Oppenheimer Developing Markets Fund NCSR Certified annual shareholder report (management investment company)

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 811-07657

Oppenheimer Developing Markets Fund

(Exact name of registrant as specified in charter)

6803 South Tucson Way, Centennial, Colorado 80112-3924

(Address of principal executive offices) (Zip code)

Arthur S. Gabinet

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: August 31

Date of reporting period: 8/31/2012

Item 1. Reports to Stockholders.



8	31	2012

ANNUAL REPORT

Oppenheimer Developing Markets Fund

LOGO

Table of Contents


Fund Performance Discussion			1
Top Holdings and Allocations			4
Fund Expenses			7
Statement of Investments			9
Statement of Assets and Liabilities			16
Statement of Operations			18
Statements of Changes in Net Assets			20
Financial Highlights			21
Notes to Financial Statements			27
Report of Independent Registered Public Accounting Firm			44
Federal Income Tax Information			45
Portfolio Proxy Voting Policies and Procedures; Updates to Statement of Investments			46
Trustees and Officers Bios			47
Privacy Policy Notice			53

Class A Shares

AVERAGE ANNUAL TOTAL RETURNS AT 8/31/12


	Class A Shares of the Fund						MSCI Emerging Markets Index
	Without Sales Charge			With Sales Charge
1-Year		–0.89	%		–6.59	%		–5.80	%
5-Year		4.26			3.04			–0.37
10-Year		18.52			17.82			15.00

Management’s Discussion of Fund Performance

Oppenheimer Developing Markets Fund provided strong relative outperformance during the reporting period despite recent volatility in emerging markets equities. For the 1-year period ended August 31, 2012, the Fund’s Class A shares (without sales charge) returned –0.89%, outperforming the MSCI Emerging Markets Index’s return of –5.80%. The Fund’s outperformance relative to the Index was driven by positions in the consumer staples, financials and energy sectors, mainly on the back of stock selection, although an overweight to consumer staples also contributed to outperformance. Stock selection in information technology and consumer discretionary detracted from relative performance for the period.

Our “evergreen” approach that is designed to produce long-term growth with a degree of downside protection helped result in the Fund’s outperformance in this midst of a volatile market backdrop. The Fund seeks to invest in high quality companies in emerging markets that we believe have meaningful and persistent

competitive advantages. Our investments tend to be in companies that have low capital requirements and the potential to produce high returns on invested capital throughout the business cycle.

COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:

LOGO


OPPENHEIMER DEVELOPING MARKETS FUND			1

MARKET OVERVIEW

The reporting period was defined by bouts of strength and weakness in the markets, with emerging markets stocks experiencing declines amid ongoing macroeconomic concerns. The fear of contagion from the worsening European sovereign debt crisis and a recession across much of Europe drove negative market sentiment in the downturns. High unemployment, soaring debt and rising borrowing costs in Greece, Spain and Italy raised questions over how to implement austerity measures, restructure debt or instead take a different tact and provide some or all of those countries with additional funds. Perhaps most worrisome of all to investors was the possibility of Greece pulling out of the euro and its ramifications for the future of the Eurozone and its common currency. To prevent a more severe crisis in the region’s banking system, the European Central Bank launched twin Long-Term Refinancing Operations (LTRO).

These measures helped boost global investors’ appetite for risk during the first quarter of 2012.

In the emerging markets, potentially slowing growth in China and efforts to stall rising inflation worried global markets, as China has been a major engine of worldwide growth. Former high-flying economies such as India, Brazil and Australia encountered meaningful deceleration in economic growth. Adding to market volatility and economic uncertainty were wild swings in the currency markets, including significant

devaluations of some high yield emerging market currencies, including the Brazilian real and South African rand against the U.S. dollar. Growing tensions in the Middle East emanating out of escalating conflicts between Syria and Turkey and continued posturing by political leadership in Iran resulted in volatility in oil prices, which spiked oil prices higher over the first quarter of 2012, only to see them sharply fall again in the second quarter on weak economic figures, and rally again in the closing months of the period. However, the period closed on a positive note for the markets, including developing market equities, which rallied over the summer of 2012. The results of elections in Greece and continued efforts by European policymakers to stabilize the situation in the region appeared to soothe market jitters slightly in the final months of the period.

FUND PERFORMANCE

The strongest performing stocks for the Fund this period were SM Prime Holdings, Inc., Fomento Economico Mexicano SA de CV (“FEMSA”), Magnit, NHN Corp. and Prada SpA. SM Prime Holdings is the largest shopping mall and retail operator in the Philippines. The company continued to expand by opening new malls in the Philippines and China and through organic growth in existing stores on robust consumer spending and strong economic fundamentals. FEMSA owns and operates OXXO, the largest convenience store chain in Latin America. It controls Coca-Cola FEMSA, one


2		OPPENHEIMER DEVELOPING MARKETS FUND

of the largest independent Coca-Cola bottlers in the world, and also holds a 20% stake in Heineken. The stock continued to perform well as sales increased across its businesses, most notably OXXO.

Magnit is one of Russia’s largest food retailers, with nearly 5,000 retail outlets. During the period, the company experienced increased sales and its stock price exceeded its peak level from early 2011. NHN is a dominant Internet search and service provider in Korea that operates the Internet portal naver.com. Search, which is a natural monopoly business, benefited from both meaningful shifts in advertising towards Internet in Korea and the advent of massive growth in mobile search queries. The Fund established a position in Prada during the period. The company is an Italian-based manufacturer of luxury leather goods and clothing for men and women. Particularly strong demand in Asia helped drive shares of Prada higher over the period.

The most significant detractors from performance during the period were information technology stocks High Tech Computer Corp. (HTC) and Ctrip.com International Ltd. HTC is a Taiwan-based designer and manufacturer of Android phones. Shares of HTC suffered during the period amid fiercer competition from Apple and Samsung. Ctrip is a dominant travel aggregator in China, participating in a highly fragmented travel and hotel property market. Ctrip has invested aggressively in sales, marketing and

research and development, which negatively impacted margins. Also detracting from performance were Impala Platinum Holdings Ltd. and New Oriental Education & Technology Group, Inc. Impala Platinum is a South African producer of platinum that experienced losses as lower platinum prices and a six-week union strike at an Impala mine disrupted production. New Oriental Education is a provider of private educational services in China. The stock’s performance met with some challenges during the period.

OUTLOOK

At period end, we remain optimistic regarding the emerging markets and the Fund despite short-term volatility. The developed world continues to have many unresolved structural problems. It is our opinion that the emerging markets will remain the engines of global growth with the sizable majority of

global growth coming out of them. The hyper-normal growth that came out of the economic crisis we believe will be replaced by more sustainable, albeit slower growth. We currently see valuations in the emerging markets presenting us with some potentially attractive opportunities.

LOGO

Justin M. Leverenz
Portfolio Manager


OPPENHEIMER DEVELOPING MARKETS FUND			3

Top Holdings and Allocations


TOP TEN GEOGRAPHICAL HOLDINGS
India	12.9	%
China	12.0
Brazil	10.5
Mexico	9.0
United Kingdom	6.9
Russia	6.6
Turkey	4.9
Korea, Republic of South	4.5
Hong Kong	4.3
United States	4.2

Portfolio holdings and allocations are subject to change. Percentages are as of August 31, 2012, and are based on the total market value of investments.


TOP TEN COMMON STOCK HOLDINGS
America Movil SAB de CV, ADR, Series L	3.6	%
Infosys Ltd.	2.9
Baidu, Inc., ADR	2.7
NHN Corp.	2.5
Magnit	2.4
Carlsberg AS, Cl. B	2.2
Tullow Oil plc	1.9
Housing Development Finance Corp. Ltd.	1.9
Fomento Economico Mexicano SA de CV, UBD	1.8
SM Prime Holdings, Inc.	1.7

Portfolio holdings and allocations are subject to change. Percentages are as of August 31, 2012, and are based on net assets. For more current Top 10 Fund holdings, please visit oppenheimerfunds.com.

REGIONAL ALLOCATION

LOGO

Portfolio holdings and allocations are subject to change. Percentages are as of August 31, 2012, and are based on the total market value of investments.


4		OPPENHEIMER DEVELOPING MARKETS FUND

Share Class Performance

Average Annual Total Returns for periods ended 8/31/112

AVERAGE ANNUAL RETURNS WITHOUT SALES CHARGE


	Inception Date		1-Year			5-Year			10-Year
Class A (ODMAX)		11/18/96		–0.89	%		4.26	%		18.52	%
Class B (ODVBX)		11/18/96		–1.73	%		3.41	%		17.97	%
Class C (ODVCX)		11/18/96		–1.57	%		3.52	%		17.67	%
Class I (ODVIX)		12/29/11		N/A			N/A			10.58	%*
Class N (ODVNX)		3/1/01		–1.24	%		3.87	%		18.10	%
Class Y (ODVYX)		9/7/05		–0.55	%		4.58	%		11.86	%*

AVERAGE ANNUAL RETURNS WITH SALES CHARGE
	Inception Date		1-Year			5-Year			10-Year
Class A		11/18/96		–6.59	%		3.04	%		17.82	%
Class B		11/18/96		–6.61	%		3.18	%		17.97	%
Class C		11/18/96		–2.55	%		3.52	%		17.67	%
Class I		12/29/11		N/A			N/A			10.58	%*
Class N		3/1/01		–2.21	%		3.87	%		18.10	%
Class Y		9/7/05		–0.55	%		4.58	%		11.86	%*

*Shows performance since inception.

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. Returns do not consider capital gains or income taxes on an individual’s investment. For performance data current to the most recent month end, visit us at oppenheimerfunds.com, or call us at 1.800.CALL OPP (225.5677). Fund returns include changes in share price, reinvested distributions, and the applicable sales charge: for Class A shares, the current maximum initial sales charge of 5.75%; 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 deferred sales charge of 1% for the 1-year period. Because Class B shares convert to Class A shares 72 months after purchase, the 10-year returns for Class B shares uses Class A performance for the period after conversion. There is no sales charge for Class Y or Class I shares.

The Fund’s performance is compared to the performance of the MSCI Emerging Markets Index, an unmanaged index of equity securities of issuers in certain developing markets. Index performance reflects the reinvestment of income but does not consider the effect of


OPPENHEIMER DEVELOPING MARKETS FUND			5

transaction costs, and none of the data in the graphs shows the effect of taxes. The Fund’s performance reflects the effects of the Fund’s business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund’s performance, it must be noted that the Fund’s investments are not limited to the investments comprising the index.

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.

Before investing in any of the Oppenheimer funds, investors should carefully consider a fund’s investment objectives, risks, charges and expenses. Fund prospectuses and summary prospectuses contain this and other information about the funds, and may be obtained by asking your financial advisor, visiting oppenheimerfunds.com, or calling 1.800.CALL OPP (225.5677). Read prospectuses and summary prospectuses carefully before investing.

Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.


6		OPPENHEIMER DEVELOPING MARKETS 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 (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 August 31, 2012.

Actual Expenses. The first section of the table provides information about actual account values and actual expenses. You may use the information in this section 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 first section 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 second section of the table provides 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 for each class before expenses, which is not the 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 the Statement of Additional Information). Therefore, the “hypothetical” section of the table is 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.


OPPENHEIMER DEVELOPING MARKETS FUND			7


Actual	Beginning Account Value March 1, 2012		Ending Account Value August 31, 2012		Expenses Paid During 6 Months Ended August 31, 2012
Class A	$	1,000.00	$	955.00	$	6.76
Class B		1,000.00		950.80		10.95
Class C		1,000.00		951.60		10.11
Class I		1,000.00		957.20		4.34
Class N		1,000.00		953.10		8.43
Class Y		1,000.00		956.60		5.08

Hypothetical (5% return before expenses)
Class A		1,000.00		1,018.25		6.97
Class B		1,000.00		1,013.98		11.30
Class C		1,000.00		1,014.83		10.44
Class I		1,000.00		1,020.71		4.48
Class N		1,000.00		1,016.54		8.70
Class Y		1,000.00		1,019.96		5.24

Expenses are equal to the Fund’s annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). Those annualized expense ratios, excluding indirect expenses from affiliated fund, based on the 6-month period ended August 31, 2012 are as follows:


Class	Expense Ratios
Class A		1.37	%
Class B		2.22
Class C		2.05
Class I		0.88
Class N		1.71
Class Y		1.03

The expense ratios reflect voluntary waivers and/or reimbursements of expenses by the Fund’s Manager and Transfer Agent. Some of these undertakings may be modified or terminated at any time, as indicated in the Fund’s prospectus. 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 and reduction to custodian expenses, if applicable.


