCATION [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Latin America 27.9% Europe 24.1 Asia 16.9 Middle East/Africa 11.9 Emerging Europe 10.8 United States/Canada 7.9 Supranational 0.5 Portfolio holdings and allocations are subject to change. Percentages are as of September 30, 2005, and are based on total market value of 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, 2005, FOLLOWED BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED MARKET INDEX. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. During its fiscal year ended September 30, 2005, Oppenheimer International Bond Fund produced higher returns than its benchmark, the Citigroup Non-U.S. Dollar World Government Bond Index. We attribute the Fund's strong relative performance to our unhedged positions in the emerging markets, where favorable movements in local currency exchange rates relative to the U.S. dollar helped support returns. Early in the reporting period, we shifted the Fund's emphasis from bonds of developed nations to bonds issued by governments in the emerging markets. We tended to focus on nations where we expected fiscal improvements to bolster investor confidence and attract more investment capital. This strategy proved to be especially successful in Brazil, Mexico and Turkey. On the other hand, we shifted the Fund's assets away from developed markets where we anticipated wider yield spreads between local bonds and U.S. Treasury securities. For example, the Fund's relative performance benefited from an underweighted position in Germany, which suffered from the weak EURO over the reporting period. We tended to prefer bonds from the more developed markets of Asia, where the regional economy is expected to grow more robustly than in Europe. The Fund also received positive contributions to performance from small positions in a number of corporate-backed bonds from international markets that, in our judgment, offered attractive yields and high levels of credit quality. For example, the Fund established a position in a state-owned gas company in Russia. Throughout the reporting period, we tended to maintain the Fund's average duration in a range that we consider to be in line with industry averages. This positioning neither contributed to nor detracted from performance, as interest rates in most overseas markets remained in a relatively tight trading range. However, toward the end of the reporting period, we began to detect signs that interest rates may fall in some parts of the emerging markets should central banks ease monetary policy, and we have begun to extend the maturities of the Fund's holdings in those areas. 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, 2005. In the case of Class A, Class B and Class C shares, performance is measured over a ten fiscal year end period. In the case of Class N shares, performance is measured from inception of the Class on March 1, 2001. In the case of 10 | OPPENHEIMER INTERNATIONAL BOND FUND Class Y shares, performance is measured from inception of the Class on September 27, 2004. 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, and reinvestments of all dividends and capital gains distributions. The Fund's performance is compared to the Citigroup Non-U.S. Dollar World Government Bond Index, a subset of the Citigroup World Government Bond Index. The Citigroup Non-U.S. 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 indices. 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-U.S. Dollar World Government Bond Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer International Citigroup Non-U.S. Dollar Date Bond Fund (Class A) World Government Bond Index 09/30/1995 9,525 10,000 12/31/1995 9,962 10,208 03/31/1996 10,330 10,035 06/30/1996 10,808 10,075 09/30/1996 11,318 10,403 12/31/1996 11,883 10,624 03/31/1997 11,970 10,010 06/30/1997 12,303 10,292 09/30/1997 12,600 10,314 12/31/1997 12,175 10,171 03/31/1998 12,345 10,213 06/30/1998 12,223 10,383 09/30/1998 11,025 11,381 12/31/1998 11,644 11,981 03/31/1999 11,620 11,401 06/30/1999 12,018 10,889 09/30/1999 12,192 11,555 12/31/1999 12,926 11,373 03/31/2000 13,459 11,241 06/30/2000 13,304 11,152 09/30/2000 13,281 10,647 12/31/2000 13,810 11,074 03/31/2001 13,454 10,531 06/30/2001 13,513 10,323 09/30/2001 13,466 11,123 12/31/2001 14,107 10,682 03/31/2002 14,410 10,482 06/30/2002 15,569 11,947 09/30/2002 15,725 12,286 12/31/2002 17,042 13,031 03/31/2003 17,552 13,517 06/30/2003 18,919 14,085 09/30/2003 19,919 14,473 12/31/2003 21,454 15,444 03/31/2004 22,552 15,686 06/30/2004 21,367 15,156 09/30/2004 22,223 15,653 12/31/2004 24,791 17,318 03/31/2005 24,093 16,782 06/30/2005 25,143 16,330 09/30/2005 25,673 16,146 AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT 9/30/05 1-Year 10.04% 5-Year 12.99% 10-Year 9.89% 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-U.S. Dollar World Government Bond Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer International Citigroup Non-U.S. Dollar Date Bond Fund (Class B) World Government Bond Index 09/30/1995 10,000 10,000 12/31/1995 10,417 10,208 03/31/1996 10,782 10,035 06/30/1996 11,282 10,075 09/30/1996 11,771 10,403 12/31/1996 12,337 10,624 03/31/1997 12,404 10,010 06/30/1997 12,726 10,292 09/30/1997 13,009 10,314 12/31/1997 12,548 10,171 03/31/1998 12,700 10,213 06/30/1998 12,551 10,383 09/30/1998 11,297 11,381 12/31/1998 11,910 11,981 03/31/1999 11,864 11,401 06/30/1999 12,248 10,889 09/30/1999 12,403 11,555 12/31/1999 13,128 11,373 03/31/2000 13,647 11,241 06/30/2000 13,433 11,152 09/30/2000 13,388 10,647 12/31/2000 13,929 11,074 03/31/2001 13,542 10,531 06/30/2001 13,576 10,323 09/30/2001 13,510 11,123 12/31/2001 14,153 10,682 03/31/2002 14,457 10,482 06/30/2002 15,620 11,947 09/30/2002 15,777 12,286 12/31/2002 17,098 13,031 03/31/2003 17,610 13,517 06/30/2003 18,981 14,085 09/30/2003 19,985 14,473 12/31/2003 21,524 15,444 03/31/2004 22,626 15,686 06/30/2004 21,438 15,156 09/30/2004 22,296 15,653 12/31/2004 24,873 17,318 03/31/2005 24,172 16,782 06/30/2005 25,226 16,330 09/30/2005 25,758 16,146 AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT 9/30/05 1-Year 9.58% 5-Year 12.97% 10-Year 9.92% 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. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, SINCE-INCEPTION RETURN FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 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-U.S. Dollar World Government Bond Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer International Citigroup Non-U.S. Dollar Date Bond Fund (Class C) World Government Bond Index 09/30/1995 10,000 10,000 12/31/1995 10,435 10,208 03/31/1996 10,800 10,035 06/30/1996 11,280 10,075 09/30/1996 11,792 10,403 12/31/1996 12,358 10,624 03/31/1997 12,403 10,010 06/30/1997 12,749 10,292 09/30/1997 13,032 10,314 12/31/1997 12,570 10,171 03/31/1998 12,722 10,213 06/30/1998 12,574 10,383 09/30/1998 11,318 11,381 12/31/1998 11,932 11,981 03/31/1999 11,886 11,401 06/30/1999 12,271 10,889 09/30/1999 12,426 11,555 12/31/1999 13,152 11,373 03/31/2000 13,672 11,241 06/30/2000 13,460 11,152 09/30/2000 13,414 10,647 12/31/2000 13,956 11,074 03/31/2001 13,568 10,531 06/30/2001 13,602 10,323 09/30/2001 13,528 11,123 12/31/2001 14,111 10,682 03/31/2002 14,423 10,482 06/30/2002 15,556 11,947 09/30/2002 15,680 12,286 12/31/2002 16,923 13,031 03/31/2003 17,397 13,517 06/30/2003 18,721 14,085 09/30/2003 19,675 14,473 12/31/2003 21,153 15,444 03/31/2004 22,236 15,686 06/30/2004 20,989 15,156 09/30/2004 21,790 15,653 12/31/2004 24,270 17,318 03/31/2005 23,539 16,782 06/30/2005 24,522 16,330 09/30/2005 24,992 16,146 AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT 9/30/05 1-Year 13.70% 5-Year 13.25% 10-Year 9.59% 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-U.S. Dollar World Government Bond Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer International Citigroup Non-U.S. Dollar Date Bond Fund (Class N) World Government Bond Index 03/01/2001 10,000 10,000 03/31/2001 9,706 9,598 06/30/2001 9,747 9,409 09/30/2001 9,712 10,139 12/31/2001 10,144 9,736 03/31/2002 10,380 9,554 06/30/2002 11,208 10,889 09/30/2002 11,287 11,198 12/31/2002 12,225 11,877 03/31/2003 12,583 12,320 06/30/2003 13,552 12,838 09/30/2003 14,257 13,192 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 12/31/2004 17,669 15,785 03/31/2005 17,122 15,296 06/30/2005 17,852 14,884 09/30/2005 18,240 14,716 AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT 9/30/05 1-Year 14.27% 5-Year N/A Since Inception (3/1/01) 14.02% 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. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, SINCE-INCEPTION RETURN FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER INFORMATION. 15 | OPPENHEIMER INTERNATIONAL BOND FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS Y SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer International Bond Fund (Class Y) Citigroup Non-U.S. Dollar World Government Bond Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer International Citigroup Non-U.S. Dollar Date Bond Fund (Class Y) World Government Bond Index 09/27/2004 10,000 10,000 09/30/2004 10,092 10,000 12/31/2004 11,270 11,064 03/31/2005 10,942 10,721 06/30/2005 11,449 10,432 09/30/2005 11,702 10,315 AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 9/30/05 1-Year 15.96% 5-Year N/A Since Inception (9/27/04) 16.87% 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. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, SINCE-INCEPTION RETURN FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER INFORMATION. 16 | 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 10-year return for Class B uses Class A performance for the period after conversion. Class B shares are subject to an annual 0.75% asset-based sales charge. CLASS C shares of the Fund were first publicly offered on 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. 17 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES - -------------------------------------------------------------------------------- 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. 18 | 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 examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended September 30, 2005. ACTUAL EXPENSES. The "actual" lines of the table provide information about actual account values and actual expenses. You may use the information on this line for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the "actual" line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to exceptions described in 19 | OPPENHEIMER INTERNATIONAL BOND FUND FUND EXPENSES - -------------------------------------------------------------------------------- the Statement of Additional Information). Therefore, the "hypothetical" lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. - ---------------------------------------------------------------------------- BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED (4/1/05) (9/30/05) SEPTEMBER 30, 2005 - ---------------------------------------------------------------------------- Class A Actual $ 1,000.00 $ 1,065.60 $ 5.29 - ---------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,019.95 5.18 - ---------------------------------------------------------------------------- Class B Actual 1,000.00 1,061.20 9.76 - ---------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,015.64 9.54 - ---------------------------------------------------------------------------- Class C Actual 1,000.00 1,061.80 9.14 - ---------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,016.24 8.93 - ---------------------------------------------------------------------------- Class N Actual 1,000.00 1,065.30 7.53 - ---------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,017.80 7.36 - ---------------------------------------------------------------------------- Class Y Actual 1,000.00 1,069.50 3.33 - ---------------------------------------------------------------------------- Class Y Hypothetical 1,000.00 1,021.86 3.25 Hypothetical assumes 5% annual return before expenses. Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). Those annualized expense ratios based on the 6-month period ended September 30, 2005 are as follows: CLASS EXPENSE RATIOS - --------------------------- Class A 1.02% - --------------------------- Class B 1.88 - --------------------------- Class C 1.76 - --------------------------- Class N 1.45 - --------------------------- Class Y 0.64 The expense ratios reflect voluntary waivers or reimbursements of expenses by the Fund's Transfer Agent that can be terminated at any time, without advance notice. The "Financial Highlights" tables in the Fund's financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements. - -------------------------------------------------------------------------------- 20 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS September 30, 2005 - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS--3.2% - ----------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp. Nts., 3.75%, 7/15/09 [EUR] 16,635,000 $ 20,747,517 - ----------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bills, 3.32%, 10/6/05 1 83,355,000 83,316,854 - ----------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 3.75%, 3/31/07 2 10,000,000 9,939,070 ---------------- Total U.S. Government Obligations (Cost $113,435,333) 114,003,441 - ----------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS--55.1% - ----------------------------------------------------------------------------------------------------------------------- ARGENTINA--1.8% Argentina (Republic of) Bonds: 1.20%, 12/31/38 3 [EUR] 3,500,000 1,672,075 1.33%, 12/31/38 3 10,530,000 4,185,675 3.663%, 9/30/14 3,4 [ARP] 21,270,000 7,550,073 4.005%, 8/3/12 3 26,446,875 24,078,319 - ----------------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Unsec. Unsub. Bonds, 5.83%, 12/31/33 4 [ARP] 33,513,245 11,837,598 - ----------------------------------------------------------------------------------------------------------------------- Buenos Aires (Province of) Bonds, Bonos de Consolidacion de Deudas, Series PBA1, 4/1/07 4,5 [ARP] 960,558 420,684 - ----------------------------------------------------------------------------------------------------------------------- Central Bank of Argentina Bonds, 2%, 2/4/18 4 [ARP] 24,766,558 12,805,811 ---------------- 62,550,235 - ----------------------------------------------------------------------------------------------------------------------- AUSTRALIA--2.0% Queensland Treasury Corp. Unsec. Nts., Series 09G, 6%, 7/14/09 [AUD] 90,250,000 69,994,164 - ----------------------------------------------------------------------------------------------------------------------- AUSTRIA--0.9% Austria (Republic of) Nts.: 3.80%, 10/20/13 6 [EUR] 6,845,000 8,673,994 5.50%, 10/20/07 6 [EUR] 2,440,000 3,111,100 Series 98-1, 5%, 1/15/08 [EUR] 9,795,000 12,436,430 - ----------------------------------------------------------------------------------------------------------------------- Austria (Republic of) Sr. Unsec. Unsub. Nts., Series 1, 5%, 7/15/12 [EUR] 6,525,000 8,834,217 ---------------- 33,055,741 - ----------------------------------------------------------------------------------------------------------------------- BELGIUM--0.2% Belgium (Kingdom of) Bonds, Series 26, 6.25%, 3/28/07 [EUR] 6,850,000 8,695,437 - ----------------------------------------------------------------------------------------------------------------------- BRAZIL--1.9% Brazil (Federal Republic of) Bonds: 8%, 1/15/18 1,471,000 1,561,467 8.75%, 2/4/25 25,990,000 27,523,410 8.875%, 10/14/19 3,830,000 4,168,955 12.50%, 1/5/16 [BRR] 65,816,000 28,360,316 Series 15 yr., 4.313%, 4/15/09 3 14,119 14,119 - ----------------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Unsec. Bonds, 4.75%, 4/10/07 4 [JPY] 500,000,000 4,602,713 ---------------- 66,230,980
21 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- BULGARIA--0.1% Bulgaria (Republic of) Bonds: 8.25%, 1/15/15 $ 1,505,000 $ 1,864,319 8.25%, 1/15/15 6 1,505,000 1,864,319 ---------------- 3,728,638 - ----------------------------------------------------------------------------------------------------------------------- COLOMBIA--1.7% Colombia (Republic of) Bonds, 12%, 10/22/15 [COP] 48,545,000,000 26,111,105 - ----------------------------------------------------------------------------------------------------------------------- Colombia (Republic of) Nts.: 8.25%, 12/22/14 6,655,000 7,490,203 11.75%, 3/1/10 [COP] 35,992,780,000 18,342,179 - ----------------------------------------------------------------------------------------------------------------------- Colombia (Republic of) Unsec. Bonds, 8.125%, 5/21/24 7,025,000 7,569,438 ---------------- 59,512,925 - ----------------------------------------------------------------------------------------------------------------------- DOMINICAN REPUBLIC--0.1% Dominican Republic Unsec. Unsub. Bonds: Series REG S, 9.04%, 1/23/18 1,588,704 1,764,256 Series REG S, 9.50%, 9/27/11 1,571,250 1,736,231 ---------------- 3,500,487 - ----------------------------------------------------------------------------------------------------------------------- EL SALVADOR--0.0% El Salvador (Republic of) Bonds, 7.625%, 9/21/34 6 1,185,000 1,321,275 - ----------------------------------------------------------------------------------------------------------------------- FINLAND--1.4% Finland (Republic of) Bonds, 5.375%, 7/4/13 [EUR] 20,985,000 29,341,749 - ----------------------------------------------------------------------------------------------------------------------- Finland (Republic of) Sr. Unsec. Unsub. Bonds: 2.75%, 7/4/06 [EUR] 3,470,000 4,187,021 5%, 7/4/07 [EUR] 12,415,000 15,585,559 ---------------- 49,114,329 - ----------------------------------------------------------------------------------------------------------------------- FRANCE--3.1% France (Government of) Obligations Assimilables du Tresor Bonds, 5.50%, 10/25/10 [EUR] 80,255,000 108,984,949 - ----------------------------------------------------------------------------------------------------------------------- GERMANY--4.8% Germany (Republic of) Bonds: 5.25%, 1/4/11 [EUR] 23,640,000 31,836,365 5.375%, 1/4/10 [EUR] 38,715,000 51,561,838 Series 02, 5%, 7/4/12 [EUR] 4,200,000 5,691,869 Series 03, 3.75% 7/4/13 7 [EUR] 64,085,000 81,010,279 ---------------- 170,100,351 - ----------------------------------------------------------------------------------------------------------------------- GREECE--0.8% Greece (Republic of) Bonds, 3.70%, 7/20/15 [EUR] 17,360,000 21,440,189 - ----------------------------------------------------------------------------------------------------------------------- Greece (Republic of) Sr. Unsub. Bonds, 4.65%, 4/19/07 [EUR] 6,980,000 8,672,674 ---------------- 30,112,863