8		OPPENHEIMER DEVELOPING MARKETS FUND

STATEMENT OF INVESTMENTS August 31, 2012


	Shares		Value
Common Stocks—95.5%
Consumer Discretionary—11.6%
Automobiles—0.9%
PT Astra International Tbk		332,136,000	$	235,125,119
Distributors—0.7%
CFAO¹		3,637,824		170,580,196
Diversified Consumer Services—2.0%
Estacio Participacoes SA¹		10,866,000		165,942,164
Kroton Educacional SA^1,2		11,364,377		185,869,903
MegaStudy Co. Ltd.¹		499,330		28,781,476
New Oriental Education & Technology Group, Inc., Sponsored ADR¹		10,457,867		145,364,351

				525,957,894
Hotels, Restaurants & Leisure—2.8%
Ctrip.com International Ltd., ADR^1,2		13,554,519		218,634,391
Genting Berhad		34,749,300		100,316,430
Genting Singapore plc		149,389,000		163,590,842
Home Inns & Hotels Management, Inc., ADR^1,2		4,389,313		101,217,558
Jollibee Foods Corp.¹		55,136,213		131,042,693

				714,801,914
Internet & Catalog Retail—0.2%
B2W Companhia Global do Varejo^1,2		11,430,158		45,610,266
Media—1.8%
Grupo Televisa SA, Sponsored GDR		6,493,873		149,229,202
Sun TV Network Ltd.		13,706,031		71,604,002
TV18 Broadcast Ltd.²		3,633,063		1,378,115


	Shares		Value
Media Continued
Zee Entertainment Enterprises Ltd.¹		80,902,731	$	237,726,766

				459,938,085
Multiline Retail—1.9%
Lojas Americanas SA, Preference¹		46,098,573		334,514,991
Shinsegae Co. Ltd.¹		705,145		140,909,485

				475,424,476
Textiles, Apparel & Luxury Goods—1.3%
Burberry Group plc		1,209,800		25,990,971
Prada SpA, Unsponsored ADR		37,792,900		292,375,604
Salvatore Ferragamo Italia SpA		1,356,865		27,952,728

				346,319,303
Consumer Staples—26.0%
Beverages—9.4%
Anadolu Efes Biracilik ve Malt Sanayii AS		14,103,020		196,908,920
Carlsberg AS, Cl. B¹		6,571,513		569,058,206
Companhia de Bebidas das Americas, Sponsored ADR, Preference		6,340,100		238,451,161
Fomento Economico Mexicano SA de CV, Sponsored ADR		4,885,713		412,842,749
Fomento Economico Mexicano SA de CV, UBD		52,842,177		447,428,421
Nigerian Breweries plc		188,827,399		146,998,545
SABMiller plc		8,728,994		385,249,434

				2,396,937,436


OPPENHEIMER DEVELOPING MARKETS FUND			9

STATEMENT OF INVESTMENTS Continued


	Shares		Value
Food & Staples Retailing—8.9%
Almacenes Exito SA		12,397,467	$	203,905,707
Almacenes Exito SA, GDR³		11,250,373		183,928,973
BIM Birlesik Magazalar AS		4,017,116		165,061,247
Companhia Brasileira de Distribuicao Grupo Pao de Acucar, Sponsored ADR¹		6,555,024		281,079,429
Dairy Farm International Holdings Ltd.		7,806,830		84,313,764
E-Mart Co. Ltd.¹		1,556,710		338,884,980
Magnit¹		4,741,774		614,835,078
Magnit OJSC, Sponsored GDR¹		4,329,830		138,078,279
Sun Art Retail Group Ltd.		1,852,000		2,337,699
Wal-Mart de Mexico SAB de CV, Series V		87,622,010		234,255,059
Wumart Stores, Inc.		20,885,000		35,221,449

				2,281,901,664
Food Products—3.8%
Tingyi Holding Corp. (Cayman Islands)		135,442,000		400,775,392
Unilever plc		7,999,022		287,557,334
Want Want China Holdings Ltd.		238,277,000		295,821,174

				984,153,900
Household Products—1.7%
Hindustan Unilever Ltd.		27,701,485		256,521,976
Unilever Indonesia Tbk		59,343,000		168,662,328

				425,184,304
Personal Products—2.2%
Colgate-Palmolive (India) Ltd.¹		7,320,782		158,885,646


	Shares		Value
Personal Products Continued
Marico Ltd.¹		30,906,283	$	111,123,714
Natura Cosmeticos SA		11,494,800		287,157,647

				557,167,007
Tobacco—0.0%
Eastern Tobacco Co.		388,428		4,916,810
Energy—9.7%
Energy Equipment & Services—2.1%
Eurasia Drilling Co. Ltd., GDR		4,266,601		128,211,360
Saipem SpA		816,831		38,784,678
Technip SA		351,230		36,994,365
Tenaris SA, ADR		7,630,712		318,276,998

				522,267,401
Oil, Gas & Consumable Fuels—7.6%
BG Group plc		14,640,760		299,426,766
China Shenhua Energy Co. Ltd.		58,551,500		214,117,716
CNOOC Ltd.		121,112,000		229,233,577
NovaTek OAO, Sponsored GDR^3,4		902,339		107,649,043
NovaTek OAO, Sponsored GDR⁴		3,393,677		404,865,666
Petroleo Brasileiro SA, Sponsored ADR		9,657,109		198,743,303
Tullow Oil plc		22,935,007		496,370,392

				1,950,406,463
Financials—18.2%
Commercial Banks—8.4%
Akbank TAS		39,487,531		155,848,984
Banco Bradesco SA, Sponsored ADR		7,859,900		129,059,558
Banco Davivienda SA, Preference¹		11,608,902		136,837,387
Banco Santander Chile SA		880,268,212		63,050,423
Bancolombia SA, Sponsored ADR		2,134,865		122,669,343
Commercial International Bank		29,618,849		146,037,633


10		OPPENHEIMER DEVELOPING MARKETS FUND


	Shares		Value
Commercial Banks Continued
Credicorp Ltd.		796,300	$	95,978,039
Grupo Financiero Inbursa SA de CV		52,758,322		137,451,815
Guaranty Trust Bank plc		460,524,698		51,881,896
HDFC Bank Ltd., ADR		10,657,063		357,864,176
ICICI Bank Ltd., Sponsored ADR		7,606,550		247,441,072
Siam Commercial Bank Public Co. Ltd.		31,323,600		149,945,428
Standard Bank Group Ltd.		10,078,599		133,133,939
Turkiye Garanti Bankasi AS		39,957,189		171,320,401
Zenith Bank plc		582,636,195		56,714,840

				2,155,234,934
Diversified Financial Services—4.0%
BM&F BOVESPA SA		76,533,698		411,718,795
Haci Omer Sabanci Holding AS		77,072,675		331,304,045
Hong Kong Exchanges & Clearing Ltd.		20,217,674		269,327,484

				1,012,350,324
Insurance—1.0%
AIA Group Ltd.		74,030,400		254,373,760
Real Estate Management & Development—2.9%
Hang Lung Group Ltd.		19,209,750		119,875,953
Hang Lung Properties Ltd.		53,470,881		183,293,433
SM Prime Holdings, Inc.¹		1,333,366,572		443,663,268

				746,832,654
Thrifts & Mortgage Finance—1.9%
Housing Development Finance Corp. Ltd.		37,347,575		493,692,978


	Shares		Value
Health Care—1.1%
Health Care Providers & Services—0.5%
Amil Participacoes SA		1,644,700	$	16,690,881
Sinopharm Group Co.		31,406,000		99,814,710

				116,505,591
Pharmaceuticals—0.6%
Cipla Ltd.		12,826,053		86,802,115
Sun Pharmaceutical Industries Ltd.		5,741,133		68,986,486

				155,788,601
Industrials—3.9%
Aerospace & Defense—0.9%
Embraer SA, ADR		8,001,222		215,632,933
Construction & Engineering—0.4%
FLSmidth & Co. AS		1,980,306		110,357,059
Industrial Conglomerates—1.8%
Enka Insaat ve Sanayi AS		79,401,458		219,977,654
Jardine Strategic Holdings Ltd.		1,036,500		34,453,260
SM Investments Corp.		12,648,325		213,135,174

				467,566,088
Machinery—0.0%
Shanghai Zhenhua Port Machinery Co. Ltd., B Shares^1,2		12,659,529		3,785,199
Transportation Infrastructure—0.8%
DP World Ltd.⁴		1,181,981		12,056,206
DP World Ltd.⁴		17,386,824		180,830,921

				192,887,127
Information Technology—15.8%
Communications Equipment—0.5%
High Tech Computer Corp.		16,035,127		138,127,701
Electronic Equipment & Instruments—0.6%
Synnex Technology International Corp.		71,816,174		160,172,296


OPPENHEIMER DEVELOPING MARKETS FUND			11

STATEMENT OF INVESTMENTS Continued


	Shares		Value
Internet Software & Services—8.9%
Baidu, Inc., ADR²		6,196,942	$	690,587,216
Mercadolibre, Inc.		342,640		27,267,291
Netease.com, Inc., ADR²		4,504,619		234,555,511
NHN Corp.¹		2,797,857		639,897,668
Tencent Holdings Ltd.		11,708,400		359,285,921
Yandex NV, Cl. A^1,2		13,981,660		295,292,659
Youku, Inc., Sponsored ADR²		2,059,046		34,571,382

				2,281,457,648
IT Services—4.0%
Infosys Ltd.		17,573,497		746,111,446
Tata Consultancy Services Ltd.		11,083,042		267,736,408

				1,013,847,854
Semiconductors & Semiconductor Equipment—1.8%
Epistar Corp.¹		60,390,000		123,336,472
Taiwan Semiconductor Manufacturing Co. Ltd.		119,263,429		331,696,559

				455,033,031
Materials—4.1%
Chemicals—0.5%
Asian Paints Ltd.		1,937,450		126,807,626
Construction Materials—0.2%
Ambuja Cements Ltd.		12,098,930		40,304,391
Ultra Tech Cement Ltd.		497,819		15,159,651

				55,464,042
Metals & Mining—3.4%
Anglo American Platinum Ltd.		2,982,130		148,677,085
Anglo American plc		9,120,623		253,439,141
Impala Platinum Holdings Ltd.		14,218,515		225,046,114
Rio Tinto plc		1,086,400		47,523,271


	Shares			Value
Metals & Mining Continued
Vale SA, Sponsored ADR, Preference		11,121,280		$	179,275,034

					853,960,645
Telecommunication Services—5.1%
Wireless Telecommunication Services—5.1%
America Movil SAB de CV, ADR, Series L		36,256,772			927,810,795
MTN Group Ltd.		20,602,275			384,928,856

					1,312,739,651

Total Common Stocks (Cost $21,199,288,448)					24,419,309,980
Structured Securities—0.1%
UBS AG, Vietnam Dairy Products JSC Equity Linked Nts.³ (Cost $21,924,029)		5,323,496			26,821,837
Investment Company—4.2%
Oppenheimer Institutional Money Market Fund, Cl. E, 0.19%^1,5 (Cost $1,060,435,956)		1,060,435,956			1,060,435,956
Total Investments, at Value (Cost $22,281,648,433)		99.8	%		25,506,567,773
Other Assets Net of Liabilities		0.2			55,863,050



Net Assets	100.0	%	$	25,562,430,823


12		OPPENHEIMER DEVELOPING MARKETS FUND

Footnotes to Statement of Investments

1. Is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended August 31, 2012, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment adviser. Transactions during the period in which the issuer was an affiliate are as follows:


	Shares/ Principal Amount August 31, 2011		Gross Additions				Gross Reductions				Shares/ Principal Amount August 31, 2012
B2W Companhia Global do Varejo		15,109,458			—				3,679,300			11,430,158
Banco Davivienda SA, Preference		2,098,070			9,510,832				—			11,608,902
Carlsberg AS, Cl. B		5,294,683			1,276,830				—			6,571,513
CFAO		3,877,554			306,130				545,860			3,637,824
Colgate-Palmolive (India) Ltd.		7,149,484			306,484				135,186			7,320,782
Companhia Brasileira de Distribuicao Grupo Pao de Acucar, Sponsored ADR^a		8,616,546			—				2,061,522			6,555,024
Ctrip. com International Ltd., ADR		4,144,309			9,410,210				—			13,554,519
E-Mart Co. Ltd.		1,453,022			280,826				177,138			1,556,710
Epistar Corp.		84,248,000			—				23,858,000			60,390,000
Estacio Participacoes SA		10,866,000			—				—			10,866,000
Home Inns & Hotels Management, Inc., ADR		1,882,915			2,506,398				—			4,389,313
Jollibee Foods Corp.		55,136,213			—				—			55,136,213
Kroton Educacional SA		4,379,100			6,985,277	^b			—			11,364,377
Kroton Educacional SA		—			697,633				697,633	^b		—
Kroton Educacional SA		—			697,633	^b			697,633	^b		—
Kroton Educacional SA		—			122,473				122,473	^b		—
Kroton Educacional SA		—			2,209,219				2,209,219	^b		—
Kroton Educacional SA, Preference		—			122,473	^b			122,473	^b		—
Li Ning Co. Ltd.		66,944,500			—				66,944,500			—
Lojas Americanas SA		—			103,790				103,790			—
Lojas Americanas SA, 13.15% Cv. Sub. Nts., 9/15/17		—			5,732	^c			5,732	^c		—
Lojas Americanas SA, Preference		25,092,684			21,005,889				—			46,098,573
Magnit		3,448,981			1,292,793	^b			—			4,741,774
Magnit OJSC		—			2,860,291				2,860,291	^b		—
Magnit OJSC, Sponsored GDR		1,041,270			4,092,260				803,700			4,329,830
Marico Ltd.^a		30,123,895			782,388				—			30,906,283
MegaStudy Co. Ltd.		499,330			—				—			499,330
New Oriental Education & Technology Group, Inc., Sponsored ADR		1,857,640			10,457,867				1,857,640			10,457,867
NHN Corp.		3,987,501			—				1,189,644			2,797,857
Oppenheimer Institutional Money Market Fund, Cl. E		303,088,396			3,934,639,002				3,177,291,442			1,060,435,956
Shanghai Zhenhua Port Machinery Co. Ltd., B Shares^a		46,991,029			—				34,331,500			12,659,529
Shinsegae Co. Ltd.		455,107			250,038				—			705,145
SM Prime Holdings, Inc.		1,178,547,358			279,068,114	^b			124,248,900			1,333,366,572
Yandex NV, Cl. A		1,361,620			12,620,040				—			13,981,660
Zee Entertainment Enterprises Ltd.		75,735,589			5,167,142				—			80,902,731

			Value				Income				Realized Gain (Loss)
B2W Companhia Global do Varejo				$	45,610,266			$	—			$ (50,303,529)
Banco Davivienda SA, Preference					136,837,387				1,270,947			—
Carlsberg AS, Cl. B					569,058,206				5,220,950			—
CFAO					170,580,196				4,078,916			1,444,840
Colgate-Palmolive (India) Ltd.					158,885,646				2,338,354			83,440


OPPENHEIMER DEVELOPING MARKETS FUND			13

STATEMENT OF INVESTMENTS Continued



	Value				Income			Realized Gain (Loss)
Companhia Brasileira de Distribuicao Grupo Pao de Acucar, Sponsored ADR^a		$	—	^d		$	—			$ (3,452,265)
Ctrip. com International Ltd., ADR			218,634,391				—			—
E-Mart Co. Ltd.			338,884,980				725,404			8,744,079
Epistar Corp.			123,336,472				1,769,737			(19,541,422	)
Estacio Participacoes SA			165,942,164				1,207,884			—
Home Inns & Hotels Management, Inc., ADR			101,217,558				—			—
Jollibee Foods Corp.			131,042,693				1,035,722			—
Kroton Educacional SA			185,869,903				—			—
Kroton Educacional SA			—				—			—
Kroton Educacional SA			—				—			—
Kroton Educacional SA			—				—			—
Kroton Educacional SA			—				—			—
Kroton Educacional SA, Preference			—				—			—
Li Ning Co. Ltd.			—				—			(72,247,497	)
Lojas Americanas SA			—				1,936			66,345
Lojas Americanas SA, 13.15% Cv. Sub. Nts., 9/15/17			—				—			—
Lojas Americanas SA, Preference			334,514,991				1,845,537			—
Magnit			614,835,078				4,955,055			—
Magnit OJSC			—				822,336			—
Magnit OJSC, Sponsored GDR			138,078,279				529,732			4,786,430
Marico Ltd.^a			—	^d			—			—
MegaStudy Co. Ltd.			28,781,476				1,477,039			—
New Oriental Education & Technology Group, Inc., Sponsored ADR			145,364,351				3,137,360			(3,033,866	)
NHN Corp.			639,897,668				1,488,455			47,633,831
Oppenheimer Institutional Money Market Fund, Cl. E			1,060,435,956				1,679,433			—
Shanghai Zhenhua Port Machinery Co. Ltd., B Shares^a			—	^d			—			(28,107,039	)
Shinsegae Co. Ltd.			140,909,485				299,684			—
SM Prime Holdings, Inc.			443,663,268				5,242,413			12,489,723
Yandex NV, Cl. A			295,292,659				—			—
Zee Entertainment Enterprises Ltd.			237,726,766				2,201,036			—

		$	6,425,399,839			$	41,327,930		$	(101,436,930	)

a. No longer an affiliate as of August 31, 2012.

b. All or a portion is the result of a corporate action.

c. Gross Addition and Gross Reduction to Principal Amount are reported in Brazilian Real.

d. The security is no longer an affiliate, therefore, the value has been excluded from this table.

2. Non-income producing security.

3. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $318,399,853 or 1.25% of the Fund’s net assets as of August 31, 2012.

4. The Fund holds securities which have been issued by the same entity and that trade on separate exchanges.

5. Rate shown is the 7-day yield as of August 31, 2012.

Distribution of investments representing geographic holdings, as a percentage of total investments at value, is as follows:


Geographic Holdings	Value		Percent
India	$	3,288,146,568		12.9	%
China		3,065,323,246		12.0
Brazil		2,689,746,065		10.5
Mexico		2,309,018,041		9.0
United Kingdom		1,748,034,038		6.9


14		OPPENHEIMER DEVELOPING MARKETS FUND

Footnotes to Statement of Investments Continued


Geographic Holdings Continued	Value		Percent
Russia	$	1,688,932,085		6.6	%
Turkey		1,240,421,251		4.9
Korea, Republic of South		1,148,473,609		4.5
Hong Kong		1,109,228,496		4.3
United States		1,060,435,956		4.2
South Africa		891,785,994		3.5
Philippines		787,841,135		3.1
Taiwan		753,333,028		3.0
Denmark		679,415,265		2.7
Colombia		647,341,410		2.5
Indonesia		403,787,447		1.6
Italy		359,113,010		1.4
Luxembourg		318,276,998		1.2
Nigeria		255,595,281		1.0
France		207,574,561		0.8
United Arab Emirates		192,887,127		0.8
Egypt		150,954,443		0.6
Thailand		149,945,428		0.6
Malaysia		100,316,430		0.4
Peru		95,978,039		0.4
Chile		63,050,423		0.2
Australia		47,523,271		0.2
Argentina		27,267,291		0.1
Vietnam		26,821,837		0.1

Total	$	25,506,567,773		100.0	%


Foreign Currency Exchange Contracts as of August 31, 2012 are as follows:
Counterparty/Contract Description	Buy/Sell	Contract Amount (000’s)			Expiration Dates		Value		Unrealized Appreciation		Unrealized Depreciation
Bank of America
Hong Kong Dollar (HKD)	Buy		6,641	HKD		9/4/12	$	856,309	$	30	$	—
JPMorgan Chase:
Brazilian Real (BRR)	Buy		10,316	BRR		9/4/12-9/5/12		5,082,183		21,967		—
Colombian Peso (COP)	Buy		7,851,315	COP		9/4/12-9/6/12		4,304,449				7,055
Egyptian Pounds (EGP)	Buy		31,374	EGP		9/4/12-9/11/12		5,141,025		—		11,991
Egyptian Pounds (EGP)	Sell		33,229	EGP		9/4/12-9/11/12		5,444,890		30		2,007
Indian Rupee (INR)	Sell		125,776	INR		9/4/12-9/5/12		2,261,141		2,810		2,702
Nigeria Naira (NGN)	Buy		149,266	NGN		9/4/12-9/5/12		944,721		—		1,221
Philippine Peso (PHP)	Sell		413,140	PHP		9/4/12-9/5/12		9,819,133		38,054		—
South Korean Won (KRW)	Sell		6,431,077	KRW		9/5/12		5,668,020		14,148		—

										77,009		24,976

Total unrealized appreciation and depreciation									$	77,039	$	24,976

See accompanying Notes to Financial Statements.


OPPENHEIMER DEVELOPING MARKETS FUND			15

STATEMENT OF ASSETS AND LIABILITIES August 31, 2012


Assets
Investments, at value—see accompanying statement of investments:
Unaffiliated companies (cost $16,329,926,970)	$	19,081,167,934
Affiliated companies (cost $5,951,721,463)		6,425,399,839
		25,506,567,773
Cash		5,271,774
Cash—foreign currencies (cost $10,327,456)		7,968,284
Unrealized appreciation on foreign currency exchange contracts		77,039
Receivables and other assets:
Shares of beneficial interest sold		225,970,933
Dividends		36,101,969
Investments sold		29,602,548
Other		718,835
Total assets		25,812,279,155
Liabilities
Unrealized depreciation on foreign currency exchange contracts		24,976
Payables and other liabilities:
Shares of beneficial interest redeemed		214,458,037
Investments purchased		14,111,618
Foreign capital gains tax		9,908,979
Transfer and shareholder servicing agent fees		4,602,672
Distribution and service plan fees		2,923,843
Trustees’ compensation		1,361,851
Shareholder communications		416,507
Other		2,039,849
Total liabilities		249,848,332
Net Assets	$	25,562,430,823
Composition of Net Assets
Paid-in capital	$	23,091,198,821
Accumulated net investment income		85,404,967
Accumulated net realized loss on investments and foreign currency transactions		(826,995,867	)
Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies		3,212,822,902
Net Assets	$	25,562,430,823


16		OPPENHEIMER DEVELOPING MARKETS FUND

STATEMENT OF ASSETS AND LIABILITIES Continued


Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of $10,784,891,335 and 334,454,593 shares of beneficial interest outstanding)	$	32.25
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price)	$	34.22
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $179,874,021 and 5,678,423 shares of beneficial interest outstanding)	$	31.68
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $2,024,405,636 and 65,581,638 shares of beneficial interest outstanding)	$	30.87
Class I Shares:
Net asset value, redemption price and offering price per share (based on net assets of $597,536,702 and 18,691,106 shares of beneficial interest outstanding)	$	31.97
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $753,301,377 and 24,211,200 shares of beneficial interest outstanding)	$	31.11
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of $11,222,421,752 and 351,406,246 shares of beneficial interest outstanding)	$	31.94

See accompanying Notes to Financial Statements.


OPPENHEIMER DEVELOPING MARKETS FUND			17

STATEMENT OF OPERATIONS For the Year Ended August 31, 2012


Investment Income
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $24,413,278)	$	413,052,979
Affiliated companies (net of foreign withholding taxes of $6,423,775)		41,327,930
Interest		1,344,113
Other income		22,915
Total investment income		455,747,937
Expenses
Management fees		181,399,020
Distribution and service plan fees:
Class A		25,393,197
Class B		1,898,609
Class C		19,758,659
Class N		3,230,008
Transfer and shareholder servicing agent fees:
Class A		27,084,365
Class B		698,375
Class C		3,886,821
Class I		31,402
Class N		3,382,344
Class Y		17,043,113
Shareholder communications:
Class A		702,952
Class B		44,027
Class C		157,077
Class I		596
Class N		37,050
Class Y		569,387
Custodian fees and expenses		10,328,307
Trustees’ compensation		440,120
Administration service fees		1,500
Other		1,480,964
Total expenses		297,567,893
Less waivers and reimbursements of expenses		(1,927,530	)
Net expenses		295,640,363
Net Investment Income		160,107,574


18		OPPENHEIMER DEVELOPING MARKETS FUND

STATEMENT OF OPERATIONS Continued


Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments from:
Unaffiliated companies (net of foreign capital gains tax of $1,814,736)	$	(128,841,203	)
Affiliated companies		(101,436,930	)
Foreign currency transactions		(146,784,408	)
Increase from payment by affiliate		212,163
Net realized loss		(376,850,378	)
Net change in unrealized appreciation/depreciation on:
Investments (net of foreign capital gains tax of $5,893,669)		1,101,770,831
Translation of assets and liabilities denominated in foreign currencies		(1,094,392,786	)
Net change in unrealized appreciation/depreciation		7,378,045
Net Decrease in Net Assets Resulting from Operations	$	(209,364,759	)

See accompanying Notes to Financial Statements.


OPPENHEIMER DEVELOPING MARKETS FUND			19

STATEMENTS OF CHANGES IN NET ASSETS


Year Ended August 31,	2012			2011
Operations
Net investment income	$	160,107,574		$	429,947,691
Net realized gain (loss)		(376,850,378	)		705,752,059
Net change in unrealized appreciation/depreciation		7,378,045			113,968,621
Net increase (decrease) in net assets resulting from operations		(209,364,759	)		1,249,668,371
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A		(179,983,152	)		(15,166,515	)
Class B		(1,405,082	)		—
Class C		(22,156,509	)		—
Class I		—			—
Class N		(8,818,276	)		—
Class Y		(188,402,503	)		(28,204,660	)
		(400,765,522	)		(43,371,175	)
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Class A		321,168,686			1,821,445,656
Class B		(41,404,741	)		(7,640,832	)
Class C		26,167,817			577,810,493
Class I		588,587,104			—
Class N		171,910,918			174,660,187
Class Y		2,938,509,695			4,187,778,424
		4,004,939,479			6,754,053,928
Net Assets
Total increase		3,394,809,198			7,960,351,124
Beginning of period		22,167,621,625			14,207,270,501
End of period (including accumulated net investment income of $85,404,967 and $337,219,806, respectively)	$	25,562,430,823		$	22,167,621,625

See accompanying Notes to Financial Statements.


20		OPPENHEIMER DEVELOPING MARKETS FUND

FINANCIAL HIGHLIGHTS


Class A Year Ended August 31,	2012			2011			2010			2009			2008

Per Share Operating Data
Net asset value, beginning of period	$	33.15		$	29.83		$	24.38		$	41.13		$	48.37
Income (loss) from investment operations:
Net investment income¹		.19			.68	²		.13			.21			.55
Net realized and unrealized gain (loss)		(.53	)		2.69			5.44			(8.08	)		(1.11	)
Total from investment operations		(.34	)		3.37			5.57			(7.87	)		(.56	)
Dividends and/or distributions to shareholders:
Dividends from net investment income		(.56	)		(.05	)		(.12	)		(.56	)		(.45	)
Distributions from net realized gain		—			—			—			(8.32	)		(6.23	)
Total dividends and/or distributions to shareholders		(.56	)		(.05	)		(.12	)		(8.88	)		(6.68	)
Net asset value, end of period	$	32.25		$	33.15		$	29.83		$	24.38		$	41.13
Total Return, at Net Asset Value³		(0.89	)%		11.28	%		22.85	%		(5.68	)%		(3.59	)%

Ratios/Supplemental Data
Net assets, end of period (in thousands)		$10,784,891			$10,802,874			$8,184,698			$5,388,513			$7,109,601
Average net assets (in thousands)		$10,327,349			$11,015,700			$7,065,585			$3,900,019			$8,667,934
Ratios to average net assets:⁴
Net investment income		0.61	%		1.94	%²		0.47	%		0.97	%		1.16	%
Total expenses⁵		1.36	%		1.30	%		1.35	%		1.43	%		1.27	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.36	%		1.30	%		1.35	%		1.43	%		1.27	%
Portfolio turnover rate		20	%		34	%		33	%		55	%		51	%

1. Per share amounts calculated based on the average shares outstanding during the period.

2. Net investment income per share and the net investment income ratio include $0.47 and 1.35%, respectively, resulting from a special dividend from E-Mart Co. Ltd. in June 2011.

3. Assumes an initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

4. Annualized for periods less than one full year.

5. Total expenses including indirect expenses from affiliated fund were as follows:


Year Ended August 31, 2012	1.36	%
Year Ended August 31, 2011	1.30	%
Year Ended August 31, 2010	1.35	%
Year Ended August 31, 2009	1.43	%
Year Ended August 31, 2008	1.27	%

See accompanying Notes to Financial Statements.