22 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- GUATEMALA--0.0% Guatemala (Republic of) Nts.: 10.25%, 11/8/11 $ 525,000 $ 643,781 10.25%, 11/8/11 6 160,000 196,200 ---------------- 839,981 - ----------------------------------------------------------------------------------------------------------------------- HUNGARY--0.3% Hungary (Government of) Bonds, Series 05/I, 8.50%, 10/12/05 [HUF] 1,918,660,000 9,240,000 - ----------------------------------------------------------------------------------------------------------------------- INDONESIA--0.0% Indonesia (Republic of) Nts.: 6.75%, 3/10/14 6 120,000 118,500 7.25%, 4/20/15 6 200,000 200,500 ---------------- 319,000 - ----------------------------------------------------------------------------------------------------------------------- IRELAND--0.9% Ireland (Republic of) Treasury Bonds, 3.25%, 4/18/09 [EUR] 25,900,000 31,833,140 - ----------------------------------------------------------------------------------------------------------------------- ISRAEL--1.1% Israel (State of) Bonds, Series 2682, 7.50%, 3/31/14 [ILS] 167,800,000 40,399,669 - ----------------------------------------------------------------------------------------------------------------------- ITALY--0.6% Italy (Republic of) Treasury Bonds: Buoni del Tesoro Poliennali, 4.50%, 3/1/07 [EUR] 14,745,000 18,258,246 Buoni del Tesoro Poliennali, 5%, 10/15/07 [EUR] 2,770,000 3,498,862 ---------------- 21,757,108 - ----------------------------------------------------------------------------------------------------------------------- JAPAN--9.0% Japan (Government of) Bonds, 10 yr., Series 239, 1.40%, 6/20/12 [JPY] 35,638,000,000 320,666,655 - ----------------------------------------------------------------------------------------------------------------------- MALAYSIA--1.2% Johor Corp. Malaysia (Government of) Bonds, Series P3, 1%, 7/31/12 3,4 [MYR] 107,980,000 30,225,232 - ----------------------------------------------------------------------------------------------------------------------- Malaysia (Government of) Bonds, Series 2/05, 4.72%, 9/30/15 [MYR] 41,730,000 11,761,128 ---------------- 41,986,360 - ----------------------------------------------------------------------------------------------------------------------- MEXICO--3.5% Mexican Williams Sr. Nts., 4.24%, 11/15/08 3,4 500,000 516,875 - ----------------------------------------------------------------------------------------------------------------------- United Mexican States Bonds: Series M10, 10.50%, 7/14/11 3 [MXN] 324,060,000 33,212,128 Series M20, 8%, 12/7/23 3 [MXN] 43,415,000 3,739,764 Series M20, 10%, 12/5/24 3 [MXN] 169,430,000 17,476,050 Series MI10, 8%, 12/19/13 [MXN] 230,788,000 20,763,540 Series MI10, 9.50%, 12/18/14 3 [MXN] 357,164,400 35,162,714 - ----------------------------------------------------------------------------------------------------------------------- United Mexican States Treasury Bills, Series BI, 10.32%, 10/13/05 8 [MXN] 130,860,000 12,043,451 - ----------------------------------------------------------------------------------------------------------------------- United Mexican States Unsec. Unsub. Nts., Series 6 BR, 6.75%, 6/6/06 [JPY] 205,000,000 1,871,943 ---------------- 124,786,465
23 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- NEW ZEALAND--0.9% New Zealand (Government of) Bonds, 7%, 7/15/09 [NZD] 28,005,000 $ 20,057,571 - ----------------------------------------------------------------------------------------------------------------------- New Zealand (Government of) Treasury Bills, 6.46%, 3/22/06 8 [NZD] 19,850,000 13,313,490 ---------------- 33,371,061 - ----------------------------------------------------------------------------------------------------------------------- NIGERIA--0.0% Central Bank of Nigeria Gtd. Bonds, Series WW, 6.25%, 11/15/20 1,375,000 1,378,438 - ----------------------------------------------------------------------------------------------------------------------- Nigeria (Federal Republic of) Promissory Nts., Series RC, 5.092%, 1/5/10 548,683 516,420 ---------------- 1,894,858 - ----------------------------------------------------------------------------------------------------------------------- PANAMA--0.6% Panama (Republic of) Bonds: 8.125%, 4/28/34 1 15,845,000 18,063,300 9.375%, 4/1/29 1,650,000 2,103,750 ---------------- 20,167,050 - ----------------------------------------------------------------------------------------------------------------------- PERU--4.1% Peru (Republic of) Bonds: 7.34%, 8/12/16 [PEN] 17,650,000 5,327,206 7.84%, 8/12/20 [PEN] 187,560,000 57,844,559 8.375%, 5/3/16 1 1,380,000 1,621,500 9.91%, 5/5/15 [PEN] 116,525,000 41,374,566 Series 2, 9%, 1/31/12 [PEN] 18,850,000 6,345,734 Series 7, 8.60%, 8/12/17 [PEN] 40,680,000 13,294,316 Series 8-1, 12.25%, 8/10/11 [PEN] 18,633,000 7,134,382 - ----------------------------------------------------------------------------------------------------------------------- Peru (Republic of) Sr. Nts., 4.53%, 2/28/16 8 5,169,696 3,324,683 - ----------------------------------------------------------------------------------------------------------------------- Peru (Republic of) Unsec. Unsub. Bonds, 8.75%, 11/21/33 1 6,720,000 8,148,000 ---------------- 144,414,946 - ----------------------------------------------------------------------------------------------------------------------- PHILIPPINES--0.5% Philippines (Republic of) Bonds: 8%, 1/15/16 1 550,000 554,813 9.50%, 2/2/30 1 4,026,000 4,307,820 Series 5-56, 12.375%, 10/28/09 [PHP] 149,350,000 2,776,245 Series 5-57, 11.50%, 1/27/10 [PHP] 507,800,000 9,233,818 - ----------------------------------------------------------------------------------------------------------------------- Philippines (Republic of) Nts., 8.25%, 1/15/14 363,000 377,974 ---------------- 17,250,670 - ----------------------------------------------------------------------------------------------------------------------- POLAND--0.9% Poland (Republic of) Bonds: Series DS1013, 5%, 10/24/13 [PLZ] 55,940,000 17,478,838 Series WS0922, 5.75%, 9/23/22 [PLZ] 10,000,000 3,402,094 - ----------------------------------------------------------------------------------------------------------------------- Poland (Republic of) Nts., Series 0K0807, 4.19%, 8/12/07 8 [PLZ] 43,990,000 12,480,724 ---------------- 33,361,656
24 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- PORTUGAL--1.7% Portugal (Republic of) Obrig Do Tes Medio Prazo Nts.: 3.25%, 7/15/08 [EUR] 8,160,000 $ 9,991,476 4.875%, 8/17/07 [EUR] 9,710,000 12,191,153 - ----------------------------------------------------------------------------------------------------------------------- Portugal (Republic of) Obrig Do Tes Medio Prazo Unsec. Unsub. Nts., 5.85%, 5/20/10 [EUR] 28,945,000 39,458,326 ---------------- 61,640,955 - ----------------------------------------------------------------------------------------------------------------------- RUSSIA--1.6% Aries Vermoegensverwaltungs GmbH Unsub. Nts.: Series B, 7.75%, 10/25/09 6 [EUR] 2,500,000 3,533,442 Series C, 9.60%, 10/25/14 23,330,000 30,829,615 - ----------------------------------------------------------------------------------------------------------------------- Ministry Finance of Russia Debs., Series VII, 3%, 5/14/11 6,620,000 5,870,120 - ----------------------------------------------------------------------------------------------------------------------- Russian Federation Unsec. Debs., Series V, 3%, 5/14/08 3,590,000 3,407,790 - ----------------------------------------------------------------------------------------------------------------------- Russian Federation Unsec. Unsub. Bonds, 5%, 3/31/30 1,3,6 8,570,750 9,856,363 - ----------------------------------------------------------------------------------------------------------------------- Russian Federation Unsub. Nts., 5%, 3/31/30 3 1,485,000 1,707,750 ---------------- 55,205,080 - ----------------------------------------------------------------------------------------------------------------------- SOUTH AFRICA--1.5% South Africa (Republic of) Bonds: Series R157, 13.50%, 9/15/15 [ZAR] 76,130,000 16,319,938 Series R186, 10.50%, 12/21/26 [ZAR] 136,575,000 27,422,863 Series R203, 8.25%, 9/15/17 [ZAR] 30,810,000 4,908,260 Series R204, 8%, 12/21/18 [ZAR] 34,150,000 5,337,974 ---------------- 53,989,035 - ----------------------------------------------------------------------------------------------------------------------- SPAIN--0.8% Spain (Kingdom of) Bonds: Bonos y Obligacion del Estado, 4.25%, 10/31/07 [EUR] 8,945,000 11,154,562 Bonos y Obligacion del Estado, 4.80%, 10/31/06 [EUR] 5,500,000 6,789,216 Bonos y Obligacion del Estado, 5.35%, 10/31/11 [EUR] 8,060,000 11,022,986 ---------------- 28,966,764 - ----------------------------------------------------------------------------------------------------------------------- THE NETHERLANDS--0.8% Netherlands (Kingdom of the) Bonds: 3.75%, 7/15/09 [EUR] 7,150,000 8,950,712 4.25%, 7/15/13 [EUR] 8,635,000 11,263,120 5.50%, 1/15/28 [EUR] 4,740,000 7,377,321 ---------------- 27,591,153 - ----------------------------------------------------------------------------------------------------------------------- TURKEY--0.6% Turkey (Republic of) Bonds, 8%, 2/14/34 13,820,000 14,649,200 - ----------------------------------------------------------------------------------------------------------------------- Turkey (Republic of) Nts., 7.25%, 3/15/15 1 6,680,000 7,064,100 ---------------- 21,713,300
25 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- UNITED KINGDOM--4.8% United Kingdom Treasury Nts., 4%, 3/7/09 [GBP] 96,885,000 $ 169,723,053 - ----------------------------------------------------------------------------------------------------------------------- VENEZUELA--0.9% Venezuela (Republic of) Bonds: 7%, 12/1/18 195,000 191,831 9.25%, 9/15/27 1 12,035,000 14,267,493 - ----------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Nts.: 7%, 3/16/15 [EUR] 5,070,000 6,600,658 8.50%, 10/8/14 8,954,000 9,961,325 ---------------- 31,021,307 ---------------- Total Foreign Government Obligations (Cost $1,929,259,339) 1,959,041,640 - ----------------------------------------------------------------------------------------------------------------------- LOAN PARTICIPATIONS--0.2% - ----------------------------------------------------------------------------------------------------------------------- Algeria (Republic of) Loan Participation Nts.: 0.878%, 3/4/10 3,4 [JPY] 159,446,686 1,397,546 4.809%, 9/4/06 3,4 328,572 327,751 4.809%, 3/4/10 3,4 609,750 605,177 - ----------------------------------------------------------------------------------------------------------------------- Deutsche Bank AG, Indonesia (Republic of) Rupiah Loan Participation Nts., 3.813%, 1/25/06 3 3,155,000 3,173,299 ---------------- Total Loan Participations (Cost $5,334,889) 5,503,773 - ----------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES--4.9% - ----------------------------------------------------------------------------------------------------------------------- Alrosa Finance SA: 8.875% Nts., 11/17/14 2,400,000 2,850,000 8.875% Nts., 11/17/14 6 4,675,000 5,551,563 - ----------------------------------------------------------------------------------------------------------------------- Argentine Beverages Financial Trust, 7.375% Bonds, 3/22/12 4 1,445,000 1,499,188 - ----------------------------------------------------------------------------------------------------------------------- CITGO Trustees Cayman Ltd., 8.50% Nts., 12/21/14 4 1,330,000 1,356,600 - ----------------------------------------------------------------------------------------------------------------------- Dresdner Bank AG (Ukreximbank), 8.75% Bonds, 2/10/10 2,580,000 2,705,772 - ----------------------------------------------------------------------------------------------------------------------- Eletropaulo Metropolitana SA, 19.125% Nts., 6/28/10 4 [BRR] 13,295,000 6,393,547 - ----------------------------------------------------------------------------------------------------------------------- Gazprom International SA, 7.201% Sr. Unsec. Bonds, 2/1/20 7,850,000 8,594,730 - ----------------------------------------------------------------------------------------------------------------------- HSBC Bank plc: 9.75% Sr. Unsec. Nts., 7/8/09 8 30,220,000 21,033,120 11.60% Sr. Unsec. Nts., 1/12/10 8 42,800,000 25,829,800 12.28% Sr. Unsec. Nts., 3/9/09 8 30,220,000 19,763,880 - ----------------------------------------------------------------------------------------------------------------------- Iansa Overseas, 7.25% Sr. Unsec. Nts., 7/28/12 6 4,000,000 3,990,000 - ----------------------------------------------------------------------------------------------------------------------- Inter-American Development Bank: 6.26% Nts., 12/8/09 3 [BRR] 11,200,000 4,721,758 8.81% Nts., 1/25/12 3 [COP] 15,694,714,310 6,896,027 - ----------------------------------------------------------------------------------------------------------------------- International Bank for Reconstruction & Development (The), 15% Nts., 1/7/10 4 [TRY] 3,000,000 2,439,658 - ----------------------------------------------------------------------------------------------------------------------- Kuznetski Capital SA, Bank of Moscow, 7.375% Nts., 11/26/10 4 5,560,000 5,879,700 - ----------------------------------------------------------------------------------------------------------------------- Nak Naftogaz Ukraine, 8.125% Bonds, 9/30/09 3,900,000 4,147,845
26 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES Continued - ----------------------------------------------------------------------------------------------------------------------- Nordic Investment Bank, 12.50% Sr. Unsec. Nts., 2/15/09 4 [TRY] 5,000,000 $ 3,722,614 - ----------------------------------------------------------------------------------------------------------------------- Ongko International Finance Co. BV, 10.50% Sec. Nts., 3/29/10 4,5 550,000 -- - ----------------------------------------------------------------------------------------------------------------------- Pemex Project Funding Master Trust, 9.125% Unsec. Unsub. Nts., 10/13/10 1 4,570,000 5,358,325 - ----------------------------------------------------------------------------------------------------------------------- Petroleum Export Ltd. Cayman SPV, 5.265% Sr. Nts., Cl. A3, 6/15/11 6 13,380,000 13,341,586 - ----------------------------------------------------------------------------------------------------------------------- Tengizchevroil LLP, 6.124% Nts., 11/15/14 1,6 5,840,000 6,000,600 - ----------------------------------------------------------------------------------------------------------------------- Titan Petrochemicals Group Ltd., 8.50% Sr. Unsec. Nts., 3/18/12 6 2,381,000 2,303,618 - ----------------------------------------------------------------------------------------------------------------------- UBS Luxembourg SA, 6.23% Sub. Nts., 2/11/15 3 8,020,000 8,220,019 - ----------------------------------------------------------------------------------------------------------------------- VTB Capital SA, 6.25% Bonds, 7/2/35 6 9,490,000 9,905,188 ---------------- Total Corporate Bonds and Notes (Cost $170,103,770) 172,505,138 SHARES - ----------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--2.0% - ----------------------------------------------------------------------------------------------------------------------- Amada Co., Ltd. 171,000 1,368,998 - ----------------------------------------------------------------------------------------------------------------------- Arcelor 60,280 1,409,830 - ----------------------------------------------------------------------------------------------------------------------- BAE Systems plc 225,040 1,363,434 - ----------------------------------------------------------------------------------------------------------------------- BNP Paribas SA 18,200 1,383,511 - ----------------------------------------------------------------------------------------------------------------------- BPB plc 100,570 1,305,551 - ----------------------------------------------------------------------------------------------------------------------- Daido Steel Co. Ltd. 264,000 1,715,379 - ----------------------------------------------------------------------------------------------------------------------- DaimlerChrysler AG 25,867 1,372,547 - ----------------------------------------------------------------------------------------------------------------------- Deutsche Telekom AG 70,200 1,277,361 - ----------------------------------------------------------------------------------------------------------------------- Douglas Holding AG 34,102 1,297,192 - ----------------------------------------------------------------------------------------------------------------------- E.ON AG 13,907 1,280,303 - ----------------------------------------------------------------------------------------------------------------------- Exel plc 62,730 1,357,586 - ----------------------------------------------------------------------------------------------------------------------- First Choice Holidays plc 360,890 1,347,863 - ----------------------------------------------------------------------------------------------------------------------- Gecina SA 11,120 1,309,729 - ----------------------------------------------------------------------------------------------------------------------- GKN plc 252,400 1,312,172 - ----------------------------------------------------------------------------------------------------------------------- Hanson plc 127,130 1,319,599 - ----------------------------------------------------------------------------------------------------------------------- Hochtief AG 32,609 1,450,465 - ----------------------------------------------------------------------------------------------------------------------- IVG Immobilien AG 62,845 1,298,366 - ----------------------------------------------------------------------------------------------------------------------- Keisei Electric Railway Co. Ltd. 256,000 1,404,933 - ----------------------------------------------------------------------------------------------------------------------- Kelda Group plc 108,690 1,346,739 - ----------------------------------------------------------------------------------------------------------------------- Klepierre 13,441 1,348,865 - ----------------------------------------------------------------------------------------------------------------------- Kubota Corp. 213,000 1,483,451 - ----------------------------------------------------------------------------------------------------------------------- Lloyds TSB Group plc 162,041 1,334,718 - ----------------------------------------------------------------------------------------------------------------------- MAN AG 26,424 1,354,466 - ----------------------------------------------------------------------------------------------------------------------- Matsui Securities Co. Ltd. 125,400 1,540,826 - ----------------------------------------------------------------------------------------------------------------------- Nikon Corp. 113,000 1,425,440 - ----------------------------------------------------------------------------------------------------------------------- Nippon Mining Holdings, Inc. 195,500 1,549,947