OPPENHEIMER DEVELOPING MARKETS FUND			21

FINANCIAL HIGHLIGHTS Continued


Class B Year Ended August 31,	2012			2011			2010			2009			2008

Per Share Operating Data
Net asset value, beginning of period	$	32.48		$	29.43		$	24.17		$	40.56		$	47.75
Income (loss) from investment operations:
Net investment income (loss)¹		(.09	)		.34	²		(.12	)		.03			.17
Net realized and unrealized gain (loss)		(.49	)		2.71			5.38			(7.88	)		(1.09	)
Total from investment operations		(.58	)		3.05			5.26			(7.85	)		(.92	)
Dividends and/or distributions to shareholders:
Dividends from net investment income		(.22	)		—			—			(.22	)		(.04	)
Distributions from net realized gain		—			—			—			(8.32	)		(6.23	)
Total dividends and/or distributions to shareholders		(.22	)		—			—			(8.54	)		(6.27	)
Net asset value, end of period	$	31.68		$	32.48		$	29.43		$	24.17		$	40.56
Total Return, at Net Asset Value³		(1.73	)%		10.36	%		21.76	%		(6.43	)%		(4.30	)%

Ratios/Supplemental Data
Net assets, end of period (in thousands)		$179,874			$228,170			$212,590			$181,249			$235,659
Average net assets (in thousands)		$189,982			$259,240			$205,371			$137,455			$307,320
Ratios to average net assets:⁴
Net investment income (loss)		(0.28	)%		0.98	%²		(0.43	)%		0.14	%		0.35	%
Total expenses⁵		2.24	%		2.14	%		2.21	%		2.23	%		2.02	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		2.22	%		2.14	%		2.21	%		2.22	%		2.02	%
Portfolio turnover rate		20	%		34	%		33	%		55	%		51	%

1. Per share amounts calculated based on the average shares outstanding during the period.

2. Net investment income per share and the net investment income ratio include $0.46 and 1.35%, respectively, resulting from a special dividend from E-Mart Co. Ltd. in June 2011.

4. Annualized for periods less than one full year.

5. Total expenses including indirect expenses from affiliated fund were as follows:


Year Ended August 31, 2012	2.24	%
Year Ended August 31, 2011	2.14	%
Year Ended August 31, 2010	2.21	%
Year Ended August 31, 2009	2.23	%
Year Ended August 31, 2008	2.02	%

See accompanying Notes to Financial Statements.


22		OPPENHEIMER DEVELOPING MARKETS FUND


Class C Year Ended August 31,	2012			2011			2010			2009			2008

Per Share Operating Data
Net asset value, beginning of period	$	31.74		$	28.72		$	23.56		$	39.91		$	47.11
Income (loss) from investment operations:
Net investment income (loss)¹		(.02	)		.43	²		(.06	)		.05			.20
Net realized and unrealized gain (loss)		(.51	)		2.59			5.23			(7.85	)		(1.08	)
Total from investment operations		(.53	)		3.02			5.17			(7.80	)		(.88	)
Dividends and/or distributions to shareholders:
Dividends from net investment income		(.34	)		—			(.01	)		(.23	)		(.09	)
Distributions from net realized gain		—			—			—			(8.32	)		(6.23	)
Total dividends and/or distributions to shareholders		(.34	)		—			(.01	)		(8.55	)		(6.32	)
Net asset value, end of period	$	30.87		$	31.74		$	28.72		$	23.56		$	39.91
Total Return, at Net Asset Value³		(1.57	)%		10.52	%		21.95	%		(6.36	)%		(4.28	)%

Ratios/Supplemental Data
Net assets, end of period (in thousands)		$2,024,406			$2,060,954			$1,374,711			$768,598			$ 923,115
Average net assets (in thousands)		$1,974,630			$2,014,543			$1,127,812			$532,652			$1,126,359
Ratios to average net assets:⁴
Net investment income (loss)		(0.08	)%		1.30	%²		(0.20	)%		0.25	%		0.43	%
Total expenses⁵		2.05	%		2.01	%		2.07	%		2.13	%		1.99	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		2.05	%		2.01	%		2.07	%		2.13	%		1.99	%
Portfolio turnover rate		20	%		34	%		33	%		55	%		51	%

1. Per share amounts calculated based on the average shares outstanding during the period.

2. Net investment income per share and the net investment income ratio include $0.45 and 1.35%, respectively, resulting from a special dividend from E-Mart Co. Ltd. in June 2011.

4. Annualized for periods less than one full year.

5. Total expenses including indirect expenses from affiliated fund were as follows:


Year Ended August 31, 2012	2.05	%
Year Ended August 31, 2011	2.01	%
Year Ended August 31, 2010	2.07	%
Year Ended August 31, 2009	2.13	%
Year Ended August 31, 2008	1.99	%

See accompanying Notes to Financial Statements.


OPPENHEIMER DEVELOPING MARKETS FUND			23

FINANCIAL HIGHLIGHTS Continued


Class I Period Ended August 31,	2012¹

Per Share Operating Data
Net asset value, beginning of period		$ 28.91
Income (loss) from investment operations:
Net investment income²		.30
Net realized and unrealized gain		2.76

Total from investment operations		3.06
Dividends and/or distributions to shareholders:
Dividends from net investment income		—
Distributions from net realized gain		—

Total dividends and/or distributions to shareholders		—
Net asset value, end of period		$31.97


Total Return, at Net Asset Value³		10.58	%

Ratios/Supplemental Data
Net assets, end of period (in thousands)		$597,537
Average net assets (in thousands)		$156,814
Ratios to average net assets:⁴
Net investment income		1.46	%
Total expenses⁵		0.88	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		0.88	%
Portfolio turnover rate		20	%

1. For the period from December 29, 2011 (inception of offering) to August 31, 2012.

2. Per share amounts calculated based on the average shares outstanding during the period.

4. Annualized for periods less than one full year.

5. Total expenses including indirect expenses from affiliated fund were as follows:


Period Ended August 31, 2012			0.88	%

See accompanying Notes to Financial Statements.


24		OPPENHEIMER DEVELOPING MARKETS FUND


Class N Year Ended August 31,	2012			2011			2010			2009			2008

Per Share Operating Data
Net asset value, beginning of period	$	32.00		$	28.87		$	23.64		$	40.21		$	47.44
Income (loss) from investment operations:
Net investment income¹		.09			.55	²		.03			.12			.36
Net realized and unrealized gain (loss)		(.52	)		2.58			5.26			(7.95	)		(1.09	)
Total from investment operations		(.43	)		3.13			5.29			(7.83	)		(.73	)
Dividends and/or distributions to shareholders:
Dividends from net investment income		(.46	)		—			(.06	)		(.42	)		(.27	)
Distributions from net realized gain		—			—			—			(8.32	)		(6.23	)
Total dividends and/or distributions to shareholders		(.46	)		—			(.06	)		(8.74	)		(6.50	)
Net asset value, end of period	$	31.11		$	32.00		$	28.87		$	23.64		$	40.21
Total Return, at Net Asset Value³		(1.24	)%		10.84	%		22.39	%		(6.00	)%		(3.98	)%

Ratios/Supplemental Data
Net assets, end of period (in thousands)		$753,301			$595,681			$388,942			$257,960			$282,921
Average net assets (in thousands)		$648,741			$571,562			$337,841			$174,883			$365,943
Ratios to average net assets:⁴
Net investment income		0.31	%		1.63	%²		0.12	%		0.60	%		0.77	%
Total expenses⁵		1.87	%		1.77	%		1.83	%		2.07	%		1.69	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.70	%		1.70	%		1.71	%		1.77	%		1.68	%
Portfolio turnover rate		20	%		34	%		33	%		55	%		51	%

1. Per share amounts calculated based on the average shares outstanding during the period.

2. Net investment income per share and the net investment income ratio include $0.46 and 1.35%, respectively, resulting from a special dividend from E-Mart Co. Ltd. in June 2011.

4. Annualized for periods less than one full year.

5. Total expenses including indirect expenses from affiliated fund were as follows:


Year Ended August 31, 2012	1.87	%
Year Ended August 31, 2011	1.77	%
Year Ended August 31, 2010	1.83	%
Year Ended August 31, 2009	2.07	%
Year Ended August 31, 2008	1.69	%

See accompanying Notes to Financial Statements.


OPPENHEIMER DEVELOPING MARKETS FUND			25

FINANCIAL HIGHLIGHTS Continued


Class Y Year Ended August 31,	2012			2011			2010			2009			2008

Per Share Operating Data
Net asset value, beginning of period	$	32.85		$	29.55		$	24.13		$	41.18		$	48.43
Income (loss) from investment operations:
Net investment income¹		.31			.84	²		.25			.27			.76
Net realized and unrealized gain (loss)		(.54	)		2.60			5.35			(8.21	)		(1.16	)
Total from investment operations		(.23	)		3.44			5.60			(7.94	)		(.40	)
Dividends and/or distributions to shareholders:
Dividends from net investment income		(.68	)		(.14	)		(.18	)		(.79	)		(.62	)
Distributions from net realized gain		—			—			—			(8.32	)		(6.23	)
Total dividends and/or distributions to shareholders		(.68	)		(.14	)		(.18	)		(9.11	)		(6.85	)
Net asset value, end of period	$	31.94		$	32.85		$	29.55		$	24.13		$	41.18
Total Return, at Net Asset Value³		(0.55	)%		11.62	%		23.22	%		(5.45	)%		(3.29	)%

Ratios/Supplemental Data
Net assets, end of period (in thousands)		$11,222,422			$8,479,943			$4,046,330			$1,788,541			$761,817
Average net assets (in thousands)		$ 9,679,262			$7,355,168			$2,838,047			$1,073,863			$699,864
Ratios to average net assets:⁴
Net investment income		0.99	%		2.42	%²		0.89	%		1.37	%		1.63	%
Total expenses⁵		1.03	%		1.00	%		1.04	%		1.08	%		0.95	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.03	%		1.00	%		1.04	%		1.08	%		0.95	%
Portfolio turnover rate		20	%		34	%		33	%		55	%		51	%

1. Per share amounts calculated based on the average shares outstanding during the period.

2. Net investment income per share and the net investment income ratio include $0.47 and 1.35%, respectively, resulting from a special dividend from E-Mart Co. Ltd. in June 2011.

4. Annualized for periods less than one full year.

5. Total expenses including indirect expenses from affiliated fund were as follows:


Year Ended August 31, 2012	1.03	%
Year Ended August 31, 2011	1.00	%
Year Ended August 31, 2010	1.04	%
Year Ended August 31, 2009	1.08	%
Year Ended August 31, 2008	0.95	%

See accompanying Notes to Financial Statements.


26		OPPENHEIMER DEVELOPING MARKETS FUND

NOTES TO FINANCIAL STATEMENTS

1. Significant Accounting Policies

Oppenheimer Developing Markets Fund (the “Fund”) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund’s investment objective is to aggressively seek capital appreciation. The Fund’s investment adviser is OppenheimerFunds, Inc. (the “Manager”).

The Fund offers Class A, Class C, Class I, Class N and Class Y shares, and previously offered Class B shares for new purchase through June 29, 2012. Subsequent to that date, no new purchases of Class B shares will be permitted, however reinvestment of dividend and/or capital gain distributions and exchanges of Class B shares into and from other Oppenheimer funds will be allowed. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class C and Class N shares are sold, and Class B shares were 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 I and Class Y shares are sold to certain institutional investors or intermediaries without either a front-end sales charge or a CDSC, however, the intermediaries may impose charges on their accountholders who beneficially own Class I and Class Y shares. 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 shares have separate distribution and/or service plans under which they pay fees. Class I and Class Y shares do not pay such fees. Class B shares will automatically convert to Class A shares 72 months after the date of purchase. Class I shares were first publicly offered on December 29, 2011.

The following is a summary of significant accounting policies consistently followed by the Fund.

Structured Securities. The Fund invests in structured securities 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 securities 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 security is sold or matures.

Investment in Oppenheimer Institutional Money Market Fund. The Fund is permitted to invest daily available cash balances in an affiliated money market fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Money Market Fund (“IMMF”) to seek current income while preserving liquidity. IMMF is a registered open-end management investment company, regulated as a money market fund under


OPPENHEIMER DEVELOPING MARKETS FUND			27

NOTES TO FINANCIAL STATEMENTS Continued

1. Significant Accounting Policies Continued

the Investment Company Act of 1940, as amended. The Manager is also the investment adviser of IMMF. When applicable, the Fund’s investment in IMMF is included in the Statement of Investments. Shares of IMMF are valued at their net asset value per share. As a shareholder, the Fund is subject to its proportional share of IMMF’s Class E expenses, including its management fee. The Manager will waive fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurred through the Fund’s investment in IMMF.

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 Exchange, normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading. Foreign exchange rates may be valued primarily using a reliable bank, dealer or service authorized by the Board of Trustees.

Reported net realized gains and losses from foreign currency transactions arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, exchange rate fluctuations 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 appreciation and depreciation on the translation of assets and liabilities denominated in foreign currencies 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.

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 Fund files income tax returns in U.S. federal and applicable state jurisdictions. The statute of limitations on the Fund’s tax return filings generally remain open for the three preceding fiscal reporting period ends.

The tax components of capital shown in the following table represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may


28		OPPENHEIMER DEVELOPING MARKETS FUND

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.

Undistributed

Net Investment

Income

Undistributed
Long-Term
Gain

Accumulated

Loss
Carryforward^1,2,3

Net Unrealized
Appreciation
Based on Cost of
Securities and Other
Investments for Federal
Income Tax Purposes

$146,720,652

—

802,066,709

3,127,878,032

1. As of August 31, 2012, the Fund had $802,066,709 of net capital loss carryforwards available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. Details of the capital loss carryforwards are included in the table below. Capital loss carryovers with no expiration, if any, must be utilized prior to those with expiration dates.


Expiring
2015	$	13,912,245
2016		3,478,061
2018		397,683,597
No expiration		386,992,806

Total	$	802,066,709

Of these losses, $13,912,244 are subject to loss limitation rules resulting from merger activity. These limitations generally reduce the utilization of these losses to a maximum of $3,478,061 per year.

2. During the fiscal year ended August 31, 2012, the Fund did not utilize any capital loss carryforward.

3. During the fiscal year ended August 31, 2011, the Fund utilized $732,799,824 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 August 31, 2012. Net assets of the Fund were unaffected by the reclassifications.