27 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
VALUE SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------- COMMON STOCKS Continued - ---------------------------------------------------------------------------------------------------------------------- Nippon Steel Corp. 454,000 $ 1,703,700 - ---------------------------------------------------------------------------------------------------------------------- OKI Electric Industry Co. 412,000 1,411,584 - ---------------------------------------------------------------------------------------------------------------------- PagesJaunes Groupe SA 51,320 1,400,113 - ---------------------------------------------------------------------------------------------------------------------- Pilkington plc 557,670 1,367,224 - ---------------------------------------------------------------------------------------------------------------------- Resolution plc 117,850 1,282,515 - ---------------------------------------------------------------------------------------------------------------------- Royal Dutch Shell plc, B Shares 39,280 1,356,537 - ---------------------------------------------------------------------------------------------------------------------- RWE AG 19,848 1,311,988 - ---------------------------------------------------------------------------------------------------------------------- Scottish & Newcastle plc 159,770 1,306,853 - ---------------------------------------------------------------------------------------------------------------------- Scottish & Southern Energy plc 74,940 1,360,118 - ---------------------------------------------------------------------------------------------------------------------- ScottishPower plc 146,730 1,479,050 - ---------------------------------------------------------------------------------------------------------------------- Shionogi & Co. Ltd. 102,000 1,392,650 - ---------------------------------------------------------------------------------------------------------------------- Societe Generale, Cl. A 12,265 1,399,630 - ---------------------------------------------------------------------------------------------------------------------- Suez SA 45,674 1,320,185 - ---------------------------------------------------------------------------------------------------------------------- Sumitomo Metal Industries 577,000 2,047,333 - ---------------------------------------------------------------------------------------------------------------------- ThyssenKrupp AG 69,567 1,454,799 - ---------------------------------------------------------------------------------------------------------------------- Tokyo Electron Ltd. 23,400 1,248,978 - ---------------------------------------------------------------------------------------------------------------------- Tokyo Steel Manufacturing Co. Ltd. 91,800 1,438,132 - ---------------------------------------------------------------------------------------------------------------------- TonenGeneral Sekiyu K.K. 121,000 1,406,977 - ---------------------------------------------------------------------------------------------------------------------- Tosoh Corp. 329,000 1,407,235 - ---------------------------------------------------------------------------------------------------------------------- TUI AG 56,146 1,195,730 - ---------------------------------------------------------------------------------------------------------------------- Unibail 9,300 1,350,207 - ---------------------------------------------------------------------------------------------------------------------- United Utilities plc 115,550 1,334,931 - ---------------------------------------------------------------------------------------------------------------------- Veolia Environnement SA 32,556 1,373,765 - ---------------------------------------------------------------------------------------------------------------------- Vinci SA 15,000 1,291,689 ---------------- Total Common Stocks (Cost $62,499,483) 69,601,194 UNITS - ---------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.0% - ---------------------------------------------------------------------------------------------------------------------- Loral Space & Communications Ltd. Wts., Exp. 1/15/07 4,9 50 -- - ---------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Oil Linked Payment Obligation Wts., Exp. 4/15/20 4,9 500 15,000 ---------------- Total Rights, Warrants and Certificates (Cost $481) 15,000
28 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------- STRUCTURED NOTES--28.0% - ---------------------------------------------------------------------------------------------------------------------- Citigroup Global Markets Holdings, Inc.: Brazil (Federal Republic of) Credit Linked Nts., 17.37%, 7/3/07 [BRR] 55,270,000 $ 18,737,576 Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 38,356,000 14,603,726 Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 59,878,000 22,798,048 Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 100,000,000 38,074,164 Brazil (Federal Republic of) Unsec. Credit Linked Nts., 18.41%, 10/4/05 [BRR] 34,700,000 15,559,143 Brazil (Federal Republic of) Unsec. Credit Linked Nts., 18.80%, 1/3/08 [BRR] 24,719,335 7,793,097 Brazil (Federal Republic of) Unsec. Credit Linked Nts., 19.85%, 1/2/09 [BRR] 28,074,132 7,670,097 Brazil (Federal Republic of) Unsec. Credit Linked Nts., 20.40%, 1/5/10 [BRR] 32,035,902 7,673,275 Colombia (Republic of) Credit Linked Bonds, 11%, 7/24/20 [COP] 12,570,000,000 6,732,082 Colombia (Republic of) Credit Linked Nts., Series II, 15%, 4/27/12 [COP] 6,942,469,928 4,272,320 Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 31,110,000,000 19,144,751 Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 12,430,000,000 7,649,285 Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 11,705,100,000 7,203,190 Colombia (Republic of) Credit Linked Nts., Series V, 13.50%, 9/15/14 [COP] 28,015,000,000 16,260,666 Dominican Republic Credit Linked Nts., 14.11%, 7/10/06 (linked to Dominican Republic Treasury Bills) 8 [DOP] 274,400,000 7,996,573 Dominican Republic Credit Linked Nts., 15.64%, 5/2/06 (linked to Dominican Republic Treasury Bills) 8 [DOP] 305,780,000 9,171,430 Dominican Republic Credit Linked Nts., 17%, 3/12/07 [DOP] 256,400,000 8,304,718 Dominican Republic Credit Linked Nts., 19.69%, 3/31/06 (linked to Dominican Republic Treasury Bills) 8 [DOP] 249,890,000 7,576,053 Dominican Republic Credit Linked Nts., 22.41%, 3/10/06 (linked to Dominican Republic Treasury Bills) 8 [DOP] 319,516,460 9,777,615 Dominican Republic Unsec. Credit Linked Nts., 14.67%, 5/15/06 (linked to Dominican Republic Treasury Bills) 8 [DOP] 165,940,000 4,949,715 Dominican Republic Unsec. Credit Linked Nts., 16.18%, 4/24/06 (linked to Dominican Republic Treasury Bills) 8 [DOP] 102,260,000 3,075,507 Dominican Republic Unsec. Credit Linked Nts., 23.07%, 3/3/06 (linked to Dominican Republic Treasury Bills) 8 [DOP] 493,299,200 15,140,870 Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.01%, 10/28/05 (linked to Egyptian Treasury Bills) 8 [EGP] 50,120,000 8,646,918 Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.21%, 9/19/06 (linked to Egyptian Treasury Bills) 8 [EGP] 41,300,000 6,594,520 Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.407%, 2/9/06 (linked to Egyptian Treasury Bills) [EGP] 75,466,000 12,701,347 Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.90%, 1/12/06 (linked to Egyptian Treasury Bills) [EGP] 57,210,000 9,692,625 Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.90%, 12/29/05 (linked to Egyptian Treasury Bills) [EGP] 17,390,000 2,956,028 Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 9.65%, 11/29/05 (linked to Egyptian Treasury Bills) 8 [EGP] 67,600,000 11,645,743 OAO Gazprom Russian Local Market Unsec. Credit Linked Nts., 15.208%, 11/8/05 4,406,270 5,032,445 Ukraine Hryvnia Unsec. Credit Linked Nts., 11.94%, 1/4/10 [UAH] 13,799,000 3,224,321 - ---------------------------------------------------------------------------------------------------------------------- Credit Suisse First Boston Corp. (Cayman), Turkey (Republic of) Credit Linked Nts., Series EMG 7, 15%, 2/10/10 [TRY] 37,857,000 30,195,632
29 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------- STRUCTURED NOTES Continued - ---------------------------------------------------------------------------------------------------------------------- Credit Suisse First Boston International: Lukoil Credit Linked Nts., Series Fbi 105, 7.25%, 11/17/09 [RUR] 321,528,000 $ 11,806,414 Moscow (City of) Credit Linked Nts., Series Fbi 98, 11%, 4/23/09 [RUR] 280,840,000 11,406,737 Moscow (City of) Credit Linked Nts., Series Fbi 101, 10%, 12/31/10 [RUR] 277,800,000 11,437,353 OAO Gazprom Credit Linked Nts., 8.11%, 1/21/07 [RUR] 289,282,000 10,562,470 South African Rand Interest Bearing Linked Nts., Series FBi 43, 3.52%, 5/23/22 2,100,000 2,081,940 Ukraine (Republic of) Credit Linked Nts., Series EMG 13, 11.94%, 12/30/09 [UAH] 30,400,000 7,098,129 - ---------------------------------------------------------------------------------------------------------------------- Credit Suisse First Boston, Inc.: (Nassau Branch), Turkey (Republic of) Credit Linked Nts., 20%, 10/18/07 4,238,000 4,937,779 (Nassau Branch), Turkey (Republic of) Credit Linked Nts., Series EM 872, 22.88%, 10/20/05 3 19,769,000 20,687,197 (Nassau Branch), Turkey (Republic of) Credit Linked Nts., Series EM 880, 20%, 10/18/07 12,320,000 15,890,459 (Nassau Branch), Turkey (Republic of) Credit Linked Nts., Series EMG 4, 18.70%, 7/6/06 [TRY] 24,930,576 16,621,557 (Nassau Branch), Turkey (Republic of) Credit Linked Nts., Series EMG 19, 16.90%, 7/5/06 8 [TRY] 20,350,000 13,567,624 (Nassau Branch), Turkey (Republic of) Credit Linked Nts., Series NAS 316, 22.66%, 2/23/06 8 7,266,000 9,430,251 (Nassau Branch), Ukraine (Republic of) Credit Linked Nts., Series EMG 11, 11.94%, 12/30/09 [UAH] 9,163,000 2,139,479 (Nassau Branch), Ukraine (Republic of) Credit Linked Nts., Series NPC 12, 11.94%, 12/30/09 [UAH] 65,490,000 15,291,331 - ---------------------------------------------------------------------------------------------------------------------- Deutsche Bank AG: Argentina (Republic of) Credit Linked Nts., 4%, 12/21/11 10 [ARP] 35,580,000 29,155,111 Brazil Real Credit Linked Nts., 13.88%, 3/3/10 8 [BRR] 61,128,560 17,246,027 Campania Total Return Linked Nts., 2.88%, 7/30/10 3 [EUR] 34,900,000 42,141,734 Egypt (The Arab Republic of) Total Return Linked Nts., 8.52%, 1/17/06 (linked to Egyptian Treasury Bills) 8 [EGP] 50,610,000 8,571,190 Egypt (The Arab Republic of) Total Return Linked Nts., 9.63%, 3/9/06 (linked to Egyptian Treasury Bills) 8 [EGP] 36,390,000 6,080,794 European Investment Bank, Russian Federation Credit Linked Nts., 5.65%, 1/19/10 8,475,000 6,729,998 Indonesia (Republic of) Credit Linked Nts., 9.50%, 6/22/15 10,300,162 7,800,313 Indonesia (Republic of) Credit Linked Nts., Series III, 14.25%, 6/15/13 12,412,800 12,476,105 Moscow (City of) Credit Linked Nts., 10%, 3/30/10 [RUR] 304,373,000 12,027,042 OAO Gazprom I Credit Nts., 6.201%, 10/20/07 1,435,000 1,570,854 OAO Gazprom II Credit Nts., 5.951%, 4/20/07 1,435,000 1,544,270 Philippines (Republic of) Credit Linked Nts., 12%, 1/20/09 [PHP] 319,400,000 6,001,406 Philippines (Republic of) Credit Linked Nts., 12.375%, 11/1/09 [PHP] 596,990,000 11,188,106 Philippines (Republic of) Credit Linked Nts., 12.375%, 3/1/15 [PHP] 109,790,000 2,012,713 Romania (The State of) 3 yr. Linked Nts., 12.25%, 10/15/07 [RON] 22,740,000 9,095,078 Romania (The State of) 3 yr. Linked Nts., 12.89%, 9/24/07 [RON] 3,320,000 1,209,648 Romania (The State of) 3 yr. Linked Nts., 12.89%, 9/24/07 [RON] 5,640,000 2,054,945 Romania (The State of) 3 yr. Linked Nts., 12.89%, 9/24/07 [RON] 10,000,000 3,643,520 Romania (The State of) Credit Linked Nts., 11.49%, 12/7/06 [RON] 9,118,650 3,449,626 Russian Federation Credit Linked Nts., 12/2/09 8 [RUR] 233,573,000 8,629,178
30 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------- STRUCTURED NOTES Continued - ---------------------------------------------------------------------------------------------------------------------- Deutsche Bank AG: Continued Ukraine (Republic of) 5 yr. Credit Linked Nts., 4.05%, 8/25/10 4,10 $ 1,345,000 $ 1,347,556 Ukraine (Republic of) 5.5 yr. Credit Linked Nts., 4.05%, 2/25/11 4,10 1,345,000 1,347,556 Ukraine (Republic of) 6 yr. Credit Linked Nts., 4.05%, 8/25/11 4,10 1,345,000 1,347,556 Ukraine (Republic of) 6.5 yr. Credit Linked Nts., 4.05%, 2/27/12 4,10 1,345,000 1,347,556 Ukraine (Republic of) 7 yr. Credit Linked Nts., 4.05%, 8/28/12 4,10 1,345,000 1,347,556 Ukraine (Republic of) Credit Linked Nts., 5.592%, 5/16/07 [UAH] 27,990,000 5,572,476 Ukraine (Republic of) Credit Linked Nts., 9.60%, 7/1/09 4 [UAH] 13,256,000 2,323,081 Ukraine (Republic of) Credit Linked Nts., 10.208%, 7/1/09 4 [UAH] 46,272,000 8,109,053 Ukraine (Republic of) Credit Linked Nts., 11.70%, 5/31/06 [UAH] 20,689,000 4,274,204 Ukraine (Republic of) Credit Linked Nts., 11.94%, 12/30/09 [UAH] 3,228,000 753,869 Ukraine (Republic of) Credit Linked Nts., 11.94%, 12/30/09 [UAH] 11,438,000 2,671,237 Ukraine (Republic of) Credit Linked Nts., Series A, 5.592%, 5/16/07 [UAH] 27,980,000 5,570,486 Videocon International Ltd. Credit Linked Nts., 5.73%, 12/29/09 7,300,000 7,312,410 - ---------------------------------------------------------------------------------------------------------------------- ING Bank NV, Ukraine (Republic of) Credit Linked Nts., Series 725, 11.89%, 12/30/09 4 [UAH] 64,285,000 14,949,696 - ---------------------------------------------------------------------------------------------------------------------- JPMorgan Chase Bank: Brazil (Federal Republic of) Credit Linked Nts., 12.08%, 1/2/15 8 [BRR] 51,226,300 6,947,340 Brazil (Federal Republic of) Credit Linked Nts., 12.68%, 6/1/13 8 [BRR] 75,340,000 12,124,548 Brazil (Federal Republic of) Credit Linked Nts., 13.85%, 4/1/10 8 [BRR] 129,150,391 31,045,433 Brazil (Federal Republic of) Credit Linked Nts., 15.33%, 1/2/15 8 [BRR] 138,200,796 18,742,871 Brazil (Federal Republic of) Credit Linked Nts., Series II, 13.55%, 1/2/15 8 114,770,000 15,565,173 [BRR] Colombia (Republic of) Credit Linked Bonds, 13.50%, 8/3/20 [COP] 132,560,000,000 16,118,383 Peru (Republic of) Credit Linked Nts., 8.12%, 9/2/15 8 [PEN] 40,860,000 5,245,920 Swaziland (Kingdom of) Credit Linked Nts., 7.25%, 6/20/10 3,850,000 3,858,201 - ---------------------------------------------------------------------------------------------------------------------- Lehman Brothers International: Romania (The State of) Total Return Linked Nts., 7.90%, 2/8/10 (linked to Romanian Treasury Bills) [RON] 10,726,400 3,891,150 Turkey (Republic of) Total Return Linked Nts., 20%, 10/17/07 (linked to Turkey Treasury Bills) 13,040,000 16,631,216 - ---------------------------------------------------------------------------------------------------------------------- Lehman Brothers Special Financing, Inc.: Romania (The State of) Total Return Linked Nts., 6.50%, 3/8/10 (linked to Romanian Treasury Bills) [RON] 30,904,100 10,531,163 Romania (The State of) Total Return Linked Nts., 6.75%, 3/10/08 (linked to Romanian Treasury Bills) [RON] 36,650,000 12,565,671 Romania (The State of) Total Return Linked Nts., 7.25%, 4/18/10 (linked to Romanian Treasury Bills) [RON] 3,105,000 1,082,689 Romania (The State of) Total Return Linked Nts., 7.50%, 3/5/07 (linked to Romanian Treasury Bills) [RON] 5,155,000 1,803,043 Romania (The State of) Total Return Linked Nts., 7.75%, 4/18/08 (linked to Romanian Treasury Bills) [RON] 3,101,000 1,083,570 Romania (The State of) Total Return Linked Nts., 7.75%, 4/18/08 (linked to Romanian Treasury Bills) [RON] 7,453,000 2,604,273 Romania (The State of) Total Return Linked Nts., 7.90%, 2/11/08 (linked to Romanian Treasury Bills) [RON] 24,895,500 8,846,125
31 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------- STRUCTURED NOTES Continued - ---------------------------------------------------------------------------------------------------------------------- Morgan Stanley Capital Services, Inc.: Brazil (Federal Republic of) Sr. Sub. Linked Nts., 15.45%, 1/2/14 [BRR] 40,700,000 $ 17,681,925 Philippines (Republic of) Credit Linked Nts., 8.652%, 9/20/15 3 30,000,000 30,000,000 Venezuela (Republic of) Credit Linked Nts., 7.382%, 5/20/10 3,850,000 4,192,650 - ---------------------------------------------------------------------------------------------------------------------- UBS AG: Israel (State of) Credit Linked Nts., 7.50%, 4/5/14 [ILS] 56,205,300 13,923,883 OAO Gazprom III Credit Nts., 5.88%, 7/5/06 3,590,000 3,719,113 ---------------- Total Structured Notes (Cost $936,281,074) 992,918,490