Increase to Paid-in Capital	Reduction to Accumulated Net Investment Income		Reduction to Accumulated Net Realized Loss on Investments
$212,163	$	11,156,891	$	10,944,728

The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 was as follows:


	Year Ended August 31, 2012		Year Ended August 31, 2011
Distributions paid from:
Ordinary income	$	400,765,522	$	43,371,175


OPPENHEIMER DEVELOPING MARKETS FUND			29

NOTES TO FINANCIAL STATEMENTS Continued

1. Significant Accounting Policies Continued

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 August 31, 2012 are noted in the following table. 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	$	22,366,564,243
Federal tax cost of other investments		14,297,407

Total federal tax cost	$	22,380,861,650

Gross unrealized appreciation	$	5,002,365,135
Gross unrealized depreciation		(1,874,487,103	)

Net unrealized appreciation	$	3,127,878,032

Certain foreign countries impose a tax on capital gains which is accrued by the Fund based on unrealized appreciation, if any, on affected securities. The tax is paid when the gain is realized.

Trustees’ Compensation. The Fund has adopted an unfunded retirement plan (the “Plan”) for the Fund’s independent trustees. Benefits are based on years of service and fees paid to each trustee during their period of service. The Plan was frozen with respect to adding new participants effective December 31, 2006 (the “Freeze Date”) and existing Plan Participants as of the Freeze Date will continue to receive accrued benefits under the Plan. Active independent trustees as of the Freeze Date have each elected a distribution method with respect to their benefits under the Plan. During the year ended August 31, 2012, the Fund’s projected benefit obligations, payments to retired trustees and accumulated liability were as follows:


Projected Benefit Obligations Increased	$	82,659
Payments Made to Retired Trustees		88,268
Accumulated Liability as of August 31, 2012		660,159

The Board of Trustees has adopted a compensation deferral 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 with the compensation deferral plan.

Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations and may


30		OPPENHEIMER DEVELOPING MARKETS FUND

differ from U.S. generally accepted accounting principles, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually or at other times as deemed necessary by the Manager.

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 is recognized on an accrual basis. Discount and premium, which are included in interest income on the Statement of Operations, are amortized or accreted daily.

Custodian Fees. “Custodian fees and expenses” in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts, to the extent they are not offset by positive cash balances maintained by the Fund, 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.

Indemnifications. The Fund’s organizational documents provide current and former trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

2. 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 trading.


OPPENHEIMER DEVELOPING MARKETS FUND			31

NOTES TO FINANCIAL STATEMENTS Continued

2. Securities Valuation Continued

The Fund’s Board has adopted procedures for the valuation of the Fund’s securities and has delegated the day-to-day responsibility for valuation determinations under those procedures to the Manager. The Manager has established a Valuation Committee which is responsible for determining a “fair valuation” for any security for which market quotations are not “readily available.” The Valuation Committee’s fair valuation determinations are subject to review, approval and ratification by the Fund’s Board at its next regularly scheduled meeting covering the calendar quarter in which the fair valuation was determined.

Valuation Methods and Inputs

Securities are valued using unadjusted quoted market prices, when available, as supplied primarily by third party pricing services or dealers.

The following methodologies are used to determine the market value or the fair value of the types of securities described below:

Securities traded on a registered U.S. securities exchange (including exchange-traded derivatives other than futures and futures options) are valued based on the last sale price of the security reported on the principal exchange on which it is traded, 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 current day’s closing “bid” and “asked” prices, and if not, at the current day’s closing bid price. A security of a foreign issuer traded on a foreign exchange but not listed on a registered U.S. securities exchange is valued based on the last sale price on the principal exchange on which the security is traded, as identified by the third party pricing service used by the Manager, prior to the time when the Fund’s assets are valued. If the last sale price is unavailable, the security is valued at the most recent official closing price on the principal exchange on which it is traded. If the last sales price or official closing price for a foreign security is not available, the security is valued at the mean between the bid and asked price per the exchange or, if not available from the exchange, obtained from two dealers. If bid and asked prices are not available from either the exchange or two dealers, the security is valued by using one of the following methodologies (listed in order of priority); (1) using a bid from the exchange, (2) the mean between the bid and asked price as provided by a single dealer, or (3) a bid from a single dealer.

Shares of a registered investment company that are not traded on an exchange are valued at that investment company’s net asset value per share.

Corporate and government debt securities (of U.S. or foreign issuers) and municipal debt securities, event-linked bonds, loans, mortgage-backed securities, collateralized mortgage obligations, and asset-backed securities are valued at the mean between the “bid” and “asked” prices utilizing evaluated prices obtained from third party pricing services or broker-dealers who may use matrix pricing methods to determine the evaluated prices.

Short-term money market type debt securities with a remaining maturity of sixty days or less are valued at cost adjusted by the amortization of discount or premium to maturity (amortized cost), which approximates market value. Short-term debt securities with a remaining maturity in excess of sixty days are valued at the mean between the “bid” and “asked” prices utilizing evaluated prices obtained from third party pricing services or broker-dealers.


32		OPPENHEIMER DEVELOPING MARKETS FUND

Forward foreign currency exchange contracts are valued utilizing current and forward currency rates obtained from third party pricing services. When the settlement date of a contract is an interim date for which a quotation is not available, interpolated values are derived using the nearest dated forward currency rate.

A description of the standard inputs that may generally be considered by the third party pricing vendors in determining their evaluated prices is provided below.


Security Type		Standard inputs generally considered by third-party pricing vendors
Corporate debt, government debt, municipal, mortgage-backed and asset-backed securities		Reported trade data, broker-dealer price quotations, benchmark yields, issuer spreads on comparable securities, the credit quality, yield, maturity, and other appropriate factors.
Loans		Information obtained from market participants regarding reported trade data and broker-dealer price quotations.
Event-linked bonds		Information obtained from market participants regarding reported trade data and broker-dealer price quotations.
Structured securities		Relevant market information such as the price of underlying financial instruments, stock market indices, foreign currencies, interest rate spreads, commodities, or the occurrence of other specific events.

If a market value or price cannot be determined for a security using the methodologies described above, or if, in the “good faith” opinion of the Manager, the market value or price obtained does not constitute a “readily available market quotation,” or a significant event has occurred that would materially affect the value of the security the security is fair valued either (i) by a standardized fair valuation methodology applicable to the security type or the significant event as previously approved by the Valuation Committee and the Fund’s Board or (ii) as determined in good faith by the Manager’s Valuation Committee. The Valuation Committee considers all relevant facts that are reasonably available, through either public information or information available to the Manager, when determining the fair value of a security. Fair value determinations by the Manager are subject to review, approval and ratification by the Fund’s Board at its next regularly scheduled meeting covering the calendar quarter in which the fair valuation was determined. Those fair valuation standardized methodologies include, but are not limited to, valuing securities at the last sale price or initially at cost and subsequently adjusting the value based on: changes in company specific fundamentals, changes in an appropriate securities index, or changes in the value of similar securities which may be further adjusted for any discounts related to security-specific resale restrictions. When possible, such methodologies use observable market inputs such as unadjusted quoted prices of similar securities, observable interest rates, currency rates and yield curves. The methodologies used for valuing securities are not necessarily an indication of the risks associated with investing in those securities nor can it be assured that the Fund can obtain the fair value assigned to a security if it were to sell the security.

To assess the continuing appropriateness of security valuations, the Manager, or its third party service provider who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities, and sale prices to the current day prices and challenges those prices exceeding certain tolerance levels with the third party pricing


OPPENHEIMER DEVELOPING MARKETS FUND			33

NOTES TO FINANCIAL STATEMENTS Continued

2. Securities Valuation Continued

service or broker source. For those securities valued by fair valuations, whether through a standardized fair valuation methodology or a fair valuation determination, the Valuation Committee reviews and affirms the reasonableness of the valuations based on such methodologies and fair valuation determinations on a regular basis after considering all relevant information that is reasonably available.

Classifications

Each investment asset or liability of the Fund is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Various data inputs are used in determining the value of each of the Fund’s investments as of the reporting period end. These data inputs are categorized in the following hierarchy under applicable financial accounting standards:

Level 1—unadjusted quoted prices in active markets for identical assets or liabilities (including securities actively traded on a securities exchange)

Level 2—inputs other than unadjusted quoted prices that are observable for the asset or liability (such as unadjusted quoted prices for similar assets and market corroborated inputs such as interest rates, prepayment speeds, credit risks, etc.)

Level 3—significant unobservable inputs (including the Manager’s own judgments about assumptions that market participants would use in pricing the asset or liability).

The inputs used for valuing securities are not necessarily an indication of the risks associated with investing in those securities.

The table below categorizes amounts that are included in the Fund’s Statement of Assets and Liabilities as of August 31, 2012 based on valuation input level:


	Level 1— Unadjusted Quoted Prices			Level 2— Other Significant Observable Inputs			Level 3— Significant Unobservable Inputs			Value
Assets Table
Investments, at Value:
Common Stocks
Consumer Discretionary		$	2,512,519,436		$	461,237,817		$	—		$	2,973,757,253
Consumer Staples			6,170,510,974			479,750,147			—			6,650,261,121
Energy			2,258,556,148			214,117,716			—			2,472,673,864
Financials			4,209,863,733			452,620,917			—			4,662,484,650
Health Care			272,294,192			—			—			272,294,192
Industrials			879,871,347			110,357,059			—			990,228,406
Information Technology			3,566,016,137			482,622,393			—			4,048,638,530
Materials			988,709,042			47,523,271			—			1,036,232,313
Telecommunication Services			1,312,739,651			—			—			1,312,739,651
Structured Securities			—			26,821,837			—			26,821,837
Investment Company			1,060,435,956			—			—			1,060,435,956

Total Investments, at Value			23,231,516,616			2,275,051,157			—			25,506,567,773
Other Financial Instruments:
Foreign currency exchange contracts			—			77,039			—			77,039

Total Assets		$	23,231,516,616		$	2,275,128,196		$	—		$	25,506,644,812


34		OPPENHEIMER DEVELOPING MARKETS FUND


	Level 1— Unadjusted Quoted Prices		Level 2— Other Significant Observable Inputs			Level 3— Significant Unobservable Inputs			Value
Liabilities Table Other Financial Instruments:
Foreign currency exchange contracts		$—		$ (24,976	)		$	—		$ (24,976	)

Total Liabilities		$—		$(24,976	)		$	—		$(24,976	)

Currency contracts and forwards, if any, are reported at their unrealized appreciation/depreciation at measurement date, which represents the change in the contract’s value from trade date. Futures, if any, are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. All additional assets and liabilities included in the above table are reported at their market value at measurement date.

The table below shows the transfers between Level 1 and Level 2. The Fund’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period.


	Transfers into Level 1*			Transfers out of Level 1**				Transfers into Level 2**			Transfers out of Level 2*
Assets Table
Investments, at Value:
Common Stocks
Consumer Discretionary		$	66,609,372		$	(136,295,343	)		$	136,295,343		$	(66,609,372	)
Consumer Staples			1,279,939,556			(171,590,205	)			171,590,205			(1,279,939,556	)
Energy			433,543,817			(258,586,416	)			258,586,416			(433,543,817	)
Financials			1,034,050,006			—				—			(1,034,050,006	)
Health Care			256,214,520			—				—			(256,214,520	)
Industrials			22,212,330			—				—			(22,212,330	)
Information Technology			2,571,766,574			—				—			(2,571,766,574	)
Materials			557,823,571			—				—			(557,823,571	)

Total Assets		$	6,222,159,746		$	(566,471,964	)		$	566,471,964		$	(6,222,159,746	)

*Transferred from Level 2 to Level 1 due to the presence of a readily available unadjusted quoted market price. As of the prior reporting period end, these securities were absent of a readily available unadjusted quoted market price due to a significant event occurring before the Fund’s assets were valued but after the close of the securities’ respective exchanges.

**Transferred from Level 1 to Level 2 because of the absence of a readily available unadjusted quoted market price due to a significant event occurring before the Fund’s assets were valued but after the close of the securities’ respective exchanges.

There have been no significant changes to the fair valuation methodologies of the Fund during the period.


OPPENHEIMER DEVELOPING MARKETS FUND			35

NOTES TO FINANCIAL STATEMENTS Continued

3. Shares of Beneficial Interest

The Fund has authorized an unlimited number of no par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:


	Year Ended August 31, 2012¹						Year Ended August 31, 2011
	Shares			Amount			Shares			Amount
Class A
Sold		113,073,202		$	3,579,619,517			166,461,173		$	5,807,838,793
Dividends and/or distributions reinvested		5,575,697			166,883,335			388,240			13,747,601
Redeemed		(110,072,018	)		(3,425,334,166	)		(115,373,222	)		(4,000,140,738	)

Net increase		8,576,881		$	321,168,686			51,476,191		$	1,821,445,656


Class B
Sold		1,220,711		$	38,155,960			2,792,119		$	95,912,291
Dividends and/or distributions reinvested		42,362			1,252,648			—			—
Redeemed		(2,608,993	)		(80,813,349	)		(2,990,728	)		(103,553,123	)

Net decrease		(1,345,920	)	$	(41,404,741	)		(198,609	)	$	(7,640,832	)


Class C
Sold		14,485,934		$	441,236,292			29,349,957		$	985,481,824
Dividends and/or distributions reinvested		599,958			17,266,780			—			—
Redeemed		(14,433,878	)		(432,335,255	)		(12,281,248	)		(407,671,331	)

Net increase		652,014		$	26,167,817			17,068,709		$	577,810,493


Class I
Sold		19,005,352		$	598,520,290			—		$	—
Dividends and/or distributions reinvested		—			—			—			—
Redeemed		(314,246	)		(9,933,186	)		—			—

Net increase		18,691,106		$	588,587,104			—		$	—


Class N
Sold		11,024,212		$	337,544,792			12,157,742		$	411,777,303
Dividends and/or distributions reinvested		281,100			8,135,043			—			—
Redeemed		(5,706,983	)		(173,768,917	)		(7,017,028	)		(237,117,116	)

Net increase		5,598,329		$	171,910,918			5,140,714		$	174,660,187


Class Y
Sold		180,143,266		$	5,634,105,379			184,804,634		$	6,367,640,129
Dividends and/or distributions reinvested		4,860,731			143,924,559			606,528			21,240,598
Redeemed		(91,706,543	)		(2,839,520,243	)		(64,236,700	)		(2,201,102,303	)

Net increase		93,297,454		$	2,938,509,695			121,174,462		$	4,187,778,424

1. For the year ended August 31, 2012, for Class A, Class B, Class C, Class N and Class Y shares, and for the period from December 29, 2011 (inception of offering) to August 31, 2012, for Class I shares.