STRIKE NOTIONAL DATE PRICE AMOUNT - ---------------------------------------------------------------------------------------------------------------------- SWAPTIONS PURCHASED--0.1% - ---------------------------------------------------------------------------------------------------------------------- Australian Dollar Call 9 2/9/06 5.67AUD $ 81,810,000 146,494 - ---------------------------------------------------------------------------------------------------------------------- Brazilian Real Call 9 10/3/05 16.50BRR 55,510,000 262 - ---------------------------------------------------------------------------------------------------------------------- Mexican Neuvo Peso Call 9 10/11/05 9.40MXN 560,400,000 593,333 - ---------------------------------------------------------------------------------------------------------------------- Mexican Neuvo Peso Call 9 11/10/05 9.02MXN 478,300,000 336,422 - ---------------------------------------------------------------------------------------------------------------------- Mexican Neuvo Peso Call 9 12/2/05 9.42MXN 1,117,400,000 2,016,925 - ---------------------------------------------------------------------------------------------------------------------- Mexican Neuvo Peso Call 9 12/8/05 9.23MXN 480,400,000 558,033 - ---------------------------------------------------------------------------------------------------------------------- Mexican Neuvo Peso Call 9 12/27/05 9.32MXN 485,160,000 697,441 --------- Total Swaptions Purchased (Cost $4,061,677) 4,348,910
PRINCIPAL AMOUNT - ---------------------------------------------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--3.4% - ---------------------------------------------------------------------------------------------------------------------- Undivided interest of 30.56% in joint repurchase agreement (Principal Amount/Value $400,132,000, with a maturity value of $400,240,369) with Cantor Fitzgerald & Co./Cantor Fitzgerald Securities, 3.25%, dated 9/30/05, to be repurchased at $122,333,123 on 10/3/05, collateralized by U.S. Treasury Bonds, 7.50%--8.875%, 11/15/16--11/15/21, with a value of $408,618,137 (Cost $122,300,000) $ 122,300,000 122,300,000 - ---------------------------------------------------------------------------------------------------------------------- Total Investments, at Value (excluding Investments Purchased with Cash Collateral from Securities Loaned) (Cost $3,343,276,046) 3,440,237,586 - ---------------------------------------------------------------------------------------------------------------------- INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED--1.0% - ---------------------------------------------------------------------------------------------------------------------- ASSET-BACKED FLOATING NOTE--0.0% Whitehawk CDO Funding Corp., 3.94%, 12/15/05 11 2,000,000 2,000,000 - ---------------------------------------------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--1.0% Undivided interest of 0.46% in joint repurchase agreement (Principal Amount/Value $3,300,000,000, with a maturity value of $3,301,064,250) with Nomura Securities, 3.87%, dated 9/30/05, to be repurchased at $15,038,089 on 10/3/05, collateralized by U.S. Agency Mortgages, 5%--5.50%, 9/1/20--8/1/35, with a value of $3,366,000,000 11 15,033,241 15,033,241
32 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS Continued Undivided interest of 4.35% in joint repurchase agreement (Principal Amount/Value $460,000,000 with a maturity value of $460,149,500) with BNP Paribas Securities Corp., 3.90%, dated 9/30/05, to be repurchased at $20,006,500 on 10/3/05, collateralized by U.S. Agency Mortgages, 3.33%--7.50%, 9/1/08--9/1/44, with a value of $469,200,000 11 $ 20,000,000 $ 20,000,000 ---------------- Total Investments Purchased with Cash Collateral from Securities Loaned (Cost $37,033,241) 37,033,241 - ---------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $3,380,309,287) 97.9% 3,477,270,827 - ---------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 2.1 74,967,503 ----------------------------------- NET ASSETS 100.0% $ 3,552,238,330 ===================================
FOOTNOTES TO STATEMENT OF INVESTMENTS Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: ARP Argentine Peso AUD Australian Dollar BRR Brazilian Real COP Colombian Peso DOP Dominican Republic Peso EGP Egyptian Pounds EUR Euro GBP British Pound Sterling HUF Hungarian Forint ILS Israeli Shekel JPY Japanese Yen MXN Mexican Nuevo Peso MYR Malaysian Ringgit NZD New Zealand Dollar PEN Peruvian New Sol PHP Philippines Peso PLZ Polish Zloty RON Romanian Leu RUR Russian Ruble TRY New Turkish Lira UAH Ukraine Hryvnia ZAR South African Rand 1. Partial or fully-loaned security. See Note 14 of Notes to Financial Statements. 2. All or a portion of the security is held in collateralized accounts to cover initial margin requirements on open futures sales contracts. The aggregate market value of such securities is $9,939,070. See Note 6 of Notes to Financial Statements. 3. Represents the current interest rate for a variable or increasing rate security. 4. Illiquid or restricted security. The aggregate value of illiquid or restricted securities as of September 30, 2005 was $123,715,377, which represents 3.48% of the Fund's net assets, none of which is considered restricted. In addition, the Fund held restricted currency with a value of $1,284,296, which represents 0.04% of the Fund's net assets. See Note 13 of Notes to Financial Statements. 5. Issue is in default. Non-income producing. See Note 1 of Notes to Financial Statements. 6. 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 $69,968,248 or 1.97% of the Fund's net assets as of September 30, 2005. 7. A sufficient amount of securities has been designated to cover outstanding foreign currency contracts. See Note 5 of Notes to Financial Statements. 8. Zero coupon bond reflects effective yield on the date of purchase. 9. Non-income producing security. 10. When-issued security or forward commitment to be delivered and settled after September 30, 2005. See Note 1 of Notes to Financial Statements. 11. The security has been segregated to satisfy the forward commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 14 of Notes to Financial Statements. 33 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued - -------------------------------------------------------------------------------- DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS: GEOGRAPHIC HOLDINGS (UNAUDITED) VALUE PERCENT - ------------------------------------------------------------------------------ Japan $ 343,212,218 9.9% Brazil 324,887,232 9.3 United States 273,336,682 7.9 Turkey 216,301,815 6.2 United Kingdom 189,897,943 5.5 Germany 183,393,568 5.3 Russia 180,672,154 5.2 Peru 149,660,866 4.3 Colombia 136,893,602 3.9 Mexico 134,346,944 3.9 France 121,162,643 3.5 Argentina 93,204,534 2.7 Ukraine 85,568,759 2.5 Egypt 80,230,751 2.3 Australia 70,140,658 2.0 Dominican Republic 69,492,968 2.0 Philippines 66,452,895 1.9 Italy 63,898,842 1.8 Romania 61,860,501 1.8 Portugal 61,640,955 1.8 South Africa 56,070,975 1.6 Israel 54,323,552 1.6 Finland 49,114,329 1.4 Malaysia 41,986,360 1.2 Venezuela 35,228,957 1.0 New Zealand 33,371,061 0.9 Poland 33,361,656 0.9 Austria 33,055,741 0.9 Ireland 31,833,140 0.9 Greece 30,112,863 0.9 Spain 28,966,764 0.8 The Netherlands 27,591,153 0.8 Indonesia 23,768,717 0.7 Panama 20,167,050 0.6 Supranational 17,780,057 0.5 Hungary 9,240,000 0.3 Belgium 8,695,437 0.2 Luxembourg 7,410,430 0.2 India 7,312,410 0.2 Chile 3,990,000 0.1 Swaziland 3,858,201 0.1 Bulgaria 3,728,638 0.1 Algeria 2,330,474 0.1 China 2,303,618 0.1 Guatemala 2,196,581 0.1 Nigeria 1,894,858 0.1 El Salvador 1,321,275 0.0 ---------------------------- Total $ 3,477,270,827 100.0% ============================ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 34 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF ASSETS AND LIABILITIES September 30, 2005 - --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------- ASSETS - ----------------------------------------------------------------------------------------- Investments, at value (including securities loaned of $119,714,105) (cost $3,380,309,287)--see accompanying statement of investments $ 3,477,270,827 - ----------------------------------------------------------------------------------------- Cash 11,180,383 - ----------------------------------------------------------------------------------------- Cash--foreign currencies (cost $1,301,399) 1,284,296 - ----------------------------------------------------------------------------------------- Unrealized appreciation on foreign currency contracts 48,877,902 - ----------------------------------------------------------------------------------------- Unrealized appreciation on swap contracts 34,046,740 - ----------------------------------------------------------------------------------------- Receivables and other assets: Interest, dividends and principal paydowns 39,251,330 Shares of beneficial interest sold 29,264,614 Investments sold on a when-issued basis or forward commitment 21,115,788 Futures margins 158,689 Other 24,566 --------------- Total assets 3,662,475,135 - ----------------------------------------------------------------------------------------- LIABILITIES - ----------------------------------------------------------------------------------------- Swaptions written, at value (premiums received $251,576) 333,827 - ----------------------------------------------------------------------------------------- Return of collateral for securities loaned 37,033,241 - ----------------------------------------------------------------------------------------- Unrealized depreciation on foreign currency contracts 10,355,465 - ----------------------------------------------------------------------------------------- Unrealized depreciation on swap contracts 4,334,370 - ----------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased (including $30,601,442 purchased on a when-issued basis or forward commitment) 43,322,342 Shares of beneficial interest redeemed 9,349,327 Distribution and service plan fees 2,010,853 Dividends 1,998,576 Transfer and shareholder servicing agent fees 474,427 Closed foreign currency contracts 409,319 Shareholder communications 154,783 Trustees' compensation 30,810 Other 429,465 --------------- Total liabilities 110,236,805 - ----------------------------------------------------------------------------------------- NET ASSETS $ 3,552,238,330 ===============
35 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF ASSETS AND LIABILITIES Continued - --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - ----------------------------------------------------------------------------------------- Par value of shares of beneficial interest $ 591,294 - ----------------------------------------------------------------------------------------- Additional paid-in capital 3,310,789,486 - ----------------------------------------------------------------------------------------- Accumulated net investment income 63,991,108 - ----------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 14,591,260 - ----------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 162,275,182 --------------- NET ASSETS $ 3,552,238,330 =============== - ----------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - ----------------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $2,683,900,318 and 446,413,842 shares of beneficial interest outstanding) $ 6.01 Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price) $ 6.31 - ----------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $224,381,020 and 37,445,175 shares of beneficial interest outstanding) $ 5.99 - ----------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $560,137,785 and 93,472,720 shares of beneficial interest outstanding) $ 5.99 - ----------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $46,533,080 and 7,758,366 shares of beneficial interest outstanding) $ 6.00 - ----------------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $37,286,127 and 6,204,011 shares of beneficial interest outstanding) $ 6.01
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 36 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF OPERATIONS For the Year Ended September 30, 2005 - --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------ INVESTMENT INCOME - ------------------------------------------------------------------------------------------ Interest (net of foreign withholding taxes of $575,418) $ 124,369,306 - ------------------------------------------------------------------------------------------ Dividends (net of foreign withholding taxes of $135,741) 1,513,177 - ------------------------------------------------------------------------------------------ Portfolio lending fees 58,192 - ------------------------------------------------------------------------------------------ Other income 13,172 ---------------- Total investment income 125,953,847 - ------------------------------------------------------------------------------------------ EXPENSES - ------------------------------------------------------------------------------------------ Management fees 14,728,663 - ------------------------------------------------------------------------------------------ Distribution and service plan fees: Class A 4,743,046 Class B 2,010,229 Class C 3,999,630 Class N 152,875 - ------------------------------------------------------------------------------------------ Transfer and shareholder servicing agent fees: Class A 2,940,595 Class B 488,057 Class C 590,173 Class N 102,667 Class Y 10,366 - ------------------------------------------------------------------------------------------ Shareholder communications: Class A 279,418 Class B 65,458 Class C 59,116 Class N 5,577 Class Y 2,694 - ------------------------------------------------------------------------------------------ Custodian fees and expenses 802,893 - ------------------------------------------------------------------------------------------ Trustees' compensation 42,887 - ------------------------------------------------------------------------------------------ Other 309,533 ---------------- Total expenses 31,333,877 Less reduction to custodian expenses (101,076) Less waivers and reimbursements of expenses (1,201) ---------------- Net expenses 31,231,600 - ------------------------------------------------------------------------------------------ NET INVESTMENT INCOME 94,722,247
37 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF OPERATIONS Continued - --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) - ------------------------------------------------------------------------------------------ Net realized gain (loss) on: Investments $ 84,303,182 Closing and expiration of option contracts written 1,131,468 Closing and expiration of swaption contracts (3,179,824) Closing of futures contracts (6,784,387) Foreign currency transactions 45,434,906 Swap contracts (19,435,525) ---------------- Net realized gain 101,469,820 - ------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) on: Investments 92,879,718 Translation of assets and liabilities denominated in foreign 2,312,874 currencies Futures contracts (2,059,151) Swaption contracts 172,239 Swap contracts 32,164,086 ---------------- Net change in unrealized appreciation 125,469,766 - ------------------------------------------------------------------------------------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 321,661,833 ================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 38 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2005 2004 - ------------------------------------------------------------------------------------------------ OPERATIONS - ------------------------------------------------------------------------------------------------ Net investment income $ 94,722,247 $ 22,611,481 - ------------------------------------------------------------------------------------------------ Net realized gain 101,469,820 77,848,408 - ------------------------------------------------------------------------------------------------ Net change in unrealized appreciation 125,469,766 (2,233,848) ----------------------------------- Net increase in net assets resulting from operations 321,661,833 98,226,041 - ------------------------------------------------------------------------------------------------ DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - ------------------------------------------------------------------------------------------------ Dividends from net investment income: Class A (119,863,500) (35,086,382) Class B (11,853,673) (6,602,563) Class C (21,678,102) (6,093,022) Class N (1,754,272) (397,275) Class Y (1,726,774) (2,820) - ------------------------------------------------------------------------------------------------ Distributions from net realized gain: Class A (15,265,136) -- Class B (1,931,153) -- Class C (3,155,872) -- Class N (225,580) -- Class Y (218,918) -- - ------------------------------------------------------------------------------------------------ BENEFICIAL INTEREST TRANSACTIONS - ------------------------------------------------------------------------------------------------ Net increase in net assets resulting from beneficial interest transactions: Class A 1,399,327,451 713,652,173 Class B 44,672,998 25,122,862 Class C 305,107,070 136,111,001 Class N 26,099,719 13,528,377 Class Y 21,571,837 14,179,799 - ------------------------------------------------------------------------------------------------ NET ASSETS - ------------------------------------------------------------------------------------------------ Total increase 1,940,767,928 952,638,191 - ------------------------------------------------------------------------------------------------ Beginning of period 1,611,470,402 658,832,211 ----------------------------------- End of period (including accumulated net investment income of $63,991,108 and $44,819,377, respectively) $ 3,552,238,330 $ 1,611,470,402 ===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 39 | OPPENHEIMER INTERNATIONAL BOND FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
CLASS A YEAR ENDED SEPTEMBER 30, 2005 2004 2003 2002 2001 - -------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 5.63 $ 5.33 $ 4.38 $ 3.95 $ 4.19 - -------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .23 1 .13 .20 .24 .30 Net realized and unrealized gain (loss) .62 .47 .95 .41 (.24) ------------------------------------------------------------------------------- Total from investment operations .85 .60 1.15 .65 .06 - -------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.41) (.30) (.20) (.19) -- Distributions from net realized gain (.06) -- -- -- -- Tax return of capital distribution -- -- -- (.03) (.30) ------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.47) (.30) (.20) (.22) (.30) - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 6.01 $ 5.63 $ 5.33 $ 4.38 $ 3.95 =============================================================================== - -------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 15.53% 11.56% 26.67% 16.78% 1.40% - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 2,683,900 $ 1,177,628 $ 429,283 $ 181,456 $ 118,733 - -------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 1,925,344 $ 811,608 $ 285,391 $ 134,912 $ 117,000 - -------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 3.85% 2.19% 3.94% 5.16% 7.10% Total expenses 1.03% 1.13% 1.22% 1.37% 1.38% Expenses after payments and waivers and reduction to custodian expenses 1.02% 1.13% 1.22% 1.37% 1.38% - -------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 90% 133% 341% 372% 377%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 40 | OPPENHEIMER INTERNATIONAL BOND FUND