36		OPPENHEIMER DEVELOPING MARKETS FUND

4. Purchases and Sales of Securities

The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations and investments in IMMF, for the year ended August 31, 2012, were as follows:


	Purchases		Sales
Investment securities	$	7,361,425,832	$	4,348,433,965

5. Fees and Other Transactions with Affiliates

Management Fees. Under the investment advisory agreement, the Fund pays the Manager a management fee based on the daily net assets of the Fund at an annual rate as shown in the following table:


Fee Schedule			Fee Schedule Prior to October 1, 2011
Up to $250 million	1.00	%	Up to $250 million	1.00	%
Next $250 million	0.95		Next $250 million	0.95
Next $500 million	0.90		Next $500 million	0.90
Next $6 billion	0.85		Next $6 billion	0.85
Next $3 billion	0.80		Next $3 billion	0.80
Next $20 billion	0.75		Over $10 billion	0.75
Over $30 billion	0.74

Administration Service Fees. The Fund pays the Manager a fee of $1,500 per year for preparing and filing the Fund’s tax returns.

Transfer Agent Fees. OppenheimerFunds Services (“OFS”), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a per account fee. For the year ended August 31, 2012, the Fund paid $49,965,485 to OFS for services to the Fund.

Additionally, Class Y shares are subject to minimum fees of $10,000 annually 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 (the “Plan”) for Class A shares under Rule 12b-1 of the Investment Company Act of 1940. Under the Plan, the Fund reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made periodically at an annual rate of up to 0.25% of the daily 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 periodically for providing personal service 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 periods. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations.


OPPENHEIMER DEVELOPING MARKETS FUND			37

NOTES TO FINANCIAL STATEMENTS Continued

5. Fees and Other Transactions with Affiliates Continued

Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund has adopted Distribution and Service Plans (the “Plans”) for Class B, Class C and Class N shares under Rule 12b-1 of the Investment Company Act of 1940 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 daily net assets and 0.25% on Class N shares daily net assets. 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. Fees incurred by the Fund under the Plans are detailed in the Statement of Operations. The Distributor determines its uncompensated expenses under the Plans at calendar quarter ends. The Distributor’s aggregate uncompensated expenses under the Plans at June 30, 2012 were as follows:


Class C	$	24,947,566
Class N		9,547,296

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 following table for the period indicated.

Year Ended

Class A

Front-End
Sales Charges
Retained by
Distributor

Class A
Contingent
Deferred
Sales Charges
Retained by
Distributor

Class B

Contingent
Deferred
Sales Charges
Retained by
Distributor

Class C
Contingent
Deferred
Sales Charges
Retained by
Distributor

Class N
Contingent
Deferred
Sales Charges
Retained by
Distributor

August 31, 2012

1,911,027

120,154

483,728

448,268

11,052

Waivers and Reimbursements of Expenses. The Manager will waive fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurred through the Fund’s investment in IMMF. During the year ended August 31, 2012, the Manager waived fees and/or reimbursed the Fund $813,211 for IMMF management fees.

OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for Classes B, C, N and Y shares to 0.35% of average annual net assets per class; this limit also applied to Class A shares prior to November 1, 2011. Effective November 1, 2011, OFS has voluntarily agreed to limit its fees for Class A shares to 0.30% of average annual net assets of the class.

During the year ended August 31, 2012, OFS waived transfer and shareholder servicing agent fees as follows:


Class B	$	25,531
Class N		1,088,788


38		OPPENHEIMER DEVELOPING MARKETS FUND

Some of these undertakings may be modified or terminated at any time; some may not be modified or terminated until after one year from the date of the current prospectus, as indicated therein.

During the year ended August 31, 2012, the Manager voluntarily reimbursed the Fund $212,163 for certain transactions. The payment is reported separately in the Statement of Operations and increased the Fund’s total returns by less than 0.01%.

6. Risk Exposures and the Use of Derivative Instruments

The Fund’s investment objectives not only permit the Fund to purchase investment securities, they also allow the Fund to enter into various types of derivatives contracts, including, but not limited to, futures contracts, forward foreign currency exchange contracts, credit default swaps, interest rate swaps, total return swaps, and purchased and written options. In doing so, the Fund will employ strategies in differing combinations to permit it to increase, decrease, or change the level or types of exposure to market risk factors. Central to those strategies are features inherent to derivatives that make them more attractive for this purpose than equity and debt securities: they require little or no initial cash investment, they can focus exposure on only certain selected risk factors, and they may not require the ultimate receipt or delivery of the underlying security (or securities) to the contract. This may allow the Fund to pursue its objectives more quickly and efficiently than if it were to make direct purchases or sales of securities capable of effecting a similar response to market factors.

Market Risk Factors. In accordance with its investment objectives, the Fund may use derivatives to increase or decrease its exposure to one or more of the following market risk factors:

Commodity Risk. Commodity risk relates to the change in value of commodities or commodity indexes as they relate to increases or decreases in the commodities market. Commodities are physical assets that have tangible properties. Examples of these types of assets are crude oil, heating oil, metals, livestock, and agricultural products.

Credit Risk. Credit risk relates to the ability of the issuer to meet interest and principal payments, or both, as they come due. In general, lower-grade, higher-yield bonds are subject to credit risk to a greater extent than lower-yield, higher-quality bonds.

Equity Risk. Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market.

Foreign Exchange Rate Risk. Foreign exchange rate risk relates to the change in the U.S. dollar value of a security held that is denominated in a foreign currency. The U.S. dollar value of a foreign currency denominated security will decrease as the dollar appreciates against the currency, while the U.S. dollar value will increase as the dollar depreciates against the currency.

Interest Rate Risk. Interest rate risk refers to the fluctuations in value of fixed-income securities resulting from the inverse relationship between price and yield. For example, an increase in general interest rates will tend to reduce the market value of already


OPPENHEIMER DEVELOPING MARKETS FUND			39

NOTES TO FINANCIAL STATEMENTS Continued

6. Risk Exposures and the Use of Derivative Instruments Continued

issued fixed-income investments, and a decline in general interest rates will tend to increase their value. In addition, debt securities with longer maturities, which tend to have higher yields, are subject to potentially greater fluctuations in value from changes in interest rates than obligations with shorter maturities.

Volatility Risk. Volatility risk refers to the magnitude of the movement, but not the direction of the movement, in a financial instrument’s price over a defined time period. Large increases or decreases in a financial instrument’s price over a relative time period typically indicate greater volatility risk, while small increases or decreases in its price typically indicate lower volatility risk.

The Fund’s actual exposures to these market risk factors during the period are discussed in further detail, by derivative type, below.

Risks of Investing in Derivatives. The Fund’s use of derivatives can result in losses due to unanticipated changes in the market risk factors and the overall market. In instances where the Fund is using derivatives to decrease, or hedge, exposures to market risk factors for securities held by the Fund, there are also risks that those derivatives may not perform as expected resulting in losses for the combined or hedged positions.

Derivatives may have little or no initial cash investment relative to their market value exposure and therefore can produce significant gains or losses in excess of their cost. This use of embedded leverage allows the Fund to increase its market value exposure relative to its net assets and can substantially increase the volatility of the Fund’s performance.

Additional associated risks from investing in derivatives also exist and potentially could have significant effects on the valuation of the derivative and the Fund. Typically, the associated risks are not the risks that the Fund is attempting to increase or decrease exposure to, per its investment objectives, but are the additional risks from investing in derivatives. Examples of these associated risks are liquidity risk, which is the risk that the Fund will not be able to sell the derivative in the open market in a timely manner, and counterparty credit risk, which is the risk that the counterparty will not fulfill its obligation to the Fund. Associated risks can be different for each type of derivative and are discussed by each derivative type in the notes that follow.

Counterparty Credit Risk. Certain derivative positions are subject to counterparty credit risk, which is the risk that the counterparty will not fulfill its obligation to the Fund. The Fund’s derivative counterparties are financial institutions who are subject to market conditions that may weaken their financial position. The Fund intends to enter into financial transactions with counterparties that the Manager believes to be creditworthy at the time of the transaction. As of August 31, 2012, the maximum amount of loss that the Fund would incur if the counterparties to its derivative transactions failed to perform would be $77,039, which represents gross payments to be received by the Fund on these derivative contracts were they to be unwound as of period end.

Credit Related Contingent Features. The Fund’s agreements with derivative counterparties have several credit related contingent features that if triggered would


40		OPPENHEIMER DEVELOPING MARKETS FUND

allow its derivatives counterparties to close out and demand payment or additional collateral to cover their exposure from the Fund. Credit related contingent features are established between the Fund and its derivatives counterparties to reduce the risk that the Fund will not fulfill its payment obligations to its counterparties. These triggering features include, but are not limited to, a percentage decrease in the Fund’s net assets and or a percentage decrease in the Fund’s Net Asset Value or NAV. The contingent features are established within the Fund’s International Swap and Derivatives Association, Inc. master agreements which govern certain positions in swaps, over-the-counter options and swaptions, and forward currency exchange contracts for each individual counterparty.

Valuations of derivative instruments as of August 31, 2012 are as follows:

Asset Derivatives

Liability Derivatives

Derivatives
Not Accounted
for as Hedging
Instruments

Statement of Assets and
Liabilities Location

Value

Statement of Assets and
Liabilities Location

Value

Foreign exchange contracts

Unrealized appreciation
on foreign currency
exchange contracts

77,039

Unrealized depreciation
on foreign currency
exchange contracts

24,976

The effect of derivative instruments on the Statement of Operations is as follows:


Amount of Realized Gain or (Loss) Recognized on Derivatives
Derivatives Not Accounted for as Hedging Instruments	Foreign currency transactions
Foreign exchange contracts	$	3,331,242

Amount of Change in Unrealized Gain or (Loss) Recognized on Derivatives
Derivatives Not Accounted for as Hedging Instruments	Translation of assets and liabilities denominated in foreign currencies
Foreign exchange contracts		$(24,939	)

Foreign Currency Exchange Contracts

The Fund may enter into foreign currency exchange contracts (“forward contracts”) for the purchase or sale of a foreign currency at a negotiated rate at a future date.

Forward contracts are reported on a schedule following the Statement of Investments. The unrealized appreciation (depreciation) is reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations within the change in unrealized appreciation (depreciation). At contract close, the difference between the original cost of the contract and the value at the close date is recorded as a realized gain (loss) in the Statement of Operations.

The Fund has purchased and sold certain forward foreign currency exchange contracts of different currencies in order to acquire currencies to pay for or sell currencies to acquire related foreign securities purchase and sale transactions, respectively, or to convert foreign currencies to U.S. dollars from related foreign securities transactions. These foreign


OPPENHEIMER DEVELOPING MARKETS FUND			41

NOTES TO FINANCIAL STATEMENTS Continued

6. Risk Exposures and the Use of Derivative Instruments Continued

currency exchange contracts are negotiated at the current spot exchange rate with settlement typically within two business days thereafter.

During the year ended August 31, 2012, the Fund had daily average contract amounts on forward foreign currency contracts to buy and sell of $46,877,553 and $34,478,403, respectively.

Additional associated risk to the Fund includes counterparty credit risk. Counterparty credit risk arises from the possibility that the counterparty will default.

7. Pending Litigation

Since 2009, a number of class action lawsuits have been pending in federal courts against OppenheimerFunds, Inc., the Fund’s investment advisor (the “Manager”), OppenheimerFunds Distributor, Inc., the Fund’s principal underwriter and distributor (the “Distributor”), and certain funds (but not including the Fund) advised by the Manager and distributed by the Distributor (the “Defendant Funds”). Several of these lawsuits also name as defendants certain officers and current and former trustees of the respective Defendant Funds. The lawsuits raise claims under federal securities law and allege, among other things, that the disclosure documents of the respective Defendant Funds contained misrepresentations and omissions and that the respective Defendant Funds’ investment policies were not followed. The plaintiffs in these actions seek unspecified damages, equitable relief and awards of attorneys’ fees and litigation expenses. The Defendant Funds’ Boards of Trustees have also engaged counsel to represent the Funds and the present and former Independent Trustees named in those suits.

Other class action and individual lawsuits have been filed since 2008 in various state and federal courts against the Manager and certain of its affiliates by investors seeking to recover investments they allegedly lost as a result of the “Ponzi” scheme run by Bernard L. Madoff and his firm, Bernard L. Madoff Investment Securities, LLC (“BLMIS”). Plaintiffs in these suits allege that they suffered losses as a result of their investments in several funds managed by an affiliate of the Manager and assert a variety of claims, including breach of fiduciary duty, fraud, negligent misrepresentation, unjust enrichment, and violation of federal and state securities laws and regulations, among others. They seek unspecified damages, equitable relief and awards of attorneys’ fees and litigation expenses. Neither the Distributor, nor any of the Oppenheimer mutual funds, their independent trustees or directors are named as defendants in these lawsuits. None of the Oppenheimer mutual funds invested in any funds or accounts managed by Madoff or BLMIS. On February 28, 2011, a stipulation of partial settlement of three groups of consolidated putative class action lawsuits relating to these matters was filed in the U.S. District Court for the Southern District of New York. On August 19, 2011, the court entered an order and final judgment approving the settlement as fair, reasonable and adequate. In September 2011, certain parties filed notices of appeal from the court’s order approving the settlement. On July 29, 2011, a stipulation of settlement between certain affiliates of the Manager and the Trustee appointed under the Securities Investor Protection Act to


42		OPPENHEIMER DEVELOPING MARKETS FUND

liquidate BLMIS was filed in the U.S. Bankruptcy Court for the Southern District of New York to resolve purported preference and fraudulent transfer claims by the Trustee. On September 22, 2011, the court entered an order approving the settlement as fair, reasonable and adequate. In October 2011, certain parties filed notices of appeal from the court’s order approving the settlement. In June 2012, the court granted appellees’ motion to dismiss the appeal. The aforementioned settlements do not resolve other outstanding lawsuits against the Manager and its affiliates relating to BLMIS.

On April 16, 2010, a lawsuit was filed in New York state court against the Manager, an affiliate of the Manager and AAArdvark IV Funding Limited (“AAArdvark IV”), an entity advised by the Manager’s affiliate, in connection with investments made by the plaintiffs in AAArdvark IV. Plaintiffs allege breach of contract against the defendants and seek compensatory damages, costs and disbursements, including attorney fees. On July 15, 2011, a lawsuit was filed in New York state court against the Manager, an affiliate of the Manager and AAArdvark Funding Limited (“AAArdvark I”), an entity advised by the Manager’s affiliate, in connection with investments made by the plaintiffs in AAArdvark I. The complaint alleges breach of contract against the defendants and seeks compensatory damages, costs and disbursements, including attorney fees. On November 9, 2011, a lawsuit was filed in New York state court against the Manager, an affiliate of the Manager and AAArdvark XS Funding Limited (“AAArdvark XS”), an entity advised by the Manager’s affiliate, in connection with investments made by the plaintiffs in AAArdvark XS. The complaint alleges breach of contract against the defendants and seeks compensatory damages, costs and disbursements, including attorney fees.

The Manager believes the lawsuits and appeals described above are without legal merit and, with the exception of actions it has settled, is defending against them vigorously. While it is premature to render any opinion as to the outcome in these lawsuits, or whether any costs that the Defendant Funds may bear in defending the suits might not be reimbursed by insurance, the Manager believes that these suits should not impair the ability of the Manager or the Distributor to perform their respective duties to the Fund, and that the outcome of all of the suits together should not have any material effect on the operations of any of the Oppenheimer mutual funds.


OPPENHEIMER DEVELOPING MARKETS FUND			43

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Trustees and Shareholders of Oppenheimer Developing Markets Fund:

We have audited the accompanying statement of assets and liabilities of Oppenheimer Developing Markets Fund, including the statement of investments, as of August 31, 2012, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 2012, by correspondence with the custodian, transfer agent and brokers, or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Developing Markets Fund as of August 31, 2012, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

KPMG LLP

Denver, Colorado

October 16, 2012


44		OPPENHEIMER DEVELOPING MARKETS FUND

FEDERAL INCOME TAX INFORMATION Unaudited

In early 2012, if applicable, shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2011.

Dividends, if any, paid by the Fund during the fiscal year ended August 31, 2012 which are not designated as capital gain distributions should be multiplied by the maximum amount allowable but not less than 0.01% to arrive at the amount eligible for the corporate dividend-received deduction.

A portion, if any, of the dividends paid by the Fund during the fiscal year ended August 31, 2012 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. The maximum amount allowable but not less than $314,444,027 of the Fund’s fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2012, shareholders of record received information regarding the percentage of distributions that are eligible for lower individual income tax rates.

Recent tax legislation allows a regulated investment company to designate distributions not designated as capital gain distributions, as either interest related dividends or short-term capital gain dividends, both of which are exempt from the U.S. withholding tax applicable to non U.S. taxpayers. For the fiscal year ended August 31, 2012, the maximum amount allowable but not less than $646,447 of the ordinary distributions to be paid by the Fund qualifies as an interest related dividend.

The Fund has elected the application of Section 853 of the Internal Revenue Code to permit shareholders to take a federal income tax credit or deduction, at their option, on a per share basis. The maximum amount allowable but not less than $33,696,944 of foreign income taxes were paid by the Fund during the fiscal year ended August 31, 2012. A separate notice will be mailed to each shareholder, which will reflect the proportionate share of such foreign taxes which must be treated by shareholders as gross income for federal income tax purposes.

Gross income of the maximum amount allowable but not less than $218,424,420 was derived from sources within foreign countries or possessions of the United States.

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.


OPPENHEIMER DEVELOPING MARKETS FUND			45

PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;

UPDATES TO STATEMENTS OF INVESTMENTS Unaudited

The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities (“portfolio proxies”) held by the Fund. A description of the Fund’s Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.CALL OPP (225.5677), (ii) on the Fund’s website at 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.CALL OPP (225.5677), 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 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.

Householding—Delivery of Shareholder Documents

This is to inform you about OppenheimerFunds’ “householding” policy. If more than one member of your household maintains an account in a particular fund, OppenheimerFunds will mail only one copy of the fund’s prospectus (or, if available, the fund’s summary prospectus), annual and semiannual report and privacy policy. The consolidation of these mailings, called householding, benefits your fund through reduced mailing expense, and benefits you by reducing the volume of mail you receive from OppenheimerFunds. Householding does not affect the delivery of your account statements.

Please note that we will continue to household these mailings for as long as you remain an OppenheimerFunds shareholder, unless you request otherwise. If you prefer to receive multiple copies of these materials, please call us at 1.800.CALL-OPP (225-5677). You may also notify us in writing or via email. We will begin sending you individual copies of the prospectus (or, if available, the summary prospectus), reports and privacy policy within 30 days of receiving your request to stop householding.


46		OPPENHEIMER DEVELOPING MARKETS FUND

TRUSTEES AND OFFICERS BIOS


Name, Position(s) Held with the Fund, Length of Service, Age		Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships Held; Number of Portfolios in the Fund Complex Currently Overseen

INDEPENDENT TRUSTEES		The address of each Trustee in the chart below is 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Trustee serves for an indefinite term, or until his or her resignation, retirement, death or removal.

Brian F. Wruble, Chairman of the Board of Trustees (since 2007), Trustee (since 2005) Age: 69		Director of Community Foundation of the Florida Keys (non-profit) (since July 2012); Chairman Emeritus and Non-Voting Trustee of The Jackson Laboratory (non-profit) (since August 2011); Director of Special Value Opportunities Fund, LLC (registered investment company) (affiliate of the Manager’s parent company) (since September 2004); Member of Zurich Insurance Advisory Council (insurance) (since 2004); Treasurer (since 2007) and Trustee of the Institute for Advanced Study (non-profit educational institute) (since May 1992); Chairman (August 2007-August 2011) and Trustee (since August 1991) of the Board of Trustees of The Jackson Laboratory (non-profit); General Partner of Odyssey Partners, L.P. (hedge fund) (September 1995-December 2007); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September 2004). Oversees 58 portfolios in the OppenheimerFunds complex. Mr. Wruble has served on the Boards of certain Oppenheimer funds since April 2001, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

David K. Downes, Trustee (since 2007) Age: 72		Director of THL Credit Inc. (since June 2009); Independent Chairman GSK Employee Benefit Trust (since April 2006); Trustee of Employee Trusts (since January 2006); Chief Executive Officer and Board Member of Community Capital Management (investment management company) (since January 2004); President of The Community Reinvestment Act Qualified Investment Fund (investment management company) (since 2004); Director of Internet Capital Group (information technology company) (since October 2003); Director of Correctnet (January 2006-2007); Independent Chairman of the Board of Trustees of Quaker Investment Trust (registered investment company) (2004-2007); Chief Operating Officer and Chief Financial Officer of Lincoln National Investment Companies, Inc. (subsidiary of Lincoln National Corporation, a publicly traded company) and Delaware Investments U.S., Inc. (investment management subsidiary of Lincoln National Corporation) (1993-2003); President, Chief Executive Officer and Trustee of Delaware Investment Family of Funds (1993-2003); President and Board Member of Lincoln National Convertible Securities Funds, Inc. and the Lincoln National Income Funds, TDC (1993-2003); Chairman and Chief Executive Officer of Retirement Financial Services, Inc. (registered transfer agent and investment adviser and subsidiary of Delaware Investments U.S., Inc.) (1993-2003); President and Chief Executive Officer of Delaware Service Company, Inc. (1995-2003); Chief Administrative Officer, Chief Financial Officer, Vice Chairman and Director of Equitable Capital Management Corporation (investment subsidiary of Equitable Life Assurance Society) (1985-1992); Corporate Controller of Merrill Lynch Company (financial services holding company) (1977-1985); held the following positions at the Colonial Penn Group, Inc. (insurance company): Corporate Budget Director (1974-1977), Assistant Treasurer (1972-1974) and Director of Corporate Taxes (1969-1972); held the following positions at Price Waterhouse Company (financial services firm): Tax Manager (1967-1969), Tax Senior (1965-1967) and Staff Accountant (1963-1965); United States Marine Corps (1957-1959). Oversees 58 portfolios in the OppenheimerFunds complex. Mr. Downes has served on the Boards of certain Oppenheimer funds since December 2005, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.


OPPENHEIMER DEVELOPING MARKETS FUND			47

TRUSTEES AND OFFICERS BIOS Continued


Matthew P. Fink, Trustee (since 2005) Age: 71		Trustee of the Committee for Economic Development (policy research foundation) (2005-2011); Director of ICI Education Foundation (education foundation) (October 1991-August 2006); President of the Investment Company Institute (trade association) (October 1991-June 2004); Director of ICI Mutual Insurance Company (insurance company) (October 1991-June 2004); Author of The Rise of Mutual Funds: An Insider’s View published by Oxford University Press (second edition 2010). Oversees 58 portfolios in the OppenheimerFunds complex. Mr. Fink has served on the Boards of certain Oppenheimer funds since January 2005, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Phillip A. Griffiths, Trustee (since 1999) Age: 73		Fellow of the Carnegie Corporation (since 2007); Member of the National Academy of Sciences (since 1979); Council on Foreign Relations (since 2002); Foreign Associate of Third World Academy of Sciences (since 2002); Chair of Science Initiative Group (since 1999); Member of the American Philosophical Society (since 1996); Trustee of Woodward Academy (since 1983); Director of GSI Lumonics Inc. (precision technology products company) (2001-2010); Senior Advisor of The Andrew W. Mellon Foundation (2001-2010); Distinguished Presidential Fellow for International Affairs of the National Academy of Science (2002-2010); Director of the Institute for Advanced Study (1991-2004); Director of Bankers Trust New York Corporation (1994-1999); Provost at Duke University (1983-1991). Oversees 58 portfolios in the OppenheimerFunds complex. Mr. Griffiths has served on the Boards of certain Oppenheimer funds since June 1999, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Mary F. Miller, Trustee (since 2004) Age: 69		Trustee of International House (not-for-profit) (since June 2007); Trustee of the American Symphony Orchestra (not-for-profit) (October 1998-November 2011); and Senior Vice President and General Auditor of American Express Company (financial services company) (July 1998-February 2003). Oversees 58 portfolios in the OppenheimerFunds complex. Ms. Miller has served on the Boards of certain Oppenheimer funds since August 2004, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Joel W. Motley, Trustee (since 2002) Age: 60		Member of the Vestry of Trinity Wall Street (since April 2012); Director of Southern Africa Legal Services Foundation (since March 2012); Board Member of Pulitzer Center for Crisis Reporting (non-profit journalism) (since December 2010); Managing Director of Public Capital Advisors, LLC (privately-held financial advisor) (since January 2006); Managing Director of Carmona Motley, Inc. (privately-held financial advisor) (since January 2002); Director of Columbia Equity Financial Corp. (privately-held financial advisor) (2002-2007); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial advisor) (January 1998-December 2001); Member of the Finance and Budget Committee of the Council on Foreign Relations, Chairman of the Investment Committee of the Episcopal Church of America, Member of the Investment Committee and Board of Human Rights Watch and Member of the Investment Committee and Board of Historic Hudson Valley. Oversees 58 portfolios in the OppenheimerFunds complex. Mr. Motley has served on the Boards of certain Oppenheimer funds since October 2002, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.


48		OPPENHEIMER DEVELOPING MARKETS FUND


Mary Ann Tynan, Trustee (since 2008) Age: 66		Director and Secretary of the Appalachian Mountain Club (non-profit outdoor organization) (since January 2012); Director of Opera House Arts (non-profit arts organization) (since October 2011); Independent Director of the ICI Board of Governors (since October 2011); Vice Chair of Board of Trustees of Brigham and Women’s/Faulkner Hospitals (non-profit hospital) (since 2000); Chair of Board of Directors of Faulkner Hospital (non-profit hospital) (since 1990); Member of Audit and Compliance Committee of Partners Health Care System (non-profit) (since 2004); Board of Trustees of Middlesex School (educational institution) (since 1994); Board of Directors of Idealswork, Inc. (financial services provider) (since 2003); Partner, Senior Vice President and Director of Regulatory Affairs of Wellington Management Company, LLP (global investment manager) (1976-2002); Vice President and Corporate Secretary, John Hancock Advisers, Inc. (mutual fund investment adviser) (1970-1976). Oversees 58 portfolios in the OppenheimerFunds complex. Ms. Tynan has served on the Boards of certain Oppenheimer funds since October 2008, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Joseph M. Wikler, Trustee (since 2005) Age: 71		Director of C-TASC (bio-statistics services) (2007-2012); formerly, Director of the following medical device companies: Medintec (1992-2011) and Cathco (1996-2011); Member of the Investment Committee of the Associated Jewish Charities of Baltimore (since 1994); Director of Lakes Environmental Association (environmental protection organization) (1996-2008); Director of Fortis/Hartford mutual funds (1994-December 2001). Oversees 58 portfolios in the OppenheimerFunds complex. Mr. Wikler has served on the Boards of certain Oppenheimer funds since August 2005, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Peter I. Wold, Trustee (since 2005) Age: 64		Director of Arch Coal, Inc. (since 2010); Director and Chairman of Wyoming Enhanced Oil Recovery Institute Commission (enhanced oil recovery study) (since 2004); President of Wold Oil Properties, Inc. (oil and gas exploration and production company) (since 1994); Vice President of American Talc Company, Inc. (talc mining and milling) (since 1999); Managing Member of Hole-in-the-Wall Ranch (cattle ranching) (since 1979); Director and Chairman of the Denver Branch of the Federal Reserve Bank of Kansas City (1993-1999); and Director of PacifiCorp. (electric utility) (1995-1999). Oversees 58 portfolios in the OppenheimerFunds complex. Mr. Wold has served on the Boards of certain Oppenheimer funds since August 2005, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.
OFFICERS OF THE FUND		The addresses of the Officers in the chart below are as follows: for Messrs. Leverenz, Glavin, Gabinet and Ms. Nasta, Two World Financial Center, 225 Liberty Street, New York, New York 10281-1008, for Messrs. Vandehey and Wixted, 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Officer serves for an indefinite term or until his or her resignation, retirement, death or removal.