CLASS B YEAR ENDED SEPTEMBER 30, 2005 2004 2003 2002 2001 - --------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 5.61 $ 5.31 $ 4.37 $ 3.94 $ 4.17 - --------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .17 1 .08 .16 .21 .26 Net realized and unrealized gain (loss) .63 .47 .94 .40 (.22) -------------------------------------------------------------------------------- Total from investment operations .80 .55 1.10 .61 .04 - --------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.36) (.25) (.16) (.15) -- Distributions from net realized gain (.06) -- -- -- -- Tax return of capital distribution -- -- -- (.03) (.27) -------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.42) (.25) (.16) (.18) (.27) - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 5.99 $ 5.61 $ 5.31 $ 4.37 $ 3.94 ================================================================================ - --------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 14.58% 10.66% 25.48% 15.90% 0.85% - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 224,381 $ 167,621 $ 134,661 $ 100,049 $ 84,427 - --------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 201,541 $ 153,117 $ 119,232 $ 85,244 $ 93,455 - --------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 2.95% 1.40% 3.20% 4.41% 6.40% Total expenses 1.89% 4 1.98% 4,5 2.03% 4 2.14% 4 2.14% 4 - --------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 90% 133% 341% 372% 377%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 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. 41 | OPPENHEIMER INTERNATIONAL BOND FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS C YEAR ENDED SEPTEMBER 30, 2005 2004 2003 2002 2001 - --------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 5.61 $ 5.31 $ 4.37 $ 3.94 $ 4.17 - --------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .18 1 .09 .16 .21 .26 Net realized and unrealized gain (loss) .63 .46 .94 .40 (.22) -------------------------------------------------------------------------------- Total from investment operations .81 .55 1.10 .61 .04 - --------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.37) (.25) (.16) (.15) -- Distributions from net realized gain (.06) -- -- -- -- Tax return of capital distribution -- -- -- (.03) (.27) -------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.43) (.25) (.16) (.18) (.27) - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 5.99 $ 5.61 $ 5.31 $ 4.37 $ 3.94 ================================================================================ - --------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 14.70% 10.75% 25.48% 15.90% 0.85% - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 560,138 $ 233,311 $ 90,248 $ 38,865 $ 25,221 - --------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 401,401 $ 170,796 $ 63,198 $ 28,635 $ 27,125 - --------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 3.10% 1.46% 3.15% 4.37% 6.39% Total expenses 1.77% 4 1.88% 4,5 2.02% 4 2.14% 4 2.14% 4 - --------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 90% 133% 341% 372% 377%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 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. 42 | OPPENHEIMER INTERNATIONAL BOND FUND
CLASS N YEAR ENDED SEPTEMBER 30, 2005 2004 2003 2002 2001 1 - --------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 5.61 $ 5.32 $ 4.37 $ 3.95 $ 4.23 - --------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .20 2 .12 .18 .21 .16 Net realized and unrealized gain (loss) .64 .45 .95 .42 (.28) -------------------------------------------------------------------------------- Total from investment operations .84 .57 1.13 .63 (.12) - --------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.39) (.28) (.18) (.18) -- Distributions from realized gain (.06) -- -- -- -- Tax return of capital distribution -- -- -- (.03) (.16) -------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.45) (.28) (.18) (.21) (.16) - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 6.00 $ 5.61 $ 5.32 $ 4.37 $ 3.95 ================================================================================ - --------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 15.27% 11.00% 26.31% 16.23% (2.88)% - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 46,533 $ 18,641 $ 4,640 $ 1,280 $ 109 - --------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 30,696 $ 10,769 $ 2,653 $ 297 $ 34 - --------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 3.45% 1.83% 3.56% 4.87% 6.56% Total expenses 1.47% 1.49% 1.57% 1.57% 1.39% Expenses after payments and waivers and reduction to custodian expenses 1.46% 1.49% 1.57% 1.57% 1.39% - --------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 90% 133% 341% 372% 377%
1. For the period from March 1, 2001 (inception of offering) to September 30, 2001. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 43 | OPPENHEIMER INTERNATIONAL BOND FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS Y YEAR ENDED SEPTEMBER 30, 2005 2004 1 - ----------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ----------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 5.63 $ 5.58 - ----------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .25 2 -- 3 Net realized and unrealized gain .63 .05 ----------------------------------- Total from investment operations .88 .05 - ----------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.44) -- Distributions from net realized gain (.06) -- Tax return of capital distribution -- -- ----------------------------------- Total dividends and/or distributions to shareholders (.50) -- - ----------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 6.01 $ 5.63 =================================== - ----------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 4 15.96% 0.92% - ----------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ----------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 37,286 $ 14,268 - ----------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 25,559 $ 7,086 - ----------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 5 Net investment income 4.23% 4.84% Total expenses 0.67% 1.17% Expenses after payments and waivers and reduction to custodian expenses 0.66% 1.17% - ----------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 90% 133%
1. For the period from September 27, 2004 (inception of offering) to September 30, 2004. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Less than $0.005 per share. 4. 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. 5. Annualized for periods of less than one full year. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 44 | 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 primary investment objective is to seek total return. As a secondary objective, the Fund seeks income when consistent with 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 due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and N have separate distribution and/or service plans. No such plan has been adopted for Class Y shares. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Securities may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities listed or traded on National Stock Exchanges or other domestic exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. Securities traded on NASDAQ are valued based on the closing price provided by NASDAQ prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing "bid" and "asked" prices, and if not, at the closing bid price. Securities traded on foreign exchanges are valued based on the last sale price on the principal exchange on which the security is traded, in the country that is identified by the portfolio pricing service, prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the official closing price on the principal exchange. Corporate, government and municipal debt instruments having a remaining maturity in excess of sixty days and all mortgage-backed securities will be valued at the mean between the "bid" and "asked" prices. 45 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued Futures contracts traded on a commodities or futures exchange will be valued at the final settlement price or official closing price on the principal exchange as reported by such principal exchange at its trading session ending at, or most recently prior to, the time when the Fund's assets are valued. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign and domestic securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund's assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board of Trustees. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- 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 Statement of Operations. The Fund records a realized gain or loss when a structured note is sold or matures. As of September 30, 2005, the market value of these securities comprised 28.0% of the Fund's net assets and resulted in unrealized cumulative gains of $56,637,416. - -------------------------------------------------------------------------------- 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, 2005, the Fund had purchased $30,601,442 of securities issued on a when-issued basis or forward commitment and sold $21,115,788 of securities issued on a when-issued basis or forward commitment. In connection with its ability to purchase or sell securities on a when-issued basis, the Fund may enter into forward roll transactions with respect to mortgage-related securities. 46 | OPPENHEIMER INTERNATIONAL BOND FUND Forward roll transactions require the sale of securities for delivery in the current month, and a simultaneous agreement with the same counterparty to repurchase similar (same type, coupon and maturity) but not identical securities on a specified future date. The Fund records the incremental difference between the forward purchase and sale of each forward roll as realized gain (loss) on investments or as fee income in the case of such transactions that have an associated fee in lieu of a difference in the forward purchase and sale price. Risks of entering into forward roll transactions include the potential inability of the counterparty to meet the terms of the agreement; the potential of the Fund to receive inferior securities at redelivery as compared to the securities sold to the counterparty; counterparty credit risk; and the potential pay down speed variance between the mortgage-related pools. - -------------------------------------------------------------------------------- SECURITY CREDIT RISK. The Fund invests in high-yield securities, which may be subject to a greater degree of credit risk, market fluctuations and loss of income and principal, and may be more sensitive to economic conditions than lower-yielding, higher-rated fixed-income securities. The Fund may acquire securities in default, and is not obligated to dispose of securities whose issuers subsequently default. As of September 30, 2005, securities with an aggregate market value of $420,684, representing 0.01% of the Fund's net assets, were in default. - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in U.S. dollars. The values of securities denominated in foreign currencies and amounts related to the purchase and sale of foreign securities and foreign investment income are translated into U.S. dollars as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Foreign exchange rates may be valued primarily using dealer supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily 47 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued 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. NET UNREALIZED APPRECIATION BASED ON COST OF SECURITIES AND UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME INCOME GAIN CARRYFORWARD 1,2 TAX PURPOSES ------------------------------------------------------------------- $ 117,018,359 $ 14,903,297 $ -- $ 110,769,517 1. During the fiscal year ended September 30, 2005, the Fund did not utilize any capital loss carryforward. 2. 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. 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, 2005. Net assets of the Fund were unaffected by the reclassifications. 48 | OPPENHEIMER INTERNATIONAL BOND FUND REDUCTION TO REDUCTION TO ACCUMULATED ACCUMULATED NET INCREASE TO NET INVESTMENT REALIZED GAIN PAID-IN CAPITAL LOSS ON INVESTMENTS 3 -------------------------------------------------- $ 1,622,965 $ 81,325,805 $ 82,948,770 3. $1,585,470, all of which was long-term capital gain, was distributed in connection with Fund share redemptions. The tax character of distributions paid during the years ended September 30, 2005 and September 30, 2004 was as follows: YEAR ENDED YEAR ENDED SEPT. 30, 2005 SEPT. 30, 2004 -------------------------------------------------------- Distributions paid from: Ordinary income $ 177,672,980 $ 48,182,062 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, 2005 are noted below. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. Federal tax cost of securities $3,373,356,518 Federal tax cost of other investments (59,627,677) --------------- Total federal tax cost $3,313,728,841 =============== Gross unrealized appreciation $ 163,461,133 Gross unrealized depreciation (52,691,616) --------------- Net unrealized appreciation $ 110,769,517 =============== - -------------------------------------------------------------------------------- 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. 49 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
YEAR ENDED SEPTEMBER 30, 2005 YEAR ENDED SEPTEMBER 30, 2004 1 SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------- CLASS A Sold 290,795,021 $ 1,714,084,347 172,839,291 $ 957,396,128 Dividends and/or distributions reinvested 17,749,603 105,430,621 5,072,488 27,463,043 Redeemed (71,447,967) (420,187,517) (49,156,351) (271,206,998) --------------------------------------------------------------- Net increase 237,096,657 $ 1,399,327,451 128,755,428 $ 713,652,173 =============================================================== - ----------------------------------------------------------------------------------------- CLASS B Sold 15,275,934 $ 89,714,849 14,676,405 $ 80,808,899 Dividends and/or distributions reinvested 1,842,516 10,920,892 944,780 5,057,584 Redeemed (9,559,054) (55,962,743) (11,077,428) (60,743,621) --------------------------------------------------------------- Net increase 7,559,396 $ 44,672,998 4,543,757 $ 25,122,862 ===============================================================
50 | OPPENHEIMER INTERNATIONAL BOND FUND
YEAR ENDED SEPTEMBER 30, 2005 YEAR ENDED SEPTEMBER 30, 2004 1 SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------- CLASS C Sold 59,355,223 $ 348,932,998 30,576,433 $ 168,801,488 Dividends and/or distributions reinvested 2,925,804 17,330,636 830,062 4,457,967 Redeemed (10,417,683) (61,156,564) (6,789,922) (37,148,454) --------------------------------------------------------------- Net increase 51,863,344 $ 305,107,070 24,616,573 $ 136,111,001 =============================================================== - ----------------------------------------------------------------------------------------- CLASS N Sold 5,802,889 $ 34,052,865 2,975,732 $ 16,429,938 Dividends and/or distributions reinvested 310,916 1,843,537 66,020 357,127 Redeemed (1,676,293) (9,796,683) (593,448) (3,258,688) --------------------------------------------------------------- Net increase 4,437,512 $ 26,099,719 2,448,304 $ 13,528,377 =============================================================== - ----------------------------------------------------------------------------------------- CLASS Y Sold 4,755,499 $ 27,879,481 2,536,075 $ 14,176,984 Dividends and/or distributions reinvested 328,793 1,945,692 500 2,815 Redeemed (1,416,856) (8,253,336) -- -- --------------------------------------------------------------- Net increase 3,667,436 $ 21,571,837 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. - -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the year ended September 30, 2005, were as follows: PURCHASES SALES - ---------------------------------------------------------------- Investment securities $ 3,106,697,823 $ 1,739,262,495 U.S. government and government agency obligations 259,866,893 228,548,343 - -------------------------------------------------------------------------------- 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. 51 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued 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, 2005, the Fund paid $3,901,101 to OFS for services to the Fund. Additionally, Class Y shares are subject to minimum fees of $10,000 per annum for assets of $10 million or more. The Class Y shares are subject to the minimum fees in the event that the per account fee does not equal or exceed the applicable minimum fees. OFS may voluntarily waive the minimum fees. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. - -------------------------------------------------------------------------------- SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made 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-based sales charge of 0.75% on Class B and Class C shares and 0.25% on Class N shares. The Distributor also receives a service fee of 0.25% per year under each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the plan at September 30, 2005 for Class B, Class C and Class N shares were $8,934,389, $7,425,451 and $329,175, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. 52 | OPPENHEIMER INTERNATIONAL BOND FUND - -------------------------------------------------------------------------------- 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, 2005 $ 1,626,798 $ 54,701 $ 368,223 $ 143,287 $ 73,709