Justin Leverenz, Vice President (since 2007) Age: 44		Senior Vice President of the Manager (since November 2009); Vice President of the Manager (July 2004-October 2009); a Chartered Financial Analyst. Prior to joining the Manager, Head of Research for Goldman Sachs in Taiwan and Head of Asian Technology Research Pan-Asia (2002-2004); Head of Equity Research Hong Kong +Taipei (1993-1995) and (1997-2000). A portfolio manager and officer of 1 portfolio in the OppenheimerFunds complex.


OPPENHEIMER DEVELOPING MARKETS FUND			49

TRUSTEES AND OFFICERS BIOS Continued


William F. Glavin, Jr., President and Principal Executive Officer (since 2009) Age: 54		Chairman of the Manager (since December 2009); Chief Executive Officer and Director of the Manager (since January 2009); President of the Manager (since May 2009); Director of Oppenheimer Acquisition Corp. (“OAC”) (the Manager’s parent holding company) (since June 2009); Executive Vice President (March 2006-February 2009) and Chief Operating Officer (July 2007-February 2009) of Massachusetts Mutual Life Insurance Company (OAC’s parent company); Director (May 2004-March 2006) and Chief Operating Officer and Chief Compliance Officer (May 2004-January 2005), President (January 2005-March 2006) and Chief Executive Officer (June 2005-March 2006) of Babson Capital Management LLC; Director (March 2005-March 2006), President (May 2003-March 2006) and Chief Compliance Officer (July 2005-March 2006) of Babson Capital Securities, Inc. (a broker-dealer); President (May 2003-March 2006) of Babson Investment Company, Inc.; Director (May 2004-August 2006) of Babson Capital Europe Limited; Director (May 2004-October 2006) of Babson Capital Guernsey Limited; Director (May 2004-March 2006) of Babson Capital Management LLC; Non-Executive Director (March 2005-March 2007) of Baring Asset Management Limited; Director (February 2005-June 2006) Baring Pension Trustees Limited; Director and Treasurer (December 2003-November 2006) of Charter Oak Capital Management, Inc.; Director (May 2006-September 2006) of C.M. Benefit Insurance Company; Director (May 2008-June 2009) and Executive Vice President (June 2007-July 2009) of C.M. Life Insurance Company; President (March 2006-May 2007) of MassMutual Assignment Company; Director (January 2005-December 2006), Deputy Chairman (March 2005-December 2006) and President (February 2005-March 2005) of MassMutual Holdings (Bermuda) Limited; Director (May 2008-June 2009) and Executive Vice President (June 2007-July 2009) of MML Bay State Life Insurance Company; Chief Executive Officer and President (April 2007-January 2009) of MML Distributors, LLC; and Chairman (March 2006-December 2008) and Chief Executive Officer (May 2007-December 2008) of MML Investors Services, Inc. Oversees 63 portfolios as a Trustee/Director and 95 portfolios as an officer in the OppenheimerFunds complex.

Arthur S. Gabinet, Secretary and Chief Legal Officer (since 2011) Age: 54		Executive Vice President (since May 2010) and General Counsel (since January 2011) of the Manager; General Counsel of the Distributor (since January 2011); General Counsel of Centennial Asset Management Corporation (since January 2011); Executive Vice President and General Counsel of HarbourView Asset Management Corporation (since January 2011); Assistant Secretary (since January 2011) and Director (since January 2011) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc. (since January 2011); Director of Oppenheimer Real Asset Management, Inc. (since January 2011); Executive Vice President and General Counsel of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since January 2011); Executive Vice President and General Counsel of OFI Private Investments, Inc. (since January 2011); Vice President of OppenheimerFunds Legacy Program (January 2011-January 2012); Executive Vice President and General Counsel of OFI Institutional Asset Management, Inc. (since January 2011); General Counsel, Asset Management of the Manager (May 2010-December 2010); Principal, The Vanguard Group (November 2005-April 2010); District Administrator, U.S. Securities and Exchange Commission (January 2003-October 2005). An officer of 95 portfolios in the OppenheimerFunds complex.

Christina M. Nasta, Vice President and Chief Business Officer (since 2011) Age: 39		Senior Vice President of the Manager (since July 2010); Vice President of the Manager (since January 2003); Vice President of OppenheimerFunds Distributor, Inc. (since January 2003). An officer of 95 portfolios in the OppenheimerFunds complex.


50		OPPENHEIMER DEVELOPING MARKETS FUND


Mark S. Vandehey, Vice President and Chief Compliance Officer (since 2004) Age: 61		Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Chief Compliance Officer of OppenheimerFunds Distributor, Inc., Centennial Asset Management and Shareholder Services, Inc. (since March 2004); Vice President of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and Shareholder Services, Inc. (since June 1983). An officer of 95 portfolios in the OppenheimerFunds complex.

Brian W. Wixted, Treasurer and Principal Financial & Accounting Officer (since 1999) Age: 52		Senior Vice President of the Manager (since March 1999); Treasurer of the Manager and the following: HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder Services, Inc., Oppenheimer Real Asset Management, Inc. and Oppenheimer Partnership Holdings, Inc. (March 1999-June 2008), OFI Private Investments, Inc. (March 2000-June 2008), OppenheimerFunds International Ltd. and OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (June 2003-January 2012); Treasurer and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of OAC (March 1999-June 2008). An officer of 95 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.CALL OPP (225.5677).


OPPENHEIMER DEVELOPING MARKETS FUND			51

OPPENHEIMER DEVELOPING MARKETS FUND


Manager		OppenheimerFunds, Inc.
Distributor		OppenheimerFunds Distributor, Inc.
Transfer and Shareholder Servicing Agent		OppenheimerFunds Services
Independent Registered Public Accounting Firm		KPMG LLP
Legal Counsel		Kramer Levin Naftalis & Frankel LLP


52		OPPENHEIMER DEVELOPING MARKETS FUND

PRIVACY POLICY NOTICE

As an Oppenheimer fund shareholder, you are entitled to know how we protect your personal information and how we limit its disclosure.

Information Sources

We obtain nonpublic personal information about our shareholders from the following sources:

Applications or other forms

When you create a user ID and password for online account access

When you enroll in eDocs Direct, our electronic document delivery service

Your transactions with us, our affiliates or others

A software program on our website, often referred to as a “cookie,” which indicates which parts of our site you’ve visited

When you set up challenge questions to reset your password online

If you visit oppenheimerfunds.com and do not log on to the secure account information areas, we do not obtain any personal information about you. When you do log on to a secure area, we do obtain your user ID and password to identify you. We also use this information to provide you with products and services you have requested, to inform you about products and services that you may be interested in and assist you in other ways.

We do not collect personal information through our website unless you willingly provide it to us, either directly by email or in those areas of the website that request information. In order to update your personal information (including your mailing address, email address and phone number) you must first log on and visit your user profile.

If you have set your browser to warn you before accepting cookies, you will receive the warning message with each cookie. You can refuse cookies by turning them off in your browser. However, doing so may limit your access to certain sections of our website.

We use cookies to help us improve and manage our website. For example, cookies help us recognize new versus repeat visitors to the site, track the pages visited, and enable some special features on the website. This data helps us provide a better service for our website visitors.

Protection of Information

We do not disclose any non-public personal information (such as names on a customer list) about current or former customers to anyone, except as permitted by law.

Disclosure of Information

We send your financial advisor (as designated by you) copies of confirmations, account statements and other documents reporting activity in your fund accounts. We may also use details about you and your investments to help us, our financial service affiliates, or firms that jointly market their financial products and services with ours, to better serve your investment needs or suggest financial services or educational material that may be of interest to you. If this requires us to provide you with an opportunity to “opt in” or “opt out” of such information sharing with a firm not affiliated with us, you will receive notification on how to do so, before any such sharing takes place.

Right of Refusal

We will not disclose your personal information to unaffiliated third parties (except as permitted by law), unless we first offer you a reasonable opportunity to refuse or “opt out” of such disclosure.

Internet Security and Encryption

In general, the email services provided by our website are encrypted and provide a secure and private means of communication with us. To protect your own privacy, confidential and/or personal information should only be communicated via email when you are advised that you are using a secure website.


OPPENHEIMER DEVELOPING MARKETS FUND			53

PRIVACY POLICY NOTICE

As a security measure, we do not include personal or account information in non-secure emails, and we advise you not to send such information to us in non-secure emails. Instead, you may take advantage of the secure features of our website to encrypt your email correspondence. To do this, you will need to use a browser that supports Secure Sockets Layer (SSL) protocol.

We do not guarantee or warrant that any part of our website, including files available for download, are free of viruses or other harmful code. It is your responsibility to take appropriate precautions, such as use of an anti-virus software package, to protect your computer hardware and software.

All transactions, including redemptions, exchanges and purchases, are secured by SSL and 128-bit encryption. SSL is used to establish a secure connection between your PC and OppenheimerFunds’ server. It transmits information in an encrypted and scrambled format.

Encryption is achieved through an electronic scrambling technology that uses a “key” to code and then decode the data. Encryption acts like the cable converter box you may have on your television set. It scrambles data with a secret code so that no one can make sense of it while it is being transmitted. When the data reaches its destination, the same software unscrambles the data.

You can exit the secure area by either closing your browser, or for added security, you can use the Log Out button before you close your browser.

Other Security Measures

We maintain physical, electronic and procedural safeguards to protect your personal account information. Our employees and agents have access to that information only so that they may offer you products or provide services, for example, when responding to your account questions.

How You Can Help

You can also do your part to keep your account information private and to prevent unauthorized transactions. If you obtain a user ID and password for your account, do not allow it to be used by anyone else. Also, take special precautions when accessing your account on a computer used by others.

Who We Are

This joint notice describes the privacy policies of the Oppenheimer funds, OppenheimerFunds Distributor, Inc., the trustee of OppenheimerFunds Individual Retirement Accounts (IRAs) and the custodian of the OppenheimerFunds 403(b)(7) tax sheltered custodial accounts. It applies to all Oppenheimer fund accounts you presently have, or may open in the future, using your Social Security number—whether or not you remain a shareholder of our funds. This notice was last updated January 16, 2004. In the event it is updated or changed, we will post an updated notice on our website at oppenheimerfunds.com. If you have any questions about these privacy policies, write to us at P.O. Box 5270, Denver, CO 80217-5270, email us by clicking on the Contact Us section of our website at oppenheimerfunds.com or call us at 1.800.CALL OPP (225.5677).


54		OPPENHEIMER DEVELOPING MARKETS FUND

Visit us at oppenheimerfunds.com for 24-hr access to account information and transactions or call us at 1.800.CALL OPP (1.800.225.5677) for 24-hr automated information and automated transactions. Representatives also available Mon-Fri 8am-8pm ET.

RA0785.001.0812 October 19, 2012

LOGO

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 David Downes, the Board’s Audit Committee Chairman, is an audit committee financial expert and that Mr. Downes is “independent” for purposes of this Item 3.

Item 4. Principal Accountant Fees and Services.

(a)	Audit Fees

The principal accountant for the audit of the registrant’s annual financial statements billed $39,700 in fiscal 2012 and $38,900 in fiscal 2011.

(b)	Audit-Related Fees

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees in fiscal 2012 and no such fees in fiscal 2011.

The principal accountant for the audit of the registrant’s annual financial statements billed $408,556 in fiscal 2012 and $159,500 in fiscal 2011 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 include: Internal control reviews, compliance procedures, GIPS attestation procedures, internal audit training, and surprise exams

(c)

Tax Fees

The principal accountant for the audit of the registrant’s annual financial statements billed $55,682 in fiscal 2012 and $25,640 in fiscal 2011.

The principal accountant for the audit of the registrant’s annual financial statements billed $317,764 in fiscal 2012 and no such fees in fiscal 2011 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 include: tax compliance, tax planning and tax advice. Tax compliance generally involves preparation of original and amended tax returns, claims for a refund and tax payment-planning services. Tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions and requests for rulings or technical advice from taxing authorities.

(d)	All Other Fees

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees in fiscal 2012 and no such fees in fiscal 2011.

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees in fiscal 2012 and no such fees in fiscal 2011 to the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant.

Such fees would include the cost to the principal accountant of attending audit committee meetings and consultations regarding the registrant’s retirement plan with respect to its Trustees.

(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 $782,002 in fiscal 2012 and $185,140 in fiscal 2011 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. No such services were rendered.

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Schedule of Investments.

a) Not applicable. The complete schedule of investments is included in Item 1 of this Form N-CSR.

b) 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

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.

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.

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:

•

the name, address, and business, educational, and/or other pertinent background of the person being recommended;

•

a statement concerning whether the person is an “interested person” as defined in the Investment Company Act of 1940;

•

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

•

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.

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.”

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 8/31/2012, 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 Developing Markets Fund



By:		/s/ William F. Glavin, Jr.
		William F. Glavin, Jr.
		Principal Executive Officer
Date:		10/8/2012

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/ William F. Glavin, Jr.
		William F. Glavin, Jr.
		Principal Executive Officer
Date:		10/8/2012

By:		/s/ Brian W. Wixted
		Brian W. Wixted
		Principal Financial Officer
Date:		10/8/2012

Oppenheimer Developing Markets Fund (ODVBX) N-CSRCertified annual shareholder report (management investment company)