- -------------------------------------------------------------------------------- WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. During the year ended September 30, 2005, OFS waived $1,201 for Class N shares. 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. 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. 53 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY CONTRACTS Continued As of September 30, 2005, the Fund had outstanding foreign currency contracts as follows:
CONTRACT VALUATION EXPIRATION AMOUNT AS OF UNREALIZED UNREALIZED CONTRACT DESCRIPTION DATES (000S) SEPT.30, 2005 APPRECIATION DEPRECIATION - ---------------------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE Argentine Peso [ARP] 10/6/05-2/2/06 102,704ARP $ 35,274,494 $ 174,389 $ 343,715 Brazilian Real [BRR] 10/26/05-9/25/06 424,820BRR 219,299,375 35,528,555 -- Canadian Dollar [CAD] 10/21/05 38,280CAD 32,948,282 130,446 -- Chilean Peso [CLP] 10/6/05-12/22/05 12,345,000CLP 23,289,559 305,907 -- Indian Rupee [INR] 10/26/05-12/20/05 1,960,440INR 44,557,240 260,759 -- Indonesian Rupiah [IDR] 1/4/06 77,030,000IDR 7,478,641 191,034 -- Mexican Nuevo Peso [MXN] 10/25/05-10/26/05 661,630MXN 61,247,499 89,681 112,992 Norwegian Krone [NOK] 10/24/05 192,390NOK 29,399,253 -- 731,409 Philippines Peso [PHP] 10/26/05 1,873,300PHP 33,318,135 191,699 -- Russian Ruble [RUR] 10/27/05 302,480RUR 10,628,649 266,196 -- Slovakia Koruna [SKK] 11/14/05-12/21/05 1,524,670SKK 47,237,935 -- 1,136,863 Swiss Franc [CHF] 10/21/05 166,350CHF 128,741,309 -- 1,864,494 Turkish Lira [TRY] 10/26/05-11/7/05 115,426TRY 102,285,820 2,783,629 260,124 -------------------------- 39,922,295 4,449,597 -------------------------- CONTRACTS TO SELL Argentine Peso [ARP] 10/6/05 61,421ARP 21,114,699 248,970 -- Australian Dollar [AUD] 12/5/05 60,640AUD 46,109,730 43,381 911,147 British Pound Sterling [GBP] 10/17/05-3/8/06 35,860GBP 63,214,315 1,535,464 -- Chinese Renminbi [CNY] 10/26/05 269,500CNY 33,331,275 53,673 -- Czech Koruna [CZK] 10/26/05 807,100CZK 32,792,647 683,090 -- Euro [EUR] 10/17/05-3/8/06 228,315EUR 274,947,927 3,269,932 -- Japanese Yen [JPY] 10/26/05-3/8/06 19,428,000JPY 172,912,802 2,232,261 -- South African Rand [ZAR] 10/11/05-11/15/05 222,795ZAR 34,942,780 -- 2,772,308 Swedish Krone [SEK] 10/26/05 255,200SEK 32,966,434 367,117 -- Swiss Franc [CHF] 10/26/05 42,260CHF 32,720,368 521,719 -- Turkish Lira [TRY] 11/1/05-2/8/06 87,322TRY 63,270,214 -- 2,222,413 -------------------------- 8,955,607 5,905,868 -------------------------- Total unrealized appreciation and depreciation $ 48,877,902 $ 10,355,465 ==========================
- -------------------------------------------------------------------------------- 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. 54 | OPPENHEIMER INTERNATIONAL BOND FUND The Fund generally sells futures contracts as a hedge against increases in interest rates and decreases in market value of portfolio securities. The Fund may also purchase futures contracts to gain exposure to market changes as it may be more efficient or cost effective than actually buying securities. Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin) in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or has expired. Cash held by the broker to cover initial margin requirements on open futures contracts is noted in the Statement of Assets and Liabilities. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. The Statement of Assets and Liabilities reflects a receivable and/or payable for the daily mark to market for variation margin. Realized gains and losses are reported in the Statement of Operations as the closing and expiration of futures contracts. The net change in unrealized appreciation and depreciation is reported in the Statement of Operations. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. As of September 30, 2005, the Fund had outstanding futures contracts as follows:
VALUATION AS OF UNREALIZED EXPIRATION NUMBER OF SEPTEMBER 30, APPRECIATION CONTRACT DESCRIPTION DATES CONTRACTS 2005 (DEPRECIATION) - -------------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE Amsterdam Exchange Index 10/21/05 58 $ 5,626,080 $ 94,959 CAC-40 10 Index 10/21/05 315 17,418,605 315,607 Standard & Poor's ASX 200 Index 12/15/05 67 5,923,111 145,427 Standard & Poor's/MIB Index, 10 yr. 12/16/05 27 5,647,269 71,339 --------------- 627,332 --------------- CONTRACTS TO SELL CAC-40 10 Index 10/21/05 256 14,156,072 (343,440) DAX Index 12/16/05 181 27,553,527 (830,300) FTSE 100 Index 12/16/05 190 18,379,692 (401,726) Nikkei 225 Index 12/8/05 161 19,231,501 (1,333,163) Standard & Poor's 500 Index 12/15/05 18 5,554,350 17,708 --------------- (2,890,921) --------------- $ (2,263,589) ===============
55 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 7. OPTION ACTIVITY The Fund may buy and sell put and call options, or write put and covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Fund generally purchases put options or writes covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. Securities designated to cover outstanding call options are noted in the Statement of Investments where applicable. 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, 2005 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, 2004 14,995,007,110 $ 1,096,886 -- $ -- Options written 14,160 25,557 28,100,000 64,863 Options closed or expired (14,995,021,270) (1,122,443) (28,100,000) (64,863) -------------------------------------------------------- Options outstanding as of September 30, 2005 -- $ -- -- $ -- ========================================================
- -------------------------------------------------------------------------------- 8. TOTAL RETURN SWAP CONTRACTS The Fund may enter into a total return swap transaction to maintain a total return on a particular investment, or portion of its portfolio, or for other non-speculative purposes. Because the principal amount is not exchanged, it represents neither an asset nor a liability to either counterparty, and is referred to as notional. The Fund records an increase or 56 | OPPENHEIMER INTERNATIONAL BOND FUND decrease to unrealized gain (loss), in the amount due to or owed by the Fund at termination or settlement. Total return swaps are subject to risks (if the counterparty fails to meet its obligations). As of September 30, 2005, the Fund had entered into the following total return swap agreements:
RECEIVED PAID BY THE RATES BY THE RATES FUND AT AS OF FUND AT AS OF SWAP NOTIONAL SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, TERMINATION UNREALIZED COUNTERPARTY AMOUNT 2005 2005 2005 2005 DATES APPRECIATION - -------------------------------------------------------------------------------------------------------- Deutsche Six-Month Bank AG $16,760,000 BBA LIBOR 4.23063% UDIS 3.586687% 5/13/15 $ 1,805,649 - -------------------------------------------------------------------------------------------------------- Goldman Sachs Group, Inc. (The): Six-Month 11,580,000 BBA LIBOR 4.23063 UDIS 3.586687 1/14/15 1,155,553 Six-Month 11,580,000 BBA LIBOR 4.23063 UDIS 3.586687 1/20/15 1,177,464 ------------ $ 4,138,666 ============
Index abbreviations are as follows: BBA LIBOR British Bankers' Association London-Interbank Offered Rate UDIS Mexican Indice Nacional de Precios al Consumidor - -------------------------------------------------------------------------------- 9. 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. 57 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 9. INTEREST RATE SWAP CONTRACTS Continued As of September 30, 2005, the Fund had entered into the following interest rate swap agreements:
RATE RATE PAID BY RECEIVED BY THE FUND AT THE FUND AT UNREALIZED SWAP NOTIONAL SEPT. 30, SEPT. 30, FLOATING TERMINATION APPRECIATION COUNTERPARTY AMOUNT 2005 2005 RATE INDEX DATES (DEPRECIATION) - ----------------------------------------------------------------------------------------------------------------------- Citigroup Global Markets Holdings, Inc.: 90-Day 333,000,000TWD 2.0200% 1.2820% CPTW 3/4/09 $ (68,339) Six-Month 16,830,000PLZ 4.3500 5.5200 WIBO 3/24/10 338,051 Six-Month 26,928,000PLZ 4.3500 5.5500 WIBO 3/24/10 550,869 Three-Month 18,776,000,000KRW 3.9300 4.3400 KWCDC 2/17/10 (121,890) 5,900,000,000KRW 3.4900 4.5750 KWCDC 8/26/10 604 90-Day 333,000,000TWD 2.0200 1.2860 CPTW 3/23/09 (52,864) - ----------------------------------------------------------------------------------------------------------------------- Credit Suisse First Boston, Six-Month Inc. (Nassau Branch) 46,785,000PLZ 4.9100 4.4800 WIBO 7/1/10 (100,547) - ----------------------------------------------------------------------------------------------------------------------- Credit Suisse First Boston 28-Day International 112,580,000MXN 10.0300 10.0000 MXN TIIE 7/9/15 556,221 - ----------------------------------------------------------------------------------------------------------------------- Deutsche Bank AG: Three-Month 32,500,000 4.8160 3.8338 BBA LIBOR 3/8/15 (262,200) Three-Month 23,710,000EUR 2.1340 3.8300 EURIBOR 3/8/15 2,006,899 Six-Month 11,050,000 3.6600 5.2500 LIBOR 6/23/15 787,415 Six-Month 500,000,000INR 4.8700 5.1083 MIFOR 3/22/09 412,763 454,000,000INR 4.8300 5.0079 IRS 1/14/09 342,797 90-Day 187,000,000TWD 2.5850 1.3600 CPTW 8/19/09 (148,281)
58 | OPPENHEIMER INTERNATIONAL BOND FUND
RATE RATE PAID BY RECEIVED BY THE FUND AT THE FUND AT UNREALIZED SWAP NOTIONAL SEPT. 30, SEPT. 30, FLOATING TERMINATION APPRECIATION COUNTERPARTY AMOUNT 2005 2005 RATE INDEX DATES (DEPRECIATION) - ----------------------------------------------------------------------------------------------------------------------- Goldman Sachs Capital Markets LP: 94,500,000MXN 9.7350% 10.2900% MXN TIIE 6/14/15 $ 612,533 21,965,083BRR 18.2500 17.7200 BZDI 1/2/07 (91,495) 120,050,000MXN 9.6100 10.2200 MXN TIIE 1/30/15 720,776 187,935,994BRR 19.7300 17.1800 BZDI 1/2/08 130,741 38,987,000BRR 19.2000 18.1600 BZDI 1/2/08 389,742 55,700,000MXN 9.4900 10.0000 MXN TIIE 6/24/15 260,650 93,375,000MXN 9.4800 10.4300 MXN TIIE 5/29/15 682,310 93,375,000MXN 9.4800 10.3000 MXN TIIE 6/1/15 607,671 - ----------------------------------------------------------------------------------------------------------------------- Goldman Sachs Group, Inc. (The): 48,030,000MXN 9.6250 9.4100 MXN TIIE 8/31/20 (4,455) 144,630,000MXN 9.6750 9.7400 MXN TIIE 1/5/10 409,671 61,200,000MXN 9.4950 10.8500 MXN TIIE 3/5/15 599,880 46,968,000BRR 18.6300 18.0000 BZDI 1/2/07 (77,250) 17,037,427BRR 18.2500 17.1700 BZDI 1/2/08 (41,721) 20,823,527BRR 18.2500 17.1700 BZDI 1/2/08 (50,992) 109,710,000MXN 9.7200 10.7000 MXN TIIE 5/8/15 986,593 100,000,000MXN 9.7200 10.7500 MXN TIIE 5/8/15 929,999 144,000,000MXN 9.6250 9.5100 MXN TIIE 8/26/25 3,397 96,930,000MXN 9.6750 9.5000 MXN TIIE 8/28/25 (6,060) 289,270,000MXN 9.6250 9.8400 MXN TIIE 12/31/09 917,796 - ----------------------------------------------------------------------------------------------------------------------- JPMorgan Chase Bank: Six-Month 1,080,000,000HUF 6.6300 7.0000 LIBOR flat 7/14/08 104,501 Six-Month 94,000,000EUR 2.1940 4.1060 LIBOR 10/8/14 11,472,730 28-Day 161,780,000MXN 9.6500 10.8800 MXN TIIE 11/16/14 1,618,262 Three-Month 66,000,000ZAR 6.9430 9.7800 LIBOR flat 2/20/11 823,353 Three-Month 66,000,000ZAR 6.9430 9.6800 LIBOR flat 2/18/11 779,396 114,500,000MXN 9.5100 9.7600 MXN TIIE 8/17/15 394,554
59 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 9. INTEREST RATE SWAP CONTRACTS Continued
RATE RATE PAID BY RECEIVED BY THE FUND AT THE FUND AT UNREALIZED SWAP NOTIONAL SEPT. 30, SEPT. 30, FLOATING TERMINATION APPRECIATION COUNTERPARTY AMOUNT 2005 2005 RATE INDEX DATES (DEPRECIATION) - ----------------------------------------------------------------------------------------------------------------------- Lehman Brothers Special Financing, Inc.: Six-Month 55,540,000PLZ 4.7400% 4.5300% WIBO 7/5/10 $ (84,275) 28-Day 111,440,000MXN 9.6250 9.9900 MXN TIIE 7/19/15 524,055 Six-Month 28,640,000GBP 4.5152 4.5200 BBA LIBOR 2/17/08 66,395 Six-Month 6,840,000GBP 4.5980 4.5152 BBA LIBOR 2/17/16 (19,917) - ----------------------------------------------------------------------------------------------------------------------- Morgan Stanley Capital Services, Inc.: 24,054,685BRR 18.6800 16.8800 BZDI 1/2/08 (137,270) Three-Month 150,000,000ZAR 6.9500 7.8100 JIBA 2/4/10 (35,336) Three-Month 50,970,000ZAR 7.0000 8.1400 JIBA 5/18/10 79,356 41,775,000BRR 19.7200 17.5900 BZDI 1/2/07 (89,773) --------------- $ 26,717,315 ===============
Notional amount is reported in U.S. Dollars, except for those denoted in the following currencies: BRR Brazilian Real EUR Euro GBP British Pound Sterling HUF Hungarian Forint KRW South Korean Won INR Indian Rupee MXN Mexican Nuevo Peso PLZ Polish Zloty TWD New Taiwan Dollar ZAR South African Rand 60 | OPPENHEIMER INTERNATIONAL BOND FUND Index abbreviations are as follows: BBA LIBOR British Bankers' Association London-Interbank Offered Rate BZDI Brazil Cetip Interbank Deposit Rate CPTW Bloomberg Taiwan Secondary Commercial Papers EURIBOR Euro Interbank Offered Rate IRS India Swap Composites JIBA South Africa Johannesburg Interbank Agreed Rate KWCDC South Korean Won LIBOR London-Interbank Offered Rate MXN TIIE Mexican Peso-Interbank Equilibrium Interest Rate MIFOR Mumbai Interbank Forward Offer Rate WIBO Poland Warsaw Interbank Offer Bid Rate - -------------------------------------------------------------------------------- 10. CREDIT SWAP CONTRACTS The Fund may enter into a credit default swap contract to seek to maintain a total return on a particular investment or portion of its portfolio, or for other non-speculative purposes. Credit default swap contracts are subject to credit risks (for example if the counterparty fails to meet its obligations). As a purchaser of a credit default swap contract, the Fund pays a periodic interest fee on the notional amount to the counterparty. This interest fee is accrued daily as a component of unrealized appreciation (depreciation) and is recorded as realized loss upon payment. Upon occurrence of a specific credit event with respect to the underlying referenced debt obligation, the Fund is obligated to deliver that security to the counter-party in exchange for receipt of the notional amount from the counterparty. The difference between the value of the security delivered and the notional amount received is recorded as realized gain. Information regarding such credit swaps as of September 30, 2005 is as follows:
NOTIONAL AMOUNT ANNUAL RECEIVED BY THE INTEREST FUND UPON RATE PAID UNREALIZED COUNTERPARTY REFERENCED DEBT OBLIGATION CREDIT EVENT BY THE FUND DEPRECIATION - ---------------------------------------------------------------------------------------------------------- Citigroup Global Markets Limited Russian Federation London, UK 5% Step-up Bond $ 33,430,000 1.09% $ 926,255 - ---------------------------------------------------------------------------------------------------------- JPMorgan Chase New York, NY: Kingdom of Jordan 6% Step-up Bond 390,000 2.00 3,819 Russian Federation 2.50% Step-up Bond 550,000 2.40 66,400 - ---------------------------------------------------------------------------------------------------------- Lehman Brothers Special Financing, Inc.: Brazil 12.25% Global Bond 5,120,000 6.15 766,749 Republic of Turkey 11.875% Bond 1,660,000 3.15 105,298
61 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 10. CREDIT SWAP CONTRACTS Continued
NOTIONAL AMOUNT ANNUAL RECEIVED BY THE INTEREST FUND UPON RATE PAID UNREALIZED COUNTERPARTY REFERENCED DEBT OBLIGATION CREDIT EVENT BY THE FUND DEPRECIATION - ----------------------------------------------------------------------------------------------------------- Morgan Stanley Capital Services, Inc.: Republic of Columbia 10.375% Bond $ 1,980,000 3.70% $ 125,563 Turkey Government 11.875% International Bond 7,010,000 3.22 234,167 Ukrainian Government Bond 5,630,000 1.65 8,725 - ----------------------------------------------------------------------------------------------------------- UBS AG, Federal Republic of Brazil London Branch 12.25% Bond 4,780,000 4.50 514,601 ------------- $ 2,751,577 =============
As a seller of a credit default swap contract, the Fund receives a periodic interest fee on the notional amount from the counterparty. This interest fee is accrued daily as a component of unrealized appreciation (depreciation) and is recorded as realized gain upon receipt. Upon occurrence of a specific credit event with respect to the underlying referenced debt obligation, the Fund receives that security from the counterparty in exchange for payment of the notional amount to the counterparty. The difference between the value of the security received and the notional amount paid is recorded as realized loss. Information regarding such credit swaps as of September 30, 2005 is as follows:
NOTIONAL ANNUAL AMOUNT INTEREST PAID BY THE RATE UNREALIZED FUND UPON RECEIVED BY APPRECIATION COUNTERPARTY REFERENCED DEBT OBLIGATION CREDIT EVENT THE FUND (DEPRECIATION) - ------------------------------------------------------------------------------------------------------------ Citigroup Global Markets Limited Russian Federation London, UK 5% Step-up Bond $ 58,500,000 0.70% $ 483,267 - ------------------------------------------------------------------------------------------------------------ Lehman Brothers Republic of Turkey Special Financing, Inc. 11.875% Bond 3,645,000 1.87 80,723 - ------------------------------------------------------------------------------------------------------------ UBS AG, Federal Republic of Brazil London Branch 12.25% Bond 15,600,000 3.80 1,234,104 -------------- $ 1,798,094 ==============
- -------------------------------------------------------------------------------- 11. FOREIGN EXCHANGE VOLATILITY SWAP CONTRACTS The Fund may enter into a foreign exchange volatility swap transaction to hedge the direction of volatility in a particular currency, or for other non-speculative purposes. In foreign exchange volatility swaps, counterparties agree to buy or sell volatility at a specific volatility level over a fixed period. Payment is normally made on the basis of a currency amount per percentage point above or below the volatility strike level at 62 | OPPENHEIMER INTERNATIONAL BOND FUND maturity. 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 a daily increase or decrease to unrealized gain (loss) based on changes in the amount due to or owed by the Fund at the expiration date of the swap. Foreign exchange volatility swaps are subject to credit risks (if the counterparty fails to meet its obligations). As of September 30, 2005, the Fund had entered into the following foreign exchange volatility swap agreements:
NOTIONAL PRINCIPAL EXPIRATION UNREALIZED SWAP COUNTERPARTY CURRENCY AMOUNT DATE PRICE DEPRECIATION - ----------------------------------------------------------------------------------------- Goldman Sachs Mexican Nuevo Group, Inc. (The) Peso [MXN] $ 30,880,000 10/12/05 11.449MXN $190,128
- -------------------------------------------------------------------------------- 12. SWAPTION TRANSACTIONS The Fund may enter into a swaption transaction, whereby a contract that grants the holder, in return for payment of the purchase price (the "premium") of the option, the right, but not the obligation, to enter into an interest rate swap at a preset rate within a specified period of time, with the writer of the contract. The writer receives premiums and bears the risk of unfavorable changes in the preset rate on the underlying interest rate swap. Swaption contracts written by the Fund do not give rise to counterparty credit risk as they obligate the Fund, not its counterparty, to perform. Swaptions written are reported as a liability in the Statement of Assets and Liabilities. Written swaption activity for the year ended September 30, 2005 was as follows:
CALL SWAPTIONS PUT SWAPTIONS --------------------------- --------------------------- NOTIONAL AMOUNT OF NOTIONAL AMOUNT OF AMOUNT PREMIUMS AMOUNT PREMIUMS - ----------------------------------------------------------------------------------------- Swaptions outstanding as of September 30, 2004 $ 50,550,000 $ 500,195 $ 62,395,000 $ 291,178 Swaptions written 324,545,000 2,047,112 62,395,000 215,509 Swaptions closed or expired (313,735,000) (2,295,731) (124,790,000) (506,687) ---------------------------------------------------------- Swaptions outstanding as of September 30, 2005 $ 61,360,000 $ 251,576 $ -- $ -- ==========================================================
As of September 30, 2005, the Fund had entered into the following swaption contracts:
NOTIONAL EXPIRATION STRIKE PREMIUM VALUE SWAPTIONS AMOUNT DATE PRICE RECEIVED SEE NOTE 1 - ----------------------------------------------------------------------------------------- U.S. Dollar $ 61,360,000 2/9/06 $ 4.74 $ 251,576 $ 333,827
63 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 13. ILLIQUID OR RESTRICTED SECURITIES AND CURRENCY As of September 30, 2005, investments in securities included issues that are illiquid or restricted. Restricted securities are purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Trustees as reflecting fair value. A security may also be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund will not invest more than 10% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid or restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limitation. Securities that are illiquid or restricted are marked with the applicable footnote on the Statement of Investments. Information concerning currency is as follows: VALUATION AS OF ACQUISITION SEPTEMBER 30, UNREALIZED CURRENCY DATES COST 2005 DEPRECIATION - -------------------------------------------------------------------------------- Argentine Peso [ARP] 7/14/05-9/15/05 $ 1,301,399 $ 1,284,296 $ 17,103 - -------------------------------------------------------------------------------- 14. 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 continues to receive the economic benefit of interest or dividends paid on the securities loaned in the form of a substitute payment received from the borrower. As of September 30, 2005, the Fund had on loan securities valued at $119,714,105. Collateral of $121,771,638 was received for the loans, of which $37,033,241 was received in cash and subsequently invested in approved instruments. - -------------------------------------------------------------------------------- 15. LITIGATION A consolidated amended complaint has been filed as putative derivative and class actions against the Manager, OFS and the Distributor, as well as 51 of the Oppenheimer funds (as "Nominal Defendants") including the Fund, 30 present and former Directors or Trustees and 8 present and former officers of the funds. This complaint, initially filed in the U.S. District Court for the Southern District of New York on January 10, 2005 and amended on March 4, 2005, consolidates into a single action and amends six individual previously- 64 | OPPENHEIMER INTERNATIONAL BOND FUND filed putative derivative and class action complaints. Like those prior complaints, the complaint alleges that the Manager charged excessive fees for distribution and other costs, improperly used assets of the funds in the form of directed brokerage commissions and 12b-1 fees to pay brokers to promote sales of the funds, and failed to properly disclose the use of assets of the funds to make those payments in violation of the Investment Company Act of 1940 and the Investment Advisers Act of 1940. Also, like those prior complaints, the complaint further alleges that by permitting and/or participating in those actions, the Directors/Trustees and the Officers breached their fiduciary duties to shareholders of the funds under the Investment Company Act of 1940 and at common law. The complaint seeks unspecified compensatory and punitive damages, rescission of the funds' investment advisory agreements, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. The defendants believe that the allegations contained in the Complaints are without merit and that they have meritorious defenses against the claims asserted. The defendants intend to defend these lawsuits vigorously and to contest any claimed liability. The defendants believe that it is premature to render any opinion as to the likelihood of an outcome unfavorable to them and that no estimate can yet be made with any degree of certainty as to the amount or range of any potential loss. 65 | 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, 2005, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the periods presented. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2005, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer International Bond Fund as of September 30, 2005, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the periods presented, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Denver, Colorado November 18, 2005 66 | OPPENHEIMER INTERNATIONAL BOND FUND FEDERAL INCOME TAX INFORMATION Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In early 2006, if applicable, shareholders of record will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 2005. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Dividends and distributions of $0.1912, $0.1866, $0.1870, $0.1889 and $0.1938 per share were paid to Class A, Class B, Class C, Class N and Class Y shareholders, respectively, on December 30, 2004, of which $0.0597 was designated as a "capital gain distribution" for federal income tax purposes. Whether received in stock or in cash, the capital gain distribution should be treated by shareholders as a gain from the sale of the capital assets held for more than one year (long-term capital gains). None of the dividends paid by the Fund during the fiscal year ended September 30, 2005 are eligible for the corporate dividend-received deduction. A portion, if any, of the dividends paid by the Fund during the fiscal year ended September 30, 2005 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. $1,281,949 of the Fund's fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2006, 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. 67 | OPPENHEIMER INTERNATIONAL BOND FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENT Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund's voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 68 | OPPENHEIMER INTERNATIONAL BOND FUND TRUSTEES AND OFFICERS Unaudited - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------ NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER THE FUND, LENGTH OF SERVICE, TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF PORTFOLIOS IN THE FUND COMPLEX AGE CURRENTLY OVERSEEN INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, TRUSTEES CENTENNIAL, CO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. WILLIAM L. ARMSTRONG, Chairman of the following private mortgage banking companies: Cherry Creek Chairman (since 2003) Mortgage Company (since 1991), Centennial State Mortgage Company (since and Trustee (since 1999) 1994), and The El Paso Mortgage Company (since 1993); Chairman of the Age: 68 following private companies: Ambassador Media Corporation (since 1984) and Broadway Ventures (since 1984); Director of the following: Helmerich & Payne, Inc. (oil and gas drilling/production company) (since 1992), Campus Crusade for Christ (since 1991) and The Lynde and Harry Bradley Foundation, Inc. (non-profit organization) (since 2002); former Chairman of the following: Transland Financial Services, Inc. (private mortgage banking company) (1997-2003), Great Frontier Insurance (insurance agency) (1995-2000), Frontier Real Estate, Inc. (residential real estate brokerage) (1994-2000) and Frontier Title (title insurance agency) (1995-2000); former Director of the following: UNUMProvident (insurance company) (1991-2004), Storage Technology Corporation (computer equipment company) (1991-2003) and International Family Entertainment (television channel) (1992-1997); U.S. Senator (January 1979-January 1991). Oversees 38 portfolios in the OppenheimerFunds complex. ROBERT G. AVIS, Director and President of A.G. Edwards Capital, Inc. (General Partner of Trustee (since 1995) private equity funds) (until February 2001); Chairman, President and Chief Age: 74 Executive Officer of A.G. Edwards Capital, Inc. (until March 2000); Director of A.G. Edwards & Sons, Inc. (brokerage company) (until 2000) and A.G. Edwards Trust Company (investment adviser) (until 2000); Vice Chairman and Director of A.G. Edwards, Inc. (until March 1999); Vice Chairman of A.G. Edwards & Sons, Inc. (until March 1999); Chairman of A.G. Edwards Trust Company (until March 1999) and A.G.E. Asset Management (investment adviser) (until March 1999). Oversees 38 portfolios in the OppenheimerFunds complex. GEORGE C. BOWEN, Assistant Secretary and Director of Centennial Asset Management Trustee (since 1998) Corporation (December 1991-April 1999); President, Treasurer and Director Age: 69 of Centennial Capital Corporation (June 1989-April 1999); Chief Executive Officer and Director of MultiSource Services, Inc. (March 1996-April 1999); Mr. Bowen held several positions with the Manager and with subsidiary or affiliated companies of the Manager (September 1987-April 1999). Oversees 38 portfolios in the OppenheimerFunds complex. EDWARD L. CAMERON, Member of The Life Guard of Mount Vernon (George Washington historical Trustee (since 1999) site) (since June 2000); Director of Genetic ID, Inc. (biotech company) Age: 67 (March 2001-May 2002); Partner at PricewaterhouseCoopers LLP (accounting firm) (July 1974-June 1999); Chairman of Price Waterhouse LLP Global Investment Management Industry Services Group (July 1994-June 1998). Oversees 38 portfolios in the OppenheimerFunds complex. JON S. FOSSEL, Director of UNUMProvident (insurance company) (since June 2002); Director Trustee (since 1995) of Northwestern Energy Corp. (public utility corporation) (since November Age: 63 2004); Director of P.R. Pharmaceuticals (October 1999-October 2003); Director of Rocky Mountain Elk Foundation (non-profit organization) (February 1998-February 2003); Chairman and Director (until October 1996) and President and Chief Executive Officer (until October 1995) of the Manager; President, Chief Executive Officer and Director of the following: Oppenheimer Acquisition Corp.
69 | OPPENHEIMER INTERNATIONAL BOND FUND TRUSTEES AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- JON S. FOSSEL, ("OAC") (parent holding company of the Manager), Shareholder Services, Continued Inc. and Shareholder Financial Services, Inc. (until October 1995). Oversees 38 portfolios in the OppenheimerFunds complex. SAM FREEDMAN, Director of Colorado Uplift (charitable organization) (since September Trustee (since 1996) 1984). Mr. Freedman held several positions with the Manager and with Age: 65 subsidiary or affiliated companies of the Manager (until October 1994). Oversees 38 portfolios in the OppenheimerFunds complex. BEVERLY L. HAMILTON, Trustee of Monterey Institute for International Studies (educational Trustee (since 2002) organization) (since February 2000); Director of The California Endowment Age: 59 (philanthropic organization) (since April 2002); Director of Community Hospital of Monterey Peninsula (since February 2002); Director American Funds' Emerging Markets Growth Fund, Inc. (mutual fund) (since October 1991); President of ARCO Investment Management Company (February 1991-April 2000); Member of the investment committees of The Rockefeller Foundation and The University of Michigan; Advisor at Credit Suisse First Boston's Sprout venture capital unit (venture capital fund) (1994-January 2005); Trustee of MassMutual Institutional Funds (investment company) (1996-June 2004); Trustee of MML Series Investment Fund (investment company) (April 1989-June 2004); Member of the investment committee of Hartford Hospital (2000-2003); and Advisor to Unilever (Holland) pension fund (2000-2003). Oversees 38 portfolios in the OppenheimerFunds complex. ROBERT J. MALONE, Director of Jones International University (educational organization) Trustee (since 2002) (since August 2005); Chairman, Chief Executive Officer and Director of Age: 61 Steele Street State Bank (commercial banking) (since August 2003); Director of Colorado UpLIFT (charitable organization) (since 1986); Trustee of the Gallagher Family Foundation (non-profit organization) (since 2000); Former Chairman of U.S. Bank-Colorado (subsidiary of U.S. Bancorp and formerly Colorado National Bank) (July 1996-April 1999); Director of Commercial Assets, Inc. (real estate investment trust) (1993-2000); Director of Jones Knowledge, Inc. (2001-July 2004); and Director of U.S. Exploration, Inc. (oil and gas exploration) (1997- February 2004). Oversees 38 portfolios in the OppenheimerFunds complex. F. WILLIAM MARSHALL, JR., Trustee of MassMutual Select Funds (formerly MassMutual Institutional Trustee (since 2000) Funds) (investment company) (since 1996) and MML Series Investment Fund Age: 63 (investment company) (since 1996), the Springfield Library and Museum Association (museums) (since 1995) and the Community Music School of Springfield (music school) (since 1996); Chairman and Trustee (since 2003) and Chairman of the Investment Committee (since 1994) of the Worcester Polytech Institute (private university); President and Treasurer of the SIS Funds (private charitable fund) (since January 1999); Chairman of SIS & Family Bank, F.S.B. (formerly SIS Bank) (commercial bank) (January 1999-July 1999); Member of the Investment Committee of the Community Foundation of Western Massachusetts (1998-2003); and Executive Vice President of Peoples Heritage Financial Group, Inc. (commercial bank) (January 1999-July 1999). Oversees 40 portfolios in the OppenheimerFunds complex.
70 | OPPENHEIMER INTERNATIONAL BOND FUND - ------------------------------------------------------------------------------------------------------------ INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY AND OFFICER STREET, 11TH FLOOR, NEW YORK, NY 10281-1008. MR. MURPHY SERVES AS A TRUSTEE FOR AN INDEFINITE TERM AND AS AN OFFICER FOR AN ANNUAL TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS AN INTERESTED TRUSTEE DUE TO HIS POSITIONS WITH OPPENHEIMERFUNDS, INC. AND ITS AFFILIATES. JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June 2001) and President and President (since September 2000) of the Manager; President and Director or Principle Executive Officer Trustee of other Oppenheimer funds; President and Director of OAC and of (since 2001) Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the and Trustee Manager) (since July 2001); Director of OppenheimerFunds Distributor, Inc. (since 2001) (subsidiary of the Manager) (since November 2001); Chairman and Director Age: 56 of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager) (since July 2001); President and Director of OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since July 2001); Director of the following investment advisory subsidiaries of the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 2001) and Director (since July 2001) of Oppenheimer Real Asset Management, Inc.; Executive Vice President of Massachusetts Mutual Life Insurance Company (OAC's parent company) (since February 1997); Director of DLB Acquisition Corporation (holding company parent of Babson Capital Management LLC) (since June 1995); Member of the Investment Company Institute's Board of Governors (since October 3, 2003); Chief Operating Officer of the Manager (September 2000-June 2001); President and Trustee of MML Series Investment Fund and MassMutual Select Funds (open-end investment companies) (November 1999-November 2001); Director of C.M. Life Insurance Company (September 1999-August 2000); President, Chief Executive Officer and Director of MML Bay State Life Insurance Company (September 1999-August 2000); Director of Emerald Isle Bancorp and Hibernia Savings Bank (wholly-owned subsidiary of Emerald Isle Bancorp) (June 1989-June 1998). Oversees 77 portfolios as a Trustee or Director and 10 additional portfolios as an officer in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------------------------------ OTHER OFFICERS THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR OF THE FUND 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 RESIGNATION, RETIREMENT, DEATH OR REMOVAL. ARTHUR P. STEINMETZ, Senior Vice President of the Manager (since March 1993) and of HarbourView Vice President Asset Management Corporation (since March 2000); an officer of 4 (since 2004) portfolios in the OppenheimerFunds complex. Age: 47 MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since Vice President and March 2004); Vice President of OppenheimerFunds Distributor, Inc., Chief Compliance Officer Centennial Asset Management Corporation and Shareholder Services, Inc. (since 2004) (since June 1983); Vice President and Director of Internal Audit of the Age: 55 Manager (1997-February 2004). An officer of 87 portfolios in the OppenheimerFunds complex.
71 | OPPENHEIMER INTERNATIONAL BOND FUND TRUSTEES AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer and Treasurer of the following: HarbourView Asset Management Corporation, Principal Financial and Shareholder Financial Services, Inc., Shareholder Services, Inc., Accounting Officer Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership (since 1999) Holdings, Inc. (since March 1999), OFI Private Investments, Inc. (since Age: 46 March 2000), OppenheimerFunds International Ltd. and OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program (since June 2003); Treasurer and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of the following: OAC (since March 1999), Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer of Bankers Trust Company-Mutual Fund Services Division (March 1995-March 1999). An officer of 87 portfolios in the OppenheimerFunds complex. ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since Vice President and Secretary March 2002) of the Manager; General Counsel and Director of the (since 2001) Distributor (since December 2001); General Counsel of Centennial Asset Age: 57 Management Corporation (since December 2001); Senior Vice President and General Counsel of HarbourView Asset Management Corporation (since December 2001); Secretary and General Counsel of OAC (since November 2001); Assistant Secretary (since September 1997) and Director (since November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset Management, Inc. (since November 2001); Senior Vice President, General Counsel and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since December 2001); Senior Vice President, General Counsel and Director of OFI Private Investments, Inc. and OFI Trust Company (since November 2001); Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice President and General Counsel of OFI Institutional Asset Management, Inc. (since November 2001); Director of OppenheimerFunds (Asia) Limited (since December 2003); Senior Vice President (May 1985-December 2003), Acting General Counsel (November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of the following: Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November 1989-November 2001), and OppenheimerFunds International Ltd. (September 1997-November 2001). An officer of 87 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION ABOUT THE FUND'S TRUSTEES AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE, UPON REQUEST, BY CALLING 1.800.525.7048. 72 | 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 $27,000 in fiscal 2005 and $28,000 in fiscal 2004. (b) Audit-Related Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $15,000 in fiscal 2005 and no such fees in fiscal 2004 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such services: seed money audits. (c) Tax Fees The principal accountant for the audit of the registrant's annual financial statements billed to the registrant $6,667 in fiscal 2005 and no such fees in fiscal 2004. The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such services: audit of the tax provision for certain structured instruments. (d) All Other Fees The principal accountant for the audit of the registrant's annual financial statements billed to the registrant no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. (e) (1) During its regularly scheduled periodic meetings, the registrant's audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant. The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting. Under applicable laws, pre-approval of non-audit services maybe waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit. (2) 100% (f) Not applicable as less than 50%. (g) The principal accountant for the audit of the registrant's annual financial statements billed $21,167 in fiscal 2005 and no such fees in fiscal 2004 to the registrant and the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934. (h) The registrant's audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS 1. The Fund's Governance Committee (the "Committee") will evaluate potential Board candidates to assess their qualifications. The Committee shall have the authority, upon approval of the Board, to retain an executive search firm to assist in this effort. The Committee may consider recommendations by business and personal contacts of current Board members and by executive search firms which the Committee may engage from time to time and may also consider shareholder recommendations. The Committee may consider the advice and recommendation of the Funds' investment manager and its affiliates in making the selection. 2. The Committee shall screen candidates for Board membership. The Committee has not established specific qualifications that it believes must be met by a trustee nominee. In evaluating trustee nominees, the Committee considers, among other things, an individual's background, skills, and experience; whether the individual is an "interested person" as defined in the Investment Company Act of 1940; and whether the individual would be deemed an "audit committee financial expert" within the meaning of applicable SEC rules. The Committee also considers whether the individual's background, skills, and experience will complement the background, skills, and experience of other nominees and will contribute to the Board. There are no differences in the manner in which the Committee evaluates nominees for trustees based on whether the nominee is recommended by a shareholder. 3. The Committee may consider nominations from shareholders for the Board at such times as the Committee meets to consider new nominees for the Board. The Committee shall have the sole discretion to determine the candidates to present to the Board and, in such cases where required, to shareholders. Recommendations for trustee nominees should, at a minimum, be accompanied by the following: o the name, address, and business, educational, and/or other pertinent background of the person being recommended; o a statement concerning whether the person is an "interested person" as defined in the Investment Company Act of 1940; o any other information that the Funds would be required to include in a proxy statement concerning the person if he or she was nominated; and o the name and address of the person submitting the recommendation and, if that person is a shareholder, the period for which that person held Fund shares. The recommendation also can include any additional information which the person submitting it believes would assist the Committee in evaluating the recommendation. 4. Shareholders should note that a person who owns securities issued by Massachusetts Mutual Life Insurance Company (the parent company of the Funds' investment adviser) would be deemed an "interested person" under the Investment Company Act of 1940. In addition, certain other relationships with Massachusetts Mutual Life Insurance Company or its subsidiaries, with registered broker-dealers, or with the Funds' outside legal counsel may cause a person to be deemed an "interested person." 5. Before the Committee decides to nominate an individual as a trustee, Committee members and other directors customarily interview the individual in person. In addition, the individual customarily is asked to complete a detailed questionnaire which is designed to elicit information which must be disclosed under SEC and stock exchange rules and to determine whether the individual is subject to any statutory disqualification from serving as a trustee of a registered investment company. ITEM 11. CONTROLS AND PROCEDURES. Based on their evaluation of the registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of September 30, 2005, the registrant's principal executive officer and principal financial officer found the registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by the registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. There have been no changes in the registrant's internal controls over financial reporting that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a) (1) Exhibit attached hereto. (2) Exhibits attached hereto. (3) Not applicable. (b) Exhibit attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Oppenheimer International Bond Fund By: /s/ John V. Murphy ------------------ John V. Murphy Principal Executive Officer Date: November 16, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ John V. Murphy ------------------ John V. Murphy Principal Executive Officer Date: November 16, 2005 By: /s/ Brian W. Wixted ------------------- Brian W. Wixted Principal Financial Officer Date: November 16, 2005 EX-99.CODE ETH 2 ra880_18580ethics.txt RA880_18580ETHICS EX-99.CODE ETH CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS OF THE OPPENHEIMER FUNDS AND OF OPPENHEIMERFUNDS, INC. This Code of Ethics for Principal Executive and Senior Financial Officers (referred to in this document as the "Code") has been adopted by each of the investment companies for which OppenheimerFunds, Inc. or one of its subsidiaries or affiliates (referred to collectively in this document as "OFI") acts as investment adviser (individually, a "Fund" and collectively, the "Funds"), and by OFI to effectuate compliance with Section 406 under the Sarbanes-Oxley Act of 2002 and the rules adopted to implement Section 406. This Code applies to each Fund's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions ("Covered Officers"). A listing of positions currently within the ambit of Covered Officers is attached as EXHIBIT A.(1) 1. PURPOSE OF THE CODE This Code sets forth standards and procedures that are reasonably designed to deter wrongdoing and promote: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely, and understandable disclosure in reports and documents that a Fund files with, or submits to, the U.S. Securities and Exchange Commission ("SEC") and in other public communications made by the Fund; o compliance with applicable governmental laws, rules and regulations; o the prompt internal reporting of violations of this Code to the Code Administrator identified below; and - ---------- (1) The obligations imposed by this Code on Covered Officers are separate from and in addition to any obligations that may be imposed on such persons as Covered Persons under the Code of Ethics adopted by the Oppenheimer Funds dated May 15, 2002, under Rule 17j-1 of the Investment Company Act of 1940, as amended and any other code of conduct applicable to Covered Officers in whatever capacity they serve. This Code does not incorporate by reference any provisions of the Rule 17j-1 Code of Ethics and accordingly, any violations or waivers granted under the Rule 17j-1 Code of Ethics will not be considered a violation or waiver under this Code. o accountability for adherence to this Code. In general, the principles that govern honest and ethical conduct, including the avoidance of conflicts of interest between personal and professional relationships, reflect, at the minimum, the following: (1) the duty at all times in performing any responsibilities as a Fund financial officer, controller, accountant or principal executive officer to place the interests of the Funds ahead of personal interests; (2) the fundamental standard that Covered Officers should not take inappropriate advantage of their positions; (3) the duty to assure that a Fund's financial statements and reports to its shareholders are prepared honestly and accurately in accordance with applicable rules, regulations and accounting standards; and (4) the duty to conduct the Funds' business and affairs in an honest and ethical manner. Each Covered Officer should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. It is acknowledged that, as a result of the contractual relationship between each Fund and OFI, of which the Covered Officers are also officers or employees, and subject to OFI's fiduciary duties to each Fund, the Covered Officers will, in the normal course of their duties, be involved in establishing policies and implementing decisions that will have different effects on OFI and the Funds. It is further acknowledged that the participation of the Covered Officers in such activities is inherent in the contractual relationship between each Fund and OFI and is consistent with the expectations of the Board of Trustees/Directors of the performance by the Covered Officers of their duties as officers of the Funds. 2. PROHIBITIONS The specific provisions and reporting requirements of this Code are concerned primarily with promoting honest and ethical conduct and avoiding conflicts of interest in personal and professional relationships. No Covered Officer may use information concerning the business and affairs of a Fund, including the investment intentions of a Fund, or use his or her ability to influence such investment intentions, for personal gain to himself or herself, his or her family or friends or any other person or in a manner detrimental to the interests of a Fund or its shareholders. No Covered Officer may use his or her personal influence or personal relationships to influence the preparation and issuance of financial reports of a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund and its shareholders. No Covered Officer shall intentionally for any reason take any action or fail to take any action in connection with his or her official acts on behalf of a Fund that causes the Fund to violate applicable laws, rules and regulations. No Covered Officer shall, in connection with carrying out his or her official duties and responsibilities on behalf of a Fund: (i) employ any device, scheme or artifice to defraud a Fund or its shareholders; (ii) intentionally cause a Fund to make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading in its official documents, regulatory filings, financial statements or communications to the public; (iii) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any Fund or its shareholders; (iv) engage in any manipulative practice with respect to any Fund; (v) use his or her personal influence or personal relationships to influence any business decision, investment decisions, or financial reporting by a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund or its shareholders; (vi) intentionally cause a Fund to fail to comply with applicable laws, rules and regulations, including failure to comply with the requirement of full, fair, accurate, understandable and timely disclosure in reports and documents that a Fund files with, or submits to, the SEC and in other public communications made by the Fund; (vii) intentionally mislead or omit to provide material information to the Fund's independent auditors or to the Board of Trustees/Directors or the officers of the Fund or its investment adviser in connection with financial reporting matters; (viii) fail to notify the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser promptly if he or she becomes aware of any existing or potential violations of this Code or applicable laws; (ix) retaliate against others for, or otherwise discourage the reporting of, actual or apparent violations of this Code; or (x) fails to acknowledge or certify compliance with this Code if requested to do so. 3. REPORTS OF CONFLICTS OF INTERESTS If a Covered Officer becomes aware of a conflict of interest under this Code or, to the Covered Officer's reasonable belief, the appearance of one, he or she must immediately report the matter to the Code's Administrator. If the Code Administrator is involved or believed to be involved in the conflict of interest or appearance of conflict of interest, the Covered Officer shall report the matter directly to the OFI's Chief Executive Officer. Upon receipt of a report of a conflict, the Code Administrator will take prompt steps to determine whether a conflict of interest exists. If the Code Administrator determines that an actual conflict of interest exists, the Code Administrator will take steps to resolve the conflict. If the Code Administrator determines that the appearance of a conflict exists, the Code Administrator will take appropriate steps to remedy such appearance. If the Code Administrator determines that no conflict or appearance of a conflict exists, the Code Administrator shall meet with the Covered Officer to advise him or her of such finding and of his or her reason for taking no action. In lieu of determining whether a conflict or appearance of conflict exists, the Code Administrator may in his or her discretion refer the matter to the Fund's Board of Trustees/Directors. 4. WAIVERS Any Covered Officer requesting a waiver of any of the provisions of this Code must submit a written request for such waiver to the Code Administrator, setting forth the basis of such request and all necessary facts upon which such request can be evaluated. The Code Administrator shall review such request and make a written determination thereon, which shall be binding. The Code Administrator may in reviewing such request, consult at his discretion with legal counsel to OFI or to the Fund. In determining whether to waive any of the provisions of this Code, the Code Administrator shall consider whether the proposed waiver: (i) is prohibited by this Code; (ii) is consistent with honest and ethical conduct; and (iii) will result in a conflict of interest between the Covered Officer's personal and professional obligations to a Fund. In lieu of determining whether to grant a waiver, the Code Administrator in his or her discretion may refer the matter to the appropriate Fund's Board of Trustees/Directors. 5. REPORTING REQUIREMENTS (a) Each Covered Officer shall, upon becoming subject to this Code, be provided with a copy of this Code and shall affirm in writing that he or she has received, read, understands and shall adhere to this Code. (b) At least annually, all Covered Officers shall be provided with a copy of this Code and shall certify that they have read and understand this Code and recognize that they are subject thereto. (c) At least annually, all Covered Officers shall certify that they have complied with the requirements of this Code and that they have disclosed or reported any violations of this Code to the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser. (d) The Code Administrator shall submit a quarterly report to the Board of Trustees/Directors of each Fund containing (i) a description of any report of a conflict of interest or apparent conflict and the disposition thereof; (ii) a description of any request for a waiver from this Code and the disposition thereof; (iii) any violation of the Code that has been reported or found and the sanction imposed; (iv) interpretations issued under the Code by the Code Administrator; and (v) any other significant information arising under the Code including any proposed amendments. (e) Each Covered Officer shall notify the Code Administrator promptly if he or she knows of or has a reasonable belief that any violation of this Code has occurred or is likely to occur. Failure to do so is itself a violation of this Code. (f) Any changes to or waivers of this Code, including "implicit" waivers as defined in applicable SEC rules, will, to the extent required, be disclosed by the Code Administrator or his or her designee as provided by applicable SEC rules.(2) 6. ANNUAL RENEWAL At least annually, the Board of Trustees/Directors of each Fund shall review the Code and determine whether any amendments (including any amendments that may be recommended by OFI or the Fund's legal counsel) are necessary or desirable, and shall consider whether to renew and/or amend the Code. 7. SANCTIONS Any violation of this Code of Ethics shall be subject to the imposition of such sanctions by OFI as may be deemed appropriate under the circumstances to achieve the purposes of this Code and may include, without limitation, a letter of censure, suspension from employment or termination of employment, in the sole discretion of OFI. 8. ADMINISTRATION AND CONSTRUCTION (a) The administration of this Code of Ethics shall be the responsibility of OFI's General Counsel or his designee as the "Code Administrator" of this Code, acting under the terms of this Code and the oversight of the Trustees/Directors of the Funds. (b) The duties of such Code Administrator will include: (i) Continuous maintenance of a current list of the names of all Covered Officers; (ii) Furnishing all Covered Officers a copy of this Code and initially and periodically informing them of their duties and obligations thereunder; (iii) Maintaining or supervising the maintenance of all records required by this Code, including records of waivers granted hereunder; - ---------- (2) An "implicit waiver" is the failure to take action within a reasonable period of time regarding a material departure from a provision of this Code that has been made known to the General Counsel, the Code Administrator, an executive officer of the Fund or OFI. (iv) Issuing interpretations of this Code which appear to the Code Administrator to be consistent with the objectives of this Code and any applicable laws or regulations; (v) Conducting such inspections or investigations as shall reasonably be required to detect and report any violations of this Code, with his or her recommendations, to the Chief Executive Officer of OFI and to the Trustees/Directors of the affected Fund(s) or any committee appointed by them to deal with such information; and (vi) Periodically conducting educational training programs as needed to explain and reinforce the terms of this Code. (c) In carrying out the duties and responsibilities described under this Code, the Code Administrator may consult with legal counsel, who may include legal counsel to the applicable Funds, and such other persons as the Administrator shall deem necessary or desirable. The Code Administrator shall be protected from any liability hereunder or under any applicable law, rule or regulation, for decisions made in good faith based upon his or her reasonable judgment. 9. REQUIRED RECORDS The Administrator shall maintain and cause to be maintained in an easily accessible place, the following records for the period required by applicable SEC rules (currently six years following the end of the fiscal year of OFI in which the applicable event or report occurred): (a) A copy of any Code which has been in effect during the period; (b) A record of any violation of any such Code and of any action taken as a result of such violation, during the period; (c) A copy of each annual report pursuant to the Code made by a Covered Officer during the period; (d) A copy of each report made by the Code Administrator pursuant to this Code during the period; (e) A list of all Covered Officers who are or have been required to make reports pursuant to this Code during the period, plus those person(s) who are or were responsible for reviewing these reports; (f) A record of any request to waive any requirement of this Code, the decision thereon and the reasons supporting the decision; and (g) A record of any report of any conflict of interest or appearance of a conflict of interest received by the Code Administrator or discovered by the Code Administrator during the period, the decision thereon and the reasons supporting the decision. 10. AMENDMENTS AND MODIFICATIONS This Code may not be amended or modified except by an amendment in writing which is approved or ratified by OFI and by a majority vote of the Independent Trustees/Directors of each of the applicable Funds. 11. CONFIDENTIALITY. This Code is identified for the internal use of the Funds and OFI. Reports and records prepared or maintained under this Code are considered confidential and shall be maintained and protected accordingly to the extent permitted by applicable laws, rules and regulations. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trustees/Directors of the affected Fund(s) and their counsel, the independent auditors of the affected Funds and/or OFI, and to OFI, except as such disclosure may be required pursuant to applicable judicial or regulatory process. Dated as of: June 25, 2003 Adopted by Board I of the Oppenheimer Funds June 13, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board II of the Oppenheimer/Centennial Funds June 24, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board III of the Oppenheimer Funds June 9, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board IV of the Oppenheimer Funds May 21, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by the Boards of Directors of OppenheimerFunds, Inc. and its subsidiaries and affiliates that act as investment adviser to the Oppenheimer or Centennial funds June 1, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Senior Vice President and General Counsel Exhibit A Positions Covered by this Code of Ethics for Senior Officers EACH OPPENHEIMER OR CENTENNIAL FUND Principal Executive Officer Principal Financial Officer Treasurer Assistant Treasurer PERSONNEL OF OFI WHO BY VIRTUE OF THEIR JOBS PERFORM CRITICAL FINANCIAL AND ACCOUNTING FUNCTIONS FOR OFI ON BEHALF OF A FUND, INCLUDING: Treasurer Senior Vice President/Fund Accounting Vice President/Fund Accounting EX-99.CERT 3 ra880_18580ex302.txt RA880_18580EX302 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 16, 2005 /s/ John V. Murphy - ------------------ John V. Murphy Principal Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, Brian W. Wixted, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 16, 2005 /s/ Brian W. Wixted - ------------------- Brian W. Wixted Principal Financial Officer EX-99.906CERT 4 ra880_18580ex906.txt RA880_18580EX906 EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 John V. Murphy, Principal Executive Officer, and Brian W. Wixted, Principal Financial Officer, of Oppenheimer International Bond Fund (the "Registrant"), each certify to the best of his knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended September 30, 2005 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Principal Executive Officer Principal Financial Officer Oppenheimer International Bond Fund Oppenheimer International Bond Fund /s/ John V. Murphy /s/ Brian W. Wixted - ------------------ ------------------- John V. Murphy Brian W. Wixted Date: November 16, 2005 Date: November 16, 2005 -----END PRIVACY-ENHANCED MESSAGE-----